杭汽轮Ｂ: 2022年年度报告（英文版）

Stock Code: 200771       Stock ID: Hangqilun B       Announcement No.: 2023-12
                     Hangzhou Steam Turbine Group Co., Ltd.
                              （Stock Code: 200771）
                                 March 2023
                            I. Important Notice , Table of Contents, and Definitions
The Board of Directors, The Supervisory Committee, the supervisors and the directors of the Company guarantee
that there are no significant omissions, fictitious or misleading statements carried in the Report and we will accept
individual and joint responsibilities for the truthfulness, accuracy and completeness of the Report.
Chairman Mr. Zheng Bin, Chief Financial Officer Zhao Jiamao, and the Chief of Accounting Department Mr.Jin
Can hereby declare: the Financial Statement in the report is guaranteed to be truthful and complete.
All of the directors attended the board meeting on which this report was examined.
This Report contains prospective descriptions, which doesn’t constitute substantial commitment to investors.
Investors are requested to be aware of the risks attached to their investment decisions.
For the risks existing in the Company's operation, please refer to the section "Prospects for the future development
of the Company" in Section III "Management Discussion & Analysis".
 The company's designated information disclosure media are: Shanghai Securities News (Chinese), Securities
Times (Chinese), Hong Kong Commercial Daily (English), http://www.cninfo.com.cn (In English and Chinese),
all information of the company is subject to the information published in the above selected media. Investors are
advised to pay attention to investment risks.
  The profit distribution proposal reviewed and approved by the boarding meeting was summarized as follows: In
repurchased as of date of record by Company and 531,180 shares of share capital were cancelled due to the
retirement and resignation of equity incentive objects in December 2022, that is, 979,537,000 shares, the
Company would distribute cash dividend to all the shareholders at the rate of CNY 3.0 for every 10 shares (with
tax inclusive) , 2 bonus shares ，and no reserve would be converted into share capital.
                                               Table of Contents
I.Important Notice, Table of contents and Definitions
II. Basic Information of the Company and Financial index
III. Management Discussion & Analysis
IV. Corporate Governance
V. Environmental & Social Responsibility
VI. Important Events
VII. Change of share capital and shareholding of Principal Shareholders
VIII. Situation of the Preferred Shares
IX. Corporate Bond
X. Financial Report
                                       Documents available for inspection
Chief Financial officer and Financial Principal.
of certified Public accountants.
China Securities Regulatory Commission in the report period.
                                                           Definition
           Terms to be defined               Refers to                                   Definition
Company, the Company                         Refers to   Hangzhou Steam Turbine Power Group Co., Ltd.
Holding shareholder, Steam Turbine
                                             Refers to   Hangzhou Steam Turbine Holdings Co., Ltd.
Holdings
                                                         State-owned Assets Supervision and Administration Commission of
Hangzhou SASAC                               Refers to
                                                         Hangzhou Municipal People's Government
Hangzhou Capital                             Refers to   Hangzhou State-owned Capital Investment and Operation Co., Ltd.
The report period, the current period, the
                                             Refers to   January 1,2022-December 31,2022
current year
Zhongneng Co.                                Refers to   Hangzhou Zhongneng Steam Turbine Power Co., Ltd.
Casting Co.                                  Refers to   Hangzhou Steam Turbine Casting Co., Ltd.
Packaged Tech. Co.                           Refers to   Zhejiang Steam Turbine Packaged Technology Development Co., Ltd.
Machinery Co.                                Refers to   Hangzhou Steam Turbine Machinery Equipment Co., Ltd.
Auxiliary Machine Co.                        Refers to   Hangzhou Steam Turbine Auxiliary Machinery Co., Ltd.
Turbine Co.                                  Refers to   Zhejiang Turbine Import & Export Co., Ltd.
Zhongrun Company                             Refers to   Zhejiang Zhongrun Gas Turbine technology Co., Ltd.
New Energy Company                           Refers to   Hangzhou Steam Turbine New Energy Co., Ltd.
Hangfa Company                               Refers to   Hangzhou Hangfa Power Generation Equipment Co., Ltd.
Sales Company                                Refers to   Hangzhou Steam Turbine Sales Service Co., Ltd.
                                                         China mechanical and Electrical Institute -HSTG (Hangzhou) United
China mechanical and Electrical Institute    Refers to
                                                         Institutes Co., Ltd.
Ranchuang Company                            Refers to   Zhejiang Ranchuang Turbine Machinery Co., Ltd.
Guoneng Company                              Refers to   Hangzhou Guoneng Steam Turbine Engineering Co., Ltd.
Huayuan Company                              Refers to   Zhejiang Huayuan Steam Turbine Machinery Co., Ltd
Anhui Casting Company                        Refers to   Anhui Hangqi Casting Technology Co., Ltd.
Industry and trade company                   Refers to   Hangzhou Steam Turbine Industry and trade Co., Ltd
Indonesia Company                            Refers to   Hangzhou Zhongneng Steam Turbine Power( Indonesia) Co., Ltd.
The Board of Directors                       Refers to   The Board of Directors of Hangzhou Steam Turbine Group Co., Ltd.
                                                         The Supervisory Committee of Hangzhou Steam Turbine
The Supervisory Committee                    Refers to
                                                         Power Group Co., Ltd.
                                                         The Board of Directors of Hangzhou Steam Turbine Power Group Co.,
The Shareholders’ Meeting                    Refers to
                                                         Ltd.
RMB, RMB0’000, RMB000’000’000                Refers to   RMB Yuan, RMB10 thousand Yuan, RMB100 million Yuan
MW                                           Refers to   Unit of power: 1000KW
PMIS                                         Refers to   Product life circle management information system
MES                                          Refers to   Manufacturing execution system
ERP                                          Refers to   Enterprise Resources Planning
ORC                                          Refers to   Organic Langken cycle
II. Basic Information of the Company and Financial index
I. Basic Information
Stock ID                        Hangqilun B                      Stock Code                         200771
Modified stock ID (if any)      No
Stock Exchange Listed           Shenzhen Stock Exchange
Company Name in Chinese         杭州汽轮动力集团股份有限公司
Short form of Company
                                杭汽轮
Name in Chinese
Name in English                 HANGZHOU STEAM TURBINE POWER GROUP CO.,LTD.
Abbreviation in English         HTC
Legal representative:           Zheng Bin
                                Building 1, No.608, Kangxin Road, Economic & Technological Development Zone, Yuhang
Reg. Add.                       District, Hangzhou City, Zhejiang
Post Code                       311106
                                In May 2021, The registered address of the company has been changed from No.357, Shiqiao
                                Road, Hangzhou city, Zhejiang Province to Building 1, No.608, Kangxin Road, Economic and
                                Technological Development Zone, Yuhang District, Hangzhou City, Zhejiang
Historical change of the
                                In June 2022, The registered address of the company has been changed from
company's registered address
                                Building 1, No.608, Kangxin Road, Economic and Technological Development Zone,
                                Hangzhou City, Zhejiang to Building 1, No.608, Kangxin Road, Linping District, Hangzhou
                                City, Zhejiang
Office address                  No.1188, Dongxin Road, Gongshu District, Hangzhou, Zhejiang
Post code of the office
address
Internet Web Site               www.htc.cn
E-mail                          lgw@htc.cn
II. Contact person and contact manner
                                                         Board secretary                    Securities affairs Representative
Name                                       Li Guiwen                                   Li Xiaoyang
                                           No.1188, Dongxin Road, Gongshu              No.1188, Dongxin Road, Gongshu
Address                                    District, Hangzhou, Zhejiang                District, Hangzhou, Zhejiang
Tel.                                       0571-85780058                               0571-85780438
Fax.                                       0571-85780433                               0571-85780433
Email.                                     lgw@htc.cn                                  lixiaoyang@htc.cn
III. Place for information disclosure
Press media for information disclosure                            www.szse.cn
                                                                 Securities Times, Shanghai Securities Daily, Hong Kong
Web address for the annual report as assigned by CSRC.           Commercial Daily and
                                                                 www.info.com.cn
The place where the Annual report is prepared and placed         Office of the Board of directors
IV. Changes in Registration
Organization code                                      913300007042026204
                                                       The original scope of main businesses of the Company: The
                                                       design and manufacturing of steam turbine, gas turbine, other
                                                       rotating and to-and-fro machinery and auxiliary equipment, and
                                                       spare parts and components, sales of self-manufactured
                                                       products and the providing of relevant after-sales service and
                                                       import & export service.
                                                       In July 2008, the business scope was modified to: Design and
                                                       manufacturing of steam turbine, gas turbine, other rotating and
                                                       to-and-fro machinery and auxiliary equipment, and spare parts
                                                       and components, sales of self-manufactured products and the
                                                       providing of relevant after-sales service; sales and import &
                                                       export of power plant, industrial driving, industrial turbine
Change of main business since listed                   equipment and complete equipment. For those involve in quota
                                                       or licensing shall follow legal procedures.
                                                       In March 2009, the business scope was modified to: Design
                                                       and manufacturing of steam turbine, gas turbine, other rotating
                                                       and to-and-fro machinery and auxiliary equipment, and spare
                                                       parts and components, sales of self-manufactured products and
                                                       the providing of relevant after-sales service; sales and import &
                                                       export of power plant, industrial driving, industrial turbine
                                                       equipment and complete equipment.
                                                       In December 2016, the business scope was modified to: Design
                                                       and manufacturing of steam turbine, gas turbine, other rotating
                                                       and to-and-fro machinery and auxiliary equipment, and spare
                                                       parts and components, sales of self-manufactured products and
                                                       the providing of relevant after-sales service; sales and import &
                                                       export of power plant, industrial driving, industrial turbine
                                                       equipment ,complete equipment and Energy conservation and
                                                       environmental protection projects.
                                                       Hangzhou Turbine Power Group Co., Ltd. is the controlling
                                                       shareholder of the Company, and the actual controller of the
                                                       Company is the State-owned Assets Supervision and
                                                       Administration Commission of Hangzhou Municipal People's
                                                       Government. On December 2020, Hangzhou SASAC
Change of holding shareholder (if any)                 transferred 90% of the shares of the Company held by itself to
                                                       its wholly-owned company Hangzhou State-owned Capital
                                                       Investment and Operation Co., Ltd., thus Hangzhou Capital
                                                       became the indirect controlling shareholder of the company,
                                                       and neither the direct controlling shareholder nor the actual
                                                       controller of the company changed.
V. Miscellaneous information
CPA hired by the Company
                                                       Pan-China Certified Public Accountants (Special general
Name of the CPA
                                                       partnership)
                                                       B Unit, Huarun Building, No.1366, Qianjiang Road, Jianggan
Address of the CPA                                     District Hangzhou
Name of CPA signed on the auditors’ report             Sheng Weiming, Lin Qunhui
The sponsor performing persist ant supervision duties engaged by the Company in the reporting period.
  □ Applicable √Not applicable
  The Financial advisor performing persist ant supervision duties engaged by the Company in the reporting period
  □ Applicable √Not applicable
  VI.Summary of Accounting data and Financial index
  Indicate by tick mark whether there is any retrospectively restated datum in the table below.
  □Yes √No
                                                                                                    Changed over
                                                                                                   last year（％）
  Operating revenue（Yuan）                                 5,518,841,939.82     5,788,288,588.91           -4.66%    4,762,315,089.10
  Net profit attributable to the shareholders of the
  listed company（Yuan）
  Net profit after deducting of non-recurring
  gain/loss attributable to the shareholders of listed     379,955,440.30       428,122,980.65           -11.25%     372,697,902.88
  company（Yuan）
  Cash flow generated by business operation, net
  （Yuan）
  Basic earning per share(Yuan/Share)                                  0.54                 0.68         -20.59%                 0.49
  Diluted gains per share(Yuan/Share)                                  0.54                 0.68         -20.59%                 0.49
  Net asset earning ratio（%）                                          6.47%                8.01%          -1.54%                6.43%
                                                                                                   Changed over
                                                           End of 2022          End of 2021                          End of 2020
                                                                                                   last year（％
  Gross assets（Yuan）                                     15,374,999,610.32    16,319,667,628.76           -5.79%   16,375,832,611.51
  Net assets attributable to shareholders of the
  listed company（Yuan）
  The lower of the company’s net profit before and after the deduction of non-recurring gains and losses in the last
  three fiscal years is negative, and the auditor's report of the previous year shows that the Company’s going
  concern ability is uncertain.
  □ Yes √No
  The lower of the net profit before and after the deduction of the non-recurring gains and losses is negative.
  □ Yes √No
VII.The differences between domestic and international accounting standards
  Accounting Standard
  □ Applicable √Not applicable
  No difference in the reporting period.
  Accounting Standard
  □ Applicable √Not applicable
  No difference in the reporting period.
  VIII.Main Financial Index by Quarters
                                                                                                                           In RMB
                                                                           Second
                                                   First quarter                            Third quarter         Fourth quarter
                                                                           quarter
Operating revenue                                 1,788,987,236.29     1,286,993,097.29    1,204,092,736.67
Net profit attributable to the shareholders
of the listed company                                                                                                94,135,672.00
Net profit after deducting of non-
recurring gain/loss attributable to the             138,956,828.84      131,810,741.42        62,952,498.88
shareholders of listed company
Net Cash flow generated by business
                                                   -124,850,206.32      289,728,029.61       -80,686,363.23
operation                                                                                                           239,949,345.57
Any material difference between the financial indicators above or their summations and those which have been
disclosed in quarterly or semi-annual reports?
□ Yes √ No
IX. Items and amount of non-current gains and losses
√ Applicable □ Not applicable
                                                                                                                          In RMB
                      Items                       Amount (2022)      Amount (2022)    Amount (2020)                 Notes
                                                                                                         Mainly due to the
                                                                                                         investment income of -
Non-current asset disposal gain/loss(including                                                           563,981.22 yuan
the write-off part for which assets impairment       -792,933.90     -77,159,058.06   -20,964,286.32     generated by the disposal
                                                                                                         of the equity of the
provision is made)
                                                                                                         Indonesian company in
                                                                                                         the current period
Tax refund, deduction and exemption that is
examined and approved by authority exceeding                            356,463.33                0.00
or has no official approval document.
Governmental Subsidy accounted as current
gain/loss, except for those subsidies at with
amount or quantity fixed by the national           57,161,745.42     129,494,304.26    38,013,637.22     [Note]
government and closely related to the
Company’s business operation.
Capital appropriation fees charged to non-
financial enterprises included in the current        127,908.28
profit and loss
Income from the exceeding part between
investment cost of the Company paid for
obtaining subsidiaries, associates and joint-
ventures and recognizable net assets fair value
attributable to the Company when acquiring the
investment
Debt restructuring profit or loss                   7,035,391.36       1,617,382.00       3,350,920.00
Net gain and loss of the subsidiary under the
common control and produced from enterprise
                                                                     -29,001,203.15    27,026,646.93
consolidation from the beginning of the period
to the consolidation date
Gain and loss arising from contingent matters
irrelevant with the Company’s normal                                                     32,202,504.57
operation business
Gain and loss from change of the fair value
arising from transactional monetary assets,
transactional financial liabilities as held as well                                                      Mainly due to the
as the investment income arising from disposal                                                           investment income of
of the transactional monetary assets,                  36,974,039.31    75,295,281.43    53,211,692.31   36,295,722.69 yuan of
transactional financial liabilities and financial                                                        bank wealth management
assets available for sale excluding the effective                                                        products
hedging transaction in connection with the
Company’s normal business
                                                                                                         Mainly due to the reverse
                                                                                                         of a provision of 19.8
Reverse of the provision for impairment of                                                               million yuan for bad debts
accounts receivable undergoing impairment test         20,281,569.00     3,600,000.00                    due to the collection of
individually                                                                                             long-term receivables with
                                                                                                         single accrual in the
                                                                                                         current period
                                                                                                         Mainly due to then non-
Operating income and expenses other than the                                                             operating income -
aforesaid items                                                                                          compensation of
                                                                                                         Mainly due to the
                                                                                                         immediately executed
                                                                                                         share payment confirmed
Other non-operating income and expenditure                                                               by the casting company of
                                                       -1,732,271.11
beside for the above items                                                                               -2,150,400 yuan and other
                                                                                                         income - withholding
                                                                                                         personal income tax fee
                                                                                                         refund
Less: Influenced amount of income tax                  17,931,285.99    13,388,887.75    12,239,646.17
Amount of influence of minority interests
（After tax）
Total                                                 142,441,367.02   221,869,493.91   103,570,207.75               --
Note: The main composition is as follows:
(1) The net government subsidy recognized as a result of the relocation compensation of the Shiqiao Road plant is
RMB21,141,733.79 (the government subsidy related to the relocation compensation is RMB37,292,533.79, and
lessening the relocation expenses of RMB16,150,800.00); (2) The government subsidy for the relocation
compensation confirmed by the old factory in Hangzhou is 8,663,283.72 yuan; (3) the funded and confirmed
government subsidy by Zhejiang Gas Turbomachinery Manufacturing Innovation Center is 5,542,854.92 yuan.
Details of other profit and loss items that meet the non-recurring profit and loss definition
□ Applicable√ Not applicable
For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on
information disclosure for Companies Offering their Securities to the Public-Non-recurring Gains and Losses and
its non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on information Disclosure
for Companies offering their securities to the public-non-recurring Gains and losses which have been defined as
recurring gains and losses, it is necessary to explain the reason.
□ Applicable√ Not applicable
None of Non-recurring gain /loss items recorgnized as recurring gain /loss/items as defined by the information
disclosure explanatory Announcement No.1- Non –recurring gain/loss in the report period.
                               Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                   III. Management Discussion & Analysis
I. Industry information of the Company during the reporting period
      As an energy equipment manufacturing enterprise, the Company is greatly affected by the national
macroeconomy and the demand of downstream industries such as petrochemical industry and electric power.
      In 2022, China's economy continued to develop under pressure, its total economic output reached a new
level, and the quality of development steadily improved. According to data released by the National Bureau of
Statistics on January 17, 2023, China's GDP for the whole year of 2022 was 121,020.7 billion yuan, with an
economic total of 121 trillion yuan, an increase of 3.0% over the previous year at constant prices, ranking
second in the world.
      During the reporting period, the operation of China's petrochemical industry was generally stable and
orderly, the oil and gas production maintained steady growth, and the oil and gas exploitation and chemical
investment grew rapidly. According to the data of the National Bureau of Statistics, the petrochemical industry
achieved operating income of 16.56 trillion yuan in 2022, a YOY increase of 14.4%; the total import and export
volume was 1.05 trillion US dollars, a year-on-year increase of 21.7%; the total profit was 1.13 trillion yuan, a
YOY decrease of 2.8%. Although the total profit decreased by more than 30 billion yuan from the previous year,
it remained above one trillion yuan for the second consecutive year, accounting for 13.4% of the total profit of
all scaled industries in the country. Investment in oil and gas extraction, chemical raw materials and chemical
manufacturing increased by 15.5% and 18.8% over the previous year respectively. According to the "Economic
Operation of China's Petroleum and Chemical Industry in 2022" released by the China Petroleum and Chemical
Industry Federation, in recent years, with the completion and operation of a number of refining and chemical
integration units, China's total refining capacity has reached 920 million tons/year, of which the number of
refineries of 10 million tons and above has increased to 32. China's total ethylene production capacity has
reached 46.75 million tons / year, exceeding the total production capacity of 44.82 million tons / year of the
United States, and it has become the world's largest ethylene production capacity. At present, although the
petrochemical industry still has a certain shortage to ethylene, polyethylene and some high-performance new
materials and high-end specialty chemicals, the other major petrochemical products manifest a state of
overcapacity. The era of rapid growth of the petrochemical industry has passed, and the era of surplus has
arrived. However, with the introduction of the latest national industrial policies, the petrochemical industry will
also usher in new opportunities. In 2022, the National Development and Reform Commission, the Ministry of
Industry and Information Technology and other relevant ministries and commissions have successively
promulgated a number of industrial policies closely related to the petrochemical industry, such as the
Implementation Guide for Energy Conservation and Carbon Reduction Transformation and Upgrading in Key
Areas of High Energy Consuming Industries (2022 Edition), the Guiding Opinions on Promoting the High-
quality Development of the Petrochemical and Chemical Industry in the 14th Five-Year Plan, the
Implementation Plan for Carbon Peaking in the Industrial Sector, the Guidelines for the Development and
Construction of Chemical Parks, the Catalogue for the Guidance of Industrial Structure Adjustment, and Notice
on Further Improving the Work Related to the Total Energy Consumption Control of Energy Used by Raw
Materials Not Included in" and so on. These policies have more scientifically and accurately free up certain
space and potential for the high-quality development of the petrochemical industry, especially for new chemical
materials, high-end fine chemicals, medical chemicals, high-purity reagents, etc., which supports high-end
manufacturing and strategic emerging industries, frees up the development space and provides new
opportunities.
                              Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
       During the reporting period, the power industry faced the challenges of supply assurance and
transformation. It actively implemented the new requirements of the "dual carbon" goal, effectively responded
to the impact of extreme weather, and made every effort to ensure power supply for people's livelihood.
According to data released by the China Electricity Council, in 2022, the electricity consumption of the whole
society in the country was 8.64 trillion kilowatt hours, a year-on-year increase of 3.6%. By the end of 2022, the
total installed capacity of power generation in the country was 2.56 billion kilowatts, a YOY increase of 7.8%.
In 2022, the green and low-carbon transformation of the power industry has achieved remarkable results. First,
non-fossil energy power generation accounted for nearly 50% of the total installed capacity. In 2022, the
country's installed power generation capacity was 200 million kilowatts, of which 160 million kilowatts of non-
fossil energy power generation capacity was added, and the put-into-operation capacity of total newly installed
capacity of power generation and non-fossil energy power generation hit a record high. Secondly, the total non-
fossil energy power generation increased by 8.7% year-on-year, and the coal power generation accounted for
nearly 60% of the total power generation. In 2022, the total grid-connected wind power and solar power
generation increased by 16.3% and 30.8% year-on-year respectively. In addition, the power investment
increased by 13.3% YOY, and the non-fossil energy power generation investment accounted for 87.7% of
power supply investment. The coal power gradually changes from the main power to providing a supporting
and regulating power source with both emphasizes on capacity and power. In 2022, China have vigorously
promoted the "three reforms" of coal power energy conservation and carbon reduction transformation,
flexibility transformation and heat supply transformation. The scale of coal power that has been upgraded is
more than 220 million kilowatts, and the clean and low-carbon development of coal power has been
continuously promoted.
The year of 2022 is a key year for the construction and improvement of the "1+N" policy system for carbon
peaking and carbon neutrality. The state has successively issued special plans such as the "14th Five-Year Plan"
Modern Energy System Plan and the "14th Five-Year Plan" Renewable Energy Development Plan, the newly
introduced industrial policies have highlighted the bottom line of safety and new requirements for development,
the "dual carbon" policy is more systematic and coordinated, the priority of energy conservation and carbon
reduction has been further improved, and the supporting mechanism has been improved, providing a solid
impetus for the green and low-carbon transformation. The Company has actively adapted to the general trend of
national energy structure and industrial policy adjustment, accelerated the transformation and upgrading of
enterprises, increased the technological innovation and independent research and development, produced high-
end boutique products, established brand advantages, and continued to develop and grow in the fierce market
competition.
II.Main Business the Company is Engaged in During the Report Period
During the reporting period, the Company's main business and operating model did not undergo significant
changes.As the leading provider of turbo machinery equipment and relevant service in China, our company is
mainly famous for designing and producing rotating turbo machinery like industrial steam turbines and gas
turbines. Our company, one of the major companies drafting the industrial standard in Chinese domestic
industry of industrial steam turbine, has developed into the biggest base to research, develop and produce
industrial steam turbines in China and ranks first among industrial steam turbine producers in terms of the
market occupancy. Holding the principle “our products should be based on clients’ demands” as our business
mode and characteristic, our company designs and produces in accordance with every client’s personal demands
so as to meet personalized needs in engineering projects to the utmost. To realize the fast research and
                               Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
development of our products, our company has adopted the advanced modular design technique and, on the
other hand, introduces information technique to assist the collaborative production to achieve the resource
saving and flexible production. In addition, our company also provides our clients with relevant service such as
engineering programs, general engineering contracting, operation and maintenance of our products as well as
remote control and so on.
 Industrial steam turbines use the steam featuring high temperature and high pressure as their working medium
 so as to convert the thermal energy into mechanical energy to drive various industrial equipments through the
 rotating steam turbines. As for different objects driven by industrial steam turbines, the steam turbines could be
 divided into industrial driving steam turbines and industrial power-generation steam turbines. Mainly driving
 rotating machines like compressors, air blowers, pumps and squeezers, industrial driving steam turbines, as the
 core power part in numerous large-scale industrial equipments, are always introduced into some industries like
 oil refining, chemical engineering, chemical fertilizer, building materials, metallurgy, electric power, light
 industry and environmental production. The industrial power-generation steam turbines, mainly utilized to
 drive electric generators and provide thermal energy, are mainly adopted in private stations, regional projects of
 combined heat and power generation, power generation by recycling waste heat in industrial production, urban
 waster power plants and gas-steam combined cycle power stations in various industrial sectors. The gas
 turbines produced by our company are mainly used by metallurgical industry to recycle the waste heat from the
 blast furnace exhaust to generate power.
In the gas turbine business, the company cooperated with Siemens Energy on SGT-800, an advanced natural gas
turbine with high efficiency, high reliability and low emission, to enter the field of natural gas distributed energy,
with its models gradually expanded to SGT-300, SGT-700 and SGT-2000E. As the general supplier of Siemens
gas turbine in China, the company has carried out gas turbine business from two aspects of project procurement
and integrated implementation, and has the ability of selecting combined cycle projects for distributed energy,
has established the complete system supporting standards and material systems, and can complete the
independent processing and supporting work of equipment other than the gas turbine itself. In the industrial
fields including the cogeneration /combined cycle power plant and the oil & gas project with distributed energy
projects that adopt the small and medium gas turbines, the Company not only can provide gas turbine
equipment for customers, but also can provide customers with complete sets of equipment for gas turbine power
plant and the efficient integrated solutions. Especially, it can provide customers with operational support
services throughout the product life, and this service model is conductive for the establishment of long-term
business cooperation relationships between the company and its customers.
      As the major producer of industrial equipments in China, our company is mainly benefited from the
      following factors in terms of the elements driving our business performance:
condition and investment cycles in different industrial fields. The company further made more specified positions
toward the market for the products, implemented the differentiated marketing strategy, and integrated the business
sectors and tapped into the potential, According to different customers' needs, it has further consolidated the
original market position and broadened the market share in new fields through precise matching and precise
policies.
improves product technical performance and tackles hard issues in the scientific researches of product structure,
core parts, basic design, manufacturing technology, material technology, etc. In addition, basing on clients’
demands, To push forward the intelligence of our products and the development of the integration technology.
                              Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Meantime, the company cooperated with universities, scientific research institutes to build the technological
exchange and cooperation platform.
distributed energy market and enhance the development and utilization of natural gas distributed energy. In the
industrial fields including the cogeneration /combined cycle power plant and the oil & gas project with
distributed energy projects that adopt the small and medium gas turbines, the Company not only can provide gas
turbine equipment for customers, but also can provide customers with complete sets of equipment for gas
turbine power plant and the efficient integrated solutions. The Company established a new energy company to
deeply explore the cogeneration needs of customers in the petrochemical field, and gradually transformed to
engineering, systematization and financialization.
 in the domestic market, The company has maintained a leading market share in the domestic industrial drive.
 The company's products have a high reputation and brand influence in the domestic market.
 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.
 projects, implement dynamic quality supervision; attach importance to products’ after-sales service market,
 integrate existing resources to increase after-sales service initiative, extend product value chain, and promote
 the company’s transformation from manufacturing to service.
III. Analysis On core Competitiveness
Firstly. A complete technical innovation system was established. The Company has under its possession of
national, provincial, and municipal grade technical centers, a doctorial workstation, and an academician
workstation. Close co-operations were carried out with institutions and universities from throughout the country.
As the main drafter of national standard on industrial steam turbine, the Company has the newest technical trend
under its close observation. The Company is now providing nearly 600 different models of steam turbines to the
customers and hold the newest technical system covering the product lines up to 150 MW.Cooperating with
Siemens Energy in the field of gas turbine, our company has been capable of selecting the model of the
combined recycling project of distributed energy. In addition, our company has also been able to finish the
independent processing or supporting work which doesn’t need to depend on the gas turbine machine.
Secondly .The advantages of solutions. The modular design of industrial steam turbine and the production
pattern featuring parallelization production enable our company to give considerations to the cost, date of
delivery and clients’ demands in the process of production in accordance with clients’ personalized designs,
thereby making our company capable of advancing with the development trend of individual requirements. Our
company has always been devoting to the localization in terms of the gas turbine business so as to achieve the
localized one-stop service step by step including the sale, production, installation, debugging, operation,
training and after-sale service. Our company has always been striving to provide clients with the complete
equipment of gas turbine power station and the efficient total solutions.
Thirdly, the Company has established strategic co-operations with main customers in the country. Further
                               Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
marketing approaches were carried on by involving itself in the customers’ value. A sound and steady image has
been set up in the domestic steam turbine market. In the global market, the Company has acquired multiple
important certifications and has established a primary global recognition.
Fourthly, the Company has its complete service providing system. The Company is not only capable to provide
onsite 24-hour service for the Company’s own products, but also accumulated rich experiences in technical
maintenance and reengineering of other manufacturers’ products.
Fifthly, the Company has cultivated a significant advantage in human resources. Great importance has been
attached to construction of work teams with collection of high-end workforce in the areas of research &
development, At the same time, our company values the cooperation with universities. “Zhejiang Technical
Association for Gas Turbines in Equipment Manufacturing Industry” was officially founded jointly by our
company and Zhejiang University and other scientific research institutions to build a new platform for
integration of production and research in terms of gas turbine technology. The Company has cultivated a
significant advantage in human resources. Great importance has been attached to construction of work teams
with collection of high-end workforce in the areas of research & development, designing, technique, testing,
and quality control. An excellent workforce provides a sound foundation to lift quality and services.
IV.Main business analysis
(1)General
     In 2022, the Company achieved an operating income of 5,518.8419 million yuan, a total profit of 707.93.1
the listed company was 379.9554million yuan. Compared with the same period of the previous year, the operati
ng income decreased by 4.66% YOY, the total profit decreased by 14.97% YOY, the net profit decreased by 19.
     In the face of adverse factors such as the decline in market demand, through the decomposition of goals
layer by layer and the joint efforts of all employees, the Company has achieved a very challenging annual
business target. During the reporting period, the Company further consolidated the market, steadily promoted
business form transformation and resource integration, accelerated innovative development and digital
transformation, and strived to promote high-quality development.
     During the reporting period, in the face of the decline in market demand caused by the economic
slowdown, the "dual carbon" policy inhibiting the launch of large-scale projects, and the shrinking market
intensifying the competition situation in the industry, the Company continued to promote the key customer
management system, implemented lean marketing, and strived to achieve breakthroughs. In the field of
industrial drive, the Company has explored and integrated six core areas, covering seven national refining and
chemical bases, further achieved strategic binding with large customers, and successively achieved ideal results
in the new projects of Zhenhai Refining, Hengli New Materials, Ningbo CICC, Ningxia Baofeng and other
                              Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
enterprises, of which Ningxia Baofeng coal-based new material project is the first large-scale coal chemical
project in China after the dual carbon policy, which has obtained a good demonstration effect for the subsequent
development of the coal chemical market. BASF's Zhanjiang Refining and Chemical Integrated Steam Turbine
Island Project EPC project has realized the whole process of EPC services, which is another important attempt
by the Company to explore the content of engineering services, and it’s of historic significance. In the field of
industrial power generation, the Zhejiang Xinzhonggang subcritical reheat back pressure heating project was
successfully put into operation, and the Company's advantages of forwardness of back-pressure units and its
market demonstration effect continued to appear. The undertaking of Shanghai Kangheng Hanchuan waste-to-
energy project marked that the Company has made new breakthroughs in the field of ultra-high-speed, double-
cylinder and double-speed, shaft-discharge waste-to-energy generation, which has benchmark significance in
the waste-to-energy and biomass power generation markets. In overseas markets, the feed pump sector
continued its good momentum and maintained a high winning rate in biding. In addition, the Company actively
explored the overseas driving business in the Middle East market, deeply tapped the potential of the Eastern
European market, and actively participated in the competition of the new energy power generation market in
Southeast Asia.
During the reporting period, the Company continued to promote the integration of resources related to the main
business of high-end manufacturing, and established a new energy company on the basis of the merger and
integration of the original group engineering company, The new energy company strives to build an engineering,
systematic and financial transformation platform, focuses on promoting the second phase of localization of
Siemens gas turbine SGT-800 and the localization of services, and completes the signing of the third bundle
contract with Siemens Energy; Negotiated the expansion of the cooperation model to the SGT-4000F class.thus
to build a platform for the Company to realize engineering, systematization and financial transformation. Taking
the construction of a 12MW distributed rooftop photovoltaic power station in the steam turbine manufacturing
base as a demonstration project, it actively promoted the new energy brand of Hangzhou Steam Turbine, deeply
explored the demand of customers in the petrochemical field for cogeneration of gas turbines and expanded the
Company's influence in subdivided industries. Plus, the Company has initially built a new energy gas turbine
service system based on strong technical support and effective quality management.
     During the reporting period, the Company gradually promoted the cross-vergenceand integration of the
key customer management system and the large service framework. With the six pilot areas of the
corresponding key customer management system as the goal, it built a localized service team and formed a
localized service capability.It promoted the construction of the "dual framework" information system, initially
completed the collection of customer information and in-service unit information in the key customer
management pilot area, started the construction of the existing market customer demand system, and paved the
information channels for the realization of the key customer management system and large service framework.
Through organizational reshaping, the service function was extended to the front-end and to the back-end,
accelerating the construction of the "two-line team" and initially forming the service management capability of
                              Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
the whole life cycle of the product. In the face of the characteristics of "large project, long cycle and many
crossovers" in the service business, the unit service responsibility contracting system was implemented, a new
performance appraisal model was created, and the awareness of active service, up-front service and
responsibility was strengthened, as well as the service efficiency and service value were improved.
     During the reporting period, the Company took optimizing the efficiency of backpressure generator sets,
expanding the efficient utilization technology and application demonstration of low-quality energy, and promoting
the utilization of low-pressure and ultra-low-pressure waste heat steam as the research and development direction;
Relying on the development of key units to expand the subcritical market, it promoted the steam turbine assembly
improvement and process optimization, we carried out high-quality and multi-faceted scientific research to
improve product economy and stability added value. 33 scientific research projects were accepted and completed.
The performance indicators of the "Zhenhai Refining and Chemical 1.2 million tons/year ethylene three-unit
development" project units have reached the international advanced level, and the "research and development of
small and medium-sized blade robot polishing system" has laid the foundation for the Company's comprehensive
promotion of polishing intelligent automation
During the reporting period, the Company promoted the development of independent gas turbines in multi
parallel directions and in a coordinated manner, overcoming the requirements of high-precision measurement in
production and manufacturing and breaking through multiple technical problems in manufacturing and
assembly processes under the mode of research and development, testing, manufacturing and verification.
Meanwhile, the Company orderly promoted the construction of project of annual output of 10 sets of gas turbine
units per year.
     During the reporting period, the Company effectively integrated R&D resources, coordinated internal
technical strength, and reshaped the Hangzhou Steam Turbine scientific and technological innovation system
with high standards. Furthermore, it actively planned the scientific and technological projects and achievement
declaration, strived for external resources by multi-channel, and the "Low-quality Energy Efficient Utilization
Technology and Application" won the second prize of China Machinery Industry Science and Technology
Award; the "Key Technology and Application of Ultra-high-speed Industrial Turbine for Multiworking Syngas
Compressor Drive" won the first prize of Zhejiang Machinery Industry Science and Technology Award.
                               Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
     During the reporting period, the Company continued to deepen data thinking, realized the digitalization of
traditional business, and enabled the data to be the most core resource and asset of the Company. It completed a
total of 249 functional developments and 9integration testing tasks of major business scenarios in ERP projects,
cooperated with the ERP system to complete the transformation of MES, the quality platform, PMIS, OA and
other systems, and it completed more than 90 interface developments, and the ERP system was officially put
into operation on January 6, 2023.
     During the reporting period, the Company continued to promote the construction of digital factories in
manufacturing bases and realized the expansion and optimization of MES system functions. It promoted the
construction of financial informatization in depth, and realized the effective management of the whole life cycle
of reimbursement and the integrated control of industry finance and taxation.
During the reporting period, the Company adhered to the combination of lean concept and specific projects, and
the senior executives assumed leadership in four big lean projects, created a total of 12.4 million yuan of direct
economic benefits throughout the year; It actively adopted the initiative to improve the market-oriented
operation ability, managed the classification of suppliers, optimized the supplier reward and punishment system,
established a new model of quantitative selection of excellent suppliers, and continued to promote the
improvement of supplier self-inspection capabilities; Combined with strategic development and market changes,
the Company continued to improve the effectiveness of system management, ensured the efficient operation of
the five major systems and the management system standards were implemented in place.
During the reporting period, the Company promoted the capital increase and share expansion of Zhongneng
Company and the equity repurchase and capital increase of Ranchuang Company, as well as supported the
corporate reform that was conducive to the development of subsidiaries; It continued to promote the
standardized operation of the listed company and effectively improved the Company's internal management
compliance; The first phase of the human resources improvement project had achieved initial results, and the
corporate culture was fully integrated with the work carriers such as party building publicity, lean production,
human resources, and groups.
                                      Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
  (2) Revenue and cost
                                                                                                                                   In RMB
                                                                                                                            Increase /decrease
                                             Amount            Proportion                Amount              Proportion
  Total operating revenue                   5,518,841,939.82           100%             5,788,288,588.91         100%                  -4.66%
  On Industry
  Boiler and power machine
  manufacture                               5,188,669,908.73                            5,310,076,826.69
  Other                                                            5.98%                                        8.26%                 -30.96%
  On product
  Industrial steam turbine                                        82.79%                                       82.57%                  -4.40%
  Part                                                             8.92%                                        7.95%                   6.92%
  Hydroelectric generating set                                     2.31%                                        1.22%                  80.76%
  Engineering service                                              3.61%                 274,143,219.58         4.74%                 -27.26%
  Other                                                            2.37%                 204,068,542.64         3.52%                 -35.92%
  On Area
  Domestic                                                        96.17%                                       95.75%                  -4.24%
  Overseas                                                         3.83%                                        4.25%                 -14.08%
  Sub-sale model
  Direct selling                                                 100.00%                                      100.00%                  -4.66%
  with Profit over 10%
  √ Applicable □ Not applicable
                                                                                                      In RMB
                                                                                                                                   Increase/decr
                                                                                                              Increase/decreas
                                                                                          Increase/decreas                         ease of gross
                                                                                                                e of business
                                                                               Gross       e of revenue in                           profit rate
                                                                                                                cost over the
                                 Turnover             Operation cost           profit     the same period                          over the same
                                                                                                               same period of
                                                                              rate(%)      of the previous                         period of the
                                                                                                                previous year
                                                                                               year(%)                             previous year
                                                                                                                     (%)
                                                                                                                                        (%)
On Industry
Boiler and power
machine manufacture          5,188,669,908.73
On product
Industrial steam
turbine                      4,569,144,871.56
On Area
Domestic                                                                      27.55%               -4.24%                 -2.14%         -1.55%
Sub-sale model
Direct selling                                                                27.02%               -4.66%                 -1.58%         -2.29%
                                     Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main
business based on latest on year’s scope of period-end.
□ Applicable √ Not applicable
√ Yes □ No
        Business                                                                                                 Change over same
                             Items                   Unit               2022                     2021
                                                                                                                  period last year
     categories
                     Sales                    Set/package                      430.00                   425.00               1.18%
   Steam turbine     Output                   Set/package                      387.00                   420.00              -7.86%
                     Inventory                Set/package                      141.00                   184.00             -23.37%
                     Sales                    Set/package                        9.00                     5.00              80.00%
    Gas turbine,
                     Output                   Set/package                       10.00                     5.00            100.00%
    compressor
                     Inventory                Set/package                        1.00                     0.00
                     Sales                    Set/package                        7.00                     7.00               0.00%
 Compressor          Output                   Set/package                        7.00                     8.00             -12.50%
                     Inventory                Set/package                        8.00                     8.00               0.00%
                     Sales                    Set/package                      120.00                   118.00               1.69%
 Electric
 generator           Output                   Set/package                      116.00                   126.00              -7.94%
                     Inventory                Set/package                       69.00                    73.00              -5.48%
Reasons for y-o-y relevant data with over 30% changes
√ Applicable □ Not applicable
During the reporting period, with the adjustment of national industrial policies, the demand for small and
medium-sized gas turbines in distributed natural gas power generation and enterprise self-owned power plants
increased, and the Company seized the market opportunity to achieve a substantial increase in gas turbine
production and sales.
□Applicable √ Not applicable
Products category
                                                                                                                         In RMB
   Products                                          Proportion in                             Proportion in     Increase/Decrease
   category        Items                                                                                                (%)
                                  Amount             the operating       Amount                the operating
                                                       costs (%)                                 costs (%)
Industrial steam
                   ——         3,376,818,026.29              83.85%    3,369,080,526.65               82.33%                   0.23%
turbine
Part               ——            315,664,695.86              7.84%      268,252,260.97                  6.56%                17.67%
Hydroelectric
                   ——             94,839,475.22              2.35%       72,463,945.41                  1.77%                30.88%
generating set
Engineering
                   ——            133,770,379.97              3.32%      200,313,316.50                  4.90%               -33.22%
service
Other              ——            106,322,225.92              2.64%      181,845,443.16                  4.44%               -41.53%
Subtotal                                                    100.00%                                 100.00%                  -1.58%
                                     Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
√ Yes □ No
Please refer to Section VI(7) of this report for details.Explanation on the changes in the scope of the
consolidated statement compared with the financial report of the previous year.
Company’s Report Period
□ Applicable √ Not applicable
Information of Main sales customers
Total sales amount to top 5 customers (Yuan)                                                            1,603,991,262.93
Proportion of sales to top 5 customers in the annual sales(%)                                                      29.06%
Proportion of the sales volume to the top five customers in the total sales to the related
parties in the year
Information of the Company’s top 5 sales customers
               No                              Name                        Amount（RMB）                Proportion
              Total                              --                                1,603,991,262.93                29.06%
Other notes
□ Applicable √ Not applicable
Principal suppliers
Total purchase of top 5 Suppliers（Yuan）                                                                   491,040,274.23
Percentage of total purchase of top 5 suppliers In total annual
purchase(%)
Proportion of purchase amount from the top 5 suppliers in the
total purchase amount from the related parties in the year
Information about the top 5 suppliers
               No                              Name                        Amount（RMB）                Proportion
              Total                              --                                  491,040,274.23                12.95%
Other notes
□ Applicable √ Not applicable
                                    Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
(3)Expenses
                                                                                                                              In RMB
                                                                                   Increase/Decr
                                                                                      ease(%)
Sale expenses                      221,489,523.60             202,868,557.82               9.18%      No major changes
    Administration
       expenses
                                                                                                      Mainly due to the net exchange
                                                                                                      gain in the current period, and
Financial expenses                  -29,296,397.92               9,748,924.22          -400.51%
                                                                                                      there’s net exchange loss in the
                                                                                                      previous period
R & D cost                         284,239,883.04             350,216,635.11            -18.84%       No major changes
(4) Research and Development
√ Applicable □ Not applicable
                                                                                                                 Expected impact on the
 Name of main
                          Project purpose         Project progress              Goal to be achieved             future development of the
 R&D project
                                                                                                                        Company
                     Improve the technical
                     reserve of the Company's
                                                                                                                Improve the steam intake
                     model, which can
                                                                      Developed the EUNG80/63, the              parameters, reduce heat
Subcritical          increase power generation
                                                  The project is      largest subcritical model at              consumption, effectively
parameter            and reduce energy
                                                  under               present, and developed a                  supplement the
EUNG80/63            consumption, and it’s in
                                                  development as      subcritical U80 cylinder and U80          Company's subcritical
steam turbine        line with the energy
                                                  planned.            inner cylinder module that meet           series, and enhance the
development          conservation and
                                                                      the needs of large pumping flow.          competitiveness of the
                     emission reduction
                                                                                                                Company's products
                     policies advocated by the
                     state.
                                                                                                                Relying on this project,
                                                                                                                the influence of wet
                     The Company expanded
Development of                                                                                                  steam on the efficiency of
                     the African market by
steam turbines                                                                                                  steam turbine, static and
                     developing the                                   Developed the saturated steam
for saturated                                                                                                   moving sleeve erosion,
                     NK32/36/32 saturated         The project is      condensation turbines
steam                                                                                                           life evaluation, etc. are
                     steam condensation           under               NK32/36/32 and the atmospheric
condensation                                                                                                    studied, thus to provide
                     turbines and the             development as      pressure intake high back pressure
and high                                                                                                        reference for the design
                     NHG32/20 atmospheric         planned.            exhaust steam turbine type
backpressure                                                                                                    and development of units
                     pressure intake high back                        NHG32/20.
power                                                                                                           with similar parameters
                     pressure exhaust steam
generation                                                                                                      in the future and enhance
                     turbines.
                                                                                                                the competitiveness of
                                                                                                                products
                     To conquer the                                                                             Meet the needs of the
                     development of the                                                                         market, conform to the
                                                  At present, the
                     industrial steam turbine                         Newly developed H40 two-half              market development
                                                  unit has
                     for high-power and high-                         inner cylinder inlet chamber,             trend, broaden and
Development of                                    completed the
                     speed reaction large-scale                       SSK50 standard low-pressure               supplement the
the HNKS40/50                                     empty load test
                     syngas field, meet the                           level, and completed the                  Company's design
steam turbine for                                 run in the plant,
                     market development                               development and manufacturing             system, steadily enhance
large syngas                                      and the design
                     trend, further improve the                       of industrial steam turbines for          the Company's strength,
compressors                                       verification is
                     Company's design                                 high-power and high-speed                 and maintain a
                                                  completed at the
                     system, and strengthen                           reaction large-scale syngas fields.       technological advantage
                                                  user's site.
                     the Company's                                                                              in the competition of
                     competitiveness in the                                                                     projects in this field.
                                        Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                        syngas field.
                                                                                                                       Improve the Company's
                                                                             Through CNAS certification, the
                        Passing CNAS                                                                                   laboratory level, have the
                                                        A site review        Company's laboratory has the
                        accreditation, improves                                                                        technical ability to carry
                                                        was conducted in     ability to carry out testing services
                        the level of laboratory                                                                        out testing services in
Laboratory                                              December 2022,       in accordance with international
                        competence, indicating                                                                         accordance with
competence                                              and it’s currently   accreditation standards, and the
                        that the laboratory has the                                                                    internationally
enhancement                                             in the process of    reports issued are recognized by
                        technical ability to carry                                                                     recognized standards, and
and CNAS                                                certification.       international accreditation bodies,
                        out testing services in                                                                        be able to better serve
certification                                           With CNAS            showing and ensuring the
                        accordance with                                                                                international customers
                                                        certified in         authenticity of the test process to
                        internationally recognized                                                                     and obtain the
                                                        March 2023.          customers and improving the trust
                        standards.                                                                                     recognition from
                                                                             of customers.
                                                                                                                       international customers.
Company's research and development personnel situation
  Number of Research and
    Development persons                                             763                               762                              0.13%
          (persons)
 Proportion of Research and
    Development persons
Academic structure of R&D personnel
Bachelor                                                            211                               218                             -3.21%
Master                                                              439                               426                              3.05%
Other                                                               113                               118                             -4.24%
Age composition of R&D personnel
Under 30 years old                                                  114                                88                             29.55%
Over 40 years old                                                   314                               273                             15.02%
The Company's R & D investment situation
      Amount of Research and
  Development Investment (Yuan)
    Proportion of Research and
Development Investment of Operation                               5.15%                             6.05%                                 -0.90%
              Revenue
      Amount of Research and
      Development Investment                                        0.00                              0.00                                  0.00%
        Capitalization (Yuan)
Proportion of Capitalization Research
  and Development Investment of
    Research and Development
             Investment
Reasons and influence of significant changes in R&D personnel composition of the Company
□ Applicable √Not applicable
The Reason of the Prominent Change in Total Amount of Research and Development Input Occupying the
Business Income Year on Year
□ Applicable √Not applicable
Reasons for the drastic change of capitalization rate of R&D investment and its rationality explanation
□ Applicable √Not applicable
（5）Cash Flow
                                                                                                                                    In RMB
                Items                                  2022                            2021                      Increase/Decrease(%)
Subtotal of cash inflow received                      4,728,700,324.82                 5,423,863,579.31                              -12.82%
                                    Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
from operation activities
Subtotal of cash outflow received
from operation activities
Net cash flow arising from
operating activities
Subtotal of cash inflow received
from investing activities
Subtotal of cash outflow for
investment activities
Net cash flow arising from
investment activities
Subtotal cash inflow received
from financing activities
Subtotal cash outflow for
financing activities
Net cash flow arising from
                                              -428,138,043.52                  -258,563,934.06                             -65.58%
financing activities
Net increase in cash and cash
equivalents
Notes to the year-on-year change of the relevant data
√Applicable □ Not applicable
                                                                                                                           In RMB
       Items                2022               2021            Increase/Decrease(%)                                Reason
 Net cash
 generated from                                                                           Mainly due to various taxes and fees paid decreased year-
 /used in operating                                                                       on-year.
 activities
                                                                                          Mainly due to the increase in the net amount of bank wea
 Net cash flow
                                                                                          lth management cash in the current period, and the increa
 generated by          412,410,737.07     -193,032,917.99                      313.65%
                                                                                          se in cash paid for the acquisition of multiple companies
 investment
                                                                                          under the same control in the previous period.
                                                                                          Mainly due to the cash received from bank loans decreas
 Net cash flow
                                                                                          ed year-on-
 generated by         -428,138,043.52     -258,563,934.06                      -65.58%
                                                                                          year, and the cash paid for distribution of dividends, profi
 financing
                                                                                          ts or interest payments increased year-on-year.
 Net increase of
 cash and cash         337,489,433.69     -382,815,680.03                      188.16%    Based on the reasons for the above changes
 equivalents
Reasons of major difference between the cash flow of operation activity in report period and net profit of the
Company
√Applicable □Not applicable
Mainly due to the payment of material purchases in the previous period in this period.
V.Analysis of Non-core Business
√ Applicable □Not applicable
                                                                                                                        In RMB
                                                                                                                              Sustain
                                              Proportion in                                                                    able
                          Amount                                                  Explanation of cause
                                               total profit                                                                   (yes or
                                                                                                                                no)
                                                                Mainly due to the recognition of relocation compensation
Other income                73,730,674.31             10.41%
                                                                and government subsidies.
Investment                 135,599,082.88             19.15%    Mainly due to recognition of the dividend distributed
                                     Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
income                                                         from Hangzhou Bank.
Non-operating                                                  mainly due to the income from project breach of agreeme
                                                               nt signed with Shenyang Turbine Machinery Co., Ltd.
income
Non-operating
expenses
VI.Condition of Asset and Liabilities
(1)Condition of Asset Causing Significant Change
                                                                                                                     In RMB
                            End of 2022                          End of 2021
                                     Proportion in                        Proportion in       Proportion          Notes to the
                      Amount            the total          Amount            the total     increase/decrease   significant change
                                       assets(%)                            assets(%)
Monetary fund     1,954,980,787.90         12.72%      1,622,883,247.79           9.94%               2.78%
Accounts
receivable
Contract assets     587,719,735.46            3.82%      583,026,649.99          3.57%                0.25%
Inventories       2,322,461,286.52           15.11%    3,041,643,747.35         18.64%               -3.53%
Investment
real estate
Long-term
  equity                                      0.00%                              0.00%                0.00%
  investment
Fixed assets      1,926,594,610.89           12.53%    1,658,423,191.83         10.16%                2.37%
Construction
in process
Use right
assets
Short-term
borrowing
Contract
liabilities
Long-term
borrowing
Lease
liabilities
Overseas assets account for a relatively high proportion.
□ Applicable √ Not applicable
(2)Asset and Liabilities Measured by Fair Value
√Applicable □ Not applicable
                                                                                                                     In RMB
                                                                 Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                                  Gain/Loss on fair                             Impairment
                                                                         Cumulative fair                           Purchased amount
                                                  value change in                              provisions in                               Sold amount in the    Other
           Items               Opening amount                             value change                              in the reporting                                         Closing amount
                                                   the reporting                               the reporting                                reporting period    changes
                                                                       recorded into equity                              period
                                                       period                                     period
Financial assets
assets（Excluding
Derivative financial
assets）
Investment
financial assets                 14,792,533.96         1,168,000.00           5,712,000.00                                             -       10,425,760.74                    5,534,773.22
Subtotal of financial assets
Total
Financial Liability                        0.00               0.00                     0.00              0.00                   0.00                    0.00          0.00               0.00
   Did great change take place in measurement of the principal assets in the reporting period ?
   □ Yes √ No
   (3) Restricted asset rights as of the end of this Reporting Period
                                                                                                       In RMB
                       Items                           End of Book value                                 Reason
   Monetary fund                                                                       Utilized for issuing bank acceptance bill
                                                                                       and L/G
   Notes receivable                                                    11,130,774.54   Utilized for issuing bank acceptance bill
   Financing receivable                                               143,516,310.23   Utilized for issuing bank acceptance bill
   Fixed assets                                                                        Utilized for pledging to obtain the bank
                                                                                       loan
   Intangible assets                                                                   Utilized for pledging to obtain the bank
                                                                                       loan
   Total                                                              446,676,135.02
                                                      Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
VII. Investment situation
√ Applicable □ Not applicable
  Investment Amount in 2022(Yuan)      Investment Amount in 2022(Yuan)                   Change rate
□ Applicable√ Not applicable
                                                                             Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
    √ Applicable □ Not applicable
                                                                                                                                                                                                            In RMB
                                                                                                                                                        Accrued
                                                                                                                                                                       Reasons for
                                                                                        Accrued Actual                                                  Realized
                                                   Industry          Investment                                                                                        not Reaching
                                   Fixed                                                Investment                            Project                   Income up
    Project      Investment                        involved in       amount in this                               Capital                Anticipated                   the Planned        Disclosure       Disclosure
                                   investments                                          Amount up to the                       schedul                  to the End                           date            Index
    name          method                           investment        reporting                                    Source                 income                        Schedule and
                                   or not                                               End of Reporting                       e                        of
                                                   projects          period                                                                                            Anticipated
                                                                                        Period                                                          Reporting
                                                                                                                                                                       Income
                                                                                                                                                        Period
                                                   General
    New
                                                                                                                  Self
    plant        Self-built        Yes             equipment           5,106,474.88       1,468,796,468.94                     96.05%                                  N/A
                                                                                                                  fund
    project
                                                   manufacturing
    Annual
    output
    of 10                                          General
    sets of                                                                                                       Self
                 Self-built        Yes             equipment          81,700,278.09          81,700,278.09                     16.34%                                  N/A
    gas                                                                                                           fund
    turbine                                        manufacturing
    unit
    project
    Total                --              --                --         86,806,752.97       1,550,496,747.03          --             --                                          --                --            --
    （1）Securities investment
    √ Applicable □ Not applicable
                                                                                                                                                                                                      In RMB
                                                                Mode of          Book value       Changes in             Cumulative      Purchase        Sale      Gain/loss        Book value
                                Stock         Initial
Security      Security                                          accounting      balance at the    fair value of           fair value     amount in     amount        of the         balance at
                              Abbreviatio     investment                                                                                                                                              Accounting items
category       code                                             measuremen     beginning of the   the this               changes in       the this      in the     reporting        the end of
                                  n:          cost
                                                                t              reporting period   period                    equity         period        this       period              the
                                                          Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                                                                                                             period           reporting
                                                                                                                                                period
Domestic
and                 Hangzhou   390,954,040.0                3,485,440,140.9    70,687,553.   3,165,173,654                                    3,556,127,6
foreign             Bank                   0                              2            56              .48                                          94.48
stocks
Domestic
and                 LUTIANH                                                                                                                   1,998,737.1
foreign             UA                                                                                                                                  8
stocks
Total                                                --                                                               0.00      0.00   0.00                                      --
                                    Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
（2）Investment in Derivatives
□ Applicable√ Not applicable
The Company had no investment in derivatives in the reporting period.
□ Applicable√ Not applicable
None
VIII. Sales of major assets and equity
(1) Sales of major assets
□ Applicable √ Not applicable
The Company had no sales of major assets in the reporting period.
(2)Sales of major equity
□ Applicable √ Not applicable
IX. Analysis of the Main Share Holding Companies and Share Participating Companies
√ Applicable □ Not applicable
Situation of Main Subsidiaries and the Joint-stock Company with over 10% net profit influencing to the Company
                                                                                                        In RMB
 Compan                   Main           Registered                                                    Operating
              Type                                     Total assets    Net assets      Turnover                      Net Profit
 y name                  business         capital                                                        profit
Auxiliar                                               749,260,497.   328,860,509     588,105,536.     54,458,589.   48,525,181
y           Subsidiar   Manufactur       80,000,000.            26            .89              05               64          .12
Machine     ies         ing                      00
Co.
Package                                                298,406,581.   113,958,943     234,634,434.     21,192,515.   18,789,173
            Subsidiar   Commerce         51,000,000.
d Tech.                                                         81            .66              19              71           .15
            ies         & trade                  00
Co.
Machine     Subsidiar   Manufactur       30,000,000.   368,898,264.   232,313,354     306,871,315.     113,160,514   95,410,281
ry Co.      ies         ing                      00             04            .03              89              .62          .94
Turbine     Subsidiar   Commerce         20,000,000.   124,783,654.    61,653,386.    81,316,737.7      267,165.41            -
Co.         ies         & trade                  00             48             70                8                   597,635.36
Zhongne                                                1,849,173,97   300,943,960     1,477,489,20
ng          Subsidiar   Manufactur      120,000,000            8.57           .98             8.21
Compan      ies         ing                     .00                                                    74,709,654.   78,762,807
y                                                                                                              79           .47
Casting                                                649,993,684.   304,933,494     439,244,605.     313,776.95     84,265.32
            Subsidiar   Manufactur       29,500,000.
Compan                                                          12            .36              73
            ies         ing                      00
y
New                                                    627,318,175.   190,991,153     248,130,833.     15,756,139.   10,390,117
Energy      Subsidiar   Constructio     500,000,000             46            .16              84              96           .84
Compan      ies         n business              .00
y
Sales                                                  123,092,838.    56,616,508.    158,482,208.     17,170,470.   12,948,418
            Subsidiar   Transportat      5,000,000.0
Compan                                                          36             61              91              28           .37
            ies         ion industry               0
y
China                                                  3,102,064.40    2,877,219.1    2,974,643.71      300,605.44   293,022.52
Mechani                                                                          0
cal         Subsidiar   Commerce         1,000,000.0
Institute   ies         & trade                    0
Compan
y
Ranchua                                                36,613,212.9    25,794,965.              0.00     83,718.85    83,328.86
ng          Subsidiar   Commerce         25,000,000.              5            88
Compan      ies         & trade                  00
y
Subsidiaries obtained or disposed in the reporting period
√ Applicable □Not applicable
                               Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                                           Means of acquisition and disposal of      Impact on overall production,
                    Company name
                                                          subsidiaries during the reporting period    operation and performance
Hangzhou Zhongneng SteamTurbine Power (Indonesia) Co.,
                                                                    Agreement transfer                  No significant impact
Ltd.
Hangzhou SteamTurbine Power Group Equipment Packaged
                                                                          M &A                          No significant impact
Engineering Co., Ltd.
Note
X. Structured subject situation controlled by the company
□ Applicable √ Not applicable
XI.Prospect for future development of the Company
       (I) Development strategy and business plan for 2023
       In 2023, in the face of the continuous impact of the "dual carbon" policy, the significant adjustment of the
energy pattern, and the increasingly fierce competition in the industry, the Company will aim the strategic goals of
the "14th Five-Year Plan", continue to promote the transformation of business form, create new competitive
advantages guided by customer needs, and take lean management and cultural construction as the starting point to
improve the basis management level.
       The Company will scientifically formulate the strategic performance targets for 2023, and do well in
tracking management, performance measurement and quantitative analysis of monthly strategic performance
indicators. It shall start from the objective actual situation, comprehensively analyze the changes in the Company's
internal and external operating environment, benchmark the four "first-class", reference the 9 strategic measures,
soundly do well in the mid-term assessment and mid-term adjustment of the "14th Five-Year Plan" strategic plan,
map out the 2023-2025 three-year action plan, and comprehensively handle the relationship between strategy and
tactics.
       By seizing the historical opportunity and taking the comprehensive reform of regional state-owned assets
and state-owned enterprises as an opportunity, it will promote the deepening reform of Hangzhou Steam Turbine.
All subsidiaries shall also grasp the relevant policies of SOE reform in a timely manner, fully grasp the historical
opportunity of the new round of SOE deepening reform, and find a reform path that conforms to the enterprise's
own development model.
       Focus on the competition for strategic markets and the development of potential markets, maintain the
dominant position in the industrial-driven market, and integrate resources to stabilize the market share of
industrial power generation. It is necessary to adapt to market changes, concentrate advantageous resources to
improve the joint promotion ability of the sales end and the service side, open up the business connection between
                                 Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
the service side and the contract execution end, and pave the way for the whole life cycle management. Seize the
market opportunities of ethylene, medium and large coal chemical industry and water supply pumps, continue the
good momentum of winning new energy projects, expand the marketing of complete sets of projects, and strive to
achieve new breakthroughs in business.
     Fully tap the market potential of conventional power engineering business transformation projects, focus on
expanding the general contracting projects in industries such as waste heat utilization in steel, building materials
and other industries, and the air compressor stations, and choose the opportunity to wedge in non-traditional
industries such as ORC waste heat utilization. Gradually expand multi-energy cogeneration and integrate smart
energy management in industrial parks, and create comprehensive smart energy system solutions with Hangzhou
steam turbine characteristics.
     The group promotes the big service model, starts from the engineering and large service business, deeply
integrates the company's internal service resources, and concentrates on expanding the service market. It is
necessary to focus on the development of new energy technology and market trends, give play to the synergy of
investment, project general contracting and operation and maintenance, and expand and strengthen the
engineering service business. Cultivate a localized service team with good service awareness and strong service
awareness, and vigorously promote "long-term" services and customized services based on existing units and new
contract units. Plus, it will carry out the construction of investment and financing platforms, select projects in a
timely manner to implement investment and management work, and effectively play the functions of investment
platforms.
     It will focus on the R&D and expansion of steam turbines for large-scale ethylene plants, the in-depth
research and promotion of subcritical units, and the development and layout of thermoelectric market products.
Effectively promote basic research and development work such as "standardization of large drive sections",
improvement of front supports of small and medium-sized units, development of medium-pressure torsion blades,
steam turbine assembly 2.0, steam turbine operation and maintenance model construction and performance
monitoring. Attach importance to the research on unit efficiency and reliability, focus on the application and
product development of torsion blade technology with a maximum exhaust area of 6.3 square meters, complete
the development of 110,000-class air separation units, and promote the research and development and application
demonstration of high-efficiency medium-pressure torsion blades.
     It will accelerate the digitalization of business procedures, business processes and integrated resources,
promote the second phase of ERP project in a timely manner, and accelerate the construction of digital factories in
manufacturing bases. Driven by data, through the implementation and interconnection of the system platform, it
will strengthen the process continuity and information sharing, thus to promote the Company's product innovation
                               Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
digitalization, intelligent production and operation, smart user service, and ecological transformation and
upgrading of the industrial system.
     On the basis of consolidating lean achievements, it will focus on the three dimensions of delivery time, cost
and quality, integrate lean work into sales, design, production, procurement, service and other links, and promote
the lean management of full value chain. With the improvement of supply chain collaboration ability as the
starting point, and the assessment mechanism as the means, we will continue to promote the flexible output
mechanism oriented by user needs. Furthermore, it will strengthen the execution of comprehensive budget by
various business departments and improve the Company's comprehensive budget management ability, promote
the second phase of the Company's human resources improvement project, and form the "2023-2028 Medium and
Long-term Human Resources Allocation Planning Report" according to the requirements of the Company's
strategic transformation. On the basis of summarizing the implementation results of corporate culture in 2019-
to 2025, and comprehensively enhance the soft power of corporate culture.
     (II) Risk factors that may be faced
     In view of the overcapacity of the domestic steam turbine industry, the market competition has intensified.
The proposal of the national "carbon peaking and carbon neutrality" goal will have a far-reaching impact on the
high-emission industries represented by petrochemicals, steel, electric power, building materials, etc., and the
Company's product sales will be further impacted. The Company's steam turbine product structure may be
adjusted according to market demand, and there is a risk of fluctuation in the gross profit margin of the product.
The Company will rely on technological innovation, highlight the advantages of core technology, expand
marketing channels, innovate marketing work mode, improve product quality, enhance end service capabilities,
strive to improve product added value, actively tap potential demand, and actively respond to and eliminate
market risks.
     With the increase in the number of assemble units and large units, the expansion of the proportion of short-
term delivery projects, and the multiple factors such as major agreement changes and the increase in the
procurement cycle of imported parts affecting the output of units, the problem of uneven production of the
Company will become more prominent, and the cost and risk of the Company's performance of the contract will
also be increased. The Company will continue to promote the flexible output mechanism oriented to user needs,
further strengthen the ability of production and marketing, improve the speed and level of enterprise response to
the market, and control the risk of contract execution.
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     With the decline operation of customers in some downstream industries and the increase in investment risks
of projects, there are persistent risks in the recovery of the Company's accounts receivable, and the average
account age tends to increase, which will have a great impact on the Company's business performance. The
Company will implement customer credit management, strengthen contract signing and performance risk control,
increase the assessment of accounts receivable, and reduce the adverse impact of overdue accounts receivable.
     The expansion of the Company's international procurement and international sales business makes the
Company's balance of payments affected by exchange rate fluctuations, and there is a certain risk of exchange loss.
With the increase of the two-way fluctuation range of the RMB exchange rate, the uncertainty of exchange gains
and losses has increased. The company will refer to the exchange rate fluctuation cycle and adopt appropriate
exchange rate risk management tools to minimize exchange losses.
     As domestic raw materials and labor costs continue to rise, while the prices of industrial products continue
to decline, the product profitability is facing a severe test. The Company will strive to improve internal
management, improve project cost management capabilities, reduce procurement costs and operation and
management costs, improve operational efficiency, and strive to eliminate the risk of declining profitability.
     During the "14th Five-Year Plan" period, the Company will continue to implement the "going global"
strategy, further expand overseas target markets, and enhance the Company's share and influence in the
international market. However, at present, the overseas markets are affected by geopolitical conflicts, changes in
internal political and economic situations and trade barrier policies, and there is great uncertainty in the
implementation of overseas market strategies. The Company will increase market research efforts, actively
demonstrate the countermeasures, and explore the path of localized business development.
XII. Particulars about researches, visits and interviews received in this reporting period
□ Applicable √ Not applicable
No reception of research, communication and interview occurred in the period
                               Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                            IV. Corporate Governance
I. General situation
(1) Standardized operation of corporate governance structure
 In accordance with the "company law" provisions, The Company has its executive, decision making and
supervisory bodies operated strictly according to the Articles of Association, Shareholders’ Meeting Criteria,
Board Meeting Criteria, and Supervisory Committee Criteria. Meetings were held by legal procedures, Corporate
governance in accordance with the relevant provisions of the laws and regulations of China Securities Regulatory
Commission and the Shenzhen Stock Exchange.During the reporting period, the company organized 10 meetings
of the board of directors, 6 meetings of the board of supervisors, 4 meetings of shareholders, 5 meetings of special
committees of the board of directors and 2 annual report communication Meetings. In strict accordance with the
Articles of Association of the Company and relevant laws and regulations, the Company deliberates and makes
decisions on major business matters. The Company insists on integrating the Party building work into the
economic work. When making administrative decisions, the opinions of the Party Committee meeting shall be
heard in advance, and the powers and responsibilities of the Party committee meeting, the general manager's
office meeting, the board of directors, the board of supervisors and the shareholders' meeting shall be clarified.
  During the reporting period, the Company reviewed its periodic reports, internal control self-assessment reports,
appointment of accounting firms, foreign investment, guarantees, related party transactions, bank credit loans,
entrusted wealth management, asset impairment and write-off, absorption and merger of steam turbine heavy
industries, equity incentives, acquisition of equity of subsidiaries of the Group and other important business and
governance activities, went through the examination and approval procedures for important matters, supervised
the Company's business activities and ensured its compliance.
（2）Effectiveness of organization
The Board of Directors is the executive body of the decisions made by the Shareholders’ Meeting. The Board is
also responsible to establish and improve the internal control system of the Company, and make it works
effectively. Chairman of the Board is the caller of the Board. Strategy, Investment, Remuneration, and Auditing
Committees were established within the Board, and were supporting the decision-making of the Board. The
Supervisory Committee is responsible to report to the Shareholders’ Meeting and supervise the legal performance
of duties of directors, managers, and executives. The management is responsible to the Board, and take charge of
daily operation of the Company. Functional departments were deployed according to the needs of business with
clear responsibilities.
（3）Basis for material decisions
  The Company has setup practical rules for all material aspects of management, including but not limited to,
external investment, trusteeship, related transactions, information disclosure, investors’ relationship, information
insider, executive shares, and management of controlled subsidiaries. These documents of rules were constantly
revised and improved to maintain effectiveness upon changing situation. In the report period,
  According to the Company Law of the People's Republic of China, and other relevant regulations of China
Securities Regulatory Commission and Shenzhen Stock Exchange, and in combination with the actual situation of
the Company, it revised the Articles of Association and the Remuneration Management System for Directors and
Senior Managers.
（4）Establishing of internal control system
The Company kept close observation on the whole business process identifying risk points according to Enterprise
Internal Control Standards, Internal Control Guidelines, Internal Assessment Guidelines, and Internal Control
Guidelines for PLCs issued by Shenzhen Stock Exchange. Effective mechanisms on risk control and internal
auditing were conducted. The Auditing Committee of the Board was responsible to supervise the internal control
practices.
（5）Corporate Information Disclosure and Transparency
The company attaches great importance to the information disclosure and the investor relations management, and
it has designated Securities Times, Hong Kong Commercial Daily and http://www.cninfo.com.cn as its statutory
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information disclosure media and website. With fair treatment to all investors, the company in a timely manner
discloses the information with truthfulness, accuracy and completeness, which well ensures the transparency of
the company and the legitimate rights and interests of all shareholders.
Does there exist any difference in compliance with the corporate governance , the PRC Company Law and the
relevant provisions of CSRC,
□ Yes √No
There exist no difference in compliance with the corporate governance , the PRC Company Law and the relevant
provisions of CSRC.
II. Independence and Completeness in business, personnel , assets, organization and finance
The Company kept independence and separated with holding shareholders on the aspects of business, human
resource, capital, organization, and accounting. And the Company established independent and complete business
operating systems.
The Company’s majors of design, manufacture, sale business of industrial steam turbine was independent from the
holding company (Hangzhou Steam Turbine Power Group).（
The Company kept independence with the holding shareholders on the aspects of human resource and
remuneration management. the Company’s management was employed and gotten salary exclusively in the
Company instead of any management duty in the holding-share share holders except the duty of chairman of the
Board. The Company’s accountant shad no part-time job in their parent company or related companies.
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.
The Company kept total independence from the controlling shareholder on the organization configuration. The
Company owned separate and independent manufacturing, supplying, and sales system, there was no horizontal
competition with the controlling shareholder, and the Company owned independent management and operation
systems. The Company signed related trading agreements with the subsidiaries of the share-holding company. The
Company’s intermediate managers are employed by the Company’s executives, and was evaluated under the
economic responsibility system.
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.
The company has been approved by Zhejiang Provincial Department of Justice to carry out corporate lawyer work,
and perform legal affairs duties according to relevant regulations such as Opinions on Implementing the Legal
Adviser System and the Lawyers System of Public Lawyers Company and Measures for the Administration of
Legal Advisers in State-owned Enterprises. Along with Zhejiang Tianche Law Firm – the public legal consultancy
employed by the Company, the Department aims to regulate the legal affairs and day-to-day administrations .
III. Competition situations of the industry
□ Applicable √ Not applicable
IV. Annual General Meeting and Extraordinary Shareholders’ Meetings in the Reporting Period
       Sessions                  Type                Investor           Meeting       Disclosure   Disclosure index
                                  Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                                  participation ratio       Date              date
Shareholders’ Meeting 2022                                               January 7,    January 8,     Announcement
                              Shareholders’                    67.37%
                               Meeting
Shareholders’ Meeting 2022                                                             February 19,   Announcement
                              Shareholders’                    68.46%    18,
                               Meeting
meeting                       Meeting
Shareholders’ Meeting 2022                                               July                         Announcement
                              Shareholders’                    68.56%
                                                                                       July 26,2022
                                                                                                      No.:2022-66
                               Meeting
□ Applicable √ Not applicable
                                                               Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
     V. Information about Directors, Supervisors and Senior Executives
     (1)Basic situation
                                                                                                                            Number     Number
                                                                                                                               of          of                  Number of
                                                                                                                Shares
                                                                                                                             shares     shares                 shares held    Reasons for
                                                                                                              held at the                           Other
                                     Office                                                  Expiry date of                 increase   reduced                at the end of   increase or
    Name              Positions                  Sex    Age      Starting date of tenure                         year-                            changes(s
                                     status                                                     tenure                      d in the     in the                    the        decrease of
                                                                                                              begin(shar                            hares)
                                                                                                                             current    current               period(share      shares
                                                                                                                  e)                                                s)
                                                                                                                             period    period(s
                                                                                                                            (shares)     hares
Zheng
           Board chairman           In office   Male      58     May 18,2016               December 9,2022       250,000     75,000                               325,000     Dividend
Bin
Ye                                                                                                                                                                            Dividend
           Director, GM             In office   Male      54     June 19,2004              December 9,2022       250,000     75,000                               325,000
Zhong
Yang
Yongmi     Vice Chairman            In office   Male      58     June 24,2013              December 9,2022       200,000     60,000                               260,000     Dividend
ng
Wang                                                                                                                                                                          Dividend
           Director, Deputy GM      In office   Male      50     June 30,2017              December 9,2022       200,000     60,000                               260,000
Gang
Pan
           Director                 In office   Male      44     May 10,2021               December 9,2022             0           0                                     0
Xiaohui
Gu                                  Dimissi
           Independent Director                 Male      66     May 18,2016               July 25,2022                0           0                                     0
Xinjian                             on
Chen
                                    Dimissi     Femal
Danhon       Independent Director                         58     May 18,2016               July 25,2022                0           0                                     0
                                    on          e
g
Zhang
           Independent Director     In office   Male      63     December 10,2019          December 9,2022             0           0                                     0
Hejie
Yao
           Independent Director     In office   Male      57     July 25,2022              December 9,2022             0           0                                     0
Jianhua
Xu
           Independent Director     In office   Male      60     July 25,2022              December 9,2022             0           0                                     0
Yongbin
Jin                                             Femal
             Independent Director   In office             53     July 25,2022              December 9,2022             0           0                                     0
Yingchu                                         e
                                                                    Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
n
Zhang      Chairman of the                       Femal
                                     In office                 37     July 23,2021           December 9,2022                0        0                   0
Weijie     Supervisory Committee                     e
Zhu
                                                 Femal
Chenqia    Supervisor                In office                 30     April 24,2022          December 9,2022                0        0                   0
n                                                    e
                                                                                                                                                              Added to a
                                                                                                                                                                personal
Yan                                              Femal
           Employee Supervisor       In office                 41     December 7,2022        December 9,2022            2,000      700               2,700    investment
Ying                                                 e                                                                                                         before the
                                                                                                                                                              supervisor
Lu                                   Dimissi
           Employee Supervisor                   Male          61     August 15,2004         April 27,2022                  0        0                   0
Jianhua                              on
Fang                                 Dimissi
           Employee Supervisor                   Male          61     February 16,2012       December 7,2022                0        0                   0
Yin                                  on
Kong
           Deputy General
Jianqian                             In office   Male          52     June 24,2013           December 9,2022          200,000    60,000            260,000    Dividend
g           Manager,Chief engineer
Li                                                                                                                                                            Dividend
                                     Dimissi
Jianshen   Deputy General Manger                 Male          59     December 5,2014        May 11,2022              200,000    60,000            260,000
                                     on
g
Wang
Zhengro    Deputy General Manger     In office   Male          52     June 9,2017            December 9,2022          200,000    60,000            260,000    Dividend
ng
Zhao       Deputy General Manger,                                                                                                                             Dividend
                                     In office   Male          47     January 1,2018         December 9,2022          200,000    60,000            260,000
Jiamao     Chief accounantant
Li         Deputy GM, secretary of               Femal
                                     In office                 52     January 9,2019         December 9,2022          200,000    60,000            260,000    Dividend
Guiwen     the board
                                                 e
Li                                                                                                                                                            Dividend
           Deputy GM                 In office   Male          40     May 11,2022            December 9,2022          100,000    30,000            130,000
Binghai
Total                   --              --           --   --                   --                     --            2,002,000   600,700   0   0   2,602,700       --
                                Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
During the reporting period, whether there is dismissal of directors and supervisors and decruitment of senior
managers
□Yes√No
Changes of directors, supervisors and senior executives
√ Applicable □ Not applicable
         Name                Positions                Types                  Date                       Reason
Lu Jianhua             Supervisor               Dimission          April 27,2022            Retire
Zhu Chenqian           Supervisor               Elected            April 27,2022            supplement
Li Jiansheng           Deputy GM                Dimission          May 11,2022              Retire
Li Binghai             Deputy GM                Appointed          May 11,2022              Due to company work needs
                                                                                            Served as an independent
Chen Danhong           Independent Director     Dimission          July 25,2022             director of the company for
                                                                                            Served as an independent
Gu Xinjian             Independent Director     Dimission          July 25,2022             director of the company for
Xu Yongbin             Director                 Elected            July 25,2022             supplement
Yao Jianhua            Director                 Elected            July 25,2022             supplement
Jin Yingchun           Director                 Elected            July 25,2022             supplement
Fang Yin               Employee Supervisor      Dimission          December 7,2022          Retire
Yan Ying               Employee Supervisor      Elected            December 7,2022          supplement
(2) Posts holding
The professional background, working experience and main responsibilities of the current board members,
supervisors and senior managers in the company
（1）Director
      Mr. Zheng Bin, born in November 1964, CCP member, university graduate, senior economics professional
certification. He served as vice chairman and Vice General Manager , Party Secretary and Chairman of Hangzhou
Steam Turbine Power Group Co., Ltd.. He was engaged the vice Chairman at the 4th term of Board on March
of the Company on June 2013, He was engaged the Chairman at the 6th term of Board on December 2014. He
was elected as Chairman of the 7th term of board of directors on May 2016. Currently is the 8th chairman of the
company.
Mr. Ye Zhong: born in April 1968, CCP member; bachelor degree; professor and senior engineer. He served as
director of Hangzhou Steam Turbine Power Group Co., Ltd.Started working in July 1990. he was the director of
the 2nd term of Board, Chief Engineer; director of the 3rd term of Board, Vice General Manager; Director of the
director and Chief Engineer of the 6th term of Board of the Company, and General Manager of the 4 Company
since December 2014. He was elected as director and General Manager of the 7th term of board of directors on
May 2016. Currently is the 8th Director and General Manager of the company.
Mr. Yang Yongming, born in November 1964, CCP member, university graduate, certified senior economist.
Currently he’s the vice general manager of Hangzhou Steam Turbine Power Group Co., Ltd. He used to be the
vice director and director of Sales Administration Departments of the Company; Since 2013, he served as vice
general manager, general manager, and vice chairman of Hangzhou Dongfeng Shipyard Ltd. Currently he’s the
vice general manager of Hangzhou Steam Turbine Power Group Co., Ltd . and the Vice Chairman of the 6th term
of Board of the Company. He was elected as Vice Chairman of the 7th term of board of directors on May 2016.
Currently is the 8th vice chairman of the company.
Mr. Wang Gang, born in February 1972, member of the Communist Party of China, postgraduate degree, Zhejiang
University MBA, senior engineer. In 1993 the company entered the company, served as the company organization
personnel, a steam shop, security, securities laws and regulations, operation and management department and
other department heads. The current party secretary of the party committee, discipline appoint secretary, trade
                              Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
union chairman. He was engaged the secretary of the board and director of the Company on June 2017. He was
elected as director of the 7th term of board of directors on June 30, 2017. Currently is the 8th Director and Deputy
General Manager of the company.
Mr. Pan Xiaohui, born in November 1978, a member of the Communist Party of China, is a senior accountant
with a university degree. He served as vice chairman of Hangzhou Steam Turbine Holdings Co., Ltd. He joined
the Hangzhou Municipal Finance Bureau in 2003 and served successively as a section member, deputy division
chief of Comprehensive Office and division chief of account of Bureau of Financial Supervision and Inspection of
Hangzhou Municipal Finance Bureau. From February 2021, Currently is the 8th Director of the company.
Mr. Zhang Hejie, born in January 1958, holds a master's degree in philosophy, a doctorate in management, a
visiting scholar at the University of Cambridge, and a professor and doctoral tutor at the School of Economics and
Management of Zhejiang University of Technology. the Communication Review Expert of the National Natural
Science Foundation. Currently is the 8th Independent director of the company.
Mr. Xu Yongbin, born in December 1962, is a member of the Communist Party of China and doctor of
management, and he has obtained the qualification certificate of independent director. He has served as a lecturer
and associate professor of Hangzhou Business School, dean and professor of the School of Finance and
Accounting of Zhejiang Gongshang University, vice president of Zhejiang Accounting Society, and vice president
of Zhejiang Auditing Society. He is currently a second-level professor and doctoral supervisor of Zhejiang
Gongshang University. He’s selected as a young and middle-aged academic leader in Zhejiang Province, a talent
of Zhejiang Province New Century 151 Talent Project Talents, and a talent of Zhejiang Province "Five Batches"
Talents. Currently is the 8th Independent director of the company.
Mr. Yao Jianhua, born in December 1965, is a member of the Communist Party of China, with a doctorate degree
of Zhejiang University of Technology, and he is a Ph.D. Director of Engineering and professor of Zhejiang
University of Technology, he is a Special Expert of Zhejiang Province. He is currently the dean of the School of
Mechanical Engineering and the dean of the Laser Advanced Manufacturing Research Institute of Zhejiang
University of Technology, concurrently holds the director of Chinese Mechanical Engineering Society and vice-
chairman of Zhejiang Nontraditional Machining Branch Engineering Society, and Standing member of heat
treatment branch, standing member of extreme manufacturing branch committee, Director of China Optical
Engineering Society, Vice Chairman of Zhejiang Mechanical Engineering Society, Vice Chairman of Zhejiang
Shipbuilding Society, etc. He’s selected into the National Hundred Thousand Talents Project, the first batch of
outstanding talents in Zhejiang Province's Ten Thousand Talents Program, the first level of Zhejiang Province's
"Zhou Zhihong Science and Technology Achievement Award", "Young and Middle-aged Experts with
Outstanding Contributions in Zhejiang Province", "Outstanding Teachers in Zhejiang Province Colleges",
"Excellent Communist Party Members in Zhejiang Province Colleges and Universities" and other honors, and he
is member of the 11th CPPCC Zhejiang Provincial Committee, enjoying the Special government allowances.
Currently is the 8th Independent director of the company.
Ms. Jin Yingchun, born in November 1969, is a member of the Communist Party of China, and she is senior
lawyer, master of civil and commercial law from Zhejiang University, intermediate economist, intermediate
merger and acquisition expert, tutor of master of law at Zhejiang University of Finance and Economics and
Zhejiang Gongshang University, and she has obtained the qualification certificate of independent director. She has
served as a full-time and part-time lawyer of Zhejiang Economic Law Firm, the founder and director of Zhejiang
Tianyi Law Firm, and she has severed as a special inspector of Zhejiang Provincial Political and Legal Committee;
currently, she is director of the Management Committee of Yingke Hangzhou Law Firm, vice chairman of
Hangzhou Lawyers Association, and Vice President of Zhejiang M&A Federation, perennial legal advisor of
Hangzhou Shangcheng District Committee. Won the honors of the outstanding female lawyer of the first session
in Zhijiang Province, the outstanding corporate lawyer of Zhejiang Lawyers Association, and the outstanding
lawyer Serving small and medium-sized enterprises in Zhejiang Province. Currently is the 8th Independent
director of the company.
   (II) The Supervisors
     Ms. Zhang Weijie, senior accountant. Served as the Project Manager of Pan-China Certified Public
Accountants; Full-time Supervisor and Chief Financial Officer of the State-owned Assets Supervision and
Administration Commission of Hangzhou Municipal People's Government; Head of Financial Special Group of
Hangzhou State-owned Capital Investment and Operation Co., Ltd. She is currently the Employee Director and
Director of Finance Management Dept of Hangzhou Capital, the Chairman of Hangzhou Steam Turbine Power
Group Co., Ltd, and the Chairman of the Eighth Board of Supervisors of the Company.
                               Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
      Ms. Zhu Chenqian, born in May 1992, a member of the Communist Party of China, obtained a master's
degree in finance, is a certified public accountant, asset appraiser and intermediate accountant; She used to be the
auditor of PricewaterhouseCoopers Zhongtian Accounting Firm (LLP), the risk manager and product manager of
Bank of Beijing Co., Ltd Hangzhou Branch; She is currently the head of the asset management department of
Hangzhou State-owned Capital Investment and Operation Co., Ltd and the supervisor of the eighth board of
supervisors of the Company.
     Ms. Yan Ying, born in November 1981, a member of the Communist Party of China, with a master's degree,
is a certified public accountant, a certified internal auditor and a senior economist. She graduated from Dongbei
University of Finance and Economics in January 2008 with majored in finance, and entered Hangzhou Turbine
Power Group Co., Ltd in March of the same year. She now works in the operation management department of
Hangzhou Turbine Power Group Co., Ltd, engaged in the Company's state-owned asset property rights
management in long-term; She is currently the employee supervisor of the eighth board of supervisors of the
Company.
(III) Senior Executives
Profiles of General Manager Ye Zhong, Deputy General manager Wang Gang are available among the directors
above.
Mr. Kong Jianqiang, born in May 1970, CCP member, Master of Engineering, certified senior engineer. Started
working in July 1992. He used to be technician, head of workshop, vice director, and director of Steam Turbine
Institute of the company. He’s the director of the 6th term of Board since June 2013, and Engineer General of the
Company since December 2014. He was elected as director of the 7th term of board of directors on May 18, 2016.
Appointed as deputy general manager and Chief engineer of the company. Currently is the 8th Director , Deputy
General Manager and Chief engineer of the company.
      Mr. Wang Zhengrong, born in October 1970, member of the Communist Party of China, university degree,
Bachelor of Engineering, Zhejiang University, senior engineer. In 1992 to enter the company work, served as
deputy director of the company sales, director, marketing party branch secretary. Since March 2010, he has been a
member of the Party Committee of the Company. He has been Assistant General Manager of the Company and
Director of Steam Turbine Marketing since June 2015. Mr. Wang was engaged the Deputy general manager of the
Company since June 2017.
      Mr. Zhao Jiamao, born in March 1975, member of the Communist Party of China, university degree, certified
public accountant and senior accountant. He joined Hangzhou Steam Turbine Power Group Co., Ltd. Finance
Office in 1995 and was once the Vice Minister of Finance of Hangzhou Steam Turbine Power Group Co., Ltd.,
Chief Accountant, Deputy General Manager and General Manager of Hangzhou Steam Turbine Power
Technology Co., Ltd. In December 2014, he was the Deputy Chief Accountant and Chief Financial Officer of the
Company. Since March 2016, he has been the General Manager Assistant, the Director of Asset Management
Department and the Finance Department and the Contract Department. Mr. Zhao was engaged the Deputy general
manager and Chief accounting of the Company since January 2018.
Ms. Li Guiwen, born in September 1970, member of the Communist Party of China, postgraduate degree, senior
engineer. In 1992 the company entered the company, She served as Deputy director General office and Deputy
Minister of Economic Management of Hangzhou Steam turbine Power Group, Since August 2007, She Served as
Minister of Strategic Development of Hangzhou Steam turbine Power Group, Since November 2017,She served
as Secretary of the Board of Directors of Hangzhou Steam turbine Power Group. Since January 2019, She served
as director of the 7th term of board of directors of the Company.On February 2019, She served as director of the
board of the company. She was engaged the Deputy GM and secretary board of directors.
Mr. Li Binghai, born in April 1982, is a member of the Communist Party of China, with a bachelor's degree and
majoring in mechanical engineering and automation and business administration from Jiangnan University, and he
has a master's degree in industrial engineering from Zhejiang University of Technology. From August 2005 to
March 2010, he worked in Hangzhou Machine Tool Group, and served as the assistant manager of the
manufacturing department and the deputy manager of the manufacturing department. He joined the Company in
March 2010 and has served as the chief of the Marketing Section of the Contract Management Office, the Deputy
Chief and the Chief of the Contract Management Office, and he is currently the director of the stator workshop of
the Company. Since May 2022, he is currently the Deputy GMof the Comapny.
Office taking in shareholder companies
√Applicable □Not applicable
                                  Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                                                                                              Does he /she
                                                                                                              receive
  Names of the          Names of the        Titles engaged in       Sharing date of         Expiry date of
                                                                                                              remuneration or
 persons in office      shareholders        the shareholders          office term            office term
                                                                                                              allowance from the
                                                                                                              shareholder
                     Hangzhou Steam        Board chairman
   Pan Xiaohui       Turbine Holding       and General             August 5,2022                              No
                     Co., Ltd.             Manager
Offices taken in other organizations
√Applicable □Not applicable
                                                                                                                     Does he/she
                                                                                                        Expiry         receive
Name of the                                              Titles engaged
                                                                             Starting date of office    date of    remuneration or
persons in           Name of other organizations          in the other
                                                                                      term              office     allowance from
office                                                   organizations
                                                                                                         term           other
                                                                                                                     organization
                                                        Board
Ye Zhong       New Energy Company                                           November 30,2021                       No
                                                        chairman
Yang                                                    Board
               Sales Company                                                December 23,2021                       No
Yongming                                                chairman
Yang           Hangzhou Heat Group Lomited by
                                                        Director            January 25,2022                        No
Yongming       Share Ltd.
               Hangzhou Zhongneng Steam Turbine         Board
Wang Gang                                                                   June 15,2022                           No
               Power Co., Ltd.                          chairman
               Hangzhou Steam Turbine Casting Co.,
Wang Gang                                               Director            July 13,2022                           No
               Ltd.
               China mechanical and Electrical
Kong
               Institute -HSTG (Hangzhou) United        Director            April 11,2022                          No
Jianqiang
               Institutes Co., Ltd.
Kong           Hangzhou Steam Turbine Auxiliary         Board
                                                                            June 15,2022                           No
Jianqiang      Machine Co., Ltd.                        chairman
Wang           Hangzhou Steam Turbine Mechanical        Board
                                                                            May 30,2022                            No
Zhengrong      Equipment Co., Ltd                       chairman
Wang           Hangzhou Zhongneng Steam Turbine
                                                        Director            June 15,2022                           No
Zhengrong      Power Co., Ltd.
Wang           Hangzhou Steam Turbine New Energy
                                                        Director            November 30,2021                       No
Zhengrong      Co., Ltd.
Zhao           Zhejiang Turbine Import & Export Co.,    Executive
                                                                            June 2,2020                            No
Jiamao         Ltd.                                     director
Zhao           Hangzhou Zhongneng Steam Turbine
                                                        Director            June 15,2022                           No
Jiamao         Power Co., Ltd.
Zhao           Hangzhou Steam Turbine New Energy
                                                        Supervisor          November 30,2021                       No
Jiamao         Co., Ltd.
               Zhejiang Packaged Technology             Board
Li Guiwen                                                                   May 13,2020                            No
               Development Co., Ltd.                    chairman
               Zhejiang Ranchuang Turbine               Board
Li Guiwen                                                                   October 28,2022                        No
               Machinery Co., Ltd.                      chairman
               Hangzhou Steam Turbine Casting Co.,      Board
Li Binghai                                                                  July 13,2022                           No
               Ltd.                                     chairman
               Hangzhou Steam Turbine Auxiliary
Li Binghai                                              Director            June 15,2022                           No
               Machinery Co., Ltd.
               Zhejiang Ranchuang Turbine
Li Binghai                                              Director            October 28,2022                        No
               Machinery Co., Ltd.
Punishments to the current and leaving board directors, supervisors and senior managers during the report period
by securities regulators in the recent three years
□ Applicable √Not applicable
(3) Remuneration to directors, supervisors and senior executives
Decision-making procedures, basis for determination and actual payment of the remuneration to directors ,
supervisors and senior executives
                                      Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
The remuneration plan for directors and executives was examined at the meeting. The Remuneration and
Assessment Committee of the Board conducted assessment on the performances of the directors and executives,
Assessment principles and procedures determined in accordance with the executive compensation management
system of directors(revised in 2021), The plan is subject to examination of the meeting of the Board.
Allowances for independent directors and supervisors are subject to approval by the Board and the Shareholders’
Meeting thereafter. The proposal of allowances for the 8th term of independent directors and supervisors was
adopted at the 2nd Provisional Shareholders’ Meeting held on December 10, 2019, and the allowance for
independent directors is RMB150,000 (tax included) per year, while it is RMB36,000 for supervisors for the
period of three years (tax included). Non employee supervisors do not enjoy the allowance
Remuneration of directors, supervisors, and executives in the report period
                                                                                                                   In RMB10,000
                                                                  Statue of    Total of reward from the      Actual reward in total
    Name                   Position               Sex    Age
                                                                    duty          Company(Pre-tax)            at end of report term
 Zheng Bin      Chairman                        Male       58   In Office                         122.00     No
 Ye Zhong       Director, GM                    Male       54   In Office                          130.51    No
 Yang
                Vice Chairman                   Male       58   In Office                           99.02    No
 Yongming
 Wang Gang      Director, Deputy GM              Male      50   In Office                          137.33    No
 Pan Xiaohui    Director                         Male      44   In Office                             0.00   Yes
 Gu Xinjian     Independent Director            Male       66   Dimission                           10.00    No
 Chen
                Independent Director            Female     58   Dimission                           10.00    No
 Danhong
 Zhang Hejie    Independent Director            Male       63   In Office                           15.00    No
 Yao Jianhua    Independent Director            Male       57   In Office                             0.00   No
 Xu Yongbin     Independent Director            Male       60   In Office                             6.25   No
 Jin Yingchun   Independent Director            Female     53   In Office                             6.25   No
                Chairman of the
 Zhang Weijie                                   Female     37   In Office                             0.00   Yes
                Supervisory Committee
 Zhu
                Supervisor                      Female     30   In Office                             0.00   Yes
 Chenqian
 Yan Ying       Employee Supervisor             Female     41   In Office                           19.38    No
 Lu Jianhua     Employee Supervisor             男          61   Dimission                           13.80    No
 Fang Yin       Employee Supervisor             Male       61   Dimission                           41.64    No
 Kong           Deputy GM, Chief
                                                Male       52   In Office                          135.60    No
 Jianqiang      engineer
 Li Jiansheng   Deputy GM                       Male       59   Dimission                          153.28    No
 Wang
                Deputy GM,                      Male       52   In Office                          144.02    No
 Zhengrong
                Deputy General Manger,
 Zhao Jiamao                                    Male       47   In Office                          139.16    No
                Chief accountant
                Deputy GM, secretary of
 Li Guiwen                                      Female     52   In Office                          146.30    No
                the board
 Li Binghai     Deputy GM                       Male       40   In Office                           59.55    No
 Total                        --                    --     --        --                           1,389.09             --
                                  Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
VI. Performance of directors' duties during the reporting period
(1) Information of the board meetings during the reporting period
         Session               Convening date            Disclosure date                        Meeting resolution
The 21st meeting of the
                          January 25,2022          January 26,2022               （Announcement No.:2022-04）
The 22nd meeting of the
                          March 22,2022            March 23,2022                 （Announcement No.:2022-09）
The 23rd meeting of the
                          March 29,2022            March 31,2022                 （Announcement No.:2022-15）
The 24th meeting of the
                          April 26,2022            April 27,2022                 （Announcement No.:2022-41）
The 25th meeting of the
                          May 11,2022              May 12,2022                   （Announcement No.:2022-49）
The 26th meeting of the
                          July 1,2022              July 2,2022                   （Announcement No.:2022-53）
The 27th meeting of the
                          July 25,2022             July 26,2022                  （Announcement No.:2022-67）
The 28th meeting of the
                          August 23,2022           August 25,2022                （Announcement No.:2022-72）
The 29th meeting of the
                          October 27,2022          OCTOBER 28,2022               （Announcement No.:2022-80）
The 30th meeting of the
                          December 21,2022         December 22,2022              （Announcement No.:2022-86）
(2) Attendance of directors at the board meetings and the general meeting of shareholders
                    Attendance of directors at the board meetings and the general meeting of shareholders
                Number of                       Number of
                  board         Number of          board                                           Whether to
                                                                  Number of
                 meetings          board         meetings                        Number of         attend the      General
                                                                     board
 Name of                                                                            board            board       meetings of
                 attended        meetings       attended by        meetings
                                                                                  meetings         meeting in    shareholders
 director                                                         attended by
                during the      attended in      means of                        absent from      person twice     attended
                reporting          person       communica            proxy
                                                                                                    in a row
                  period                            tion
Zheng Bin                 10                8              2                0               0         No                    4
 Ye Zhong                 10                8              2                0               0         No                    4
   Yang
Yongming
   Wang
   Gang
    Pan
  Xiaohui
Gu Xinjian                6                 5              1                0               0         No                    3
Chen
Danhong
Zhang
Hejie
Xu Yongbin                4                 2              2                0               0         No                    1
Yao Jianhua               4                 2              2                0               0         No                    1
Jin Yingchun              4                 2              2                0               0         No                    1
Explanation of failure to attend the board meeting in person twice in a row
                                 Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
 (3) Directors' objections to related matters of the Company
 Whether the director raises any objection to the relevant matters of the Company
 □ Yes √ No
 During the reporting period, the directors did not raise any objection to the relevant matters of the Company.
 (4) Other descriptions of directors' performance of duties
 Whether the directors' suggestions on the Company have been adopted
 √Yes □ No
 The director's statement on whether the relevant suggestions of the Company have been adopted or not
 During the reporting period, in accordance with the provisions of The Company Law, The Securities Law, the
 Articles of Association and other laws and regulations, the directors paid attention to the standardization of the
 Company's operation, proceeded from the interests of the Company, and put forward reasonable suggestions based
 on the long-term development of the enterprise in the process of deliberating on regular reports, capital increase to
 new energy company, restricted stock repurchases, investment and construction of 10 sets of gas turbine units per
 year, etc. The Company listened carefully to the suggestions of directors, organized relevant personnel to evaluate
 and verify related matters, and fully utilized the leadership role of directors in scientific decision-making and
 standardized management.
 VII. Situation of special committees under the Board of Directors during the reporting period
                                                                                    Put forward       Other
                                     Number of                                                                   Details of
 Committee           Member                       Convening                          important     information
                                      meetings                 Meeting content                                   objections
   name            information                      date                            opinions and     of duty
                                     convened                                                                     (if any)
                                                                                    suggestions    performance
               Chen Danhong                                    Preliminary
Audit          (Convenor), Gu                     January      deliberations of
Committee      Xinjian, Zhang                     25,2022      the Audit
               Hejie, Ye Zhong                                 Committee:
                                                               Report on the
                                                               implementation
                                                               of audit work,
                                                               communicate
                                                               annual report
                                                               audit and
                                                               internal control
                                                               audit matters.
                                                               The accounting
                                                               firm reported the
                                                               audit situation of
                                                               the "2021
               Chen Danhong
                                                               Annual Audit
Audit          (Convenor), Gu                     March 22,
Committee      Xinjian, Zhang                     2022
                                                               "Special
               Hejie, Ye Zhong
                                                               Explanation on
                                                               the Occupation
                                                               of Non-
                                                               operating Funds
                                                               and Other
                                                               Related Funds",
                                                               "Internal Control
                                                               Audit Report"
                                                               and other audit
                                                               conditions;
                                                               Preliminary
                                                               deliberations of
                                Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                                              the Audit
                                                              Committee:
                                                              ：
                                                              Report
                                                              Report 2021
                                                              Impairment
                                                              Provision and
                                                              Bad Debt
                                                              Provision
                                                              of Assets Losse
                                                              Distribution
                                                              Plan
                                                              extend the
                                                              service of Pan-
                                                              China CPA as
                                                              auditor of the
                                                              Company
                                                              the use of idle
                                                              funds for short-
                                                              term and
                                                              medium-term
                                                              financial
                                                              management by
                                                              the company in
                                                              Retrospective
                                                              Adjustment of
                                                              Financial Data
                                                              by Mergers of
                                                              Enterprises
                                                              Under Same
                                                              Control
                                                              Internal Audit
                                                              Work in 2021
                                                              and Internal
                                                              Audit Plan in
                                                              Control Self-
                                                              Evaluation
                                                              Report
               Zhang
Remuneration                                                  Preliminary
               Hejie(Convenor) Gu
and                                              March 22,    deliberations of
               Xinjian, Chen                 1                                    N/A       N/A
Assessment                                       2022         the Audit
               Danhong, Pan
Committee                                                     Committee:
               Xiaohui
               Gu Xinjian, Chen                               The Proposal on
Nomination                                       May
               Danhong, Zhang                2                Nominating Li       N/A       N/A
committee                                        11,2022
               Hejie, Zheng Bin                               Binghai as the
                                     Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                                                     Deputy General
                                                                     Manager of the
                                                                     Company
                                                                     Nominating Jin
                                                                     Yingchun as a
                                                                     Candidate for
                                                                     Independent
                                                                     Director of the
                                                                     Company
                                                                     Nominating Yao
                  Gu Xinjian, Chen                                   Jianhua as a
Nomination                                             July
                  Danhong, Zhang                   2                 Candidate for     N/A         N/A
committee                                              1,2022
                  Hejie, Zheng Bin                                   Independent
                                                                     Director of the
                                                                     Company
                                                                     Nominating Xu
                                                                     Yongbin as a
                                                                     Candidate for
                                                                     Independent
                                                                     Director of the
                                                                     Company
  VIII.The working status of the board of supervisors
  The board of supervisors finds out whether the company has risks during the monitoring activities during the repo
  rting period
  □ Yes √ No
   The Supervisory Committee has no objection to the supervision matters during the reporting period.
  IX. Particulars about employees.
  (1)Number of staff, professional structure and educational background
  Number of in-service staff of the parent company(person)                                                    2,026
  Number of in-service staff of the main subsidiaries(person)                                                 1,959
  The total number of the in-service staff(person)                                                            3,985
  The total number of staff receiving remuneration in the current
  period(person)
  Retired staff with charges paid by the parent company and main
  subsidiaries (person)
                                                            Professional
                            Category                                              Number of persons（person）
                           Production                                                                         2,250
                              Sales                                                                             340
                              Tech                                                                              883
                            Finance                                                                              85
                          Administration                                                                        427
                              Total                                                                           3,985
                                                             Education
                            Category                                              Number of persons（person）
                         Master’s Degree                                                                        329
                            Bachelor                                                                          1,530
                         College diploma                                                                        809
                                Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                  High school and below                                                                       1,317
                          Total                                                                               3,985
     Under the premise of considering the annual benefit, with the level of competition, the ability to pay of
enterprises, price levels and other factors, in 2022 the company adequate remuneration be adjusted according to
the value of the unpaid position, according to the performance of the performance fee, adhere to labor distribution,
taking into account efficiency and equity, the maximum level of protection of the interests of employees, to
achieve a win-win business and employees. Company on a monthly basis, full and timely payment of wages,
overtime pay in accordance with national regulations, on a monthly basis.
      In 2022, the staff education and training work strived for realize the goal of “Talents invigorate enterprises”,
and set the work objectives of training and optimizing the “the three teams namely the management team, the
professional and technical personnel team and the high-skilled personnel team”, and upon combining with the
company’s strategic goals and the departmental performance targets and the employees’ development goals, it
well did the annual training work, formulated the “2022 Company Education and training Plan”, implemented
various training programs in an orderly manner as required, continuously improved the staff's business level and
comprehensive capabilities and made contributions to the company’s stable operation. In terms of the funding, the
company drew 2.5% of the total salary as the staff education fund, which effectively guaranteed the expenditure of
the training program. According to statistics, 137 training classes were held in 2022, the person-time of staff
received trainings reached 5046. For 2023, the company plans to carry out 120 training programs in aspects of
management, engineering technology, operation skills, quality, environment and safety education.
□ Applicable √ Not applicable
X. Specification of profit distribution and capitalizing of common reserves
Formulation, implementation or adjustment of the profit distribution policy, especially the cash dividend policy
during the reporting period
√ Applicable □ Not applicable
(1) Company dividend policy principle: The Company's profit distribution policy maintains its continuity and
stability, with full attention to the reasonable return on investment for investors, and consideration of the long-
term interests of the Company, the overall interests of all shareholders and the sustainable development of the
Company;
(2) Cash dividend priority: The Company can distribute dividends by cash, stock or by combination of both. On
the premise that the Company is profitable and has sufficient cash flow to meet its sustainable operation and long-
term development, the Company will give priority to the profit distribution method of cash dividend;
(3) Listen to the opinions and demands of independent directors and minority shareholders: the Board of Directors
of the Company fully considers the development stage, profit scale, cash flow status and current capital demand of
the Company, and formulates a specific dividend plan based on the opinions of shareholders, especially minority
shareholders, which is submitted to the General Meeting of Shareholders of the Company for deliberation after the
independent directors express their independent opinions; When the General Meeting of Shareholders of the
Company deliberates the specific cash dividend plan, it shall actively communicate and exchange with
shareholders, especially minority shareholders, through various channels, fully listen to the opinions and demands
of minority shareholders, and timely address to their concerns;
(4) Dividend period: In principle, the Company implements profit distribution on an annual basis. The Company
announces the dividend plan within four months after each fiscal year, and implements the distribution plan within
two months after the General Meeting of Shareholders approves it;
(5) Dividend ratio: On the premise that the Company is profitable and the cash can meet its continuous operation
and long-term development, the accumulated profit distributed by the Company in cash in the last three years is
not less than 30% of the annual distributable profit realized in the last three years;
(6) Decision-making procedure of dividend plan: According to the Articles of Association, the dividend plan of the
Company is proposed by the Board of Directors, and submitted to the General Meeting of Shareholders of the
Company for deliberation after being reviewed and approved by the Board of Directors and expressed opinions on
by independent directors;
(7) Adjustment procedure of dividend policy: If the Company is required to adjust the profit distribution policy
                                    Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
according to the needs of production and operation, investment planning and long-term development, the adjusted
profit distribution policy shall not violate the relevant regulations of China Securities Regulatory Commission and
the stock exchange. Opinions of independent directors and the board of supervisors shall be solicited in advance
for the proposal for adjusting the profit distribution policy, which shall be submitted to the Company's General
Meeting of Shareholders after deliberation by the Company's Board of Directors, and be implemented only after
more than two-thirds of the voting rights held by shareholders present at the General Meeting of Shareholders.
                                           Special description of cash dividend policy
Whether it meets the requirements of the Articles of Association or the resolution of the
                                                                                                    Yes
general meeting of shareholders:
Whether the dividend standard and proportion are explicit and clear:                                Yes
Whether the relevant decision-making procedures and mechanisms are complete:                        Yes
Whether the independent directors have performed their duties and played their due role:            Yes
Whether the minority shareholders have the opportunity to fully express their opinions and
                                                                                                    Yes
demands, and whether their legitimate rights and interests have been fully protected:
Whether the cash dividend policy is adjusted or changed, and whether the conditions and
                                                                                                    Yes
procedures are compliant and transparent:
During the reporting period, the Company made a profit and the profit available to shareholders of the parent
company was positive, but no cash dividend distribution plan was put forward.
□ Applicable √ Not applicable
Profit distribution and capitalization of capital reserve during the reporting period
√ Applicable □ Not applicable
Bonus shares for every ten shares(Shares)                                                                                         2
Cash dividend for every ten shares (Yuan)(Tax-included)                                                                           3
A total number of shares as the distribution basis(shares)                                                             979,537,000
Cash dividend amount (yuan, including tax                                                                            293,861,100.00
Other means (such as repurchase of shares) cash dividend
amount (yuan)
Total cash dividend (yuan, including tax)                                                                            293,861,100.00
Distributable profit (yuan)                                                                                        3,385,297,545.74
Proportion of cash dividend in the distributable profit                                                                        60%
                                                 Cash dividend distribution policy
Where the distribution of profits is carried out in the company's development stage that belongs to a mature stage and there is
significant capital expenditure arrangement, the proportion of cash dividends in this profit distribution shall be at least 40%.
                                      Details of profit distribution or reserve capitalization plan
  In 2022, with the total share capital of 980,179,980 shares at the end of the year deducting 111,800 treasury shares repurchased
as of date of record by Company and 531,180 shares of share capital were cancelled due to the retirement and resignation of
equity incentive objects in December 2022, that is, 979,537,000 shares, the Company would distribute cash dividend to all the
shareholders at the rate of CNY 3.0 for every 10 shares (with tax inclusive) , 2 bonus shares ，and no reserve would be converted
into share capital.
XI. Implementation Situation of Stock Incentive Plan of the Company, Employee Stock Ownership Plan or
Other Employee Incentive Measures
√ Applicable □ Not applicable
(1) Equity incentive
      (I) On July 11, 2021, the 14th Meeting of the Eighth Board of Directors reviewed and approved the Proposal
on the Company's Restricted Stock Incentive Plan (Draft) in 2021 and its Summary, the Proposal on the
Company's Implementation Assessment Management Measures for the Restricted Stock Incentive Plan in 2021,
and the Proposal on Requesting the General Meeting of Shareholders to Authorize the Board of Directors to
Handle Matters Related to the Restricted Stock Incentive Plan in 2021, and the Ninth Meeting of the Eighth
Supervisors of the Company reviewed and approved the above related proposals.
      Independent directors of the Company expressed their independent opinions on whether the equity incentive
plan is conducive to the sustainable development of the Company and whether there is any harm to the interests of
the Company and all shareholders.
      (II) On August 12, 2021, the Company disclosed the Announcement on the Approval of Equity Incentive
Plan by Hangzhou SASAC. The Company received the Reply of Hangzhou Steam Turbine Co., Ltd. on
Implementing the Restricted Stock Incentive Plan in 2021 (HGZK [2021] No.45), and Hangzhou SASAC
                               Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
agreed in principle that the Company should implement the restricted stock incentive plan in 2021.
      (III)From July 12, 2021 to July 21, 2021, the company will post the "Announcement of the Company'
s 2021 Restricted Stock Incentive Objects" through the company's business premises, publicizing the name
s and positions of the incentive objects, and clarifying the circumstances under which they cannot become equity i
ncentive objects. , as well as the ways and means of feedback during the publicity period. As of the expiration of
the publicity period, the company has not received any objection from any organization or individual to the incenti
ve objects of this incentive plan.
      (IV) On August 27, 2021, the Company held the Second provisional Shareholders' General Meeting in 2021,
which reviewed and approved the Proposal on the Company's Restricted Stock Incentive Plan in 2021 and its
Summary, the Proposal on the Company's Implementation Assessment Management Measures for the Restricted
Stock Incentive Plan in 2021, and the Proposal on Requesting the General Meeting of Shareholders to Authorize
the Board of Directors to Handle Matters Related to the Restricted Stock Incentive Plan in 2021.
      Meanwhile, the Company disclosed the Self-inspection Report on Insider Information of Restricted Stock
Incentive Plan in 2021 and Stock Trading of Incentive Objects.
      (V) On August 30, 2021, the Company convened the 16th Meeting of the Eighth Board of Directors and the
Granting Restricted Stocks to Incentive Objects for the First Time. The Board of Directors of the Company
considered that the granting conditions of restricted stocks stipulated in this incentive plan had been fulfilled, and
agreed to grant 18.17 million restricted stocks to 457 incentive objects who meet the granting conditions on
September 1, 2021 for the first time, at a price of HK$ 6.825 per share. The Board of Supervisors of the Company
verified the list of incentive objectives again and issued a clear consent opinion. Independent directors of the
Company expressed their agreed independent opinions on this.
      (VI) On October 22, 2021, the Company completed the registration of granting restricted shares for the first
time, with 455 people registered for the first time and 18,060,000 shares registered.
      (VII) On December 16, 2021, the 20th Meeting of the 8th Board of Directors and the 13th Meeting of 8th
Board of Supervisors of the Company reviewed and approved the Proposal on Granting Reserved Restricted
Shares to Incentive Objects.. it is agreed that December 16, 2021 will be reserved for granting restricted shares,
and 1,380,000 restricted shares will be granted to 37 eligible incentive objects at a grant price of HK$ 6.825 per
share. Independent directors of the Company expressed independent opinions on relevant proposals of the Board
of Directors
      （VIII) On January 14, 2022, the Company completed the registration of reserved grant of restricted shares,
with 37 registered shareholders reserved and 1,380,000 registered shares.
(IX)On December 21, 2022, the Company held the 30th meeting of the 8th session of the Board of Directors and
the 19th meeting of the 8th session of the Board of Supervisors, in which it deliberated and passed the "Proposal
on Repurchase and Cancellation of Some Restricted Shares" and "Proposal on Adjusting the Repurchase Quantity
and Repurchase Price of the 2021 Restricted Stock Incentive Plan". In view of the fact that 9 of the incentive
objects are no longer eligible for incentive objects due to retirement reasons, and 1 person is no longer eligible for
incentive object due to personal reasons, it’s agreed to repurchase and cancel a total of 531,180 shares of restricted
shares held by them that have been granted but have not yet been lifted. Meanwhile, as the Company had
completed the implementation of the 2021 profit distribution plan, in accordance with the provisions of the
Incentive Plan, the repurchase price of restricted shares has been adjusted from RMB 5.6764 per share (HKD
price is HKD 6.825 HKD per share) to RMB 4.06 per share. After the review and confirmation of the Shenzhen
branch of China Securities Depository and Clearing Co., Ltd, the afore-said repurchase cancellation has been
completed on March 2023.
                                                                Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
  Evaluation mechanism and incentives of senior managers
  √ Applicable □ Not applicable
                                                                                                                                                                                           In shares
                                                                                        Strike price                                 Quantity                 Quantity
                                                  Number                                                                                                                                      Quantity
                                      Number                               Number         and the       Number                           of                       of
                                                 of newly    umber of                                                                            Quantity                                         of
                                      of stock                                of        number of       of stock                    restricted                restricted
                                                  granted      vested                                              Market price                    of the                   Price of the     restricted
                                      options                             exercised          the        options                       shares                    shares
                                                   stock       shares                                              at the end of                   shares                    restricted         shares
                                      held at                               shares       exercised      held at                       held at                   newly
  Name              Position                      options     during                                               the reporting                 unlocked                      shares          held at
                                         the                               during          shares       the end                         the                    granted
                                                  during        the                                                    period                      in the                     granted        the end of
                                     beginning                               the        during the       of the                     beginning                   during
                                                    the      reporting                                             (CNY/share)                   reporting                 (CNY/share)           the
                                       of the                             reporting      reporting     reporting                      of the                     the
                                                 reporting    period                                                                              period                                      reporting
                                        year                               period          period        period                     reporting                 reporting
                                                  period                                                                                                                                        period
                                                                                       (CNY/share)                                    period                    period
Zheng Bin    Board Chairman                                                                                                          250,000                                                  325,000
Ye Zhong     Director, GM                                                                                                            250,000                                                  325,000
Yang
             Vice Board Chairman                                                                                                     200,000                                                  260,000
Yongming
Wang
             Director, Deputy GM                                                                                                     200,000                                                  260,000
Gang
             Deputy GM, secretary
Li Guiwen                                                                                                                            200,000                                                  260,000
             of the board
Kong         Deputy GM, Chief
Jianqiang    Engineer
Li
             Deputy GM                                                                                                               200,000                                                  260,000
Jiansheng
Wang
             Deputy GM                                                                                                               200,000                                                  260,000
Zhengrong
Zhao         Deputy, GM, Chief
Jiamao       accountant
             Deputy Secretary of
             the Party Committee
Li Shijie                                                                                                                            200,000                                                  260,000
             and Chairman of the
             Trade union
             Secretary of the
Cai
             Commission for                                                                                                          200,000                                                  260,000
Weijun
             discipline inspection
Li Binghai   Deputy GM                                                                                                               100,000                                                  130,000
tOTAL                   --                                                                  --                           --         2,400,000                                   --           3,120,000
Remark（If any）
                                           The reason for the increase in the number of restricted shares held at the end of the period was due the 2021 equity distribution: based on the total
                                                           Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                share capital of 754,010,400 shares at the end of 2021, excluding the repurchased 111,800 treasury shares as of the record date of the equity distribution, that
                                was the 753,898,600 shares was the basis, it distributed a cash dividend of 4.0 yuan per 10 shares (including tax) and 3 bonus shares (including tax) to all
                                shareholders.
Evaluation mechanism and incentive situation of senior managers
The Company conducts performance appraisal for senior managers according to the Management Measures for the Implementation of Restricted Stock Incentive
Plan in 2021, Detailed Rules for Performance Appraisal of Restricted Stock Incentive Objects of Hangzhou Steam Turbine Co., Ltd. (Trial) and the Remuneration
Management System for Directors and Senior Managers of the Company.
(2) Implementation of ESOP
□ Applicable √ Not applicable
(3) Other employee incentives
□ Applicable √Not applicable
                                     Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
XII. Construction and implementation of internal control system during the reporting period
(1) Construction and implementation of internal control
      According to Basic Standards for Internal Control of Enterprises, Guidelines for Application of Internal
Control, Guidelines for Evaluation of Internal Control and Guidelines for Internal Control of Listed Companies
issued by Shenzhen Stock Exchange, the Company formulated the Internal Control Manual of the Company,
comprehensively combed the Company's business processes, identified key risk points, controlled the risk points
according to the Company's actual situation, and the internal audit organization of the Company regularly
evaluated the above control process and effect, and put forward rectification items and improvement suggestions.
The Audit Committee of the Company guided and supervised the internal control of the Company.
      During the reporting period, according to the identification of major internal control defects in the
Company's financial report, there were no major internal control defects in the financial report on the base date of
the internal control evaluation report.
According to the identification of major defects in the internal control of the Company's non-financial reports, the
Company found no major defects in the internal control of non-financial reports on the base date of the internal
control evaluation report.
      There were no factors influencing the evaluation conclusion of internal control effectiveness between the
base date of the internal control evaluation report and the date of issuance of the internal control evaluation report.
(2)Details of major internal control defects found during the reporting period
□ Yes √ No
XIII. Management and control of the Company's subsidiaries during the reporting period
                                                                Problems                                                Subsequent
                                             Integration                         Measures taken         Solution
 Company name       Integration plan                         encountered in                                               planned
                                              progress                            for solution          progress
                                                               integration                                                solution
 Not applicable     Not applicable      Not applicable       Not applicable      Not applicable     Not applicable     Not applicable
XIV.Internal control self-evaluation report or internal control audit report
(1)Self-evaluation report on internal control
Disclosure date of appraisal report on
                                               March 29,2023
internal control
Disclosure index of appraisal report on
internal control                               Disclosed by http://www.cninfo.com.cn dated March 29, 2023
Proportion of total unit assets covered by
appraisal in the total assets of the
consolidated financial statements of the
company
Proportion of total unit incomes covered
by appraisal in the total business incomes
of the consolidated financial statements
of the company
                                                    Standards of Defects Evaluation
                  Type                                       Financial Report                           Non-financial Report
                                               Deficiency characterized as below will        (1) Punishment received by governments
                                               be treated as fatal defects: To correct the   below provincial level ( including
                                               fatal errors already published in the         provincial level) but no negative effects
                                               financial report （except for the              for our company’s periodic report
                                               retrospection and adjustments of              disclosure will be considered as a general
                                               previous years because of policies            deficiency; (2) or punishments from
                                               changing and other objective factors          national governments above provincial
Standard                                                                                     level but no negative effects for our
                                               changing);fatal errors already discovered
                                               by auditor, unidentified in the current       company’s periodic report disclosure will
                                               financial report; any fraud among top         be considered as a significant deficiency;
                                               management; invalid monitoring to the         (3) external official disclosure has been
                                               financial report from audit committee         already carried out and brought certain
                                               and internal audit department.                negative effects to our company’s
                                      Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                                                                            periodic report disclosure will be
                                                                                            considered as a fatal deficiency.
                                              In accordance with the degree of              1) Losses < consolidating 3% of pre-tax
                                              importance of deficiency that may cause       profit, will be asserted as general
                                              financial report errors, our company          deficiencies; (2) 3% of combined pre-tax
                                              defined quantitative identification           profit ≤ losses < 5% of combined pre-tax
                                              standard of financial report internal         profit, will be asserted as significant
                                              deficiency control as per the average of      deficiencies; (3) losses ≥5% of combined
                                              the last three-year total profit. 1) errors   pre-tax profit, will be asserted as fatal
                                              reported indicator < consolidating 3% of      deficiencies.
Standards of Quantization                     pre-tax profit, will be asserted as general
                                              deficiencies; (2) 3% of combined pre-tax
                                              profit ≤ errors reported indicator < 5% of
                                              combined pre-tax profit, will be asserted
                                              as significant deficiencies; (3) errors
                                              reported indicator ≥5% of combined pre-
                                              tax profit, will be asserted as fatal
                                              deficiencies.
Number of major defects in financial
reporting（a）
Number of major defects in non financial
reporting (a)
Number of important defects in financial
reporting（a）
Number of important defects in non
financial reporting（a）
(2) Internal Control audit report
√ Applicable □Not applicable
                                         Review opinions in the internal control audit report
As far as our best understanding, Hangzhou Steam Turbine Co., Ltd. has been conducting effective internal control over its
financial reporting system in all material aspects we observed as of December 31, 2021, and has been following with the
Enterprise Internal Control Criteria.
Disclosure of internal audit report                                  Disclosure
Disclosure date of audit report
                                                                     March 29,2023
of internal control
Index of audit report of
                                                                     Disclosed by http://www.cninfo.com.cn dated March 29, 2023
internal control (full-text)
Internal audit report’s opinion                                      Unqualified audit opinion
Non-financial reporting the existence of significant deficiencies    No
Has the CPAs issued a qualified auditor’s report of internal control .
□ Yes √No
Does the internal control audit report issued by the CPAs agree with the self-assessment report of the Board of
Directors
√Yes □No
                            Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
XV. Rectification of self-examination problems in special governance actions of listed companies
None
                                 Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                     V. Environmental & Social Responsibility
I. Significant environmental issues
Whether the Company or any of its subsidiaries is identified as a key polluter by the environment authorities
√ Yes □ No
Administrative penalties for environmental problems during the reporting period
                                                                                 Impact on the
                                                                                                       Company's
Name of company or Reasons for                                                   production and
                                         Violation situation   Penalty result                          rectification
subsidiary         punishment                                                    operation of listed
                                                                                                       measures
                                                                                 companies
Not applicable     Not applicable        Not applicable        Not applicable    Not applicable        Not applicable
Prevention and control of pollution facilities construction and operation
None
Administrative penalties for environmental problems during the reporting period
Applicable□ Not applicable
In 2022, based on technical energy saving, the Company further promoted the green and low-carbon production
and achieved the purpose of energy conservation and consumption reduction through the transformation and
implementation of a series of energy technology projects such as waste heat recovery and reuse of steam emitted
by the final assembly commission, accurate measurement of natural gas usage data in the rotor workshop, and full
use of the 12MWp distributed photovoltaic power generation project of the manufacturing base.
Reasons for not disclosing other environmental information
（I）Environmental protection
      The company has adopted cleaner production management in an all-round way and started cleaner
production audit, which not only reduces consumption and efficiency, but also reduces the pressure and cost of
end treatment. The company's environmental management system has been operating for many years, and has
strictly abided by the provisions of relevant national laws and regulations and the principle of continuous
improvement. The company formulates annual environmental protection targets and environmental management
plans every year. During the reporting period, there was no environmental pollution accident or over-emission
incident.
      The company also continues to promote the awareness of social responsibility in the process of product
design and process design, and embodies the concept of green environmental protection in the design process. The
product design process fully considers the possibility of environmental pollution and the impact on occupational
health, meets the international environmental protection requirements, reduces noise, reduces emissions, and uses
harmless materials and processes. For example, by taking measures such as sound insulation enclosure, the
running noise of steam turbine can meet the standard. Set up thermal insulation layer to reduce its thermal
radiation to a safe level. In all kinds of nonmetallic materials used in steam turbines, components harmful to
human body are eliminated.
(II) Energy conservation and emission reduction
      In recent years, the company has attached great importance to energy conservation and emission reduction
according to the overall arrangement and requirements of its superiors. It has strengthened its leadership and
carefully deployed various work measures to further promote energy conservation and emission reduction at
various levels to ensure solid results in energy conservation and emission reduction.
II. Social responsibilities
      With "driving industrial civilization and sustaining China's power" as its business mission, the company leads
the its reform and development with the development concept of "innovation, coordination, green, openness and
sharing". While standardized operation and operation according to law, it strives to shoulder due social
responsibilities and promote the harmonious development of the company, shareholders, investors, employees,
suppliers, customers, consumers and the whole society.
     (1) While the company is committed to long-term development and realization of shareholder value, it pays
attention to the natural environment and resources, and undertakes corresponding responsibilities to shareholders,
employees, customers, suppliers, communities and other relevant stakeholders to realize the harmony,
coordination and unity of sustainable development between the company and society.
    (2) The company has formulated the "social responsibility management standard", which defines the
company's responsibilities and standard requirements in protecting shareholders and creditors, protects the
interests of employees, ensures safety in production, environmental protection, energy conservation and emission
reduction, and social welfare undertakings, and defines the importance of social responsibility.
                              Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
    (3) The company has further strengthened the protection of the rights and interests of small and medium-sized
investors, strengthened the management of investor relations, and established communication channels in all
aspects. For news affecting major changes in the company's stock price, the company has actively verified the
information content to clarify the facts, and issued announcements when necessary to announce the actual
situation of the company, so as to protect the legitimate rights and interests of small and medium-sized investors.
    (4) The company treats suppliers and users in good faith and always maintains good commercial credit and
excellent contract performance level. The company has established a strategic cooperation relationship with
suppliers, set up a convenient information communication platform, and continuously improved the level of
cooperation between the two parties. The company provides customers with high-quality products and
professional services, as well as personalized business solutions adapted to different environments, which are well
received by customers.
    (5) The company actively promotes the professional development of employees, continuously improves the
professional environment of employees, and protects the physical and mental health of employees. The company
has a number of highly skilled talents such as national technical experts and provincial and municipal technical
competition pacesetters, and has set up a number of skilled master studios in the production line to create a golden
blue collar team in modern manufacturing. The company has further raised the level of medical expenses
subsidies for employees, and provided health insurance and cancer prevention insurance for employees.
Throughout the year, the company has continuously carried out group cultural activities, expanded the venues for
cultural and sports activities for employees, supported employees to spontaneously establish various cultural
organizations, and created a dynamic enterprise atmosphere.
    (6) The company attaches great importance to environmental protection and energy conservation and emission
reduction. The company has set up special assessment indicators to strictly regulate all kinds of environmental
behaviors in the business process. It strengthens the management of hazardous wastes and strictly controls the
transfer and storage of hazardous wastes. The company's safe disposal rate of hazardous wastes has reached 100%.
During the reporting period, the company's emission tests including waste water, waste gas, noise and other items
all met the national standards. The company has formulated energy consumption control indicators for various
departments, incorporated energy consumption indicators into the annual assessment system, vigorously carried
out energy-saving publicity, regularly organized energy-saving inspections, and implemented a number of energy-
saving renovation projects. The total comprehensive energy consumption for the whole year decreased
significantly year on year.
（7）The Company continued to support and carried out public welfare undertakings. During the reporting period,
it actively responded to the call of the Hangzhou Municipal Party Committee and the Municipal Government for
the "Spring Breeze Action", played a leading and exemplary role as a caring enterprise, and donated 500,000 yuan
to the "Spring Breeze Action".
III. Consolidate and expand the achievements of poverty alleviation and rural revitalization
      The Company participated in the assistance activities of "Connecting Villages and Towns" in Hangzhou,
and from 2022 to 2025, it provided assistance activities to Zitong Town, Chun'an County with an annual fund of
RMB 150,000.
                                 Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                                 VI. Important Events
I. The fulfilled commitments in the reporting period and under-fulfillment commitments by the end of the
reporting period made by the company, shareholder, actual controller, acquirer, director, supervisor,
senior management personnel and other related parities.
Applicable □Not applicable
                                                                                      Time of
                                                                                                 Period of
Commitmen      Commitmen      Commitmen                                               making
                                                          Contents                              commitmen    Fulfillment
    t            t maket        t type                                              commitmen
                                                                                                     t
                                                                                         t
               Hangzhou
               Turbine        Commitmen
               Power          t to the
Other
               Group Co.,     transfer of
commitment
               LTD.,          the target
s made to                                                                                                    Normal
               Hangzhou       company's     http://www.cninfo.com.cn(Announceme    November
the minority                                                                                                 performanc
               Turbine        accounts      nt No.:2021-101 and 2021-102)          16,2021
shareholders                                                                                                 e
               Power          receivable
of the
               Technology     recovery
company
               Co., LTD.,     and other
               and other      matters
               transferor
Note: Hangzhou Turbine Power Group Co., Ltd has been renamed as Hangzhou Steam Turbine Holdings Co., Ltd,
and Hangzhou Steam Turbine Power Technology Co., Ltd has been renamed as Hangzhou Guoyu Property
Management Co., Ltd.
II. Particulars about the non-operating occupation of funds by the controlling shareholder
□ Applicable √ Not applicable
III. Illegal provision of guarantees for external parties
□ Applicable √ Not applicable
No such cases in the reporting period.
IV. Explanation of the Board of Directors on the latest "Non-standard Audit Report"
□ Applicable √ Not applicable
V.Notes for “non-standard audit report” of CPAs firm during the Reporting Period by board of directors
and supervisory board
□ Applicable √ Not applicable
VI.Explain change of the accounting policy, accounting estimate and measurement methods as compared
with the financial reporting of last year.
□ Applicable √ Not applicable
No such cases in the reporting period.
VII.Explain change of the consolidation scope as compared with the financial reporting of last year.
√ Applicable □ Not applicable
(1) Disposal of subsidiaries
                                     Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                                                                                             Disposal price and disposal of
                                                                                                                      investment
                                    Disposal                                             The basis for
Subsidiary                                            Way of
             Price of disposal       Equity                         Time point of       determining the           the difference in the
                                                      equity
name         share                    ratio                          loss control      time point of loss     subsidiary's net asset share
                                                     disposal
                                    （%）                                                    of control        enjoyed by the corresponding
                                                                                                                 consolidated financial
                                                                                                                       statement
                                                                                      Industrial and
                                                                                      commercial
Indonesian                                       Transfer of
company                                          Agreement
                                                                                      registration is
                                                                                      completed
       （Continued）
                                                                                                                    Other comprehensive
              The                The carrying                                                                       income related to the
                                                   The fair                                 Method and key
              proportion         amount of                                                                           former subsidiary’s
                                                   value of the    Remeasure gains          assumptions for
              of equity          the                                                                               equity investments, and
                                                                                          determining the fair
Subsidiary                                         remaining       or losses from                                   the amount by which
              remaining          remaining                                                    value of the
                                                   equity at the   remaining equity                                   changes in others’
   name       on the date        equity on the                                            remaining equity at
                                                   date of loss    at fair value                                      owned equity are
              of loss of         date of loss                                              the date of loss of
                                                                                                                        transferred to
                                                   of control                                   control
              control            of control                                                                          investment gains or
                                                                                                                            losses
Indonesian
                   —                  —                 —                    —                     —                -1,557,635.65[Note]
company
[Note] In November 2022, Zhongneng Company and PT.HANGZHOU TURBINE SERVICES signed the Equity
Transfer Agreement, in which transferred its 70% equity of the Indonesian company to PT.HANGZHOU
TURBINE SERVICES at a price of 6.12 million yuan. The equity transfer was obtained with a decree issued by
the Local Ministry of Justice and Human Rights in Indonesia on December 27, 2022. The net asset value of the
Indonesia Company as of December 31,2022 was 7,323,350.80 yuan, and the net assets of the Indonesian
company enjoyed by Zhongneng Company were 5,126,345.57 yuan according to the 70% shareholding ratio, and
the difference of 993,654.43 yuan to the disposal price of 6,120,000.00 yuan was recognized as investment
income; Meanwhile, other comprehensive income related to the equity investment of the Indonesian company-
changes in the translation difference in foreign currency financial statements was transferred to the profit or loss
of the current period when lost the control, and the investment income was recorded in the consolidated statement
of -1,557,635.65 yuan; the total investment income recognized was RMB 563,981.22.
(2) Changes in the scope of consolidation for other reasons
       Lessened scope of consolidation
                                                                                                                      Net profit from the
                                 Equity disposal             Time of equity           Net assets at the disposal   beginning of the period
  Company name                                                                                                      to the date of disposal
                                    method                      disposal                         date
Hangzhou Steam Turbine
Power Group Equipment
                                      A/M                       2022.12.26                        10,076,214.15               1,001,509.06
Packaged Engineering
Co., Ltd[Note]
    [Note] Due to the needs of business development, the new energy company and its former subsidiary,
Hangzhou Turbine Power Group Equipment Complete Engineering Co., Ltd, signed the "Merger Agreement" on
August 11, 2022, taking July 31, 2022 as the base date to absorb and merge Hangzhou Turbine Power Group
Equipment Complete Engineering Co., Ltd, and Hangzhou Turbine Power Group Equipment Complete
Engineering Co., Ltd cancelled its legal personality
VIII. Engagement/Disengagement of CPAs
CPAs currently engaged
Name of the domestic CPAs                                                Pan-China Certified Public Accountants (Special common
                                   Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                                                                                    partnership)
Remuneration for domestic accounting firm（In RMB
Successive years of the domestic CPAs offering auditing
services
Names of the certified public accountants from the domestic
                                                               Sheng Weiming, Lin Qunhui
CPAs
Successive years of the domestic CPAs offering auditing
services
Has the CPAs been changed in the current period
□ Yes √No
Engaging of CPA for internal auditing, financial consultants or sponsors
√ Applicable □ Not applicable
Pan-China Certified Public Accountants is engaged the auditor of internal control system for the current year.
With payment of RMB 300,000 for its service.
IX.Situation of Facing Listing Suspension and Listing Termination after the Disclosure of the Yearly
Report
□Applicable √ Not applicable
X. Relevant Matters of Bankruptcy Reorganization
□Applicable √ Not applicable
No such cases in the reporting period.
XI. Matters of Important Lawsuit and Arbitration
□Applicable √ Not applicable
No such cases in the reporting period.
XII. Situation of Punishment and Rectification
□Applicable √ Not applicable
No such cases in the reporting period.
XIII. Credit Condition of the Company and its Controlling Shareholders and Actual Controllers
□Applicable √ Not applicable
XIV. Material related transactions
□Applicable √ Not applicable
No such cases in the reporting period.
□Applicable √ Not applicable
No such cases in the reporting period.
□Applicable √ Not applicable
No such cases in the reporting period.
√ Applicable □ Not applicable
                                     Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Whether there is any non-operating related creditor's rights and debts
√ Yes □ No
Creditor's rights receivable from related parties
                                           Whether                      New      Amount
                                         there is any    Opening     amount in recovered in                   Current    Ending
  Related       Related                  occupation      balance      current   the current                   interest   balance
                             Cause                                                          Interest rate
   party      association                  of non-        (RMB         period      period                      (RMB       (RMB
                                          operating      '0,000)       (RMB        (RMB                       '0,000)    '0,000)
                                            funds                     '0,000)     '0,000)
Debt payable to related parties
                                                                New         Repayment
                                               Opening       amount in      amount in                       Current      Ending
  Related        Related                       balance        current        current                        interest     balance
                               Cause                                                     Interest rate
   party       association                      (RMB           period          period                        (RMB         (RMB
                                               '0,000)         (RMB            (RMB                         '0,000)      '0,000)
                                                              '0,000)         '0,000)
Steam
               Holding       Borrowing
Turbine                                           24,000           542.57    24,542.57        3.85%            542.57              0
               shareholder   funds
Holdings
Influence of related debt
                             Due to the needs of production and operation, Hangzhou Steam Turbine Engineering Co., Ltd. (now
on the Company's
                             renamed as New Energy Company) began to borrow funds from Hangzhou Steam Turbine Group in
operating results and
financial status
□Applicable √ Not applicable
No such cases in the reporting period.
□ Applicable √Not applicable
There is no deposit, loan, credit or other financial business between the financial company controlled by the
Company and related parties.
□Applicable√Not applicable
No such cases in the reporting period.
XV.Significant contracts and execution
（1）Entrustment
□Applicable √ Not applicable
No such cases in the reporting period.
（2）Contracting
□Applicable √ Not applicable
No such cases in the reporting period.
                                  Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
（3）Leasing
□Applicable √ Not applicable
No such cases in the reporting period.
√ Applicable □ Not applicable
                                                                                                              In RMB10,000
        Outward guarantees offered by the Company and its subsidiaries (Excluding guarantee to the subsidiaries）
         Relevan
              t                                                                                                        Guarant
                                Date of
         disclosu                                                               Counte                                    ee
                               happeni
Name of      re    Amount                                             Guaran       r-                   Complete          for
                                   ng        Actual
         date/No.     of                                   Guarant              guarant   Guarant     implementat      associat
  the        of    Guarant
                               (Date of     mount of
                                                           ee type
                                                                       ty（If
                                                                                           ee term         ion            ed
Company                         signing     guarantee                  any）      ee（If
            the       ee                                                                                  or not        parties
                               agreeme                                           any）
         guarante                                                                                                      (Yes or
                                   nt)
             ed                                                                                                          no)
         amount
                                         Guarantee of the company for its subsidiaries
             Relevan
                  t                                                                                                    Guarant
                                    Date of
             disclosu                                                               Counte                                ee
                                   happeni
Name of          re     Amount                                             Guaran      r-                 Complete        for
                                       ng        Actual
             date/No.     of                                   Guarant              guarant   Guarant    implementat   associat
  the            of     Guarant
                                   (Date of     mount of
                                                               ee type
                                                                           ty（If
                                                                                              ee term        ion          ed
Company                             signing     guarantee                  any）     ee（If
                the       ee                                                                                or not      parties
                                   agreeme                                           any）
             guarante                                                                                                  (Yes or
                                       nt)
                 ed                                                                                                      no)
             amount
                                                                                              Three
                                                                                              years
                                                                                              from
                                                               The
Hangzhou                                                                                      the date
Xhongnen                                                       joint
             January               August      20,543.9816,                                   of
g New                    30,000                                liability                                 No            No
Energy                                                         guarant
Co., Ltd.                                                                                     on of
                                                               y
                                                                                              the
                                                                                              principa
                                                                                              l debt
                                                                                              Three
                                                                                              years
                                                                                              from
                                                               The
Hangzho                                                                                       the date
u Steam                            Novemb                      joint
             October                                                                          of
Turbine                   5,000    er                 3,000    liability                                 No            No
Casting                            15,2022                     guarant
Co., Ltd.                                                                                     on of
                                                               y
                                                                                              the
                                                                                              principa
                                                                                              l debt
Hangzhou                                                       The                            Two
Steam        Novemb
                                   October                     joint                          years
Turbin       er          16,800                      16,800                                              No            No
Power        4,2021
Co., Ltd.                                                      guarant                        the date
                                    Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                                                  y                                  of
                                                                                                     expirati
                                                                                                     on of
                                                                                                     the
                                                                                                     principa
                                                                                                     l debt
 Total of guarantee for                         Total of actual guarantee
 subsidiaries approved                 35,000   for subsidiaries in the                                                       40,343.98
   in the period(B1)                            period (B2)
Total of guarantee for                          Total of actual guarantee
subsidiaries approved                  51,800   for subsidiaries at                                                           40,343.98
at period-end(B3)                               period-end(B4)
                                    Guarantee of the subsidiaries for the controlling subsidiaries
              Relevan
                   t                                                                                                           Guarant
                                      Date of
              disclosu                                                                  Counte                                    ee
                                     happeni
Name of           re      Amount                                              Guaran       r-                    Complete         for
                                         ng         Actual
              date/No.      of                                    Guarant               guarant      Guarant    implementat    associat
  the             of      Guarant
                                     (Date of      mount of
                                                                  ee type
                                                                              ty（If
                                                                                                     ee term        ion           ed
Company                               signing      guarantee                  any）      ee（If
                 the        ee                                                                                     or not       parties
                                     agreeme                                             any）
              guarante                                                                                                         (Yes or
                                         nt)
                  ed                                                                                                             no)
              amount
                                                                                                     Two
Hangzho                                                                                              years
u                                                                 The                                from
Guoneng                                                           joint                              the date
Steam         July                   July                                                            of
Turbine       20,2021                20,2021                                                         expirati
Engineeri                                                         guarant                            on of
ng Co.,                                                           y                                  the
Ltd.                                                                                                 principa
                                                                                                     l debt
                                                                                                     Two
Hangzho                                                                                              years
u                                                                 The                                from
Guoneng                                                           joint                              the date
Steam         July                   July                                                            of
Turbine       20,2021                20,2021                                                         expirati
Engineeri                                                         guarant                            on of
ng Co.,                                                           y                                  the
Ltd.                                                                                                 principa
                                                                                                     l debt
                                                                                                     Two
Hangzho                                                                                              years
u                                                                 The                                from
Guoneng                                                           joint                              the date
Steam         July                   July                                                            of
Turbine       20,2021                20,2021                                                         expirati
Engineeri                                                         guarant                            on of
ng Co.,                                                           y                                  the
Ltd.                                                                                                 principa
                                                                                                     l debt
Hangzhou                                                          The                                Two
Zhongneng                                                                                            years
                                     October                      joint
Steam                       8,000                      5,441.7                                       from       No             No
Turbine                                                                                              the date
Power Co.,                                                        guarant                            of
                                     Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Ltd.                                                                 y                           expirati
                                                                                                 on of
                                                                                                 the
                                                                                                 principa
                                                                                                 l debt
                                                                                                 Two
                                                                                                 years
Hangzhou                                                             The                         from
Zhongneng                                                            joint                       the date
                                      Novemb
Steam                                                                                            of
Turbine                                                                                          expirati
Power Co.,                                                                                       on of
Ltd.                                                                 y                           the
                                                                                                 principa
                                                                                                 l debt
                                                  Total amount of
Total guarantee quota
                                                  guarantee to the
to the subsidiaries
approved in the
                                                  incurred in the reporting
reporting period (C1)
                                                  period (C2)
Total guarantee quota
                                                  Total balance of actual
to the subsidiaries
                                                  guarantee to the
approved at the end of                  29,000                                                                   17,983.06
                                                  subsidiaries at the end of
the reporting period
                                                  the reporting period (C4)
(C3)
                          Total of Company’s guarantee（namely total of the large three aforementioned）
Total of guarantee in                          Total of actual guarantee
the Period                            47,000 in the Period                                                       58,327.04
（A1+B1+C1）                                     （A2+B2+C2）
Total of guarantee at                          Total of actual guarantee
Period-end                            80,800 at Period-end                                                       58,327.04
（A3+B3+C3）                                     A4+B4+C4）
The proportion of the total amount of actually
guarantee in the net assets of the Company(that is                                                                  7.00%
A4+B4+C4)
Including
Amount of guarantee for shareholders, actual
controller and its associated parties（D）
The debts guarantee amount provided for the
Guaranteed parties whose assets-liability ratio exceed                                                           23,441.70
Proportion of total amount of guarantee in net assets
of the company exceed 50%（F）
Total guarantee Amount of the abovementioned
guarantees（D+E+F）
Explanations on possibly bearing joint and several
liquidating responsibilities for undue guarantees ( If     0
any)
   Explanations on external guarantee against regulated
                                      procedures(If any)
Description of the guarantee with complex method
(1)Situation of Entrusted Finance
                               Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
√ Applicable □Not applicable
Overview of entrusted wealth-management during the reporting period
                                                                                                   In RMB 10,000
                  Source of funds      The Occurred
                  for entrusted        Amount of                                                  Un-recovered of
Specific type                                              Undue balance         Amount overdue
                  financial            Entrusted Wealth-                                          overdue amount
                  management           management
 Bank financing
                  Self funds                     103,000            60,500.24                 0                     0
        product
Total                                            103,000            60,500.24                 0                     0
                                                            Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
The detailed information of entrusted wealth-management with significant amount or low safety, poor liquidity or high risk with no promise of principal
Applicable □Not applicable
                                                                                                                                                                            In RMB
                                                                                                                                                                           Summ
                                                                                                                                           Amount                          ary of
                                                                                                                                                       Whethe
                                                                                                                                          of reserve             Wheth      the
                                                                                                    Anticipat                                                r
Trustee                                                                                   Referen                             Actual         for                 er has    items
                                                                               Criteria                 ed        Actual                               approve
instituti    Trust                      Sourc                       Capital                 ce                               collected    devaluatio             entrust    and
                     Product    Amou             Start   Expiry                   for                income     gains/loss                              d by
 on (or       ee                        e of                       investmen              annual                             gains/loss      n of                financ    related
                       type      nt              date     date                  fixing                  (if       es in                                 legal
name of      type                       funds                      t purpose              rate of                              es in      withdrawi              e plan    query
                                                                                reward              applicabl     period                               procedu
trustee)                                                                                   return                             period        ng (if               in the    index
                                                                                                        e)                                               re
                                                                                                                                          applicable             future      (if
                                                                                                                                                        (Y/N)
                                                                                                                                              )                            applic
                                                                                                                                                                           able)
                     Bank                                          money
                                                August   Decemb
Hangzh               financin           Self                       market      Floating
            Bank                7,000           31,202   er                                1.48%        31.94       31.93    31.93                     Yes       No
ou Bank              g                  funds                      instrumen   income
                     product                                       t
Total                           7,000    --       --       --          --         --         --         31.94       31.93        --                      --        --        --
        Entrusted financing appears to be unable to recover the principal or there may be other circumstances that may result in impairment
□ Applicable √ Not applicable
(2)Situation of Entrusted Loans
□ Applicable √ Not applicable
None
□ Applicable √ Not applicable
None
                               Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
XVI. Explanation on other significant events
√ Applicable □Not applicable
number: 2022-11) published by the Company on the Cninfo Information Network (http://www.cninfo.com.cn) on
March 23, 2022.
please refer to the announcement (Announcement number: 2022-35) published by the Company on the Cninfo
Information Network (http://www.cninfo.com.cn) on March 31, 2022.
the announcement (Announcement number: 2022-61) published by the Company on the Cninfo Information
Network (http://www.cninfo.com.cn) on July 2, 2022.
announcement (Announcement number: 2022-90) published by the Company on the Cninfo Information Network
(http://www.cninfo.com.cn) on December 22, 2022.
published by the Company on the Cninfo Information Network (http://www.cninfo.com.cn) on January 17, 2022.
XVII. Significant event of subsidiary of the Company
√ Applicable □Not applicable
√ Applicable □Not applicable
Equity Swap. please refer to the announcement (Announcement number: 2022-62) published by the Company on
the Cninfo Information Network (http://www.cninfo.com.cn) on July 2, 2022.
published by the Company on the Cninfo Information Network (http://www.cninfo.com.cn) on Jnuary 17, 2023.
                                           Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                           VII. Change of share capital and shareholding of Principal Shareholders
                                                                                                                             In shares
                   Before the change                             Increase/decrease（+，-）                                 After the Change
                  Amount      Proportion                                 Capitalization of
                                                Share       Bonus
                                                                         common reserve    Other        Subtotal      Quantity     Proportion
                                              allotment     shares
                                                                               fund
I. Unlisted
shares
stock
Including：
State-owned      479,824,800    63.64%                0   143,947,440                   0       0      143,947,440   623,772,240     63.64%
shares
II.Non-
restricted       274,185,600    36.36%                0    82,222,140                   0       0       82,222,140   356,407,740     36.36%
shares
listed
foreign
shares
III. Total of
capital          754,010,400   100.00%                0   226,169,580                   0       0      226,169,580   980,179,980    100.00%
shares
         Causes of Change of shares
         √ Applicable □Not applicable
         The Company's share changes during the reporting period were caused by the implementation of the 2021 profit
         distribution plan. The Company's 2021 profit distribution plan was to distribute a cash dividend of 4.0 yuan (tax
         included) and 3 bonus shares (tax included) for every 10 shares and no shared converted by reserveto all
         shareholders based on the total share capital of 754,010,400 shares at the end of 2021 after excluding the
         Company's repurchased 111,800 treasury shares on the equity distribution record date-that was 753,898,600
         shares.
         Approval of change of the shares
         √ Applicable □Not applicable
         The Company's 2021 profit distribution plan had been reviewed and approved at the 2021 annual general meeting
         held on April 27, 2022.
         Ownership transfer of share changes
         √ Applicable □Not applicable
                                   Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
  The Company completed the 2021 profit distribution on May 26, 2022. Before the dividend distribution, the
  Company's total share capital was 754,010,400 shares. After the distribution, the total share capital was increased
  to 980,179,980 shares.
  Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to
  common shareholders of Company in latest year and period
  □ Applicable √ Not applicable
  Other information necessary to disclose for the company or need to disclosed under requirement from security
  regulators
  □ Applicable √ Not applicable
  √ Applicable □Not applicable
                                                                                                                        In RMB
                                           Number of
                            Number of                    Restricted
                Initial                    Increased                      Reason for
Shareholder                 Unrestricted                Shares in the
               Restricted                  Restricted                     Restricted           Date of Restriction Removal
  Name                      Shares This                  End of the
                Shares                      Shares                         Shares
                               Term                        Term
                                           This Term
                                                                        Equity
                                                                                        The limitations are lifted according to the
                                                                        incentive
Zheng Bin        250,000         75,000             0        325,000                    relevant provisions of the 2021 restricted
                                                                        restricted
                                                                                        stock incentive plan
                                                                        stocks
                                                                        Equity
                                                                                        The limitations are lifted according to the
                                                                        incentive
Ye Zhong         250,000         75,000             0        325,000                    relevant provisions of the 2021 restricted
                                                                        restricted
                                                                                        stock incentive plan
                                                                        stocks
                                                                        Equity
                                                                                        The limitations are lifted according to the
Yang                                                                    incentive
Yongming                                                                restricted
                                                                                        stock incentive plan
                                                                        stocks
                                                                        Equity
                                                                                        The limitations are lifted according to the
                                                                        incentive
Wang Gang        200,000         60,000             0        260,000                    relevant provisions of the 2021 restricted
                                                                        restricted
                                                                                        stock incentive plan
                                                                        stocks
                                                                        Equity
                                                                                        The limitations are lifted according to the
Kong                                                                    incentive
Jianqiang                                                               restricted
                                                                                        stock incentive plan
                                                                        stocks
                                                                        Equity
                                                                                        The limitations are lifted according to the
Wang                                                                    incentive
Zhengrong                                                               restricted
                                                                                        stock incentive plan
                                                                        stocks
                                                                        Equity
                                                                                        The limitations are lifted according to the
Zhao                                                                    incentive
Jiamao                                                                  restricted
                                                                                        stock incentive plan
                                                                        stocks
                                                                        Equity
                                                                                        The limitations are lifted according to the
                                                                        incentive
Li Guiwen        200,000         60,000             0        260,000                    relevant provisions of the 2021 restricted
                                                                        restricted
                                                                                        stock incentive plan
                                                                        stocks
                                                                        Equity
                                                                                        The limitations are lifted according to the
                                                                        incentive
Li Shijie               0       260,000             0        260,000                    relevant provisions of the 2021 restricted
                                                                        restricted
                                                                                        stock incentive plan
                                                                        stocks
                                                                        Equity          The limitations are lifted according to the
Cai Weijun       200,000         60,000             0        260,000
                                                                        incentive       relevant provisions of the 2021 restricted
                                       Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                                                                restricted        stock incentive plan
                                                                                stocks
                                                                                Equity
                                                                                                  The limitations are lifted according to the
                                                                                incentive
  Other           16,268,059       6,349,418              0       22,617,477                      relevant provisions of the 2021 restricted
                                                                                restricted
                                                                                                  stock incentive plan
                                                                                stocks
  Total           18,168,059       7,179,418              0       25,347,477             --                              --
    II. Securities issue and listing
    □ Applicable √ Not applicable
    □ Applicable √ Not applicable
    □ Applicable √ Not applicable
    III. Particulars about the shareholders and substantial controller
                                                                                                                                    In shares
                                    Total
                                                                    The total num                     Total preference
                                    shareholder                     ber of preferre                   shareholders with
Total number of                     s at the end                    d shareholders                    voting rights
common                              of the                           voting                           recovered at end
shareholders at the end   11,261    month from           11,171     rights restored               0   of last month                             0
                                    the date of                      at period-end                    before annual
of the reporting period
                                    disclosing                      (if any)(Note                     report disclosed(if
                                    the annual                      8)                                any)(Note8)
                                    report
                               Particulars about shares held above 5% by shareholders or top ten shareholders
                                                                                                                                      Number of
                                                                                                                                         share
                                                   Proporti
                                                                                                                                     pledged/froz
                                                     on of     Number of          Changes in      Amount of          Amount of
                                    Nature of                                                                                             en
           Shareholders                             shares    shares held at       reporting       restricted       un-restricted
                                   shareholder       held                                                                            Stat
                                                               period -end           period       shares held        shares held
                                                                                                                                     e of    Am
                                                   （%）
                                                                                                                                     shar ount
                                                                                                                                       e
Hangzhou Steam Turbine             State-owned
Holdings Co., Ltd.                 legal person
China Merchants                      Foreign
Secutities(HK)Co., Ltd.            legal person
GUOTAI JUNAN
                                     Foreign
SECURITIES（HONG                                     0.67%           6,547,507          -1129918                 0     6,547,507
                                   legal person
KONG） LIMITED
                                   Domestic
Zhou Jie                           Natural          0.64%           6,302,300          1679600                  0     6,302,300
                                   person
VANGUARD TOTAL                       Foreign        0.56%           5,482,009          1047556                  0     5,482,009
                                         Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
INTERNATIONAL STOCK                  legal person
INDEX FUND
ISHARES CORE MSCI                      Foreign
EMERGING MARKETS ETF                 legal person
VANGUARD EMERGING
                                       Foreign
MARKETS STOCK INDEX                                   0.52%          5,096,887        814805                  0      5,096,887
                                     legal person
FUND
                                      Foreign
NORGES BANK                                           0.33%          3,268,888        754359                  0      3,268,888
                                    legal person
                                    Domestic
Xia Zulin                           Natural           0.32%          3,170,000        850000                  0      3,170,000
                                    person
                                    Domestic
Gu Yang                             Natural           0.21%          2,038,821        470497                  0      2,038,821
                                    person
Particulars about strategic investors or general
corporations becoming among the top 10              Not applicable
shareholders due to share placing
                                                    (1) Hangzhou Steam Turbine Power Group Co., Ltd. is the holder of state-shares of the
                                                    Company, all other shareholders’ are holders of domestic listed foreign shares (B shares)
                                                    (2) There is no relationship between Hangzhou Steam Turbine Power Group Co., Ltd. and
Explanation on associated relationship among        other shareholders;
the aforesaid shareholders                          (3) Hangzhou Steam Turbine Power Group Co., Ltd. is not an “action-in-concert” party
                                                    with any of other shareholders as described by the “Administration Rules of Informational
                                                    Disclosure about Change of Shareholding Statues of PLCs”.
Above shareholders entrusting or entrusted with
                                                    Not applicable
voting rights, or waiving voting rights
Top 10 shareholders including the special
                                                    Not applicable
account for repurchase (if any) (see note 10)
                                         Top 10 holders of shares without trading limited conditions
                                                                                  Amount of                       Category of shares
                         Name of the shareholder                             unconditional shares
                                                                             held at end of period           Category            Amount
                                                                                                       Foreign shares
China Merchants Secutities(HK)Co., Ltd.                                                   6,966,378    placed in domestic              6,966,378
                                                                                                       exchange
                                                                                                       Foreign shares
GUOTAI JUNAN SECURITIES（HONG KONG） LIMITED                                                6,547,507    placed in domestic              6,547,507
                                                                                                       exchange
                                                                                                       Foreign shares
Zhou Jie                                                                                  6,302,300    placed in domestic              6,302,300
                                                                                                       exchange
                                                                                                       Foreign shares
VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND                                             5,482,009    placed in domestic              5,482,009
                                                                                                       exchange
                                                                                                       Foreign shares
ISHARES CORE MSCI EMERGING MARKETS ETF                                                    5,301,262    placed in domestic              5,301,262
                                                                                                       exchange
                                                                                                       Foreign shares
VANGUARD EMERGING MARKETS STOCK INDEX FUND                                                5,096,887    placed in domestic              5,096,887
                                                                                                       exchange
                                                                                                       Foreign shares
NORGES BANK                                                                               3,268,888                                    3,268,888
                                                                                                       placed in domestic
                                         Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                                                                                         exchange
                                                                                                         Foreign shares
Xia Zulin                                                                                  3,170,000     placed in domestic              3,170,000
                                                                                                         exchange
                                                                                                         Foreign shares
Gu Yang                                                                                    2,038,821     placed in domestic              2,038,821
                                                                                                         exchange
                                                                                                         Foreign shares
Wang Yihu                                                                                  2,001,956     placed in domestic              2,001,956
                                                                                                       exchange
                                                                               among the top 10 common share holders without restriction;
Explanation on associated relationship or consistent action among the top
                                                                               (2) Hangzhou Steam Turbine Group Co., Ltd. is not an action-in-
                                                                               concert” party with any of other shareholders as described by the
top 10 shareholders of non-restricted negotiable shares and top 10
                                                                               “Administration Rules of Informational Disclosure about Change
shareholders
                                                                               of Shareholding Statues of PLCs”.
Notes to the shareholders involved in financing securities (if any)(See
                                                                               Not applicable
Notes 4)
    Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a buy-
    back agreement dealing in reporting period.
    □ Yes √ No
    The top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company
    have no buy –back agreement dealing in reporting period.
    Nature of Controlling Shareholders: Local state holding
    Type: Legal person
     Name of the
                          Legal         Incorporated
       holding                                             Organization code                           Registered capital
                      representative         in
     shareholder
                                                                                   Manufacturing and processing: textile machinery,
                                                                                   Manufacturing machines,paper-making machinery,
                                                                                   pump, casting products, electrical tools, gear box,
                                                                                   thermal transmitter, digital controlling device, and spare
                                                                                   parts of the above (limited to the subsidiaries);
    Hangzhou                                                                             Contracting of domestic and overseas machinery
    Steam Turbine                       December
                      Pan Xiaohui                        91330100143071842L        engineering projects, export of above equipments and
    Holdings Co.,                       14,1992
    Ltd.                                                                           materials, provide labor services for above overseas
                                                                                   projects.    Thermal power plant project and equipment
                                                                                   engineering; wholesale and retail: products and spare
                                                                                   parts manufactured by members of the group, and
                                                                                   technical research, consulting, and service of above
                                                                                   products; Provide materials, equipments, and spare
                                     Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                                                              parts to members of the Group, water and power supply
                                                                              (other than installation and maintaining of power
                                                                              supply equipment);     Including the business scope of
                                                                              subsidiaries.
Shareholding status of the holding
shareholder in other PLCs in the
                                            None
country and abroad during the report
period
Change of holding shareholder
□ Applicable √ Not applicable
No change of holding shareholder in the report period.
Actual controller nature：Local state owned Assets Management
Actual controller type：Legal person
Name of the substantial                                                                                       Principal business
                           Legal representative       Date of incorporation        Organization code
controller                                                                                                        activities
State-owned Assets
Supervision and
Administration
                           Wang Xi                                              113301007766375272              Not applicable
Commission of
Hangzhou Municipal
Government
The equity of the
controlling shareholder    Hangzhou Jiebai (SH.600814) held 59.64% shares;
in other domestic and      Digital Source Technology Co., Ltd.（SZ.000909）held 39.16% shares;
foreign listed
companies held or          Hangyang Co., Ltd.(SZ.002430)held 48.96% shares.
partly held by it in the
report period
Change of the actual controller in the reporting period
□ Applicable √ Not applicable
None
Block Diagram of the ownership and control relations between the company and the actual controller
                              Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
The actual controller controls the company by means of trust or managing the assets in other way
□ Applicable √ Not applicable
company and its person acting in concert accounts for 80% of the number of shares held by the company
□Applicable √Not applicable
□Applicable √Not applicable
and Other Commitment Subjects
□Applicable √Not applicable
IV. Specific implementation of share repurchase during the reporting period
Progress in implementation of share repurchase
□ Applicable √Not applicable
Implementation progress of reducing repurchased shares by centralized bidding
□ Applicable √Not applicable
                             Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                VIII. Situation of the Preferred Shares
□Applicable √Not applicable
The Company had no preferred shares in the reporting period.
                                Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                                IX. Corporate Bond
□ Applicable √ Not applicable
                                    Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                                   X.Financial Report
I. Auditors' Report
                    Type of auditing opinion                    Standard report without qualified opinion
Date of signature of audit report                               March 27, 2023
                                                                Pan-China Certified Public Accountants (Special common
Name of the CPA
                                                                partnership)
Reference number of audit Report                                Tianjianshen(2023)No.:1178
Name of the certified Public Accountants                        Sheng Weiming, Lin Qunhui
                                                     Auditors’ Report
To the entire shareholders of Hangzhou Steam Turbine Power Group Co., Ltd.
     I. Opinion
We have audited the financial statements of Hangzhou Steam Turbine Co., Ltd..(hereinafter referred to as "the
Company"), which comprise the balance sheet as at December 31, 2022, and the income statement, the statement
of cash flows and the statement of changes in owners' equity for the year then ended and notes to the financial
statements.
    In our opinion, the attached financial statements are prepared, in all material respects, in accordance with
Accounting Standards for Business Enterprises and present fairly the financial position of the Company as at
December 31, 2022 and its operating results and cash flows for the year then ended.
      II. Basis for Our Opinion
We conducted our audit in accordance with the Auditing Standards for Certified Public Accountants in China. Our
responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the
Financial Statements section of our report. According to the Code of Ethics for Chinese CPA, we are independent
of the Company in accordance with the Code of Ethics for Chinese CPA and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit opinion.
     III. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial statements of the current period. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
(I) Recognition of income
     For details of the relevant information disclosure, please refer to Note xI (39) and Note X ,VII (61) in the
financial statements.
      The operating income of Hangzhou Steam Turbine Co., Ltd. mainly comes from the R&D, production and
sales of industrial steam turbines and other products. In 2022, the amount of operating income items shown in the
consolidated financial statements of Hangzhou Steam Turbine Co., Ltd. was RMB 5,518.8419 million, of which
the operating income of industrial steam turbine sales business was RMB 4,569.1449 million, accounting for
      As operating income is one of the key performance indicators of Hangzhou Steam Turbine Co., Ltd., there
may be inherent risks that the management of Hangzhou Steam Turbine Co., Ltd. (hereinafter referred to as
management) can achieve specific goals or expectations through improper income recognition. Therefore, we
                               Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
have identified revenue recognition as a key audit matter.
     For revenue recognition, the audit procedures we have implemented mainly include:
     (1) Understand key internal controls related to revenue recognition, evaluate the design of these controls,
determine whether they are implemented, and test the operational effectiveness of relevant internal controls;
      (2) Check the sales contract, understand the main contract terms or conditions, and evaluate whether the
revenue recognition method is appropriate;
      (3) Implementing substantive analysis procedures for operating income and gross profit margin according to
products and customers to identify whether there are material or abnormal fluctuations, and to identify the causes
of such fluctuations;
     (4) For domestic sales income, by sampling method check the supporting documents related to revenue
recognition, including sales contracts, sales invoices, shipment bills and receipts; for export income, by sampling
method check the supporting documents including sales contracts, export declarations, freight bills of lading and
sales invoices;
     (5) In conjunction with the letter confirmation of accounts receivable, the sales amount of the current period
for major customers are letter confirmed by sampling method;
       (6) Implement a cut-off test on the operating income recognized before and after the balance sheet date, and
evaluate whether the operating income is recognized within an appropriate period;
       (7) Obtain the sales return record after the balance sheet date, and check whether there is any situation that
the income recognition conditions are not met on the balance sheet date;
      (8) Check that the information related to the operating income whether has been properly presented and
disclosed in the financial statements.
(II) Impairment of accounts receivable
     For related information disclosure, please refer to Note X,V (10) and Note x (7) of the financial statements.
     As of December 31, 2022, the book balance of accounts receivable items shown in the consolidated financial
statements of Hangzhou Steam Turbine Co., Ltd. was RMB 2,914.6332 million, the bad debt provision was RMB
     According to the credit risk characteristics of each account receivable, the management measures its loss
reserves on the basis of individual accounts receivable or a combination of accounts receivable and according to
the expected credit loss amount equivalent to the whole duration. For accounts receivable that measure expected
credit losses on a single basis, the management comprehensively considers reasonable and reliable information
about past events, current status and future economic status forecasts, estimates the expected cash flow, and
determines the provision for bad debts to be accrued accordingly; For accounts receivable whose expected credit
losses are measured on the basis of combination, the management divides the combination based on aging, refers
to historical credit loss experience, and adjusts it according to forward-looking estimation, and compiles a
comparison table between the aging of accounts receivable and loss given default, thereby determining the bad
debt reserves to be accrued.
     Due to the significant amount of accounts receivable and the impairment test of accounts receivable
involving significant management judgment, we determine the impairment of accounts receivable as a key audit
matter.
     For the impairment of accounts receivable, the audit procedures we have implemented mainly include:
     (1) Understand the key internal controls related to the impairment of accounts receivable, evaluate the design
of these controls, determine whether they have been implemented, and test the operational effectiveness of the
relevant internal controls;
     (2) Review the subsequent actual write-off or reversal of accounts receivable with provision for bad debts in
previous years, and evaluate the accuracy of the management's past forecasts;
     (3) Review the management's relevant considerations and the objective evidence for the impairment test of
the accounts receivable, and evaluate whether the management fully recognizes the accounts receivable that have
been impaired;
     (4) For accounts receivable that are individually tested for impairment, obtain and examine the management's
forecast on the present value of future cash flows, evaluate the rationality of the key assumptions and the accuracy
of the data used in the forecast, and verify with the external evidence obtained;
     (5) For the accounts receivable that are tested for impairment using the combination method, evaluate the
                                Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
rationality of the management's combination dividing according to the credit risk characteristics; based on the
historical loss rate of a combination with similar credit risk characteristics and the relevant observable data
reflecting the current situation and so on to evaluate the rationality of the management's impairment test method
(including the proportion of the provision for bad debts of each combination); test the accuracy and completeness
of the data used by the management (including the accounts receivable combination with aging as the risk
characteristics, checking the accuracy of the ageing of accounts receivable by sampling method) and test whether
the calculation of the corresponding provision for bad debts is accurate;
     (6) Checking the post-payments of accounts receivable and evaluating the reasonableness of the
management's provision for bad debts of accounts receivable;
     (7) Check whether the information related to the impairment of accounts receivable has been properly
presented and disclosed in the financial statements.
(III) Net realizable value of inventories
     For details of relevant information disclosure, please refer to Notex,vI (15) and Note x,vii (9) 8 of the
financial statements.
     As of December 31, 2022, the book balance of the inventory items shown in the consolidated financial
statements of Hangzhou Steam Turbine Co., Ltd. was RMB 2,616.8032 million, the provision for price falling was
RMB 294.3419 million, and the book value was RMB2,322.4613 million.
     On the balance sheet date, the inventories are measured at the lower of the cost and net realizable value, and
the provision for inventory falling price is made based on the difference that the cost of a single inventory
exceeding the net realizable value. On the basis of considering the purpose of holding the inventory, the
management determines the estimated selling price according to the contract price, the market price of the same or
similar products, the advance receipt, the estimated disposal income, etc., and determines the net realizable value
of the inventory by the estimated sales price subtracting the estimated occurrence cost will be happened at the
time of completion and subtracting the estimated sales expenses and related taxes and fees
     Due to the significant amount of inventories and the determination of the net realizable value of inventories
involving significant management judgment, we determine the net realizable value of inventories as a key audit
item.
     For the net realizable value of inventories, the audit procedures we have implemented mainly include:
     (1) Understand the key internal controls related to the net realizable value of inventory, evaluate the design of
these controls, determine whether they have been implemented, and test the operational effectiveness of the
relevant internal controls;
     (2) Review management's forecast of the net realizable value of inventory and the actual operating results in
previous years, and evaluate the accuracy of management's past forecasts;
     (3) by sampling method review the management's forecast of the estimated selling price of the inventory, and
compare the estimated selling price with the post-event situation, the contracted selling price, the advance receipt,
and the valuation value;
     (4) evaluate the management's reasonableness for the estimation on the costs, sales expenses and related
taxes and fees that will occur from the inventory to its completion sales;
     (5) test the accuracy of the management's calculation on the net realizable value of inventory;
     (6) In combination with the inventory monitoring, check whether the ending inventory has long storage age,
obsolete models, project suspension or termination situation, and evaluate whether the management has
reasonably estimated the net realizable value;
     (7) Check whether the information related to the net realizable value of the inventory has been properly
presented and disclosed in the financial statements.
IV. Other information
The management of the Company is responsible for the other information. The other information comprises
information of the Company's annual report, but excludes the financial statements and our auditor's report.
Our opinion on the financial statements does not cover the other information and we do not and will not express
any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
                               Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
     If, based on the work we have performed on the other information that we obtained prior to the date of this
auditor's report, we conclude that there is a material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard
V. Responsibilities of Management and Those Charged with Governance for the Financial Statements
The Company's management is responsible for preparing the financial statements in accordance with the
requirements of Accounting Standards for Business Enterprises to achieve a fair presentation, and for designing,
implementing and maintaining internal control that is necessary to ensure that the financial statements are free
from material misstatements, whether due to frauds or errors.
In preparing the financial statements, management of the Company is responsible for assessing the Company's
ability to continue as a going concern, disclosing matters related to going concern and using the going concern
basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no
realistic alternative but to do so.
     Those charged with governance are responsible for overseeing the Company's financial reporting process.
VI. Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the audit standards will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.
     As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional
scepticism throughout the audit. We also:
     (1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, omissions,
misrepresentations, or the override of internal control.
     (2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances.
     (3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by management of the Company.
     (4) Conclude on the appropriateness of using the going concern assumption by the management of the
Company, and conclude, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related
disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events
or conditions may cause the Company to cease to continue as a going concern.
    (5) Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in a manner that
achieves fair presentation.
    (6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Company to express an opinion on the financial statements and bear all liability for the
opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit matters, including any significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of
                              Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
most significance in the audit of the financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
                  March 27, 2023
                                   Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
II. The Financial Statements
Statement in Financial Notes are carried in RMB
Prepared by: Hangzhou Steam Turbine Power Group Co., Ltd
                                           December 31,2022
                                                                                                             In RMB
                           Items                                    December 31,2022           January 1, 2022
Current asset：
Monetary fund                                                               1,954,980,787.90       1,622,883,247.79
Settlement provision
Outgoing call loan
Transactional financial assets                                                607,001,143.44         960,645,259.82
  Derivative financial assets
  Notes receivable                                                             95,612,927.26         215,046,941.09
     Account receivable                                                     1,924,679,367.08       1,997,950,120.70
     Financing of receivables                                                 817,555,768.45         816,653,211.21
Prepayments                                                                   401,523,615.49         443,770,434.91
Insurance receivable
Reinsurance receivable
Provisions of Reinsurance contracts receivable
     Other account receivable                                                  25,366,963.26          44,163,396.56
     Including：Interest receivable
            Dividend receivable
    Repurchasing of financial assets
    Inventories                                                             2,322,461,286.52       3,041,643,747.35
    Contract assets                                                           587,719,735.46         583,026,649.99
     Assets held for sales
Non-current asset due within 1 year
     Other current asset                                                       78,949,731.48          66,174,951.42
Total of current assets                                                     8,815,851,326.34       9,791,957,960.84
Non-current assets：
Non-current assets：
Loans and payment on other’s behalf disbursed
Creditor's right investment
  Long-term receivable                                                         77,541,093.03         153,741,093.20
  Long term share equity investment
  Other equity instruments investment                                       3,556,127,694.48       3,485,440,140.92
Other non-current financial assets                                              5,534,773.22          14,792,533.96
  Property investment                                                           6,451,478.55           6,903,986.07
    Fixed assets                                                            1,926,594,610.89       1,658,423,191.83
Construction in progress                                                      286,290,854.97         517,835,956.11
    Production physical assets
    Oil & gas assets
    Use right assets                                                           28,105,943.29          30,437,778.92
    Intangible assets                                                         274,844,788.47         277,469,707.24
  Development expenses
    Goodwill
  Long-germ expenses to be amortized
  Deferred income tax asset                                                   352,734,092.61         382,665,279.67
  Other non-current asset                                                      44,922,954.47
Total of non-current assets                                                 6,559,148,283.98       6,527,709,667.92
Total of assets                                                            15,374,999,610.32      16,319,667,628.76
Current liabilities
 Short-term loans                                                             287,753,227.89         250,065,920.45
                                  Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Loan from Central Bank
  Borrowing funds
     Transactional financial liabilities
        Derivative financial liabilities
        Notes payable                                                        411,886,347.73      309,404,319.27
     Account payable                                                       1,202,915,727.29    1,910,150,188.14
     Advance receipts                                                            230,204.48          812,701.37
     Contract liabilities                                                  2,306,912,441.68    3,052,515,293.06
Selling of repurchased financial assets
Deposit taking and interbank deposit
Entrusted trading of securities
Entrusted selling of securities
Employees’ wage payable                                                      139,014,673.58     133,122,509.92
Tax payable                                                                   73,385,124.09      81,622,378.10
      Other account payable                                                  203,788,336.85     434,578,338.13
     Including：Interest payable
             Dividend payable                                                     90,000.00
     Fees and commissions payable
     Reinsurance fee payable
     Liabilities held for sales
Non-current liability due within 1 year                                       42,802,886.86       17,607,722.97
Other current liability                                                      267,585,963.69      395,640,629.47
Total of current liability                                                 4,936,274,934.14    6,585,520,000.88
Non-current liabilities：
Reserve fund for insurance contracts
 Long-term loan                                                              159,903,673.86     180,830,007.55
Bond payable
  Including：preferred stock
  Sustainable debt
        Lease liability                                                       16,334,023.10      22,575,754.77
   Long-term payable                                                          11,104,088.21       7,579,677.56
Long-term remuneration payable to staff
Expected liabilities
     Deferred income                                                         877,381,129.85     729,438,751.74
  Deferred income tax liability                                              474,809,014.19     464,172,915.14
Other non-current liabilities
Total non-current liabilities                                              1,539,531,929.21    1,404,597,106.76
Total of liability                                                         6,475,806,863.35    7,990,117,107.64
Owners’ equity
 Share capital                                                               980,179,980.00     754,010,400.00
  Other equity instruments
  Including：preferred stock
  Sustainable debt
Capital reserves                                                             394,935,862.00      282,946,030.50
 Less：Shares in stock                                                        136,466,388.09      144,078,948.09
Other comprehensive income                                                 2,690,397,606.30    2,629,477,756.99
     Special reserve                                                          17,841,325.92       18,369,033.52
 Surplus reserves                                                            625,178,089.82      625,178,089.82
Common risk provision
Retained profit                                                            3,756,414,638.24    3,761,583,410.91
Total of owner’s equity belong to the parent company                       8,328,481,114.19    7,927,485,773.65
Minority shareholders’ equity                                                570,711,632.78      402,064,747.47
Total of owners’ equity                                                    8,899,192,746.97    8,329,550,521.12
Total of liabilities and owners’ equity                                   15,374,999,610.32   16,319,667,628.76
Legal Representative: Zheng Bin Person in charge of accounting：Zhao Jiamao Accounting Dept Leader: Jin Can
                                      Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                                                                                                    I RMB
                             Items                                     December 31,2022           January 1, 2022
Current asset：
Monetary fund                                                                  1,074,031,333.05         911,448,637.39
Transactional financial assets                                                   381,998,737.18         870,645,259.82
  Derivative financial assets
    Notes receivable                                                              34,407,856.32           6,961,501.77
    Account receivable                                                         1,438,060,860.05       1,580,364,876.72
Financing of receivables                                                         456,488,422.29         521,567,126.16
   Prepayments                                                                   316,162,169.59         362,130,094.32
  Other account receivable                                                         8,397,079.99          27,054,816.71
    Including：Interest receivable
    Dividend receivable                                                              110,000.00
     Inventories                                                               1,258,239,826.08       1,972,162,485.26
     Contract assets                                                             358,622,953.48         336,771,206.36
     Assets held for sales
Non-current asset due within 1 year
     Other current asset                                                          66,426,019.02          54,571,853.02
Total of current assets                                                        5,392,835,257.05       6,643,677,857.53
Non-current assets：
Creditor's right investment
  Other investment on bonds
  Long-term receivable
  Long term share equity investment                                              400,480,973.25         191,793,655.63
Other equity instruments investment                                            3,556,127,694.48       3,485,440,140.92
Other non-current financial assets                                                 5,534,773.22          14,654,773.22
 Property investment
 Fixed assets                                                                  1,474,208,708.15       1,216,961,095.52
Construction in progress                                                         283,786,818.95         510,746,977.12
   Production physical assets
   Oil & gas assets
   Use right assets                                                                2,717,667.45           5,718,846.89
    Intangible assets                                                            188,674,302.83         194,828,927.84
  Development expenses
    Goodwill
Long-germ expenses to be amortized
  Deferred income tax asset                                                      297,762,053.26         317,178,990.36
  Other non-current asset                                                         30,999,462.87
Total of non-current assets                                                    6,240,292,454.46       5,937,323,407.50
Total of assets                                                               11,633,127,711.51      12,581,001,265.03
Current liabilities
   Short-term loans                                                              200,169,863.01         150,136,986.30
     Transactional financial liabilities
        Derivative financial liabilities
     Notes payable                                                                 5,900,000.00
     Account payable                                                             740,412,296.58       1,225,766,343.67
  Advance receipts
     Contract Liabilities                                                      1,332,554,908.08       2,144,268,617.09
Employees’ wage payable                                                           82,125,367.12          76,018,039.12
Tax payable                                                                       17,200,998.61          11,130,803.71
      Other account payable                                                      184,847,189.08         177,365,722.18
     Including：Interest payable
                                  Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
             Dividend payable
     Liabilities held for sales
Non-current liability due within 1 year                                        1,503,579.95                 4,612,006.37
Other current liability                                                      140,853,281.80               276,610,651.60
Total of current liability                                                 2,705,567,484.23             4,065,909,170.04
Non-current liabilities：
 Long-term loan
Bond payable
  Including：preferred stock
  Sustainable debt
           Lease liability                                                     1,575,000.00                 2,799,027.12
     Long-term payable                                                         5,852,616.69                 2,785,102.53
Long-term remuneration payable to staff
Expected liabilities
     Deferred income                                                         741,999,661.14               582,083,796.03
  Deferred income tax liability                                              474,809,014.19               464,172,915.14
Other non-current liabilities
Total non-current liabilities                                              1,224,236,292.02             1,051,840,840.82
Total of liability                                                         3,929,803,776.25             5,117,750,010.86
Owners’ equity
 Share capital                                                               980,179,980.00               754,010,400.00
  Other equity instruments
  Including：preferred stock
  Sustainable debt
  Capital reserves                                                           175,558,788.66               121,457,098.65
  Less：Shares in stock                                                       136,466,388.09               144,078,948.09
Other comprehensive income                                                 2,690,397,606.30             2,630,313,185.77
     Special reserve                                                           6,000,000.00                 6,000,000.00
 Surplus reserves                                                            602,356,402.65               602,356,402.65
     Retained profit                                                       3,385,297,545.74             3,493,193,115.19
Total of owners’ equity                                                    7,703,323,935.26             7,463,251,254.17
Total of liabilities and owners’ equity                                   11,633,127,711.51            12,581,001,265.03
Legal Representative: Zheng Bin           Person in charge of accounting：Zhao Jiamao          Accounting Dept Leader: Jin
Can
                                                                                                                  In RMB
Items                                                                                 Year 2022               Year 2021
I. Income from the key business                                                                         5,788,288,588.91
Incl：Business income                                                                                    5,788,288,588.91
Interest income
Insurance fee earned
Fee and commission received
II. Total business cost                                                                                 5,360,902,963.39
Incl：Business cost                                                                                      4,091,955,492.69
  Interest expense
Fee and commission paid
 Insurance discharge payment
Net claim amount paid
                                    Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Net amount of withdrawal of insurance contract reserve
Insurance policy dividend paid
 Reinsurance expenses
  Business tax and surcharge                                                                         45,829,030.25
  Sales expense                                                                    221,489,523.60   202,868,557.82
Administrative expense                                                                              660,284,323.30
          R & D costs                                                                               350,216,635.11
     Financial expenses                                                                                9,748,924.22
     Including：Interest expense                                                                      23,435,810.36
                  Interest income                                                                    18,328,752.35
  Add: Other income                                                                                 202,548,518.03
Investment gain（“-”for loss）                                                                        168,937,379.22
   Incl: investment gains from affiliates
   Financial assets measured at amortized cost cease to be recognized
as income
         Gains from currency exchange
     Net exposure hedging income
       Changing income of fair value                                                                   -141,525.84
       Credit impairment loss                                                                        15,768,143.94
     Impairment loss of assets                                                                       -28,511,019.43
  Assets disposal income                                                                               1,094,656.77
III. Operational profit（“-”for loss）                                                                787,081,778.21
  Add ：Non-operational income                                                                       134,352,975.28
  Less: Non-operating expense                                                                        88,887,299.33
IV. Total profit(“-”for loss)                                                                       832,547,454.16
  Less：Income tax expenses                                                                          105,299,694.37
V. Net profit                                                                                       727,247,759.79
  (I) Classification by business continuity
  (II) Classification by ownership
VI. Net after-tax of other comprehensive income                                                     -485,737,329.38
                                                                                                    -485,484,629.85
                                    Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Net of profit of other comprehensive income attributable to owners of t             59,972,370.69
he parent company.
（I）Other comprehensive income items that will not be reclassified
                                                                                                            -485,297,242.70
into gains/losses in the subsequent accounting period                               60,084,420.53
measurement of defined benefit plans of changes in net debt or net ass
ets
ot be reclassified into profit or loss.
（II）
Other comprehensive income that will be reclassified into profit or loss                                        -187,387.15
.                                                                                      112,049.84
e reclassified into profit or loss.
financial assets
obligations
Net of profit of other comprehensive income attributable to Minority                            -
                                                                                                                -252,699.53
shareholders’ equity                                                                   151,103.95
VII. Total comprehensive income                                                                              241,510,430.41
Total comprehensive income attributable to the owner of the parent
company                                                                            582,369,178.01
Total comprehensive income attributable minority shareholders                                                 77,002,585.70
VIII. Earnings per share
（I）Basic earnings per share                                                                     0.54                   0.68
(II)Diluted earnings per share                                                                  0.54                   0.68
Legal Representative: Zheng Bin           Person in charge of accounting：Zhao Jiamao             Accounting Dept Leader: Jin
Can
                                    Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                                                                                             In RMB
Items                                                                                   Year 2022          Year 2021
I. Income from the key business                                                  3,185,535,942.16   3,367,538,714.58
Incl：Business cost                                                               2,463,100,672.79   2,420,764,986.89
Business tax and surcharge                                                          21,955,800.03      20,873,235.49
Sales expense                                                                       94,333,279.35      93,124,353.76
Administrative expense                                                             392,945,595.33     435,170,658.26
          R & D expense                                                            138,488,509.23     192,171,313.79
      Financial expenses                                                           -31,955,926.80      -5,277,760.85
        Including：Interest expenses                                                  5,389,750.73       4,788,907.66
          Interest income                                                           11,578,539.98      11,520,301.18
   Add：Other income                                                                 46,434,957.91     174,266,374.76
   Investment gain（“-”for loss）                                                    216,423,127.90     321,333,915.33
Including: investment gains from affiliates                                                               272,641.24
Financial assets measured at amortized cost cease to be recognized as
income
        Net exposure hedging income
        Changing income of fair value                                                  313,477.36      -2,609,265.44
       Credit impairment loss                                                                         13,154,499.97
     Impairment loss of assets                                                                        -18,259,455.46
   Assets disposal income                                                               26,288.11
II. Operational profit（“-”for loss）                                                409,341,745.21    698,597,996.40
      Add ：Non-operational income                                                   47,625,261.60    120,301,778.59
   Less：Non -operational expenses                                                    1,929,713.30     87,148,771.55
III. Total profit(“-”for loss)                                                     455,037,293.51    731,751,003.44
      Less：Income tax expenses                                                      35,367,282.97     61,521,858.42
IV. Net profit                                                                     419,670,010.54    670,229,145.02
V. Net after-tax of other comprehensive income                                      60,084,420.53   -485,297,242.70
（I）Other comprehensive income items that will not be reclassified
into gains/losses in the subsequent accounting period
measurement of defined benefit plans of changes in net debt or net ass
ets
ot be reclassified into profit or loss.
(II)Other comprehensive income that will be reclassified into profit or
loss
e reclassified into profit or loss.
financial assets
obligations
                                    Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
VI. Total comprehensive income                                                     479,754,431.07           184,931,902.32
VII. Earnings per share
（I）Basic earnings per share
(II)Diluted earnings per share
Legal Representative: Zheng Bin            Person in charge of accounting：Zhao Jiamao           Accounting Dept Leader: Jin
Can
                                   Items                                       Year 2022                  Year 2021
I.Cash flows from operating activities
Cash received from sales of goods or rending of services                         4,396,331,648.09         4,911,745,732.94
 Net increase of customer deposits and capital kept for brother
company
Net increase of loans from central bank
Net increase of inter-bank loans from other financial bodies
Cash received against original insurance contract
Net cash received from reinsurance business
Net increase of client deposit and investment
   Cash received from interest, commission charge and commission
Net increase of inter-bank fund received
Net increase of repurchasing business
   Net cash received by agent in securities trading
  Tax returned                                                                      81,231,460.36            19,124,473.13
Other cash received from business operation                                        251,137,216.37           492,993,373.24
  Sub-total of cash inflow                                                       4,728,700,324.82         5,423,863,579.31
Cash paid for purchasing of merchandise and services                             2,662,046,241.61         3,264,017,654.61
Net increase of client trade and advance
Net increase of savings in central bank and brother company
   Cash paid for original contract claim
   Net increase in financial assets held for trading purposes
   Net increase for Outgoing call loan
 Cash paid for interest, processing fee and commission
Cash paid to staffs or paid for staffs                                           1,027,230,600.33           995,048,140.94
 Taxes paid                                                                        344,859,140.11           566,304,337.33
Other cash paid for business activities                                            370,423,537.14           526,683,957.41
Sub-total of cash outflow from business activities                               4,404,559,519.19         5,352,054,090.29
Net cash generated from /used in operating activities                              324,140,805.63            71,809,489.02
II. Cash flow generated by investing
Cash received from investment retrieving                                            10,752,958.20
Cash received as investment gains                                                  131,449,638.53           220,665,203.47
Net cash retrieved from disposal of fixed assets, intangible assets, and
other long-term assets
Net cash received from disposal of subsidiaries or other operational
units
Other investment-related cash received                                           2,627,490,212.88         4,447,665,088.15
Sub-total of cash inflow due to investment activities                            2,770,909,495.92         4,670,633,768.49
Cash paid for construction of fixed assets, intangible assets and other
      long-term assets
Cash paid as investment
Net increase of loan against pledge
Net cash received from subsidiaries and other operational units                                             298,438,942.86
Other cash paid for investment activities                                        2,085,697,180.39         4,383,572,000.00
Sub-total of cash outflow due to investment activities                           2,358,498,758.85         4,863,666,686.48
                                    Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Net cash flow generated by investment                                              412,410,737.07          -193,032,917.99
III.Cash flow generated by financing
Cash received as investment                                                        169,795,500.00               320,000.00
Including: Cash received as investment from minor shareholders                     169,795,500.00               320,000.00
   Cash received as loans                                                          306,300,000.00           422,800,000.00
Other financing –related cash received                                                 200,000.00           117,695,995.86
Sub-total of cash inflow from financing activities                                 476,295,500.00           540,815,995.86
Cash to repay debts                                                                267,900,000.00           258,500,000.00
Cash paid as dividend, profit, or interests                                        363,192,673.98           269,797,633.75
Including: Dividend and profit paid by subsidiaries to minor
shareholders
Other cash paid for financing activities                                           273,340,869.54           271,082,296.17
Sub-total of cash outflow due to financing activities                              904,433,543.52           799,379,929.92
Net cash flow generated by financing                                              -428,138,043.52          -258,563,934.06
IV. Influence of exchange rate alternation on cash and cash equivalents             29,075,934.51            -3,028,317.00
V.Net increase of cash and cash equivalents                                        337,489,433.69          -382,815,680.03
Add: balance of cash and cash equivalents at the beginning of term               1,467,538,968.07         1,850,354,648.10
VI ..Balance of cash and cash equivalents at the end of term                     1,805,028,401.76         1,467,538,968.07
Legal Representative: Zheng Bin            Person in charge of accounting：Zhao Jiamao           Accounting Dept Leader: Jin
Can
                                                                                                                      In RMB
                                   Items                                       Year 2022                  Year 2021
I.Cash flows from operating activities
Cash received from sales of goods or rending of services                         1,980,841,503.83         2,515,049,261.36
 Tax returned                                                                       52,872,382.00             3,177,679.96
Other cash received from business operation                                         66,396,405.12            85,083,996.83
Sub-total of cash inflow                                                         2,100,110,290.95         2,603,310,938.15
Cash paid for purchasing of merchandise and services                             1,314,401,634.33         1,620,710,170.84
Cash paid to staffs or paid for staffs                                             597,944,639.72           568,164,460.95
Taxes paid                                                                         159,798,491.41           394,260,109.04
Other cash paid for business activities                                             85,114,385.41           165,905,142.91
Sub-total of cash outflow from business activities                               2,157,259,150.87         2,749,039,883.74
Net cash generated from /used in operating activities                              -57,148,859.92          -145,728,945.59
II. Cash flow generated by investing
Cash received from investment retrieving                                            10,288,000.00
Cash received as investment gains                                                  217,826,572.17           367,693,490.76
Net cash retrieved from disposal of fixed assets, intangible assets, and
other long-term assets
Net cash received from disposal of subsidiaries or other operational
units
Other investment-related cash received                                           1,943,515,564.65         2,580,396,347.51
 Sub-total of cash inflow due to investment activities                           2,172,431,018.82         2,948,349,946.47
Cash paid for construction of fixed assets, intangible assets and other
      long-term assets
      Cash paid as investment                                                      203,652,611.00           279,075,715.98
Net cash received from subsidiaries and other operational units                                                       0.00
Other cash paid for investment activities                                        1,260,000,000.00         2,476,000,000.00
Sub-total of cash outflow due to investment activities                           1,672,528,719.57         2,871,569,999.23
Net cash flow generated by investment                                              499,902,299.25            76,779,947.24
III. Cash flow generated by financing
   Cash received as investment
   Cash received as loans                                                          200,000,000.00           150,000,000.00
                                   Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Other financing –related ash received                                                                      110,195,995.86
 Sub-total of cash inflow from financing activities                               200,000,000.00           260,195,995.86
  Cash to repay debts                                                             150,000,000.00           150,000,000.00
Cash paid as dividend, profit, or interests                                       306,578,624.17           188,403,557.65
Other cash paid for financing activities                                            7,456,797.00             1,103,760.00
 Sub-total of cash outflow due to financing activities                            464,035,421.17           339,507,317.65
Net cash flow generated by financing                                             -264,035,421.17           -79,311,321.79
IV. Influence of exchange rate alternation on cash and cash equivalents            21,960,352.49            -2,217,274.76
V.Net increase of cash and cash equivalents                                       200,678,370.65          -150,477,594.90
Add: balance of cash and cash equivalents at the beginning of term                873,334,962.40         1,023,812,557.30
VI ..Balance of cash and cash equivalents at the end of term                    1,074,013,333.05           873,334,962.40
Legal Representative: Zheng Bin           Person in charge of accounting：Zhao Jiamao           Accounting Dept Leader: Jin
Can
                                                                                         Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
            Amount in this period
                                                                                                                                                                                                                                    In RMB
                                                                                                                                                  Year 2022
                                                                                                               Owner’s equity Attributable to the Parent Company
                                                               Other Equity instrument           Share                                                                                                                           Minor            Total of
                   Items                                                                         Capital            Other                                                     Comm
                                                                                                                                   Other                                                                                       shareholder        owners’
                                               Share         Preferr              Preferr                          Equity                       Specialize     Surplus        on risk    Retained       Oth
                                                                                                                                Comprehensi                                                                     Subtotal        s’ equity          equity
                                               Capital          ed     Sustaina     ed                           instrument                     d reserve      reserves       provisi     profit        er
                                                                                               Sustainable                       ve Income
                                                              stock    ble debt                                     Other                                                       on
                                                                                   stock          debt
I.Balance at the end of last year             754,010,40                                       282,946,03        144,078,94     2,629,477,75     18,369,03    625,178,08                3,761,583,41          7,927,485,77     402,064,74     8,329,550,52
Add: Change of accounting policy                                                                                                                                                                                           -                                 -
Correcting of previous errors
                                                                                                                                                                                                                           -                                 -
Merger of entities under common control
                                                                                                                                                                                                                           -                                 -
  Other
                                                                                                                                                                                                                           -                                 -
II.Balance at the beginning of current year   754,010,40                                       282,946,03         144,078,94    2,629,477,75     18,369,03    625,178,08                3,761,583,41          7,927,485,77     402,064,74     8,329,550,52
                                                                   -          -            -                                                                                        -                     -
                                                                                                                           -                             -
III.Changed in the current year               226,169,58                                       111,989,83        7,612,560.0    60,919,849.3     527,707.6                                         -          400,995,340.     168,646,88     569,642,225.
                                                                   -          -            -                                                                              -         -                     -
（1）Total comprehensive income                                                                                                   59,972,370.6                                            522,396,807.          582,369,178.     102,691,44     685,060,625.
（II）Investment or decreasing of capital
by owners                                                -         -          -            -                               -               -             -                -         -               -     -
ers                                                                                                                                                                                                                        -
vested capital                                                                                                                                                                                                             -                                 -
as owners’ equity                                                                                      13                                                                                                                3               8               1
                                                                                                                                                                                                                           -                                 -
                                                                                                                           -                                                                       -                                                     -
                                                                                                                                                                                                                         -               -
（III）Profit allotment                                                                                            7,612,560.0                                                            301,395,999.                                          338,199,809.
                                                         -         -          -            -               -                               -             -                -         -                     -   293,783,439.     44,416,370.
                                                                                                                                                                                                                           -                                 -
                                                                                                                                                                                                                           -                                 -
                                                                                            Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                                                                                                             -                                                                             -                                                        -
  shareholders)                                                                                                                                                                                                        293,783,439.      44,416,370.
                                                                                                                                                                                                                                     -                                -
  (IV) Internal transferring of owners’
  equity                                                                                                                                                                                                                             -                                -
  capital shares)                                                                                                                                                                                                                    -                                -
  capital shares)                                                                                                                                                                                                                    -                                -
                                                                                                                                                                                                                                     -                                -
  that carry forward
                                                                                                                                                                                                                                     -                                -
  Retained earnings
  over retained earnings                                                                                                                                                                                                             -                                -
                                                                                                                                                                                                                                     -                                -
  (V). Special reserves                                                                                                                                 443,211.6                                                                                 -
                                                           -         -          -           -                 -                 -                  -                              -         -                -          443,211.69                           275,800.98
  （VI）Other                                                                                       57,070,344.                                           970,919.2                                                      57,046,903.7                                 -
  IV. Balance at the end of this term           980,179,98                                        394,935,86        136,466,38       2,690,397,60       17,841,32     625,178,08                3,756,414,63           8,328,481,11      570,711,63      8,899,192,74
                                                                     -          -           -                                                                                               -
               Amount in last year
                                                                                                                                                                                                                                            In RMB
                                                                                                                                                          Year 2021
                                                                                                                  Owner’s equity Attributable to the Parent Company
                    Items                                        Other Equity instrument                                                                                              Comm                                                  Minor              Total of
                                                                                                                    Less:              Other                                                                                              shareholder          owners’
                                                 Share         Preferr                            Capital                                              Specialize      Surplus        on risk     Retained       Oth
                                                                                      Oth                          Shares in        Comprehensi                                                                           Subtotal         s’ equity            equity
                                                 Capital          ed     Sustaina                reserves                                              d reserve       reserves       provisi      profit        er
                                                                                       er                           stock            ve Income
                                                                stock    ble debt                                                                                                       on
I.Balance at the end of last year
                                                       .00                                              .65               .09               6.84              .27             .78                       9.91                    1.36               .13               8.49
Add: Change of accounting policy
                                                             Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Correcting of previous errors
Merger of entities under common control                                                                   869,345.59                 172,106,637.
                                                                       .27                                                      4                             6            25              51
  Other
II.Balance at the beginning of current year
                                                       .00             .92           .09           6.84          .86           .82           2.27           8.62           .38            3.00
                                                                         -                            -                                                        -             -               -
                                                                                                                   -                 346,225,008.
III.Changed in the current year                                96,960,436.                 485,484,629.                                             236,420,004.   124,400,666    360,820,671.
（1）Total comprehensive income                                                              485,484,629.
（II）Investment or decreasing of capital                        17,297,907.                                                                          17,297,907.4                  17,617,907.4
by owners                                                                                                                                                           320,000.00
s                                                                                                                                                                   320,000.00     320,000.00
sted capital
owners’ equity                                                         40                                                                                     0                             0
                                                                                                                                                -              -             -               -
（III）Profit allotment                                                                                                                185,864,649.   185,864,649.   73,830,370.    259,695,019.
                                                                                                                                                -              -             -               -
shareholders)                                                                                                                        185,864,649.   185,864,649.   73,830,370.    259,695,019.
(IV) Internal transferring of owners’ equity
capital shares)
capital shares)
that carry forward
Retained earnings
retained earnings
                                                                                          Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
(V). Special reserves                                                                                                                                                                                                        -238,297.48      -793,099.20        -1,031,396.68
                                                                                                                                                            -                                                                                              -
                                                                                                         -                                                                                                   -                            -                -                 -
（VI）Other                                                                                  114,258,343                                              38,350.14                                   117,902,815.                232,122,809.      127,099,783        359,222,593.
                                                                                                       .82                                                                                               93                             61               .41               02
IV. Balance at the end of this term
                                                         .00                                           .50                .09               6.99          .52               .82                         0.91                           3.65              .47             1.12
               Legal Representative: Zheng Bin                 Person in charge of accounting：Zhao Jiamao                                Accounting Dept Leader: Jin Can
               Amount in this period
                                                                                                                                                                                                                                                    In RMB
                                                                                                                                                          Year 2022
                                                                                  Other Equity instrument
                                 Items                                                                                                                        Other
                                                                                                                          Capital         Less: Shares                            Specialized     Surplus                                 Othe         Total of
                                                               Share capital   Preferre                      Othe                                         Comprehensive                                              Retained profit
                                                                                          Sustainabl                     reserves           in stock                                reserve       reserves                                 r         owners’ equity
                                                                                                                                                             Income
                                                                               d stock                        r
                                                                                            e debt
          I.Balance at the end of last year
          Add: Change of accounting policy
          Correcting of previous errors
               Other
          II.Balance at the beginning of current year
          III.Changed in the current year                                                                             54,101,690.01       -7,612,560.00     60,084,420.53                                                                           240,072,681.09
          （I）Total comprehensive income                                                                                                                     60,084,420.53                                            419,670,010.54                 479,754,431.07
          (II) Investment or decreasing of capital by owners                                                          54,101,690.01                                                                                                                   54,101,690.01
                                                                                Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
pital
equity                                                                                                54,101,690.01                                                                                               54,101,690.01
                                                                                                                                                                                                      -                       -
（III）Profit allotment                                                                                                  -7,612,560.00
                                                                                                                                                                                                      -                       -
(IV) Internal transferring of owners’ equity
shares)
shares)
carry forward
Retained earnings
retained earnings
(V) Special reserves
（VI）Other
IV. Balance at the end of this term
     Amount in last year
                                                                                                                                                                                                                 In RMB
                                                                                                                                       Year 2021
                                                                        Other Equity instrument                                            Other
                        Items                                                                            Capital       Less: Shares                      Specialized     Surplus                          Othe     Total of
                                                     Share Capital   Preferre                Othe                                      Comprehensive                                    Retained profit
                                                                                                        reserves         in stock                          reserve       reserves                          r     owners’ equity
                                                                                                                                          Income
                                                                     d stock    Sustainabl        r
                                                                     Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                                                       e debt
I.Balance at the end of last year
Add: Change of accounting policy
Correcting of previous errors
      Other
II.Balance at the beginning of current year
                                                                                                   -                                 -
III.Changed in the current year                                                                                                                                        514,870,642.43    12,077,248.29
（I）Total comprehensive income                                                                                                                                          670,229,145.02   184,931,902.32
(II) Investment or decreasing of capital by owners                                     17,297,907.40                                                                                     17,297,907.40
pital
equity                                                                                 17,297,907.40                                                                                     17,297,907.40
                                                                                                                                                                                    -                -
（III）Profit allotment
                                                                                                                                                                                    -                -
(IV) Internal transferring of owners’ equity
shares)
shares)
carry forward
Retained earnings
retained earnings
(V) Special reserves
                                                         Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
（VI）Other                                                                                                                                                   28,256,147.40     -6,537,911.44
IV. Balance at the end of this term
     Legal Representative: Zheng Bin   Person in charge of accounting：Zhao Jiamao          Accounting Dept Leader: Jin Can
                               Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
III．Basic Information of the Company
Hangzhou Steam Turbine Power Group Co., Ltd. (Original name: Hangzhou Steam Turbine Co., Ltd. Hereinafter
referred to as "the Company") was incorporated as a joint stock limited company exclusively promoted by
Hangzhou Steam Turbine Holdings Co., Ltd(Original name: Hanghou Steam Turbine Power Group Co.,
Ltd.Hereinafter referred to as "Steam Turbine Holdings") approved by the Securities Regulatory Commission of
the State Council with the Document SRC [1998] No. 8 by offering domestically listed foreign currency ordinary
shares (B Shares), with registration date: April 23, 1998, Headquartered in Hangzhou, Zhejiang Province. The
company now holds a unified social credit code for the 913300007042026204 business license, The Company’s
registered capital is RMB 980,179.98 million with total capital share of 980,179.98 million shares (face value
RMB1.00). Among which state-owned legal person shares were 623.77224 million shares and 356.40774 million
shares of current B shares. The shares were issued and listed for trading in Shenzhen Stock Exchange on April 28,
  The design, manufacturing, Main Business Activities: R&D, Production and Sales of Industrial Steam Turbine.
Main Products: Industrial Steam Turbine.
These Financial Statements are released upon approval at the 32nd meeting of the 8th term of Board held on
March 27, 2023.
     As of December 31, 2022, the Company included the following 16 subsidiaries in the scope of the current
consolidated financial statements, as shown in Notes X(8) to this financial statement.
    No               Names of subsidiaries included in the consolidated financial statements of   Abbreviation
                     the current period
                     Zhejiang Steam Turbine Packaged Technologies Co., Ltd.,                      Packaged Technologies
                                                                                                  Co.
                     China mechanical and Electrical Institute -HSTG (Hangzhou) United            China mechanical In
                                                                                                  stitute Company
IV. Basis of compiling the financial statement
(1) Basis of compiling
The Company adopts perpetual operation as the basis of financial statements.
(II) Assessment on perpetuation
       No issue or situation, in 12 months since the end of report period, composes major doubt on the
                                Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
       perpetuation assumption of the Company.
 V. Principal Accounting Policies and Estimations
Principal Accounting Policies and Estimations
Important prompt: The Company utilized detailed accounting polices and estimations on providing of bad debt
provisions, fixed asset depreciation, intangible asset amortization, recognition of revenue, and so forth, according
to its business practices.
The finance report produced by the Company is accordance with the Enterprise Accounting Standard, and reflects
the Company’s financial state, business performance and cash flow frankly and completely.
The Company uses the calendar year for its fiscal year. A fiscal year is from January 1 to December 31.
The Company’s relatively shorter operational period, which is 12 months, and is used as division of liquidity of
assets and liabilities.
The Company uses Renminbi (RMB) as the standard currency for book keeping.
(1). Treatment of entities under common control
Assets and liabilities acquired in merger of entities are measured at book values at the date of merger. The
difference between the net book value of asset and the offered price (or total of face value of shares issued) will be
adjusted into capital reserves; when the capital reserves is not enough to reduce, it will be adjusted into retained
profit.
(2). Treatment of entities under different control
     The difference of takeover cost over the fair value of recognizable net asset of the acquired entity is
recognized as goodwill at the day of takeover; in case the takeover cost is lower than the fair value of recognizable
net asset of the acquired entity, the measuring process over the recognizable asset, liabilities, contingent liabilities,
and takeover cost, shall be repeated, if comes out the same result, the difference shall be be recorded into current
income
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.
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.
(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
                                 Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Asset and liability items in the balance sheet are translated basing on the exchange rate of the balance sheet date;
Owners’ equities other than Retained Profit are translated at the exchange rate of the date when the trade
happened. Income and expense items in the income statement are translated at the similar rate of the date when the
trade happened. Differences generated by the above translating of foreign currencies are demonstrated separately
under the owners’ equity in the balance sheet.
       (1) Classification of financial assets and financial liabilities
      Financial assets are divided into the following three categories upon initial recognition: 1) Financial assets
measured in amortized cost; 2) Financial assets measured at fair value, whose changes are included in other
comprehensive income; 3) Financial assets measured at fair value, whose changes are included in current profits
and losses.
      Financial liabilities are divided into the following four categories upon initial recognition: 1) Financial
liabilities measured at fair value, whose changes are included in current profits and losses; 2) Financial liabilities
resulting from the transfer of financial assets that do not meet the conditions for derecognition or continue to be
involved in the transferred financial assets; 3) Financial guarantee contracts that do not belong to the above 1) or
Financial liabilities measured in amortized cost.
      (2) Recognition basis, measurement methods and conditions for derecognition of financial assets and
financial liabilities
      However, if the accounts receivable initially recognized by the company do not contain significant financing
components or the company does not consider the financing components in the contract for less than one year, the
initial measurement shall be made according to the transaction price. The initial measurement is made according
to the transaction price defined in Accounting Standards for Business Enterprises No.14-Income.
      ①Financial assets measured at amortized cost
      The actual interest rate method is adopted for subsequent measurement according to amortized cost. Gains or
losses arising from financial assets measured in amortized cost that are not part of any hedging relationship are
included in current profits and losses when derecognition, reclassification, amortization according to the effective
interest rate method, or impairment recognition.
      ② Debt instruments investment measured at fair value, whose changes are included in other comprehensive
income
      Fair value is adopted for subsequent measurement. Interest, impairment losses or gains and exchange gains
and losses calculated by the effective interest rate method are included in the current profits and losses, while
other gains or losses are included in other comprehensive income. Upon termination of recognition, the
accumulated gains or losses previously included in other comprehensive income shall be transferred out of other
comprehensive income and included in current profits and losses.
      ③ Equity instrument investments measured at fair value, whose changes are included in other
comprehensive income
      Fair value is adopted for subsequent measurement. Dividends received (except those that belong to the part
of investment cost recovery) are included in current profits and losses, and other gains or losses are included in
other comprehensive income. Upon termination of recognition, the accumulated gains or losses previously
included in other comprehensive income shall be transferred out of other comprehensive income and included in
retained income.
      ④ Financial assets measured at fair value and changes included in current profits and losses
      The fair value is adopted for subsequent measurement, and the resulting gains or losses (including interest
and dividend income) are included in the current profits and losses unless the financial asset is part of the hedging
relationship.
      (3) Subsequent measurement methods of financial liabilities
      ① Financial liabilities measured at fair value, whose changes are included in current profits and losses
      Such financial liabilities include transactional financial liabilities (including derivatives of financial liabilities)
and financial liabilities designated to be measured at fair value, whose changes are included in current profits and
losses. Such financial liabilities are subsequently measured at fair value. Changes in the fair value of financial
liabilities designated to be measured at fair value, whose changes are included in the profits and losses of the
current period due to changes in the company's own credit risk are included in other comprehensive income,
                                Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
unless such treatment will cause or expand accounting mismatch in profits and losses. Other gains or losses
arising from such financial liabilities (including interest expenses and changes in fair value except for changes in
the company's own credit risk) are included in the current profits and losses unless the financial liabilities are part
of the hedging relationship. Upon termination of recognition, the accumulated gains or losses previously included
in other comprehensive income shall be transferred out of other comprehensive income and included in retained
income.
      ② Financial liabilities resulting from the transfer of financial assets that do not meet the conditions for
derecognition or continue to be involved in the transferred financial assets
      B. Financial assets have been transferred, and the transfer meets the provisions of the Accounting Standards
for Business Enterprises No.23-Transfer of Financial Assets on the derecognition of financial assets.
      When the current obligation of a financial liability (or part thereof) has been discharged, the financial liability
(or part thereof) shall be derecognized accordingly.
      (4) Recognition basis and measurement method of financial asset transfer
      If the company has transferred almost all risks and rewards in the ownership of financial assets, it shall
terminate the recognition of the financial assets and separately recognize the rights and obligations arising from or
retained in the transfer as assets or liabilities; If almost all risks and rewards on the ownership of financial assets
are retained, the transferred financial assets shall continue to be recognized. If the company neither transfers nor
retains almost all risks and rewards in the ownership of the financial asset, the following situations shall be
handled respectively: 1) If the control over the financial asset is not retained, the recognition of the financial asset
shall be terminated, and the rights and obligations generated or retained in the transfer shall be separately
recognized as assets or liabilities; 2) If the control over the financial assets is retained, the relevant financial assets
shall be recognized according to the extent of continuing involvement in the transferred financial assets, and the
relevant liabilities shall be recognized accordingly.
      If the overall transfer of financial assets meets the conditions for derecognition, the difference between the
following two amounts shall be included in the current profits and losses: 1) The book value of the transferred
financial assets on the derecognition date; 2) The sum of the consideration received for the transfer of financial
assets and the amount of the corresponding derecognized portion of the accumulated amount of changes in fair
value originally directly included in other comprehensive income (the financial assets involved in the transfer are
debt instrument investments measured at fair value, whose changes are included in other comprehensive income).
If a part of the financial asset is transferred and the transferred part meets the conditions for derecognition as a
whole, the book value of the financial asset before transfer shall be apportioned between the derecognition part
and the continuing recognition part according to their respective relative fair values on the transfer date, and the
difference between the following two amounts shall be included in the current profits and losses: 1) The book
value of the derecognition part; 2) The sum of the consideration of the derecognized portion and the amount of the
corresponding derecognized portion of the cumulative amount of changes in fair value originally directly included
in other comprehensive income (financial assets involved in transfer are debt instrument investments measured at
fair value, whose changes are included in other comprehensive income).
      (5) Impairment of financial instruments
      On the basis of expected credit losses, the company carries out impairment treatment on financial assets
measured at amortized cost, debt instrument investments measured at fair value whose changes are included in
other comprehensive income, lease receivables, loan commitments other than financial liabilities classified as
financial liabilities measured at fair value, whose changes are included in current profits and losses, financial
liabilities not measured at fair value, whose changes are included in current profits and losses, or financial
guarantee contracts that are not financial asset transfers which do not meet the conditions for derecognition or
which continue to be involved in financial liabilities formed by transferred financial assets, and recognize loss
provisions.
      Expected credit loss refers to the weighted average of the credit losses of financial instruments weighted by
the risk of default. Credit loss refers to the difference between the cash flow of all contracts discounted according
to the original real interest rate and the expected cash flow of all contracts receivable according to the contract,
that is, the present value of all cash shortages. Among them, the Company discounts the financial assets purchased
or originated with credit impairment at the actual interest rate adjusted by credit.
      For financial assets purchased or originated that have suffered credit impairment, the company will only
recognize the accumulated changes in expected credit losses during the entire duration since initial recognition as
loss reserves on the balance sheet date.
      For accounts receivable that do not contain significant financing components or that the company does not
consider financing components in contracts of not more than one year, the company uses simplified measurement
                                   Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
methods to measure the loss reserve according to the expected credit loss amount equivalent to the entire duration.
     For lease receivables and receivables containing significant financing components, the company uses
simplified measurement methods to measure the loss reserve according to the expected credit loss amount
equivalent to the entire duration.
     For financial assets other than the above measurement methods, the company evaluates whether its credit risk
has increased significantly since the initial recognition on each balance sheet date. If the credit risk has increased
significantly since the initial recognition, the company shall measure the loss reserve according to the amount of
expected credit loss during the whole duration. If the credit risk has not increased significantly since the initial
recognition, the company shall measure the loss reserve according to the expected credit loss amount of the
financial instrument within the next 12 months.
     The company uses the available reasonable and reliable information, including forward-looking information,
to determine whether the credit risk of financial instruments has increased significantly since the initial
recognition by comparing the risk of default on the balance sheet date with the risk of default on the initial
recognition date.
     The company evaluates expected credit risks and measures expected credit losses on the basis of individual
financial instruments or combinations of financial instruments. When based on the combination of financial
instruments, the company divides financial instruments into different combinations based on common risk
characteristics.
     For financial assets measured in amortized cost, the loss reserve shall be offset against the book value of the
financial assets listed in the balance sheet; For creditor's rights investments measured at fair value, whose changes
are included in other comprehensive income, the company recognizes its loss reserve in other comprehensive
income, which does not offset the book value of the financial asset.
   Items                              Basis for determining combination                 Methods of measuring expected credit loss
Other receivables-associated          Taking related parties within the scope of
transaction combinations within the   consolidated financial statements as credit       Refer to the historical credit loss experience,
scope of consolidated financial       risk characteristics, other receivables are       combine the current situation with the forecast
statements                            combined                                          of future economic situation, and calculate the
                                                                                        expected credit loss through default risk
                                      Taking aging as the credit risk characteristic,   exposure and the expected credit loss rate
                                      combine other receivables except the related      within the next 12 months or the whole
Other receivables-aging combination
                                      party receivables within the scope of the         duration.
                                      consolidated financial statements
(3) Expected credit risks and measuring expected credit losses by combination
   Items                              Basis for determining combination       Methods of measuring expected credit loss
Bank acceptance bills receivable                                              Refer to the historical credit loss experience, combine
                                                                              the current situation and the forecast of the future
                                                                              economic situation, compile a comparison table
Commercial acceptance bills           Bill type                               between the aging of accounts receivable and the
receivable                                                                    expected credit loss rate during the whole duration,
                                                                              and calculate the expected credit loss.
                                                                              Refer to the historical credit loss experience, combine
                                      Taking related parties within the
Accounts receivable-associated                                                the current situation and the forecast of the future
                                      scope of consolidated financial
transaction combinations within the                                           economic situation, compile a comparison table
                                      statements as credit risk
scope of consolidated financial                                               between the aging of accounts receivable and the
                                      characteristics, receivables are
statements                                                                    expected credit loss rate during the whole duration,
                                      combined
                                                                              and calculate the expected credit loss.
                                                                              Refer to the historical credit loss experience, combine
                                      Taking aging as the credit risk
                                                                              the current situation and the forecast of the future
Accounts receivable-aging             characteristic, combine receivables
                                                                              economic situation, compile a comparison table
                                      except the related party receivables
combination                                                                   between the aging of accounts receivable and the
                                      within the scope of the consolidated
                                                                              expected credit loss rate during the whole duration,
                                      financial statements
                                                                              and calculate the expected credit loss.
Contract assets——associated           Taking related parties within the       Refer to the historical credit loss experience, combine
transaction combinations within the   scope of consolidated financial         the current situation and the forecast of the future
scope of consolidated financial       statements as credit risk               economic situation, compile a comparison table
statements                            characteristics, Costract assets are    between the aging of accounts receivable and the
                                      combined                                expected credit loss rate during the whole duration,
                                                                              and calculate the expected credit loss.
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Contract assets——aging combination Taking aging as the credit risk        Refer to the historical credit loss experience, combine
                                   characteristic, combine receivables    the current situation and the forecast of the future
                                   except the related party contract      economic situation, compile a comparison table
                                   assets within the scope of the         between the aging of accounts receivable and the
                                   consolidated financial statements      expected credit loss rate during the whole duration,
                                                                          and calculate the expected credit loss.
Long-term receivable——aging            Aging                              Refer to the historical credit loss experience, combine
combination                                                               the current situation and the forecast of the future
                                                                          economic situation, compile a comparison table
                                                                          between the aging of accounts receivable and the
                                                                          expected credit loss rate during the whole duration,
                                                                          and calculate the expected credit loss.
Rate for the Whole Duration
                                   Aging                                   Receivable receivable/contract assets Expected credit
                                                                                               loss rate (%)
Within 1 year (inclusive, the same below)
Over 5 years
      (6) Setoff of Financial Assets and Liabilities
      The financial assets and liabilities of the company are shown separately in the balance sheet which do not
offset each other. However, when the following conditions are met at the same time, the net amount after mutual
offset is shown on the balance sheet. 1. The company has the legal right to offset the recognized amount, and this
legal right is currently enforceable. 2. The company plans to settle the financial assets or liquidate the financial
liabilities at the same time for netting settlement.
      If the transfer of financial assets does not meet the conditions for the termination of recognition, the company
shall not set off the transferred financial assets and related liabilities.
    For details, please refer to Section X(5)-10 Financial instrument of this report.
    For details, please refer to Section X(5)-10 Financial instrument of this report.
     For details, please refer to Section X(5)-10 Financial instrument of this report.
Methods for determining expected credit losses of other receivables and accounting treatment
    For details, please refer to Section X(5)-10 Financial instrument of this report.
(1) Inventory classification
Inventories include saleable finished goods or merchandise, product-in-process , consumption material and goods
in manufacturing procedure or working procedure.
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(2) Pricing of inventory to be delivered
On company adopts the mobile weighted average method, other companies adopt the weighted average method at
the end of the month, and the individual valuation method
(3) Recognition of realizable net value of inventory and providing of inventory impairment provision
At the balance sheet day, inventories are measured at the lower of costs and cashable net values, the individual
difference between the cashable net value and cost are provided as inventory impairment provision. For finished
product, merchandise, saleable material and other saleable merchandise inventory, their cashable net values are
recognized by their estimated sale price in normal operation deducting estimated sale expenses and related taxes;
for material inventory which need processing, it cashable net value are recognized by the estimated sale prices of
its finished products in normal operation deducting the estimated cost, sale expenses and related taxes due to the
end of processing; At the balance sheet day, for inventory item which part has contract price and part has no
contract price, the cashable net value is accounted separately, and recognize the inventory impairment provision
or returnable cash..
(4) Inventory system
Inventory system: perpetual inventory system
(5) Amortization of low-value consumables and packaging materials
Basis of amortizing: one-off
Basis of amortizing: one-off
     According to the relationship between performance obligation and customer payment, the company lists
contract assets or contract liabilities in the balance sheet. The company will offset the contractual assets and
contractual liabilities under the same contract and list them in net amount.
     The company lists the right to receive consideration from customers unconditionally (that is, only depending
on the passage of time) as receivables, and lists the right to receive consideration after transferring goods to
customers (which depends on factors other than the passage of time) as contract assets.
     The Company's obligation to transfer goods to customers for received or receivable consideration from
customers is listed as a contractual liability.
     For details, please refer to Section X(5)-10 Financial instrument of this report.
According to the contract, if the invested enterprise’s main finance and operation policy need to be agreed by the
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other investing party, the investment is common control investment; if only have participating decision rights in
invested enterprise’s main finance and operation policy but have no own control or common control with other
investing part, the investment is investment with substantial influence.
(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.
recognized as the initial investment cost on cost basis.
Transactions under an “one-off” trade are accounted as a common trade of ownership. Transactions which are not
“one-off” trades are re-measured for their fair value at the day of acquisition. Balance between the fair value and
the book value of the long-term equity investment is adjusted to current investment gains; other gains from equity
on equity basis before the acquisition day are written over to current gains of at the day of acquisition, but not the
gains from re-calculating of changes in net liability or asset by the invested entity.
 (3) Formed by means other than entity merger:
Acquired by cash payment – initial investment cost is the actual amount of payment;
Acquired by issuing of equity certificates – initial investment cost is the fair value of equity certificate issued;
Acquired by debtor restructuring – initial cost recognized as according to the Enterprise Accounting Standard
No.12 – Debtor restructuring;
Acquired by trading of non-monetary asset - initial cost recognized as according to the Enterprise Accounting
Standard No.7 – Trade of non-monetary assets;
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.
(1) Individual account
The difference between the book value and the actual purchase price of the disposed equity is recorded into the
current profit and loss. With regard to the remaining equity, which still has a significant impact on the invested
entity or exercises joint control with other parties, it shall be converted to equity accounting; if the entity under
investment can no longer be controlled, jointly controlled or significantly affected, it shall be recognized as a
financial asset, Accounting shall be carried out in accordance with the relevant provisions of Accounting
Standards for Enterprises No. 22-recognition and Measurement of Financial Instruments.
(2) Basis of Consolidated Financial Statements
as “one-off” trade:
Before losing of control power, the balance of disposal consideration and the share of net asset attributable to the
Company on continued basis since purchasing or merger, is adjusted to capital reserves (capital premium),
whereas if the capital premium is not enough to offset the amount, retained profit will be offset at corresponding
amount.
At losing of control power over a former subsidiary, the retained equity shares shall be re-calculated according to
the fair value at the day of losing power. Sum of the consideration obtained from disposal and fair value of the
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retained equity shares, less the share of net asset attributable to the Company on continued basis since purchasing
or merger, is accounted into investment gains of the period when the control power is disposed, and goodwill shall
be offset meanwhile. Other gains related to the equities in formal subsidiary shall be written over to current
investment gains at the period when control power was disposed.
“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.
The measurement mode of investment property
Measurement cost method
Depreciation or amortization method
      (1) Investment real estate includes leased land use rights, land use rights held and ready to be transferred
after appreciation, and leased buildings.
       (2) Investment real estate is initially measured according to cost, followed by measurement by cost model,
and depreciated or amortized in the same way as fixed assets and intangible assets.
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.
                                                                                                     Annual depreciation
      Categories        Basis of depreciation   Depreciation age (year)         Retain value rate
                                                                                                                ratio
                       Straight average on
Houses & buildings                              20-40                     4-5                       4.8-2.35
                       period
Equipment &            Straight average on
machinery              period
Transportation         Straight average on
equipment              period
                       Straight average on
Office equipment                                3-10                      4-5                       32-9.4
                       period
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.
cost. If the construction in process has reached useful status but with completion of project settlement process, it is
transferred to fixed asset at the value estimated, and adjustment will happen after completion of project settlement
process but no adjustment on depreciation provided previously.
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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.
(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.
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.
For details, please refer to Section X （5）42 Lease.
（1）Pricing Method, service life and impairment test
implementation method of the economic benefit of the intangible asset systematically and reasonably. If can’t
recognize the anticipating implementation method, the straight basis is deployed.
  Items                                                                           Amortiing years
Land using right
Patent
Non patent technology                                        10
Software                                                     3-10
(2) Accounting policy for internal research and development expenditure
 Expenditures of internal researching projects are accounted into current term gain and loss when happens. The
development period expenditures are recognized as intangible assets when fulfill following conditions: (1) The
intangible asset is completed and technically possible to be used or sold; (2) With intention to complete the
intangible asset for purpose of use or sale; (3) Evidence showing that there are markets or the products produced
with using of the intangible asset, or markets of the intangible asset itself, by which the intangible asset may
produce financial benefits. Intangible assets used inside the Company must be approved for their usable characters.
(4) Developing of the intangible assets are supported by sufficient technical, financial, and other resources, and
the intangible assets can be used or sold. (5) Expenditures occurred in developing of the intangible asset may be
reliably measured.
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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.
For details, please refer to Section X, V 16 Contract Assets of this report.
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.
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.
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;
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.
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.
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.
For details, please refer to Section X （5）42 Lease.
      (1) When it is very much likely to cause economic interests which can be reliably calculated outflow from
the company to fulfill the obligation which is due to giving security outside, contentious matter, quality guarantee
of products, onerous contract and other contingency, the company will regard the obligation as anticipation
liabilities.
     (2) The company will make an initial measurement of anticipation liabilities according to needed expense
of best estimation when fulfilling related obligations and check the book value of anticipation liabilities on the
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 balance sheet date.
        (1) Types of share-based payment
        Including equity-settled share-based payment and cash-settled share-based payment.
        (2) Accounting treatment related to implementation, modification and termination of share-based payment
 plan
       Equity-settled share-based payment in exchange for employee services immediately after the grant, shall be
 included in relevant costs or expenses according to the fair value of equity instruments on the grant date, and the
 capital reserve shall be adjusted accordingly. For equity-settled share-based payment that can only be exchanged
 for employee services if the service in the waiting period is completed or the specified performance conditions are
 met, on each balance sheet date in the waiting period, based on the best estimation of the number of equity
 instruments with the vesting right, the services obtained in the current period shall be included in relevant costs or
 expenses according to the fair value of the equity instruments on the granting date, and the capital reserve shall be
 adjusted accordingly.
       Share-based payment for equity settlement of other parties' services, if the fair value of other parties'
 services can be reliably measured, shall be measured according to the fair value of other parties' services on the
 acquisition date; If the fair value of other parties' services cannot be measured reliably, but the fair value of equity
 instruments can be measured reliably, it shall be measured according to the fair value of equity instruments on the
 service acquisition date, and included in the related costs or expenses, and the owner's equity shall be increased
 accordingly.
       Cash-settled share-based payment in exchange for employee services immediately after the grant, shall be
 included in relevant costs or expenses according to the fair value of liabilities borne by the Company on the grant
 date, and liabilities shall be increased accordingly. For cash-settled share-based payment in exchange for
 employee services only after the service in the waiting period is completed or the specified performance
 conditions are met, on each balance sheet date in the waiting period, based on the best estimation of the situation
 of the vesting right, the services obtained in the current period shall be included in the relevant costs or expenses
 and corresponding liabilities according to the fair value of the liabilities assumed by the Company.
       If the modification increases the fair value of the granted equity instruments, the Company shall
 correspondingly recognize the increase of the obtained services according to the increase of the fair value of the
 equity instruments; If the modification increases the number of equity instruments granted, the fair value of the
 increased equity instruments will be recognized as the increase of services by the Company; If the Company
 modifies the vesting conditions in a way that is beneficial to employees, the Company will consider the modified
 vesting conditions when dealing with the vesting conditions.
       If the modification reduces the fair value of the granted equity instruments, the Company will continue to
 recognize the amount of services obtained based on the fair value of the equity instruments on the granting date,
 without considering the reduction of the fair value of the equity instruments; If the modification reduces the
 number of granted equity instruments, the Company will treat the reduced part as the cancellation of the granted
 equity instruments; If the vesting conditions are modified in a way that is unfavorable to employees, the modified
 vesting conditions will not be considered when dealing with the vesting conditions.
       If the Company cancels the granted equity instruments or settles the granted equity instruments during the
 waiting period (except those cancelled due to failure to meet the vesting right conditions), the cancellation or
 settlement will be treated as accelerated vesting right, and the amount originally recognized during the remaining
 waiting period will be immediately recognized.
 Accounting policies used for revenue recognition and measurement
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      Since the starting date of the contract, the company shall evaluate the contract, identifies each individual
performance obligation contained in, and determines whether each individual performance obligation is
performed within a certain period of time or at a certain point of time.
    The performance obligation is defined as fulfillment within a certain period of time if one of the following
conditions is met, otherwise, it is defined as fulfilled at a certain point in time: (1) The customer obtains and
consumes the economic benefits brought by the company's performance while the company performs the contract;
The goods or services produced during the company's performance have irreplaceable uses, and the company has
the right to accumulate for the completed performances during the entire contract period.
      For obligations performed within a certain period of time, the company recognizes revenue in accordance
with the performance progress in that period. If the performance progress cannot be reasonably determined, and
the cost incurred is expected to be compensated, the revenue shall be recognized according to the amount of the
cost incurred until the performance progress can be reasonably determined. For obligations performed at a certain
point in time, revenue shall be recognized at the point when the customer obtains control of the relevant goods or
services. When judging whether the customer has obtained control of the product, the company shall consider the
following points: (1) The company has the current right to receive payment for the product, that is, the customer
has the current payment obligation for the product; (2) The company has transferred the legal ownership of the
product to the customer, that is, the customer has the legal ownership of the product; (3) The company has
transferred the physical product to the customer, that is, the customer has physically taken possession of the
product; (4) The company has transferred the main risks and rewards on the ownership of the product to the
customer, that is, the customer has obtained the main risks and rewards on the ownership of the product; (5) the
customer has accepted the product; (6) other signs that the customer has obtained control of the product.
    (1) The company shall measure revenue based on the transaction price allocated to each individual
performance obligation. The transaction price is the amount of consideration that the company expects to be
entitled to receive due to the transfer of goods or services to customers, while does not include payments received
on behalf of third parties and payments expected to be returned to customers.
    (2) If there is variable consideration in the contract, the company shall determine its best estimate according to
the expected value or the most likely amount, but the transaction price including the variable consideration shall
not exceed the accumulated amount that, if relevant uncertainty is eliminated, will most likely have no significant
reversal.
      (3) If there is any significant financing component in the contract, the company shall determine the
transaction price based on the amount payable in cash when the customer assumes control of the goods or services.
The difference between transaction price and contract consideration shall be amortized through effective interest
method during the contract period.
       (4) If the contract contains two or more performance obligations, the company shall, on date of the contract,
allocate the transaction price to each individual obligation item in accordance with the relative proportion of the
separate selling price of promised goods.
      The company's selling of steam turbines, gas turbine or spare parts shall belong to the performance of
obligation at a certain point in time.
      Domestic sales revenue is recognized when the Company has delivered the product in accordance with the co
ntract and obtained the receipt confirmed by the purchaser, with received the payment or obtained the right to rece
ive payment and the relevant economic benefits are likely to flow in. Export sales revenue is recognized when the
Company has declared the product in accordance with the contract and obtained the export goods declaration form
 and the bill of lading, with received the payment or obtained the right to receive payment and the relevant econo
mic benefits are likely to flow in.
contracting projects)
       The Company's business of selling hydro-generator sets and providing engineering services are the
performance obligations performed within a certain period of time. The performance progress is determined
according to the proportion of the incurred cost to the estimated total cost, and the revenue is recognized
according to the performance progress. When the performance progress cannot be reasonably recognized, if the
cost already incurred by the Company is expected to be compensated, the revenue will be recognized according to
the cost amount already incurred until the performance progress can be reasonably recognized.
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The adoption of different business models in similar businesses leads to differences in accounting policies for
revenue recognition
Company can meet the conditions attached to the government subsidies; (2) the Company can receive government
subsidies. Where government subsidies are monetary assets, they shall be measured by the amount received or
receivable. Where government subsidies are non-monetary assets, they shall be measured by the fair value; if the
fair value cannot be reliably obtained, they shall be measured by the nominal amount.
      Government subsidies used for formation of long-term assets through purchase, construction or any other
method as stipulated by government documents fall into the category of asset-related government subsidies. If
government subsidies are not defined in the government documents, a judgment shall be made on the ground of
essential conditions for obtaining the subsidies, among which, ones with an essential condition of formation of
long-term assets through purchase, construction or any other method shall be asset-related government subsidies.
For government subsidies related to assets, the book value of the relevant assets is deducted or the deferred
income is recognized. Where such subsidies are recognized as deferred income, the relevant assets shall, within
the useful life of the relevant assets, be reasonably recognized, The method of the system shall be recorded into
profit and loss by stages. The government subsidy measured according to the nominal amount shall be directly
accounted for in the profits and losses of the current period. Where the relevant assets are sold, transferred,
scrapped or damaged before the end of their useful life, Transfer the undistributed balance of deferred income to
the current profit or loss of asset disposal.
A government subsidy other than an asset-related government subsidy is divided into profit-related government
subsidies. It is difficult to distinguish between asset-related and revenue-related government subsidies that include
both asset-related and revenue-related components. Overall classification as government subvention related to
income. Than asset-related subsidies are recognized as income-related government subsidies. Those, which are
used to cover costs or losses in subsequent periods, are recognized as deferred income and accounted to current
gain/loss to the periods of related expenses. Those, which are used to makeup expenses or losses already occurred,
are recorded to current gain/loss account.
incomes or offset relevant costs and expenses by nature of economic business. Government subsidies irrelevant to
routine activities of the Company shall be included into the non-operating receipt and disbursement.
(1) If the finance allocates interest subsidy funds to a lending banks that serves a loan to the Company at a policy-
based preferential rate, the actual debit amount received shall be seen as the entry value of loan and relevant loan
costs shall be worked out pursuant to the loan principal and the policy-based preferential rate.
      (2) If the finance directly allocates interest subsidy funds to the Company, corresponding interest subsidies
shall offset relevant loan costs.
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.
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.
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.
expenditures or gains, but exclude the following income taxes: (1) Merger of enterprises; (2) Transactions or
events recognized directly in owners’ equity.
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(1)Accounting of operational lease
      On the start date of the lease term, the company will recognize the lease with a lease term of no more than 12
months and without the purchase option as a short-term lease; and recognize the lease with lower value when a
single leased asset is a brand-new asset as a low-value asset lease. If the company subleases or expects to sublet
the leased assets, the original lease shall not be deemed as low-value asset lease.
      For all short-term leases and low-value asset leases, the company will calculate the lease payment amount
into the relevant asset cost or current profits and losses according to the straight-line method in each period of the
lease term.
      In addition to the above-mentioned short-term leases and low-value asset leases with simplified processing,
the company recognizes the right to use assets and lease liabilities for leases on the start date of the lease term.
      ① Right-to-use assets
      The right-to-use assets are initially measured according to the cost, which includes: i. The initial
measurement amount of lease liabilities; ii. If there is lease incentive for the lease payment issued on or before the
start date of the lease term, the amount related to the lease incentive enjoyed shall be deducted; ⅲ. Initial direct
expenses incurred by the lessee; iv. The estimated costs that the lessee will incur for dismantling and removing the
leased assets, restoring the leased assets' site or restoring the leased assets to the state agreed in the lease terms.
      The company depreciates the right-to-use assets according to the straight-line method. If it can be reasonably
determined that the ownership of the leased asset is acquired at the expiration of the lease term, the company shall
accrue depreciation within the remaining service life of the leased asset. If it is impossible to reasonably determine
that the ownership of the leased asset can be acquired at the expiration of the lease term, the company shall accrue
depreciation within the shorter of the lease term and the remaining service life of the leased asset.
      ② Lease liabilities
      On the lease start date, the company recognizes the present value of the unpaid lease payment as the lease
liability. When calculating the present value of the lease payment amount, the lease inclusive interest rate is used
as the discount rate. If the lease inclusive interest rate cannot be determined, the company's incremental loan
interest rate is used as the discount rate. The difference between the lease payment amount and its present value is
considered as unrecognized financing expense, and the interest expense is recognized according to the discount
rate for recognizing the present value of the lease payment amount in each period of the lease term, which is
included in the current profits and losses. The variable lease payments that are not included in the measurement of
lease liabilities are included in the current profits and losses when they actually occur.
      After the start of the lease term, when the actual fixed payment amount changes, the estimated payable
amount of the guarantee residual value changes, the index or ratio used to determine the lease payment amount
changes, and the evaluation result or actual exercise situation of the purchase option, renewal option or
termination option changes, the company will re-measure the lease liability according to the present value of the
changed lease payment amount, and adjust the book value of the right-to-use assets accordingly. If the book value
of the right-to-use assets has been reduced to zero, but the lease liability still needs to be further reduced, the
remaining amount will be included in the current profits and losses.
      On the lease start date, the company classifies the lease with almost all risks and rewards related to the
ownership of leased assets transferred as financial lease, and all other leases as operating leases.
      ① Operating lease
      During each period of the lease term, the company recognizes the lease receipts as lease income according to
the straight-line method, and the initial direct expenses incurred are capitalized and allocated on the same basis as
the lease income recognition, and are included in the current profits and losses by stages. The variable lease
payments related to operating leases that are not included in the lease receipts obtained by the company are
included in the current profits and losses when they actually occur.
      ② Financing lease
      On the start date of the lease term, the company recognizes the receivable financing lease payments
according to the net lease investment (the sum of the unsecured residual value and the present value of the lease
receipts that have not been received at the start date of the lease term), and derecognizes the financing lease assets.
During each period of the lease term, the company calculates and recognizes the interest income according to the
interest rate included in the lease.
      The variable lease payments obtained by the company that are not included in the measurement of net lease
investment are recorded into the current profits and losses when they actually occur.
      ① Company as the Lessee
                                  Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
     According to the Accounting Standards for Business Enterprises No.14-Income, the company evaluates and
determines whether the asset transfer in the after-sale leaseback transaction is a sale.
     If the asset transfer in the after-sale leaseback transaction is a sale, the company shall measure the right-to-
use assets formed by the after-sale leaseback according to the part of the book value of the original assets related
to the right-to-use acquired by leaseback, and only recognize the related gains or losses for the rights transferred
to the lessor.
     If the asset transfer in the after-sale leaseback transaction is not a sale, the company will continue to
recognize the transferred asset, and at the same time recognize a financial liability equal to the transfer income,
and conduct accounting treatment on the financial liability in accordance with Accounting Standards for Business
Enterprises No.22-Recognition and Measurement of Financial Instruments.
     ② Company as the Lessor
     According to the Accounting Standards for Business Enterprises No.14-Income, the company evaluates and
determines whether the asset transfer in the after-sale leaseback transaction is a sale.
     If the asset transfer in the after-sale leaseback transaction is a sale, the company shall conduct accounting
treatment on asset purchase according to other applicable accounting standards for enterprises, and conduct
accounting treatment on asset lease according to Accounting Standards for Enterprises No.21-Lease.
     If the asset transfer in the after-sale leaseback transaction is not a sale, the company will not recognize the
transferred asset, but recognize a financial asset equal to the transfer income, and conduct accounting treatment on
the financial asset in accordance with Accounting Standards for Business Enterprises No.22-Recognition and
Measurement of Financial Instruments.
(2) Accounting Method for Financing Leases
(1)Work                                                  safety                                               costs
The Company withdraws and includes work safety costs into relevant product costs or current profits and loss and
the subject of "special reserve" as per Measures for Management of Enterprise Withdrawal and Use of Work
Safety Costs (Cai Qi [2022] No.136) jointly promulgated by Ministry of Finance and State Administration of
Work Safety. As work safety costs withdrawn are used, ones attributable to the cost disbursement shall directly
offset special reserve. To form fixed assets, the disbursement incurred for inclusion into the subject of
"construction in progress" shall be recognized as fixed assets when safety projects are completed and available for
use as expected; meanwhile, costs for forming fixed assets shall offset special reserve, cumulative depreciation in
the corresponding amount shall be recognized and depreciation shall no longer be withdrawn for the fixed assets
in the following period.
（2）Accounting treatment methods related to repurchase of company shares
      If the shares of the Company are acquired for reasons such as reducing the registered capital or rewarding
employees, they shall be treated as treasury shares according to the actual amount paid, and registered for future
reference. If the repurchased shares are cancelled, the difference between the total face value of the shares
calculated according to the face value of the cancelled shares and the number of cancelled shares and the amount
actually paid for the repurchase will be offset against the capital reserve; if the capital reserve is insufficient for
offset, the retained earnings will be offset; If rewarding of the repurchased shares to the employees of the
Company is equity-settled share-based payment, when the employees exercise their right to purchase the shares of
the Company and receive the price, the cost of the treasury stocks delivered to the employees and the accumulated
amount of capital reserves (other capital reserves) during the waiting period will be written off, and meanwhile,
the capital reserves (equity premium) will be adjusted according to such difference.
(1)Change of main accounting policies
√ Applicable □ Not applicable
Contents and causes of changes in accounting policies                              Approval procedure   Remarks
Since January 1, 2022, the Company has implemented the provisions of the "No. 15
Interpretation of Accounting Standards for Business Enterprises" issued by the
Ministry of Finance "On the Accounting Treatment of Products or By-products
Produced by an Enterprise Before the Fixed Assets Are Reached the Predetermined
                                   Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Usable State or in the Process of R&D", and this change in accounting policy has no
impact on the Company's financial statements.
Since January 1, 2022, the Company has implemented the "No. 15 Interpretation of
Accounting Standards for Business Enterprises "on "Judgment on Loss-making
Contracts" issued by the Ministry of Finance, and this change in accounting policy has
no impact on the Company's financial statements.
Since November 30, 2022, the Company has implemented the provisions of the No. 16
Interpretation of Accounting Standards for Business Enterprises issued by the Ministry
of Finance on "Accounting for the Income Tax Treatment of Dividends Related to
Financial Instruments Classified by Issuers as Equity Instruments", and this change in
accounting policy has no impact on the Company's financial statements.
Since November 30, 2022, the Company has implemented the provisions of the No. 16
Interpretation of Accounting Standards for Business Enterprises issued by the Ministry
of Finance On the "Accounting Treatment of Enterprises Modifying Cash-settled
Share-Based Payments to Equity-Settled Share-Based Payments", and this change in
accounting policy has no impact on the Company's financial statements.
(2) Change of main accounting estimations
□ Applicable √ Not applicable
  VI. Taxation
      Tax (expenses)                                 Tax (expenses) base                                   Tax (expenses) rate
                          The output tax is calculated on the basis of the income from sales of
                          goods and taxable services calculated according to the provisions of the
VAT                                                                                                  13%，9%，6%
                          tax law. After deducting the input tax allowed to be deducted in the
                          current period, the difference is the VAT payable
                          For those on price basis, taxes are paid at 1.2% of the balance of
House tax                 original value of the property after deducting of 30%; for those on        1.2%，12%
                          rental basis, taxes are paid at 12% of the rental.
City maintenance and
                          Turnover tax payable                                                       7%，5%
construction tax
Educational surcharge     Turnover tax payable                                                       3%
Local education
                          Turnover tax payable                                                       2%
additional
Enterprise income tax     Amount of income taxable                                                   15%，20%，25%
Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate
                                         Name                                                               Income tax rate
The Company , Guoneng Company, Packaged Tech. Company,Huayuan Company, ,Zhongneng
Company ,Hangfa Company and Casting Company
Ranchuang Company, China mechanical and Electrical Institute -HSTG (Hangzhou) United
Institutes Co., Ltd
Other Subsidiary（Domestic）                                                                           25%
                                    Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
issued by Department of Science and Technology High-tech Development Center, the Company along with
Guoneng Company , Packaged Tech Company, Huayuan Company, Zhongneng Company and Hangfa. – subsidies
of the Company, were qualified as high-tech enterprises for term of three years. As the result of the re-examination
on 2021 high-tech enterprises has not yet been determined, the corporate income tax is temporarily reduced at a
years) issued by the Zhejiang Provincial Department of Science and Technology, the Zhejiang Provincial
Department of Finance and the Zhejiang Provincial Taxation Bureau of the State Administration of Taxation on
December 24, 2022, the subsidiary casting & forging company enjoys high-tech enterprise income tax incentives,
thus the enterprise income tax in 2022 shall be reduced to be 15%.
Micro Enterprises and Individual Industrial and Commercial Households (No.12, 2021) issued by the Ministry of
Finance and the State Administration of Taxation, the preferential tax policies for small and low-profit enterprises
was applicable to subsidiary Ranchuang Turbine and China mechanical and Electrical Institute -HSTG (Hangzhou)
United Institutes Co., Ltd in 2021. If the annual taxable income does not exceed RMB 1 million, it would be
included in the taxable income at a reduced rate of 12.5%, and the enterprise income tax would be paid at the rate
of 20%.
VII. Notes to the Consolidated Financial Statements
                                                                                                                 In RMB
                  Items                                     End of term                          Beginning of term
Cash in stock                                                               107,551.80                               65,904.06
Bank deposit                                                        1,852,884,189.83                        1,467,327,722.30
Other monetary fund                                                   101,989,046.27                          155,489,621.43
Total                                                               1,954,980,787.90                        1,622,883,247.79
Incl: Total of accounts saved overseas                                                                          7,989,643.89
Other note：
The bank deposit at the end of the period included RMB 47,973,000.00 of restricted pledge time deposit and RMB
use bank acceptance bill deposit, RMB 9,321,352.25 for deposit of letter of guarantee, the balance of the
unrestricted special account for treasury stock repurchase of RMB 5,701.86, the balance of the special account for
the purchase of convertible bonds of RMB 6.30 and the deposit interest of RMB 22,951.97 that can be transferred
at any time.
                                                                                                                         In RMB
                           Items                                          End of term                Beginning of term
Financial assets measured at fair value through profit or
loss
  Of which ：
                                   Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
  Of which ：Equity instrument investment                                          1,998,737.18                        2,645,259.82
Financing product                                                               605,002,406.26                      958,000,000.00
  Of which：
Total                                                                           607,001,143.44                      960,645,259.82
Other note：
(1) Notes receivable listed by category
                                                                                                                            In RMB
                 Items                                      End of term                              Beginning of term
Bank acceptance bill                                                      42,622,891.99                             179,088,740.17
Trade acceptance bill                                                     52,990,035.27                              35,958,200.92
Total                                                                     95,612,927.26                             215,046,941.09
                                                                                                                           单位：元
                                   End of term                                                Beginning of term
Categor        Book balance          Bad debt provision                       Book balance         Bad debt provision
   y                                                           Book                                                        Book
                   Proportion(                   Proporti      value              Proportion(                 Proporti     value
            Amount             Amount                                      Amount             Amount
                       %)                                                             %)
                                                 on(%)                                                        on(%)
  Of
which：
Accrual
of bad
debt        106,144,                10,531,4                 95,612,9      218,390,                3,343,29               215,046,
provisio
n by
portfolio
Of
which：
Bank
acceptan                 40.16%                                                           82.00%
ce
Commer
cial        63,521,4                10,531,4                 52,990,0      39,301,4                3,343,29               35,958,2
acceptan
ce
Total                    100.00%                   9.92%                              100.00%                     1.53%
                               Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Accrual of bad debt provision by single item:
                                                                 Amount in year-end
          Name
                            Book Balance             Bad debt provision         Proportion(%)                 Reason
Accrual of bad debt provision by portfolio: 10,531,452.80
                                                                                                                       In RMB
                                                                Amount in year-end
          Name
                            Book Balance             Bad debt provision                     Proportion(%)
 Bank acceptance               42,622,891.99
 Commercial
 acceptance
 Total                         106,144,380.06              10,531,452.80
Relevant information of the provision for bad debts will be disclosed with reference to the disclosure method of
other receivables if the provision for bad debts of bills receivable is accrued according to the general model of
expected credit loss:
□ Applicable √ Not applicable
(2) Accounts receivable withdraw, reversed or collected during the reporting period
The withdrawal amount of the bad debt provision：
                                                                                                                       In RMB
                                                     Amount of change in the current period
                            Opening                            Reversed or
        Category                                                                 Write-                     Closing balance
                            balance              Accrual         collected                  Other
                                                                                  off
                                                                  amount
Accrual of bad debt
provision by portfolio
Total                       3,343,290.79        7,188,162.01                                                    10,531,452.80
Of which the significant amount of the reversed or collected part during the reporting period
□ Applicable √ Not applicable
（3）Notes receivable pledged by the company at the end of the period
（4）Accounts receivable financing endorsed or discounted by the Company at the end of the period and not
expired yet on the date of balance sheet
                                                                                                                       In RMB
                                           Amount derecognized at the end of the     Amount not yet derecognized at the end of
                   Items
                                                         period                                     the period
Bank acceptance                                                     6,413,205.40
Commercial acceptance                                                                                           11,130,774.54
Total                                                              6,413,205.40                                 11,130,774.54
（5）Accounts receivable financing transferred to accounts receivable by the Company at the end of the period
due to failure of the drawer to perform
Other note：
     The acceptor of the bank acceptance bill is a commercial bank, because the commercial bank has high credit,
the possibility of the bank acceptance bill not being paid at maturity is low, so the company has endorsed or
discounted the bank acceptance bill to terminate the confirmation. However, if the bill is not paid at maturity, the
company shall remain jointly and severally liable to the holder under the provisions of the bill act.
                                       Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
 （6） The actual write-off accounts receivable
 (1) Accounts receivable disclosed by category
                                                                                                                                     In RMB
                                          End of term                                                   Beginning of term
  Category              Book balance        Bad debt provision                         Book balance           Bad debt provision
                                                                        Book                                                           Book
                               Proporti                  Proporti                                 Proporti                Proporti
                   Amount                   Amount                      value       Amount                   Amount                    value
                                 on %                     on %                                     on %                     on %
Accrual of bad
debt provision                   2.55%                  100.00%                                     2.53%                 100.00%
by single item        27.13                    27.13                                   65.71                    65.71
Including：
Accrual of bad
debt provision                  97.45%                    32.23%                                   97.47%                   32.95%
by portfolio       4,129.98                   762.90                   9,367.08     6,652.43                   531.73                 0,120.70
Including：
Total                          100.00%                    33.96%                                 100.00%                    34.64%
 Accrual of bad debt provision by single item：74,459,027.13
                                                                                                                                     In RMB
                                                                                       Closing balance
                    Name                                                        Bad debt
                                                   Book balance                                     Proportion              Reason
                                                                                provision
 Xinjiang Altay Jinhao Iron Industry Co.,                                                                           Not expected to be
 Ltd                                                                                                                recovered
 Hangzhou New Concept Energy Saving                                                                                 Not expected to be
 Technology Co., Ltd                                                                                                recovered
                                                                                                                    Not expected to be
 Dezhou Jinghua Group Zhenhua Co., Ltd.                10,980,000.00            10,980,000.00             100.00%
                                                                                                                    recovered
 Qingdao Jieneng Steam Turbine Group                                                                                Not expected to be
 Co., Ltd.                                                                                                          recovered
                                                                                                                    Not expected to be
 Qingdao Jieneng Material Trade Co., Ltd.               6,534,000.00             6,534,000.00             100.00%
                                                                                                                    recovered
 Qingdao Jieneng Steam Turbine Co.,                                                                                 Not expected to be
 Ltd.Hangzhou Company                                                                                               recovered
 Sinosteel Tiancheng Environmental                                                                                  Not expected to be
 Protection Science & Technology Co., Ltd.                                                                          recovered
 Minhe Jinxing Hydropower Development                                                                               Not expected to be
 Co., Ltd.                                                                                                          recovered
 Diebu Axia Hydropower Development Co.,                                                                             Not expected to be
 Ltd.                                                                                                               recovered
 Weifang Leinuote Power Equipment Co.,                                                                              Not expected to be
 Ltd.                                                                                                               recovered
 Total                                       74,459,027.13                      74,459,027.13
 Accrual of bad debt provision by portfolio: 915,494,762.90
                                                                                Amount in year-end
                 Name
                                             Book balance                        Bad debt provision                     Proportion
  Within 1 year                                   1,088,113,527.42                           54,405,676.37                            5.00%
                                     Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
   Over 5 years                                      433,071,214.37                   433,071,214.37                              100.00%
   Total                                           2,840,174,129.98                   915,494,762.90
  Relevant information of the provision for bad debts will be disclosed with reference to the disclosure method of
  other receivables if the provision for bad debts of bills receivable is accrued according to the general model of
  expected credit loss:
  □ Applicable √ Not applicable
  Disclosure by aging
                                                                                                               In RMB
                                Aging                                                          Closing balance
   Within 1 year（Including 1 year）                                                                                      1,088,113,527.42
   Over 3 years                                                                                                          877,380,758.74
      Over 5 years                                                                                                       507,530,241.50
   Total                                                                                                                2,914,633,157.11
  (2) Accounts receivable withdraw, reversed or collected during the reporting period
  The withdrawal amount of the bad debt provision：
                                                                                                                                  In RMB
                                                                Amount of change in the current period
      Category             Opening balance                            Reversed or
                                                                                                                           Closing balance
                                                        Accrual         collected       Write-off            Other
                                                                         amount
Accrual of bad debt
provision by single            77,191,565.71                             462,838.60                       3,195,377.18        74,459,027.13
item
Accrual of bad debt
provision by portfolio
Total                       1,058,988,097.44           -65,271,266.77    462,838.60     844,467.22        3,381,412.02      989,953,790.03
  (3) The actual write-off accounts receivable
                                                                                                                                  In RMB
                              Items                                                               Amount
  Accrual of bad debt provision by portfolio                                                                                844,467.22
  The significant actual write-off accounts receivable for the current period
                                                                                                                                  In RMB
                                                                                                                              Arising from
                                               Nature of account Amount written    Reason for            Verification
           Name                                                                                                           related transactions
                                                  receivable         off           written off           procedures
                                                                                                                                 (Y/N)
                                                                                  Uncollectible      The examined and
Hanmen Daqian Thermal Power Co., Ltd.          Goods               296,392.20                        adopted to Board       No
                                                                                      amount         of directors
                                                                                  Uncollectible      The examined and
Xinjiang Wensu Yongan Hydroelectricity
                                               Goods               207,000.00                        adopted to Board       No
Development Co., Ltd.
                                                                                      amount         od directors
                                                                                  Uncollectible      The examined and
Hangzhou Steam Turbine Power Group
                                               Goods               158,500.00                        adopted to Board       Yes
Co., Ltd.Southwest Branch
                                                                                      amount         of directors
                                  Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                                                           Uncollectible        The examined and
Other                                   Goods                 182,575.02                        adopted to Board      No
                                                                               amount           of directors
Total                                                         844,467.22
  Note：
  （4）The ending balance of account receivables owed by the imputation of the top five parties
                                                                                                               In RMB
        Name                              Amount               Proportion(%)                           Bad debt provision
  Client 1                                   751,654,053.31                         25.79%                     199,008,158.71
  Client 2                                   191,733,969.26                             6.58%                  113,264,290.47
  Client 3                                    82,411,200.00                             2.83%                       4,120,560.00
  Client 4                                    60,631,419.75                             2.08%                      13,161,015.39
  Client 5                                    51,240,000.00                             1.76%                       2,562,000.00
  Total                                    1,137,670,642.32                         39.04%
  （5）Account receivable which terminate the recognition owning to the transfer of the financial assets
   (6)The amount of the assets and liabilities formed by the transfer and the continues involvement of accounts
  receivable
                                             In RMB
  Items                                                End of term                                Beginning of term
  Bank acceptance                                                 817,555,768.45                               816,653,211.21
                    Total                                         817,555,768.45                               816,653,211.21
  Changes in the current period of receivables financing and fair value
  □ Applicable √ Not applicable
  Relevant information of the financing provision for bad debts will be disclosed with reference to the disclosure
  method of other receivables if the provision for bad debts of bills receivable is accrued according to the general
  model of expected credit loss:
  □ Applicable √ Not applicable
  Other note：
  (1) Notes receivable pledged by the Company at the end of the period
        Items                                                                              Pledged amount
  Bank acceptance                                                                                                  143,516,310.23
                                Total                                                                              143,516,310.23
  (2) Notes receivable which had endorsed by the Company or had discounted and had not due on the balance sheet
  date at the period-end
                                                                                                                           In RMB
                                   Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                Items                                          Amount of recognition termination at the period-end
Bank acceptance                                                                                                      535,567,912.87
                                Total                                                                                535,567,912.87
     The acceptor of the bank acceptance bill is a commercial bank, because the commercial bank has high credit,
the possibility of the bank acceptance bill not being paid at maturity is low, so the company has endorsed or
discounted the bank acceptance bill to terminate the confirmation. However, if the bill is not paid at maturity, the
company shall remain jointly and severally liable to the holder under the provisions of the bill act.
（1）Age analysis
                                                                                                                            In RMB
                                              End of term                                        Beginning of term
          Age
                               Book balance                 Proportion(%)             Book balance              Proportion(%)
Within 1 year                     367,741,841.11                      91.59%             402,228,171.12                    90.64%
Over 3 years                       17,270,475.89                       4.30%              21,573,565.66                     4.86%
Total                             401,523,615.49                                         443,770,434.91
Notes of the reasons of the prepayment ages over 1 year with significant amount but failed settled in time
(2) Top 5 of the closing balance of the prepayment collected according to the prepayment target
                                Name                                                  Amount
                                                                                                          Proportion(%)
Siemens Energy AB                                                                       126,578,801.75                      31.52
Siemens Energy Co., Ltd.                                                                 78,749,171.72                      19.61
Mitsubishi Hitachi Electric Gas Engine Service (Nanjing) Co., Ltd                        21,181,977.09                       5.28
PROCARE PLUS LTD                                                                         16,122,035.57                       4.02
Yixing Yuxiang Machinery Technology Co., Ltd.                                            11,232,000.00                       2.80
   Subtotal                                                                             253,863,986.13                      63.23
Other
                                                                                                                            In RMB
                   Items                               Closing balance                               Opening balance
Interest receivable
Dividend receivable
Other receivable                                                        25,366,963.26                                44,163,396.56
Total                                                                   25,366,963.26                                44,163,396.56
（1）Interest receivable
□ Applicable √ Not applicable
（2）Dividend receivable
                                        Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
  □ Applicable √ Not applicable
  （3） Other accounts receivable
                                                                                                                              In RMB
                    Nature                                Closing book balance                       Opening book balance
  Accrual of bad debt provision by
  portfolio:
  Total                                                                  25,366,963.26                              44,163,396.56
                                                                                                                              In RMB
                                            Stage 1                  Stage 2                    Stage 3
                                                                                         Expected credit losses
                                     Expected credit losses    Expected credit loss
        Bad Debt Reserves                                                                for the entire duration            Total
                                       over the next 12        over life (no credit
                                                                                           (credit impairment
                                           months                 impairment)
                                                                                                occurred)
Balance as at January 1, 2022                 1,795,961.52               963,314.31              13,542,296.38              16,301,572.21
Balance as at January 1, 2022
in current
——Transfer to stage II                         -201,140.61               201,140.61
——Transfer to stage III                                                 -645,605.36                  645,605.36
Provision in the current period                -692,685.59               -116,568.34                -267,421.41             -1,076,675.34
Write - off in the current period                                                                  2,471,012.90              2,471,012.90
Other(Note)                                       -1,230.43                                                                     -1,230.43
Balance as at December 31,
  [Note] Other changes are caused by the change of the merger scope and the bad debt provisions of the Indonesian
  Company.
  Loss provision changes in current period, change in book balance with significant amount
  □Applicable √ Not applicable
  Disclosure by aging
                                                                                                          In RMB
                                Aging                                                           Closing balance
Within 1 year(Including 1 year）                                                                                             18,018,097.76
Over 3 years                                                                                                                 9,622,653.31
  Over 5 years                                                                                                               9,246,148.44
Total                                                                                                                       38,119,616.80
                                           Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
        The withdrawal amount of the bad debt provision：
                                                                                                                                        In RMB
                                        Opening        Amount of change in the current period
                Category                                                                                                       Closing balance
                                        balance                          Reversed or
                                                         Accrual                              Write-off            Other
                                                                      collected amount
        Accrual of bad debt                                       -                                                       -
        provision by portfolio:
                                                                  -                                                       -
        Total                         16,301,572.21                                              2,471,012.90                       12,752,653.54
                                                                                                                                        In RMB
                                    Items                                                                 Amount
        Accrual of bad debt provision by portfolio:                                                                              2,471,012.90
                  The significant actual write-off other accounts receivable for the current period
                                                                                                                                        In RMB
                                                Nature of account      Amount written       Reason for        Verification Arising from related
                Name
                                                   receivable              off              written off        procedures   transactions (Y/N)
                                                                                                             The examined
   Wuhan Huazhong Automatic                  Receivable temporary                        Uncollectible       and adopted to
   Technology Development Co., Ltd           payment                                     amount              Board of
                                                                                                             directors
                                                                                                             The examined
                                                                                         Uncollectible       and adopted to
   Other                                     Deposit                       140,012.90                                       No
                                                                                         amount              Board of
                                                                                                             directors
   Total                                                                 2,471,012.90
        Other note
                                                                                                                                        In RMB
                                                                                                             Proportion of the
                                                                                                              total year end          Closing balance
                     Name                         Nature            Closing balance         Aging             balance of the            of bad debt
                                                                                                                 accounts                provision
                                                                                                                receivable
                                            Equity transfer
PT.HANGZHOUTURBINE
                                            payment                    4,120,000.00     Within 1 year                      10.81%          206,000.00
SERVICES
                                            receivable
Shanghai Customs Waigaoqiao Office          Deposit                    3,710,320.94     Over 5 years                       9.73%         3,710,320.94
Hangzhou Chisu Trade Co., Ltd.              Deposit                    2,848,700.00     2-3 years                          7.47%           854,610.00
Hangzhou Chisu Trade Co., Ltd.              Deposit                    2,300,000.00     1-2 years                          6.03%           230,000.00
Ningxia Baofeng Energy Group Co.,
                                            Deposit                    1,700,000.00     (Note)                             4.46%           260,000.00
Ltd.
Total                                                                 14,679,020.94                                        38.50%        5,260,930.94
                                       Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
   [Note] Within 1 year:1,000,000.00 yuan, 2-3 years:700,000.00 yuan.
   receivable
   Other note：
   Whether the company need to comply with the disclosure requirements of the real estate industry
   No
   （1）Category of Inventory
                                                                                                                              In RMB
                                Closing book balance                                             Opening book balance
                                    Provision for                                                   Provision for
 Items                                inventory                                                       inventory
               Book balance                                 Book value          Book balance                                Book value
                                     impairment                                                       impairment
Raw
materials
Goods in
progress
Stock
goods
Total       2,616,803,152.03          294,341,865.51      2,322,461,286.52    3,352,423,874.16           310,780,126.81   3,041,643,747.35
   (2) Falling price reserves of inventory
                                                                                                                              In RMB
                                            Increased amount                     Decreased amount
    Items        Opening balance                         Reverse
                                                                                                                    Closing balance
                                       Withdrawal        or write-      Reverse or write-off     Other
                                                            off
   Raw
   materials
   Goods in
   progress
   Stock
   goods
   Total            310,780,126.81       32,352,000.41                        48,790,261.71                                294,341,865.51
   The specific basis for determining the net realizable value, and the reasons for reversing or reselling the inventory
   depreciation reserve in the current period
         Items                                                                                   Current write-off Reason for provision for
                                   Specific basis for determining net realizable value
                                                                                                                 inventory
                      The net realizable value shall be recognized by the amount of the
                                                                                                 Used for current production and use and
 Raw materials        estimated selling prices minus the estimated selling costs and relevant
                                                                                                 sales realization
                      taxes and dues
                      The net realizable value determines the amount after deducting the         Used for current production and use and
 Goods in process
                      estimated sales cost and the relevant taxes                                realization
                                     Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                 The net realizable value shall be recognized by the amount of the
                 estimated selling prices minus the estimated selling costs and relevant
                 taxes and dues, wherein regarding suspended projects expected not be to          Used for current production and use and
Commodity stocks
                 be recovered or projects whose sales agreements are released, the net            sales realization
                 realizable value shall be recognized by the expected recoverable
                 compensation
 (3) Notes of the closing balance of the inventory which includes capitalized borrowing expenses
 (4) Completed unsettled assets formed from the construction contact at the period-end
                                                                                                                                  In RMB
                                              Year-end balance                                       Year-beginning balance
          Items
                                                 Bad debt                                                  Bad debt
                           Book balance                             Book value        Book balance                            Book value
                                                 provision                                                 provision
 Quality guarantee         577,093,698.74       44,818,828.73     532,274,870.01      564,548,403.36     53,513,171.70     511,035,231.66
 The construction
 contract forms the         63,333,343.14        7,888,477.69      55,444,865.45       79,560,175.93       7,568,757.60       71,991,418.33
 assets
 Total                     640,427,041.88       52,707,306.42     587,719,735.46      644,108,579.29     61,081,929.30     583,026,649.99
 Relevant information of the provision for bad debts will be disclosed with reference to the disclosure method of
 other receivables if the provision for bad debts of contract assets is accrued according to the general model of
 expected credit loss:
 □ Applicable √Not applicable
 Provision for impairment of contract assets in the current period
                                                                                                          In RMB
                                                                                     Reversal/write-off in
            Items           Current accrual             Change amount                                           Reason
                                                                                     current period
 Accrual by single item                                                                           462,838.60
 Accrual by portfolio                -7,911,784.28                                                              Accrual by aging
 Total                               -7,911,784.28                                               462,838.60               ——
 Other note：[Note] Other reduction in the provision for impairment in this period is caused by the transfer of
 warranty guarantee into accounts receivable.
         Contract assets with impairment provision in combination
              Items                                                               End of term
                                        Book balance                     Impairment provision                  Accrual proportion (%)
 Aging portfolio                                640,427,041.88                          52,707,306.42                                   8.23
 Subtotal                                       640,427,041.88                          52,707,306.42                                   8.23
                                                                                                                                  In RMB
                          Items                                 End of term                               Beginning of term
 Input tax deductible                                                         51,338,998.29                               34,506,442.84
                                 Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Prepaid income tax                                                      26,920,714.32                                30,524,440.80
Rent charge                                                                690,018.87                                 1,144,067.78
Total                                                                   78,949,731.48                                66,174,951.42
Other note
(1) List of long-term accounts receivable
                                                                                                                           In RMB
                             Closing balance                                   Opening balance
                              Provision for                                     Provision for                        Discount rate
    Items                       inventory                                         inventory
                Book balance                     Book value       Book balance                        Book value       interval
                               impairment                                        impairment
Project item
Total
(2) Long-term accounts receivable which terminate the recognition owning to the transfer of the financial assets
 (3) The amount of the assets and liabilities formed by the transfer and the continues involvement of long-term
accounts receivable
Other note
                                                                          Closing balance
        Type                             Book balance                             Bad debt provision
                                                                                                                      Book value
                                    Amount           Proportion %             Amount              Proportion %
Accrual by single item              41,600,000.00             39.24           24,960,000.00                60.00      16,640,000.00
Accrual by portfolio                64,422,203.37             60.76            3,521,110.34                  5.47     60,901,093.03
Total                             106,022,203.37           100.00             28,481,110.34                26.86      77,541,093.03
（Continued)
                                                                         Beginning of term
  Type                                   Book balance                            Bad debt provision
                                                                                                                     Book value
                                    Amount            Proportion %            Amount           Proportion %
Accrual by single item              74,600,000.00               36.39        44,760,000.00              60.00         29,840,000.00
Accrual by portfolio               130,422,203.37               63.61         6,521,110.17               5.00        123,901,093.20
Total                              205,022,203.37             100.00         51,281,110.17              25.01        153,741,093.20
  Name                            Book balance            Bad debt provision                Proportion %               Reason
                                   Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
  Name                              Book balance              Bad debt provision               Proportion %                 Reason
Changzhi Yiyang Energy
Technology Co.,Ltd.
  Subtotal                                 41,600,000.00                24,960,000.00                       60.00
                                                                            Closing balance
  Age
                                           Book balance                      Bad debt provision                     Proportion %
Not overdue                                        58,422,200.00                            2,921,110.00                              5.00
One year overdue                                    6,000,003.37                              600,000.34                             10.00
  Subtotal                                         64,422,203.37                            3,521,110.34                              5.47
(4) The bad debt provision：
                                                    Increased amount                        Decreased amount
                              Opening                                                                                         Closing
  Items                                                                                               write-
                              balance          Withdraw       recover      Other   Switch back                  Other         balance
                                                                                                       off
Accrual by single
item
Accrual by portfolio        6,521,110.17                                                                                     3,521,110.34
Total                      51,281,110.17                                           19,800,000.00                            28,481,110.34
[Note] Mainly due to the recovery of 33.3 million yuan of long-term receivables in the current period
correspondingly resulted in reverse of 19.8 million yuan for provision to bad debts.
                                                                                                                                        In
RMB
Items                                                        End of term                                Beginning of term
Hangzhou Bank                                                           3,556,127,694.48                             3,485,440,140.92
Total                                                                   3,556,127,694.48                             3,485,440,140.92
Itemized disclosure of the current non - trading equity instrument investment
                                                                                                                                 In RMB
                                                                                                                          Reasons for
                                                                   Amount of other                                            other
                                                                                             Reasons for being
                                                                   comprehensive                                        comprehensive
              Recognized                                                                   measured at fair value
                                Accumulating     Accumulating           income
  Name         dividend
                                   profit           profit          transferred to
                                                                                           and whose changes are            income
                income                                                                        included in other          transferred to
                                                                       retained
                                                                                           comprehensive income             retained
                                                                       earnings
                                                                                                                            earnings
                                                                                        The shares of Hangzhou
                                                                                        Bank Co., Ltd. held by
                                                                                        the company cannot
Hangzhou                                                                                pass the contract cash
Bank                                                                                    flow characteristic test,
                                                                                        but the company does
                                                                                        not hold the equity
                                                                                        instrument for the
                                      Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                                                                         purpose of trading, so it
                                                                                         is designated as a
                                                                                         financial asset measured
                                                                                         at fair value and its
                                                                                         changes are included in
                                                                                         other comprehensive
                                                                                         income.
Other note
                                                                                                                                  In RMB
                                      Items                                             End of term                  Beginning of term
Classified as financial assets measured by fair value and whose changes are i
                     ncluded in the current profit and loss
                                      Total                                                 5,534,773.22                     14,792,533.96
Other note
(2) Detail
                                                                                         Increase /decrease
                                                                                                      Change
                                               Opening                                                in fair
Investees                                                       Additional         Decrease in         value         Other comprehensive
                                               balance
                                                                investment         investment          gains         adjustment to revenue
                                                                                                        and
                                                                                                      losses
Actions Xinxing          No.9   Private       9,120,000.00                          9,120,000.00
Equity Fund
Greenesol power systems PVT Ltd.              5,534,773.22
Heilongjiang Multi-Power
Hydropower Development United                  137,760.74                             137,760.74
Company
  Total                                   14,792,533.96                             9,257,760.74
     (Continued)
                                                              Increase /decrease                                                 Closing
                                                                                                              Closing           balance of
             Investees               Other equity
                                                                                                 Other        balance          impairment
                                       changes                                                                                  provision
Actions Xinxing No.9 Private
Equity Fund
Greenesol power systems PVT                                                                                5,534,773.22
Ltd.
Heilongjiang Multi-Power
Hydropower Development
United Company
  Total                                                                                                    5,534,773.22
(1) Investment real estate adopted the cost measurement mode
√Applicable □ Not applicable
                                                                                                                                 In RMB
                                      Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                                                                                  Construction
                      Items                              House, Building      Land use right                        Total
                                                                                                   in process
I. Original price
  (1) Purchase
     （2）Inventory \ fixed assets \ project under
construction transfer
(3)Increased of Enterprise Combination
    （1）Dispose
    （2）Other out
II.Accumulated amortization
     (1) Withdrawal                                              452,507.52                                          452,507.52
    （1）Dispose
    （2）Other out
III. Impairment provision
      (1) Withdrawal
    （1）Dispose
     （2）Other out
IV. Book value
(2) Investment property adopted fair value measurement mode
□Applicable√ Not applicable
(3) Investment real estate without certificate of ownership
                                                                                                                      In RMB
                    Items                                 Book balance                                   Reason
Other note
                                         Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
     The investment real estate at the end of the period includes the resettlement housing with a book value of RMB 6,
     rea of the subsidiary Hangfa Company in 2021. Other places participated in the housing reform and other reasons ,
     and the property rights of the relevant houses belonged to the Company.
                                                                                                                                In RMB
                       Items                                Year-end balance                         Year-beginning balance
     Fixed assets                                                      1,926,594,610.89                            1,658,423,191.83
     Total                                                             1,926,594,610.89                            1,658,423,191.83
            (1) List of fixed assets
                                                                                                                                In RMB
                                                   Houses &           Machinery                               Office
                    Items                                                             Transportations                              Total
                                                   buildings          equipment                             equipment
I. Original price
  (1) Purchase                                       600,921.71        4,655,891.52       1,576,133.10      2,690,471.78          9,523,418.11
(2) Transferred from construction in progress    323,360,957.31      60,754,764.76                          4,520,462.89       388,636,184.96
(3)Increased of Enterprise Combination
   （1）Disposal                                                         6,146,760.01     4,084,890.29       4,067,745.73          14,299,396.03
     (2) Relocation transfer                                           1,158,023.72       411,687.00         249,010.49           1,818,721.21
II. Accumulated depreciation
     (1) Withdrawal                               44,731,334.08      67,934,774.40      2,224,233.15      13,433,219.74        128,323,561.37
   （1）Disposal                                                        5,464,280.71      3,686,303.64       3,819,929.60          12,970,513.95
      (2) Relocation transfer                                           901,706.77        332,936.78         245,750.94           1,480,394.49
III. Impairment provision
（1）Withdrawal
  （1）Disposal                                                              1,871.00                              715.16              2,586.16
IV. Book value
                                        Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
  (2) Fixed assets temporarily idled
    ⑶Fixed assets leased out through operating leases
  （4）Details of fixed assets failed to accomplish certification of property
                                                                    In RMB
                    Items                                          Book value                                      Reason
  Steam Turbine Heavy Industry Plant -
  Complete sets of factory
  Other note
  （5）Liquidation of fixed assets
                                                                                                                                      In RMB
                      Items                                        End of term                                Beginning of term
  Construction in progress                                                    286,290,854.97                                  517,835,956.11
  Total                                                                       286,290,854.97                                  517,835,956.11
  (1) List of construction in progress
                                                                                                                                      In RMB
                                                   End of term                                              Beginning of term
           Items                                   Provision for                                              Provision for
                              Book balance                             Book value          Book balance                           Book value
                                                    impairment                                                 impairment
  New Plant project           161,344,450.28                         161,344,450.28        493,629,477.17                       493,629,477.17
  Annual output of 10
  sets of gas turbine unit     81,700,278.09                           81,700,278.09
  project
  Software project             13,362,743.79                           13,362,743.79        11,327,261.17                         11,327,261.17
  Other project                27,285,325.58                           27,285,325.58         9,356,085.45                          9,356,085.45
  Prepayment         for
  equipment or projects
    Total                     286,290,854.97                         286,290,854.97        517,835,956.11                       517,835,956.11
    (2)Changes of significant construction in progress
                                                                                                                                      In RMB
                                                                                                                      Includi
                                                                                                                      ng
                                                                                                                                  Capital
                                                                                                                      g:
                                                                                                            Capital               iz
                     Budget                          Transf                                                           capital
                               Openi                             Other                                      iz                    ation     Source
                                                     erred                    End                 Project             iz
                     （0'00       ng      Increas                 decrea                  Propor             ation                 of        of
Name of project                                        to                    balanc               proces              ation
                                                     fixed                      e                    s                of
                       ）          e
                                                     assets
                                                                   e)                                       interes
                                                                                                                      interes
                                                                                                                                  t            g
                                                                                                                t                   rate
                                                                                                                      t
                                                                                                                                    (%)
                                                                                                                      this
                                                                                                                       period
                                        Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
New Plant             173,32             5,106,                                 96.05                9,819,
project                 8.76             474.88                                    %                 482.47
Annual output of
                                         ,278.0                       ,278.0              constr                              Other
turbine unit             .00                                                       %
project
Software project               ,261.1                                 ,743.7                                                  Other
Photovoltaic
power                 3,615.                                                   100.00     Coom
                                         ,319.2    ,319.2                                                                     Other
generation                73                                                       %      pleted
project
Other project                            ,463.9    ,223.8             ,325.5                                                  Other
Prepayment      for
equipment        or                                                                                                           Other
projects                       132.32    065.03    140.12             057.23
  Total                        5,956.    6,713.    6,184.             0,854.
   [Note] Other reductions in the current period are the software cost of intangible assets after the completion.
   (3) List of the withdrawal of the impairment provision of the construction in progress
   （4）Engineering material
   (1) Productive biological assets measured at cost methods
   □ Applicable √ Not applicable
   (2) Productive biological assets measured at fair value
   □ Applicable √ Not applicable
   □ Applicable √ Not applicable
                                                                                                                        In RMB
                 Items                    House and Building            Mechanical equipment                  Total
   I. Original price
   beginning
   period
   （1）Rent                                           9,859,326.72                       391,374.21               10,250,700.93
   the period
   (1)Disposition                                    1,190,879.29                                                 1,190,879.29
                                     Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
II. Accumulated depreciation
  period
      (1) Withdrawal                             12,386,849.44                      195,687.12                   12,582,536.56
period
  （1）Disposal                                      1,190,879.29                                                   1,190,879.29
III. Impairment provision
  period
（1）Withdrawal
period
  （1）Disposal
IV. Book value
 end
 begin
Other note：
(1) Information
                                                                                                                        In RMB
                 Items                  Land using right     Patent     Non patent technology      Software          Total
  I. Original price
  (1) Purchase                                                                                    8,836,626.55     8,836,626.55
  (2)Internal Development
  (3)Increased of Enterprise
  Combination
  period
  （1）Disposal
  II.Accumulated amortization
                                     Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
   (1) Withdrawal                            6,505,466.93     7,611.42               800,000.04     4,148,466.93    11,461,545.32
  period
  （1）Disposal
  III. Impairment provision
   (1) Withdrawal
  period
  （1）Disposal
  IV. Book value
The proportion the intangible assets formed from the internal R&D through the Company amount the balance of
the intangible assets at the period-end.
(2) Details of fixed assets failed to accomplish certification of land use right
(1) Original book value of goodwill
（2）Impairment of goodwill
（1）Details of the un-recognized deferred income tax assets
                                                                                                                            In RMB
                                                        Balance in year-end                         Balance in year-begin
                  Items
                                                  Deductible         Deferred income           Deductible          Deferred income
                                              temporary difference      tax assets         temporary difference       tax assets
Provision for Asset Impairment                   1,245,922,022.12        197,517,063.24       1,356,205,463.61      215,697,910.21
Internal trade profit not realized                  21,474,851.24          3,221,227.69          58,598,289.97        8,789,743.49
Revenue from changes in fair value
generated by financial assets classified               870,485.96             130,572.89          7,103,959.98         1,065,594.00
at fair value through profit or loss
Temporary difference such as                                                                         99,651.17              14,947.68
                                    Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
amortizing of software expense
Relocation compensation                         1,005,531,878.82           151,865,228.79        1,041,307,329.87       157,097,084.29
Total                                           2,273,799,238.14           352,734,092.61        2,463,314,694.60       382,665,279.67
[Note] Includes the relocation compensation of the Company and the machinery compan
(2) Deferred income tax liabilities had not been off-set
                                                                                                                               In RMB
                                          Balance in year-end                                      Balance in year-begin
   Items                  Deductible temporary        Deferred income tax          Deductible temporary         Deferred income tax
                              difference                   liabilities                 difference                    liabilities
Changes in fair value
of investments in other           3,165,173,654.48             474,776,048.17           3,094,486,100.92                   464,172,915.14
equity instruments
Accelerated                           219,773.45                   32,966.02
depreciation of fixed
assets
Total                        3,165,393,427.93                474,809,014.19           3,094,486,100.92                464,172,915.14
（3）Deferred income tax assets and liabilities are presented as net amount after neutralization
                                                                                                                               In RMB
                                                                                                                  Temporarily
                          Deferred Income Tax            Temporarily               Deferred Income Tax
                                                                                                              Deductable or Taxable
                          Assets or Liabilities at   Deductable or Taxable         Assets or Liabilities at
           Items                                                                                                Difference at the
                            the End of Report        Difference at the End           the Beginning of
                                                                                                               Beginning of Report
                                  Period               of Report Period                Report Period
                                                                                                                     Period
Deferred income tax
assets
Deferred income tax
liabilities
(4)Details of income tax assets not recognized
                                                                                                                               In RMB
                Items                                        End of term                                Beginning of term
Deductible temporary difference
Deductible loss
Total                                                                  278,178,061.63                                324,454,929.68
(5) The un-recognized deductible losses of deferred income tax assets will due in the following years:
                                                                                                                               In RMB
              Year                     Balance in year-end             Balance in year-begin                      Remark
Total                                           123,070,154.92                      166,619,930.21
                                    Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Other note
                                                                                                                            In RMB
                                                         Balance in year-end                    Balance in year-begin
                    Items                       Book         Provision      Book value    Book         Provision       Book value
                                               balance          for                      balance          for
                                                            devaluation                               devaluation
        Advance equipment payment
                                                    .47                            .47
             Advance land payable
                                                    .00                            .00
                    Total
                                                    .47                            .47
Other note
（1）Categories of short-term loans
                                                                                                                          In RMB
  Items
                                                           End of term                             Beginning of term
Mortgage Borrowings                                                    50,059,115.83                             74,897,015.73
Guarantee Borrowing                                                    70,059,711.17                            170,163,630.75
Credit borrowing                                                      155,634,400.89                              5,005,273.97
Domestic letter of credit discount loan                                  12,000,000.00
Total                                                                 287,753,227.89                            250,065,920.45
Note：
(2) List of the short-term borrowings overdue but not return
                                                         In RMB
  Items
                                                           End of term                             Beginning of term
Commercial acceptance bill                                              8,000,000.00                              7,500,000.00
Bank acceptance bill                                                  403,886,347.73                            301,904,319.27
Total                                                                 411,886,347.73                            309,404,319.27
The total amount of outstanding notes payable at the end of this period is RMB .
                                   Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
(1) List of accounts payable
                                                                                                                         In RMB
  Items
                                                          End of term                            Beginning of term
Goods                                                             1,050,477,495.94                          1,709,868,854.24
Equipment and Engineering                                           140,729,051.34                            186,363,724.44
Other                                                                11,709,180.01                             13,917,609.46
Total                                                             1,202,915,727.29                          1,910,150,188.14
(2) Notes of the accounts payable aging over one year
(1) List of Advances received
                                                                                                                         In RMB
  Items
                                                          End of term                            Beginning of term
Rent                                                                     230,204.48                                  812,701.37
Total                                                                    230,204.48                                  812,701.37
(2) Notes of the accounts payable aging over one year
                                                                                                                In RMB
  Items
                                                          End of term                            Beginning of term
Goods                                                             2,306,912,441.68                          3,052,515,293.06
Total                                                             2,306,912,441.68                          3,052,515,293.06
(1) List of Payroll payable
                                                                                                                         In RMB
                                       Balance in year-        Increase in this       Payable in this       Balance in year-
              Items
                                            begin                  period              period(Note)              end
I. Short-term compensation                 99,276,656.74         911,420,247.64          910,642,301.53       100,054,602.85
II.Post-employment benefits -
 defined contribution plans
III. Dismissal benefits                                            1,005,045.84            1,005,045.84
Total                                     133,122,509.92       1,034,387,375.51        1,028,495,211.85       139,014,673.58
[Note] The short-term salary of the Indonesian company is RMB 2,410.13,4..
（2）Short-term remuneration
                                                                                                                         In RMB
                                       Balance in year-        Increase in this       Decrease in this      Balance in year-
              Items
                                            begin                  period                 period                 end
(1) Salary, bonus, allowance and
subsidy
(2) Employee benefits                                             50,239,108.20           50,239,108.20
                                      Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
 (3) Social insurance expenses                 8,702,497.23            61,362,582.76             62,509,036.82          7,556,043.17
 Including: medical insurance
 premium
  Work-related injury insurance
 premium
 (4) Housing fund                                  458,552.96          74,911,731.37             74,912,020.37             458,263.96
 (5) Labor union expenditures and
 employee education expenses
 Total                                        99,276,656.74           911,420,247.64            910,642,301.53        100,054,602.85
 (3) List of drawing scheme
                                                                                                                               In RMB
          Items                  Opening balance                Increase                    Decrease              Closing balance
 insurance
 insurance
 Total                                33,845,853.18             121,962,082.03              116,847,864.48             38,960,070.73
 Other note
                                                                                                                               In RMB
                    Items                                   End of term                                Beginning of term
 VAT                                                                        26,831,710.72                              40,924,370.15
 Enterprise Income tax
 Property tax                                                               14,880,121.69                               7,532,910.03
 Individual Income tax                                                       3,947,213.74                               2,870,186.04
 Land use tax                                                                3,836,290.15                               1,912,650.90
 City Construction tax                                                       2,081,991.58                               5,687,507.47
 Education subjoin                                                             941,347.25                               2,485,447.07
 Locality Education subjoin                                                    632,108.09                               1,666,388.01
 Other                                                                         938,259.93                                  656,799.67
 Total                                                                      73,385,124.09                              81,622,378.10
 Other note：
                                                                                                                               In RMB
                    Items                                   End of term                                Beginning of term
 Dividend payable                                                               90,000.00
 Other account payable                                                     203,698,336.85                             434,578,338.13
 Total                                                                     203,788,336.85                             434,578,338.13
                                      Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
（1) Interest payable
(2) Dividends payable
                                                                                                                        In RMB
                 Items                                    End of term                             Beginning of term
Research Institute of Mechanical
Science, Zhejiang Branch Co., Ltd
Total                                                                       90,000.00
Note: Including significant unpaid dividends payable over one year, the unpaid reason shall be disclosed:
(3) Other accounts payable
(1) Other accounts payable listed by nature of the account
                                                                                                                        In RMB
                  Items                                    End of term                             Beginning of term
Restricted stock subscription funds(Note)                            100,222,346.86                             110,195,995.86
Provisional account payable                                           92,141,265.66                              73,387,357.24
Deposit                                                                8,650,506.77                               7,710,407.05
Other                                                                  2,684,217.56                               3,284,577.98
Related party demolition loan                                                                                   240,000,000.00
Total                                                                203,698,336.85                             434,578,338.13
 [Note] It is the accumulated restricted stock subscription payment paid by the equity incentive object during the
waiting period.
                                                                                                                        In RMB
                  Items                                    End of term                             Beginning of term
Long-term loans due within 1 year                                        30,637,507.55                            9,011,464.45
Rease liabilities due within 1 year                                      12,165,379.31                            8,596,258.52
Total                                                                    42,802,886.86                           17,607,722.97
Other note：
                                                                                                                        In RMB
                  Items                                    End of term                             Beginning of term
Output tax to be transferred                                         266,480,963.69                             394,535,629.47
Maintenance and renovation costs                                       1,105,000.00                               1,105,000.00
Total                                                                267,585,963.69                             395,640,629.47
Other note
                                 Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
(1) Category of long-term loan
                                                                                                                      In RMB
                  Items                               End of term                             Beginning of term
Mortgage loan                                                        9,711,173.86                           20,624,674.22
Guarantee loan                                                  150,192,500.00                             160,205,333.33
Total                                                           159,903,673.86                             180,830,007.55
Note：
Other notes，including interest rate range：
(1) Bonds payable
(2) Changes on bonds payable (not including other financial instrument classified as preferred stock and perpetual
capital securities of financial liabilities)
(3) Note to conditions and time of share transfer of convertible bonds
(4) Note to other financial instrument classified as financial liabilities
                                                                                                                      In RMB
                  Items                               End of term                             Beginning of term
Unpaid lease payments                                               17,206,632.59                           24,310,879.76
Less：Financing charges are not
recognized
                 Total                                              16,334,023.10                           22,575,754.77
Other note
                                                                                                                      In RMB
                  Items                               End of term                             Beginning of term
Long term account payable                                             330,000.00                                  330,000.00
Special Payable                                                     10,774,088.21                            7,249,677.56
  Total                                                             11,104,088.21                            7,579,677.56
 (1) Long-term payable listed by nature of the account
                                                                                                                      In RMB
                  Items                              End of term                             Beginning of term
Drawing in administrative
restructuring
Subtotal                                                              330,000.00                                  330,000.00
(2) Special Payable
                                    Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                                                                                                                 In RMB
       Items                Opening balance            Increase             Decrease                End balance             Reason
Compensation for
relocation
Funding for Personnel
Training
Simple dormitory area
demolition and                   2,023,928.32             17,000.00                                    2,040,928.32
resettlement
Total                            7,249,677.56        201,244,786.03        197,720,375.38             10,774,088.21
Other note：
over of compensation for land requisition and relocation, in which the corresponding part of the relocation cost of
RMB 16,150,800.00 in the current period is transferred to other income, and the corresponding part of the fixed
assets of RMB 180,689,420.54 in the new factory area put into use in the current period is transferred to deferred
revenue, as shown in Note X,XVI(8)2 to this Financial Statement.
demolition and housing reform of the family dormitory area of the subsidiary, Hangfa Company.
 (1) List of long term payroll payable
(2) Changes of defined benefit plans
                                                                                                                                 In RMB
                                                Increased this        Decreased this
        Items           Beginning of term                                                     End of term          Reason
                                                    period               period
                                                                                                                        Receive
Government
Subsidy                                                                                                                subsidies
Total                     729,438,751.74          199,510,020.54        51,567,642.43         877,381,129.85                --
Items involved in government subsidies:：
                                                                                                                                 In RMB
                                    Amount of newly Amount accrued                                                     Related to the
        Items       Opening balance                                           Other changes        Closing balance
                                       subsidy      in non-business                                                    assets/income
Other note:
     Note：Please refer to Note X (7) 84 of the Financial Statements for details of the amount of government
subsidies included in the current profits and losses.
                                                                                                                     In RMB
                Balance Year-                             Increase/decrease this time (+ , - )                           Balance year-
                 beginning           Issuing of                         Transferred                                          end
                                                      Bonus shares                         Other        Subtotal
                                     new share                         from reserves
Total of
capital
                               Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
shares
Other note
According to the "2021 Annual Profit Distribution Plan" adopted by the resolution of the 2021 Annual General
Meeting of Shareholders, this equity distribution was based on the total share capital of 754,010,400 shares at the
end of 2021, excluding the repurchased 111,800 treasury shares by the Company as of the record date of the
equity distribution, that was, the 753,898,600 shares was the basis, it distributed a cash dividend of 4.0 yuan per
mentioned new registered capital has been verified by Zhejiang Southern Accounting Firm Co., Ltd, and the
"Capital Verification Report" (No. 012 [2022] Nanfang Yanzi) has been issued, and the Company has completed
the industrial and commercial change registration procedures on September 5, 2022.
(1) Basic information of preferred stock, perpetual capital securities and other financial instruments outstanding
issued at period-end
(2) Change list of preferred stock, perpetual capital securities and other financial instruments outstanding issued at
period-end
                                                                                                                    In RMB
                         Year-beginning      Increase in the current   Decrease in the current   Year-end balance
         Items
                            balance                 period                     period
Capital premium             204,650,998.01           57,888,141.49                                   262,539,139.50
Other capital reserves       78,295,032.49           54,101,690.01                                   132,396,722.50
Total                       282,946,030.50          111,989,831.50                                   394,935,862.00
Other notes, including changes and reason of change:
(1) The current increase of share capital premium includes:
involving the share-based payment expenses for employees with immediate execution, the Company increased the
capital reserve - equity premium of 817,797.12 yuan according to the shareholding ratio.
between the newly acquired long-term equity investment cost and the share of identifiable net assets of
continuously calculated from the merge date of the subsidiary enjoyed according to the proportion of newly added
shareholding was adjusted to increase capital reserve-equity premium of RMB 121,378.42
shareholders of Zhongneng Company and Anhui Casting & Forging Company increased the capital, and the
Company included the difference between its share in the net book assets of the subsidiary before the capital
increase calculated according to the shareholding ratio before the capital increase and its share of the net book
assets of the subsidiary after the capital increase calculated according to the shareholding ratio after the capital
increase into the capital reserve- equity premium of 56,903,077.38 yuan.
(2) Other capital reserve increases in the current period include:
In the current period, the Company increased its capital reserve - other capital reserve of 54,101,690.01 yuan due
to the share-based payment expenses involving employees in the equity settlement, as detailed in Section 10 XIII
Explanation of Share Payment in this financial statement.
                                                                                                                    In RMB
                                                Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                        Year-beginning balance    Increase in the current   Decrease in the current       Year-end balance
                     Items
                                                                          period                    period
             Treasury stock                    144,078,948.09                                           7,612,560.00             136,466,388.09
             Total                             144,078,948.09                                           7,612,560.00             136,466,388.09
             Other notes, including changes and reason of change:
             According to the resolution of the Company's 2021 Annual General Meeting, the Company distributed a cash
             dividend of $4.00 (including tax) to all shareholders for every 10 shares, the number of expected lifted restricted
             shares of the first grant was 19,031,400 shares, with the corresponding cash dividend of RMB 7,612,560.00, and
             the corresponding reduction of other payables and treasury shares of RMB 7,612,560.00.
                                                                                                                                           In RMB
                                                                                Occurred current term
                                                          Less：
                                                                         Less：
                                                         Amount
                                                                           Prior
                                                       transferred
                                                                          period
                                                        into profit
                                                                      included in
                                                       and loss in
                              Opening      Amount                         other                     After-tax      After-tax      Other             Closing
       Items                                           the current                     Less：
                              balance      incurred                    composite                   attribute to   attribute to    (Note)            balance
                                                       period that                   Income tax
                                            before                       income                    the parent      minority
                                         income tax     recognied                     expenses      company       shareholder
                                                                       transfer to
                                                        into other
                                                                        retained
                                                       comprehen
                                                                       income in
                                                           sive
                                                                      the current
                                                        income in
                                                                          period
                                                       prior period
comprehensive
income that cannot       2,630,313,1     70,687,553.                                 10,603,133.   60,084,420.                                    2,690,397,6
be reclassified in
the loss and gain in
the future
Changes in fair
value of
investments in                 85.77             56                                          03            53                                           06.30
other equity
instruments
comprehensive                                                                                                 -
income                             -              -                                                                        - 947,478.62
reclassifiable to         835,428.78     263,153.79                                                112,049.84     151,103.95
profit or loss in
subsequent periods
Difference of                      -              -                                                                        - 947,478.62
translating of
                                             Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
foreign currency
accounts
Total of other                                                                               59,972,370
comprehensive                 56.99           77                                       03           .69    151,103.95                          06.30
income
           Other notes, including the adjustment of the recognition of initial amount of effective part of the cash flow
           Other changes in the current period are due to changes in the scope of consolidation and the corresponding
           transfer of the difference in the translation of the foreign currency financial statements attributable to the
           Company by RMB -947,478.62.
                                                                                                                                In RMB
                    Items              Beginning of term      Increased this period    Decreased this period        End of term
           Labor safety expenses             18,369,033.52             5,749,535.20             6,277,242.80             17,841,325.92
           Total                             18,369,033.52             5,749,535.20             6,277,242.80             17,841,325.92
           Other note, including changes and reason of change:
           (1) The current decreases include:
           commodity and equipment.
           proportion of equity owned by the Company (without losing control), and transferred out the special reserve of
           (2) Upon the application of the Company and the approval of Hangzhou Safety Production Supervision and
           Administration Bureau (HSPSAB), the minimum reserved amount for the collection and use of the safety
           production cost of the Company and its subsidiaries is RMB 20 million. If the safety production costs that have
           been withdrawn in previous years have exceeded the minimum reserved amount, it will no longer be reduced; if
           the safety production costs for the subsequent years are less than the above-mentioned minimum reserved amount,
           withdraw in the current year to compensate up to the minimum reserved amount. After adding the work safety
           expenses attributable to minority shareholders, the total of the Company's work safety expenses at the end of the
           period is RMB27,841,261.86.
                                                                                                               In RMB
                    Items              Beginning of term      Increased this period    Decreased this period        End of term
           Statutory surplus
           reserves
             Total                          625,178,089.82                                                              625,178,089.82
           Other note, including changes and reason of change
                                     Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                                                                                                                  In RMB
                     Items                               Amount of this period                         Amount of last period
Adjust the undistributed profits before and at
the end of the period
Add：Net profit belonging to the owner of the
parent company
     Common stock dividend payable                                        527,565,579.99                              185,864,649.99
 Other                                                                                                                117,902,815.93
Retained profits at the period end                                       3,756,414,638.24                           3,761,583,410.91
Other note:
The profit distribution proposal reviewed and approved by the boarding meeting was summarized as follows: In
repurchased as of date of record by Company, that is, 753,898,600 shares, the Company would distribute cash
dividend to all the shareholders at the rate of CNY 4.0 for every 10 shares（including tax）, 3 bonus shares
（including tax）   ，A total stock dividend of RMB 226,169,580.00 and a cash dividend of RMB 301,559,439.99, of which a cash
dividend of RMB 163,440.00 was distributed to the expected unlockable restricted stock.
(1)As the retroactive adjustment on Enterprise Accounting Standards and its related new regulations, the affected
beginning undistributed profits are RMB 0.
(2) As the change of the accounting policy, the affected beginning undistributed profits are RMB 0.
(3) As the correction of significant accounting error, the affected beginning undistributed profits are RMB 0 .
(4) As the change of consolidation scope caused by the same control, the affected beginning undistributed profits
are RMB 0.
(5) Other adjustment of the total affected beginning undistributed profits are RMB 0 .
                                                                            In RMB
                                          Amount of this period                                    Amount of last period
  Items
                                     Income                       Cost                       Income                        Cost
Main Business                    5,495,693,244.56          4,016,656,619.93                 5,756,713,931.47        4,062,659,604.63
Other                                 23,148,695.26           10,758,183.33                   31,574,657.44            29,295,888.06
Total                            5,518,841,939.82          4,027,414,803.26                 5,788,288,588.91        4,091,955,492.69
Whether the net profit before and after deducting non-recurring gains and losses is negative after audit
□ Yes √ No
                                                                                                        In RMB
Information related to performance obligations:
The Company’s sales link has entered into a legal and effective sales contract/order with the customer. The
contract/order clarifies the terms of the subject product, specification model, transaction quantity, unit price,
settlement method, delivery obligation, etc., and the performance obligation is clear, and it is the single
performance obligation at a single point in time. The transaction prices of the Company’s various product
contracts/orders are clear, and the Company will confirm revenue after fulfilling the relevant performance
obligations in accordance with the contract/order related agreements.
Information related to transaction value assigned to residual performance obligations:
                                 Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
The income corresponding to the performance obligations that have not been performed or have been performed
incompletely but the contract has been signed at the end of the reporting period is RMB 7,919,070,000.00.
Other note
                                                                                                                    In RMB
                  Items                          Amount of this period                       Amount of last period
Urban maintenance and construction tax                           10,009,589.55                                15,477,429.38
Educational surtax                                                 4,366,464.42                                6,755,116.33
Locality Education surcharge                                       2,910,976.25                                4,506,158.80
House tax                                                        14,957,149.91                                11,919,435.52
Land royalties                                                     2,400,686.40                                4,610,225.78
Stamp tax                                                          3,667,483.45                                2,477,515.63
vehicle and vessel tax                                                60,286.64                                   69,072.31
Other                                                                 11,122.15                                   14,076.50
Total                                                            38,383,758.77                                45,829,030.25
Other note：
                                                                                                                    In RMB
                 Items                           Amount of this period                       Amount of last period
Employees’ remunerations                                        131,040,859.19                              101,207,766.17
Consulting service fee                                           25,231,173.94                                26,377,049.32
Travel expenses                                                   24,781,070.36                              26,421,118.72
Business reception expenses                                       17,726,723.65                              16,944,060.09
Three charge                                                      7,800,806.05                               18,802,491.64
Warehousing                                                       5,028,381.37                                2,872,837.87
Conferences                                                       1,758,083.86                                1,732,483.74
Advertising fee                                                   1,584,233.98                                1,841,852.03
Other                                                             6,538,191.20                                6,668,898.24
Total                                                           221,489,523.60                              202,868,557.82
Other note
                                                       In RMB
                   Items                           Amount of this period                      Amount of last period
 Employees’ remunerations                                         394,509,449.15                             435,806,921.20
 Stock payable                                                     56,252,090.01                               17,297,907.40
 Asset depreciation and amortizing                                  42,711,626.99                              33,173,062.19
 Rental fee, House rental, property
 management, water and power
 Office expenses                                                   10,780,226.70                              12,664,641.22
 Material consumption and amortization
 of low-value consumables
 Agency fee                                                         8,075,703.91                               8,949,478.71
 Repair costs                                                       7,522,911.20                              14,285,987.83
 Travel expenses and overseas travel
 expenses
 Enterprise relocation costs [Note]                                                                           31,652,234.54
 Other                                                             36,353,147.51                              54,977,315.56
 Total                                                            590,938,269.71                             660,284,323.30
                                 Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Other note:
The relocation expenditure incurred in the current period was RMB 16,150,800.00 and it’s presented under
employee remuneration.
                                                                                                                     In RMB
                   Items                           Amount of this period                     Amount of last period
Labor cost                                                        162,914,571.31                            170,270,207.41
Direct materials                                                   98,709,801.80                            145,030,641.50
Depreciation expenses                                               5,331,971.14                              9,953,767.74
Test and inspection fee                                             4,583,898.71                              2,322,130.32
Commissioned research & development                                 5,246,830.91                              8,013,059.40
Other                                                               7,452,809.17                             14,626,828.74
  Total                                                           284,239,883.04                            350,216,635.11
Other note
                                                                                                                     In RMB
                 Items                             Amount of this period                     Amount of last period
Interest expense                                                    24,366,789.74                             23,435,810.36
Less: Incoming interests                                            18,946,425.24                             18,328,752.35
Exchange gains/losses                                              -38,338,007.69                              1,903,566.98
Commission                                                           3,621,245.27                              2,738,299.23
Total                                                              -29,296,397.92                              9,748,924.22
Other note：
                                                                                                                     In RMB
                          Items                                Amount of this period             Amount of last period
Government subsidies related to assets                                     29,873,987.51                     30,843,067.37
Government subsidies related to income                                     43,438,557.91                   171,327,615.80
Individual tax commission refunds                                             418,128.89                        377,834.86
[Note] For the government subsidies included in other income in this period, see Section X VII 84 of this report.
                                                                                                                     In RMB
                          Items                                Amount of this period             Amount of last period
Long-term equity investment income by equity method                          -563,981.22
Investment income of trading financial assets during the
                                                                            -2,689,211.31                     -3,273,132.15
holding period
Investment income obtained from the disposal of trading
financial assets
Dividend income from other equity instrument investments
during the holding period
                                      Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Dividend income derived from other equity instrument
investments during the holding period
Debt restructuring gains                                                           7,035,391.36                      1,617,382.00
Other                                                                                                               -6,491,695.59
Total                                                                         135,599,082.88                       168,937,379.22
Other note：
                                                                                                                      In RMB
                 Source                               Amount of this period                         Amount of last period
Transactional Financial assets                                           -646,522.64                                    963,450.48
Other non-current financial assets                                        960,000.00                                 -1,104,976.32
Total                                                                     313,477.36                                   -141,525.84
                                                                                                                  In RMB
                     Items                            Amount of this period                         Amount of last period
Losses on bad debt                                                     82,441,348.93                                15,768,143.94
Total                                                                  82,441,348.93                                15,768,143.94
                                                                                                                   In RMB
Items                                                      Amount of this period                    Amount of last period
II. Loss of inventory value and impairment of
                                                                      -32,352,000.41                                -26,504,227.85
contract performance costs
V. Impairment loss of fixed assets                                                                                   -9,028,267.09
XII. Loss of impairment of contract assets                              7,911,784.28                                  7,021,475.51
Total                                                                 -24,440,216.13                                -28,511,019.43
Other note：
                                                                                                                        In RMB
                  Source                              Amount of this period                         Amount of last period
Profits of disposal of fixed assets                                        95,281.00                                  1,094,656.77
Total                                                                      95,281.00                                  1,094,656.77
                                                                                                                        In RMB
                                                                                                     Recorded in the amount of the
             Items                     Amount of this period          Amount of last period
                                                                                                     non-recurring gains and losses
Compensation income[Note]                         56,511,643.28                    131,153,708.15                    56,511,643.28
No payment required                                1,136,297.51                      2,662,252.07                     1,136,297.51
Loss of non-current assets:
obsolescence gain
                                      Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Other                                                    2,507.61                       434,801.16                               2,507.61
Total                                               57,650,448.40                   134,352,975.28                          57,650,448.40
Government subsidies recorded into current profits and losses：
[Note] The compensation income for this period is mainly based on the "Long-
period Suspension Unit Cancellation Agreement" signed between the company and Shenyang Turbine Machine C
o., Ltd. The project was cleared and released, and after the communication between the two parties, it was confir
med that the breach of contract income of the project was RMB 39.5835 million.
                                                                                                          In RMB
                                                                Whether the
                                                                  impact of                   Amount of        Amount of
                                                                               Whether                                           Assets-
                                   Issuing                      subsidies on
   Items        Issuing body                       Nature                       special                                       related/incom
                                   Reason                        the current                    current         previous
                                                                               subsidies                                        e -related
                                                                  profit and
                                                                     loss
                                                                                                period           period
                                                                                                                                In RMB
                                                                                                          Recorded in the amount of the
              Items                    Amount of this period              Amount of last period
                                                                                                          non-recurring gains and losses
Compensation expenses                                1,955,731.38                     9,386,784.95                       1,955,731.38
Donations                                              765,000.00                       310,000.00                         765,000.00
Non-current assets scrapping
loss
Fine, late payment                                         45,155.29                       203,901.79                         45,155.29
Other                                                      40,455.62                        23,067.14                         40,455.62
  Total                                              3,130,575.97                    88,887,299.33                         3,130,575.97
(1) Details
                                                                                                                                In RMB
                 Items                                     Amount of this period                         Amount of last period
   Income tax of current term                                              52,728,108.37                                  67,189,032.96
Deferred income tax                                                        29,964,153.08                                    38,110,661.41
Total                                                                      82,692,261.45                                   105,299,694.37
(2) Adjustment process of accounting profit and income tax expenses
                                                                                                                                  In RMB
                                         Items                                                          Amount of this period
Total profit                                                                                                             707,931,620.14
Income tax expense at parent company's applicable tax rate                                                               106,189,743.02
Effect of different tax rates applicable to subsidiaries                                                                     6,913,411.96
Adjustment for income tax in prior year                                                                                      1,682,143.93
Income not subject to tax                                                                                                  -14,012,598.42
Effects of non-deductible costs, expenses and losses                                                                         4,523,132.62
                                      Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Impact of deductible losses on the use of previously unrecognized deferred income
                                                                                                                   -2,457,232.80
tax assets
The current period does not affect the deferred tax assets recognized deductible
temporary differences or deductible loss
Impact of additional deductions for R & D expenses                                                               -30,529,223.73
Impact of additional deduction for equipment and appliances of high-tech
                                                                                                                      -32,966.02
enterprises in the fourth quarter
Impact of additional deductions for the disabled                                                                    -389,996.66
Impact of share payments                                                                                           8,618,724.17
Income tax expenses                                                                                               82,692,261.45
For details, please refer to Note X(VII)57
(1) Other cash received from operating activities
                                                                                                                   In RMB
                  Items                               Amount of this period                       Amount of last period
Recovery of operating bank deposits                                    199,173,666.41                            398,801,063.82
Government subsidies received                                           27,321,284.08                             31,902,074.30
Deposit interest                                                        18,946,425.24                             18,237,333.89
Receipt of operating current account                                     3,936,945.05                              5,033,170.11
Lease income                                                             1,091,668.02                              2,966,095.79
Compensation income                                                         97,470.00                             35,240,999.31
Other                                                                      569,757.57                                812,636.02
Total                                                                  251,137,216.37                            492,993,373.24
Note：
(2) Other cash paid related to operation
                                                                                                                          In RMB
                  Items                               Amount of this period                       Amount of last period
Payment of operational bank                                          180,292,694.53
deposits
Payment cash Management expenses                                        81,915,119.72                            148,934,743.59
Payment cash sales expenses                                             86,924,480.00                            102,134,607.20
Payment cash R & D cost                                                 16,719,251.91                             25,057,788.44
Payment cash financial expenses                                          3,621,245.27                              2,738,299.23
Pay compensation                                                           100,134.80                              4,529,909.30
Other                                                                      850,610.91                                536,968.94
Payment of business transactions                                                                                  19,701,721.07
Total                                                                  370,423,537.14                            526,683,957.41
（3）Other investment-related cash received
                                                                                                                          In RMB
                  Items                               Amount of this period                       Amount of last period
Repurchasing of trusteeship                                        2,430,000,000.00                            3,758,818,000.00
Receipt of levy and relocation
compensation
Receive the interest on the funds
occupied by the non-related parties
                                     Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Reduction of Hangzhou bank convertible
bond
Get the cash received by the subsidiaries                                                                           1,275,088.15
Total                                                                2,627,490,212.88                           4,447,665,088.15
（4）Other cash paid for investment activities
                                                                                                                           In RMB
                  Items                                 Amount of this period                      Amount of last period
Purchasing of financial products                                     2,077,000,000.00                           3,696,000,000.00
Net cash paid by disposal subsidiaries
(negative)
Purchasing of convertible bonds                                                                                   687,572,000.00
Total                                                                2,085,697,180.39                           4,383,572,000.00
（5）Other cash paid for Financing activities
                                                                                                                            In RMB
                  Items                                 Amount of this period                      Amount of last period
Recovering the right to use the assets
deposit
Received of restricted stock warrants                                                                             110,195,995.86
Discounting payment of financing bill                                                                               7,500,000.00
Total                                                                      200,000.00                             117,695,995.86
（6）Other cash paid relevant to financing activities
                                                                                                                            In RMB
                   Items                                Amount of this period                      Amount of last period
Return the related party's capital
occupation and interest
Pay the rent of the right to use the asset                              15,314,937.25                               7,337,642.50
Financing notes due and payment                                          7,500,000.00
buy minority stake                                                       2,902,611.00                              53,295,800.13
Repurchase stocks                                                        2,197,649.00
Payment of CDB investment interest                                                                                155,000,000.00
Subsidiary cancels and returns minority
shareholders
Pay interest on CDB Fund investment                                                                                 2,021,333.33
Payment of discounted interest on
financing bills
Total                                                                  273,340,869.54                             271,082,296.17
（1）Supplement Information for cash flow statement
                                                                                                                           In RMB
                        Supplementary Info.                                Amount of this period          Amount of last period
I. Adjusting net profit to cash flow from operating activities
     Net profit                                                                      625,239,358.69               727,247,759.79
Add: Impairment loss provision of assets                                             -58,001,132.80                12,742,875.49
  Depreciation of fixed assets, oil and gas assets and consumable
biological assets
          Depreciation of Use right assets                                              12,582,536.56               7,670,173.81
                                    Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Amortization of intangible assets                                                 11,461,545.32     10,482,651.22
Amortization of Long-term deferred expenses                                                              3,520.00
Loss on disposal of fixed assets, intangible assets and other long-
                                                                                     -95,281.00      -1,094,656.77
term deferred assets
Fixed assets scrap loss                                                              326,033.68     78,861,331.55
       Loss on fair value changes                                                   -313,477.36        141,525.84
Financial cost                                                                   -14,033,357.95     25,227,104.80
Loss on investment                                                              -131,252,902.83   -170,593,129.37
Decrease of deferred income tax assets                                            29,931,187.06     38,837,335.36
Increased of deferred income tax liabilities                                          32,966.02       -726,673.95
Decrease of inventories                                                          686,701,189.28   -764,962,478.57
Decease of operating receivables                                                 409,317,867.69   -297,533,528.78
Increased of operating Payable                                                -1,433,059,686.61    284,977,912.55
       Other                                                                56,527,890.99[Note]     16,266,510.72
Net cash flows arising from operating activities                                 324,140,805.63     71,809,489.02
II. Significant investment and financing activities that without cash
flows:
   Conversion of debt into capital
   Convertible corporate bonds maturing within one year
   Financing of fixed assets leased
Ending balance of cash                                                         1,805,028,401.76   1,467,538,968.07
Less: Beginning balance of cash equivalents                                    1,467,538,968.07   1,850,354,648.10
     Add：End balance of cash equivalents
  Less: Beginning balance of cash equivalents
  Net increase of cash and cash equivalent                                       337,489,433.69   -382,815,680.03
[Note] Others include the net change in special reserves of RMB 275,800.98 and the confirmation of share-
based payment expenses of RMB 56,252,090.01 in the current period
(2) Net Cash paid of obtaining the subsidiary
(3) Net Cash receive of disposal of the subsidiary
                                                                                                           In RMB
                                                                                         Amount
Current disposal of cash or cash equivalents received by
subsidiaries during the current period
Of which:
Of which:Indonesia Comapny                                                                           2,000,000.00
Less: Cash and cash equivalents held by the Company on days
of loss of control
Of which:
Of which:Indonesia Comapny                                                                          10,697,180.39
Of which:
Net cash received from the disposal of subsidiaries                                                  -8,697,180.39
                                    Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
(4) Component of cash and cash equivalents
                                                                                                                           In RMB
                        Items                                  Year-end balance                     Year-beginning balance
I.Cash
Of which: Cash in stock
Bank savings could be used at any time                                      1,804,892,189.83                    1,467,310,722.30
Other monetary capital could be used at any time                                   28,660.13                          162,341.71
III. Balance of cash and cash equivalents at the
period end
(1) Monetary funds that do not belong to cash and cash equivalent
  Items                                                               Year-end balance                 Year-beginning balance
Bank acceptance bill margin                                                       92,639,033.89                     151,092,217.21
Guarantee deposit                                                                  9,321,352.25                       4,235,062.51
Pledge time deposit                                                               47,973,000.00
ETC business margin                                                                   19,000.00                          17,000.00
Subtotal                                                                         149,952,386.14                     155,344,279.72
(2) Endorsement transfer amount of commercial bills not involving cash receipts and payments
  Items                                                               Current amount               Amount of the same period last
                                                                                                               year
Amount of commercial bill endorsed and transferred                             1,304,085,972.09                 1,539,746,319.56
In which: payment for goods                                                    1,296,077,749.78                   1,486,046,319.56
Payment for the purchase of long-term assets such as fixed                         8,008,222.31                      12,700,000.00
assets
       Payment of loan                                                                                               41,000,000.00
Explain "other" project name and adjustment amount of the adjustment of closing balance in previous year, etc.
                                                                                                                          In RMB
                    Items                              Closing book value                        Causation o limitation
                                                                                        Used as security for issuing of
Monetary capital                                                    149,952,386.14
                                                                                        acceptance bill and bill of guarantees
                                                                                        Used as security for issuing of
Notes receivable                                                      11,130,774.54
                                                                                        acceptance drafts and bill
Receivables financing                                               143,516,310.23
                                                                                        Used as security for issuing of
Fixed assets                                                        124,868,888.02
                                                                                        acceptance drafts and bill
                                                                                        Used as security for issuing of
Intangible assets                                                    17,207,776.09
                                                                                        acceptance bill and bill of guarantees
Total                                                               446,676,135.02
                                 Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
(1) Foreign currency monetary items
                                                                                                                    In RMB
                                                                                             Translated to RMB at end of
              Items              Balance at end of period              Exchange rate
                                                                                                       period
      Monetary capital                                                                                    408,588,968.12
         Incl：USD                            58,245,732.47    6.9646                                      405,658,228.36
              Euro                              393,677.46    7.4229                                        2,922,228.42
       HKD                                         6,383.13   0.89327                                             5,701.86
Yen                                               53,659.00   0.052358                                            2,809.48
Account receivable                                                                                        183,412,441.10
Incl：USD                                     24,988,196.84    6.9646                                      174,032,795.71
       Euro                                    1,230,284.14   7.4229                                        9,132,276.14
       HKD
SGD                                               47,726.12   5.1831                                            247,369.25
Long-term loans
Incl：USD
       Euro
       HKD
Other receivable                                                                                            3,482,300.00
Incl：USD                                        500,000.00    6.9646                                        3,482,300.00
Contract assets                                                                                             4,302,231.28
Incl：USD                                        542,440.00    6.9646                                        3,777,877.62
  Euro                                           70,640.00    7.4229                                          524,353.66
  Euro                                                                                                     11,335,719.76
Incl：USD                                        625,951.96    6.9646                                        4,359,505.02
       Euro                                     939,823.35    7.4229                                        6,976,214.74
(2) Note to overseas operating entities, including important overseas operating entities, which should be disclosed
about its principal business place, function currency for bookkeeping and basis for the choice. In case of any
change in function currency, the cause should be disclosed.
□ Applicable √ Not applicable
Arbitrage According to arbitrage category to disclose arbitrage item, relevant arbitrage tools and the arbitraged
risk qualitative and quantitative information:
                                                                                                                    In RMB
                                                                                             Amount included in current profit
                         Items                              Amount               Project
                                                                                                        and loss
                                     Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
（2）Government subsidy return
□ Applicable √ Not applicable
Other note：
(1) Detail
                                                                                                                                 Current
                                   Beginning                                                                  Ending             amortization
            Items                                        Current subsidy increase    Current amortization
                                   Deferred income                                                            Deferred income    Item
                                                                                                                                 presentation
Relocation and relocation           587,965,976.12
compensation (Shiqiao Road                                       180,689,420.54             21,141,733.79      747,513,662.87    Other income
factory area)
Relocation and relocation           126,889,398.13
compensation (Hangfa factory                                                                 8,663,283.72      118,226,114.41    Other income
area)
Financial subsidy for
industrial projects
Subsidy for casting and
forging projects
Financial subsidy for recycling
economy
Subtotal                            715,200,224.25               180,689,420.54             29,873,987.51      866,015,657.28
            Items                  At the beginning of     New subsidies for         This period of     End-of-term deferred        Amortize the
                                       the deferred          this period              amortization            income                items in this
                                         income                                                                                        period
Supported by Zhejiang Gas
Turbine Machinery
Manufacturing Innovation
Center
Zhejiang Province science and
technology plan project                                         2,601,800.00                55,179.80             2,546,620.20      Other income
subsidies
Subtotal                                 14,238,527.49          2,669,800.00             5,542,854.92           11,365,472.57
in the Company
Items                                                                                   Amount                  Item presentation
Relocation and relocation compensation (Shiqiao Road factory area)                            16,150,800.00     Other income
Social security return                                                                         4,063,515.21     Other income
R & D investment subsidy funds                                                                 3,285,200.00     Other income
The first batch of financial support funds for district-level Kunpeng and quasi-
Kunpeng enterprises
One-time job training subsidy                                                                  1,691,000.00     Other income
Incentive funds for the first (set) product                                                    1,500,000.00     Other income
Procurement incentive funds for backbone enterprises                                           1,422,000.00     Other income
Special funds for the development of military-civilian integration                             1,370,000.00     Other income
Funding for Talent Cultivation                                                                   910,154.84     Other income
Subsidies for digital transformation research projects                                           609,300.00     Other income
Industry-university-research cooperation subsidy funds                                           500,000.00     Other income
Special financial funds for industrial and information technology development                    500,000.00     Other income
District-level supporting funds for provincial-level industrial Internet platforms               500,000.00     Other income
                                    Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Special fund for new manufacturing plan                                                  500,000.00   Other income
Factory IoT Project Grants                                                               479,300.00   Other income
patent grant                                                                             442,580.46   Other income
"Manufacturing Quality Award" incentive funds                                            300,000.00   Other income
Brand building subsidy                                                                   200,000.00   Other income
Foreign trade development fund project subsidy                                           200,000.00   Other income
property tax refund                                                                      143,264.07   Other income
 Qiantang District encourages employees from outside the province to stay in the
district during the New Year to stabilize jobs and promote production subsidies
 Qiantang District Outstanding Contribution Enterprise Award                             100,000.00   Other income
Incentive funds for stable production and growth                                         100,000.00   Other income
Subsidies for sea and air transportation for key foreign trade enterprises               100,000.00   Other income
Other                                                                                    503,343.41   Other income
Subtotal                                                                              37,895,702.99
(2) The current amount of government subsidies included into the current profits and loss is RMB 73,312,545.42.
VIII. Changes of merge scope
(1) Business merger not under same control in reporting period
（2）Merger cost and goodwill
(3) The identifiable assets and liabilities of acquiree at purchase date
(4) The profit or loss from equity held by the date before acquisition in accordance with the fair value measured
again
(5) Note to merger could not be determined reasonable consideration or Identifiable assets, Fair value of liabilities
of the acquiree at acquisition date or closing period of the merge
(6) Other note:
(1) Business combination under the same control during the reporting period
（2）Combination cost
（3）Book value of the assets and liabilities of the mergee at the merger date
                                     Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Basic information of trading, the basis of transactions constitute counter purchase, the retain assets , liabilities of
the listed companies whether constituted a business and its basis, the determination of the combination costs, the
amount and calculation of adjusted rights and interests in accordance with the equity transaction process.
Whether there are multiple transactions step by step dispose the investment to subsidiary and lost control in
reporting period
Yes□ No
                                                                                                                              In RMB
                                                                 The
                                                              differen
                                                                  ce
                                                             between
                                                                 the                                                          Amount
                                                             disposal                                             Determi    transferr
                                                                price               Book      Fair                 nation     ed from
                                                                          Perce
                                                              and the               value    value                 method       other
                                                                          ntage
                                                              share of                 of       of                   and     compreh
                                                                            of                         Gain or
                                                Determi          the                remai    remai                  main       ensive
                                        point                             remai                       loss from
                   Equi    Equity                nation      subsidia                ning     ning                assumpti    income
                                          of                               ning                       remeasur
Subsi    Equity     ty     dispos               basis for      ry's net             equity   equity                ons of      related
                                         loss                             equity                      ement of
diary    disposa   disp      al                 the point    assets at              on the   at the                  fair    to equity
                                          of                              at the                      remainin
name     l price   osal    metho                 of loss         the                 date     date                value of   investme
                                        contr                              date                        g equity
                   ratio      d                     of       consolid                  of       of                remainin      nt in
                                          ol                              of loss                       at fair
                                                 control         ated                 loss     loss               g equity     atomic
                                                                            of                          value
                                                             financial                 of       of                 on the    company
                                                                          contro
                                                              stateme                contr    contr                date of        to
                                                                             l
                                                              nt level                 ol       ol                 loss of   investme
                                                             correspo                                              control    nt profit
                                                             nding to                                                         and loss
                                                                 the
                                                             disposal
                                                              investm
                                                                 ent
                                                Industria
                                                l and
                                                commer
Indon                      Agree       Dece
                                                cial                                                                                -
esia     6,120,0   70.0    ment        mber                  993,654.
                                                change                                                                       1,557,63
Coma       00.00    0%     transfe     27,                         43
                                                registrati                                                                       5.65
pny                        r           2022
                                                on is
                                                complet
                                                ed
Other note
In November 2022, Zhongneng Company and PT.HANGZHOU TURBINE SERVICES signed the Equity
Transfer Agreement, in which transferred its 70% equity of the Indonesian company to PT.HANGZHOU
TURBINE SERVICES at a price of 6.12 million yuan. The equity transfer was obtained with a decree issued by
the Local Ministry of Justice and Human Rights in Indonesia on December 27, 2022. The net asset value of the
Indonesia Company as of December 31,2022 was 7,323,350.80 yuan, and the net assets of the Indonesian
company enjoyed by Zhongneng Company were 5,126,345.57 yuan according to the 70% shareholding ratio, and
                                 Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
the difference of 993,654.43 yuan to the disposal price of 6,120,000.00 yuan was recognized as investment
income; Meanwhile, other comprehensive income related to the equity investment of the Indonesian company-
changes in the translation difference in foreign currency financial statements was transferred to the profit or loss
of the current period when lost the control, and the investment income was recorded in the consolidated statement
of -1,557,635.65 yuan; the total investment income recognized was RMB-563,981.22.
 Whether there are multiple transactions step by step dispose the investment to subsidiary and lost control in
 reporting period
 □ Yes √ No
 Notes to reasons for the changes in combination scope (Newly established subsidiary and subsidiary of
 liquidation) and relevant information:
Reduced scope of consolidation：
                                                                                                               Net profit from
                            Equity disposal
          Name                                    Equity disposal point      Net assets on disposal date     opening to disposal
                               method
                                                                                                                    date
Hangzhou Steam
Turbine Power Group
                                 M&A                  2022.12.26                          10,076,214.15              1,001,509.06
Equipment Engineering
Co., Ltd
[Note] Due to the needs of business development, the New Energy Company signed a Merger Agreement with its
subsidiary Hangzhou Steam Turbine Power Group Equipment Engineering Co., Ltd ., which was absorbed and merged on
August 11, 2022 as the base date, and whose legal person status was cancelled.
IX. Equity in other entities
     (1) The structure of the enterprise group
                                                                          Share proportion %
Name of the      Main business                      Business
                                   Reg. Add.                                                               Way of obtain
subsidiaries     location                           property                  Direct        Indir
                                                                                               ect
Auxiliary        Hangzhou          Hangzhou
                 Zhejiang          Zhejiang         Manufacturing                87.53%              Incorporation
Machine Co.
Packaged         Hangzhou          Hangzhou
Technologies     Zhejiang          Zhejiang         Commerce                     75.86%              Incorporation
Co.
                 Hangzhou          Hangzhou
Machinery Co.    Zhejiang          Zhejiang         Manufacturing                52.00%              Incorporation
                 Hangzhou          Hangzhou
Turbine Co.      Zhejiang          Zhejiang         Commerce                    100.00%              Incorporation
Zhongneng        Hangzhou          Hangzhou
                                                    Manufacturing                46.89%              Incorporation
Company
                 Zhejiang          Zhejiang
Casing                                              Manufacturing
                 Hangzhou          Hangzhou                                      38.03%              Incorporation
Company
                                      Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                    Zhejiang            Zhejiang
New Energy          Hangzhou            Hangzhou          Construction                                  Business consolidation
Company                                                   business                                      under the same control
                    Zhejiang            Zhejiang
                    Hangzhou            Hangzhou                                                        Business consolidation
Sales Company                                             Transportation           30.00%
                                                                                                        under the same control
                    Zhejiang            Zhejiang          industry
China
Mechanical          Hangzhou            Hangzhou                                                        Business consolidation
                                                          Commerce                 55.00%
Institute                                                                                               under the same control
Company             Zhejiang            Zhejiang
Ranchuang           Hangzhou            Hangzhou                                                        Business consolidation
                                                          Commerce                100.00%
Company                                                                                                 under the same control
                    Zhejiang            Zhejiang
Notes: holding proportion in subsidiary different from voting proportion:
 Basis of holding half or less voting rights but still been controlled investee and holding more than half of the
voting rights not been controlled investee:
(1) In December 2022, the subsidiary Zhongneng Company introduced strategic investors and simultaneously
implemented employee shareholding, resulting in the Company's shareholding ratio falling from 60.83% to
appointed by the Company, and two other directors have signed the "Concerted Action Person Agreement" with
the Company, thus the Company controls Zhongneng Company.
(2) In December 2018, the subsidiary Casting & Forging Company introduced external strategic investors,
resulting in the Company's shareholding ratio falling from 51% to 38.03%. Since the Company still holds more
than 1 / 3 equity and holds three of the five board seats, it has control over the casting company.
(3) On November 11, 2021, the Company acquired 30% of the equity of the sales company. According to the
articles of association of the sales company and the resolution of the shareholders' meeting, the board of directors
of the sales company has five board seats, and the five directors are appointed by the company, so the Company
has control over the sales company.
(2) Significant not wholly owned subsidiary
                                                                                                                        In RMB
                               Share portion of     Gains/loss of the period    Dividend announced in       Balance of equity of
     Name of the
                                    minor            attributable to minor       the period to minor        minor shareholders at
     subsidiaries
                                shareholders             shareholders               shareholders                end of period
Auxiliary Machine Co.                   12.47%                  6,051,090.09             4,988,000.00               39,619,762.30
Packaged Technologies
Co.
Machinery Co.                           48.00%                 45,796,935.33            28,800,000.00              111,510,409.92
Zhongneng Company                       53.11%                 30,941,153.08                                      159,836,453.72
Casing Company                          61.97%                  -1,135,708.59                                     187,852,632.33
Sales Company                           70.00%                   9,063,892.86            3,150,000.00              39,631,556.03
China Mechanical
Institute Company
Holding proportion of minority shareholder in subsidiary different from voting proportion:
Other note:
                                    Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
(3) The main financial information of significant not wholly owned subsidiary
                                                                                                                                        In RMB
                                 End of term                                                          Beginning of term
Subsid                                      Curren       Non-          Total                                    Curren       Non-         Total
                       Non-     Total                                                        Non-      Total
 iaries    Curren                               t       current          of      Curren                             t       current         of
Name                  current     of                                                        current      of
           t assets                         liabiliti   liabiliti     liabilit   t assets                       liabiliti   liabiliti    liabilit
                       assets   assets                                                       assets    assets
                                               es          es            y                                         es          es           y
Auxili     662,28     86,972    749,26      417,63                    420,39     733,02     78,861     811,89   491,55                   491,55
ary                                                     2,761,
Machi                                                   627.48
ne Co.         11          5        26          89                        37         32          8         20       43                       43
Packag
ed         289,27               298,40      183,55                    184,44     295,13                302,39   176,62                   176,62
Techn      2,485.               6,581.      4,800.                    7,638.     5,373.                2,408.   2,637.                   2,637.
ologies               096.47                              7.72                              034.74
Co.
Machi      341,33     27,559    368,89      132,13                    136,58     287,17     24,884     312,05    113,11                  115,15
nery       8,629.     ,634.5    8,264.      1,820.                    4,910.     3,778.      ,211.2    7,989.    4,270.                  4,917.
Co.                                                     089.98                                                              646.71
Zhong
neng       1,592,     256,91    1,849,      1,277,      271,09        1,548,     1,543,     271,31     1,814,   1,464,      289,54       1,754,
Compa      257,46     6,512.    173,97      138,14      1,873.        230,01     408,28     1,148.     719,43   528,61      8,659.       077,27
ny           5.58         99      8.57        3.86          73          7.59       8.89         18       7.07     0.29          78         0.07
Casing     488,55     161,44    649,99      324,87      20,186        345,06     447,03     163,45     610,49   278,72      36,696       315,42
Compa      0,333.     3,351.    3,684.      3,817.      ,372.2        0,189.     2,301.     8,336.     0,637.   4,887.      ,712.5       1,599.
ny             02         10        12          53           3            76         14         65         79       30           5            85
Sales      83,930     39,162    123,09      59,249                    66,476     83,054     39,677     122,73   68,682                   74,564
Compa      ,156.8     ,681.5    2,838.      ,528.0                    ,329.7     ,537.4     ,964.5     2,502.   ,231.7                    ,411.8
ny                                                      801.73                                                              180.09
China
Mecha
nical
Institut              827.75
e          236.65               064.40        5.30                      5.30     442.19         53     081.72        14                       14
Compa
ny
Other note
loss and cash flow situation
                                                                          Amount of current period
 Subsidiaries Name                                                                                                     Cash flow for business
                                 Turnover                           Net profit               Total Misc Gains
                                                                                                                              activities
Auxiliary Machine
Co.
Packaged
Technologies Co.
Machinery Co.                      306,871,315.89                       95,410,281.94                 95,410,281.94                87,100,058.13
Zhongneng Company                1,477,489,208.21                       78,762,807.47                 78,499,653.68              -108,465,527.91
Casing Company                     439,244,605.73                            84,265.32                    84,265.32                 -3,154,973.95
Sales Company                      158,482,208.91                       12,948,418.37                 12,948,418.37                17,232,333.27
China Mechanical
Institute Company
(Continued)
 Subsidiaries Name                                                       Amount of previous period
                                   Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                                                                                             Cash flow for business
                                Turnover                  Net profit               Total Misc Gains
                                                                                                                    activities
Auxiliary Machine
Co.
Packaged
Technologies Co.
Machinery Co.                     305,270,504.99              74,265,964.44               74,265,964.44                 56,947,908.11
Zhongneng
Company                         1,374,266,364.91                  5,949,744.78              5,509,658.10              138,098,467.82
Casing Company                    502,362,854.32              28,136,543.47               28,136,543.47                 11,414,695.55
Sales Company                     227,668,616.83              10,861,889.02               10,861,889.02                 30,147,532.45
China Mechanical
Institute Company
(4) Significant restrictions of using enterprise group assets and pay off enterprise group debt
(5) Provide financial support or other support for structure entities incorporate into the scope of
consolidated financial statements
(1) Note to owner’s equity share changed in subsidiary
                                           Change time                 Shareholding ratio before           Shareholding ratio after
  Subsidiaries Name
                                                                               change                             change
Ranchuang Company                           2022.8.24                                      85.60%                            100.00%
Zhongneng Company                          2022.12.31                                      60.83%                              46.89%
Anhui Casting Company                      2022.12.31                                      67.00%                              51.54%
(2) The transaction’s influence to equity of minority shareholders and attributable to the owner's equity of the
parent company
                                                                                                                             In RMB
                                     Ranchuang Company                 Zhongneng Company               Anhui Casting Company
Cost/disposal
consideration
--Cash                                             2,902,611.00
-- Fair value of the non-cash
assets
Total purchase
cost/disposal                                      2,902,611.00
consideration
Less: share of net assets
of subsidiaries calculated
according to the                                   3,023,989.42                   55,956,542.77                              56,544.55
proportion of equity
acquired/disposed of
Difference                                         -121,378.42                   -55,956,542.77                             -56,544.55
Including: adjustment of
                                                   -121,378.42                   -55,956,542.77                             -21,503.89
capital reserve
Adjustment of Surplus
reserve
Adjustment of the minority                                                                                                  -35,040.66
                                 Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
 shareholders' equity
 Other note
 (1) Significant joint venture arrangement or associated enterprise
 （2）Major joint ventures and associates
 (3) Main financial information of significant associated enterprise
 (4) Summary financial information of insignificant joint venture or associated enterprise
 (5) Provide financial support or other support for structure entities incorporate into the scope of consolidated
 financial statements
 (6) The excess loss of joint venture or associated enterprise
 (7) The unrecognized commitment related to joint venture investment
 (8) Contingent liabilities related to joint venture or associated enterprise investment
X. Risks related to financial instruments
 The objective of the Company’s risk management is to achieve a balance between the risk and gains. Constrain
 the negative influence on business operation to the lowest limit, and maximum the interests of shareholders and
 other equity holders. With regard to this target, the basic policies of the Company are; locate and analyse the risks,
 set appropriate bottom line for risks, and manage and monitor on each risk and constrain them in a certain extent.
 Risks attached to financial instruments are mainly credit risks, liquidity risks, and market risks.
 The following risk managing policies have been examined and approved by the management:
 (I) Credit risks
 Credit risks are introduced when one party of the financial instrument failed to exercise its liabilities and then
 caused financial loss to another.
 (1) Evaluation method of credit risk
       On each balance sheet date, the company evaluates whether the credit risk of relevant financial instruments
 has increased significantly since the initial confirmation. When determining whether the credit risk has increased
 significantly since the initial confirmation, the company considers to obtain reasonable and reliable information
 without unnecessary extra costs or efforts, including qualitative and quantitative analysis based on historical data,
 external credit risk rating and forward-looking information. Based on a single financial instrument or a
 combination of financial instruments with similar credit risk characteristics, the company compares the risk of
 default of financial instruments on the balance sheet date with the risk of default on the initial confirmation date to
 determine the change of default risk of financial instruments during their expected duration.
       When one or more of the following quantitative and qualitative criteria are triggered, the company believes
 that the credit risk of financial instruments has increased significantly:
 balance sheet date rises by more than a certain proportion compared with the initial confirmation;
 situation, changes in existing or expected technology, market, economic or legal environment, and significant
 adverse effects on the debtor's repayment ability of the company.
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(2) Definition of default and credit impairment assets
      When a financial instrument meets one or more of the following conditions, the company defines the
financial asset as having defaulted, and its criteria are consistent with the definition of having incurred credit
impairment:
economic or contractual considerations related to the debtor's financial difficulties.
      Key parameters of expected credit loss measurement include default probability, loss given default and
default risk exposure. The company considers the quantitative analysis and forward-looking information of
historical statistical data (such as counterparty rating, guarantee method, collateral type, repayment method, etc.)
to establish default probability, loss given default and default risk exposure models.
statement of the opening balance and closing balance of the financial instrument loss reserve.
      The company's credit risk mainly comes from monetary funds and receivables. In order to control the above-
mentioned related risks, the company has taken the following measures respectively.
(1) Monetary fund
The company deposits bank deposits and other monetary funds in financial institutions with high credit rating, so
its credit risk is low.
(2) Account receivable
The Company performs credit assessment on the clients on periodic and constant basis. Results suggested by the
assessment are used by the Company to determine clients with higher ranks and to overlook the rest. This was
conducted to avoid risks brought by material bad debts.
     As the Company only does business with recognized and reputable third parties, so no collateral is needed.
Credit risks are centralized managed in accordance with customers. As of December 31,2022, the Company has a
characteristic of specific credit risk concentration. 39.04% (December 31,2021: 46.36%) of the Company's
accounts receivable comes from the top five customers. The Company does not hold any collateral or other credit
enhancement for the balance of accounts receivable.
     The maximum credit risk exposure the company is subject to is the book value of each financial asset in the
balance sheet.
(II) Liquidation risks
Liquidation risks are the possibilities of short in cash at fulfilling liabilities of payment or settlement for financial
assets. They may be caused by failing to cash financial assets at fair value instantly; debtors’ failing of paying
debts due; debts due before schedule; or failing of generating expected cash flow.
   To handle these risks, the Company adopted multiple measures such as note clearance and bank loans. Long-
term and short-term financing approaches were used to maintain balance between constancy and flexibility. The
Company has obtained credit from multiple banks to satisfy the needs of business operation and capital output.
   Categorizing of financial liabilities on remained period to due
                                                                  Year-end balance
  Items                   Book value        Contract amount not      within 1 year           1-3 years       Over 3 years
                                                discounted
Bank loans                478,294,409.30        501,882,838.03        331,194,021.29    119,282,104.41       51,406,712.33
Notes payable             411,886,347.73        411,886,347.73        411,886,347.73
Account payable          1,202,915,727.29     1,202,915,727.29      1,202,915,727.29
Other payable             203,788,336.85        203,788,336.85        203,788,336.85
Lease                      28,499,402.41         30,325,807.64         13,119,175.05         14,501,193.61    2,705,438.98
liabilities[Note]
Subtotal                 2,325,384,223.58     2,350,799,057.54      2,162,903,608.21    133,783,298.02       54,112,151.31
      (Continued)
   Items                                                     Year-beginning balance
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                             Book value        Contract amount not      within 1 year           1-3 years       Over 3 years
                                                   discounted
Bank loans                   439,907,392.45        470,301,376.99        271,803,491.55         93,584,460.78   104,913,424.66
Notes payable                309,404,319.27        309,404,319.27        309,404,319.27
Account payable             1,910,150,188.14     1,910,150,188.14      1,910,150,188.14
Other payable                434,578,338.13        434,578,338.13        434,578,338.13
Lease liabilities             31,172,013.29         34,120,327.22          9,809,447.46         17,078,896.12     7,231,983.64
Subtotal                    3,125,212,251.28     3,158,554,549.75      2,935,745,784.55     110,663,356.90      112,145,408.30
Note: Exclusive of Long-term payable—Restructured withholding and special payables
(III) Market risks
Market risks are those brought by change of fair value or expectable cash flow of financial instruments due to
change of market prices, mainly interest risks and exchange rate risks.
Interest risks are those brought by change of fair value or expectable cash flow of financial instruments due to
change of interest rates, mainly regards the loans at floating interest rates.
      Fixed-rate interest-bearing financial instruments expose the Company to fair value interest rate risks, while
floating-rate interest-bearing financial instruments expose the Company to cash flow interest rate risks. The
Company determines the ratio of fixed interest rate to floating interest rate financial instruments according to the
market environment, and maintains an appropriate portfolio of financial instruments through regular review and
monitoring. The cash flow interest rate risk faced by the Company is mainly related to the bank borrowings with
floating interest rates.
      As of December 31, 2022, the company's bank borrowings with floating interest rate were RMB
unchanged, assuming that the interest rate changes by 50 benchmark points, there will be no significant impact on
the company's total profits and shareholders' equity.
     Foreign currency risks (exchange rate risks) are those caused by change of fair value or expectable cash flow
of financial instruments due to fluctuation of exchange rates. These risks are mainly related to foreign currency
assets and liabilities. The Company operates in mainland China and mostly uses RMB as standard currency,
therefore no major risks regarding exchange rates. For details of foreign currency assets and liabilities, please go
to the descriptions in the notes to the consolidated financial statements.
     Details of the company's foreign currency monetary assets and liabilities at the end of the period are
described in note X (VII)82 to the Financial Statements.
XI. The disclosure of the fair value
                                                                                                                      In RMB
                                                                              Closing fair value
                                                                       Fair value
                                                   Fair value                              Fair value
                    Items                                            measurement
                                                 measurement                             measurement               Total
                                                                     items at level
                                                items at level 1                        items at level 3
I. Consistent fair value
                                                       --                  --                    --                  --
measurement
一Consistent fair value
measurement
                                     Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
other non-current financial assets
    Financial assets classified as fair
value through profit or loss
        Financing product                             1,998,737.18                            5,534,773.22           7,533,510.40
 Equity instrument investment                                                               817,555,768.45         817,555,768.45
investment
Total liabilities of consistent fair
                                                       --                   --                   --                     --
value measurement
II. Non-continuous fair value
measurement
    The company adopts unadjusted quotations on active markets for the same assets that can be obtained on the
measurement date.
level fair value measurement items, using valuation techniques and qualitative and quantitative information on im
portant parameters
level fair value measurement items, using valuation techniques and qualitative and quantitative information on im
portant parameters
term wealth management products with floating income and equity instrument investments, the company adopted
valuation techniques for fair value measurement, mainly using a discounted future cash flow model.
e measured at fair value and whose changes are included in other comprehensive income. Cost represents the best
estimate of fair value, so the cost is used to confirm its fair value .
book value of consistent fair value measurement items at level 3
among consistent fair value measurement items at different levels
XII. Related party and related Transaction
                                                                                       Shareholding ratio
Name of the parent                                                                                           Voting ratio in the
                        Registered place      Business nature     Registered capital    in the Company
   company                                                                                                    Company (%)
                                                                                               (%)
Steam Turbine
                      Hangzhou China         Manufacturing       800 million                      63.64%                63.64%
Holdings
                                    Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Notes
    Hangzhou Municipal Government State-owned Asset Supervisory Committee is the ultimate controller of the
Company.
Other note：
For details of the subsidiary, see note X,9 to the financial statements.
The details of significant joint venture and associated enterprise of the Company
              Name of other related parties                                     Relationship with the Company
Hangzhou Capital                                                   The parent company of Hangzhou Steam Turbine Holdings
Hangzhou Steam Turbine Compressor Co., Ltd.                        A subsidiary enterprise of Hangzhou Steam Turbine Holdings
Hangzhou Xiangjiang Technology Co., Ltd.                           A subsidiary enterprise of Hangzhou Steam Turbine Holdings
Hangzhou Oxygen Group Co., Ltd                                     Affiliated enterprise of Hangzhou Capital
Hangzhou Oxygen Turbine Machinery Co., Ltd                         Affiliated enterprise of Hangzhou Oxygen
Zhumadian Hangzhou Oxygen Gas Co. Ltd                              Affiliated enterprise of Hangzhou Oxygen
Hangzhou Oxyen Expander Machine Co., Ltd.                          Affiliated enterprise of Hangzhou Oxygen
Hangzhou Oxyen Cryogenic Container Co., Ltd                        Affiliated enterprise of Hangzhou Oxygen
Hangzhou Oxyen Tooling Pump Co., Ltd                               Affiliated enterprise of Hangzhou Oxygen
Hangzhou Oxygen Machine Research Institute Co.,
                                                                   Affiliated enterprise of Hangzhou Oxygen
LTD
Hangzhou Guoyu International Trade Co., Ltd.                       Affiliated enterprise of Hangzhou Capital
Greenesolpower systems PVT Ltd.                                    shareholding enterprise of the company
Hangzhou Relian Group Co.,Ltd.                                     Yang Yongming is a director of the company
(1) Sale of goods/rendering of labor services/labor service offering
Purchase of goods and service
                                                                                                                          In RMB
                                                                                                    Over the
                             Content of related     Amount of current          Amount of                            Amount of last
      Related parties                                                                            trading limit or
                                transaction                                                                           period
                                                                                                       not?
                                                          period             previous period
Hangzhou Oxygen Turbine
                             Parts                       1,785,840.69            3,500,000.00   No                     3,948,672.19
Machinery Co., Ltd
Greenesol
                             Technical service           1,389,571.62                    0.00   Yes
power systems PVT Ltd.
Hangzhou Oxyen Tooling
                             Regulating value              292,917.77                    0.00   Yes
Pump Co., Ltd
Hangzhou Oxygen
Machine Research Institute   Test                            4528.30                            Yes
Co., Ltd
Steam Turbine Holdings       Warehousing                                                 0.00   No                       764,983.49
Subtotal                                                3,472,858.38             3,500,000.00   No                     4,713,655.68
                                        Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
 Related transactions regarding sales of goods or providing of services
                                                                                                                                               In RMB
                                                     Subjects of the related
 Related parties                                                                    Current term                    Same period of last term
                                                     transactions
 Hangzhou Oxygen Turbine Machinery Co.,
                                                     Turbine                                  21,824,796.49                               1,327.43
 Ltd
 Greenesolpower systems PVT Ltd.                     Parts                                     2,974,801.65                          1,588,105.14
 Hangzhou Oxyen Expander Machine Co.,
                                                     Parts                                          104,424.77
 Ltd.
 Hangzhou Oxyen Cryogenic Container
                                                     Transport service                               87,981.66
 Co., Ltd
 Steam Turbine Holdings                              Material repair                                   4,344.52                       460,725.47
 Hangzhou Oxygen Turbine Machinery Co.,
                                                     Steam Turbine                                                                   8,654,867.26
 Ltd
 Hangzhou Guoyu International Trade Co.,
                                                     Material sales                                                                  2,722,604.67
 Ltd.
 Zhumadian Hangzhou Oxygen Gas Co. Ltd               Technical serivice                                                                11,320.75
 Subtotal                                                                                     24,996,349.09                        13,438,950.72
 (2) Related trusteeship/contract
 (3) Information of related lease
 The Company was lessor:
                                                                                                                                            In RMB
                                                                              The lease income confirmed             The lease income confirmed
           Name of lessee               Category of leased assets
                                                                                      in this year                           in last year
 Steam Turbine Holdings               House and Building                                                                              1,077,902.81
 - The company was lessee：
                                                                                                                                               In RMB
                                                          Variable lease
                             Rental charges for           payments not
                                                                                                            Interest expenses
                               short-term and           included in lease                                                          Increased use right
                                                                                        Rent paid           on lease liabilities
                              low-value assets              liabilities                                                                  assets
                                                                                                                 assumed
                                  (if any)              measurement (if
                                                               any)
                   Categor
                     y of
   Lessor
                   leased    Amoun        Amoun        Amoun          Amoun      Amoun        Amoun        Amoun        Amoun      Amoun        Amoun
                    assets
                             t of           t of       t of            t of      t of           t of       t of           t of     t of           t of
                             current      previou      current        previou    current      previou      current      previou    current      previou
                             period       s period     period     s period       period      s period      period       s period   period       s period
Hangzhou           House
Xiangjiang         and                                                           1,145,4     668,205       225,264      130,795
Technology         Buildin                                                         95.20         .53           .58          .52
Co., Ltd.          g
                   House
Steam
                   and                    2,601,7
Turbine
                   Buildin                  43.42
Holdings
                   g
 （4）Related-party guarantee
                                 Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
(5) Inter-bank lending of capital of related parties
                                                                                                                            In RMB
   Related party
                   Year-beginning balance     Increase in the       Decrease in the        Year-end balance        Among them: the
                                                                                                                   interest payment
                                              current period        current period
Steam Turbine            240,000,000.00          5,425,672.29        245,425,672.29                       0.00         5,425,672.29
Holdings
（6）Related party asset transfer and debt restructuring
（7） Remunerations of key managements
                                                                                                                            In RMB
                Items                                   Current term                              Same period of last term
Remunerations of key managements                                    13,050,763.17                                     9,701,792.35
(8) Other related transactions
(1) Service and power supply
The Company and its subsidiaries purchased hydropower services from Steam Turbine Holding and paid
RMB17,422.61 in the current period.
In the current period, the Company purchased fixed assets such as machinery and equipment from Steam Turbine
Holdings of 285,902.66 yuan.
In the current period, the Company and its subsidiaries paid the annual software usage fee of 179,891.32 yuan to
Steam Turbine Holdings.
In the current period, the Company uses the registered trademark owned by Steam Turbine Holdings in free of
charge.
In the current period, Steam Turbine Holdings advanced 35,392.80 yuan for the subsidiary for salary payment.
In the current period, the subsidiary sales company does not need to pay the Steam Turbine Holding in amount of
（1）Receivables
                                                                                                                               In RMB
                                                                      End of term                          Beginning of term
     Name                     Related party                                     Bad debt                                Bad debt
                                                           Book balance                            Book balance
                                                                                provision                               provision
Account
                   Greenesol power systems PVT Ltd.       14,774,392.59        14,738,519.62       13,490,558.24       13,490,558.24
receivable
                   Hangzhou Oxyen Turbine
                   Machinery Co., Ltd.
                   Hangzhou Steam Turbine                       59,000.00             59,000.00        59,000.00           59,000.00
                                Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                   Compressor Co., Ltd’
                   Hangzhou Oxyen Cryogenic
                   Container Co., Ltd
                   Hangzhou Oxygen Group Co., Ltd                                            2,460,000.00      2,460,000.00
                   Steam Turbine Holdings                                                      835,349.87        486,348.07
                   Hangzhou Relian Group Co., Ltd.                                               8,937.60          8,937.60
Subtotal                                              22,727,492.59       22,647,349.62     26,078,845.71     25,729,843.91
Financing
                   Hangzhou Oxygen Group Co., Ltd       7,050,000.00
receivable
                   Hangzhou Oxyen Turbine
                   Machinery Co., Ltd.
Subtotal                                                7,050,000.00                         3,000,000.00
                   Hangzhou Xiangjiang Technology
Other receivable                                           601,384.98       180,415.49        601,384.98          60,138.50
                   Co., Ltd.
                   Steam Turbine Holdings                                                      462,761.45         34,304.70
Subtotal                                                  601,384.98        180,415.49       1,064,146.43         94,443.20
Constract assets   Hangzhou Oxygen Group Co., Ltd       2,823,000.00        141,150.00
                   Hangzhou Oxyen Turbine
                   Machinery Co., Ltd.
Subtotal                                                3,312,000.00        190,050.00        489,000.00          24,450.00
（2）Payables
                                                                                                                   In RMB
     Name                       Related party                       Amount at year              Amount at year beginning
Account payable    Greenesol power systems PVT Ltd.                         2,625,853.11                        1,835,287.07
                   Hangzhou Oxyen Turbine Machinery Co.,
                   Ltd.
                   Hangzhou Oxyen Tooling Pump Co., Ltd                       128,316.00
                   Steam Turbine Holdings                                                                        230,568.42
Subtotal                                                                    3,311,691.18                       2,563,440.58
Constract
                   Steam Turbine Holdings                                  16,378,000.00                      29,652,336.28
liabilities
                   Hangzhou Oxyen Group Co., Ltd.                           4,000,000.00                       7,404,000.00
                   Greenesol power systems PVT Ltd.                           640,228.64                         353,288.27
                   Hangzhou Oxyen Expander Machine Co.,
                   Ltd.
                   Hangzhou Steam Turbine Compressor
                   Co., Ltd’
Subtotal                                                                   21,159,228.64                      37,496,124.55
Other payable      Steam Turbine Holdings                                  15,211,830.51                     240,448,987.71
Subtotal                                                                   15,211,830.51                     240,448,987.71
[Note] The contract liabilities are the tax-inclusive balance.
XIII. Stock payment
√ Applicable □ Not applicable
                                                                                                                  In RMB
（1）Detail
                                   Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Total amount of various equity instruments granted by the company during the
                                                                                     N/A
current period
Total amount of various equity instruments that the company exercises during
                                                                                     N/A
the period
Total amount of various equity instruments that have expired in the current
period
The scope of executive price of the company’s outstanding share options at the
                                                                                     [Note]
end of the period and the remaining term of the contract
[Note] The range of exercise price of other equity instruments issued by the Company at the end of the period and
the remaining term of the contract
          Items              Exercise price                                     Remaining term of contract
                                              The first restriction lifting period of restricted shares granted for the first time is from
                                              the first trading day after 24 months from the date of registration of restricted shares
                                              granted for the first time to the last trading day within 36 months from the date of
                                              registration of some restricted shares granted for the first time; The second restriction
First grant of restricted   HKD 6.825 per     lifting period of restricted shares is from the first trading day after 36 months after the
stock in 2021               share             registration of restricted shares granted for the first time to the last trading day within 48
                                              months after the registration of some restricted shares granted accordingly; The third
                                              restriction lifting period of the restricted shares is from the first trading day 48 months
                                              after the registration of restricted shares granted for the first time to the last trading day
                                              within 60 months after the registration of some restricted shares granted accordingly.
                                              The first restriction lifting period of restricted sales is from the first trading day after 24
Partial grant of 2021
                            HKD 6.825 per     months from the date when the registration the restricted shares is completed
restricted stock
                            share             accordingly to the last trading day within 36 months from the date when the registration
reserved
                                              of the restricted shares is completed accordingly;
（2）Restricted stock that has expired in the current period
According to the "Proposal on Repurchase and Cancellation of Some Restricted Shares" deliberated and passed by
the 30th meeting of the 8th Board of Directors and the 19th meeting of the 8th Board of Supervisors of the
Company, 9 of the incentive objects of the Company's 2021 restricted stock incentive plan are no longer eligible
for incentive objects due to retirement, and 1 person is no longer eligible for incentive object due to personal
reasons. The afore-mentioned retirees can still lift the restricted shares according to the agreed conditions
according to the specific number of years of service during their performance appraisal period, and the remaining
restricted shares that have not yet been lifted shall not be lifted, and the Company shall repurchase and cancel the
shares at the grant price plus the bank deposit interest for the same period, and the restricted shares that have been
granted but not yet lifted by the above-mentioned leaving personnel shall be repurchased and cancelled by the
Company at the grant price. The number of restricted shares cancelled in this repurchase is 531,180 shares, and
the repurchase amount payable by the Company in connection with the repurchase of restricted shares is
verified by Zhejiang Southern Accounting Firm Co., Ltd, and the "Capital Verification Report" (No. 003 [2023]
Nanfang        Zhen)       has      been      issued.      As of the approval date of this financial report, the above-
mentioned capital reduction has not yet completed the industrial and commercial change registration procedures.
√ Applicable □Not applicable
                                                                                                                                In RMB
Determination method of the fair value of equity instruments       The closing price of the company's stock on grant date - grant
on the grant date                                                  price
Equity-settled share-based payment is included in the
accumulated amount of capital reserve
Total amount of fees confirmed by equity-settled share-based
payments in the current period
Other note
                                Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
□ Applicable √ Not applicable
In order to improve the long-term incentive mechanism, the holding subsidiary Casting & Forging Company
implemented the equity incentives for its core employees. The share-based payment expense of RMB
(1) In May 2022, 15 core employees including Hao Mingshan and Xu Zhixian of Casting Company purchased the
equity transferred by Yu Junming, Yu Yifeng and Tong Ziqian shareholders of Casting & Forging Company by
increasing their capital ownership platform Hangzhou Steam Turbine Co-construction Enterprise Management
Consulting Partnership (Limited Partnership), thus the equity held indirectly in Casting Company was the share
payment of immediately executed shares, and the calculated share-based payment expenses increased the capital
reserve - capital premium of 897,600.00 yuan.
(2) In August 2022, Hao Mingshan and Chen Xinnv, core employees of Casting & Forging Company, acquired
the transfer of equity by Tong Ziqian, a shareholder of Casting & Forging Company, thus the equity of Casting &
Forging Company held by was the share payment of immediately executed shares, and the calculated share-based
payment fee increased the capital reserve - capital premium of 1,252,800.00 yuan.
XIV. Commitments
Significant commitments at balance sheet date
（1）With regard to bank letters of credit opened by the Company and its subsidiaries, the outstanding balance
till December 31, 2022 is as follows:
    Name                        Bank                     Currency              Amount              Way of guarantee
 The Company    ICBC Banshan Branch                        Euro                   15,227,000.00         Credit
 The Company    ICBC Banshan Branch                   Swedish krona               67,500,000.00         Credit
 The Company    China CITIC Bank Hangzhou                                                               Credit
                                                           USD                     2,067,300.00
                Branch
 The Company    China CITIC Bank Hangzhou                Swedish                                        Credit
                Branch                                    krona
  New Enegy     China CITIC Bank Hangzhou                                                               Credit
                                                           Euro                      303,000.00
   Company      Branch
    Hangfa                                                                                        Zhongneng Company
                Hangzhou Bank High -tech Branch           RMB                     12,000,000.00
   Comapny                                                                                            Guarantee
（2）With regard to bank letters of Guarantee opened by the Company and its subsidiaries, the outstanding
balance till December 31, 2022 is as follows:
    Name                        Bank                     Currency              Amount              Way of guarantee
The Company     ICBC Banshan Branch                        RMB                   285,310,859.06         Credit
The Company     ICBC Hangzhou Branch                       RMB                     8,851,931.00         Credit
The Company     China CITIC Bank Hangzhou Branch           RMB                    32,013,742.28         Credit
The Company     China CITIC Bank Hangzhou Branch           USD                     1,470,970.00         Credit
The Company     China Bank Hangzhou Branch                 RMB                   107,292,635.88         Credit
The Company     China Bank Hangzhou Branch                 USD                     7,877,200.00         Credit
                               Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                 China Merchants Bank Hangzhou                                                          Credit
 The Company                                              RMB                     1,045,000.00
                 Branch
Machinery Co.    ICBC Banshan Branch                      RMB                    17,900,476.90          Credit
 New Energy                                                                                         The Company
                 Hangzhou Bank High -tech Branch          RMB                   179,100,790.00
  Company                                                                                            Guarantee
 New Energy                                                                                            Credit
                 China CITIC Bank Hangzhou Branch         RMB                     7,323,900.81
  Company
 Turbine Co.     China CITIC Bank Hangzhou Branch         RMB                     8,954,292.00          Credit
Auxiliary        ICBC Banshan Branch                                                                    Credit
                                                          RMB                    23,689,717.50
Company
Guoneng          ICBC Banshan Branch                                                                    Credit
                                                          USD                     2,222,700.00
Company
Guoneng          ICBC Banshan Branch                                                                    Credit
                                                          Euro                    1,404,914.20
Company
Guoneng          ICBC Banshan Branch                                                                    Credit
                                                          RMB                     1,526,300.00
Company
   Guoneng                                                                                              Credit
                 China Bank Tangqi Branch                 RMB                     3,067,285.00
   Company
    Hangfa       Ningbo Bank Hangzhou Chengdong                                                     The Company
                                                          RMB                       162,000.00
   Company       Branch                                                                              Guarantee
    Hangfa       Ningbo Bank Hangzhou Chengdong
                                                          RMB                     9,889,294.00          Credit
   Company       Branch
    Hangfa                                                                                       Hangfa company Self-
                 ICBC Hangzhou Xiaoshan Branch            RMB                       215,696.00
   Company                                                                                       owned land mortgage
    Hangfa       Ningbo Bank Hangzhou Chengdong                                   1,611,600.00   Zhongneng Company
                                                          RMB
   Company       Branch                                                                               Guarantee
    Hangfa                                                                          148,000.00   Zhongneng Company
                 Hangzhou Bank High -tech Branch          USD
   Company                                                                                            Guarantee
Zhongneng        China Bank Hangzhou Qiantang New                                63,684,886.70          Credit
                                                          RMB
Company          area Branch
Zhongneng        China Bank Hangzhou Qiantang New                                 1,881,240.00          Credit
                                                          USD
Company          area Branch
(II). Contingency
(1) Significant contingency at balance sheet date
In October 019, Hesheng Electric (Shanshan) Co., Ltd (hereinafter referred to as Hesheng Company) filed a
lawsuit against Zhongneng Company in the Turpan Intermediate People's Court, requesting to cancel the "25MW
Backpressure Steam Turbine and Auxiliary Equipment Sales Contract" (contract number: SSDY-2016-019, the
total contract price is 5.75 million yuan) signed by the two parties, and Zhongneng Company to refund the paid
amount of 4.76 million yuan of goods payment and compensate 66.29 million yuan for various losses. In March
completing the maintenance of the rotor and accessories and reinstalling and debugging the steam turbine unit to
achieve 72+24-hour smooth operation, Hesheng Company shall pay the maintenance fee of 1.193 million yuan
and the final payment of the contract of 1.19 million yuan; and if the delivered steam turbine unit has quality
problems and cannot be started and used normally due to reasons attributable to Zhongneng Company, Zhongneng
Company needs to refund the received payment of 4.76 million. After the mediation letter came into effect,
Zhongneng completed the maintenance, installation and commissioning work according to the agreement, the
steam turbine unit was connected to the grid and operated with load, and Hesheng Company unilaterally stopped
the operation of the equipment on the grounds of defectselimination. On April 7, 2022, Hesheng filed a lawsuit in
the People's Court of Shanshan, Xinjiang Uygur Autonomous Region, arguing that the steam turbine unit
delivered by Zhongneng after completing the maintenance still can not be started and used normally, and regarded
as the purpose of the contract can not be achieved, and demanded to terminate the original contract and
Zhongneng Company refunds the paid amount of 4.76 million yuan and compensates various losses of 89.55
million yuan (including 3.55 million yuan for third-party procurement price difference, 85 million yuan for
production loss and 1 million yuan for labor loss). In May 2022, Zhongneng countersued Hesheng Company for
continued to perform the original contract, requiring it to pay maintenance fees of 1.193 million yuan and the final
payment of 1.19 million yuan of the contract. As of the date of approval of this financial report, the case has not
                                    Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
yet been tried.
(2) The Company have no significant contingency to disclose, also should be stated
There was no significant contingency in the Company.
XV. Events after balance sheet date
(1) Profit distribution after the balance sheet date
                                                    According to the 2022 annual profit distribution plan reviewed and passed
                                                    at the 32nd Meeting of the eighth board of directorof the Company on
                                                    March 27,2022,In 2022, with the total share capital of 980,179,980 shares at
                                                    the end of the year deducting 111,800 treasury shares repurchased as of date
                                                    of record by Company and 531,180 shares of share capital were cancelled
Profit or dividend proposed to be distributed       due to the retirement and resignation of equity incentive objects in
                                                    December 2022, that is, 979,537,000 shares, the Company would distribute
                                                    cash dividend to all the shareholders at the rate of CNY 3.0 for every 10
                                                    shares (with tax inclusive) , 2 bonus shares ，and no reserve would be
                                                    converted into share capital.
（2）Important and non-adjustment matters
     (1) Capital increase of Ranchuang Company
      According to the "Proposal on Capital Increase Namely Investment in Western Power in Zhejiang
Ranchuang Corporation" deliberated and passed by the 31st meeting of the Eighth Session of Board of Directors
of the Company, the Company shall invest in Pengzhou Western Blue Power Technology Co., Ltd (hereinafter
referred to as Western Power Company) through the transfer of equity and capital increase of Ranchuang
Company. According to the capital needs of the Ranchuang Company to invest in Western Power Company and
its continuous operation and development needs, the Company has increased its capital to the Ranchuang by 130
million yuan on January 13, 2023. On January 28, 2023, Ranchuang completed the registration procedures for
industrial and commercial changes.
      (2) Acquisition of equity in Western Power
      In January 2023, according to the first shareholders’ decision of Ranchuang in 2023, Ranchuang acquired 20%
of the equity of Western Power Company held by Chengdu Mengjiang Investment Group Co., Ltd at a price not
higher than the appraisal value of the corresponding equity assets on the record, and respectively acquired 15%
and 3% of the equity of Western Power Company held by Liaoning Paison Energy Technology Service Co., Ltd
and the natural person Liu Yuhuan at a price of 1.27 yuan per unit of registered capital, and subscribed to the
registered capital of 43 million yuan of the capital increase of Western Power for 1.27 yuan per unit of registered
capital. As of the date of approval of the financial report, the afore-said matters have not yet completed the
registration          procedures          for          industrial        and         commercial           changes,
Ranchuang Company has paid RMB 48.06 million for equity transfer and RMB 54.61 million for premium capital
 increase.
      (3) Relocation matters of Zhongneng Company
     The "Proposal on the Investment and Construction of New Production Base of Zhongneng Company" was
deliberated and passed in the 27th meeting of the 8th session of Board of Directors of the Company, Zhongneng
                               Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Company started the overall relocation of the enterprise, and planned to invest in the construction of a new
production base in the Qianjin intelligent manufacturing park of Dajiangdong Industrial Agglomeration Zone in
Qiantang New Area, Hangzhou. According to the needs of the development and construction of Eastern Bay New
City in Qiantang New District, Hangzhou, Zhongneng Company and Hangzhou Eastern Bay New City
Development and Construction Headquarter signed the "Non-residential Housing Relocation Compensation
Agreement" on February 13, 2023, including real estate and decoration and appurtenance compensation within the
scope of relocation, equipment relocation compensation fee, relocation fee and production and business shut-
down loss fee (including employee resettlement compensation fee, operating loss, etc.), signing incentive and
floor area ratio subsidy incentive, etc., with a total relocation compensation amount of RMB 202,227,000. The
relocation compensation fund will be compensated in installments according to the progress of land obtaining and
the actual relocation progress in the Qianjin intelligent manufacturing park by Zhongneng Company.
As of the date of approval of the financial statements, RMB 60,668,100.00 of relocation compensation has been re
ceived.
(4)Henan Junhua Development Co., Ltd litigation matters
In January 2022, Henan Junhua Development Co., Ltd (hereinafter referred to as Henan Junhua Company) sued
the Company in the People's Court of Yicheng DistrictZhumadian City, Henan Province, demanding that the
Company compensate for its losses of RMB 40 million and other expenses such as case acceptance fees and
property preservation fees. In March 2023, the People's Court of Yicheng District Zhumadian City, Henan
Province issued a Civil Judgment, confirming that the case was a contract dispute, dismissing the plaintiff Henan
Junhua Company's claim, and the case acceptance fee is borne by the plaintiff Henan Junhua Company. As of the
date of approval of this financial report, Henan Junhua Company has not appealed, and the first-instance judgment
has taken effect.
XVI. Other significant events
（1）Retrospective restatement
（2）Prospective application
(1) Non-monetary assets exchange
(2) Other assets replacement
(1) Recognition basis and accounting policies of reportable segment
     The Company's main business is to produce and sell industrial steam turbines, their auxiliaries, accessories
and other products. The Company regards such business as a whole to implement management and evaluate the
operating results. Therefore, the Company does not need to disclose segment information. The operating income
and operating costs of the Company by product/region are detailed in Note X VII (61) 1 of the Financial
Statements.
                                        Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
(2) The financial information of reportable segment
(3) There was no reportable segment, or the total amount of assets and liabilities of each part of reportable
segment, shall disclose the reason.
（4）Other note
(I) Lease
(1) For information about the right-to-use assets, please refer to Note X VII 25 to this Financial Statement;
(2) The Company's accounting policies for short-term leases and low-value asset leases are detailed in Note X V
included in the current profits and losses are as follows:
   Items                                                                           Current term         Same period of last term
Short-term lease expense                                                                 3,496,724.77               12,300,753.43
Low-value asset lease expense (except short-term lease)                                      2,277.88                    4,866.90
   Total                                                                                 3,499,002.65               12,305,620.33
(3) Current profit and loss and cash flow related to leasing
   Items                                                                           Current term         Same period of last term
Interest expense of lease liabilities                                                    1,585,096.61                  559,478.09
Total cash outflow related to leasing                                                   15,314,937.25                7,337,642.50
(4) The maturity analysis of the lease liabilities and the corresponding liquidity risk management are detailed in
Note X 10 of this Financial Statement.
(1) Operating lease
   Items                                                                           Current term         Same period of last term
Lease income                                                                             1,674,164.91               2,966,095.79
Items                                                                              End amount               End of last year
Real estate investment                                                                   6,451,478.55               6,903,986.07
   Subtotal                                                                              6,451,478.55               6,903,986.07
the future for irrevocably lease
   Remaining term                                                                  End amount               End of last year
Within 1 year                                                                            1,261,194.10                471,842.25
                              Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Over 5 years                                                                                            13,040.00
  Total                                                                        3,010,713.26          1,353,038.45
(II) Other
      According to the planning of the Hangzhou Municipal Government, the property right bodies of 6 companies
including Hangzhou Steam Turbine Holdings within the plant area of Hangzhou Steam Shiqiao Road factory area
were included in the scope of the Expropriation and Relocation Planning. According to the Hangzhou Municipal
People's Government's Minutes (Hangfu Minutes [2016] No. 87) on the relevant issues concerning the
compensation for the relocation of the Steam Turbine Shiqiao road plant area and the spirit of the minutes (Hangfu
Minutes [2016] No. 47)of the special meeting of Hangzhou Municipal people's Government on the relevant issues
concerning speeding up the relocation of the Shiqiao Road Factory area of Hangzhou Steam Turbine and the
Construction of the Hangzhou Steam Turbine Heavy Industry Project, Hangzhou Municipal Government, in
accordance with the principle of "one factory, one policy", determines that the compensation for the overall
relocation of the plant area of Hangzhou Steam Turbine Shiqiao road plant is RMB 1.815 billion, with the
compensation contents include the compensation for physical assets such as buildings, structures, housing
renovations, equipment, and land within the area of relocation, as well as personnel resettlement fees,
compensation fees for shutdown loss and production stoppage loss and incentive fees, and the compensation
agreement shall be signed by the Xiacheng Urban Construction Investment Group-the land-making main-body
affiliated to Hangzhou Xiacheng District Municipal Government with each relocation unit.
      On March 21, 2018, based on the evaluation opinion of Kunyuan Assets Appraisal Co., Ltd (No. 606-2017
Kunnyuan Appraisal Report, No. 609-2017 Kunnyuan Appraisal Report, No. 18-2018 Kunnyuan Appraisal
Report,), the company signed the “Relocation Compensation Agreement for Non-residential Buildings on State-
owned Land” with Xiacheng Urban Construction Investment Group, and determined that Xiacheng Urban
Construction Investment Group shall make full monetary relocation compensation for the Company and its
subsidiary the Machinery Company, with the total amount of compensation for various physical assets and
expenses is RMB 1,321,860,410.00 (Including the incentive fee of RMB 35,275,640.00), and this aforementioned
compensation shall be firstly collected by Hangzhou Steam Turbine Holdings.
The Company and its subsidiaries received relocation compensation of RMB197,297,786.03 in the current period,
and received RMB74,060,327.54 in 2023 as of the date of approval of the financial report, with a cumulative
relocation compensation of RMB1,131,878,961.99; The Company and its subsidiaries incurred relocation
expenses of RMB16,150,800.00 in the current period, and accumulated the relocation expenses of
RMB259,997,391.15
     The subsidiary steam turbine heavy industry company incurred an asset purchase and construction
expenditure of180,689,420.54 yuan in the current period, with an accumulated asset purchase and construction
expenditure of 795,323,031.10 yuan. The corresponding special payables carried forward for the current period-
relocation compensation of 196,840,220.54 yuan, which is transferred to deferred revenue. The balance of unused
relocation compensation at the end of the period is 2,498,212.20 yuan.
XVII. Notes of main items in the financial statements of the Parent Company
(1) Accounts receivable classified by category
                                                                                                         In RMB
                                         Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                        End of term                                                  Beginning of term
   Category            Book balance       Bad debt provision                           Book balance       Bad debt provision
                                                                         Book                                                             Book
                               Proporti              Proporti                                  Proporti              Proporti
                     Amount              Amount                          value       Amount              Amount                           value
                                on %                  on %                                      on %                   on %
Including
Accrual of bad
debt provision                    100.00%                   32.55%                              100.00%                      32.69%
by portfolio         8,307.54                   447.49                  0,860.05     1,612.01                    735.29                 4,876.72
Including：
Total                             100.00%        32.55%                                         100.00%                      32.69%
  Accrual of bad debt provision by portfolio:693,967,447.49
                                                                                                                                       In RMB
                                                                                      Closing balance
                     Name
                                                     Book balance                  Bad debt provision                   Proportion
  Associated transaction portfolio                       97,772,097.67
  Aging portfolio                                         2,034,256,209.87               693,967,447.49                              34.11%
  Total                                                   2,132,028,307.54               693,967,447.49
  Accrual of bad debt provision by portfolio: 693,967,447.49
                                                                                                                                       In RMB
                                                                                       Closing balance
                      Name
                                                         Book balance                 Bad debt provision                  Proportion
  Relevant information of the provision for bad debts will be disclosed with reference to the disclosure method of
  other receivables if the provision for bad debts of bills receivable is accrued according to the general model of
  expected credit loss:
  □ Applicable √ Not applicable
  Disclosure by aging
                                                                                                            In RMB
                                 Aging                                                            Book balance
  Within 1 year（Including 1 year）                                                                                           724,266,757.49
  Over 3 years                                                                                                              645,374,771.96
    Over 5 years                                                                                                            348,498,468.93
  Total                                                                                                                    2,132,028,307.54
  (2) Accounts receivable withdraw, reversed or collected during the reporting period
  The withdrawal amount of the bad debt provision：
                                                                                                                                       In RMB
                                                   Amount of change in the current period                                              Closing
          Category              Opening balance
                                                         Accrual     Reversed or collected amount          Write-off                   balance
                                                                                                                          Other
Accrual of bad debt
provision by Single term
Accrual of bad debt
provision by portfolio
          Total                  767,426,735.29    -73,004,395.60                                          454,892.20             693,967,447.49
                                   Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
(3) The actual write-off accounts receivable
                                                                                                                          In RMB
                            Items                                                            Amount
Accrual of bad debt provision by portfolio                                                                           454,892.20
The significant actual write-off accounts receivable
                                                                                                                          In RMB
                                                                                                                        Arising from
                                   Nature of
                                                 Amount written      Reason for                                            related
           Name                     account                                              Verification procedures
                                                     off             written off                                        transactions
                                   receivable
                                                                                                                            (Y/N)
Haimen Daqian Thermal Power                                         Uncollectible    The examined and adopted to
                                   Goods              296,392.20                                                        No
Co., Ltd.                                                                            Board of directors
                                                                       amount
Hangzhou Steam Turbine Power                                        Uncollectible    The examined and adopted to
                                   Goods              158,500.00                                                        Yes
Group Southwest Branch                                                               Board of directors
                                                                       amount
Total                                                 454,892.20
（4）The ending balance of account receivables owed by the imputation of the top five parties
                                                                                                                        In RMB
   Name                                      Amount                Proportion(%)                          Bad debt provision
Client 1                                         733,175,082.50                          34.39%                     193,382,266.95
Client 2                                         190,409,119.52                          8.93%                      112,469,392.80
Client 3                                          82,411,200.00                          3.87%                          4,120,560.00
Client 4                                          56,983,919.41                          2.67%                       12,796,890.19
Client 5                                          51,240,000.00                          2.40%                          2,562,000.00
Total                                           1,114,219,321.43                         52.26%
（5）Account receivable which terminate the recognition owning to the transfer of the financial assets
Other note：
(6)The amount of the assets and liabilities formed by the transfer and the continues involvement of accounts
receivable
                                                                                                                          In RMB
                   Items                                  Closing balance                             Opening balance
Interest receivable
Dividend receivable                                                         110,000.00
Other receivable                                                        8,287,079.99                                 27,054,816.71
Total                                                                   8,397,079.99                                 27,054,816.71
（1）Interest receivable
□ Applicable √ Not applicable
                                      Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
  （2）Dividend receivable
                                                                                                                              In RMB
                     Items                                   End of term                             Beginning of term
  China mechanical and Electrical Institute                                  110,000.00
  Total                                                                      110,000.00
  □ Applicable √ Not applicable
  Other note：
  （3） Other accounts receivable
                                                                                                                     In RMB
                   Nature                               Closing book balance                      Opening book balance
Deposit                                                                    11,450,773.84                                   30,465,219.01
Provisional payment receivable                                               598,767.58                                      832,087.45
Other                                                                       1,672,805.50                                    1,999,123.61
Total                                                                      13,722,346.92                                   33,296,430.07
                                                                                                                              In RMB
                                              Stage 1                      Stage 2                    Stage 3
                                                                Expected credit loss over    Expected credit losses for
          Bad Debt Reserves            Expected credit losses                                                                    Total
                                                                     life (no credit         the entire duration (credit
                                      over the next 12 months
                                                                      impairment)              impairment occurred)
Balance as at January 1, 2022                   1,271,720.39                    213,125.64                 4,756,767.33      6,241,613.36
Balance as at January 1, 2022 in
current
——Transfer to stage II                            -19,971.45                     19,971.45
——Transfer to stage III                                                        -168,036.86                   168,036.86
Provision in the current period                  -969,613.33                    -25,117.33                   188,384.23       -806,346.43
Balance as at December 31, 2022                   282,135.61                     39,942.90                 5,113,188.42      5,435,266.93
  Loss provision changes in current period, change in book balance with significant amount
  □ Applicable √ Not applicable
  Disclosure by aging
                                                                                                                                In RMB
                              Aging                                                           Book balance
  Within 1 year(Including 1 year）                                                                                            7,013,397.47
  Over 3 years                                                                                                               4,629,151.84
    Over 5 years                                                                                                             4,528,966.84
                                       Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Total                                                                                                                     13,722,346.92
The withdrawal amount of the bad debt provision：
                                                                                                                           In RMB
                                         Amount of change in the current period
                        Opening
   Category                                                 Reversed or                                              Closing balance
                        balance
                                           Accrual            collected         Write-off         Other
                                                               amount
Accrual of bad
debt provision          6,241,613.36        -806,346.43                                                                  5,435,266.93
by portfolio
Total                   6,241,613.36        -806,346.43                                                                  5,435,266.93
(4) The actual write-off accounts receivable
(5) Top 5 of the closing balance of the other accounts receivable collected according to the arrears party
                                                                                                                            In RMB
                                                                                               Proportion of the
                                                                                                 total year end     Closing balance of
                 Name                       Nature        Closing balance      Aging
                                                                                                 balance of the     bad debt provision
                                                                                              accounts receivable
Shanghai Customs Waigaoqiao                                                 Over 5
                                         Deposit            3,710,320.94                                  27.04%         3,710,320.94
Office                                                                      years
                                                                            Within 1
Shanghai Customs                         Deposit              906,722.90                                    6.61%           45,336.15
                                                                            year
Hangzhou Ganghua Gas Co., Ltd.           Deposit              900,000.00    (Note)                          6.56%          320,000.00
Nantong Jiaxing Thermoelectric
                                         Deposit              700,000.00    2-3 years                       5.10%          210,000.00
Co., Ltd.
                                                                            Within 1
Guoneng Company                          Other                675,477.72                                    4.92%
                                                                            year
Total                                                       6,892,521.56                                  50.23%         4,285,657.09
[Note]2-3 years:800,000.00 yuan,4-5 years:100,000.00 yuan.
(6) Accounts receivable involved with government subsidies
(7) Other account receivable which terminate the recognition owning to the transfer of the financial assets
(8) The amount of the assets and liabilities formed by the transfer and the continues involvement of other accounts
receivable
Other note:
                                                                                                                            In RMB
                                        Closing balance                                           Opening balance
        Items                             Provision for                                           Provision for
                    Book balance                             Book value       Book balance                            Book value
                                           impairment                                              impairment
Investments in
subsidiaries
Total               400,480,973.25                         400,480,973.25    191,793,655.63                            191,793,655.63
                                     Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
   (1)Investments in subsidiaries
                                                                                                                           In RMB
                                                         Increase /decrease
                                                                                                                      Closing balance
                       Opening                                            Withdrawn                      Closing
Investees                                  Add          Decreased                                                      of impairment
                       balance                                           impairment       Other          balance
                                        investment      investment                                                        provision
                                                                          provision
Auxiliary
Machine Co.
Packaged Co.
Machinery             7,968,000.00                                                                   7,968,000.00
Company
Turbine Company      20,208,700.14        584,992.83                                                20,793,692.97
Zhongneng            27,644,475.06                                                                  27,644,475.06
Company
Casting Company      11,220,000.00                                                                  11,220,000.00
New Energy            1,193,092.39    204,449,713.79                                               205,642,806.18
Company
Sales Company        13,721,544.50                                                                  13,721,544.50
China Mechanical      1,533,768.30                                                                   1,533,768.30
Institute Company
Ranchuang            22,017,172.27      3,652,611.00                                                25,669,783.27
Company
Total               191,793,655.63    208,687,317.62                                               400,480,973.25
   （2）Investments in associates and joint ventures
   （3）Other note
                                                                                                                           In RMB
            Items                   Amount of current period                              Amount of previous period
                                  Income                Cost                           Income                  Cost
   Main business                 3,165,445,499.40          2,453,557,174.72           3,346,432,079.14              2,393,749,908.61
   Other                             20,090,442.76             9,543,498.07             21,106,635.44                 27,015,078.28
   Total                        3,185,535,942.16       2,463,100,672.79       3,367,538,714.58        2,420,764,986.89
   Income related information：
   Information related to performance obligations:
   The Company’s sales link has entered into a legal and effective sales contract/order with the customer. The
   contract/order clarifies the terms of the subject product, specification model, transaction quantity, unit price,
   settlement method, delivery obligation, etc., and the performance obligation is clear, and it is the single
   performance obligation at a single point in time. The transaction prices of the Company’s various product
   contracts/orders are clear, and the Company will confirm revenue after fulfilling the relevant performance
   obligations in accordance with the contract/order related agreements.
   Information related to transaction value assigned to residual performance obligations:
   The income corresponding to the performance obligations that have not been performed or have been performed
   incompletely but the contract has been signed at the end of the reporting period is RMB 5,036,010,000.00.
   Other note：
                                                                                                                          In RMB
                       Items                                Occurred current term                 Occurred in previous term
                                      Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Long-term equity investment income by equity
method
Long-term equity investment income by Cost
method
Investment income obtained from the disposal of
trading financial assets
Investment income obtained from the disposal of
other non-current financial assets
Financing discount loss                                                     -1,721,444.27                           -2,924,174.07
Dividend income from other equity instrument
investments during the holding period
Debt restructuring gains                                                                                             -102,750.00
Total                                                                      216,423,127.90                         321,333,915.33
XVIII. Supplement information
√ Applicable □Not applicable
                                                                                                                          In RMB
                       Items                               Amount                                  Notes
                                                                           Mainly due to the investment income of -563,981.22
Non-current asset disposal gain/loss                         -792,933.90   yuan generated by the disposal of the equity of the
                                                                           Indonesian company in the current period
                                                                           (1) The net government subsidy recognized as a result
                                                                           of the relocation compensation of the Shiqiao Road
                                                                           plant is RMB21,141,733.79 (the government subsidy
Governmental Subsidy accounted as current                                  related to the relocation compensation is
gain/loss, except for those subsidies at with                              RMB37,292,533.79, and lessening the relocation
amount or quantity fixed by the national                   57,161,745.42   expenses of RMB16,150,800.00); (2) The government
government and closely related to the Company’s                            subsidy for the relocation compensation confirmed by
business operation.                                                        the old factory in Hangzhou is 8,663,283.72 yuan; (3)
                                                                           the funded and confirmed government subsidy by
                                                                           Zhejiang Gas Turbomachinery Manufacturing
                                                                           Innovation Center is 5,542,854.92 yuan.
Capital occupation charges on non-financial
enterprises that are recorded into current gains              127,908.28
and losses
Gains/losses of debt restructure                            7,035,391.36
Gain and loss from change of the fair value
arising from transactional monetary assets,
transactional financial liabilities as held as well
as the investment income arising from disposal                             Mainly due to the investment income of
of the transactional monetary assets,                      36,974,039.31   36,295,722.69 yuan of bank wealth management
transactional financial liabilities and financial                          products
assets available for sale excluding the effective
hedging transaction in connection with the
Company’s normal business
                                                                           Mainly due to the reverse of a provision of 19.8
Reverse of the provision for impairment of
                                                                           million yuan for bad debts due to the collection of
accounts receivable undergoing impairment test             20,281,569.00
                                                                           long-term receivables with single accrual in the
individually
                                                                           current period
Income from custodian charge obtained from                                 Mainly due to then non-operating income -
entrusted operation                                        54,844,106.11
                                                                           compensation of 56,511,643.28 yuan
                                    Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
                                                                         Mainly due to the immediately executed share
Operating income and expenses other than the                             payment confirmed by the casting company of -
                                                         -1,732,271.11
aforesaid items                                                          2,150,400 yuan and other income - withholding
                                                                         personal income tax fee refund
Less: Influenced amount of income tax                    17,931,285.99
Amount of influence of minority interests（After
tax）
Total                                                   142,441,367.02                            --
Details of other profit and loss items that meet the non-recurring profit and loss definition
□ Applicable√ Not applicable
Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition in
the Explanatory Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the
Public-Extraordinary Gains and Losses, or classifies any extraordinary gain/loss item mentioned in the said
explanatory announcement as a recurrent gain/loss item.
□ Applicable √Not applicable
                                                                                      Earnings per share
                                           Weighted average
          Profit of report period                                     Basic earnings per             Diluted earnings per
                                           returns equity(%)
                                                                     share(RMB/share）                 share(RMB/share)
Net profit attributable to the Common
stock shareholders of Company.
Net profit attributable to the Common
stock shareholders of Company after                    4.71%                             0.39                               0.39
deducting of non-recurring gain/loss.
（1）Simultaneously pursuant to both Chinese accounting standards and international accounting standards
disclosed in the financial reports of differences in net income and net assets.
□ Applicable□√ Not applicable
（2）Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese
accounting standards.
□ Applicable□√ Not applicable
(3)Explanation of the reasons for the differences in accounting data under domestic and foreign accounting standa
rds. If the data that has been audited by an overseas audit institution is adjusted for differences, the name of the ov
erseas institution should be indicated
                                                                         Hangzhou Steam Turbine Power Group Co., Ltd.
                                                                                                               March 29,2023