证券代码：000037、200037 证券简称：深南电A、深南电B 公告编号：2020-012
深圳南山热电股份有限公司Shenzhen Nanshan Power Co., Ltd.
Annual Report 2019
March 2020
Section I. Important Notice, Contents and InterpretationBoard of Directors, Supervisory Committee, all directors, supervisors and seniorofficers of Shenzhen Nanshan Power Co., Ltd. (hereinafter, the Company)guarantee that the Annual Report contains no misrepresentations, misleadingstatements or material omissions, and take all responsibilities, individual and/orjoint, for the reality, accuracy and completion of the whole contents.Principal of the Company- Chairman Li Xinwei, person in charger ofaccounting works- Director and GM Chen Yuhui, CFO Dai Xiji and person incharge of accounting organ (chief accountants)- deputy GM Wang Yi(act forfinancial works) guarantee that the Financial Report of the annual reportdisclosed is truthful, accurate and complete.All directors are attended the Board Meeting for annual report deliberation.The pre-plan for profit distribution that approved by 6
th Session of 8
thBOD is:
based on the Company’s share capital of 602,762,596 shares on 31
stDecember2019, distribute RMB 0.2 (tax included) cash dividends for every ten stocks towhole shareholders, 0 share bonus and no transfer of public reserve into sharecapital carry out.Concerning the forward-looking statements with future planning involved in theAnnual Report, they do not constitute a substantial commitment for investors.Investors are advised to exercise caution of investment risks.
The report has been prepared in both Chinese and English, for anydiscrepancies, the Chinese version shall prevail. Please read the full reportseriously.
Contents
Section I Important Notice, Contents and Interpretation ...... 2
Section II Company Profile and Main Financial Indexes ...... 7
Section III Summary of Company Business ...... 11
Section IV Discussion and Analysis of the Operation ...... 14
Section V Important Events ...... 34
Section VI Changes in shares and particular about shareholders ...... 56
Section VII Preferred Stock ...... 62
Section VIII Convertible Bonds ...... 64Section IX Particulars about Directors, Supervisors, Senior Officers and Employees错误!未定义书签。Section X Corporate Governance ...... 75
Section XI Corporate-bond ...... 86
Section XII Financial Report ...... 87
Section XIII Documents available for referenc ...... 88
InterpretationItems Refers to
Contents
Company, the Company, Shen Nan Dian, The
listed company
Refers to
Company, the Company, Shen Nan Dian, The
Shenzhen Nanshan Power Co., Ltd.Shen Nan Dian Zhongshan Company Refers to
Shen Nan Dian (Zhongshan) Electric Power Co., Ltd.Shen Nan Dian Dongguan Company Refers to
Shen Nan Dian (Dongguan) Weimei Electric Power Co., LtdShen Nan Dian Engineering Company Refers to
Shenzhen Shennandian Turbine Engineering Technology Co., Ltd.Shen Nan Dian Environment ProtectionCompany
Refers to
Shenzhen Shen Nan Dian Environment Protection Co., Ltd.Server Company Refers to
Shenzhen Server Petrochemical Supplying Co., LtdNew Power Company Refers to
Shenzhen New Power Industrial Co., Ltd.Singapore Company Refers to
Shen Nan Energy (Singapore) Co., Ltd.Nanshan Power Factory Refers to
Nanshan Power Factory of Shenzhen Nanshan Power Co., Ltd.Zhongshan Nanlang Power Plant Refers to
Zhongshan Nanlang Power Plant of Shen Nan Dian (Zhongshan)
Electric Power Co., Ltd.Dongguan Gaobu Power Plant Refers to
Dongguan Gaobu Power Plant of Shen Nan Dian (Dongguan)
Weimei Electric Power Co., LtdNAM HOI Refers to
HONG KONG NAM HOI (INTERNATIONAL) LTD.Hong Kong Energy Refers to
Shenzhen Energy (Hong Kong) International Co.,LTD.SZ Energy Group Refers to
Shenzhen Energy Group Co., Ltd.Energy Corporation Refers to
Shenzhen Energy CorporationShenzhen Capital Group Refers to
Former name as Shenzhen Capital Co., Ltd., renamed as Shenzhen
Capital Operation Group Co., Ltd. On 3 March 2020Guangju Industrial Refers to
Shenzhen Guangju Industrial Co., Ltd.Guangju Holding Refers to
Shenzhen Guangju Investment Holding (Group) Co., Ltd.Guangju Energy Refers to
Shenzhen Guangju Energy Co., Ltd.Kehuitong Refers to
Shenzhen Kehuitong Investment Holding Co., Ltd.Shenzhen Gas Refers to
Shenzhen Gas Group Co., Ltd.SASAC of Shenzhen Municipal Refers to
State-owned Assets Supervision and Administration Commission of
the People’s Government of Shenzhen MunicipalAudit institution, LIXINZHONGLIAN,accounting organ
Refers to
LIXINZHONGLIAN CPAS (SPECIAL GENERAL PARTNERSHIP)
Ruihua Certified Public Accounts Refers to
Ruihua Certified Public Accounts (Engagement Partner)SZ United Ex Refers to
Shenzhen United Property and Share Rights ExchangeCompany Law Refers to
Company Law of the People’s Republic of China
Securities Law Refers to
Securities Law of the People’s Republic of ChinaRules Governing the Listing of Stocks Refers to
Rules Governing the Listing of Stocks on Shenzhen Stock Exchange
Articles of Association Refers to
Article of Association of Shenzhen Nanshan Power Co., Ltd.Yuan, ten thousand Yuan, one hundred million
Refers to
Except the special description of the monetary unit, the rest of the
monetary unit is RMB Yuan, ten thousand Yuan,one hundred million
YuanReporting period Refers to
1 January 2019 to 31 December 2019
Section II. Company Profile and Main Financial IndexesI. Company informationShort form of the stock Shen Nan Dian A , Shen Nan Dian B Stock code 000037, 200037Stock exchange for listing Shenzhen Stock ExchangeName of the Company (inChinese)
深圳南山热电股份有限公司Short form of the Company(in Chinese)
深南电Foreign name of the Company(if any)
Shenzhen Nanshan Power Co., Ltd.Legal representative LI XINWEIRegistrations add. No.2097 Yueliangwan Avenue, Nanshan District, Shenzhen, Guangdong ProvinceCode for registrations add 518054Offices add. 16/F-17/F, Hantang Building, OCT, Nanshan District, Shenzhen, Guangdong ProvinceCodes for office add. 518053Company’s Internet Web Site
http://www.nsrd.com.cnE-mail public@nspower.com.cn; investor@nspower.com.cnII. Person/Way to contact
Secretary to the BOD Rep. of security affairsName Zhang JieContact add.
16/F-
17/F, Hantang Building, OCT,
17/F, Hantang Building, OCT,Nanshan District, Shenzhen, Guangdong
Province
Tel. 0755-26003611Fax. 0755-26003684E-mail investor@nspower.com.cn
III. Information disclosure and preparation placeNewspaper appointed for information disclosure China Securities Journal; Securities Times; Hong Kong Commercial Daily
Nanshan District, Shenzhen, Guangdong
Website for annual report publish appointed by http://www.cninfo.com.cn/
Preparation place for annual report
Nanshan District, Shenzhen, Guangdong ProvinceIV. Registration changes of the Company
Organization code 91440300618815121HChanges of main business since listing (ifapplicable)
N/A
V. Other relevant informationCPA engaged by the CompanyName of CPA LIXINZHONGLIAN CPAS (SPECIAL GENERAL PARTNERSHIP)Offices add. for CPA
Room 5017-11, No. 1 Building, No.1 Gate, South Zone, Financial and Trade Center, No. 6975,Asia Road, Pilot Free Trade Zones (Dong-jiang Free Trade Port Zone), TianjinSigning Accountants Liu Xinfa, Ding DongmeiSponsor engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable √ Not applicable
Financial consultant engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable √ Not applicable
VI. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data or not
□ Yes √ No
2019 2018 Changes over last year
Secretariat of the Board of Directors, 17/F, Hantang Building, OCT,
2017Operating income (RMB) 1,222,577,954.53
1,884,937,109.00
-35.14%
2,045,766,831.74
Net profit attributable toshareholders of the listed Company
(RMB)
24,900,956.73
| shareholders of the listed Company | |
19,253,766.12
29.33%
15,904,182.47
Net profit attributable to
Net profit attributable toshareholders of the listed Company
after deducting non-
shareholders of the listed Companyrecurring gains
and losses (RMB)
14,685,745.16
recurring gains
-13,515,247.29
-208.66%
11,413,492.42
operating activities (RMB)
202,943,908.61
| Net cash flow arising from | ||
236,563,160.38
-14.21%
196,799,855.73
Basic earnings per share
(RMB/Share)
0.0413
| Basic earnings per share | ||
0.032
28.13%
0.026
(RMB/Share)
0.0413
| Diluted earnings per share | ||
0.032
28.13%
0.026
Weighted average ROE 0.74%
-0.69%
-207.25%
0.59%
Year-end of 2019 Year-end of 2018
Changes over end of
last year
Year-end of 2017Total assets (RMB) 3,219,261,720.55
3,307,148,289.92
-2.66%
2,883,804,392.70
Net assets attributable toshareholder of listed Company
(RMB)
2,002,772,808.24
| shareholder of listed Company | |
1,977,871,851.51
1.26%
1,958,618,085.39
VII. Difference of the accounting data under accounting rules in and out of China
1. Difference of the net profit and net assets disclosed in financial report, under both IAS (InternationalAccounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either IAS (InternationalAccounting Standards) or Chinese GAAP (Generally Accepted Accounting Principles) in the period.
2. Difference of the net profit and net assets disclosed in financial report, under both foreign accountingrules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either foreign accounting rules orChinese GAAP (Generally Accepted Accounting Principles) in the period.VIII. Quarterly main financial index
In RMB/CNYFirst quarter Second quarter Third quarter Fourth quarterOperating income 152,975,230.74
255,149,385.64
408,965,405.06
405,487,933.09
Net profit attributable toshareholders of the listed Company
-28,373,168.62
3,089,977.80
33,806,673.10
16,377,474.45
Net profit attributable to
after deducting non-recurring gainsand losses
-28,916,498.43
| shareholders of the listed Company | ||
809,987.61
32,161,272.48
10,630,983.49
Net cash flow arising fromoperating activities
-4,897,654.96
61,115,031.85
27,344,953.54
119,381,578.18
Whether there are significant differences between the above-mentioned financial index or its total number and the relevant financialindex disclosed in the Company’s quarterly report and semi-annual report
□ Yes √ No
IX. Items and amounts of extraordinary profit (gains)/loss
√Applicable □ Not applicable
In RMB/CNYItems 2019 2018 2017 Note
non-current asset (including the write-
Gains/losses from the disposal ofoff
that accrued for impairment of assets)
-527,109.02
| off | ||
-454,644.16
Governmental subsidy calculated into
Governmental subsidy calculated intocurrent gains and losses(while closely
current gains and losses(while closelyrelated with the normal business of the
Company, excluding the fixed-
related with the normal business of theamount or
fixed-
amount orproportion governmental subsidy
according to the unified national standard)
6,402,848.81
proportion governmental subsidy
5,124,971.79
4,331,837.03
Switch back of the impairment forreceivables and contract assets that hasimpairment test independently
12,000.00
1,504,310.97
Other non-
operating income and expenditure
except for the aforementioned items
5,578,877.22
operating income and expenditure
37,044,913.53
335,919.18
Less: impact on income tax
6,525,056.89
| 195,823.19 | |
803,999.72
equity (post-tax)
| Impact on minority shareholders’ | 1,055,582.25 |
2,875,815.02
422,733.25
Total
32,769,013.41
| 10,215,211.57 | |
4,490,690.05
--Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for CompaniesOffering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according tothe lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering TheirSecurities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √ Not applicable
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for CompaniesOffering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according tothe lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering TheirSecurities to the Public --- Extraordinary Profit/loss, the Company has no such items in the reporting period for the aforesaid
Section III. Summary of Company BusinessI. Main businesses of the Company in the reporting periodThe company is specialized in power and thermal supply, as well as providing technical consulting and technical services for powerstations. The company has three wholly-owned or holding gas turbine plants, which equipped with seven sets of 9E gas steamcombined cycle power generating units, with total installed capacity up to 1260000 KW (Nanshan Power Factory: 3×180000 KW,Zhongshan Nanlang Power Plant: 2×180000 KW, Dongguan Gaobu Power Plant: 2×180000 KW). These three gas turbine plants areall located in the power load center of Pearl River Delta area, which are the main peaking power sources in their areas. During thereporting period, the Company mainly engaged in the combined cycle power generation business with gas-steam, the subordinateNanshan Power Factory, Zhongshan Nanlang Power Plant and Dongguan Gaobu Power Plant are operates in a normal station. Due tothe continuous reduction of the on-grid electricity price and the continuous reduction of the base power of the Company in recentyears, and the pressure of fuel costs and environmental protection supervision, the Company's main business of electricity facedgreater difficulties during the reporting period. In order to minimize the negative impact of the external environment on thecompany’s operating performance, on the basis of paying close attention to safety production management, the company increased itseconomic operation management, complied with the constantly accelerating trend of the power market-oriented reform process inGuangdong Province, organized the three subordinate power plants actively participate in the power market marketing competitionand achieved good results. In 2019, the Company’s subordinate power plants totally completed electricity quantity (on-gridelectricity quantity + electricity marketing quantity) of 3.466 billion KWH, the actual on-grid electricity quantity of 1.458 billionKWH and electricity marketing quantity of 2.008 billion KWH. Completion of the electricity for subordinate power plants are as:
Nanshan Power Factory completed 647 million KWH of on-grid electricity, the full electricity quantity totaled 1.306 billion KWH,with a year-on-year down of 26.05%; Zhongshan Nanlang Power Plant completed 124 million KWH of on-grid electricity, the fullelectricity quantity totaled 848 million KWH, with a year-on-year down of 30.72% and the Dongguan Gaobu Power Plant completed687 million KWH of on-grid electricity, the full electricity quantity totaled 1312 million KWH, with a year-on-year growth of 2.5%.
During the reporting period, the company not only strive to improve the operating efficiency of its main business of electric power,but also made great efforts to the operation and expansion of related businesses. The subordinate Shen Nan Dian EngineeringCompany continued to develop the technical consultation and technology service business for the construction of domestic andinternational gas turbine power stations. Shen Nan Dian Environmental Protection Company engaged in the drying treatment of wetsludge in sewage treatment plants by utilizing the waste heat generated by gas turbines, and the annual processing capacity of wetsludge was 155,200 tons, which created a new record for its production, and realized the reduction and harmless treatment of sludgeand the comprehensive utilization of resources.
II. Major changes in main assets
1. Major changes in main assets
Major assets Note of major changes
Equity assets No major changesFixed assets No major changesIntangible assets No major changesConstruction in process
The upgrading and improvement project for low-nitrogen combustion system was carriedforward as fixed assetsMonetary fund Repayment of bank loans and purchasing bank financial productsAccount paid in advance The account paid in advance for natural gas increasedOther account receivable Margin of natural gas collectedOther current assets New financial products in the year
2. Main overseas assets
□ Applicable √ Not applicable
III. Core Competitiveness Analysis
In recent years, due to the impact of the macroeconomic situation and the common problems of gas turbine generating industry, theCompany’s main business has been facing increasing difficulties and challenges. However, the basic core competitiveness formed bythe operation and development for three decades and thanks to the strong support from major shareholders, and the managementinnovations adopted by new session of the Board and leading group, it has laid a necessary foundation for the Company to surviveand seeking transformation and development.
1. A mature and completed governance structure & a rigorous and standardized risk-control mechanism. As a listed company withover 20-year baptism in securities market on the main board, the Company has established and continuously improved its modernenterprise management system, and has had a relatively mature and standardized corporate governance structure and a relativelystreamlined management organization structure. The “Three Meetings” operation was normative and efficient, and the internalmanagement was streamlined and orderly. In 2019, major changes have taken place in the corporate governance structure. Thecontrolling shareholder of the Company's major shareholder, Shenzhen Energy Group, was changed to Shenzhen Capital Groupwhich added confidence and support for the Company's pursuit of transformation, upgrading and sustainable development withstrong shareholder resource advantages and experienced and professional director resource advantages. In addition, the Company'sgeneral party branch was upgraded to the party committee, which strengthened the leadership and the honest and clean supervisionrole of the party organization. At the same time, the Company continuously reinforcing the supervision and auditing role on standardoperation and internal control of the listed company played by supervisory committee and auditing authority; effectively prevent andavoid the risks while improving the management and decision-making efficiency.
2. Hard-working and innovative management culture, and pragmatic and efficient operating mechanism. Combining its own actualsituation, the Company has broken the barriers of the original traditional business model since 2018, and greatly improved thedecision-making efficiency and work performance by establishing four major operation and management centers, including a powersales center, a fuel center, a financial center, and an information center, innovating the management model of productioncoordination and safety supervision, and effectively integrating business resources. On this basis, in 2019, the Company furtherinnovated the management mechanism, while upgrading the production coordination and the safety supervision mode, the Companyset up a capital (operation) center and set up an accounting sharing center to comprehensively balance the improvement of production,operation and management efficiency. While the Company built an efficient operating mechanism, the leadership team served as role
models, combined a series of effective management measures, such as deepening human resources reform and the "military order"assessment mechanism, advocated and built the management culture of unity, hard work, innovation and enterprise throughout theCompany, which laid a good management foundation for the Company to deeply explore its internal potential and actively seekexternal opportunities.
3. A loyal and dedicated management team & professional and progressive technical personnel. With more than 30 years of hardwork and the company’s influence in the gas turbine power generation industry and the Company’s pioneering and innovative spiritand enterprising spirit, the Company has absorbed and trained a group of technical experts and professionals in the gas turbineindustry, accumulated rich experience in the construction and operation management of gas turbine power plants. In order to adapt tothe market situation of the further propulsion of the electricity trading market-oriented reform in Guangdong Province, the Companyformed a team of professionals to study the electricity trading strategy and build a mathematical model of electricity trading. Itaccumulated rich experience in electricity marketing, which laid a solid foundation for the Company to actively respond to theelectricity market reform. Further more, Shen Nan Dian Engineering Company has provided professional services such as technicalconsulting, commissioning and maintenance for dozens of domestic and international gas turbine power stations. The Company'straining center has successively undertaken the technician training business for tens of power plants at home and abroad, and hasbecome a renowned professional training base in the domestic gas turbine industry, and has established a good reputation andprofessional brand image in the industry. The Company also has a group of management talents with innovative consciousness andfighting spirit, based on the principle of being highly responsible to the Company, they lead all employees to make unremittingefforts for the Company’s continuous operation and transformation development.
Section IV. Discussion and Analysis of the OperationI. Introduction2019 was the 70
th anniversary of the founding of the People's Republic of China, the 4
thanniversary of the founding of ShenzhenCity, and the beginning year of the construction of the Guangdong-Hong Kong-Macao Greater Bay Area and the pioneeringdemonstration zone of socialism with Chinese characteristics. Faced with the complicated situation of rising risks and challengesat home and abroad, under the strong leadership of the Party Central Committee with Comrade Xi Jinping as the core, the wholeparty implemented the Party Central Committee's decision-making and deployment, adhered to the general tone of steadyprogress, and adhered to taking the supply-side structural reform as the main line, and steadily promoted the high-qualitydevelopment. The progress of the main indicators of the "Thirteenth Five-Year Plan" was in line with the expectations, and theeconomic society maintained sustainable and healthy development.
In 2019, Guangdong's power market reform was further intensified. The market transaction size was about 200 billion kilowatthours, a year-on-year increase of 27.2%, accounting for about 46% of the province's power generation. Under this trend, NanshanPower Factory, the Company's subordinate, has also been included in the main body of the market-oriented power generation side,and the Company's power generation business entered a comprehensive market-based competitive landscape. At the same time,Guangdong's electricity spot market took the lead in entering the settlement trial operation nationwide. Under the situation ofhigh natural gas prices and a sharp decline in base electricity, the Company's main business of electricity faced unprecedentedlyhuge challenges. Based on a practical and realistic, proactive and prudent attitude, combined with the key indicators of electricquantity and gas prices and the actual situation of the Company's business development, the Company has set a goal of striving toachieve annual profit on the basis of the cascade business goals determined at the beginning of the year.
During the reporting period, the Company’s new leadership team led all employees to actively respond to various challenges,continued to take the “1+ 5” strategic road map as a guide, comprehensively and deeply analyzed the Company’s operatingsituation, accurately grasped and made full use of favorable conditions, vigorously promoted a series of targeted measures torespond to changes in the situation, defied difficulties, struggled and determined to move forward. During the reporting period,we focused on the following major tasks:
1. Paid close attention to safety management and practiced environmental protectionresponsibility. Overcame difficulties such as obsolete power generation equipment, achieved the "five no" safety goal throughoutthe year by strengthening the safety production responsibility system, enhancing the dynamic assessment and peripheralmanagement of safety production, upgrading the supervision mode of safety production, implementing the entire process andcomprehensive safety management. At the same time, it achieved new records of "zero non-cut", "zero obstacles" and "zeroaccidents", and achieved a total of 5,722 days of safe production, created the Company’s best safety records.
2. Investigated competitive strategies and improved main performance. In order to go all out to meet the challenges of theexternal market environment, the Company scientifically, reasonably and profitably operated its main business of electricity withpriority to efficiency by seizing long-term electric quantity, intensively studying the electricity trading and the “two regulations”policy, and comprehensively analyzing multiple factors such as power transfer, monthly competition power, deviation income,cold reserve compensation, etc. The Company realized the transfer of 1.464 billion kilowatt-hours of electricity throughout the
year, an increase of 25% on a year-on-year basis, which laid a necessary foundation for the Company to achieve annual operatingprofit.
3. Strictly controlled cost and expanded fuel channels. Continuously strengthened the communications with suppliers, andactively expanded gas source procurement channels, opened up deep-energy OEM rights, reduced procurement costs, andenhanced market bargaining power; obtained stable and high-quality gas sources with competitive prices through the "ResourceStrategic Cooperation Agreement" signed by Shen Nan Dian Dongguan Company and Shenzhen Gas, and effectively reducedfuel procurement costs. At the same time, the Company kept abreast of changes in the external situation, carried out scientificfinancial analysis and calculations dynamically, strengthened the role of financial staff in guiding and operating the Company'svarious operations, further strengthened the overall management of funds in the system, and adopted various measures toeffectively reduce the cost of funds and the operating costs.
4. Responded to the national strategic call “One Belt and One Road” and actively explored overseas markets. The Company'ssubordinate Shen Nan Dian Engineering Company actively explored markets in Angola, Turkey, Malaysia, Georgia, Egypt andother countries along the “One Belt and One Road”, and undertook related technical services such as operation and maintenanceof gas turbine power stations. As of December 31, 2019, the contract signing of three operation and maintenance projects inGeorgia and Malaysia had been completed, the total contract amount was 67.652 million Yuan, achieving profit of 12.1 millionYuan.
5. Served the Guangdong-Hong Kong-Macao Greater Bay Area, and made a little contribution to the "Shenzhen Blue". TheCompany actively fulfilled its social responsibilities and completed the “Shenzhen Blue” technical transformation project onschedule. The nitrogen oxide emission index of the generator set was better than the emission standards required by thegovernment, which made positive contribution to the improvement of Shenzhen's environmental quality. The Company'ssubordinate Shen Nan Dian Environment Protection Company assisted the stabilizing treatment of urban sludge in Shenzhen. In2019, 155,200 tons of wet sludge was treated, the treatment volume reached a new record. At the same time, 3 million Yuan wasinvested to complete the sludge drying waste gas treatment and transformation, and a new set of large-capacity chemicaldeodorization equipment was added which effectively reduced the environmental protection emission index after operation, andmade positive social contributions to the "bluer sky and cleaner water" project at Qianhai area of the Greater Bay Area.
6. Innovated management mode and improved operation efficiency. Established a joint on-site coordination mechanism forenvironmental protection projects to improve production decision-making efficiency and achieve optimal sharing of productioninformation and resources; established a capital (operation) center to strengthen corporate capital management and control toensure the secure, reasonable and efficient operations of corporate capital; set up an accounting sharing center to further integratefinance into the Company's strategic transformation and the decision-making and management of various industrial chains so asto provide the Company with necessary capital reserves for capital operations.
7. Deepened human resources reform and strengthened performance appraisal mechanism. Continued to deepen human resourcesreform, and further optimized human resources allocation through batch adjustment of ranks and continuous post exchanges, etc.so as to lay the necessary talent base for the Company's business development goals; continued to implement the "military order"assessment, and summarized existing experience, on the basis of this, closely optimized and adjusted the "military order"assessment indicators around the Company's annual business goals to promote the Company's annual goals.
8. Promoted the revitalization of existing assets and explored incremental asset allocation. Comprehensively analyzed the macro
situation, industry trends and market situation, prudently studied, explored and started the revitalization work of existing assets,and strive to regenerate the old capacity, and also created favorable conditions for the injection of new capacity; with the help ofthe socialist pilot demonstration zones with Chinese characteristics and the favorable policies of Guangdong-Hong Kong-MacaoGreater Bay Area, relied on the advantages of shareholders and other parties, gave full play to the Company's own subjectiveinitiative, actively explored new project opportunities, and created conditions for the Company to seek strategic transformationand achieve sustainable and healthy development.
In 2019, the Company was guided by Xi Jinping's thoughts on socialism with Chinese characteristics in the new era, firmlygrasped the correct political direction, comprehensively strengthened party leadership and party building, the Company's partyorganization has been upgraded to party committee, and continued to promote the deep integration of party building andcompany management so as to strengthen the party's construction and promote the operations.
In year of 2019, the Company has achieved a revenue in operation of 1223 million Yuan, the net profit attributable to shareholderof listed company amounted as 24.901 million Yuan and basic EPS was 0.04 Yuan.
II. Main business analysis
1. Introduction
Found more in I. Introduction in Discussion and Analysis of the Operation
2. Revenue and cost
(1) Constitute of operation revenue
In RMB/CNY
2019 2018
Increase/decrease
y-o-yAmount
Ratio in operationrevenue
Amount
Ratio in operationrevenueTotal operationrevenue
1,222,577,954.53
100%
1,884,937,109.00
100%
-35.14%
Industry classificationEnergy industry 1,082,001,858.50
88.50%
1,768,441,244.50
93.82%
-38.82%
Engineering service
62,635,550.65
5.12%
45,701,543.76
2.42%
37.05%
Sludge drying 70,420,653.67
5.76%
64,698,909.32
3.43%
8.84%
Other business 7,519,891.71
0.62%
6,095,411.42
0.32%
23.37%
Product classificationElectricity sales 1,082,001,858.50
88.50%
1,768,441,244.50
93.82%
-38.82%
Engineering service
62,635,550.65
5.12%
45,701,543.76
2.42%
37.05%
Sludge drying 70,420,653.67
5.76%
64,698,909.32
3.43%
8.84%
Other business 7,519,891.71
0.62%
6,095,411.42
0.32%
23.37%
Region classificationDomestic 1,222,577,954.53
100.00%
1,884,937,109.00
100.00%
-35.14%
overseas -
0.00%
-
0.00%
0.00%
(2) The industries, products, or regions accounting for over 10% of the Company’s operating income oroperating profit
√Applicable □ Not applicable
In RMB/CNY
Operatingrevenue
Operating cost Gross profit ratio
Increase/decrease
| of operating |
revenue y-o-y
Increase/decrease
y-o-y
Increase/decrease
| of operating cost | of gross profit |
ratio y-o-yIndustry classificationEnergy industry 1,082,001,858.50
969,503,809.30
10.40%
-38.82%
-42.27%
5.36%
Engineeringservice 62,635,550.65
44,467,064.24
29.01%
37.05%
41.98%
-2.46%
Sludge drying70,420,653.67
47,133,619.81
33.07%
8.84%
17.36%
-4.86%
Product classificationElectricity sales 1,082,001,858.50
969,503,809.30
10.40%
-38.82%
-42.27%
5.36%
Engineeringservice 62,635,550.65
44,467,064.24
29.01%
37.05%
41.98%
-2.46%
Sludge drying 70,420,653.67
47,133,619.81
33.07%
8.84%
17.36%
-4.86%
Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based onlatest one year’s scope of period-end
□ Applicable √ Not applicable
(3) Income from physical sales larger than income from labors
√ Yes □ No
Industries Item Unit 2019 2018
Increase/decreasey-o-yElectric Power
Sales volume 100 million KWH
34.66
42.7
-18.83%
Output 100 million KWH
14.58
27.97
-47.87%
Storage 100 million KWH
-
-
-
Reasons for y-o-y relevant data with over 30% changes
√Applicable □ Not applicable
In 2019, the reform of Guangdong's electric power marketization has been further strengthened, and the market transaction sizehas increased by nearly 30% on a year-on-year basis, accounting for about 50% of power generation in the province. WithNanshan Power Factory being included in the main trading body of electricity marketization, three subordinate power plants ofthe Company all entered the power market transaction, the Company changed from the past planned power generation mode tothe marketing-oriented power production mode, and the base electricity consumption dropped significantly.
(4) Performance of the material sales contract signed by the Company up to the reporting period
□ Applicable √Not applicable
(5) Constitute of operation cost
Industry and products classification
In RMB/CNYIndustries Item
2019 2018
y-o-yAmount
| Increase/decrease | ||
| Ratio in operation |
cost
Amount
costEnergy industry
Power,
Ratio in operationheat
supply
969,503,809.30
heat
91.30%
1,679,314,517.30
95.84%
-42.27%
Engineeringservice
Engineering cost
44,467,064.24
4.19%
31,319,671.15
1.79%
41.98%
Other business
etc.
47,945,840.31
| Sludge drying | ||
4.52%
41,519,138.75
2.37%
15.48%
In RMB/CNYProducts Item
2019 2018
y-o-yAmount
| Increase/decrease | ||
| Ratio in operation |
cost
Amount
costElectricity sales Power supplying
Ratio in operation
969,503,809.30
91.30%
1,679,314,517.30
95.84%
-42.27%
Engineeringservice
Engineering cost
44,467,064.24
4.19%
31,319,671.15
1.79%
41.98%
Sludge drying Sludge treatment
47,133,619.81
4.44%
40,161,542.67
2.29%
17.36%
Other business Other 812,220.50
0.08%
1,357,596.08
0.08%
-40.17%
(6) Changes in the scope of consolidation in Reporting Period
□ Yes √ No
(7) Major changes or adjustment in business, product or service of the Company in Reporting Period
□ Applicable √ Not applicable
(8) Major sales and main suppliers
Major sales client of the CompanyTotal top five clients in sales (RMB)1,179,362,173.80
Proportion in total annual sales volume for top five clients
96.47%
Proportion in total annual sales for the related party’s sales intop five clients’ sales
0.00%
Information of top five clients of the CompanySerial Name Sales (RMB) Proportion in total annual sales1 Guangdong Power Grid Co., Ltd.618,584,498.54
50.60%
2 Shenzhen Power Supply Bureau Co., Ltd.447,680,549.85
36.62%
3 Shenzhen Municipal Water Affairs Bureau54,214,502.32
4.43%
4 China Machinery Engineering Corporation
42,676,471.74
3.49%
5 Shenzhen Water Group16,206,151.35
1.33%
Total --1,179,362,173.80
96.47%
Other situation of main clients
□ Applicable √ Not applicable
Main suppliers of the CompanyTotal purchase amount from top five suppliers (RMB)
Proportion in total annual purchase amount for top fivesuppliers
73.13%
694,128,794.86
Proportion in total annual purchase amount for the relatedparty’s amount in top five suppliers
2.90%
Information of top five suppliers of the CompanySerial Name Purchases (RMB) Proportion in total annual purchases
1 Shenzhen Gas Group Co., Ltd. 378,598,827.20
39.89%
2 CNOOC Gas Power Group Co., Ltd. 233,653,941.04
24.62%
3 Shenzhen Nan Guang Power Co., Ltd. 30,678,718.88
3.23%
4 Dongguan Jiufeng NG Storage Co., Ltd.
| 27,555,147.22 |
2.90%
Shenzhen Energy Gas Investment HoldingCo., Ltd., Shenzhen Energy GasInvestment Holding Co., Ltd.
23,642,160.52
2.49%
Total --
73.13%
| 694,128,794.86 | |
Other notes of main suppliers of the Company
□ Applicable √ Not applicable
3. Expenses
In RMB/CNY2019 2018
Increase/decreasey-o-y
Note of major changes
Sales expense 5,599,305.43
3,715,812.95
50.69%
Increased due to the cost of dry sludge
Increased due to the cost of dry sludgetreatment from Shen Nan Dian
Environment Protection Co
treatment from Shen Nan Dianmpany
(wholly-owned subsidiary) increased
mpany
Management expense 109,541,900.18
93,529,697.87
17.12%
Increased due to the previous year’s
Increased due to the previous year’sexpenses are charge off at same period
last yearFinancial expense 22,310,708.04
expenses are charge off at same period
39,606,243.43
-43.67%
Decreased due t
o the loans and lending
rate declined
4. R&D expenses
□ Applicable √ Not applicable
5. Cash flow
In RMB/CNYItem 2019 2018 Y-o-y changesSubtotal of cash in-
o the loans and lendingflow from
operation activity
1,413,997,516.01
| flow from | ||
2,228,506,103.32
-36.55%
Subtotal of cash out-
operation activity
1,211,053,607.40
| flow from | ||
1,991,942,942.94
-39.20%
activity
202,943,908.61
| Net cash flow from operation | ||
236,563,160.38
-14.21%
Subtotal of cash in-
investment activity
35,486,018.97
| flow from | ||
284,400.00
12377.50%
Subtotal of cash out-
investment activity
193,242,132.78
| flow from | ||
152,775,247.81
26.49%
activity
-157,756,113.81
Net cash flow from investment
-152,490,847.81
3.45%
Subtotal of cash in-
financing activity
1,465,170,000.00
| flow from | ||
1,551,000,000.00
-5.53%
Subtotal of cash out-
financing activity
1,653,932,661.32
| flow from | ||
1,132,043,516.39
46.10%
activity
-188,762,661.32
Net cash flow from financing
418,956,483.61
-145.06%
Net increased amount of cash andcash equivalent
-143,466,610.74
503,343,234.63
-128.50%
Main reasons for y-o-y major changes in aspect of relevant data
√Applicable □ Not applicable
1. Cash in-flow from operation activity has 36.55% declined over that of last year, mainly because the revenue from electricitysales decreased for the reduction of generation capacity in the year;
2. Cash out-flow from operation activity has 39.20% declined over that of last year, mainly because the costs of natural gas (NG)purchase decreased for the reduction of generation capacity in the year;
3. Net cash flow from operation activity has 14.21% down from a year earlier, mainly includes the generating revenue declined inthe year and the payment of NG decreased and the VAT and surcharge reduced;
4. Cash in-flow from investment activity has an increase of 12377.50% on a y-o-y basis, mainly because redemption of the newfinancial products increased in the year;
5. Cash out-flow from investment activity has an increase of 26.49% on a y-o-y basis, mainly due to the expenses on newfinancial products increased in the year;
6. Cash in-flow from financing activity has an increase of 46.10% on a y-o-y basis, mainly because repayment of the bank loansincreased in the year;
7. Net cash flow from financing activity has 145.06% down on a y-o-y basis, mainly because repayment of the bank loansincreased in the year and the size of lending are decreased;
8. Net increased amount of cash and cash equivalent has 128.50% down on a y-o-y basis, mainly because the net cash fromoperation activities and financing activities are declined in the year.Explanation on reasons for the significant differences between the net cash flow arising from operation activities in the Periodand net profit of last year
□ Applicable √ Not applicable
III. Analysis of the non-main business
√Applicable □ Not applicable
In RMB/CNY Amount Ratio in total profit
Note Whether be sustainable (Y/N)
Investment income
-
| 1,429,841.92 |
-4.97%
Income from long-
term
equity inve
termstment measured
by equity
YGains/losses of fairvalue changes
-
stment measured
0.00%
Assets impairment
-
0.00%
Non-operatingincome
5,601,216.93
19.47%
| 5,601,216.93 | |
Income for selling thecarbon emission quota and
waste materials
NNon-operatingexpenditure
carbon emission quota and270,348.79
0.94%
| 270,348.79 | |
assets
NIV. Assets and liability
1. Major changes of assets composition
In RMB/CNY
Year-end of 2019 Year-begin of 2019
Ratiochanges
Loss on retirement of fixed
Notes of major changesAmount
Ratio in total
assets
Amount
Ratio in totalassetsMonetary fund 773,209,854.84
24.02% 925,829,404.44
27.99%
-3.97%
Bank loans declinedAccountreceivable
178,150,580.32
5.53% 132,430,024.97
4.00%
1.53%
increasedInventory 124,686,443.61
Electricity charge receivable
3.87% 124,758,334.97
3.77%
0.10%
No major changesInvestmentproperty
2,401,327.00
0.07% 2,606,302.71
0.08%
-0.01%
No major changesLong-term equityinvestment
14,619,203.03
0.45% 16,049,044.95
0.49%
-0.04%
No major changesFix assets 1,381,675,872.68
42.92% 1,405,649,989.24
42.50%
0.42%
No major changes
process
66,474,630.23
| Construction in | ||
2.06% 82,348,008.39
2.49%
-0.43%
No major changesShort-term loans
881,075,378.48
27.37% 1,000,000,000.00
30.24%
-2.87%
Bank loans declinedLong-term loans
0.00% 25,940,000.00
0.78%
-0.78%
Repayment of the long-
term loans
ahead of schedule
2. Assets and liability measured by fair value
□ Applicable √ Not applicable
3. Assets right restriction till end of reporting period
V. Investment
1. Overall situation
□ Applicable √ Not applicable
2. The major equity investment obtained in the reporting period
□ Applicable √ Not applicable
3. The major non-equity investment doing in the reporting period
□ Applicable √ Not applicable
4. Financial assets investment
(1) Securities investment
□ Applicable √ Not applicable
The Company had no securities investment in the reporting period.
(2) Derivative investment
□ Applicable √ Not applicable
The Company had no derivatives investment in the reporting period.
5. Use of proceeds
□ Applicable √ Not applicable
The Company had no use of proceeds in the reporting period.VI. 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
VII. Analysis of main holding Company and stock-jointly companies
√Applicable □ Not applicable
Particular about main subsidiaries and stock-jointly companies net profit over 10%
In RMB/CNYCompany
name
Type Main business
Registercapital
Total assets
Net assets
Operatingrevenue
Operatingprofit
Net profit
ShenzhenNew PowerIndustrialCo., Ltd.
Subsidiary
Technologydevelopment
regarding to
regarding toapplication of
application ofremaining heat
remaining heat(excluding restricted
(excluding restricteditems) and power
items) and powergeneration with
generation withremaining heat. Add:
remaining heat. Add:
power generation
power generationthrough burning
machines.
RMB
113.85
million
202,283,267
.08
through burning
155,533,014
.55
144,934,297
.05
-2,350,999.13
-2,350,999.13
ShenzhenShen NanDianEnvironmentProtectionCo., Ltd.
Subsidiary
Sludge drying; thedesign and operations
design and operationsmanagement of sludge
management of sludgetreatment and disposal
treatment and disposalfacilities and
engineering;
facilities andthe
technologydevelopment,
thetechnology transfer,
technology transfer,technical advice,
technical advice,technical services of
environmental
technical services ofpollution control and
comprehensive
pollution control andutilization domain;
utilization domain;(Except for the
(Except for theprojects required to be
projects required to beapproved before
approved beforeregistration by laws,
administrativereg
registration by laws,ulations, or
ulations, ordecisions and
decisions andstipulation of the State
stipulation of the StateCouncil, the restricted
Council, the restricteditems must be
items must beapproved before
operating)
approved beforeRMB 79
million
151,486,548
.72
RMB 79
124,995,928
.28
70,441,892.
16,058,909
.35
13,733,65
3.52
ShenzhenShennandianTurbineEngineeringTechnologyCo., Ltd.
Subsidiary
Engage in thetechnical advisory
technical advisoryservice for the
service for theconstruction projects
of gas-
construction projectssteam
steamcombined cycle power
combined cycle powerplant (station), and
plant (station), andundertake the
undertake themaintenance and
maintenance andoverhaul of the
overhaul of theoperation equipment
of gas-
operation equipmentsteam
steamcombined cycle power
plant (s
combined cycle powertation). Import
tation). Importand export of goods
and export of goodsand technologies
and technologies(excluding distribution
(excluding distributionand state monopoly
commodities)
and state monopolyRMB 10
million
66,788,443.
RMB 10
36,050,095.
62,635,550.
11,237,044
.64
8,251,057.
ShenzhenServerPetrochemical SupplyingCo., Ltd
Subsidiary
Self-
supporting orimport agent business
import agent businessof fuel oil; trade
of fuel oil; trade(excluding production
(excluding productionand storage and
and storage andtransportation) in
transportation) indiesel, lubricating oil,
diesel, lubricating oil,liquefied petroleum
liquefied petroleumgas, natural gas,
gas, natural gas,compressed gas and
compressed gas andliquefied gas,
liquefied gas,chemical products
chemical products(excluding dangerous
chemicals);investment,
(excluding dangerousconstruction and
construction andtechnical supports in
technical supports inliquefied petroleum
liquefied petroleumgas, natural gas and
gas, natural gas andrelated facilities;
related facilities;import and export
import and exportbusinesses and
businesses anddomestic trade of
domestic trade ofgoods and
technologies
goods and(excluding franchise,
(excluding franchise,exclusive control, and
monopoly products)
exclusive control, and;
;leasing business.
leasing business.Licensed projects: fuel
Licensed projects: fueloil warehousing
oil warehousingbusiness (except for
business (except forrefined oil); general
refined oil); generalfreight transport,
freight transport,special transportation
special transportationof goods (containers),
of goods (containers),special transportation
of goods (tank)
special transportationRMB 53.3
million
123,526,851
.76
RMB 53.3
93,735,606.
1,174,190.4
-4,714,966
.66
-4,699,037
.46
Shen NanDian(Zhongshan)ElectricPower Co.,Ltd.
Subsidiary
Gas turbine powergeneration, waste heat
generation, waste heatpower generation,
power generation,power supply and
power supply andheating (excluding
heating (excludingheating pipe network),
heating pipe network),leasing of wharf and
oil depots (exc
leasing of wharf andluding
ludingrefined oil, dangerous
refined oil, dangerouschemicals, or
chemicals, orflammable and
explosive goods).
flammable andRMB 746.8
million
597,611,180
.05
RMB 746.8
-94,338,788.
171,254,894
.37
-4,618,828.55
656,087.4
Shen NanDian(Dongguan)WeimeiElectricPower Co.,Ltd
Subsidiary
Construction and
opera
Construction andtion of natural
tion of naturalgas power stations,
gas power stations,construction and
construction andoperation of natural
operation of naturalgas cogeneration
power plants.
gas cogenerationUS $ 35.04
million
621,158,083
.32
US $ 35.04
108,425,691
.07
464,032,241
.35
10,043,492
.05
10,034,29
0.45
Shen NanEnergy(Singapore)Co., Ltd.
Subsidiary
Agent f
or oils trade
or oils tradeand spare parts of gas
turbine
and spare parts of gasUS $ 0.9
million
150,337,347
.17
US $ 0.9
147,623,527
.73
0.00
235,764.20
235,764.2
Subsidiary disposes and acquired in the period
□ Applicable √ Not applicable
VIII. Structured vehicle controlled by the Company
□ Applicable √ Not applicable
IX. Future Development Prospects
(i) Brief analysis of macroeconomic situation and industry trendsIn 2020, the macroeconomic situation at home and abroad is complex and challenging. From the external environment, thegrowth of the world economy and trade has slowed down simultaneously, the geopolitical instability and economic operationrisks have increased, and the uncertain factors have somewhat increased. From the internal environment, China's economicdevelopment is facing new risks and challenges, and its economic operation is facing new downward pressure. In particular, theoutbreak of pneumonia caused by the novel coronavirus infections at the beginning of the year has a huge impact on theeconomic construction, further increasing the difficulties of the real economy, and significantly reducing the demand for powerconsumption. However, China's economy has tremendous resilience and potential. Although the novel coronavirus pneumoniaepidemic has a significant impact on economic operations, the long-term positive trend will not be changed. 2020 is the closing
year for the implementation of China’s “13th Five-Year Plan” and a key year for the layout of the “14th Five-Year Plan”, thePolitical Bureau of the CPC Central Committee has emphasized that it is necessary to coordinate the work of epidemicprevention and control and economic and social development, unswervingly implement the new development concept, deepenthe supply-side structural reforms, fight the three major challenges, and accomplish the "six stability" work, give full play to thepositivity, initiative and creativity of all parties, minimize the impact of the epidemic, and work hard to achieve the goals andtasks of economic and social development throughout the year, to achieve the goals and objectives of building a well-off societyin an all-round way and overcoming poverty, and to start a new journey of socialist modernization.
In terms of power industry trends, in recent years, the gas turbine power generation industry in Guangdong Province has shown adevelopment pattern that the energy structure is being optimized and adjusted, the core of gas power development is the PearlRiver Delta region, the main body of new gas power is distributed energy resources and the growth of gas power construction israther rapid, in the future, the market competition among gas and power companies in the province will further intensify. Theoutput of gas generating units in 2019 was about 1.56 million kilowatts, and the expected output in 2020 is 6.72 million kilowatts,a significant year-on-year increase of 331%. On the other hand, according to the Notice of Guangdong Energy Bureau on IssuingGuidance Plan for Base Power of Generator Unit and on Making Annual Trading Arrangements for the Electricity Market in2020"(YNDL Letter [2019] No.589) issued by Guangdong Energy Bureau, the total base power in the province in 2020 will be206 billion kwh, a year-on-year decrease of 18%, and the base power of the Company’s subordinate power plants to fall further.In addition, power spot trading is expected to be officially implemented in 2020, and the Company's main power business willface more intense and brutal market competition and challenges.
(ii) Summary of the Company’s annual business plan for 2020In 2020, the Company will unswervingly take the "1 + 5" strategic road map as the guide, and through the implementation of the"125" project, that is, taking "strategic transformation" as a center, "solidifying foundation and destocking, city and industryintegration" as two basic points, and taking "solidifying foundation, cutting overcapacity, integrating projects, optimizing mobileinvestment, laying out double cities" as five important measures, and strive to achieve strategic transformation and sustainableand healthy development, grab the “dual-zone drive” strategic opportunities in Guangdong-Hong Kong-Macao Greater Bay Areaand the leading demonstration zone of socialism with Chinese characteristics, consider the situation and make careful deployment,and on the basis of continuing to do a good job in the production and operation of the existing main business, designedlyimplement the optimal transfer of existing assets, accelerate the Company's transformation and upgrading, and strive to createmore value returns for shareholders. During the year, the Company will focus on the following work:
1. Strengthen safety management and implement environmental protection responsibilities. First, to consistently implementsafety supervision and management and strictly implement the safety responsibility system and safety guarantee measures toensure that the Company's safe production is stable and orderly. Second, to strengthen the technical supervision and managementof equipment, enhance the regular inspection and maintenance of equipment, and ensure the equipment’s normal operation; Third,build a full staff, all-round and all-weather security patterns, strive to create an all-around security situation of production,operation, management, etc., ensure the realization of the annual safety “five nos” and the capital chain security. Fourth, do agood job in environmental protection and strictly control emission targets to ensure the goal of achieving a blue card in theenvironmental credit evaluation; continue to play a pioneering roles in the industry, actively perform the social responsibility andparticipate in the municipal sludge treatment project of the Guangdong-Hong Kong-Macao Greater Bay Area.
2. Stick to the bottom line of compliance, help the development of the Company. First, further improve the corporate governancestructure and modern enterprise management system of listed companies, persist in managing enterprises according to law andstandardize operations. Second, continue in doing a good job of information disclosure in accordance with the laws and
regulations, make further efforts on improving the quality of information disclosure; Third, continue to manage the investorrelations in accordance with the laws and regulations, make further efforts on improving the level of investor management,earnestly protect the legitimate rights and interest of whole investors. Fourth, to pay close attention to the changes in policies andregulations, adopt various methods to carry out publicity and training on relevant laws, regulations and policies, strengthen therisk awareness and legal awareness of business management personnel at all levels and all employees, and further improve thegovernance and standard operation. The fifth is to further strengthen the internal control management, improve the riskprevention mechanism, strengthen the overall-process supervision and management of funds and foreign investment, andeffectively reduce and avoid capital and investment risks.
3. Adhere to the party's leadership and play a leading role. The first is to strictly implement the responsibility system for partybuilding, adhere to the principle of party management and party building, and always regard party building as the top priority toensure that the party building is at a new level. The second is to improve the Company's party building regulations in accordancewith relevant party organization regulations and party building requirements to provide basis and guidance for theimplementation of the Company's party building work. The third is to strengthen the party's leadership role, firmly establish thesense of responsibility, main business, and protagonist, further implement the party committee deliberations and decision-makingmechanism, and strengthen the party's leading role in important decisions and governance for production safety, businessmanagement, and transformation development.
4. Pay close attention to the main business operations and improve business performance. The first is to pay close attention to theproduction, operation and management of the main business of power generation, based on the principle of "maximizingbenefits", strive to enhance the power marketing capabilities, actively study spot trading policies and operating rules, anddynamically adjust the coping strategies according to the changes in the power marketing situation. The second is to strengthenthe strategic cooperation with suppliers, dynamically formulate natural gas procurement strategies, reduce natural gasprocurement costs while ensuring a stable supply of natural gas, and strive to obtain the maximum benefits of main business. Thethird is to strengthen the overall management of funds and the budget management, adopt diversified methods to reduce financialcosts, and improve the efficiency of use of funds and the level of income on the premise of ensuring the control of liquidity andrisks required for daily operations.
5. Revitalize stock assets and expand living space. The first is to combine the external operating environment and the actualsituation of the Company, explore effective paths for the Company's stock assets to be optimally transferred and invested, andimplement 70% equity transfer of Shen Nan Dian Dongguan Company to reduce the Company's funding pressure and operatingpressure. The second is to actively respond to the national “One Belt and One Road” strategy, endeavor to find new bases andfootholds for 9E units while striving for overseas engineering service projects so as to expand the space for the Company'stransformation and development. The third is to take advantage of the “dual zone drive” advantage, and use the capital platformof listed companies to actively and prudently seek new project opportunities and development opportunities, and seek strategictransformation and sustainable development of the Company.
6. Follow up the land plan and lay out the “two cities with one production”. Firstly, it is necessary to closely track and study theQianhai area planning and related policy developments, maintain communications with the relevant functional departments ofShenzhen and the Qianhai Administration, study and formulate coping strategies and work plans, actively strive for the follow asthe precursor, including the implementation of innovative industry projects as advance manufacturing, life & health, newgeneration IT and science & technology finance, promote the changes of the land nature in Qianhai area where Nanshan PowerFactory locates; Secondly, we must actively seize the development opportunities of the Shenzhen-Zhongshan channel, fullyrevitalized the land resources of Shen Nan Dian Zhongshan Company, and strive for the landing of new projects and newproduction capacity. Thirdly, with the participation and cooperation of legal advisers, all work is carried out in accordance with
the standardization requirements of listed companies, and necessary decision-making approval procedures and informationdisclosure obligations shall be fulfilled to maximize the interests of the Company and all shareholders and the legitimate rightsand interests of employees..
The business plan and related situation analysis described in this report do not constitute the company’s performancecommitment to investors. The company reminds investors to maintain sufficient risk awareness and understand the differencebetween business plan and performance commitment and make prudent investment decision making.
(iii) Possible main risks and countermeasures
1. In terms of main business, in recent years, with the further advancement of Guangdong's power market reform, the powergeneration side has said goodbye to the past generation scheduling model issued by the government, the market competition forthe gas turbine power generation industry has intensified, the base power plan to fall further, the “two detailed rules” assessmentand compensation standards fell sharply, and the main business of power generation was struggling. In addition, the pneumoniaepidemic caused by COVID-19 had a negative impact on power generation, the Company faces greater main business challengesand huge operating pressure in 2020. The Company will actively communicate with relevant provincial and municipalgovernment departments to reflect the difficulties of the enterprise and seek government supports; do its best to improve theprofitability of the main business and the overall operating efficiency by strengthening the management of the stock assets. At thesame time, the Company will actively explore diversified business models and transformation and development opportunities tocreate better conditions for the Company's continued operation and healthy development.
2. Safety production: The power generation equipment of the Company’s subordinate power plants have various degrees of aging,potential malfunction and safety risks increase year by year, which make higher requirements on the equipment management andmaintenance investment, in addition, the aging problem of the Company’s technical personnel becomes increasingly obvious, sothe Company’s safety management faces big challenges. The Company will strengthen the equipment inspection andmaintenance work, enhance the employees’ safety education and training, intensify the safety production responsibility system,and strictly implement the safety management system and other measures while combining with the assessments, rewards andpunishment so as to raise the awareness of safety and responsibilities among staff at all levels and ensure the production safety.
3. Fuel procurement: In 2020, the Company's natural gas purchase price is expected to fluctuate with the supplier's sales price andthe market demand changes, while the foreign-trade dependence of China's natural gas is as high as 42% (data for the first half of2019), resulting in gas prices being largely affected by the international political situation, it does not rule out the possibility thatnatural gas prices will fluctuate more than in 2019. In addition, with the continuous advancement of the market-oriented reformof electricity trading in Guangdong Province, the uncertainty of the Company's actual power generation will further increase, andit is difficult to match the planned power generation with the actual power generation, resulting in a big conflict between theplanned purchase of natural gas and the actual purchase. As the natural gas procurement contract must be signed in advance, thecontract amount has been determined at the time of signing, if the gas cannot be fetched according to the contract due to factorssuch as power transactions in the later period, it may lead to under-provision of the contract amount, and it is necessary to bearthe relevant liabilities for under-provision. The Company will continue to take advantage of the scale procurement and theregulatory functions of multi-gas sources, and do its utmost to reduce the cost of natural gas procurement while ensuring it meetsthe power production needs.
4. Land of Nanshan Power Factory: In August 2019, the Shenzhen Municipal Government's online website announced the Noticeof Shenzhen Municipal Planning and Natural Resources Bureau on Printing and Distributing “the Shenzhen City's 2019 UrbanRenewal and Land Preparation Plan”, and once again included the land parcel of the Company's subordinate Nanshan Power
Factory in the land preparation plan. Although the Company has actively used various opportunities to express its own demandsand suggestions, it has achieved little success so far. The Company will closely maintain communication with the relevantfunctional departments of Shenzhen and Qianhai Authority, actively follow up the progress of the implementation of relevantgovernment plans, and work closely with legal counsel to study the related situation of the land of Nanshan Power Factory, studyand formulate coping strategies and work plans, and do their best to safeguard the legitimate rights and interests of listedcompany and all shareholders.Investors are advised to pay attention to the above-mentioned major risks and other risks that the Company may face and makerational investment decisions prudently.X. Reception of research, communication and interview
1. In the report period, reception of research, communication and interview
√Applicable □ Not applicable
Time Way Type Basic situation index of investigation
Jan.-Dec. 2019 On-site reception Individual
Enquiry of register of shareholders,
Enquiry of register of shareholders,getting information of the Company,
getting information of the Company,attending the shareholders’ general
attending the shareholders’ generalmeeting, communicate and submit
meeting, communicate and submittemporary proposals to shareholders’
g
temporary proposals to shareholders’eneral meeting. Reception according to
the laws and regulations.
Jan.-Dec. 2019
Reply the questions ininteractive platform
Individual
Continuous o
eneral meeting. Reception according toperation of the Company,
relevant lands issues of
peration of the Company,Nanshan Power
Nanshan PowerFactory, relevant matters of Shen Nan
Dia
Factory, relevant matters of Shen Nann Dongguan Company, number of
shareholders
n Dongguan Company, number ofand future development
and future developmentideas etc. The Company reply timely in
written.
Jan.-Dec. 2019 Telephoning Individual
Continuous o
ideas etc. The Company reply timely inperation of the Company,
relevant lands issues of
peration of the Company,Nanshan Power
Factory, relevant matters
Nanshan Powerof Shen Nan
Dian Dongguan Company
of Shen Nanand future
development ideas etc.
and futureThe Company
The Companyanswers and replies according to the
laws and regulations.Reception (times)
130 person times on-site, 44 person times reply in interactive platform and
dozens of times through telephoningNumber of hospitality 0Number of individual reception 174
Disclosed, released or let out major undisclosedinformation
N
Section V. Important EventsI. Profit distribution plan of common stock and transfer of public reserve into share capital
Formulation, Implementation and Adjustment of common stock Profit Distribution Policy Especially Cash Dividend policy duringthe Reporting Period
√Applicable □Not applicable
According to the “Profit distribution policy” carried out in Article 168 of the Article of Association:
(i) “The Company shall carry out sustainable and stable profit distribution policy, comprehensively taking reasonable return oninvestment of the investors and the long-term development of the Company into consideration. The profit distribution of theCompany shall not exceed the cumulative profits available for distribution, shall not damage the on-going business capability, andshall adhere to principle of distribution in doctrine of legal sequence and shall not be distributed if deficit not yet made up.”
(ii) The Company’s profit can be distributed in the form of cash, stock and combination of cash and stock, or any other way allowedby the laws and regulations.
(iii)The condition of cash bonus”1. “The annual and semi-annual distributive profits are positive and the cash flow is abundant, and the cash bonus shall not affectthe on-going business and operation of the Company;”
2. The audit institution issued standard unqualified audit reports on the Company's annual or semi-annual financial report; or theaudit institution issued non-standard unqualified audit reports on the Company's annual or semi-annual financial report, but whichdid not affect the annual financial position, operating results and cash flow;
3. There were no major investment plans or major cash expenditures (except for fund-raising projects).Significant investment plans or significant cash expenditures refer to the cumulative expenditures the Company plans to spend oninvestment abroad, asset purchases, or equipment purchases within the next twelve months reach or exceed 30% of the Company'slatest audited total assets.
In accordance with relevant regulations of Company Law and Article of Association, combined with the practical condition of theCompany, the Company intend to carry out profit distribution plan for the year of 2019 as: based on the share capital of 602,762,596shares on 31
stDecember 2019, distribute RMB 0.2 (tax included) cash dividends for every ten stocks to whole shareholders, totallyRMB 12,055,251.92 distributed in cash.
Special instructions of the cash dividend policySatisfy regulations of General Meeting or requirement of Articleof Association (Y/N):
YWell-defined and clearly dividend standards and proportion(Y/N):
YCompleted relevant decision-making process and mechanism(Y/N):
Y
Independent directors perform duties completely and play aproper role (Y/N):
YMinority s
demands totally and their legal rights are fully protected (Y/N):
Y
hareholders have opportunity to express opinions andCondition and procedures are compliance and transparent while
the cash bonus policy adjusted or changed (Y/N):
YProfit distribution plan (pre-plan) of common stock and transfer of public reserve into share capital plan (pre-plan) in latest threeyears (including the reporting period)
1. In 2017, audited by Ruihua Certified Public Accounts , the net profit attributable to shareholders of listed Company for year of2017 amounting as RMB 15,904,182.47. The Company has no plans of surplus accumulation fund accrual, no profit distribution planand transfer of public reserve into share capital either. (For details, please refer to the announcement of the 2
nd session of 8
thBOD(No.: 2018-003) published on China Securities Journal, Securities Times, Hong Kong Commercial Daily and Juchao informationwebsite dated 22 March 2018)
2. In 2018, audited by Ruihua Certified Public Accounts, the net profit attributable to shareholders of listed Company for year of2018 amounting as RMB 19,253,766.12. The Company has no plans of surplus accumulation fund accrual, no profit distribution planand transfer of public reserve into share capital either. (For details, please refer to the announcement of the 4
th session of 8
thBOD(No.: 2019-008) published on China Securities Journal, Securities Times, Hong Kong Commercial Daily and Juchao informationwebsite dated 28 March 2019)
3. In 2019, audited by LIXINZHONGLIAN, the net profit attributable to shareholders of listed Company for year of 2019 amountingas RMB24,900,956.73. The Company has no plans of surplus accumulation fund accrual and based on the share capital of602,762,596 shares on 31
stDecember 2019, distribute RMB0.2(tax included) cash dividends for every ten stocks to wholeshareholders, there is no transfer of public reserve into share capital. (For details, please refer to the announcement of the 6
thsessionof 8th
BOD (No.: 2020-009) published on China Securities Journal, Securities Times, Hong Kong Commercial Daily and Juchaoinformation website dated 20 March 2020)
Cash dividend of common stock in latest three years (including the reporting period)
In RMB/CNY
Year for bonus
shares
Amount for
Condition and procedures are compliance and transparent whilecash bonus (tax
included)
cash bonus (tax
Net profitattributable tocommon stock
shareholders of
shareholders oflisted company
inconsolidationstatement for
bonus year
listed company
Ratio of the
cash bonus in
net profitattributable tocommon stock
cash bonus inshareholders of
listed company
contained inconsolidation
statement
Proportion forcash bonus byother ways(i.e.
sharebuy-backs)
Ratio of thecash bonus byother ways in
net profitattributable tocommon stock
| shareholders of | ||
| shareholders of |
contained inconsolidation
statement
Total cash
bonus(includingother ways)
listed company
Ratio of the
total cashbonus (otherways included)
in net profitattributable tocommon stock
| shareholders of |
listed company
contained in
consolidation
statement
2019 12,055,251.92
24,900,956.73
48.41%
0.00
0.00%
12,055,251.92
48.41%
2018 0.00
19,253,766.12
0.00%
0.00
0.00%
0.00
0.00%
2017 0.00
15,904,182.47
0.00%
0.00
0.00%
0.00
0.00%
The Company gains profits in reporting period and the retained profit of common stock shareholders provided by parent Company ispositive but no plan of cash dividend proposed of common stock
□ Applicable √Not applicable
II. Profit distribution plan and transfer of public reserve into share capital for the Period
√Applicable □ Not applicable
Bonus shares for every 10-share (Share) 0
Dividends for every 10-share (RMB) (Tax included) 0.2
Shares added for every 10-share base (Share) 0
Equity base of distribution plan (Share) 602,762,596
Total cash dividend (RMB) (Tax included) 12,055,251.92
Cash dividend for other ways (i.e. repurchased) (RMB) 0.00
Total cash dividend (including other way) (RMB) 12,055,251.92
Distributable profits (RMB) 710,334,373.89
Ratio of cash dividend (including other way) in total profitdistribution
100.00%
Cash dividendOther
Detail explanation on profit distribution or transfer of public reserve into share capital
According to the “Profit distribution policy” carried out in Article 168 of the Article of Association:
(i) “The Company shall carry out sustainable and stable profit distribution policy, compr
investment of the investors and the long-
ehensively taking reasonable return onterm development of the Company into consideration. The profit distribution of the
Company shall not exceed the cumulative profits available for distribution, shall not damage the on-
term development of the Company into consideration. The profit distribution of thegoing business capability, and
shall adhere to principle of distribution in doctrine of legal sequence and shall not be distributed if deficit not yet made up.”
(ii) The Company’s profit can be distributed in the form of cash, stock and combination
going business capability, andof cash and stock, or any other way
allowed by the laws and regulations.
(iii)The condition of cash bonus”1. “The annual and semi-
of cash and stock, or any other wayannual distributive profits are positive and the cash flow is abundant, and the cash bonus shall not affect
the on-going business and operation of the Company;”
2.The audit institution issued standard unqualified audit reports on the Company's annual or semi-
annual distributive profits are positive and the cash flow is abundant, and the cash bonus shall not affectannual financial report; or the
audit institution issued non-standard unqualified audit reports on the Company's annual or semi-annual financial report, but which
annual financial report; or the
did not affect the annual financial position, operating results and cash flow;
3. There were no major investment plans or major cash expenditures (except for fund-raising projects).Significant investment plans or significant cash expenditures refer to the cumulative expenditures the Company plans to spend
on
investment abroad, asset purchases, or equipment purchases within the next twelve months reach or exceed 30% of the C
onompany's
latest audited total assets.In accordance with relevant regulations of Company Law and Article of Association
ompany's, combined with the practical condition of the
Company, the Company intend to carry out profit distribution plan for the year of 2019 as:
, combined with the practical condition of thebased on the share capital of
602,762,596 shares on 31
st December 2019, distribute RMB 0.2
based on the share capital of(tax included) cash dividends for every ten stocks to whole
shareholders, totally RMB12,055,251.92 distributed in cash.III. Implementation of commitment
1. Commitments that the actual controller, shareholders, related parties, acquirer and the Company havefulfilled during the reporting period and have not yet fulfilled by the end of reporting period
□Applicable √Not applicable
There was no commitments that the actual controller, shareholders, related parties, acquirer and the Company have fulfilled duringthe reporting period and have not yet fulfilled by the end of the reporting period
2. Concerning assets or project of the Company, which has profit forecast, and reporting period still inforecasting period, explain reasons of reaching the original profit forecast
□ Applicable √ Not applicable
IV. Non-operational fund occupation from controlling shareholders and its related party
□ Applicable √ Not applicable
No non-operational fund occupation from controlling shareholders and its related party in period.
V. Explanation from Board of Directors, Supervisory Committee and Independent Directors(if applicable) for “Modified Audit Report” issued by CPA
□ Applicable √ Not applicable
VI. Particulars about the changes in aspect of accounting policy, estimates and calculationmethod compared with the financial report of last year
√ Applicable □ Not applicable
I. Summary of the accounting policy change(i) CausesOn March 31, 2017, the Ministry of Finance of the People’s Republic of China (hereinafter, the Ministry of Finance) revised andissued the Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments,Accounting Standards for Business Enterprises No. 23 - Transfer of Financial Assets, Accounting Standards for Business EnterprisesNo. 24 - Hedge Accounting, and issued and revised the Accounting Standards for Business Enterprises No. 37 – FinancialInstruments Presentation on May 2, 2017 (the above-mentioned four standards are collectively referred to as the “New FinancialInstruments Standards”), relevant accounting policy are adjusted correspondingly. And on 30 April 2019 and 19 September 2019, theRevising and Printing the Format of Financial Statements for General Enterprises in 2019 (CK (2019) No.6) and Notice on Revisingand Printing the Format of Consolidated Financial Statements (2019) [CK(2019) No.16] are issued by the Ministry of Finance,financial statement’s format for general enterprise are being revised. According to the above mentioned requirement, relevant contentof the accounting policy shall be adjusted correspondingly.(ii) Changes
1.Accounting policy before change
Before the changes, the Company comply with the Accounting Standards for Business Enterprises - Basic Standards issued byMinistry of Finance on 15 February 2006 and vary specific accounting rules, as well as the Accounting Standards for BusinessEnterprises issued and revised subsequently, the Application Guide of Accounting Standards for Business Enterprises, InterpretationAnnouncement on Accounting Standards for Business Enterprises and other relevant regulations (hereinafter, the AccountingStandards for Business Enterprises).
2. Accounting policy after change
After the changes, the Company comply with the New Financial Instruments Standards issued in 2017 by Ministry of Finance andthe Revising and Printing the Format of Financial Statements for General Enterprises in 2019 issued in 2019. Except for the abovementioned accounting policies, the Company still exercise the Accounting Standards for Business Enterprises and relevantregulations that issued and revised on 15 February 2006 and subsequently by Ministry of Finance.(iii) Date of changeThe Company perform the accounting policy of New Financial Instruments Standards since 1 January 2019.(iv) voting and deliberation conditionOn 14 August 2019, the Implementation of New Financial Instruments Standards was deliberated and approved by the 5
th
session of
th
BOD and 5
th session of 8
th
Supervisory Committee, independent directors issued an independent opinions. Change of thisaccounting policy no need to submit for deliberation on shareholders’ general meeting.II. Impact on the Company
1. The “Financial assets available-for-sale” adjusted to “Other equity instrument investment”, as for the equity instrument investmentof Jiangxi Nuclear Power Co., Ltd, which has no quotation in active market and are not measured reliable for its fair value, theCompany has no controls, common controls or significant influence over the Jiangxi Nuclear Power Co., Ltd; the “Financial assets
available-for-sale” that originally classified, according to the New Financial Instrument Standards, designated as “Financial assetsmeasured at fair value and whose changes are reckoned in other comprehensive income”, presented as “Other equity instrumentinvestment”
2. Change of impairment of financial assets: According to the New Financial Instruments Standards, the accrual of impairment offinancial assets changed to “expected loss method” instead of “incurred loss method”.
3. Revised the presentation of financial statements correspondingly: According to the requirement of Accounting Standards forBusiness Enterprises No. 37 – Financial Instruments Presentation and the Revising and Printing the Format of Financial Statementsfor General Enterprises in 2018 from Ministry of Finance, the Company revised the presentation of financial statements, theinvestment for Jiangxi Nuclear Power Co., Ltd will presented as “Other equity instrument investment” instead of “Financial assetsavailable-for-sale”.VII. Major accounting errors within reporting period that needs retrospective restatement
□ Applicable √ Not applicable
No major accounting errors within reporting period that needs retrospective restatement for the Company in the period.VIII. Compare with last year’s financial report; explain changes in consolidation statement’sscope
□ Applicable √ Not applicable
No changes in consolidation statement scope during the periodIX. Appointment and non-reappointment (dismissal) of CPAAccounting firm appointed
Name of domestic accounting firm
LIXINZHONGLIAN CPAS (SPECIAL GENERAL
PARTNERSHIP)
Yuan)
Continuous year of auditing service for domestic accounting firm
Remuneration for domestic accounting firm (in 10 thousand
Name of domestic CPA Liu Xinfa, Ding DongmeiContinuous year of auditing service for domestic CPA 1Re-appointed accounting firms in this period
√Yes □ No
Re-appointed accounting firms in auditing period
□ Yes √ No
Perform the approval procedure for changing the CPA
√Yes □ No
Explanation on re-appointment and change of CPA
Being deliberated and approved by Annual General Meeting of 2018 held by 18 April 2019, Ruihua Certified Public Accounts wasappointed as the auditing institute for the financial and internal control of the Company for year of 2019. According to the operationand needs of business development as well as the arrangement of annual auditing works, being deliberated and approved by the ninthextraordinary meeting of 8
th
BOD held on 23 October 2019 and the second extraordinary shareholder general meeting of 2019 heldon 11 November 2019, the Company change its auditing institute to LIXINZHONGLIAN Certified Public Accounts (SpecialGeneral Partnership), the auditing organ of financial and internal control for year of 2019. As for changing the auditing institute, theCompany made prior communication with Ruihua Certified Public Accounts and asked for their understanding and supports. (Foundmore in Notice on Changing the Auditing Institute for year of 2019 [No.:2019-058] and Resolution of the Second ExtraordinaryShareholders General Meeting of 2019 [No.:2019-063] released on China Securities Journal, Securities Times, Hong KongCommercial Daily and Juchao Website dated 25 October 2019 and 12 November 2019 respectively.Appointment of internal control auditing accounting firm, financial consultant or sponsor
√Applicable □ Not applicable
LIXINZHONGLIAN CPAS (SPECIAL GENERAL PARTNERSHIP) was appointed as the internal control auditing authority of theCompany for year of 2019 with expenses of 0.2 million Yuan for one year
X. Suspension and Termination of Listing after Annual Report Released
□ Applicable √ Not applicable
XI. Bankruptcy reorganization
□ Applicable √ Not applicable
No bankruptcy reorganization for the Company in reporting period.
XII. Major litigation and arbitration of the Company
□ Applicable √ Not applicable
No major litigation and arbitration occurred in the periodXIII. Penalty and rectification
□ Applicable √ Not applicable
No penalty and rectification for the Company in reporting period.XIV. Integrity of the Company and its controlling shareholders and actual controllers
□ Applicable √ Not applicable
XV. Implementation of the Company’s stock incentive plan, employee stock ownership planor other employee incentives
□ Applicable √ Not applicable
The Company has no equity incentive plan, employee stock ownership plans or other employee incentives.XVI. Major related party transaction
1. Related party transaction with routine operation concerned
√Applicable □ Not applicable
Relatedparty
Relation
ship
Transact
ionType
Content
Pricingprincipl
e
Transact
ionprice
Transact
ionamount(in 10thousand Yuan)
Proportion insimilartransactions
Tradinglimitapproved (in 10thousand Yuan)
Whether overtheapprovedlimitedor not(Y/N)
Meansofpayment
Availablesimilarmarketprice
Date ofdisclosureIndexofdisclosure
ShenzhenEnergyGasInvestmentHoldingCo., Ltd.,FuelBranch ofShenzhenEnergyCorporation
Relatedlegalperson
Purchase fuel
TheCompan
y, New
PowerCompan
y, Newy and
ShenNanDian(Dongguan)Compan
y andy are
entered
y areinto the
NaturalGasSalesandPurchaseContract
into thewith SZ
EnergyGasHoldingrespecti
with SZvely, and
entered
vely, andin the
Purchas
in thee and
SaleManagementServiceAgreem
e andent of
LNGwithFuelBranch
ent of
Inprinciple, theprice
shall not
behigherthan themarketprice ofnatural
shall notgas with
reference to themarketstandard
gas with
Inprinciple, theprice
shall not
behigherthan themarketprice ofnatural
shall notgas with
reference to themarketstandard
gas with
2,983.3
100.00
%
8,867
N
Byagreement
--
2019-06-25
TheNotice
of OEM
of OEMfor
EquityGasPurchase andRelatedPartyTransaction(NoticeNo.:
2019-033)released onChinaSecuritiesJournal,SecuritiesTimes,HongKongCommercialDailyandJuchaoWebsite
for
Total -- --
2,983.3
-- 8,867
-- --Detail of sales return with majoramount involved
N/AReport the actual implementation ofthe daily related party transactionswhich were projected about their totalamount by types during the reportingperiod (if any)
Not applicable
Reasons for major differencesbetween trading price and marketreference price (if applicable)
Not applicable
2. Related party transactions by assets acquisition and sold
□ Applicable √ Not applicable
No related party transactions by assets acquisition and sold for the Company in Period.
3. Main related transactions of mutual investment outside
□ Applicable √ Not applicable
No main related transactions of mutual investment outside for the Company in Period.
4. Contact of related credit and debt
√Applicable □ Not applicable
Whether has non-operational contact of related liability and debts or not
√ Yes □ No
Claim receivable from related party:
Relatedparty
Relationship
Causes
Whetherhas
non-busines
s capital
occupying
or not (Y/N)
Balance atperiod-begi
n (10thousand
Yuan)
Currentnewlyadded
(10thousand
Yuan)
Currentrecovery
(10thousand
Yuan)
Interest rate
Currentinterest
(10thousand
Yuan)
Endingbalance (10
thousand
Yuan)Shen NanDianEnvironmentProtectionCompany
Subsidiary
Substitutecost andCapitallending
N 570.35
1,728.67
1,910.04
388.98
Shen NanDianDongguanCompany
Subsidiary
Substitutecost
and
Capitallending
N 43,590.48
| and | ||
14,146.26
39,502.32
5.20%
1,401.99
18,234.42
Shen NanDianZhongshanCompany
Subsidiary
Substitutecost
and
Capitallending
N 60,120.96
| and | ||
17,428.87
10,790.83
5.20%
3,317.67
66,759.00
Shen NanDianEngineering Company
Subsidiary
Substitutecost
and
Capitallending
N 221.95
and
1,447.13
19.59
5.20%
24.08
1,649.49
SingaporeCompany
Subsidiary
Substitutecost
and
Capitallending
N 152.19
and
152.19
Influence on businessperformance andfinancial status of theCompany from relatedliabilities
N/A
Debts payable to related party:
Related party
| Relationship |
Causes
Balance atperiod-begin(10 thousand
Yuan)
Current
(10 thousand
Yuan)
Currentrecovery(10 thousand
Yuan)
Interest rate
| newly added | ||
Currentinterest(10 thousand
Yuan)
Endingbalance (10
thousand
Yuan)New PowerCompany
Subsidiary
Substitutecost
5,080.21
20,040.77
16,259.15
8,861.83
ServerCompany
Subsidiary
Capitallending
7,000
273.38
673.38
3.92%
273.38
6,600
EnvironmentProtectionCompany
Subsidiary
Capitallending
Shen Nan Dian
2,553.39
30.61
3.92%
53.4
2,522.78
SyndisomeCompany
Subsidiary
Capitallending
380.54
28.32
22.17
386.69
Influence on businessperformance and financialstatus of the Company fromrelated debts
N/A
5. Other major related party transactions
□ Applicable √ Not applicable
No other major related party transactions occurred in the periodXVII. Significant contract and implementations
1. Trusteeship, contract and leasing
(1) Trusteeship
√Applicable □ Not applicable
Explanation on trustIn accordance with the “Assets (Generator Sets) Custody Operation Contract of Shenzhen New Power Industrial Co., Ltd.” signedwith the New Power Company, the Company entrusted with management for the generator assets owned by New Power Company(wholly-owned subsidiary of the Company). During the reporting period, the Company received an assets custody services of 10.7962million Yuan
Gains/losses to the Company from projects that reached over 10% in total profit of the Company in reporting period
□ Applicable √ Not applicable
No gains or losses to the Company from projects that reached over 10% in total profit of the Company in reporting period.
(2) Contract
□ Applicable √ Not applicable
No contract for the Company in reporting period
(3) Leasing
□ Applicable √ Not applicable
No leasing for the Company in reporting period.
2. Major guarantees
√Applicable □ Not applicable
(1) Guarantees
In 10 thousand YuanParticulars about the external guarantee of the Company and its subsidiary (Barring the guarantee for subsidiaries)
guaranteed
RelatedAnnounce
mentdisclosuredate
Guaranteelimit
Actual date of
happening
Actualguaranteelimit
Guarantee
type
Guarantee
term
Implemen
Name of the Companyted (Y/N)
Guarantee forrelatedparty(Y/N)
ted (Y/N)
Total approving external guaranteein report period (A1)
Total actual occurredexternal guarantee in reportperiod (A2)
Total approved external guaranteeat the end of report period ( A3)
Total actual balance ofexternal guarantee at theend of report period (A4)
Guarantee of the Company for the subsidiaries
Name of the Company
guaranteed
RelatedAnnouncementdisclosure
date
Guaranteelimit
Actual date ofhappening
Actualguaranteelimit
Guaranteetype
Guaranteeterm
Implemen
Name of the Companyted (Y/N)
Guarantee forrelatedparty(Y/N)
ted (Y/N)
Shen Nan DianDongguan Company
2019-03-28
20,000
2019-06-24
20,000
Generalassurance
One year N NShen Nan DianDongguan Company
2019-03-28
20,000
2019-06-26
10,000
Generalassurance
One year N N
Total amount of approvingguarantee for subsidiaries in report
period (B1)
40,000
| guarantee for subsidiaries in report | |
occu
Total amount of actualrred guarantee for
rred guarantee forsubsidiaries in report period
(B2)
30,000
subsidiaries in report period
Total amount of approved
Total amount of approvedguarantee for subsidiaries at the
end of reporting period (B3)
40,000
guarantee for subsidiaries at the
Total balance of actual
Total balance of actualguarantee for subsidiaries at
guarantee for subsidiaries atthe end of reporting period
(B4)
30,000
the end of reporting period
Guarantee of the subsidiary for the subsidiaries
guaranteed
RelatedAnnouncementdisclosuredate
Guarantee
limit
Actual date of
happening
Actualguaranteelimit
Guaranteetype
Guaranteeterm
Implemen
Name of the Companyted (Y/N)
Guarantee forrelatedparty(Y/N)
ted (Y/N)
Total amount of approving
Total amount of approvingguarantee for subsidiaries in report
period (C1)
guarantee for subsidiaries in report
Total amount of actual
Total amount of actualoccurred guarantee for
occurred guarantee forsubsidiaries in report period
(C2)
subsidiaries in report period
Total amount of approved
Total amount of approvedguarantee for subsidiaries at the
end of reporting period (C3)
| guarantee for subsidiaries at the | |
Total balance of actualguarantee for subsidiaries at
guarantee for subsidiaries atthe end of reporting period
(C4)
the end of reporting period
Total amount of guarantee of the Company (total of three above-mentioned guarantee)Total amount of approvingguarantee in report period(A1+B1+C1)
40,000
Total amount of actual
| occurred guarantee in report | ||
period (A2+B2+C2)
30,000
Total amount of approvedguarantee at the end of reportperiod (A3+B3+C3)
40,000
Total balance of actualguarantee at the end ofreport period (A4+B4+C4)
30,000
The proportion of the total amount of actually guarantee in the netassets of the Company (that is A4+ B4+C4)
14.98%
Including:
Amount of guarantee for shareholders, actual controller and its
related parties (D)
| Amount of guarantee for shareholders, actual controller and its | ||
The debts guarantee amount provided for the guaranteed par
whose assets-liability ratio exceed 70% directly or indirectly (E)
ties
30,000
Proportion of total amount of guarantee in net assets of the
Company exceed 50% (F)
| Proportion of total amount of guarantee in net assets of the | ||
Total amount of the aforesaid three guarantees (D+E+F) 30,000
Explanations on possibly
bearing joint and several liquidating
responsibilities for undue guarantees (if applicable)
无
| bearing joint and several liquidating | ||
(if applicable)
无
| Explanations on external guarantee against regulated procedures | ||
Explanation on guarantee with composite way
(2) Guarantee outside against the regulation
□ Applicable √ Not applicable
No guarantee outside against the regulation in Period.
3. Entrust others to cash asset management
(1) Trust financing
√Applicable □Not applicable
Trust financing in the period:
In 10 thousand YuanType Capital sources Amount occurred Outstanding balance
Overdue amountBank financial products
Own funds 8,600
8,600
Total 8,600
8,600
Details of the single major amount, or high-risk trust investment with low security, poor fluidity and non-guaranteed
□Applicable √Not applicable
Entrust financial expected to be unable to recover the principal or impairment might be occurred
□ Applicable √ Not applicable
(2) Entrusted loans
□ Applicable √ Not applicable
The company had no entrusted loans in the reporting period.
4. Other material contracts
√Applicable □ Not applicable
Thenameof thecontractingcompany
Thenameof thecontract
edcompan
y
Contract object
Thedate ofsignature of thecontract
Thebookvalueof theassetsinvolved in thecontract(RMB’0000)(if any)
Theassesse
d
valueof theassetsinvolved in thecontract(RMB’0000)(if any)
Nameof theevaluati
onorganization(if
any)
Thebasedateevaluati
on (ifany)
Pricingprincipl
es
Bargain
price(RMB’00
00)
Whethe
rconnectedtransaction(Y/N)
Bargain
Inciden
cerelation
Theperform
ance by
the endof the
term
ance by
Thedate ofdisclos
ure
Theindex
ofdisclos
ure
ShenNanDianZhongshanCompany
Zhuhai
BranchofCNOOC GasandPowerGroup
Trading
NaturalGas
2014-05-31
N/A
Compo
naturalgasprices,
sed ofthe cost
ofintegrated
the costservices
and tax
services
Compo
sed of
naturalgasprices,
sed ofthe cost
ofintegrated
the costservices
and tax
services
N
Notapplicable
Relevant
contract
hasbeencompleted
Release
| contract | |
| d on 25 |
April2014
NoticeofMajorContract(NoticeNo.:
2014-030)release
ChinaSecuritiesJournal,SecuritiesTimes,HongKongCommercialDailyandJuchaoWebsite
d on
TheCompany,NewPowerCompany
Shenzhen GasGroupCo.,Ltd.
Pipeline gas
2018-05-14
N/A
The
contractis a
frameworkagreement,
is aprice of
price ofthe NG
willdecidethroughconsultationbysupplementalagreementbetwee
the NGn the
twoparties
n the
The
contract
contractis a
frameworkagreement,
is aprice of
price ofthe NG
willdecidethroughconsultationbysupplementalagreementbetwee
the NGn the
twoparties
n the
N
Notapplicable
Inprogress
Failure
to meet
specific
disclosurerequirements
specific
XVIII. Explanation on other significant events
1. Fulfill the social responsibility
In 2019, the Company faced more and more severe operating situations, the continuous reduction of on-grid electricity prices, highnatural gas prices, and increasingly fierce competition in the power marketization transactions and other negative factors made theCompany's power main business face greater difficulties and challenges. While making every effort to actively respond to thebusiness dilemma and seek transformation and development, the Company continued to reply on its main business and fulfill its duesocial responsibilities within its ability, and remained committed to the healthy and harmonious development between the Companyand its employees, the Company and the society, and the Company and the environment.
1. Corporate governance: in compliance with the relevant laws and regulations, governance norms of listed Company as well as theCompany’s Articles of Association, the Company established a sound modern enterprise management system and corporategovernance mechanism, strove to achieve the well-defined power and responsibility, the performing of its own functions, effectivechecks and balances, and the coordinated operation among the general meeting of shareholders, board of supervisors, board ofsupervision and manager office. In accordance with the listed company's corporate governance standards and related regulations, theCompany strictly implemented the decision-making procedures of the "three meetings", did a good job in information disclosure andinvestor relationship management in accordance with laws and regulations, actively maintained the public image of listed companies,and protected the legitimate interests of all shareholders.
2. In terms of party building, the Company attached great importance to party building and fully reflected the core leadership role ofparty organizations in business operations and management. According to organizational regulations, the Company's general partybranch was upgraded to the party committee, forming a more complete organizational system. The Company actively implementedthe requirements of comprehensively strengthening party discipline, earnestly implemented the directive spirit of higher-level partycommittees, strictly implemented the decision-making system of "three important and one major", and implemented the requirementsof the "Party Constitution" and the relevant provisions of the "Articles of Association" into the actual work.
3. Safety production: we seriously in line with the Law on Safety in Production and relevant laws and regulations, and the rules of“same responsibility of the Party & Government, double duties, concerted efforts and negligence of duty”;established and perfectedcomprehensive safety management organization network and safety management system; Strengthened the all-round safetymanagement concept and safety awareness at all levels, and strengthened the “zero non-stop”, dynamic assessment and terminalmanagement through innovative safety production supervision mode, which strictly prevented all kinds of accidents, and realized the“jumping” progress in safety production indicators and the company’s best safety management achievements in the past ten years.
4. Environment protection: the Company has stringently complied with the national and local environment laws and regulations andconsistently adhered to the policy of eco-friendly power generation and cyclic economic development. Our works relating toenvironment protection were effectively implemented with satisfaction of all the emission standards. It completed the task set forreduction of pollutant discharge, therefore, no environment pollution accident occurred. Besides, there was no effective complaintregarding environment pollution and no administrative punishment in connection with the same. The Company was rated as the “bluerate” at the annual environment credit rating for year of 2019. All the working targets for environment issues have been achieved forthe year. The Company actively implemented the “Shenzhen Blue” sustainable action plan formulated by the Shenzhen MunicipalGovernment, and completed the upgrading and transformation of the low-nitrogen combustion system of the last one gas turbine ofNanshan Power Factor within the prescribed time limit. The nitrogen oxide emission value after transformation was superior to the15mg/m3 emission standard required by the government, which has made positive contributions to the improvement of ambient airquality in Shenzhen. Under the severe situation that the central environmental protection inspection team implemented the strict“looking back” supervision and some non-standard sludge treatment enterprises were exposed and discontinued successively, theCompany’s subordinate Shen Nan Dian Environment Protection Company maintained the normal production due to the strictimplementation of environmental management, which greatly eased the sludge disposal pressure in Shenzhen and fulfilled its socialresponsibilities to the utmost extent.
5. Human Resources: The Company attached great importance to talent training and employee care, through a series of humanresources reform measures and employee job skills training measures, continuously optimized human resource allocation, improvedemployees’ professional quality and job competence, and made necessary talent preparations for the Company's transformation anddevelopment, at the same time, created favorable conditions for the personal career growth of employees; through a series of people’slivelihood care measures, created better working environment and conditions for employees in accordance with local conditions, andincreased employee happiness and corporate cohesion.
6. In terms of helping and supporting, the Company actively responded to and participated in relevant poverty alleviation plans,adopted 16 mu (32 parts) of land at Hujing Village, Longchuan County, HeYuan, and adopted 3840 kgs of selenium-rich rice with atotal value of 63,360 Yuan. In difficult circumstances, the Company has contributed to changing the face of poor villages and helpingthe poor to enter a well-off society together.
2. Fulfill the precise social responsibility for poverty alleviationAdopted 16 mu (32 parts) of land at Hujing Village, Longchuan County, HeYuan, and adopted 3840 kilograms of selenium-rich ricewith a total value of 63,360 Yuan. In difficult circumstances, the Company has contributed to changing the face of poor villages andhelping the poor to enter a well-off society together.
3. Environmental protection
(1) The listed Company and its subsidiary whether belongs to the key sewage units released from environmental protectiondepartmentYesEnterpriseorsubsidiary
Mainpollutantand features
Way ofdischarge
Number ofdischarge
outlet
Distribution
of thedischarge
outlet
Distribution
Emissionconcentratio
n
Pollutantdischargestandardimplemente
d
Totaldischarge
Totalapprovedemissions
Excessiveemission
ShenzhenNanshanPower Co.,
Ltd.
Oxynitride
OxynitrideConcentrate
emissionfrom boiler
uptake
Concentrate
In plant area
ofNanshanPowerFactory
<15 mg/ m
In plant area
Implementation of“ShenzhenBlue”emission
standard<15
mg/m
82.46 ton 457.5 ton 0
ShenzhenNew PowerIndustrialCo., Ltd.
Oxynitride
standard<15
Concentrate
emissionfrom boiler
uptake
ConcentrateIn plant area
ofNanshanPowerFactory
<15 mg/ m
In plant area
Implementation of“ShenzhenBlue”emission
standard<15
mg/m
8.13 ton 228.75 ton
standard<15
Shen NanDian(Dongguan)WeimeiElectricPower Co.,Ltd
Oxynitride
Concentrate
emissionfrom boiler
uptake
| Concentrate | ||
| In plant area |
of GaobuPower Plant
<25mg/ m
GB13223 108 ton 414.4 ton 0
Shen NanDian(Zhongshan) ElectricPower Co.,Ltd.
Oxynitride
Concentrate
emissionfrom boiler
uptake
| Concentrate | ||
| In plant area |
of NanlangPower Plant
<25 mg/ m
GB13223 11.48 ton 324.50 ton
Construction and operation of the facilities preventing and controlling pollutionAll facilities are work normally, vary pollutant discharge are in standards
Environmental impact review and other environment protection administrative licensingThe aforesaid companies have pass the environment impact review and file in department of Environmental Protection of Guangdongprovince
Emergency plan for abrupt environmental accidentsThe plans have file in department of Environmental Protection of Guangdong province and corresponding environmental protectionbureau
Environmental self-monitoring planWe have prepared the plans of self-monitoring and approved by Environmental Protection Bureau; monitoring data will release onEnvironmental Protection Website on time
Other information need for releasedNil
Relevant environmental protection informationNilXIX. Other important events
√Applicable □ Not applicable
1. T102-0011, T102-0155 land related matters. During the reporting period, the Shenzhen Municipal Government's online websiteannounced the Notice of Shenzhen Municipal Planning and Natural Resources Bureau on Printing and Distributing the ShenzhenCity's 2019 Urban Renewal and Land Consolidation Plan, in accordance with the Shenzhen City's 2019 Urban Renewal and LandConsolidation Plan and its related content in the schedule, the land consolidation project of Qianhai Cooperation Zone in 2019 stillincluded the land plot of the Company’s subordinate Nanshan Power Factory (for details, please refer to the Company'sAnnouncement on the Shenzhen Municipal Planning and Natural Resources Bureau's Publishing of "Shenzhen City's 2019 UrbanRenewal and Land Consolidation Plan" (Announcement No.: 2019-041) disclosed on China Securities Journal, Securities Times,Hong Kong Commercial Daily and www.cninfo.com. After being informed of the above situation, the Company immediatelysubmitted the “Application of Shen Nan Dian Company for Amending the Land Planning of Nanshan Thermal Power Plant” toShenzhen Qianhai Administration Bureau and relevant government departments, and again proposed to follow the principles of“development in the original place and win-win cooperation”, use the relevant experience of other land plots in Qianhai Area forreference to change the land use planning for the land plot of Nanshan Power Factory so as to better protect the legitimate rights andinterests of the Company and its shareholders. After that, the Company received the “Reply Letter from Shenzhen QianhaiAdministration Bureau on Land Planning Related Issues of Nanshan Thermal Power Plant” (hereinafter referred to as the “ReplyLetter”) from Shenzhen Qianhai Administration Bureau, and corresponding replies were made on planning-related matters andmatters related to land acquisition and storage. The "Reply Letter" responded to the Company's request to change the planning asfollows: "According to the "Comprehensive Planning for China (Guangdong) Pilot Free Trade Zone Shenzhen Qianhai Shekou Area
and Nanshan Surrounding Area (hereinafter referred to as the “Qianhai-Shekou Free Trade Comprehensive Planning”), the landwhere Nanshan Power Factory locates is planned for public facilities land, public open space land and land for roads; the planningrequires to accelerate the relocation of Nanshan Thermal Power Plant. We have received your opinion and have studied and managedaccording to the procedures during the publicity of Qianhai-Shekou Free Trade Comprehensive Planning, the planning clearlydefines that the land where the Nanshan Power Factory locates shall be implemented as public facilities land, public open space landand land for roads". The Company will continue to follow up and get to know the relevant situation with the participation andcooperation of legal advisers, study the coping strategies and work plans, and make every effort to protect the legitimate rights andinterests of listed companies and all shareholders.
2. “Shenzhen Blue” technical transformation project. During the reporting period, the company continued to promote the “ShenzhenBlue” technical transformation project. On March 15, 2019, the company completed the upgrade of the low-nitrogen burner of theremaining 9E gas-fired unit of Nanshan Power Factory, and the nitrogen oxide emission value after the upgrade is better than the15mg/m3 emission standard required by the government. At the end of June 2019, the company and the New Power Company receivedthe second batch of special subsidies of RMB 23,361,160 and RMB 14,736,113 for the improvement of atmospheric environmentalquality in Shenzhen from the Shenzhen Ecological Environment Bureau. So far, the subsidies for the “Shenzhen Blue” technicaltransformation project have been fully funded. (Found more to the Announcement on the Receipt of ‘the Notice on the General Office ofShenzhen Municipal People's Government’s Issuance of the "Shenzhen Blue" Sustainable Action Plan in 2018’, the Announcement onthe “Shenzhen Atmospheric Environmental Quality Improvement Subsidy Measures (2018-2020)”, and the Announcement onReceiving the Special Subsidy Fund for the Improvement of Atmospheric Environment Quality in Shenzhen” which the companydisclosed on China Securities Journal, Securities Times, Hong Kong Commercial Daily and www.cninfo.com.cn, Announcement No.:
2018-015, 2018-028, 2019-036).
3. The free transfer of state-owned shares of Shenzhen Energy Group, the Company's major shareholder: during the reporting period,the Company received a notification from its major shareholder, Shenzhen Energy Group, that it was planning a major eventinvolving the equity of Shenzhen Energy Group, which may cause changes in the controlling power of Shenzhen Energy Group.After applying to the Shenzhen Stock Exchange, the Company's stock was suspended from the market opening on February 18, 2019,and continued to be suspended from the market opening on February 20. After research, SASAC of Shenzhen Municipal decided totransfer its 75% equity of Shenzhen Energy Corporation for free to Shenzhen Capital Group, which is wholly-owned by SASAC ofShenzhen Municipal. According to relevant regulations, upon the Company's application, the Company's stock resumed trading sinceFebruary 21, 2019. On March 1, 2019, SASAC of Shenzhen Municipal and Shenzhen Capital Group signed the Agreement on theFree Transfer of State-owned Property Rights of Shenzhen Energy Corporation, transferring 75% of the Company's majorshareholder, Shenzhen Energy Corporation, to Shenzhen Capital Group for free. On April 8, 2019, Shenzhen Energy Corporationcompleted the industrial and commercial change registration procedures for the free transfer of state-owned shares, and obtained the"Notification of Change (Record)" issued by Shenzhen Market Supervision Administration. Prior to the free transfer of state-ownedshares, Shenzhen Energy Corporation directly held 65,106,130 shares (A shares) of the Company, accounting for 10.80% of theCompany's total share capital, and indirectly held 92,123,248 shares (B shares) of the Company, accounting for 15.28% of theCompany's total share capital, held a total of 157,229,378 shares of the Company, accounting for 26.08% of the Company's totalshare capital. After the completion of the free transfer of state-owned shares, Shenzhen Capital Group became the controllingshareholder holding 75% of the shares of Shenzhen Energy Corporation, Shenzhen Energy Corporation remains the Company'slargest shareholder, and the Company's shares have not changed. The Company still has no controlling shareholder and no actualcontroller. (Found more to the announcement of Suspension of Trading on Major Matters, Progress of Major Matters and Continuesto Suspension, Progress of Major Matters and Resume Trading, Suggestive Notice on the State-owned Shares transfer for free byMain shareholders and Notice on Complete the Registration of Industrial & Commercial Changes for State-owned Shares transferfor free by Main shareholders that released on China Securities Journal, Securities Times, Hong Kong Commercial Daily and
www.cninfo.com.cn, with announcement No.: 2019—001, 2019—002, 2019—003, 2019—005, 2019—016, and the Detail Report onChange of Interest released on Juchao Website).
4. Public listing and transfer of 70% equity of Shen Nan Dian Dongguan Company, in order to achieve healthy and sustainabledevelopment, in 2019, the Company started the related work of relocation and investment of stock assets. After prudent research anddecision-making by the board of directors, the Company took the lead in carrying out the public listing and transfer of 70% equity ofShen Nan Dian Dongguan Company held directly and indirectly. On September 4, 2019, the Company publicly listed and transferred70% equity of Shen Nan Dian Dongguan Company at an evaluation price of RMB 8329.92 million at the Shenzhen United Propertyand Share Rights Exchange. During the public listing period, Shenzhen Gas proposed cooperation intentions and hoped to developstrategic cooperation on natural gas resources with Shen Nan Dian Dongguan Company. In view of the failure to collect an enterpriseto delist from the time of the public listing to the suspension of listing, and considering the actual production and operationconditions, Shen Nan Dian Dongguan Company and Shenzhen Gas signed a "Resource Strategic Cooperation Agreement". In viewthat the strategic cooperation with Shenzhen Gas can make Shen Nan Dian Dongguan Company obtain stable gas sources with priceadvantages, which can help improve Shen Nan Dian Dongguan Company's operating performance and help maximize the profits oflisted companies, after comprehensive consideration, on September 15, 2019, the eighth extraordinary meeting of the eighth board ofdirectors of the Company approved the suspension of the public listing transfer. Thereafter, in accordance with the relevantrequirements of the Shenzhen United Property and Share Rights Exchange on the “Decision to Resume or Terminate the Release ofInformation As Soon As Possible After the Suspension of Listing of the Company”, on January 9, 2020, the tenth extraordinarymeeting of the eighth board of directors of the Company approved the closing of the public listing transfer of 70% equity of ShenNan Dian Dongguan Company. (Found more to the announcement of Transferring 70% equity of Shen Nan Dian (Dongguan)Weimei Electric Power Co., Ltd by public listing, Notice on Suspension of the 70% equity of Shen Nan Dian (Dongguan) WeimeiElectric Power Co., Ltd transferred through public listing and Notice on Terminated the 70% equity of Shen Nan Dian (Dongguan)Weimei Electric Power Co., Ltd transferred through public listing that released on China Securities Journal, Securities Times, HongKong Commercial Daily and www.cninfo.com.cn, with announcement No.: 2019—040, 2019—051 and 2020—003).
In addition to the above matters, the construction-aid project for Xinjiang in Guangdong Province participated in 2013 and thecollection for refunds of “technical reform benefit fund” are no further progress or changes in the period
XX. Significant event of subsidiary of the Company
√Applicable □Not applicable
On 19 November 2019, Dongguan Weimei Ceramic Industrial Park Co., ltd entered into an Equity Transfer Agreement on 10%Equity of Shen Nan Dian (Dongguan) Weimei Electric Power Co., Ltd with Shenzhen Gas, the 10% equity of Shen Nan DianDongguan Company held by Donga Weimei Ceramic Industrial Park Co., ltd are transferred to Shenzhen Gas. The registration ofindustrial & commercial for the equity transfer completed by Shen Nan Dian Dongguan Company on 5 December 2019.
Section VI. Changes in Shares and Particulars about Shareholders
I. Changes in Share Capital
1. Changes in Share Capital
In Share
Before the Change
Increase/Decrease in the Change (+, -) After the Change
Amount
Proportion
Newsharesissued
Bonusshares
Capitaliza
tion ofpublicreserve
Others
Subtotal
Amount
Proportio
nI. Restricted shares 14,139
0.0023%
14,139
0.0023%
1. State holding
2. Shares held by state-
legal person
| owned | ||||||||||||||||||
3. Other domestic shares 14,139
0.0023%
14,139
0.0023%
4. foreign ownership
Among：
overseas legal person
| Shares held by | ||||||||||||||||||
overseas natural persons
| Shares held by | ||||||||||||||||||
person’s shares
14,139
| Domestic natural | ||
0.0023%
14,139
0.0023%
II. Unrestricted shares
602,748,4
99.9977%
602,748,4
99.9977%
1. RMB Ordinary shares
338,894,0
56.2235%
338,894,0
56.2235%
2. Domestically listed foreign
shares
263,854,4
43.7742%
263,854,4
43.7742%
3. Foreign shares listed
overseas
4. Among
III. Total shares
602,762,5
100.00%
602,762,5
100.00%
Reasons for share changed
□ Applicable √Not applicable
Approval of share changed
□ Applicable √ Not applicable
Ownership transfer of share changes
□ Applicable √ Not applicable
Implementation progress of shares buy-back
□ Applicable √ Not applicable
Implementation progress of the reduction of repurchases shares by centralized bidding
□ Applicable √ Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to commonshareholders of Company in latest year and period
□ Applicable √ Not applicable
Other information necessary to disclose or need to disclosed under requirement from security regulators
□ Applicable √ Not applicable
2. Changes of restricted shares
□ Applicable √ Not applicable
II. Securities issuance and listing
1. Security offering (without preferred stock) in Reporting Period
□ Applicable √ Not applicable
2. Changes of total shares and shareholders structure as well as explanation on changes of assets andliability structure
□ Applicable √ Not applicable
3. Existing internal staff shares
□ Applicable √ Not applicable
III. Particulars about shareholder and actual controller of the Company
1. Amount of shareholders of the Company and particulars about shares holding
In Share
Total commonstockshareholders atend of thereportingperiod
24,762
Total common
stock
Total commonshareholders at
shareholders atend of last month
end of last monthbefore annual
report disclosed
before annual
25,090
Total preference
Total preferenceshareholders with
shareholders withvoting rights
voting rightsrecovered at end of
reporting period
recovered at end of(if
(ifapplicable) (see
note 8)
applicable) (see
Total preference
shareholders
Total preferencewith voting
with votingrights recovered
rights recoveredat end of last
at end of lastmonth before
month beforeannual report
annual reportdisclosed (if
disclosed (ifapplicable) (see
note 8)
applicable) (see
Particulars about shares held above 5% by shareholders or top ten shareholders
Full name ofShareholders
Nature ofshareholder
Proportion ofsharesheld
Totalshareholders at
the end of
report
period
the end of
Changesin reportperiod
Amountofrestrictedsharesheld
Amountofun-restricted sharesheld
Number of share pledged/frozen
State of share AmountHONG KONGNAM HOI(INTERNATIONAL) LTD.
Overseas legalperson
15.28%
92,123,24
92,123,24
Shenzhen GuangjuIndustrial Co., Ltd.
State-owned legalperson
12.22%
73,666,82
73,666,82
Shenzhen Energy
Group Co., Ltd.
State-owned legalperson
10.80%
65,106,13
65,106,13
Gaohua－HSBC－GOLDMAN,SACHS &CO.LLC
Overseas legalperson
2.13%
12,839,72
12,839,72
BOCISECURITIESLIMITED
Overseas legalperson
1.82%
10,952,64
10,952,64
Liu Fang
Domestic natureperson
1.57%
9,452,088
9,452,088
China MerchantsSecurities H.K.Co., Ltd.
State-owned legalperson
1.38%
8,326,928
8,326,928
Zeng Ying
Domestic natureperson
1.26%
7,599,600
7,599,600
Meiyi InvestmentProperty Co., Ltd.
Domestic nonstate legal person
0.86%
5,207,800
5,207,800
LI SHERYNZHAN MING
Overseas natureperson
0.80%
4,802,890
4,802,890
Strategy investors or generalcorporation comes top 10 shareholdersdue to rights issue (if applicable)
N/A
among the aforesaid shareholders
Explanation on associated relationship
1. 100% equity of HONG KONG NAM HOI (INTERNATIONAL) LIMITED 100% held
by Shenzhen Energy Group Co., Ltd.;
1. 100% equity of HONG KONG NAM HOI (INTERNATIONAL) LIMITED 100% held
2. The Company is unknown whether there exists
associated relationship or belongs to the consistent actor among the other shareholders.Particular about top ten shareholders with un-restrict shares heldShareholders’ name Amount of un-restrict shares held at Period-end
Type of sharesType AmountHONG KONG NAM HOI(INTERNATIONAL) LTD.
92,123,248
2. The Company is unknown whether there exists
Domesticallylisted foreignshares
92,123,248
Shenzhen Guangju Industrial Co., Ltd.
73,666,824
RMB commonshares
73,666,824
Shenzhen Energy Group Co., Ltd. 65,106,130
RMB commonshares
65,106,130
Gaohua－HSBC－GOLDMAN,SACHS & CO.LLC
12,839,723
RMB commonshares
12,839,723
BOCI SECURITIES LIMITED 10,952,647
Domesticallylisted foreignshares
10,952,647
Liu Fang 9,452,088
RMB commonshares
6,391,288
Domesticallylisted foreignshares
3,060,800
China Merchants Securities H.K. Co.,Ltd.
8,326,928
Domesticallylisted foreignshares
8,326,928
Zeng Ying 7,599,600
Domesticallylisted foreignshares
7,599,600
Meiyi Investment Property Co., Ltd. 5,207,800
RMB commonshares
5,207,800
LI SHERYN ZHAN MING 4,802,890
Domesticallylisted foreignshares
4,802,890
Expiation on as
sociated relationship orconsistent actors within the top 10
un-
consistent actors within the top 10restrict shareholders and between
top 10 un-
restrict shareholders and betweenrestrict shareholders and top
10 shareholders
restrict shareholders and top
1. 100% equity of HONG KONG NAM HOI (INTERNATIONAL) LIMITED 100% held
by Shenzhen Energy Group Co., Ltd.;
1. 100% equity of HONG KONG NAM HOI (INTERNATIONAL) LIMITED 100% held
2. The Company is unknown whether there exists
associated relationship or belongs to the consistent actor among the other shareholders.
2. The Company is unknown whether there exists
Explanation on top 10 shareholders
Explanation on top 10 shareholdersinvolving margin business (if
applicable) (see note 4)
Among the top ten shareholders, Ms. Liu Fang holds 3,891,588
involving margin business (ifshares through credit
transaction guarantee securities accountWhether top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held have a buy-backagreement dealing in reporting period
□ Yes √ No
The top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held of the Company have nobuy-back agreement dealing in reporting period.
2. Controlling shareholders
Nature of controlling shareholders: no controlling shareholderType of controlling shareholders: nilExplanation on the Company’s absence of controlling shareholderIn accordance with the paraphrase of controlling shareholder carried in Rules Governing the Listing of Stocks, the Company has nocontrolling shareholder and such condition has no changes in the reporting period
Change of controlling shareholder in reporting period
□Applicable √Not applicable
No changes of controlling shareholder for the Company in reporting period
3. Actual controller of the Company and persons acting in concert
Nature of actual controller: no actual controllerType of actual controller: nilExplanation on the Company’s absence of actual controllerAccording to the Rules Governing the Listing of Stocks definition of actual controlling, no actual controlling of the Company and nochanges for the aforesaid condition in reporting period
Whether has shareholder owns over 10% shares at ultimate control level
√Yes □No
Legal PersonShare-holding at ultimate control level
Shareholder
Legal
in charge of the
enterprise
Date ofestablishment
Organization code Main business
representative/PersonSASAC of Shenzhen
Municipal
Yu Gang 2004 11440300K317280672
Fulfill investor duty on behalfof the Shenzhen MunicipalGovernmentShenzhen Nanshan DistrictSASAC
Li Zhina 2005 114403050075421285 Administrative unitsOther equity of listed
SASAC of Shenzhencompanies in and out of China
controlled by shareholder inultimate control level duringthe reporting period
Not applicable
Change of actual controller in the period
□Applicable √Not applicable
Actual controller of the Company has no changes in the reporting periodRelation schema of property rights and control between the Company and main shareholders:
Actual controller controlling the Company by entrust or other assets management
□ Applicable √ Not applicable
4. Particulars about other legal person shareholders with over 10% shares held
□Applicable √Not applicable
5. Shares reduction restriction from controlling shareholder, actual controller, recombined square andother commitment entity
□ Applicable √ Not applicable
Section VII. Preferred Stock
□ Applicable √ Not applicable
The Company had no preferred stock in the Period
Section VIII Convertible Bonds
□ Applicable √ Not applicable
The Company had no convertible bonds in the Period
Section IX. Particulars about Directors, Supervisors, Senior Officers
and Employees
I. Changes of shares held by directors, supervisors and senior officers
Name Title
Working
status
Sex Age
Startdated of
office
term
End dateof officeterm
Sharesheld atperiod-begin(Share)
Amountof sharesincreasedin thisperiod(Share)
Amountof shares
in thisperiod(Share)
decreased
Otherchanges(share)
Sharesheld atperiod-end(Share)
Li Xinwei
Chairman
Currentlyin office
M 54
2017-08-
2020-11-
LiHongsheng
Vicechairman
Currentlyin office
M 56
2011-01-
2020-11-
HuangQing
Director
Currentlyin office
M 48
2019-06-
2020-11-
ChenYuhui
Director,GM
Currentlyin office
M 54
2017-08-28,2017-08-
2020-11-
WuGuowen
Director,
StandingDeputyGM
Currentlyin office
M 54
2016-04-25,2016-04-
2020-11-
LiWenying
Director
Currentlyin office
M 40
2019-06-
2020-11-
MoJianmin
Independentdirector
Currentlyin office
M 53
2017-11-
2020-11-
ChenZetong
Independentdirector
Currentlyin office
M 49
2017-11-
2020-11-
Du Wei
Independentdirector
Currentlyin office
M 64
2019-11-1
2020-11-
QiangWenqiao
Director
Office-leaving
M 50
2014-11-
2019-5-1
YuChunling
Director
Office-leaving
F 54
1998-08-
2019-5-1
LiaoNangang
IndependentDirector
Office-leaving
M 49
2013-11-
2019-11-1
YeQiliang
Chairmanofsupervisory board
Currentlyin office
M 56
2017-11-
2020-11-
Li Zhiwei
Supervisor
Currentlyin office
M 39
2019-06-
2020-11-
LiaoJunkai
Supervisor
Currentlyin office
M 31
2019-06-
2020-11-
LiangJianqiang
Employee
supervisor
Currentlyin office
Employee
M 51
2014-11-
2020-11-
Peng Bo
Employee
supervisor
Currentlyin office
Employee
M 46
2017-11-
2020-11-
1,527
1,527
XiongQingsheng
Supervisor
Office-leaving
M 46
2017-11-
2019-5-1
Pan Sha
Supervisor
Office-leaving
F 47
2017-11-
2019-5-1
Zhang Jie
DeputyGM,secretaryof theBoard
Currentlyin office
F 51
2006-12-30,2015-12-
2020-11-
17,325
17,325
Dai Xiji CFO
Currentlyin office
M 50
2017-11-
2020-11-
Lin Qing
DeputyGM
Office-leaving
F 55
2003-10-
2019-11-
Total -- -- -- -- -- -- 18,852
18,852
II. Changes of directors, supervisors and senior officers
√Applicable □ Not applicable
Name Title Type Date ReasonQiang Wenqiao Director Leaving office 2019-05-15 For workYu Chunling Director Leaving office 2019-05-15 For workXiongQingsheng
Supervisor Leaving office 2019-05-15 For workPan sha Supervisor Leaving office 2019-05-15 For workLiao Nangang
Independent
director
leaving office
Term expired and
2019-11-11 Reach the specified term of officeLin Qing Deputy GM
Term expired and
leaving office
Term expired and
2019-11-25 RetireIII. Post-holdingProfessional background, major working experience and present main responsibilities in Company of directors, supervisors andsenior officers at the presentMembers of the Board of Directors:
Mr. Li Xinwei was born in 1965, a senior accountant, a postgraduate of Xiamen University, and a master of business administration.From 1984 to 1992, he held the post of director of the accounting department of Guangdong Nuclear Power Joint Venture Co., Ltd.;from 1992 to 2006, he served as the financial manager of Shenzhen Worldsun Enterprises Co., Ltd. and he served as the cadre offinance department of Shenzhen Energy Corporation, the director of finance department of Shenzhen Mawan Power Co., Ltd., thechief accountant and the director of finance department of Shenzhen Energy Group Power Generation Branch, the deputy director ofcapital office of Shenzhen Energy Group Co., Ltd. (at ministerial level), the director and deputy general manager of ShenzhenMawan Power Co., Ltd.; from 2004 to 2006, he also served as the chairman of Huizhou City Gas Development Co., Ltd.; from 2006to August 2017, he held the post of managing director of Shenzhen Energy Finance Co., Ltd., he also holds the post of chairman ofSichuan Shenzhen Energy Power Investment Holding Co., Ltd. from 2015 to October 2018; and he has held the post of director andchairman of the Company since August 2017, now served as chairman of Shenzhen Shen Nan Dian Environment Protection Co., Ltd.,Shenzhen Shennandian Turbine Engineering Technology Co., Ltd. and director of Shen Nan Energy (Singapore) Co., Ltd. May 2019to present: Secretary of the Party committee of the company.
Mr. Li Hongsheng, born in 1963, was Communist party member, a master. From November 2004, he served as director of ShenzhenGuangju Investment Holding (Group) Co., Ltd, director financial controller of Shenzhen Guangju Energy Co., Ltd, chairman ofShenzhen Yangrun Investment Co., Ltd.;From December 2007 to now he serves as Managing director of Shenzhen Guangju EnergyCo., Ltd. and director of Guangju Energy (HK) Co., Ltd; and he serves as director and vice chairman of the Company since January2011.
Mr. Huang Qing, born in 1971, intermediate economist, master of economics, graduated from Wuhan University with a major innational economic planning and management. He successively served as a staff member, deputy chief staff member, and a chief staffmember of the General Office of Shenzhen Municipal Government, deputy chief of the General Office of Shenzhen MunicipalGovernment, chief of the General Office of Shenzhen Municipal Government, deputy departmental-level secretary of the GeneralOffice of Shanxi Provincial Government, deputy director of Shanxi Provincial Government's Guangzhou Office and a member of theParty Group. He currently serves as deputy general manager of Shenzhen Capital Operation Group Co., Ltd.(former ShenzhenCapital Co., Ltd.), concurrently serves as director and president of Guangzhou NasSoft Information Technology Co., Ltd., director of
Shenzhen Energy Corporation, director and vice president of Shenzhen Water Investment Co., Ltd., director of Shenzhen HTI GroupCo., Ltd., director of Xiong'an Lvyan Zhiku Co., Ltd., director of Shenzhen Institute of Building Research Co., Ltd., supervisor ofShenzhen Yixin Investment Co., Ltd., and the director of Shum Yip Investment Development Co., Ltd .; and he serves as the directorof the Company since June 2019.
Mr. Chen Yuhui was born in 1965, a senior engineer, graduated from Shanghai Jiao Tong University and obtained a bachelor'sdegree in marine power and a master's degree in vibration, shock & noise (postgraduate degree). In 1989, he worked in themaintenance department of Shenyang Liming Gas Turbine Co., Ltd.; from December 1989 to June 2006, he worked in ShenzhenEnergy Group Yueliangwan Power Plant, and successively held the posts of chief-operator of operation department, specialistengineer of general office, deputy director of maintenance department, factory deputy manager, factory manager, etc.; from June2006 to July 2014, he worked in Shenzhen Energy East Power Plant and held the posts of deputy general manager and operationdirector; from July 2014 to August 2017, he served as the chairman, general manager, and party branch secretary of Zhuhai ShenzhenEnergy Hongwan Power Co., Ltd.; and he has held the posts of director and general manager of the Company and the chairman ofShennandian (Zhongshan) Power Co., Ltd. and Shen Nan Dian (Dongguan) Weimei Electric Power Co., Ltd. and the director of ShenNan Energy (Singapore) Co., Ltd. since August 2017, May 2019 to present: Deputy Secretary of the Party committee of thecompany.
Mr. Wu Guowen, born in 1965, an undergraduate, He worked in Shenzhen Guangju Energy Co., Ltd. since 1994; and worked inShenzhen Yisheng Liquid Storage Co., Ltd. from 2008 to November 2010, and served as deputy GM; he works in Shenzhen GuangjuReal Estate Co., Ltd. From December 2010 to March 2016, and successively appointed as standing deputy GM, legal representative,executive director and GM; serves as staff supervisor in Shenzhen Guangju Energy Co., Ltd. since August 2013. he serves as director,standing deputy GM of the Company since April 2016, he serves as chairman of Shenzhen Server Energy Co., Ltd. Since March2018.
Mr. Li Wenying, born in 1979, master of business administration, graduated from Guanghua School of Management, PekingUniversity with a major in business administration. He successively served as the planning director of National Express TransportGroup Co., Ltd., department manager of Shenzhen Zhongnan Industrial Co., Ltd., department manager of Shenzhen Tongchan GroupCo., Ltd., investment manager, senior manager and deputy director of Shenzhen Capital Operation Group Co., Ltd.(former ShenzhenCapital Co., Ltd.), and the deputy director (presiding over the work) of Investment Development Department of Shenzhen CapitalCo., Ltd. He currently serves as the director of the Investment Development Department of Shenzhen Capital Operation Group Co.,Ltd., concurrently serves as director of Shenzhen Energy Group Co., Ltd. and director of Shenzhen SD Microfinance Co., Ltd .; sinceJune 2019, he has been a director of the Company.
Mr. Mo Jianmin was born in 1966, a China Certified Public Accountant, graduated from School of Law of Nanchang University.From March 1985 to October 1996, he worked at Tonggu County Taxation Bureau of Jiangxi Province and Local Taxation Bureau ofTonggu County; from November 1996 to October 1999, he worked at Shenzhen Tongren Certified Public Accountants; from October1999 to March 2001, he worked at Zhongtianqin Certified Public Accountants; from April 2001 to December 2003, worked atShenzhen Languang Enterprise Group; from January 2004 to December 2010, he worked at Shenzhen Jinniu Accounting Firm; fromJanuary 2011 to October 2012, he was appointed as a partner of Jonten Certified Public Accountants Shenzhen Branch; fromNovember 2012 to May 2014, he served as a partner of Beijing Yongtuo Certified Public Accountants; he has served as a partner ofDa Hua Certified Public Accountants since June 2014.He serves as independent director of the Company since Nov. 2017.
Mr. Chen Zetong was born in 1970, a bachelor of laws at Southwest University of Political Science and Law, a master of laws at theUniversity of Hong Kong, a doctor of laws at Jilin University. From 1994 to 2003, he served as a court clerk, assistant judge and
judge at the Real Estate Trial Division of Shenzhen Intermediate People's Court; from July to August 2002, he practiced as a judicialassistant in the High Court of Hong Kong; from 2003 to 2006, he served as the presiding judge at the Economic Trial Division; from2006 to 2010, he served as the deputy presiding judge at the seventh court of Shenzhen Intermediate People's Court (CorporateLiquidation and Bankruptcy Trial Division), and presided over the work of this court from June 2006 to August 2008. From 2010 to2012, he served as a partner of Beijing King & Wood Mallesons. Since 2012, he has been a senior partner of Beijing JunZeJun LawOffices. He is currently an arbitrator of Shenzhen Court of International Arbitration, concurrently an independent director of listedcompany Tianma Microelectronics Co., Ltd. (A-share 000050), an independent director of Hubei Sanxia New Building Materials Co.,Ltd. (A-share 600293), an independent director of non-listed company Funde Insurance Holding Co., Ltd., an independent director ofFunde Sino Life Co., Ltd., and an independent director of Sino Life Assets Management Co., Ltd. He serves an independent directorof the Company since November 2017
Mr. Du Wei, born in 1955, senior engineer, Ph.D., graduated from the Institute of Plasma Physics Chinese Academy of Sciences,majoring in nuclear fusion and plasma physics. He served as a cadre of the National Energy Commission, assistant engineer andprincipal staff member of the Yangtze River Basin Planning Office, engineer and deputy manager of China Nanshan DevelopmentCo., Ltd., deputy general manager and general manager of Shenzhen Changjiang Computer Industry Corporation, deputy director anddirector of the senior manager evaluation and recommendation center of the Organization Department of Shenzhen MunicipalCommittee, deputy general manager of Shenzhen Expressway Development Co., Ltd.; president of Shenzhen International WesternLogistics Co., Ltd., and general manager of Shenzhen International Qianhai Industry (Shenzhen) Co., Ltd. He is currently a seniorconsultant of Shenzhen International Business Management (Shenzhen) Co., Ltd., and has been an independent director of theCompany since November 2019.
Members of supervisory committee of the board:
Mr. Ye Qiliang was born in 1963, a member of the Communist Party of China with a college degree. From 1979 to January 1984, heserved in the Army 83020; from January 1984 to March 1997, he worked in Quannan County of Jiangxi Province; from March 1997to February 1999, he worked at Shenzhen Shennan Petroleum (Group) Co., Ltd. and served as a clerk in the investment department;from February 1999 to June 2009, he worked at Shenzhen Guangju Energy Co., Ltd. and served as the deputy director of the generalmanager office, the deputy director of the secretariat of the board of directors, and the representative of securities affairs; he serves asthe committee member of labor union of Shenzhen Guangju Energy Co., Ltd. since July 2012; from July 2009 to March 2016, hesuccessively served as the deputy general manager and general party branch member of Shenzhen Nanshan Petroleum Co., Ltd.; hehas served as the secretary of party general branch of the Company from April 2016 to July 2018, served as the deputy secretary ofparty general branch of the Company from July 2018 to May 2019, now he served as deputy party secretary the Company since May2019.
Mr. Li Zhiwei, born in 1980, senior accountant, certified public accountant, national leading accountant (enterprise), Doctor ofAccounting, graduated from Xiamen University majoring in Accounting. He has successively served as cost strategy planner, financedirector of R & D system, investment director, subsidiary CFO, and foreign exchange director of ZTE Corporation, and chiefaccountant of ZTE Corporation. He currently serves as deputy director of the Planning and Finance Department of Shenzhen CapitalOperation Group Co., Ltd.(former Shenzhen Capital Co., Ltd.), and concurrently serves as a director of Shenzhen CMAF IntelligentIndustry Co., Ltd. and a director of Shenzhen SD Microfinance Co., Ltd.; since June 2019, he has been a supervisor of the Company.
Mr. Liao Junkai, born in 1988, master of law, graduated from South China University of Technology with a major in master of law(law). He has successively held positions of assistant, supervisor and manager of the Risk Control Department of Shenzhen CapitalCo., Ltd. He is currently the senior manager of the Risk Control Department of Shenzhen Capital Operation Group Co., Ltd.(formerShenzhen Capital Co., Ltd.); he has been a supervisor of the Company since June 2019.
Mr. Liang Jianqiang, born in 1968, an engineer, bachelor degree, graduated from department of engineering physics of TsinghuaUniversity in 1991, major in nuclear energy and heat energy utilization. He worked in Shenzhen Moon Bay Gas Turbine Power Plantfrom 1991 to 1998, successively served as specialist engineer of gas turbine in operation department, sub-director of the gas turbinein inspection and maintenance department and specialist engineer of planning in inspection and maintenance department. He worksin Shenzhen Nanshan Power Co., Ltd. since July 1998 transferred by Shenzhen Energy Group Co., Ltd, and successively served asdeputy chief, chief of the inspection and maintenance department, deputy chief of the operation department, director of productionmanagement department and security chief. Served as chief of production technology department and security chief of the Companyfrom 2005 to 2013; he serves as employee supervisor of the Company since November 2014. Serves as deputy director in NanshanPower Plant in December 2013 and acting manager of Nanshan Power Plant since October 2017. he serves as director of NanshanPower Plant since December 2017. and now he serves as director of Shen Nan Dian Environmental Protection Co., Ltd and the vicechairman of Shenzhen New Power Industrial Co., Ltd.
Mr. Peng Bo was born in 1973, a senior economist, engineer, and a master graduate student. He graduated from Huazhong Universityof Science and Technology, majoring in power system automation in 1994, and then he majored in business administration atHuazhong University of Science and Technology and obtained a master's degree. He has been working in Shenzhen Nanshan PowerCo., Ltd. since 1994, and has served as a professional engineer of gas turbine thermal control maintenance, supervisor of labor andcapital, assistant of office director, and deputy director of human resources department; from April 2007 to December 2013, heserved as the director of human resources department, and concurrently served as the supervisor of a subsidiary Zhongshan ZhongfaPower Company; from May 2011 to November 2014, he served as the employee supervisor of the company's sixth board ofsupervisors; from December 2013 to December 2017, he served as the deputy director of Nanshan Thermal Power Plant; he serves sthe director and GM of Shenzhen Shennandian Environmental Protection Co., Ltd. since December 2017. now he holds the employeesupervisor of the Company since November 2017.
Senior officers of the Company:
Resume of Director/GM Chen Yuhui and Director/ standing deputy GM Wu Guowen found the aforesaid
Ms. Zhang Jie, born in 1968, CHRM, Master of Psychology of Beijing University; she was successively study with specialty ofBritish and American Literature in the Foreign Language Department of Zhengzhou University and specialty of applied psychologyin the Psychology Department, Beijing University. She used to work in Henan Provincial Seismological Bureau as a translator in1990, worked in the financial department and office of Shenzhen Nanshan Power Co., Ltd. since October 1990; she successively heldthe posts of secretary, office director, general manager assistant and employee supervisor of the Company since 1993. and holds theposts of deputy GM of the Company since December 2006. She worked as chairman of Shenzhen Shen Nan Dian EnvironmentProtection Co., Ltd from 2014 to September 2018. She holds the secretary of the Board of the Company since 23 December 2015.
Mr. Dai Xiji was born in 1969, a bachelor, and a senior accountant. From July 1992 to December 1996, he served as an accountant ofShenzhen Mawan Power Co., Ltd. Mawan Power Plant; from January 1997 to July 1998, he served as an accountant at the financedepartment of Shenzhen Energy Corporation Power Generation Branch; from July 1998 to December 1999, he was an accountant atthe finance and accounting division of Shenzhen Energy Group Co., Ltd.; from December 1999 to December 2007, he served as thedeputy director at finance department and the director at finance and accounting division of Mawan Power Plant; from January 2008to September 2008, she served as the director at finance department of Shenzhen Mawan Power Co., Ltd.; from August to September2008, he served as the cadre at the preparation office of Binhai Power Plant; from September 2008 to July 2014, he served as thesenior manager at financial management department of Shenzhen Energy Group Co., Ltd.; From February 2011 to June 2014, heconcurrently serves as the manager at the financial management department of Shenzhen Energy Fuel Branch; from July 2014 to
November 2017, he was appointed as the deputy general manager of Shenzhen Energy Fuel Branch, he serves as CFO of theCompany since November 2017 and now he also acts as the chairman of Shenzhen New Power Industrial Co., Ltd., the subordinateEnterprise of the Company and director of Shen Nan Dian (Dongguan) Weimei Electric Power Co., Ltd., and director of Shen NanEnergy (Singapore) Co., Ltd.
Post-holding in shareholder’s unit
√Applicable □ Not applicable
Name Name of shareholder’s unit
Position inshareholder’s
unit n
Worked from
Expired on
Receivedremuneration fromshareholder’s unit(Y/N)Huang Qing Shenzhen Energy Group Co., Ltd. Director 2019-04-24 NLi Wenying Shenzhen Energy Group Co., Ltd. Director 2019-04-24 NPost-holding in other unit
√Applicable □ Not applicable
Name Name of other units
Position inother unit
Worked from
Expired on
Receivedremunerationfrom other unit
(Y/N)
Li Xinwei
Shenzhen Shen Nan Dian Environment
Protection Co., Ltd.
Chairman 2018-10-30 NShenzhen Shenna
Shenzhen Shen Nan Dian Environmentndian Turbine Engineering
Technology Co., Ltd.
Chairman 2019-01-18 NShen Nan Energy (Singapore) Co., Ltd. Director 2017-12-27 NLi Hongsheng
ndian Turbine Engineering
Shenzhen Guangju Energy Co., Ltd.
| Director, GM |
2007-12-22 YHuang Qing Shenzhen Capital Operation Group Co., Ltd
Deputy GM 2016-9-1 Y
Chen Yuhui
Shen Nan Dian (Zhongshan) Electric Power
Co., Ltd.
Chairman 2017-08-26 N
Shen Nan Dian (Zhongshan) Electric PowerShen Nan Dian (Dongguan) Weimei Electric
Power Co., Ltd
Chairman 2017-08-26 N
Shen Nan Dian (Dongguan) Weimei ElectricShenzhen Shennandian Turbine Engineering
Technology Co., Ltd.
Chairman 2018-01-01 2019-01-18 NShen Nan Energy (Singapore) Co., Ltd. Director 2017-12-27 NWu Guowen Shenzhen Server Energy Co., Ltd. Chairman 2018-05-02 N
Li Wenying Shenzhen Capital Operation Group Co., Ltd
Shenzhen Shennandian Turbine Engineering
Director of
the
Investment
Development
Department
2012-9-1 Y
Mo Jianmin Da Hua Certified Public Accountants Partner 2014-06-09 YChen Zetong Junzejun Law Offices Senior partner
2012-09-01 YDu Wei
Shenzhen International BusinessManagement (Shenzhen) Co., Ltd.
Senior adviser
2017-03-01 Y
Li Zhiwei Shenzhen Capital Operation Group Co., Ltd
Deputydirector ofaccountingand financedepartment
2018-05-01 Y
Liao Junkai Shenzhen Capital Operation Group Co., Ltd
Seniormanager ofrisk controldepartment
2014-07-01 Y
Liang Jianqiang
Shenzhen New Power Industrial Co., Ltd.
Vicechairman
2018-02-23 NShenzhen Nanshan Power Co., Ltd.Nanshan
thermo electric plant
GM 2017-12-12 Y
Shenzhen Shen Nan Dian Environment
Protection Co., Ltd.
Director 2014-03-26 NPeng Bo
Shenzhen Shen Nan Dian EnvironmentShenzhen Shen Nan Dian Environment
Protection Co., Ltd.
Director,
GM
2017-10-16 Y
Dai Xiji
Shenzhen New Power Industrial Co., Ltd. Chairman 2018-02-23 NShen Nan Energy (Singapore) Co., Ltd. Director 2017-12-27 NShen Nan Dian (Dongguan) Weim
Shenzhen Shen Nan Dian Environmentei Electric
Power Co., Ltd
Director 2017-12-19 NPunishment of securities regulatory authority in recent three years to the Company’s current and outgoing directors, supervisors andsenior officers during the reporting period
□ Applicable √ Not applicable
IV. Remuneration for directors, supervisors and senior officersDecision-making procedures, recognition basis and payment for directors, supervisors and senior officers
1. Decision-making process: In accordance with relevant regulations of “Articles of Association”, the stockholders' meeting woulddetermine the remuneration of directors and supervisors, and the board of directors would determine the remuneration of seniorofficers.
2. Determine basis: Currently, except for the independent directors, the Company has no remuneration system for non-independentdirectors and supervisors, the directors and staff supervisor only received the pay for the post actually served in the Company. TheBoard of Directors will define the annual remuneration standard of the senior officers of the Company on the basis of annualoperating performance, post rank and other factors and in consideration of the industrial remuneration level. It will decide theactually paid remuneration standard by referring to the examination of annual operation performance and audit status.
3. Actual payment: the Company is strictly paying the remuneration to directors in line with the decision-making process anddetermining basis on remuneration for directors, supervisors and senior officers, the relevant expenses arising from transportation,accommodation, research, study and attending a meeting are borne by the Company.
Remuneration for directors, supervisors and senior officers in reporting period
In 10 thousand Yuan
Name Title Sex Age
Post-holdingstatus
Totalremuneration
Company (before
taxes)
Whetherremunerationobtained fromrelated party of
the CompanyLi Xinwei Chairman M 54
obtained from the
Currently inoffice
79.5
NLi Hongsheng Vice chairman M 56
Currently inoffice
YHuang Qing Director M 48
Currently inoffice
YChen Yuhui Director, GM M 54
Currently inoffice
71.5
NWu Guowen
Director,Standing deputyGM
M 54
Currently inoffice
NLi Wenying Director M 40
Currently inoffice
YMo Jianmin
Independentdirector
M 53
Currently inoffice
11.9
NChen Zetong
Independentdirector
M 49
Currently inoffice
11.9
NDu Wei
Independentdirector
M 64
Currently inoffice
1.98
NQiang Wenqiao Director M 50
Leaving office 0
YYu Chunling Director F 54
Leaving office 0
YLiao Nangang
Independentdirector
M 49
Leaving office 10.91
NYe Qiliang
Chairman ofsupervisorycommittee
M 56
Currently inoffice
66.5
NLi Zhiwei Supervisor M 39
Currently inoffice
Y
Liao Junkai Supervisor M 31
Currently inoffice
YLiang Jianqiang
Employeesupervisor
M 51
Currently inoffice
32.5
NPeng Bo
Employeesupervisor
M 46
Currently inoffice
33.46
NXiong Qingsheng
Supervisor M 46
Leaving office 0
YPan sha Supervisor F 47
Leaving office 0
YZhang Jie
Deputy GM,secretary of theBoard
F 51
Currently inoffice
64.5
NDai Xiji CFO M 50
Currently inoffice
64.5
NLin Qing Deputy GM F 55
Leaving office 60.96
NTotal
571.11
Delegated equity incentive for directors, supervisors and senior officers in reporting period
□ Applicable √ Not applicable
V. Particulars of workforce
1. Number of Employees, Professional categories, Education backgroundEmployee in-post of the parent Company (people) 277
Employee in-post of main Subsidiaries (people) 239
The total number of current employees (people) 516
The total number of current employees to receive pay (people)
Retired employee’ s expenses borne by the parent Company andmain Subsidiaries (people)
Professional categoriesTypes of professional category Numbers of professional categoryProduction and technical personnel 308
Financial staff
Administration staff
Total 516
Education backgroundType of education background Numbers (people)
High school and below
3-years regular college graduate and Polytechnic school graduate
Bachelor degree
Master and above
Total 516
2. Remuneration Policy
According to the Company's annual operation performance combined with the market-oriented remuneration in the region andindustry, the Board implements a principle of annual remuneration provision with the fixed remuneration as main body, which will, atthe same time of controlling remuneration cost, create conditions for the stable workforce. Meanwhile, special incentive mechanismwill be available according to the completion of annual business objectives and core mission so as set up an incentive mechanismlinked with operation performance and exert the incentive role of remuneration.The remuneration and incentive scheme of the chairman of board will be submitted to the shareholders' meeting for approval after ithas been deliberated by the board of directors. The remuneration and incentive scheme of the general manager, deputy generalmanager and other senior officers level will be prepared by the Board Remuneration and Appraisal Committee and then be submittedto the board of directors for approval. The Board of Directors will decide the annual remuneration standard of the senior officers ofthe Company on the basis of annual operating efficiency, post rank and other factors and in consideration of the industrialremuneration level and the actually paid remuneration standard by referring to the examination of annual operation performance andaudit status. The operation team is authorized to manage the remuneration and incentive of other personnel on the principle of“defining salary in terms of post and obtaining remuneration in terms of labor”. Within the annual remuneration limit approved bythe board of directors, and in compliance with the remuneration principle and Interim Remuneration Management Provision set downby the Board of Directors, determine and execute the remuneration standard, distribution plan, examination and incentive method ofemployees at each level.
3. Training programs
The Company always attached great importance to staff training, and established of the "staff training and management regulations"and a more perfect training network. Through strengthening the staff training, enhancing the staff's job skills and comprehensivequality, to better meet the Company's management, management demand for talent, while training reserve personnel for theCompany's sustainable development. During the reporting period, the Company strictly implemented the training plans thatformulated in beginning of the Year, mainly carried out the following aspects of the training:
(1) Safety Training: According to the Production Safety Law, other laws and regulations and the Safety Training Regulations of theCompany, organize the safety certificate training and following training for the safety principal, principal and security officer of theCompany headquarters and affiliated companies in order to meet legal regulatory requirements for security training, carry outemergency drills and safety management procedures training, and improve the safety awareness and accident prevention capacity ofmanagement at all levels and employee;
(2) Post qualification training: by means of learning assignments, the obtaining of certificate, internal training and assessment, carryout certification training for key business and technical post, meet with requirements of relevant laws and regulations for vocationalqualification requirements, and improve employee job performance ability.
(3) Simulator skills training: relying on gas turbine simulation training base, continued to carry out stimulator training for theoperation personnel within three power plants of the Company, and improve the practical operation and adaptability to changes ofplant operations personnel.
(4) The induction training of new employees: Carry out systematic and pointed job skill and professional training for the newlyrecruited graduates of the company;
(5) Training and study of party members: the Company Party committee and the party branches of the company will formulatedetailed and feasible plans according to the requirements of the higher-level organizations, and actively carry out the learningactivities of “two studies and one doing” and “studying makes a stronger country” by adopting various forms such as issuing booksand materials, bringing in teachers and experts, and leading party members to go out; strictly implement the “three meetings and oneclass” system, and develop activities such as “secretary teaches party lessons”. We will ensure that party organizations play the roleof battle-bastion and the majority of party members to play a vanguard and exemplary role through training and study.
4. Labor outsourcing
□ Applicable √ Not applicable
Section X. Corporate GovernanceI. Corporate governance of the CompanyCorporate governance of the Company has major changes in the reporting period, the controlling shareholder of SZ Energy Group(the first majority shareholder of the Company) changed to Shenzhen Capital Group. During the reporting period, in accordance withguideline of Company Law, Securities Law, Corporate Governance Guidelines, Stock Listing Rules and other regulatory documents,and requirements of Articles of Associations and rules of procedures, constantly optimized the corporate governance structure,maintained sound modern enterprise management system, improve governance and standardization meticulous management, andeffectively protected the interests and legitimate rights of listed companies, investors and employees.
1. Shareholders' meeting: the Company holds the shareholders general meeting in strict accordance with the legal procedures, and toensure that the shareholders exercise their rights in accordance with the law. During the reporting period, the Company held oneregular shareholders’ meeting and two extraordinary shareholders meeting to carefully deliberate and decide on issues which weresubmitted to the general shareholders’ meeting for approval. The convening of the shareholders’ meeting was legal and alldecision-making processes were open, fair and just. The qualifications and proposals of the attendees met the requirements of lawsand regulations, and the resolutions of the shareholders' general meeting were disclosed in a timely manner after the meeting, whicheffectively protected all shareholders from exercising their right to know and vote on major issues of the Company in accordancewith the law. Shareholders of the Company earnestly fulfilled their responsibilities under the Company Law and Articles ofAssociation , there were no large shareholders and related parties who occupied or transferred the Company's funds, assets and otherresources with various forms.
2. Board of Directors: The Company's board of directors adhered to standardized operation and management, took various measuresto strengthen its own construction, and improved the board's standardized operation and scientific decision-making level. In thereport period, the Board of Directors of the Company held two regular meetings and two extraordinary meetings to carefully research,deliberate and make decisions on significant matters within the rights of board of directors. During the reporting period, theCompany's board of directors replaced two shareholder representative directors and one independent director, which addedprofessional director resources to the Company and was beneficial to the Company's transformation and development. Four specialcommittees under the Board of Directors, the Strategy and Investment Committee, Audit Committee, Nomination Committee, as wellas Remuneration and Appraisal Committee are carefully deliberated relevant proposals and giving opinions and suggestions. The fulluse of the active role of the special committees in major investment decisions, important personnel adjustments, standardized salarymanagement, internal audit, and risk control has effectively ensured the scientific nature of the Company's decisions and thenormalization of management. Independent directors played their professional advantages, upheld the objective and independentprinciple and conscientiously performed their duties, and paid attention to the interests of the Company as a whole and those theshareholders of the Company, especially the legitimate interests of minority shareholders.They issued independent opinions onresolutions and brought forward constructive comments and suggestions on the Company’s standardized operation and riskprevention.
3. Supervisory Committee: pursuit to relevant rules of laws and regulations, supervisory committee of the Company perform thesupervision responsibility in line with to the Company and shareholders responsible manner. During the reporting period, theSupervisory Committee of the Board held two regular meetings and seven extraordinary meetings, effectively supervised theday-to-day operations of the board of directors, the Company's financial status, operating conditions, related transactions, asset
disposal, financial investment, and the legality and compliance of directors and senior management in performing their duties,independently issued opinions, and effectively protected the legitimate rights and interests of the Company and shareholders,especially the small and medium shareholders. During the reporting period, the Board of Supervisors of the Company replaced twoshareholder representative supervisors. At the same time, the board of supervisors extended the connotation of supervision andstandardized operation and risk prevention to daily operations, the board of supervisors also learned about the Company's operationsand management by attending the shareholders' meetings and attending the board meetings and organizing on-site inspections on theCompany's subsidiaries to better understand the Company's operations and management so as to better perform supervisory duties.
4. Manager Office: During the reporting period, the Company's managers strictly implemented various decisions of the shareholders'meeting and the board of directors in accordance with the requirements of relevant laws and regulations and the Company's Articlesof Association and other regulatory documents, and actively organized the Company's various production, operation and managementtasks, constantly improved the office conference system and internal control system, continued to optimize work processes anddecision-making procedures, built a harmonious and aggressive corporate culture atmosphere, followed the work principle ofreasonable division of labor and enhanced cooperation and the purpose of collective decision-making on major issues, andcontinuously improved the Company's management level and strive to achieved better business performance.
5. Major information confidentiality : In strict accordance with the requirement of Rules Governing the Listing of Stocks and InsidersRegistration System, to standardize the confidentiality of inside information, and submit the inside information list in strictaccordance with relevant regulations, kindly reminded the insider information to strictly comply with the related regulations oninsider information confidentiality and stocks trading of the Company before the convening of the meetings of general shareholders,board of directors and supervisory board. There were no significant information disclosures within the reporting period. There wereno significant information disclosures within the reporting period. During the reporting period, the Company did not provideundisclosed information to large shareholders in violation of information disclosure requirements.
6. Information disclosure and investor relations management: During the reporting period, in strict accordance with the requirementof relevant laws, regulations and normative documents as Company Law, Rules Governing the Listing of Stocks and ManagementMechanism of the Information Disclosure, conscientiously fulfill the obligation of information disclosure, and disclosed the periodicand Ad-hoc Reports in a timely and fair manner to whole shareholders on China Securities Journal, Securities Times, Hong KongCommercial Daily and Juchao Website with truthfulness, accuracy and completeness contents. In 2019, the Company completed thepreparation and disclosure of periodic reports and interim announcements on schedule, a total of 63 announcements were issuedthroughout the year, strive to give investors a complete picture of the Company’s finances, operation, personnel, and other significantmatters. The Company strictly complied with the requirements of the "Company Investor Relations Management Work System" anddid a good job in investor relations management. In addition to the on-site visit reception, it also used the Company's mailbox,investor phone line, and the irm.cninfo.com.cn of Shenzhen Stock Exchange, the smooth communication channels with investorsenabled investors to have a more comprehensive, in-depth and objective understanding of the Company.
7. Internal control and standardized management: During the reporting period, in order to better meet the company's needs forstandardized governance and efficient operation, in accordance with the requirement of relevant laws, regulations and normativedocuments, combine with actual condition of the Company, to established and completed the management mechanism and workingprocedure matching the innovation management mode timely, to ensure an efficient decision-making and standardization of thebusiness operation. The Company carried out special audit work on internal control self-evaluation, internal regular audit anddeparture audit, and took active and effective measures to improve existing problems and deficiencies. Strengthened the training andideological education of directors, supervisors, senior officers personnel, and middle-level management cadres at all levels, andemphasized the performance of duties according to law, standardized the words and deeds, and fought against corruption. The
company has been striving to prevent business management risks by continuously improving the internal control system, increasingthe assessment and rewards and punishments, and further improving the standardization of management.
Is there any difference between the actual condition of corporate governance and relevant regulations about corporate governance forlisted Company from CSRC?
□Yes √ No
There are no differences between the actual condition of corporate governance and relevant regulations about corporate governancefor listed Company from CSRC.II. Independence of the Company relative to controlling shareholders’ in aspect of businesses,personnel, assets, organization and financeThe Company has not controlling shareholder. The Company is completely independent in personnel, assets, finance, business, andinstitutions and is able to make independent decision and operations.
1. Personnel independence: The Company has set up an independent human resource management system and compensation &benefits systems. All members of the management level and senior officers are full-time executives and are paid remuneration by theCompany and none of them takes other administrative posts in shareholders. Within the amount approved by the Board, the Companyindependently hires or fires employees according to the management needs. The Company has established a more perfect humanresources management system, and has an independent management right.
2. Assets independence: the Company has independent production facilities and auxiliary systems, land use rights, property rights,office facilities and equipment. Within the range authorized by the board of directors and general shareholders’ meeting, theCompany has the powers of independent acquisition and disposition of assets.
3. Financial independence: The Company has independent financial management and accounting system, is equipped withindependent financial management and accounting personnel, and establishes a relatively sound financial management system,independent bank account and tax accounts. Within the range authorized by the board of directors and shareholders’ meeting, theCompany can made independent financial decision and there are no substantial shareholders with financial management interference,embezzlement of funds and other circumstances.
4. Business independence: the Company independently carries out production and business activities, has set up independent andcomplete production, procurement, sales channels and management system. Within the range authorized by the board of directors andshareholders’ meeting, the Company makes its own management decisions, carries out self management and takes fullresponsibilities for its own profits and losses.
5. Independent organization: The Company, in accordance with the needs of production, operation, management, followed modernenterprise management standards and established a relatively sound organization and management structure. There were neitherinterference of shareholders in the establishment and operation of the neither Company nor organization structure shared betweenshareholders and the Company.Note: if the Company unable to guarantee independence with the controlling shareholder and unable to maintain independentoperation ability in aspect of business, personnel, assets, organization and finance, explanation shall required.
III. Horizontal competition
□ Applicable √ Not applicable
IV. In the report period, the Company held annual shareholders’ general meeting andextraordinary shareholders’ general meeting
1. Annual Shareholders’ General Meeting in the report periodSession of meeting
Type
Ratio of investorparticipation
Date Date of disclosure
Index of disclosure
Annual GeneralMeeting of 2018
AGM 38.59%
2019-04-18 2019-04-19
“Resolution Notice
“Resolution Noticeof Annual General
of Annual GeneralMeeting 2018”
No.:2019-019,published on “
Meeting 2018”China
Securities Journal
China”
“Securities Times
””
“
”Hong Kong
Commercial Daily
Hong Kong”
and Juchao Website
”
First Extraordinary
shareholders’ general
meeting of 2019
Extraordinary
| shareholders’ general | shareholders’ general |
meeting
51.38%
2019-06-03 2019-06-04
“Resolution Notice
“Resolution Noticeof First
Extraordinary
of Firstshareholders’ general
shareholders’ generalmeeting of 2019”
No.:2019-030,published on “
meeting of 2019”China
Securities Journal
China”
“Securities Times
””
“
”Hong Kong
Commercial Daily
Hong Kong”
and Juchao Website
”
SecondExtraordinary
meeting of 2019
Extraordinary
shareholders’ generalshareholders’ general
meeting
38.91%
| shareholders’ general | |
2019-11-11 2019-11-12
“Resolution
Noticeof Second
Extraordinary
of Secondshareholders’ general
shareholders’ generalmeeting of 2019”
No.:2019-062,published on “
meeting of 2019”China
Securities Journal
China”
“Securities Times
””
“
”Hong Kong
Commercial Daily
Hong Kong”
and Juchao Website
”
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √ Not applicable
V. Responsibility performance of independent directors
1. The attending of independent directors to Board meetings and general meeting
The attending of independent directors to Board Meeting and Shareholders General Meeting
IndependentDirector
Times ofBoard meetingsupposed toattend in thereport period
Times ofPresence
Times ofattending the
Board Meeting
bycommunication
Times ofentrustedpresence
Board Meeting
Times ofAbsence
Absent theMeeting forthe secondtime in a row(Y/N)
Times ofattend thegeneralmeetingMo Jianmin 9
N 2
Chen Zetong 9
N 2
Liao Nangang 9
N 3
Du Wei 0
N 0
Explanation of absent the Board Meeting for the second time in a rowNil
2. Objection for relevant events from independent directorsIndependent directors come up with objection about Company’s relevant matters
□ Yes √ No
No independent directors come up with objection about Company’s relevant matters in the Period
3. Other explanation about responsibility performance of independent directorsThe opinions from independent directors have been adopted
√ Yes □ No
Explanation on advice that accepted/not accepted from independent directorsWithin the reporting period, in accordance with the Company Law, the Corporate Governance Guidelines, Guideline on theEstablishment of Independent Directors in Listed Companies, the Working System of Independent Directors, the Articles ofAssociation and other requirements of normative documents, and based on the spirit of independence, objectivity and the principle ofprudence, all independent directors of the Company conscientiously performed their duties, understood and paid attention to theCompany's business development, and deliberated and voted all resolutions submitted by the board of directors. Besides, by means oftheir professional advantages in their respective fields, all independent directors deeply and prudently judged significant matters forwhich the opinions of independent directors were necessary, delivered a written independent opinions and made recommendations tosafeguard the legitimate interests of the Company and all shareholders. The Board of Directors fully respected the performance ofduties by independent directors, attached great importance to and carefully accepted the views and recommendations of theindependent director. And there were no recommendations of independent directors not adopted.
VI. Duty performance of the special committees under the board during the reporting period
(i) Strategy and investment management committee
1. Attending the meeting of the Board and shareholders general meeting, keep track of the production, operation and development ofthe CompanyIn 2019, member of the strategy and investment management committee attended the 9 meetings of the Board, 3 shareholders generalmeetings, they careful review the all comprehensive documents as Work Report of GM for year of 2018, Integrated Business Plansfor year of 2019 and Revised the Article of Association of Shenzhen Nanshan Power Co., Ltd, performing the duties and offeringadvice and suggestions to the Board with purpose of keep track of the Company’s production and operation
2. Convening a meeting of strategy and investment management committee, review the company's business plan and majorinvestment decisionsOn March 26, 2019, the Strategy and Investment Management Committee of the 8
thBoard of Directors of the Company held itssecond meeting by way of communication voting, reviewed and approved the 2018 Annual Performance Report of the Strategy andInvestment Management Committee of the Board of Directors, and studied and determined the work ideas and work plans for 2019.
On June 28, 2019, the Strategy and Investment Management Committee of the 8
thBoard of Directors of the Company held its thirdmeeting to hear the "Report on the Implementation of Land Operations" and the "Report on the Implementation of the Company's2019 Asset Optimal Relocation and Investment Work", and the deliberation passed the "Proposal on Carrying out the Share Transferof Shen Nan Dian (Dongguan) Weimei Power Co., Ltd.".
On October 23, 2019, the Strategy and Investment Management Committee of the 8
th
Board of Directors of the Company held itsfourth meeting by way of communication voting, reviewed and approved the "Proposal on the Use of Idle Funds to PurchaseFinancing Products", and agreed to use its own idle funds to purchase financing products to improve the efficiency of fund use underthe premise of ensuring the fund security and controllable risks.
(ii) Audit Committee
1. Attending the meeting of the Board and shareholder general meeting, know the production, operation and development of the
CompanyIn 2019, the audit committee members of the company’s board of directors attended 9 board meetings, 3 shareholders meetings, andcarefully reviewed all documents including “2018 Annual General Manager Work Report” and “Proposal on the 2019 AnnualComprehensive Business Plan” and conduct careful research on documents as auditing reports and internal control system andrelevant proposals, creating conditions for conscientious performance of duties and suggestions to the Board.
2. Held meeting of Audit Committee and issued opinions on annual audit and other related matters.On March 22, 2019, the fifth meeting of the Audit Committee of the eighth Board of Directors of the Company was held bytelephone conference. The meeting heard Ruihua Certified Public Accountants' introduction to the communication issues with themanagement during the 2018 annual audit, and discussed the important matters raised by the accountants in the audit process item byitem, and determined the treatment opinions on the important matters, and required the Company to cooperate with the auditinstitution to finalize the 2018 annual audit report in strict accordance with the requirements of regulatory authorities.
On 26 Mar. 2019, the Audit Committee of the 8
th Board of Directors of the Company convened the 6
thmeeting with Ruihua CertifiedPublic Accountants about the finalization of 2018 annual audit report, and listened to the accounting firm's suggestions to the annualaudit work, the deliberation reviewed and passed the Proposal for Reviewing 2018 Annual Internal Control Evaluation Report, theProposal on the Company's Work Plan for 2019 Annual Internal Audit and Internal Control, the Re-engagaement of AuditingInstitution and Remuneration for year of 2019 and the 2018 Duty Performance Report of the Audit Committee of the Board etc.
On 2 August 2019, the 8
th audit committee of the Board hold 7
thmeeting voting by correspondence, deliberated and approved theproposal of changing the auditing institute for year of 2019, the Company changed its annual auditing organ to LIXINZHONGLIANCPAS (SPECIAL GENERAL PARTNERSHIP); deliberated and approved the proposal of exercising new financial instrumentrules.(iii) Nomination Committee
1. Attending the shareholding meeting and the Board, keep track of the production, operation and development of the CompanyIn 2019, members of the Nomination Committee of the 8
thBoard of Directors attended 9 Board meetings, 3 shareholders’ meetings,they careful review the all documents as Work Report of GM for year of 2018, Integrated Business Plans for year of 2019 andRevised the Article of Association of Shenzhen Nanshan Power Co., Ltd etc. Keep track of the Company’s production and creatingcondition for performing the duties and offering advice and suggestions to the Board.
2. Convened meeting of Nomination Committee, consider the proposal of changing directorsOn March 26, 2019, the Nomination Committee of the 8
th Board of Directors of the Company convened the 3
rdmeeting, reviewedand approved the Performance Report for year of 2018 of Nomination Committee of the Board, and formulated a working ideas andplans for the year of 2019.On 17 May, 2019, the 8
th Nomination Committee of the Board hold 4
thmeeting voting by correspondence to deliberated andapproved the proposal for changing the Board.On 23 October, 2019, the 8
th Nomination Committee of the Board hold 5
thmeeting voting by correspondence to deliberated andapproved the proposal for changing the Independent Directors.
(iv) Remuneration and Appraisal Committee
1. Attending the meeting of the Board and shareholders general meeting, and propose opinions and plans on remuneration,assessment and reward
In 2019, members of the remuneration and appraisal committee attended 9 Board meetings, 3 shareholders’ meetings, they careful
review all documents as Work Report of GM for year of 2018, Integrated Business Plans for year of 2019, and Revised the Article ofAssociation of Shenzhen Nanshan Power Co., Ltd etc. and creating condition for offering suggestion and plan to the Board in order toperforming their duties; Furthermore, reviewing and deliberating relevant proposals with remuneration and awarding plans concerned,keep eyes on the implementation of remuneration and propose suggestion; organized activities of formulating relevant rewardprograms and supervise the implementation, which conscientiously fulfill the obligation of diligence and duties.
2. Held meeting of Remuneration and Appraisal Committee, deliberated the resolution on the provision of annual remuneration andrelevant rewards with appraisal concerned, and make recommendations for the Board of DirectorsOn March 26, 2019, the Remuneration and Appraisal Committee of the 8
th Board of Directors convened 2
ndmeeting approved theWork Report of Remuneration and Appraisal Committee for year of 2018, and determine the work idea and plans for year of 2019 byresearch, deliberated and approved the Accrual of the Remuneration for 2019 and Appraisal Plan and Request for Special Award for2018.
On 6 September, 2019, the Remuneration and Appraisal Committee of the 8
th
Board hold 3
rdmeeting voting by correspondence todeliberated and approved the Distribution Plan for Special Awards of 2018.VII. Works from Supervisory CommitteeThe Company has risks in reporting period that found in supervisory activity from supervisory committee
□ Yes √ No
Supervisory committee has no objection about supervision events in reporting periodVIII. Examination and incentives of senior officersThe Remuneration and Evaluation Committee of the Board is responsible for setting down and supervision implementation theappraisal and remuneration system of Company managers and other senior officers personnel to develop, established theremuneration incentive mechanism liked with operation performance. At the beginning of the year, according to the annual operationtarget, core tasks and post ranks of senior officers, and in comprehensive consideration of the industrial and regional remunerationlevel, research and determine the total amount of remuneration and the remuneration and appraisal standard of senior officers. Afterthe year ends, determine the annual remuneration granting standard and incentive scheme in accordance with the appraisal ofcompletion of operation performance and in combination of the performance of duties of senior officers.IX. Internal Control
1. Details of major defects in IC appraisal report that found in reporting period
□ Yes √ No
2. Appraisal Report of Internal Control
evaluation report
2020-03-20
evaluation report
“Audit report of internal control for year of 2019” published on Juchao Website(www.cninfo.com.cn)
Disclosure index of full internal controlThe ratio of the total assets of units
The ratio of the total assets of unitsincluded in the scope of evaluation
included in the scope of evaluationaccounting for the total assets on the
accounting for the total assets on theCompany's consolidated financial
statements
100.00%
Company's consolidated financial
The ratio of the operating income of units
included in the s
The ratio of the operating income of unitscope of evaluation
cope of evaluationaccounting for the operating income on the
accounting for the operating income on theCompany's consolidated financial
statements
100.00%
Company's consolidated financial
Defects Evaluation StandardsCategory Financial Reports Non-financial Reports
Qualitative criteria
a
Major defects: under major operationalctivities, there are major defects in several
ctivities, there are major defects in severalcompanies which are consolidated into the
companies which are consolidated into thepreparation of financial statements, or there
preparation of financial statements, or thereare major defects in few of companies which
are major defects in few of companies whichare consolidated into the preparation of
financial statements but the Company
are consolidated into the preparation ofwith
withmajor defect are the main one participating
into such major operation activities;
major defect are the main one participatingSubstantial defects: under major operational
Substantial defects: under major operationalactivities, there are substantial defects in few
activities, there are substantial defects in fewof companies which are consolidated into the
preparation of financial state
of companies which are consolidated into thements, or there
ments, or thereare moderate defects in several companies
are moderate defects in several companieswhich are consolidated into the preparation
which are consolidated into the preparationof financial statements but the Company
of financial statements but the Companywith major defect are the main on
with major defect are the main onparticipating into such major operation
activities; or there are moderate defect
participating into such major operations in
s infew of companies which are consolidated
few of companies which are consolidatedinto the preparation of financial statements
into the preparation of financial statementsbut the Company with moderate defect are
but the Company with moderate defect arethe main one participating into such major
operation activities;
the main one participating into such majorGeneral defects: under major operational
activities, there a
General defects: under major operationalre moderate defects in few
re moderate defects in fewof companies which are consolidated into the
of companies which are consolidated into thepreparation of financial statements, and the
preparation of financial statements, and theCompany with moderate defects is not the
Company with moderate defects is not themain one participating into the major
main one participating into the majoroperational activities; or there are only
general defects in
operational activities; or there are onlycompanies which are
companies which areconsolidated into the preparation of financial
consolidated into the preparation of financialstatements; there are no internal control
statements; there are no internal controldefects in major operational activities and
defects in major operational activities andthere are only internal control defects in
minor operational activities.
Major defects: under major op
there are only internal control defects inerational
erationalactivities, there are major defects in
activities, there are major defects inseveral companies which are
several companies which areconsolidated into the preparation of
consolidated into the preparation offinancial statements, or there are major
financial statements, or there are majordefects in few of companies which are
defects in few of companies which areconsolidated into the preparation of
financial statements but t
consolidated into the preparation ofhe Company
he Companywith major defect are the main one
with major defect are the main oneparticipating into such major operation
activities;
participating into such major operationSubstantial defects: under major
Substantial defects: under majoroperational activities, there are
operational activities, there aresubstantial defects in few of companies
substantial defects in few of companieswhich are consolidated into the
preparation of fina
which are consolidated into thencial statements, or
ncial statements, orthere are moderate defects in several
there are moderate defects in severalcompanies which are consolidated into
companies which are consolidated intothe preparation of financial statements
the preparation of financial statementsbut the Company with major defect are
but the Company with major defect arethe main on participating into such major
the main on participating into such majoroperation activities; or there are
mode
operation activities; or there arerate defects in few of companies
rate defects in few of companieswhich are consolidated into the
which are consolidated into thepreparation of financial statements but
preparation of financial statements butthe Company with moderate defect are
the Company with moderate defect arethe main one participating into such
major operation activities;
the main one participating into suchGeneral defects: under major operational
activiti
General defects: under major operationales, there are moderate defects in
es, there are moderate defects infew of companies which are consolidated
few of companies which are consolidatedinto the preparation of financial
into the preparation of financialstatements, and the Company with
statements, and the Company withmoderate defects is not the main one
moderate defects is not the main oneparticipating into the major operational
activities; or there are only general
participating into the major operational
defects in companies which are
defects in companies which areconsolidated into the preparation of
consolidated into the preparation offinancial statements; there are no internal
financial statements; there are no internalcontrol defects in major operational
control defects in major operationalactivities and there are only internal
activities and there are only internalcontrol defects in minor operational
activities.
Quantitative standard
in consolidated financial statement×0.5%Substantial defects: total assets inconsolidated financialstatement×0.2%≤mistaken amount< totalassets in consolidated financialstatement×0.5%General defect: mistaken amount <totalassets in consolidated financialstatement×0.2%
Major defects: amount of direct loss≥total assets in consolidated financialstatement ×0.5%Substantial defects: total assets inconsolidated financial statement×0.2%≤amount of direct loss< total assets inconsolidated financial statement×0.5%General defect: amount of direct loss<total assets in consolidated financialstatement×0.2%
Major defects: mistaken amount ≥total assetsAmount of significant defects in financial
reports
| Amount of significant defects in financial | ||
non-financial reports
| Amount of significant defects in | ||
reports
Amount of important defects in financial
Amount of important defects in
non-financial reports
| Amount of important defects in | ||
X. Auditing report of internal control
√Applicable □ Not applicable
Deliberations in Internal Control Audit ReportThe accountant firm thinks
significant aspects in accordance with the Basic Regulation of Enterprise Internal ControlDisclosure of internal control auditreport
DisclosedDisclosure date of audit report ofinternal control (full-text)
2020-03-20
Shenzhen Nanshan Power Co., Ltd. maintains effective internal control of financial report in allIndex of audit report of internal
control (full-text)
“Audit report of internal co
| Index of audit report of internal | ntrol for year of 2019” published on Juchao Website |
(www.cninfo.com.cn)
IC
Standard unqualifiedwhether the non-
Opinion type of auditing report offinancial report
had major defects
NoCarried out modified opinion for internal control audit report from CPA
□ Yes √ No
The internal control audit report, issued by CPA, has concerted opinion with self-evaluation report, issued from the Board
√ Yes □ No
Section XI. Corporation Bonds
Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without due on the date whenannual report approved for released or fail to cash in full on dueNo
Section XII. Financial ReportI. Audit reportType of audit opinion Standard unqualified opinionSigning date of audit report 2019-03-18Name of audit institute
PARTNERSHIP)Name of CPA Liu Xinfa, Ding Dongmei
Text of Report (Attached)
Section XIII. Documents available for Reference
I. Original Annual Report of 2019 carrying the signature of the legal representative of the CompanyII. Financial statement with signature and seal of Person in charge of the Company (legal person), person in chargeof accounting works (General manager and chief financial officer) and person in charge of accountingorgan(accountant in charge);III. Original audit report seal with accounting firms and signature and seal from CPA;IV. Text of notice and original draft that public on China Securities Journal, Securities Times and Hong KongCommercial Daily that appointed by CSRC within report period.V. The place where the document placed: Shenzhen Stock Exchange, Office of Board of Directors of the Company.
立信中联会计师事务所（特殊普通合伙）LixinZhonglian CPAs (SPECIAL GENERAL PARTNERSHIP)
Shenzhen Nanshan Power Co., Ltd.
深圳南山热电股份有限公司
Auditor’s Report立信中联审字[2020] D-151号
Auditor’s Report
LixinZhonglian Shen Zi[2019] No. D-0151
To Shareholders of Shenzhen Nanshan Power Co., Ltd.
I. Auditor’s opinionWe, as the auditors, audited the financial statements of Shenzhen Nanshan Power Co., Ltd. (hereinafter, the“Company”), which included the consolidated and parent company’s balance sheet as of 31 December 2019, theconsolidated and parent company’s statement of income, the consolidated and parent company’s statement of cashflow and the consolidated statement of changes in equity of the Company and parent company’s for the year ended31 December 2019, together with the relevant notes thereto.
We have the view that the attached financial statements are prepared in accordance with the Accounting Standardsfor Business Enterprises in all material aspects, which reflect fairly the consolidated financial position of theCompany and parent company’s as of 31 December 2019 and the operating results and cash flow of the Companyand parent company’s for the year of 2019.
II. Basis for audit opinionsWe conducted this audit under the requirements of the Auditing Standards of the Certified Public Accountant ofthe PRC. The section headed “Certified Public Accountant’s responsibility for audit of financial statement” in theaudit report has further clarified our responsibilities under these standards. Pursuant to the code of professionalconduct as certified public accountant in the PRC, we are independent of the Company and have performed otherresponsibility as required by our professional ethics. We believe that the audit evidence obtained by us is sufficientand adequate, which provides foundation for us to issue audit opinion.
III. Key audit itemsKey audit issues refer to those which in our opinion based on our professional judgment are the most importantissues in respect of audit for the current financial statements. We issue audit opinions on these issues in their entityand provide no opinions separately for each of them.
Key audit items Countermeasures(i) Impairment of fixed assetsReference to the Annotations of Financial Statementwith the “15. Accounting policy” in Note III. Majoraccounting policies and estimation, and the note (11)of V. Annotation of the items in consolidate financialstatement
As at 31 December 2019, the Company has fixed
Auditing procedures on the impairment of fixed assetsincluding:
(1)assess and test the design and effectiveness ofexecution of the internal control related to fixed assetsimpairment;
(2)select samples of fixed assets to implement supervision
procedure, so as to understand whether the assets
立信中联会计师事务所（特殊普通合伙）
LixinZhonglian CPAs (SPECIAL GENERAL PARTNERSHIP)
Key audit items Countermeasuresassets with carrying value of RMB 1,381,857,204.28,accounting for 43% of the consolidated total assetsand 87% of the non-current assets of the Company,which constitutes the essential part of the Company’sassets. The management has assessed whether thereis any sign of impairment in fixed assets. For thoseassets with impairment sign identified, themanagement makes impairment test by comparisonbetween the recoverable amount of the fixed assets(calculated individually or the assets group in whichthe asset belongs to) and their carrying value.
Since the management of Shen Nan Dian needs todetermine the estimated recoverable amount of fixedassets with significant accounting estimation andjudgment, and the impact amount is significant, wedetermine the impairment of fixed assets as a keyaudit item
experience backward crafts, long-term idle and load rate;
(3) Make use of the work of the experts of externalappraiser, comprehensively evaluate the parameters usedin assessment method of the external appraiser’squalification and competency
(ii) Revenue recognition principle
As for the accounting policy for revenue recognitionand analysis of revenue, reference to the Annotationsof Financial Statement with the “(23) Accountingpolicy” in Note III Major accounting policies andestimation and the Note (30). in V. Annotation of theitems in consolidate financial statement
In 2019, consolidate operation revenue for Shen NanDian amounted as RMB 1,221,870,208.52, a 35%down from a year earlier.Since the operation revenue is one of the keyperformance indicators of the Company, and there isan inherent risk that the revenue recognition pointmay be manipulated to achieve specific objectives orexpectations, we identify the revenue recognition asa key audit item.
Auditing procedures with recognition of operationrevenue concerned including:
1. Evaluate the design and operational effectiveness of key
internal controls related to revenue recognition;
2. Select sample to examining the sales contract, identify
terms and conditions of the contract relating to the transferof risk and reward in the ownership of the goods, and toevaluate whether the point of revenue recognitionconforms to the requirements of Accounting Standards forBusiness Enterprises;
3. Make substantial analysis process with respect tooperating income and gross profit, and make judgment onthe reasonableness of the change in operating income andgross profit for the period;
4. Select samples from the accounting records of operating
income and settlement sheet of power rate to review thetruthfulness and completeness of operating revenuerecognition; inspect receivables records and selectsamples to issue letters to enquire the balance of endingtrade receivables and amount received in advance.Together with the collection of trade receivables insubsequent periods, to confirm the truthfulness of sales
Key audit items Countermeasures
transactions;
5. Make deadline test on operating income to confirmwhether the operating income is recorded in appropriateaccounting periods.IV. Other informationThe management of Shen Nan Dian (hereinafter, the Management) is responsible for other information, whichincludes the information covered in the 2019 Annual Report except for the financial statements and our auditreport.
Our audit opinion issued on financial statement does not cover other information, and we would not issue any formof verification conclusion for those information.
To prepare our audit on financial statement, we are required to read other information, and during the procedure, toconsider that whether other information differs materially from the financial statement or the information obtainedby us during the audit or whether there exits material error.
Based on the works done by us, in case we find any material error in other information, we shall report this fact. Inthis regard, we have nothing to report.
V. Management’s responsibility for financial statementsThe Management is responsible for preparing financial statements according to the Business Accounting Standardswhich make fair reflection, and for designing, implementing and maintaining necessary internal control system tomake sure that there is no material misstatement in the financial statements due to fraud or mistake.
When preparing the financial statements, the management is responsible for assessing the Company’s ability ofcontinuous operation, disclosing the matters relating to continuous operation and applying the assumption ofcontinuous operation, unless the management plans to liquidate the Company, terminate operation or has no otherpracticable choice.
The governance is responsible for monitoring the financial reporting process of the Company.
VI. Auditor’s responsibility for audit of the financial statementsOur objectives are to obtain reasonable assurance about whether these financial statements as a whole are free frommaterial 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 accordancewith auditing standards will always be found in the presence of a material misstatement. Misstatements can arisefrom fraud or error and are considered material if, individually or in the aggregate, they could reasonably beexpected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with auditing standards, we exercise professional judgment and maintain
professional skepticism 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 andappropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional 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 areappropriate in the circumstances.
(3)Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made by management.
(4)Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based onthe audit evidence obtained, whether a material uncertainty exists related to events or conditions that may castsignificant doubt on the Company’s ability to continue as a going concern. If we conclude that a materialuncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in thesefinancial statements or, if such disclosures are inadequate, we have to modify our opinion. Our conclusions arebased on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditionsmay cause the Company to cease to continue as a going concern.
(5)Evaluate the overall presentation, structure and content of the financial statements, and whether the financialstatements represent the underlying transactions and events in a manner that achieves fair presentation.
(6)Obtain adequate and appropriate audit evidence in relation to the financial information of the entities orbusiness transactions of the Company, in order to issue audit opinion on the financial statement. We are responsiblefor guiding, supervising and executing the audit for the Group, and we accept full responsibility for the auditopinion.
We communicate with those charged with governance regarding, among other matters, the planned scope andtiming of the audit and significant audit findings, including any significant deficiencies in internal control that weidentify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethicalrequirements regarding independence, and to communicate with them all relationships and other matters that mayreasonably be thought to bear on our independence, and related safeguards (if applicable).
From the matters communicated with those charged with governance, we determine those matters that were ofmost significance in the audit of the financial statements of the current period and are therefore the key auditmatters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosureabout 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 publicinterest benefits of such communication.
LIXINZHONGLIAN CPAS(SPECIAL GENERAL PARTNERSHIP) Chinese CPA (Engagementpartner):
Chinese CPA (Engagementpartner):
Tianjin China 18 March 2020
Consolidated Balance Sheet
2019-12-31Prepared by Shenzhen Nanshan Power Co., Ltd.
In RMB/CNY
Item Note V Ending balance Opening balanceCurrent assets:
—— ——Monetary funds
(1)773,209,854.84
925,829,404.44
Tradable financial assets
Financial assets measured by fairvalue and with variation reckonedinto current gains/losses
Derivative financial liability
Note receivable
Account receivable (2)
178,150,580.32
132,430,024.97
Receivable financing
Account paid in advance (3)
70,005,681.50
53,655,777.12
Other account receivables (4)
32,321,826.94
40,133,297.74
Inventory (5)
124,686,443.61
124,758,334.97
Assets held for sale
Non-current asset due within oneyear
Other current assets (6)
445,236,731.33
390,108,844.11
Total current assets
1,623,611,118.54
1,666,915,683.35
Non-current assets:
—— ——
Debt investment
Financial assets available forsale (7)
60,615,000.00
Other debt investment
Held-to-maturity investment
Long-term account receivable
Long-term equity investment (8)
14,619,203.03
16,049,044.95
Other equity instrumentinvestment (9)
60,615,000.00
Other non-current financialassets
Investment real estate (10)
2,401,327.00
2,606,302.71
Fixed assets (11)
1,381,675,872.68
1,405,649,989.24
Construction in progress (12)
66,474,630.23
82,348,008.39
Productive biological asset
Oil and gas asset
Intangible assets (13)
43,602,166.44
45,987,255.24
Expense on Research andDevelopment
Goodwill
Long-term deferred expenses (14)
1,174,171.16
Deferred income tax asset (15)
2,206,049.69
2,071,324.26
Other non-current asset (16)
22,882,181.78
24,905,681.78
Total non-current asset
1,595,650,602.01
1,640,232,606.57
Total assets
3,219,261,720.55
3,307,148,289.92
Legal Representative: Person in charge of accounting works:
Finance Director; Person in charge of accounting institute:
Consolidated Balance Sheet (Cont.)
2019-12-31Prepared by Shenzhen Nanshan Power Co., Ltd. In RMB/CNY
Liabilities and shareholder’ s equity
Note V Ending balance Opening balanceCurrent liabilities:
Short-term loans
(17)
881,075,378.48
1,000,000,000.00
Trading financial liability
Financial liability measured by fairvalue and with variation reckonedinto current gains/losses
Derivative financial liability
Note payable
Account payable (18)
19,871,102.41
18,065,898.69
Accounts received in advance
Payroll payable
(19)
55,208,432.53
44,912,599.66
Taxes payable
(20)
21,769,273.77
16,000,039.55
Other accounts payable
(21)
43,691,472.06
63,091,881.43
Liability held for sale
Non-current liabilities duewithin 1 year
Other current liabilities
Total current liabilities
1,021,615,659.25
1,142,070,419.33
Non-current liabilities:
Long-term loans
(22)
25,940,000.00
Bonds payable
Including: preferred stock
Perpetual capital securities
Long-term account payable
Accrual liability
(23)
26,646,056.28
26,726,232.38
Deferred income
(24)
108,507,683.52
75,612,259.33
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities
135,153,739.80
128,278,491.71
Total liabilities
1,156,769,399.05
1,270,348,911.04
Owner’s equity (or shareholders’equity):
Paid-in capital (or share capital) (25)
602,762,596.00
602,762,596.00
Other equity instrument
Including: preferred stock
Perpetual capital securities
Capital reserve
(26)
362,770,922.10
362,770,922.10
Less: Inventory shares
Other comprehensive income
(27)
-2,500,000.00
Surplus reserve
(28)
332,908,397.60
332,908,397.60
Retained profit
(29)
706,830,892.54
679,429,935.81
Total owner’s equity attributable to
parent company
2,002,772,808.24
1,977,871,851.51
Minority interests
59,719,513.26
58,927,527.37
Total owner’ s equity (orshareholders’ equity)
2,062,492,321.50
2,036,799,378.88
Total liabilities and owner’ sequity(or shareholders’ equity)
3,219,261,720.55
3,307,148,289.92
Legal Representative: Person in charge of accounting works:
Finance Director; Person in charge of accounting institute:
Balance Sheet2019-12-31Prepared by Shenzhen Nanshan Power Co., Ltd. In RMB/CNY
Item Note XIV Ending balance Opening balanceCurrent assets:
—— ——Monetary funds
632,948,706.11
766,041,463.01Tradable financial assets
Financial assets measured by fairvalue and with variation reckonedinto current gains/losses
Derivative financial liability
Note receivable
Account receivable
(1)
31,824,693.69
50,415,180.20
Receivable financing
Accounts paid in advance
46,152,700.57
33,326,061.81
Other account receivables
(2)
873,861,071.55
1,048,357,217.53Inventories
101,728,367.43
111,279,675.08Assets held for sale
Non-current asset due within oneyear
Other current assets
438,613,774.49
362,678,678.87Total current assets
2,125,129,313.84
2,372,098,276.50Non-current assets:
—— ——
Debt investment
Financial assets available forsale
60,615,000.00
Other debt investment
Held-to-maturity investment
Long-term account receivable
Long-term equity investment
(3)
303,341,165.00
303,341,165.00
Other equity instruments
60,615,000.00
investmentOther non-current financialassets
Investment property
Fixed assets
321,395,526.04
284,572,482.22Construction in progress
1,949,450.23
16,490,240.75Productive biological asset
Oil and gas asset
Intangible assets
404,104.06
1,518,096.75
Expense on Research andDevelopment
Goodwill
Long-term expenses to beapportioned
790,841.39
Deferred income tax asset
Other non-current asset
Total non-current asset
688,496,086.72
666,536,984.72
Total assets
2,813,625,400.56
3,038,635,261.22Legal Representative: Person in charge of accounting works:
Finance Director; Person in charge of accounting institute:
Balance Sheet (Cont.)
2019-12-31Prepared by Shenzhen Nanshan Power Co., Ltd. In RMB/CNY
Liabilities and shareholder’ s equity
Note XIV Ending balance Opening balanceCurrent liabilities:
Short-term loans
580,640,114.59
860,000,000.00
Trading financial liability
Financial liability measured by fairvalue and with variation reckonedinto current gains/losses
Derivative financial liability
Note payable
Account payable
864,016.74
5,349,562.56
Accounts received in advance
Wage payable
33,840,544.53
26,953,632.92
Taxes payable
718,630.17
11,962,377.72
Other accounts payable
203,332,331.14
157,816,358.94
Liability held for sale
Non-current liabilities duewithin 1 year
Other current liabilities
Total current liabilities
819,395,637.17
1,062,081,932.14
Non-current liabilities:
Long-term loans
Bonds payable
Including: preferred stock
Perpetual capital securities
Long-term account payable
Accrual liability
Deferred income
58,261,356.20
41,337,945.14
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities
58,261,356.20
41,337,945.14
Total liabilities
877,656,993.37
1,103,419,877.28
Owner’s equity (or shareholders’equity):
Paid-in capital (or share capital)
602,762,596.00
602,762,596.00
Other equity instrument
Including: preferred stock
Perpetual capital securities
Capital public reserve
289,963,039.70
289,963,039.70
Less: Inventory shares
Other comprehensive income
Surplus public reserve
332,908,397.60
332,908,397.60
Retained profit
710,334,373.89
709,581,350.64
Total owner’s equity attributable to
parent company
1,935,968,407.19
1,935,215,383.94
Minority interests
Total owner’ s equity (orshareholders’ equity)
1,935,968,407.19
1,935,215,383.94
Total liabilities and owner’ sequity(or shareholders’ equity)
2,813,625,400.56
3,038,635,261.22
Legal Representative: Person in charge of accounting works:
Finance Director; Person in charge of accounting institute:
Consolidated Profit Statement
2019Prepared by Shenzhen Nanshan Power Co., Ltd. In RMB/CNY
Item Note V Current Period Last PeriodI.Operating income
(30)
1,222,577,954.53
1,884,937,109.00
Less: operating cost
(30)
1,061,916,713.85
1,752,153,327.20
Tax and surcharge
(31)
7,640,784.83
11,443,320.37
Sales expense
(32)
5,599,305.43
3,715,812.95
Administration expense
(33)
109,541,900.18
93,529,697.87
R&D expenses
-
Financial expense
(34)
22,310,708.04
39,606,243.43
Including: interest expenses
(34)
49,212,452.58
48,580,643.69
Interest income
(34)
26,884,777.55
9,503,215.24
Add: other income
(35)
10,137,838.38
8,428,575.96
Investment income (Loss is listedwith “-”) (36)
-1,429,841.92
-2,205,628.45
Including: Investment income on
(36)
affiliated company and joint venture
-1,429,841.92
-2,205,628.45
The termination ofincome recognition for financialassets measured by amortized cost
-
Net exposure hedgingincome
-
Income from change offair value (Loss is listed with “-”)
-
-
Credit impairment loss(Loss is listed with “-”)(37)
-556,572.76
Assets impairment loss(Loss is listed with “-”)(38)
-
-385,343.65
Income from disposal ofassets (Loss is listed with “-”) (39)
-279,099.94
-
II. Operating profit (Loss islisted with “-”)
23,440,865.96
-9,673,688.96
Add: Non-operating revenue
(40)
5,601,216.93
39,264,446.03
Less: Non-operatingexpenditure (41)
270,348.79
1,141,532.50
III. Total Profit (Loss is listedwith “-”)
28,771,734.10
28,449,224.57
Less: Income tax expenses
(42)
3,078,791.48
15,996,399.82
IV. Net profit (Net loss is listedwith “-”)
25,692,942.62
12,452,824.75
(i) Classify by businesscontinuity
1.continuous operating net
profit
25,692,942.62
12,452,824.75
2.termination of net profit
(ii) Classify by ownership
1.Minority shareholders’ gains and
losses (net loss is listed with “-”)
791,985.89
-6,800,941.37
2.Net profit attributable to
shareholders of parent company (netloss is listed with “-”)
24,900,956.73
19,253,766.12
V. Net amount of othercomprehensive income after-tax
Net after-tax of othercomprehensive income attributableto owners of parent company
(I) Other comprehensiveincome items which will not bereclassified subsequently to profit ofloss
1.Changes of the
defined benefit plans thatre-measured
2.Other comprehensive
income under equity method thatcannot be transfer to gain/loss
3.Change of fair value
of investment in other equity
instrument
4.Fair value change of
enterprise's credit risk
(ii) Other comprehensiveincome items which will bereclassified subsequently to profit orloss
1.Other comprehensive
income under equity method thatcan transfer to gain/loss
2.Change of fair value
of other debt investment
3.gain/loss of fair value
changes for available-for-salefinancial assets
4.Amount of financial
assets re-classify to othercomprehensive income
5.Gain/loss ofheld-to-maturity investments thatre-classify to available-for-salefinancial asset
6.Credit impairment
provision for other debt investment
7.Cash flow hedging
reserve
8.Translationdifferences arising on translation offoreign currency financialstatements
9.Other
Net after-tax of othercomprehensive income attributableto minority shareholders
VI. Total consolidated income
25,692,942.62
12,452,824.75
Total consolidated incomeattributable to owners of parentcompany
24,900,956.73
19,253,766.12
Total consolidated income
791,985.89
-6,800,941.37
attributable to minority shareholders
七、每股收益：
（一）基本每股收益
0.04
0.03
（二）稀释每股收益
0.04
0.03
Legal Representative: Person in charge of accounting works:
Finance Director; Person in charge of accounting institute:
Profit Statement
2019Prepared by Shenzhen Nanshan Power Co., Ltd. In RMB/CNY
Item Note XIV Current Period Last PeriodI.Operating income(4)
406,004,521.28
785,960,951.01
Less: operating cost (4)
388,210,502.44
744,134,218.18
Tax and surcharge
2,361,313.49
2,336,818.62
Sales expense
-
-
Management expense
54,248,280.07
46,200,286.78
R&D expenses
-
Financial expense
-30,081,146.05
-18,931,826.38
Including: interest expenses
39,534,771.43
36,464,884.41
Interest income
69,680,898.66
56,241,370.17
Add: other income
7,437,748.94
2,687,817.81
Investment income (Loss is listedwith “-”)
-
-
Including: Investment income on
affiliated company and joint venture
-
-
The termination ofincome recognition for financialassets measured by amortized cost
-
Net exposure hedgingincome
-
Income from change offair value (Loss is listed with “-”)
-
-
Loss of credit impairment(Loss is listed with “-”)
-
Losses of devaluation ofasset (Loss is listed with “-”)
-
-388,641,684.76
Income from assetsdisposal (Loss is listed with “-”)
-231,973.37
-
II. Operating profit (Loss islisted with “-”)
-1,528,653.10
-373,732,413.14
Add: Non-operating income
46,869.52
23,917,666.03
Less: Non-operating expense
12,018.03
1,001,588.80
III. Total Profit (Loss is listedwith “-”)
-1,493,801.61
-350,816,335.91
Less: Income tax
-2,246,824.86
9,721,941.34
IV. Net profit (Net loss is listedwith “-”)
753,023.25
-360,538,277.25
(i) Classify by businesscontinuity
1.continuous operating net
profit
753,023.25
-360,538,277.25
2.termination of net profit
(ii) Classify by ownership
1.Minority shareholders’ gains and
losses (net loss is listed with “-”)
2.Net profit attributable to
shareholders of parent company (netloss is listed with “-”)
753,023.25
-360,538,277.25
V. Net amount of othercomprehensive income after-tax
Net after-tax of othercomprehensive income attributableto owners of parent company
(I) Other comprehensiveincome items which will not bereclassified subsequently to profit ofloss
1.Changes of the
defined benefit plans thatre-measured
2.Other comprehensive
income under equity method thatcannot be transfer to gain/loss
3.Change of fair value
of investment in other equityinstrument
4.Fair value change of
enterprise's credit risk
(ii) Other comprehensiveincome items which will bereclassified subsequently to profit orloss
1.Other comprehensive
income under equity method thatcan transfer to gain/loss
2.Change of fair value
of other debt investment
3.gain/loss of fair value
changes for available-for-salefinancial assets
4.Amount of financial
assets re-classify to othercomprehensive income
5.Gain/loss ofheld-to-maturity investments thatre-classify to available-for-salefinancial asset
6.Credit impairment
provision for other debt investment
7.Cash flow hedging
reserve
8.Translationdifferences arising on translation offoreign currency financialstatements
9.Other
Net after-tax of othercomprehensive income attributableto minority shareholders
VI. Total consolidated income
753,023.25
-360,538,277.25
Total consolidated incomeattributable to owners of parentcompany
753,023.25
-360,538,277.25
Total consolidated incomeattributable to minority shareholders
VII. Earnings per share
(i) Basic earnings per share
(ii) Diluted earnings per share
Legal Representative: Person in charge of accounting works:
Finance Director; Person in charge of accounting institute:
Consolidated Cash Flow Statement
2019Prepared by Shenzhen Nanshan Power Co., Ltd. In RMB/CNY
Item Note V Current Period Last PeriodI. Cash flows arising fromoperating activities:
Cash received from sellingcommodities and providing laborservices
1,331,274,801.35
2,165,865,438.32
Write-back of tax received
3,984,902.00
5,096,924.80
Cash received with otheroperating activities concerned (43)
78,737,812.66
57,543,740.20
Subtotal of cash inflowarising from operating activities
1,413,997,516.01
2,228,506,103.32
Cash paid for purchasingcommodities and receiving laborservice
968,845,362.61
1,699,322,019.51
Cash paid to/for staff andworkers
144,365,094.41
136,763,050.21
Taxes paid
40,161,219.78
89,933,046.65
Other cash paid in relation tooperation activities(43)
57,681,930.60
65,924,826.57
Subtotal of cash outflowarising from operating activities
1,211,053,607.40
1,991,942,942.94
Net cash flows arising from
operating activities
202,943,908.61
236,563,160.38
II. Cash flows arising frominvesting activities:
Cash received from recoveringinvestment
32,000,000.00
Cash received from investmentincome
6,273.97
Net cash received fromdisposal of fixed, intangible andother long-term assets
1,990,145.00
284,400.00
Net cash received fromdisposal of subsidiaries and other
unitsCash received from other
investment activities(43)
1,489,600.00
Subtotal of cash inflow frominvesting activities
35,486,018.97
284,400.00
Cash paid for purchasing fixed,intangible and other long-termassets
75,242,132.78
152,775,247.81
Cash paid for investment
118,000,000.00
Net cash received fromsubsidiaries and other units
Cash paid related with other
investment activities (43)
Subtotal of cash outflow
from investing activities
193,242,132.78
152,775,247.81
Net cash flows arising from
investing activities
-157,756,113.81
-152,490,847.81
III. Cash flows arising fromfinancing activities
Cash received from absorbinginvestment
Including: Cash received fromabsorbing minority shareholders’investment by subsidiaries
Cash received from loans
1,460,000,000.00
1,530,000,000.00
Cash received from issuing
bonds
Other cash received in relationto financing activities(43)
5,170,000.00
21,000,000.00
Subtotal of cash inflow from
financing activities
1,465,170,000.00
1,551,000,000.00
Cash paid for settling debts
1,605,940,000.00
1,078,250,000.00
Cash paid for dividend andprofit distributing or interest paying
47,992,661.32
48,623,516.39
Including: Dividend and profitof minority shareholder paid bysubsidiaries
Cash paid related with
(43)
5,170,000.00
financing activities
Subtotal of cash outflowfrom financing activities
1,653,932,661.32
1,132,043,516.39
Net cash flows arising from
financing activities
-188,762,661.32
418,956,483.61
IV. Influence on cash due tofluctuation in exchange rate
108,255.78
314,438.45
V. Net increase of cash and cashequivalents
-143,466,610.74
503,343,234.63
Add: Balance of cash and cashequivalents at the period -begin
914,956,611.70
411,613,377.07
VI. Balance of cash and cashequivalents at the period -end
771,490,000.96
914,956,611.70
Legal Representative: Person in charge of accounting works:
Finance Director; Person in charge of accounting institute:
Cash Flow Statement
2019Prepared by Shenzhen Nanshan Power Co., Ltd. In RMB/CNY
Item Note Current Period Last PeriodI. Cash flows arising fromoperating activities:
Cash received from sellingcommodities and providing laborservices
563,020,587.66
937,195,103.67
Write-back of tax received
Other cash receivedconcerning operating activities
72,985,064.74
36,494,830.38
Subtotal of cash inflowarising from operating activities
636,005,652.40
973,689,934.05
Cash paid for purchasingcommodities and receiving laborservice
395,885,100.64
831,681,363.28
Cash paid to/for staff andworkers
90,154,340.11
81,997,181.05
Taxes paid
11,935,461.99
5,122,624.45
Other cash paid concerningoperating activities
49,268,827.60
31,038,781.40
Subtotal of cash outflowarising from operating activities
547,243,730.34
949,839,950.18
Net cash flows arising from
operating activities
88,761,922.06
23,849,983.87
II. Cash flows arising frominvesting activities:
Cash received from recoveringinvestment
32,000,000.00
Cash received from investmentincome
6,273.97
Net cash received fromdisposal of fixed, intangible andother long-term assets
1,795,100.00
269,000.00
Net cash received from
disposal of subsidiaries and otherunitsOther cash received concerninginvesting activities
488,010,509.85
578,720,050.85
Subtotal of cash inflow from
investing activities
521,811,883.82
578,989,050.85
Cash paid for purchasing fixed,intangible and other long-termassets
51,869,922.10
111,411,381.86
Cash paid for investment
118,000,000.00
Net cash received fromsubsidiaries and other units
Other cash paid concerninginvesting activities
275,000,000.00
660,000,000.00
Subtotal of cash outflow
from investing activities
444,869,922.10
771,411,381.86
Net cash flows arising from
investing activities
76,941,961.72
-192,422,331.01
III. Cash flows arising fromfinancing activities
Cash received from absorbinginvestment
Including: Cash received fromabsorbing minority shareholders’investment by subsidiaries
Cash received from loans
1,160,000,000.00
1,220,000,000.00
Cash received from issuing
bonds
Other cash received concerningfinancing activities
25,000,000.00
11,660,000.00
Subtotal of cash inflow from
financing activities
1,185,000,000.00
1,231,660,000.00
Cash paid for settling debts
1,440,000,000.00
410,000,000.00
Cash paid for dividend andprofit distributing or interest paying
36,757,499.51
32,493,128.98
Including: Dividend and profitof minority shareholder paid bysubsidiaries
Other cash paid concerningfinancing activities
7,039,888.75
2,778,562.50
Subtotal of cash outflow
from financing activities
1,483,797,388.26
445,271,691.48
Net cash flows arising fromfinancing activities
-298,797,388.26
786,388,308.52
IV. Influence on cash due tofluctuation in exchange rate
747.58
1,950.58
V. Net increase of cash and cashequivalents
-133,092,756.90
617,817,911.96
Add: Balance of cash and cashequivalents at the period -begin
766,041,463.01
148,223,551.05
VI. Balance of cash and cashequivalents at the period -end
632,948,706.11
766,041,463.01
Legal Representative: Person in charge of accounting works:
Finance Director; Person in charge of accounting institute:
Statement of Changes in Owners’ Equity (Consolidated)
2019Prepared by Shenzhen Nanshan Power Co.,Ltd. In RMB/CNY
Item
Current yearOwners’ equity attributable to the parent Company
Minority’s
equity
Totalowners’equity (orshareholders’)Paid-incapital (orsharecapital)
Other equity instruments
Capitalreserve
Less:
Inventory shares
Othercomprehensive income
Specia
lreserv
e
Surplusreserves
Retained
profit
Othe
rPreferred stock
Perpetual debt
OtherI. Balance at theend of the lastyear
602,762,596.0
362,770,922.1
332,908,397.6
679,429,935.8
58,927,527.3
2,036,799,378.
Add: Changes ofaccounting policy
-2,500,000.00
2,500,000.00
Error correction ofthe last period
Enterprise
combine underthe same control
Other
II. Balance at thebeginning of thisyear
602,762,596.0
362,770,922.1
-2,500,000.00
332,908,397.6
681,929,935.8
58,927,527.3
2,036,799,378.
III. Increase/Decrease in thisyear (Decrease islisted with “-”)
24,900,956.73
791,985.89
25,692,942.62
(i) Totalcomprehensiveincome
24,900,956.73
791,985.89
25,692,942.62
(ii) Owners’(orshareholders’)devoted anddecreased capital
1.Common shares
invested byowners(orshareholders)
2. Capital invested
by holders of otherequity instruments
3. Amount
reckoned into
owners(orshareholders)equity withshare-basedpayment
4. Other
-
(III) Profitdistribution
1. Withdrawal of
surplus reserves
2. Distribution for
owners (orshareholders)
3. Other
(IV) Carryingforward internalowners’ equity
1. Capital reserves
conversed tocapital (sharecapital)
2. Surplus reserves
conversed tocapital (share
capital)
3. Remedying loss
with surplusreserve
4. Change amount
of defined benefitplans that carryforward retainedearnings
5．Carry-overretained earningsfrom othercomprehensiveincome
6. Others
IV. Balance at theend of the year
602,762,596.0
362,770,922.1
-2,500,000.00
332,908,397.6
706,830,892.5
59,719,513.2
2,062,492,321.
Legal Representative: Person in charge of accounting works: Finance Director; Person in charge of accounting institute:
Item
Last yearOwners’ equity attributable to the parent Company
Minority’sequity
Total owners’equity (orshareholders’)Paid-incapital (orsharecapital)
Other equity instruments
Capitalreserve
Less:
Inventory shares
Othercomprehensiv
e income
Surplusreserve
Provisio
n ofgeneral
risk
Retained
profitPreferred stock
Perpetua
l debt
Othe
rI. Balance atthe end ofthe last year
602,762,596.0
362,770,922.1
332,908,397.6
660,176,169.6
65,728,468.74
2,024,346,554.1
Add:
Changes ofaccountingpolicy
Errorcorrection ofthe last period
Enterprisecombineunder thesame control
Other
II. Balance atthebeginning ofthis year
602,762,596.0
362,770,922.1
332,908,397.6
660,176,169.6
65,728,468.74
2,024,346,554.1
III. Increase/Decrease inthis year(Decrease islisted with“-”)
19,253,766.12
-6,800,941.37
12,452,824.75
(i) Totalcomprehensive income
19,253,766.12
-6,800,941.37
12,452,824.75
(ii)Owners’(orshareholders’)devoted anddecreasedcapital
1.Common
sharesinvested byowners(orshareholders)
2. Capital
invested byholders ofother equityinstruments
3. Amount
reckoned intoowners(orshareholders)equity withshare-basedpayment
4. Other
(III) Profitdistribution
1. Withdrawal
of surplusreserves
2. Withdrawal
of general riskprovisions
3.Distributionfor owners (orshareholders)
4. Other
(IV) Carryingforwardinternalowners’equity
1. Capital
reservesconversed tocapital (sharecapital)
2. Surplus
reservesconversed tocapital (sharecapital)
3. Remedying
loss withsurplusreserve
4. Change
amount ofdefinedbenefit plansthat carry
forwardretainedearnings
5. Other
IV. Balanceat the end ofthe year
602,762,596.0
362,770,922.1
332,908,397.6
679,429,935.8
58,927,527.37
2,036,799,378.8
Legal Representative: Person in charge of accounting works: Finance Director; Person in charge of accounting institute:
Statement of Changes in Owners’ Equity
2019Prepared by Shenzhen Nanshan Power Co., Ltd. In RMB/CNY
Item
Current yearOwners’ equity attributable to the parent Company
Minority
’sequity
Total owners’equity (orshareholders’)Paid-incapital (orsharecapital)
Other equityinstruments
Capital reserve
Less:
Inventoryshares
Othercomprehensiveincome
Surplusreserve
Retained profit
Other
Preferredstock
Perpetualdebt
Other
I. Balance at the end of the last year
602,762,5
96.00
289,963,039.70
332,908,3
97.60
709,581,350.64
1,935,215,383.
Add: Changes of accounting policy
Error correction of thelast period
Enterprise combine under the
same control
Other
II. Balance at the beginning of thisyear
602,762,5
96.00
289,963,039.70
332,908,3
97.60
709,581,350.64
1,935,215,383.
III. Increase/ Decrease in this year(Decrease is listed with “-”)
753,023.25
753,023.25(i) Total comprehensive income
753,023.25
753,023.25
(ii) Owners’(or shareholders’)devoted and decreased capital
1.Common shares invested by
owners(or shareholders)
2. Capital invested by holders of other
equity instruments
3. Amount reckoned into owners(or
shareholders) equity with share-basedpayment
4. Other
-
(III) Profit distribution
1. Withdrawal of surplus reserves
2. Distribution for owners (or
shareholders)
3. Other
(IV) Carrying forward internalowners’ equity
1. Capital reserves conversed to
capital (share capital)
2. Surplus reserves conversed to
capital (share capital)
3. Remedying loss with surplus
reserve
4. Change amount of defined benefit
plans that carry forward retainedearnings
5．Carry-over retained earnings fromother comprehensive income
6. Others
IV. Balance at the end of the year
602,762,5
96.00
289,963,039.70
332,908,3
97.60
710,334,373.89
1,935,968,407.
Legal Representative: Person in charge of accounting works: Finance Director; Person in charge of accounting institute:
Statement of Changes in Owners’ Equity (Cont.1)
2019Prepared by Shenzhen Nanshan Power Co., Ltd.
In RMB/CNY
Item
Last yearOwners’ equity attributable to the parent Company
Minority’s equity
Totalowners’equity (orshareholder
s’)Paid-incapital (orsharecapital)
Other equity instruments
Capitalreserve
Less:
Invento
ryshares
Othercomprehensive income
Surplusreserve
Provision ofgeneralrisk
Retainedprofit
Other
Preferred stock
Perpetual debt
Other
I. Balance at the endof the last year
602,762,596.
289,963,039.
332,908,397.
1,070,119,627.
2,295,753,661.
Add: Changes ofaccounting policy
Errorcorrection of the lastperiod
Enterprisecombine under thesame control
Other
II. Balance at the
602,762,596.
289,963,039.
332,908,397.
1,070,119,627.
2,295,753,661.
beginning of thisyear
00 70 60 89 19III. Increase/Decrease in this year(Decrease is listedwith “-”)
-360,538,277.
-360,538,277.
(i) Totalcomprehensiveincome
-360,538,277.
-360,538,277.
(ii) Owners’(orshareholders’)devoted anddecreased capital
1.Common shares
invested byowners(orshareholders)
2. Capital invested by
holders of otherequity instruments
3. Amount reckoned
into owners(orshareholders) equitywith share-based
payment
4. Other
(III) Profitdistribution
1. Withdrawal of
surplus reserves
2. Withdrawal of
general riskprovisions
3. Distribution for
owners (orshareholders)
4 Other
(IV) Carryingforward internalowners’ equity
1. Capital reserves
conversed to capital(share capital)
2. Surplus reserves
conversed to capital(share capital)
3. Remedying loss
with surplus reserve
4. Change amount of
defined benefit plansthat carry forwardretained earnings
5．Carry-overretained earningsfrom othercomprehensiveincome
6. Other
IV. Balance at theend of the reportperiod
602,762,596.
289,963,039.
332,908,397.
709,581,350.6
1,935,215,383.
Legal Representative: Person in charge of accounting works: Finance Director; Person in charge of accounting institute:
Shenzhen Nanshan Power Co., Ltd.
Notes to financial statement 2019
(Unless otherwise stated, the amount of unit is RMB/CNY)
I. Company Profile
(1) Profile
Shenzhen Nanshan Power Co., Ltd (hereinafter, the “Company”) was reorganized to be a joint-stock enterprisefrom a foreign investment enterprise on 25 November 1993, upon the approval of General Office of ShenzhenMunicipal Government with Document Shen Fu Ban Fu [1993] No.897.
After approved by Document Shen Zhu Ban Fu [1993] No.179 issued by Shenzhen Securities Regulatory Office,on 3 January 1994, the Company offered 40,000,000 RMB common shares and 37,000,000 domestically listedforeign shares in and out of China. And the RMB common shares (A-stock) and domestically listed foreign listedshares (B-stock) were listed in Shenzhen Stock Exchange successively on July 1, 1994 and Nov. 28, 1994.
Headquarter of the Company located on 16/F, 17/F, Han Tang Building, OCT, Nanshan District, Shenzhen City,Guangdong Province, P.R.C.
The financial statement has approved for report by the Board on 18 March 2020.
(2) Scope of consolidate financial statement
Subsidiary included in the consolidate financial statement of the Company up to 31 December2019 are as:
SubsidiaryShen Nan Dian (Zhongshan) Electric Power Co., Ltd.（“Zhongshan Electric Power ”）Shen Nan Dian (Dongguan) Weimei Electric Power Co., Ltd（“ Weimei Electric Power ”）Shenzhen Shennandian Turbine Engineering Technology Co., Ltd.（“Engineering Company”）Shenzhen Shen Nan Dian Environment Protection Co., Ltd.（“Environment Protection Company”）Shenzhen Server Petrochemical Supplying Co., Ltd（“Shenzhen Server ”）Shenzhen New Power Industrial Co., Ltd.（“New Power Company”）Shen Nan Energy (Singapore) Co., Ltd.（“Singapore Company”）Hong Kong Syndisome Co., Ltd.（“Syndisome ”）Zhongshan Shen Nan Dian Storage Co., Ltd.（“Shen Storage ”）
Scope of the consolidate financial statement and its changes found more in the VI. Change ofConsolidate Scope and VII. Equity in other entity carry in the Note
II. Preparation basis of Financial statement
(1) Preparation basis
The Company’s financial statements have been prepared based on the going concern and the actual transactionsand events. In accordance with the Accounting Standards for Business Enterprises- Basic Norms and everyspecific accounting rules, the application guidelines of the Accounting Standards for Business Enterprises,interpretations and other related rules of the Accounting Standards for Business Enterprises (hereinafter referred toas “ASBEs”), and the disclosure requirements of the “Regulation on the Preparation of Information Disclosures ofCompanies Issuing Public Shares, No. 15- General Requirements for Financial Reports” of China SecuritiesRegulatory Commission.
(2)Going concern
The Company is capable of going concern for 12 months from the end of the reporting period, andthere are no major issues affecting the ability to go concern.
III. Major Accounting Policies and Estimation
The Company together with its subsidiaries is mainly engaged in businesses as production of power and heat,power plant construction, fuel trading, engineering consulting and and sludge drying.According to the actualproduction and operation characteristics, the Company and its subsidiaries establish certain specific accountingpolicies and accounting estimates in respect of their transactions and matters such as sales revenue recognitionpursuant to relevant business accounting principles. Details are set out in (15) Fixed assets and the (23) Revenueunder Note III. For explanation on material accounting judgment and estimate issued by the management, pleaserefer to (28) Major accounting judgment and estimation under Note III.
(1) Statement on observation of Accounting Standard for Business EnterprisesThe Financial Statements are up to requirements of Accounting Standards for Business Enterprises,and reflect the financial status, operation outcomes and cash flows of the Company in reportingperiod in truthfulness and completeness.
(2) Accounting period
Accounting period of the Company divide into annual and medium-term, and the medium-term is the reportingperiod that shorter than one completed accounting year. The Company’s accounting year is Gregorian calendaryear, namely from 1
st January to 31
stDecember.
(3) Operating cycle
The operating cycle of the Company is 12 months.
(4) Book-keeping standard currency
Book-keeping standard of the Company is RMB(CNY)
(5) Accounting treatment on enterprise combine under the same control and under the
different control
Enterprise combination under the same control: The assets and liabilities obtained by the Company in enterprisecombination are measured at the book value of the consolidated financial statements of the ultimate controllingparty in accordance with the assets and liabilities of the combined party on the date of combination. The differencebetween the carrying amount of the net assets obtained and the carrying amount of the consideration paid for thecombination (or the aggregate nominal value of shares issued as consideration) is charged to the share capitalpremium in capital reserve. If the share capital premium in capital reserve is not sufficient to absorb the difference,any excess shall be adjusted against retained earnings.
Enterprise combinations not under the same control: The Company's assets paid and liabilities incurred or assumedon the date of purchase as a consideration of enterprise combination are measured at fair value, and the differencebetween the fair value and its book value is included in the current profit and loss. Where the cost of a businesscombination exceeds the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the differenceis recognized as goodwill; where the cost of a business combination less than the acquirer’s interest in the fairvalue of the acquiree’s identifiable net assets, reckoned into current gains/losses after double-check.The intermediary fees, such as auditing, legal services, consultation and other directly relevantincurred in the merger of enterprises shall be reckon into the current gains/losses when incurred;the transaction costs of issuing equity securities for the purpose of enterprise combination shouldbe charge-off.
(6) Preparation methods for consolidated statement
1.Consolidate scope
Scope of the consolidate financial statement is determined on a control basis, all subsidiaries(including the part of the enterprise under control of the investee that can be divided) are includedin the consolidated financial statement.
2. Consolidate procedures
Based on the financial statements of itself and its subsidiaries, the Company compiles theconsolidated financial statements in line with other relevant information. The Company compilesconsolidated financial statements, considers the entire enterprise group as an accounting entity,and reflects the overall financial position, operating results and cash flow of the enterprise groupin accordance with the relevant accounting standards' recognition, measurement and presentationrequirements and in accordance with unified accounting policies.
The accounting policies and accounting periods adopted by all subsidiaries included in theconsolidation scope of the consolidated financial statements are consistent with the Company. Ifthe accounting policies and accounting periods adopted by the subsidiaries are inconsistent withthe Company, when preparing the consolidated financial statements, make necessary adjustments
according to the accounting policies and accounting periods of the Company. For a subsidiaryacquired through a business combination not under the same control, its financial statements areadjusted based on the fair value of the identifiable net assets at the acquisition date. For asubsidiary acquired through a business combination under the same control, its financialstatements are adjusted based on the book value of its assets and liabilities (including the goodwillformed by the ultimate controlling party's acquisition of the subsidiary) in the ultimate controllingparty's financial statements.
The subsidiary's owner's equity, current net profit or loss and the share of current comprehensiveincome belonging to minority shareholders are separately listed under the owner's equity item inthe consolidated balance sheet, under the net profit item in the consolidated income statement andunder the total comprehensive income item. If the current loss shared by the minority shareholdersof a subsidiary exceeds the minority shareholder' share in the owner's equity of the subsidiary atthe beginning of the period, the balance shall offset against the minority shareholders' equity.
(1) Increase subsidiaries or businesses
During the reporting period, if a subsidiary or business is added due to a business combinationunder the same control, adjust the opening balance of the consolidated balance sheet; incorporatethe income, expenses, and profits of the subsidiary or business combination from the beginning ofthe current period to the end of the reporting period into the consolidated income statement;incorporate the cash flows of the subsidiary or business combination from the beginning of thecurrent period to the end of the reporting period into the consolidated cash flow statement, andadjust the relevant items of the comparative statement as if the consolidated reporting entity hadbeen existing since the time when the ultimate controlling party began controlling.Where it is possible to exercise control over an investee under the same control due to additionalinvestment, all parties participating in the combination are deemed to have adjusted in theircurrent state when the ultimate controlling party commenced control. The equity investment heldbefore the control of the combined party is obtained, the relevant profit or loss and othercomprehensive income that have been confirmed between the date of acquisition of the originalequity and the date on which the combining party and the combined party are under the samecontrol until the combining date, as well as other changes in net assets respectively write down theretained earnings at the beginning of period or the current profits and losses in the comparativestatements.
During the reporting period, if a subsidiary or business is added due to a business combination notunder the same control, the opening balance of the consolidated balance sheet period will not beadjusted; the income, expenses, and profits of the subsidiary or business from the acquisition dateto the end of the reporting period will be included in the consolidated income statement; the cash
flows of the subsidiary or business from the acquisition date to the end of the reporting period areincluded in the consolidated statement of cash flow.
For reasons such as additional investments that can control an investee not under the same control, the Companyremeasures the equity of the acquiree held before the purchase date according to the fair value of the equity on thepurchase date, and the balance between the fair value and its book value is included in the current investmentincome. If the equity of the acquiree held before the purchase date involves other comprehensive income under theequity method and other changes in owner's equity other than net profit or loss, other comprehensive income andprofit distribution, other comprehensive income and other changes in owner's equity related to it shall be convertedinto the investment income of the current period on the date of purchase, except for other comprehensive incomearising from the re-measurement of the net liabilities or changes in net assets of the defined benefit plan of theinvestee.
(2) Disposal of subsidiaries or businesses
①General treatment method
During the reporting period, when the Company disposes of a subsidiary or business, the income, expenses andprofits of the subsidiary or business from the beginning of the period to the disposal date are included in theconsolidated income statement, while the cash flow of the subsidiary or the business from the beginning of theperiod to the disposal date is included in the consolidated statement of cash flow.
For control rights loss in original subsidiary for partial equity investment disposal or other reasons, the remainedequity should re-measured based on the fair value at date of control losses. The difference between the net assets oforiginal subsidiary share by proportion held that sustainable calculated since purchased date (or combination date)and sum of consideration obtained by equity disposal and fair value of remain equity, reckoned into the currentinvestment income of control rights loss. Other comprehensive income related to the original subsidiary's equityinvestment or other changes in owner's equity other than net profit and loss, other comprehensive income andprofit distribution will be converted to current investment income when the control is lost, except for othercomprehensive income arising from the remeasurement of the net liabilities or changes in net assets of the definedbenefit plan of the investee.
If other investors’ capital increases in the subsidiary results in a decline in the Company'sshareholding ratio and thus loss of control power, accounting shall be conducted in accordancewith the above principles.
② Dispose subsidiary step-by-step
When the Company disposes of equity investment in a subsidiary by a stage-up approach withseveral transactions until the control over the subsidiary is lost, these several transactions relatedto the disposal of equity investment in a subsidiary are accounted for as transactions in a basketwhen the terms, conditions and economic impacts of these several transactions meet the followingone or more conditions:
i. these transactions are entered into at the same time or after considering their impacts on eachother;ii. these transactions as a whole can reach complete business results;iii the occurrence of a transaction depends on at least the occurrence of an other transaction;iv.an individual transaction is not deemed as economic, but is deemed as economic whenconsidered with other transactions.
When several transactions related to the disposal of equity investment in a subsidiary until the control over thesubsidiary is lost fall within transactions in a basket, each of which is accounted for as disposal of a subsidiarywith a transaction until the control over a subsidiary is lost; however, the different between the amount of disposalprior to the loss of control and the net assets of a subsidiary attributable to the disposal investment shall berecognized as other comprehensive income in consolidated financial statements and transferred to profit or loss forthe period at the time when the control is lost.
If the transactions that dispose of the equity investment in the subsidiary until the loss of controldo not belong to the package transaction, before the loss of control, the relevant policies for partialdisposal of the equity investment in the subsidiary shall be accounted for without losing control.When the control right is lost, the accounting treatment shall be carried out according to thegeneral treatment method for disposing of the subsidiary.
(3) Purchase of minority shares in subsidiaries
The difference between the Company's newly acquired long-term equity investment due to thepurchase of minority shares and the net assets share calculated continuously by the subsidiaryfrom the date of purchase (or merger date) in accordance with the calculation of the newlyincreased shareholding ratio, adjust the equity premium in the capital reserve in the consolidatedbalance sheet, if the equity premium in the capital reserve is insufficient to offset, adjust theretained earnings.
(4) Partial disposal of equity investment in subsidiaries without losing controlThe difference between the disposal cost obtained as a result of partial disposal of long-term equity investment in asubsidiary without losing control and the net assets share calculated continuously by the subsidiary from the dateof purchase or merger corresponding to the disposal of the long-term equity investment, adjust the equity premiumin the capital reserve in the consolidated balance sheet, if the equity premium in the capital reserve is insufficientto offset, adjust the retained earnings.
(7) Classification of joint arrangement and accounting treatmentJoint arrangement is divided into joint operation and joint venture.As a joint party of the joint arrangement, it is a joint operation when the Company enjoys assetsrelated to the arrangement and bears the liabilities related to the arrangement.The company confirms the following items related to the share of interests in its joint operations, and in
accordance with the provisions of the relevant accounting standards for accounting treatment:
(1) Recognize the assets held solely by the Company, and recognize assets held jointly by the Company inappropriation to the share of the Company;
(2) Recognize the obligations assumed solely by the Company, and recognize obligations assumed jointly by theCompany in appropriation to the share of the Company;
(3) Recognize revenue from disposal of the share of joint operations of the Company;
(4) Recognize fees solely occurred by Company;
(5) Recognize fees from joint operations in appropriation to the share of the Company.Accounting policy for the joint venture investment found more in (13) Long-term equityinvestment under Note III.
(8) Determination criteria of cash and cash equivalent
While preparing the cash flow statement, the stock cash and savings available for payment at anytime are recognized as cash. The investments meets the follow four conditions at the same time arerecognized as cash equivalent, that is short-term (normally fall due within three months from thedate of acquisition) and highly liquid investments held the Group which are readily convertibleinto known amounts of cash and which are subject to insignificant risk of value change.
(9) Foreign currency business and foreign currency statement translation
1.Foreign currency business
Foreign currency business uses the spot exchange rate on the transaction date as the conversionrate to convert foreign currency amounts into RMB for accounting.
The balance of foreign currency monetary items at the balance sheet date is converted at the spot exchange rate onthe balance sheet date, the resulting exchange difference is included in current profit and loss, except that theexchange difference arising from foreign currency special borrowings related to the acquisition or construction ofassets eligible for capitalization is disposed with the principle of borrowing costs capitalization.
2. Foreign currency statement translation
Assets and liabilities in the balance sheet are converted at the spot exchange rate on the balancesheet date; the owners' equity items are converted at the spot exchange rate at the time ofoccurrence, except for the "undistributed profit" item. The income and expense items in theincome statement are converted at the spot exchange rate on the transaction date.
When disposing of an overseas operation, the translation difference in the foreign currency financial statementsrelated to the overseas operation is transferred from the owner's equity item to the disposal of current profit or loss.
(10) Financial instrument
Financial instrument consist of financial assets, financial liability and equity instrument.
Accounting policy applicable since 1 Jan. 2019
1.Classification of financial instrument
Based on the Company's business model for managing financial assets and the contractual cashflow characteristics of financial assets, financial assets are classified as the financial assetsmeasured at amortized cost, the financial assets (debt instruments) measured at fair value andwhose changes are included in other comprehensive income and the financial assets measured atfair value and whose changes are included in current profit and loss at initial recognition.
Business model to collect the contractual cash flow, and the contractual cash flow is only thepayment of the principal and the interest based on the outstanding principal amount, is classifiedas a financial asset measured at amortized cost; business model to collect the contractual cash flowand sell the financial asset, and the contractual cash flow is only the payment of principal and theinterest based on the outstanding principal amount, is classified as a financial asset measured atfair value and whose changes are included in other comprehensive income (debt instruments);other financial assets other than these are classified as financial assets measured at fair value andwhose changes are included in the current profit and loss.
For a non-tradable equity instrument investment, the Company determines at the time of initialrecognition whether to designate it as a financial asset (equity instrument) measured at fair valueand whose changes are included in other comprehensive income. At the time of initial recognition,in order to eliminate or significantly reduce accounting mismatches, financial assets can bedesignated as financial assets that are measured at fair value and whose changes are included inthe current profit and loss.
At the time of initial recognition, financial liabilities are classified into financial liabilities that are measured at fairvalue and whose changes are included in the current profit and loss and financial liabilities that are measured atamortized cost.
A financial liability that meets one of the following conditions can be designated as a financialliability measured at fair value and whose changes are included in current profit and loss at initialmeasurement:
1) This designation can eliminate or significantly reduce accounting mismatches.
2) In accordance with the corporate risk management or investment strategy stated in formal written documents,make management and performance evaluation to financial liability portfolios or financial assets and financialliability portfolios based on fair value, and report to the key management personnel within the enterprise based onthis.
3) The financial liability includes embedded derivatives that need to be split separately.According to the above conditions, the financial liabilities designated by the Company mainly include: (Specific
description of the designated situation)
2. Recognition basis and measurement method of financial instruments
(1) Financial assets measured at amortized cost
Financial assets measured at amortized cost include bills receivable, accounts receivable, otherreceivables, long-term receivables, debt investment, etc., which are initially measured at fair value,and related transaction costs are included in the initially recognized amount; accounts receivableexcluding significant financing components and accounts receivable with financing componentsnot exceeding one year that the Company decides not to consider are initially measured at thecontract transaction price.The interest calculated by using the effective interest method during the holding period is includedin the current profit and loss.
When taking back or disposing, the difference between the cost obtained and the book value of the financial assetis included in the current profit and loss.
(2) Financial assets (debt instrument) measured at fair value and whose changes are reckoned intoother comprehensive incomeThe financial assets (debt instrument) measured at fair value and whose changes are reckoned intoother comprehensive income consist of receivable financing and other debt investment andinitially measured at fair value, relevant transaction fees are included in initial recognized amount.The financial assets are subsequently measured at fair value, and the fair value changes arereckoned into other comprehensive income except for the interest, impairment loss or gain andexchange gain or loss calculated by actual interest rate method.Upon termination of the recognition, the accumulated gains or losses previously included in othercomprehensive income shall be transferred out and reckoned into current profit and loss.
(3) Financial assets (equity instrument) measured at fair value and whose changes are reckonedinto other comprehensive incomeThe financial assets (equity instrument) measured at fair value and whose changes are reckonedinto other comprehensive income consist of the equity instrument investment etc. and initiallymeasured at fair value, relevant transaction fees are included in initial recognized amount. Thefinancial assets are subsequently measured at fair value, and the fair value changes are reckonedinto other comprehensive income. The dividend obtained should reckoned into currentgains/losses.Upon termination of the recognition, the accumulated gains or losses previously included in othercomprehensive income shall be transferred out and reckoned into retained earnings.
(4) Financial assets measured at fair value and whose changes are reckoned into currentgains/lossesThe financial assets measured at fair value and whose changes are reckoned into currentgains/losses consist of trading financial assets, derivative financial assets and other non-currentfinancial assets etc. and initially measured at fair value, relevant transaction fees are included incurrent gains/losses. The financial assets are subsequently measured at fair value, and the fairvalue changes are reckoned into current gains/losses.Upon termination of the recognition, the difference between its fair value and initial entry amountis recognized as investment income, and adjust the gains/losses from fair value changes at thesame time.
(5) Financial liability measured at fair value and whose changes are reckoned into currentgains/losses
The financial liability measured at fair value and whose changes are reckoned into currentgains/losses consist of trading financial liability and derivative financial liability etc. and initiallymeasured at fair value, relevant transaction fees are included in current gains/losses. The financialliabilities are subsequently measured at fair value, and the fair value changes are reckoned intocurrent gains/losses.Upon termination of the recognition, the difference between its fair value and initial entry amountis recognized as investment income, and adjust the gains/losses from fair value changes at thesame time.
(6) Financial liability measured at amortized cost
The financial liabilities measured at amortized cost consist of short-term loans, note payable,account payable, other account payable, long-term loans, bond payable and long-term accountpayable, and initially measured at fair value, relevant transaction fees are included in initialrecognized amount.
The interests calculated by effective interest rate method during the holding period is reckonedinto current gains/losses.
Upon termination of the recognition, the difference between consideration paid and the book valueof financial liability is reckoned into current gains/losses.
3. Recognition basis and measurement method for transfer of financial assetsWhen the Company transfers financial assets, if almost all risks and rewards of ownership offinancial assets have been transferred to the transferee, derecognize the financial assets; if almostall risks and rewards of ownership of financial assets have been retained, don’t derecognize thefinancial assets.
When determining whether the transfer of financial assets meets the above conditions for thetermination of recognition of financial assets, adopt the principle of substance over form. TheCompany distinguishes the transfer of financial assets into overall transfers and partial transfers offinancial assets. If the overall transfer of financial assets meets the conditions for derecognition,the difference between the following two amounts is included in the current profit and loss:
(1) The book value of the transferred financial assets;
(2) The sum of the consideration received as a result of the transfer and the cumulative amount ofchanges in the fair value that were directly credited to the owner's equity (the transferred financialasset is an available-for-sale financial asset).
If partial transfer of financial assets meets the conditions for derecognition, the entire book valueof the transferred financial assets is apportioned between the derecognized parts andnon-derecognized parts according to their relative fair values, and the difference between thefollowing two amounts is included in the current profit and loss:
(1) The book value of the derecognition part;
(2) The sum of the consideration of the derecognition part and the amount corresponding to the derecognition partof the cumulative total of changes in fair value that were directly credited to the owner's equity (the transferredfinancial asset is an available-for-sale financial asset).If the transfer of financial assets does not meet the conditions for derecognition, the financial assets arecontinuously recognized, and the consideration received is recognized as a financial liability.
4. Termination recognition of financial liability
Where the current obligation of a financial liability have been discharged in whole or in part, therecognition of the financial liability or part thereof shall be terminated; If the Company enteredinto an agreement with its creditors to replace its existing financial liabilities with the newfinancial liability, and the contract terms of the new financial liabilities and the existing financialliabilities are substantially different, the existing financial liabilities shall be terminated forrecognition and the new ones shall be recognized at the same time. As for substantive changesmade to the contract terms (in whole or in part) of the existing financial liabilities, the existingfinancial liabilities (or part of it) will be terminated for recognition, and the financial liabilitiesafter term revision will be recognized as a new financial liability.
When a financial liability is derecognized in whole or in part, the difference between the bookvalue of the financial liability derecognized and the consideration paid (including the non-cashassets transferred out or the new financial liabilities assumed) is included in the current profit andloss.
If the Company repurchases part of the financial liabilities, the entire book value of the financialliabilities will be allocated on the repurchase date according to the relative fair value of the
continuing recognition part and the derecognition part. The difference between the book valueallocated to the derecognition part and the consideration paid (including the transferred non-cashassets or assumed new financial liabilities) is included in the current profit and loss.
5. Methods for determining the fair value of financial assets and financial liabilitiesFor financial instruments that have an active market, their fair values are determined by using quotes in the activemarket. For financial instruments that do not have an active market, valuation techniques are used to determinetheir fair values. In the valuation, the Company adopts valuation techniques that are applicable under the currentcircumstances and have sufficient available data and other information support, chooses the input values consistentwith the characteristics of assets or liabilities considered by market participants in the transactions of related assetsor liabilities, and prioritizes the relevant observable input values. The Company uses unobservable input valuesonly if the relevant observable input values cannot be obtained or are not practicable.
6. Test methods and accounting treatment methods for impairment of financial assets(excluding receivables)The Company considers all reasonable and evidence-based information, includingforward-looking information, and estimates the expected credit losses of financial assets measuredat amortized cost by the single or combined way and financial assets (debt instruments) measuredat fair value and whose changes are included in other comprehensive income. The measurement ofexpected credit losses depends on whether a significant increase in credit risk has occurred sincethe initial recognition of a financial asset.
If the credit risk of the financial instrument has increased significantly since initial recognition, theCompany shall measure its loss provision at an amount equivalent to the expected credit lossthroughout the life of the financial instrument. If the credit risk of the financial instrument has notincreased significantly since initial recognition, the Company shall measure its loss provision at anamount equivalent to the expected credit loss of the financial instrument in the next 12 months.The increased or reversed amount of the loss provision thus formed shall be included in thecurrent profit and loss as impairment losses or gains.
Usually, the Company considers that the credit risk of the financial instrument has increasedsignificantly when it is overdue for more than 30 days, unless there is conclusive evidence that thecredit risk of the financial instrument has not increased significantly after initial recognition.
If the credit risk of a financial instrument at the balance sheet date is low, the Company willconsider that the credit risk of the financial instrument has not increased significantly since initialrecognition.
Accounting policies applicable before January 1, 2019A financial asset or financial liability is recognized when the Company becomes a party to afinancial instrument contract. Financial assets and financial liabilities are measured at fair value atinitial recognition. For financial assets and financial liabilities measured at fair value and whosechanges are included in current profit or loss, the related transaction costs are directly included inprofit or loss; for other types of financial assets and financial liabilities, the related transactioncosts are included in the initial recognition amount.
1. Fair value determination method of financial assets and financial liabilitiesFair value refers to the price that a market participant can receive by selling an asset or needs topay for transferring a liability in an orderly transaction occurring on the measurement date. Wherethere is an active market for financial instruments, the Company uses the quoted price in the activemarket to determine its fair value. Quotes in an active market refer to prices that are be liable toobtain on a regular basis from exchanges, brokers, industry associations, pricing service agencies,etc., and represent the prices of market transactions that actually take place in fair transactions.Where there is no active market for financial instruments, the Company uses valuation techniquesto determine its fair value. Valuation techniques include reference to the prices used in recentmarket transactions among parties familiar with the situation and making voluntary transactions,and reference to the current fair value, discounted cash flow method, and option pricing models ofother financial instruments that are substantially equivalent.
2. Classification, recognition and measurement of financial assetsAccounting recognition and de recognition of financial assets bought and sold in the conventionalmanner are done on the transaction date. At the time of initial recognition, financial assets areclassified into financial assets measured at fair value and whose changes are included in thecurrent profit and loss, held-to-maturity investments, loans and receivables, and available-for-salefinancial assets.
(1) Financial assets measured at fair value and whose changes are included in the current profitand lossInclude trading financial assets and financial assets designated to be measured at fair value andwhose changes are included in the current profit and loss.Trading financial assets refer to the financial assets that meet one of the following conditions: A.The purpose of obtaining the financial assets is mainly to sell them in the near future. B. It is partof an identifiable financial instruments portfolio for centralized management and there is objectiveevidence indicates that the Company has recently managed the portfolio with short-term profitway. C. It is a derivative, however, except for the derivative designated as an effective hedginginstrument, the derivative belonging to a financial guarantee contract, and the derivativeinstrument has no quotes in an active market and whose fair value cannot be reliably measured
and which are linked to investment in equity instrument and must be settled by delivery of theequity instrument.
A financial asset that meets one of the following conditions can be designated as a financial assetmeasured at fair value and whose changes are included in current profit and loss at initialrecognition: A. The designation can eliminate or significantly reduce the inconsistencies ofrelevant gains or losses in recognition or measurement caused by the different measurement basisof the financial asset. B. The official written documents of the Company's risk management orinvestment strategy have clearly stated to carry out management and evaluation on the financialasset portfolio or the portfolio of financial assets and financial liabilities where the financial assetslocate based on the fair value, and report to the key management personnel.
Financial assets measured at fair value and whose changes are included in the current profit andloss are subsequently measured at fair value. Gains or losses arising from changes in fair value anddividends and interest income related to these financial assets are included in the current profit andloss.
(2) Held-to-maturity investments
It refers to the non-derivative financial assets with fixed maturity dates and fixed or ascertainablerecovery amounts, and the Company has a clear intention and ability to hold to maturity.
Held-to-maturity investment adopts effective interest method and is subsequently measured atamortized cost, the gains or losses arising from derecognition, impairment or amortization areincluded in the current profit and loss.
The effective interest rate method refers to the method of calculating the amortized cost andinterest income or expenditure of each period based on the effective interest rate of a financialasset or financial liability (including a group of financial assets or financial liabilities). Theeffective interest rate refers to the interest rate used to discount the future cash flows of a financialasset or financial liability within the expected duration or a shorter applicable period to the currentbook value of the financial asset or financial liability.
When calculating the effective interest rate, the Company will estimate the future cash flows aftertaking into account all the contract terms of the financial asset or financial liability (withoutconsidering future credit losses), it will also consider all charges, transaction fees, and discounts orpremiums that are paid or collected among all parties to contract of the financial asset or financialliability and are part of the effective interest rate.
(3) Loans and receivables
It refers to the non-derivative financial assets with no quotes and with fixed or ascertainablerecovery amount in active markets. The Company's financial assets classified as loans andreceivables include notes receivable, accounts receivable, interest receivable, dividends receivableand other receivables.
Loans and receivables are subsequently measured at amortized cost by using the effective interestmethod. Gains or losses arising from derecognition, impairment or amortization are included inthe current profit and loss.
(4) Available-for-sale financial assets
It includes non-derivative financial assets that are designated as available for sale at initialrecognition, and financial assets other than financial assets measured at fair value with changesincluded in current profit and loss, loans and receivables, and held-to-maturity investments.
The closing cost of available-for-sale debt instrument investments is determined according to theamortized cost method, that is, the initial recognition amount deducts the principal repaid, adds orsubtracts the accumulated amortization amount arising from the amortization of differencebetween the initial recognition amount and the due date amount by the effective interest method,and the amount after deducting the impairment loss that has occurred. The closing cost of anavailable-for-sale equity instrument investment is its initial acquisition cost.
Available-for-sale financial assets are subsequently measured at fair value. Gains or losses arisingfrom changes in fair value are recognized as other comprehensive income, except that theimpairment losses and the exchange differences related to foreign currency monetary financialassets and amortized costs are included in the current profit and loss, and are transferred out at thederecognition of the financial assets and are included in the current profit and loss. However, theequity instruments investments that are not quoted in an active market and whose fair value cannotbe reliably measured and the derivative financial assets that are linked to the equity instrument andmust be settled by delivery of the equity instrument are subsequently measured at cost.
Interest obtained during the holding of available-for-sale financial assets and cash dividendsdeclared by the investee are included in investment income.
3. Impairment of financial assets
Except for financial assets measured at fair value and whose changes are included in the currentprofit and loss, the Company checks the book value of other financial assets on each balance sheetdate. If there is objective evidence that the financial assets are impaired, make provision for
impairment.
The Company conducts separate impairment tests on financial assets with significant singleamounts. For financial assets with insignificant single amounts, it conducts separate impairmenttests or includes them in financial asset portfolios with similar credit risk characteristics forimpairment tests. Financial assets ((including financial assets that are individually significant andinsignificant) without impairment in individual testing are included in the financial asset portfolioswith similar credit risk characteristics for impairment tests again. Financial assets that have beenindividually recognized for impairment loss are not included in the financial asset portfolios withsimilar credit risk characteristics for impairment tests.
(1) Impairment of held-to-maturity investments, loans and receivablesFinancial assets measured at cost or amortized cost write down their book value to the presentvalue of estimated future cash flows. The write-down amount is recognized as an impairment lossand is included in the current profit and loss. After the financial asset recognizes the impairmentloss, if there is objective evidence that the value of the financial asset has been restored, and it isobjectively related to the event that occurred after the recognition of the loss, the originallyrecognized impairment loss shall be reversed, and the book value of the financial asset afterreversing the impairment loss doesn’t exceed the amortized cost of the financial asset on the dateof reversal under the assumption that no impairment provision is made.
(2) Impairment of available-for-sale financial assets
When the fair value of the available-for-sale equity instrument investment is judged to be a seriousor non-temporary decline based on comprehensive relevant factors, it indicates that theavailable-for-sale equity instrument investment is impaired.
When an available-for-sale financial asset is impaired, the accumulated losses that were originallyincluded in other comprehensive income due to the decline in fair value shall be transferred outand included in the current profit and loss, the accumulated losses transferred out are the balanceafter deducting principal recovered, amortized amount, current fair value and impairment lossoriginally included in profit and loss from initial acquisition cost of the asset.
After recognizing the impairment loss, if there is objective evidence that the value of the financialasset has recovered after the period and it is objectively related to the events that occurred after theloss was recognized, the originally recognized impairment loss shall be reversed, the impairmentloss of available-for-sale equity instrument investment shall be reversed and recognized as othercomprehensive income, and the impairment loss of available-for-sale debt instruments shall bereversed and included in current profit and loss.
Impairment losses on equity instrument investments that do not have quotes in an active market and whose fairvalue cannot be reliably measured or on derivative financial assets that are linked to the equity instrument andmust be settled by delivery of the equity instrument shall not be reversed.
4. Recognition basis and measurement method for transfer of financial assetsAs for the financial assets up to the following conditions, the recognition termination is available: ①Terminationof the contract right to take the cash flow of the financial assets; ② transferred to the transferring-in part nearlyall risk and compensation; ③ all risk and compensation neither transferred nor retained, and with the give-up ofthe control over the financial assets.
As for financial assets of almost all risk and compensation neither transferred nor retained, and without the give-upof the control over the financial assets, it was recognized according to the extension of the continual entry into thetransferred financial assets and relevant liabilities are correspondingly recognized. The continual entry into thetransferred financial assets is risk level which the enterprise faces up to due to the assets changes.
As for the whole transfer of the financial assets up to the recognition termination conditions, the book value of thetransferred assets, together with the difference between the consideration value and the accumulative total of thefair value change of the other consolidated income, is reckoned into the current gain/loss.
As for the partial transfer of the financial assets up to the recognition termination conditions, the book value of thetransferred assets is diluted on the relative fair value between the terminated part and the un-terminated part; andreckoned into the current loss/gain is the difference between the sum of the consideration value and theaccumulative sum of the valuation change ought to be diluted into the recognition termination part but into theother consolidated income, and the above diluted book value, is reckoned into the current loss/gain.
For financial assets that are transferred with recourse or endorsement, the Group needs to determine whether therisk and rewards of ownership of the financial asset have been substantially transferred. If the risk and rewards ofownership of the financial asset have been substantially transferred, the financial assets shall be terminated forrecognized. If the risk and rewards of ownership of the financial asset have been retained, the financial assets shallnot be terminated for recognized. If the Group neither transfers nor retains substantially all the risks and rewards ofownership of the financial asset, the Group shall assess whether the control over the financial asset is retained, andthe financial assets shall be accounted for according to the above paragraphs.
5. Classification and measurement of financial liability
At initial recognition, financial liabilities are classified into financial liabilities measured by fair value withchanges counted into current gains/losses and other financial liabilities. Financial liabilities are initially recognizedat fair value. For financial liabilities classified as fair value through profit or loss, relevant transaction costs aredirectly recognized in profit or loss for the period. For financial liabilities classified as other categories, relevanttransaction costs are included in the amount initially recognized.
(1) Financial liability measured at fair value and whose changes reckoned into current gains/losses
The criteria for a financial liability to be classified as held for trading and designated as financial liabilities at fairvalue through profit or loss are the same as those for a financial asset to be classified as held for trading anddesignated as financial assets at fair value through profit or loss.
Financial liabilities at fair value through profit or loss for the period are subsequently measured at fair value. Thegain or loss arising from changes in fair value and dividends and interest income related to such financial liabilitiesare included in profit or loss for the period.
(2) Other financial liabilities
Derivative financial liabilities which are linked to equity instruments that are not quoted in an active market andthe fair value of which cannot be measured reliably measured, and which shall be settled by delivery of equityinstruments are subsequently measured at cost. Other financial liabilities are subsequently measured at amortizedcost using the effective interest method. Gains or losses arising from de-recognition or amortization is recognizedin profit or loss for the period.
(3) Financial Guarantee Contracts and loan commitmentFinancial guarantee contracts other than those designated as financial liabilities at fair value through profit or lossor loan commitment other than those designated measured by fair value and with its variation for gains/lossesreckoned as well as the loans lower than the market rates are initially recognized at fair value, and shall besubsequently measured at the higher of the following: the amount determined in accordance with AccountingStandard for Business Enterprises No. 13 “Contingencies” and the amount initially recognized less cumulativeamortization recognized in accordance with the principles set out in “Accounting Standard for BusinessEnterprises No. 14- Revenue”.
6. Termination recognition of financial liabilities
Only is released the whole or part of the current duties, the termination of the liabilities or part of it is available.The Group (the creditor) signed the agreement with the debtor: the existing liabilities are replaced by the bearingof the new liabilities; and the contract terms are fundamentally different of the new liabilities and the existing ones;the termination of the recognition of the existing ones is available; and the recognition of new ones is available.
As for the whole or partial termination of the recognition of the liabilities, the difference between the book value ofthe part of recognition termination and the consideration value paid (including the non-cash assets transferred outor the liabilities newly beard) is reckoned into the current loss/gain.
7. Derivatives and embedded derivatives
Derivative instruments are initially recognized at fair value on the date on which a derivative contract is enteredinto and are subsequently measured at fair value. Any gains or losses arising from changes in fair value ofderivatives are taken directly to profit or loss for the period, except for derivative instruments that are designated ashedging instruments and which are highly effective in hedging, gains or losses arising from changes in their fairvalue are taken to the profit or loss for the period in accordance with the hedge accounting requirement based on
the nature of hedging relationships.
For combined instruments contain embedded derivatives which are not designated as financial assets or financialliabilities at fair value through profit or loss, and the embedded derivative and the main contract does not have amaterial relation in terms of risk and economic attributes, and when an individual instrument which is the same asthe embedded derivative can be defined as derivative, the embedded derivative shall be separated from thecombined instrument and treated as an individual derivative. If the embedded derivative cannot be separatelymeasured at acquisition or subsequent balance sheet date, the combined instrument shall be designated as financialassets or financial liabilities at fair value through profit or loss.
8. Balance-out between the financial assets and liabilities
As the Group has the legal right to balance out the financial liabilities by the net or liquidation of the financialassets, the balance-out sum between the financial assets and liabilities is listed in the balance sheet. In addition, thefinancial assets and liabilities are listed in the balance sheet without being balanced out.
9. Equity instrument
The equity instrument is the contract to prove the holding of the surplus stock of the assets with the deduction ofall liabilities in the Group. The Company issues (including refinancing), repurchases, sells or cancels equityinstruments as movement of equity. No fair value change of equity instrument would be recognized by theCompany. Transaction fees relating to equity transactions are deducted from equity.
The Group’s all distribution (shares dividend excluded) to the holders of the stock instrument will decrease theshareholders’ equity. The Group does not recognize the fair value change sum of the stock instrument.
(11) Bad deb provision of account receivable
Accounting policy applicable since 1 Jan. 2019Regarding account receivables, whether or not it contains a significant financing component, theCompany always measures its loss provisions at an amount equivalent to the expected credit lossthroughout the duration, and the resulting increase and reversed amount of loss provisions isincluded in the current profit and loss as impairment losses or gains.
In addition to receivables that individually assess credit risk, based on their credit risk characteristics, they aredivided into different portfolios:
Item Accrual ratio for account receivable (%)Group 1: low-risk
The portfolio is determined based on the similarity of credit riskcharacteristics, the Company believes that the credit risk of a receivable thathas not been impaired in a single assessment of credit risk is low, and noprovision for bad debts is made unless there is evidence that the credit risk ofa certain receivable is high.If there is objective evidence that a certain account receivable has suffered credit impairment, the Company shall
make provision for bad debts on that account receivable and confirm the expected credit loss.
Accounting policy applicable before 1 Jan. 2019Account receivable consist of account receivable and other receivable etc.
1. Recognition of bad debt provision
The Group reviews carrying value of account receivables on balance sheet date, and make impairment provisionfor account receivables which are proven to be impaired by the following objective evidences: ①debtorexperiences material financial difficulties; ②debtor is in breach of contract terms (for instance: default orexpiration of payment for principal or interest); ③debtor is likely to face bankruptcy or other financingrestructuring; ④other objective evidence showing account receivables are impaired.
2. Provision for bad debt provision
(1) Recognition criteria and accrual method on accounts with single major amount and withdrawalbad debt provision independentlyThe single account receivable above RMB 2 million is recognized as single substantive account receivable TheCompany takes the independent impairment test on the single substantive account. As for the account receivablewithout the impairment in the test, it is included in the account receivable portfolio of the similar credit riskcharacters for the impairment test. As for the account receivable with the recognition of impairment loss, it is notincluded in the account receivable portfolio of the similar credit risk characters for the impairment test
(2) Determination bases for account receivables for which bad debt provision is made according tocategory of credit risks, and provision for bad debtThe Company determines categories of account receivables according to the similarity of credit risk characteristics.Account receivables consist of those with insignificant single amount and those with significant single amountwhich is not impaired based on separate impairment test. The Group is of the view that account receivables withinsignificant single amount and those with significant single amount which is not impaired based on separateimpairment test are exposed to low credit risks, thus it is not necessary to make bad debt provision, unless there isevidence showing that account receivables have relatively substantial credit risks.
(3) Account receivables with insignificant single amount for which bad debt provision is madeseparately
For account receivables with insignificant single amount, if there is evidence showing that account receivables areexposed to relatively substantial credit risks, bad debt provision shall be made for such account receivables underspecific identification method.
3. Reversal of bad debt
If there is objective evidence showing recovery in value of account receivables impaired and which is related toany event occurring after such recognition, the impairment loss originally recognized shall be reversed to theextent that the carrying value of the account receivables upon reversal will not exceed the amortized cost as at thereversal date assuming there is no provision for impairment.
(12) Inventory
1. Categories of inventory
Inventory consists of fuels and raw materials etc.
2. Valuation method of delivered inventory
The inventories are initially measured at cost. When the inventory is delivered, the actual cost ofdelivered inventory shall be determined by weighted average method.
3.Basis for determining the net realizable value of different types of inventoriesOn the balance sheet day, the inventory is measured by the lower one between the cost and the netrealizable value. As the net realizable value is lower than the cost, the inventory depreciationprovision is accrued. The net realizable value is balance of the estimated sale price less theestimated forthcoming cost upon the completion, the estimated sale expense, and the relevant taxin the daily activities. Upon the recognition of net realizable value of the inventory, the concreteevidence is based on and the purpose of holding the inventory and the influence of events after thebalance sheet day are considered.
As for the inventory of large sum and lower price, the inventory depreciation provision is accrued by the inventorycategories. As for the inventory related to the product series produced and sold in the same district, of the same orsimilar final use or purpose and impossible to be separated from the other items, the provision is consolidated andaccrued. The provision for other inventory is accrued by the difference between the cost and net realizable value.
Upon the accrual of the inventory depreciation provision, if the previous influence factors on the inventorydeduction disappeared, which resulted in the net realizable value being higher than its book value; the accrual istransferred back within the previous accrual of the provision and reckoned into the current gain/loss.
4. Inventory system
Perpetual inventory system required
5. Amortization method of low-value consumables and packaging
(1) Low-value consumables-one pass method
(2) Packaging- one pass method
(13) Long-term equity investment
1. Criteria judgement for joint control and significant influenceJoint control is the Company’s contractually agreed sharing of control over an arrangement, which relevantactivities of such arrangement must be decided by unanimously agreement from parties who share control. Wherethe Company and other joint ventures exercise joint control over the investee and enjoy the rights to the net assetsof the investee, the investee is a joint venture of the Company.
Significant influence is the right of the Company to participate in the financial and operation decision-making ofan enterprise, but not to control or jointly control the formulation of such policies with other parties. Where theCompany is able to exert significant influence on the investee, the investee shall be a joint venture of the Company.
2. Determination of initial investment cost
(1) Long-term equity investment resulting from enterprise combination
Enterprise combination under the same control: If the Company pays cash, transfers non-cashassets or assumes debt, and issues equity securities as the consideration for the merger, the shareof the book value of the owner's equity of the combined party in the consolidated financialstatements of the ultimate controlling party on the combining date shall be used as the initialinvestment cost of long-term equity investment. If it is possible to control the investee under thesame control due to additional investments, etc., the initial investment cost of long-term equityinvestment shall be determined based on the share of the book value of the net assets of thecombined party in the consolidated financial statements of the ultimate controlling party on themerger date. The difference between the initial investment cost of the long-term equity investmenton the merger date and the sum of the book value of the long-term equity investment before themerger plus the book value of the new share payment consideration obtained on the merger dateadjusts the equity premium. If the equity premium is insufficient to be offset, the retained earningsshall be offset.
Business combination not under the same control: The Company uses the combination costdetermined on the purchase date as the initial investment cost of the long-term equity investment.If it is possible to exercise control over an investee that is not under the same control due toadditional investments, etc., the sum of the book value of the original equity investment plus thenewly increased investment cost is used as the initial investment cost calculated by the costmethod.
(2) Long-term equity investment obtained through other methodsFor a long-term equity investment obtained by paying cash, the actually paid purchase price istaken as the initial investment cost.
For a long-term equity investment obtained by issuing equity securities, the fair value of the issuedequity securities is taken as the initial investment cost.
On the premise that the non-monetary asset exchange has commercial substance and that the fair value of the
assets swapped in or out can be reliably measured, the initial investment cost of the long-term equity investmentswapped in by non-monetary assets exchange is determined by the fair value of assets swapped out and therelevant payable taxes and fees, unless there is conclusive evidence that the fair value of the assets swapped in ismore reliable; for non-monetary assets exchange that do not meet the above preconditions, the book value of theassets swapped out and the relevant taxes and fees payable are used as the initial investment cost of the long-termequity investment swapped in.
For a long-term equity investment obtained through debt restructuring, its entry valueis determined based on the fair value of the abandoned creditor's rights and other costs such as taxes directlyattributable to the asset, and the difference between the fair value of the abandoned creditor's rights and the bookvalue is included in the current profit and loss.
3. Follow-up measurement and gain/loss recognition
(1) Long-term equity investment measured at cost
The long-term equity investment in subsidiaries shall be measured at cost. In addition to the actual prices or theannounced but yet undistributed cash dividend or profit in consideration valuation, the current investment return isrecognized by the announced cash dividend or profit by the invested units.
(2) Long-term equity investment measured at equity
The long-term equity investment in associated enterprise and joint ventures shall be measured atcost. If the initial investment cost is greater than than the share of fair value of the invested entity’sidentifiable net assets, the initial investment cost of the long-term equity investment will not beadjusted; if the initial investment cost is less than than the share of fair value of the investedentity’s identifiable net assets, the difference shall reckoned in current gains/losses.
The investment gain and other comprehensive income shall be recognized based on theCompany’s share of the net profits or losses and other comprehensive income made by theinvestee, respectively. Meanwhile, the carrying amount of long-term equity investment shall beadjusted. The carrying amount of long-term equity investment shall be reduced based on theGroup’s share of profit or cash dividend distributed by the investee. In respect of the othermovement of net profit or loss, other comprehensive income and profit distribution of investee, thecarrying value of long-term equity investment shall be adjusted and included in the owners’equity.
The Company shall recognize its share of the investee’s net profits or losses based on the fair values of theinvestee’s individual separately identifiable assets at the time of acquisition, after making appropriate adjustmentsthereto during the accounting period and according to the accounting policy of the Company. During the period ofholding the investment, the investee prepares the consolidated financial statements based on the net profit, othercomprehensive income, and the amount attributable to the investee in changes in other owners' equity in theconsolidated financial statements for business accounting.
When the Company confirms that it should share the losses incurred by the investee, it shall proceed in thefollowing order. Firstly, write off the book value of the long-term equity investment. Secondly, if the book value ofthe long-term equity investment is not sufficient to offset, the investment loss shall continue to be recognizedwithin the limit of the book value of long-term equity that substantially constitutes a net investment in the investee,and offset the book value of long-term receivables. Finally, after the above-mentioned treatment, if the enterprisestill bears additional obligations as stipulated in the investment contract or agreement, the estimated liabilities arerecognized according to the estimated obligations and included in the current investment loss.
(3) Disposal of long-term equity investment
When disposing of a long-term equity investment, the difference between its book value and theactual purchase price is included in the current profit and loss.
When disposing of a long-term equity investment accounted for by using the equity method, usethe same basis as the investee directly disposes of related assets or liabilities, and make accountingtreatment to the portion that was originally included in other comprehensive income according tothe corresponding proportion. The owner's equity recognized as a result of changes in otherowner's equity of the investee other than net profit or loss, other comprehensive income, and profitdistribution is carried forward to the current profit and loss on a pro rata basis, except for othercomprehensive income arising from the remeasurement of the net liabilities or net assets changesof the defined benefit plan by the investee.
If the joint control or significant influence on the investee is lost due to the disposal of part of theequity investment, etc., the remaining equity after disposal shall be calculated in accordance withthe financial instrument recognition and measurement standards, and the difference between thefair value and the book value on the day of losing the joint control or significant influence isincluded in the current profit and loss. Other comprehensive income of the original equityinvestment recognized due to using the equity method for accounting shall adopt the accountingtreatment on the same basis as the investee directly disposes of related assets or liabilities whenterminating the adoption of equity method for accounting. The owner's equity recognized as aresult of changes in the owner's equity other than net profit or loss, other comprehensive incomeand profit distribution of the investee is transferred to current profit and loss when terminating theadoption of equity method for accounting.
The control over the investee is lost due to the disposal of part of the equity investment and the capital increase inthe subsidiary by other investors resulting in a decline in the shareholding ratio of the Company, in preparingseparate financial statements, the remaining equity interest which can apply common control or impose significantinfluence over the investee shall be accounted for using equity method. Such remaining equity interest shall betreated as accounting for using equity method since it is obtained and adjustment was made accordingly. Forremaining equity interest which cannot apply common control or impose significant influence over the investeel, it
shall be accounted for using the recognition and measurement standard of financial instruments. The differencebetween its fair value and carrying amount as at the date of losing control shall be included in profit or loss for thecurrent period.
The disposed equity is obtained through business combination due to additional investment and other reasons,when preparing individual financial statements, if the remaining equity after disposal uses cost method or equitymethod for accounting, the equity investments held before the acquisition date shall be carried forward inproportion to other comprehensive income and other owner's equity recognized through equity method accounting;For the remaining equity interest after disposal accounted for using the recognition and measurement standard offinancial instruments, other comprehensive income and other owners’ equity shall be fully transferred.
(14) Investment real estate
Investment real estate is defined as the real estate with the purpose to earn rent or capital appreciation or both,including the rented land use rights and the land use rights which are held and prepared for transfer afterappreciation, the rented buildings. (Including buildings for lease after self-construction or development activitiescompleted and buildings under construction or development for lease in the future)
Investment real estate of the Company are measured at cost model. The Investment real estate-rental buildings measured at cost model has the same depreciation policy as fixed assets, the landuse right for lease is exercise the amortization policy as intangible assets.
(15) Fixed assets
1. Recognition conditions for the fixed 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 fiscal year ofservice life. Fixed assets are recognized when the following conditions are simultaneously met:
(1) The economic benefits with the fixed assets concerned are likely to flow into the enterprise;and
(2) cost of the fixed assets can be measured reliably.
2. Depreciation method
From the next month since reaching the intended use state, depreciation on fixed assets shall be accounted by usingthe method of average life length except the steam turbine generating unit that accounted by withdrawal theworking volume method.
Life expectancy, expected net impairment value and annual depreciation rate of all assets are as follows:
Category Depreciation method
Depreciation life
(Year)
Residuals
rate(%)
Annual depreciation
rate (%)Houses and buildings Straight-line20- Year
4.5
Equipment (fuelmachinery setsexcluded)
Straight-line 15-20-year 10
4.5-6
Equipment-fuelmachinery sets(Note)
The work quantity
method
The work quantity
methodTransportation tools
Straight-line
5-year 10
Other equipment
Straight-linemethod
5-year 10
Estimated salvage value refers to the amount of value retrieved after deducting of predicted disposal expense whenthe expected using life of a fixed asset has expired and in the expected state of termination.
Note: gas turbine generator set is provided with depreciation under workload method, namely to determine thedepreciation amount per hour of gas turbine generator set based on equipment value, predicted net remaining valueand predicted generation hours. Details are set out as follows:
Name of the Company
Fixed assets Depreciation amount (RMB/Hour)
The Company
Generating unit 1#
538.33
Generating unit 3#
601.20
New Power Company Generating unit 10#
520.61
Zhongshan Electric Power
Generating unit 1#
4,246.00
Generating unit 3#
4,160.83
Weimei Electric Power
Generating unit 1#
4,490.65
Generating unit 3#
4,233.13
3. Recognition basis and measurement method of fixed assets under finance leaseLeases are classified as finance leases whenever the terms of the lease transfer substantially all the risks andrewards of ownership to the lessee. Title may or may not eventually be transferred. The depreciation policy forfixed asset held under finance lease is consistent with that for its owned fixed asset. When a leased asset can bereasonably determined that its ownership will be transferred at the end of the lease term, it is depreciated over theperiod of expected use; otherwise, the leased asset is depreciated over the shorter period of the lease term and the
period of expected use.
4. Other explanation
Concerning the follow-up expenses related to fixed assets, if the relevant economy benefit of fixedassets probably in-flow into the Company and can be measured reliably, reckoned into cost offixed assets and terminated the recognition of the book value of the parts that been replaced.Others follow-up expenses should reckoned into current gains/losses while occurred.
Terminated the recognition of fixed assets that in the status of disposal or pass through the predicted usage orwithout any economy benefits arising from disposal. Income from treatment of fixed asset disposing, transferring,discarding or damage, the balance after deducting of book value and relative taxes is recorded into current incomeaccount.
The Company re-reviews useful life, expected net residual value and depreciation method of fixed assets at least ateach year end. Any change thereof would be recorded as change of accounting estimates.
(16) Construction-in-progress
Cost of construction in process is determined at practical construction expenditures, including all expenses duringthe construction, capitalized loan expenses before the construction reaches useful status, and other relativeexpenses. It is transferred to fixed asset as soon as the construction reaches the useful status.
(17) Borrowing expenses
Borrowing expenses include interest, amortization of discounts or premiums related to borrowings, ancillary costsincurred in connection with the arrangement of borrowings, and exchange differences arising from foreigncurrency borrowings. Borrowing expenses that can be directly attributed for purchasing or construction of assetsthat are complying with capitalizing conditions start to be capitalized when the payment of asset and borrowingexpenses have already occurred, and the purchasing or production activities in purpose of make the asset usablehave started; Capitalizing will be terminated as soon as the asset that complying with capitalizing conditions hasreached its usable or saleable status. The other borrowing expenses are recognized as expenses when occurred.
Interest expenses practically occurred at the current term of a special borrowing are capitalized after deducting ofthe bank saving interest of unused borrowed fund or provisional investment gains; Capitalization amounts ofcommon borrowings are decided by the weighted average of exceeding part of accumulated asset expenses overthe special borrowing assets multiply the capitalizing rate of common borrowings adopted. Capitalization rates aredecided by the weighted average of common borrowings.
During the capitalization period, exchange differences on a specific purpose borrowing denominated in foreigncurrency shall be capitalized. Exchange differences related to general-purpose borrowings denominated in foreigncurrency shall be included in profit or loss for the current period.
Qualifying assets are assets (fixed assets, investment property, inventories, etc.) that necessarily take a substantial
period of time for acquisition, construction or production to get ready for their intended use or sale.
Capitalization of borrowing costs shall be suspended during periods in which the acquisition, construction orproduction of a qualifying asset is interrupted abnormally, when the interruption is for a continuous period of morethan 3 months, until the acquisition, construction or production of the qualifying asset is resumed.
(18) Intangible assets
An intangible asset is an identifiable non-monetary asset without physical substance owned or controlled by theCompany.
An intangible asset shall be initially measured at cost. The expenditures incurred on an intangible asset shall berecognized as cost of the intangible asset only if it is probable that economic benefits associated with the asset willflow to the Company and the cost of the asset can be measured reliably. Other expenditures on an item asset shallbe charged to profit or loss when incurred.
Land use right acquired shall normally be recognized as an intangible asset. Self-constructed buildings (e.g. plants),related land use right and the buildings shall be separately accounted for as an intangible asset and fixed asset. Forbuildings and structures purchased, the purchase consideration shall be allocated among the land use right and thebuildings on a reasonable basis. In case there is difficulty in making a reasonable allocation, the consideration shallbe recognized in full as fixed assets.
An intangible asset with a finite useful life shall be stated at cost less estimated net residual value and anyaccumulated impairment loss provision and amortized using the straight-line method over its useful life when theasset is available for use. Intangible assets with indefinite life are not amortized.
The Group shall review the useful life of intangible asset with a finite useful life and the amortization methodapplied at least at each financial year-end. A change in the useful life or amortization method used shall beaccounted for as a change in accounting estimate. For an intangible asset with an indefinite useful life, the Groupshall review the useful life of the asset in each accounting period. If there is evidence indicating that the useful lifeof that intangible asset is finite, the Company shall estimate the useful life of that asset and apply the accountingpolicies accordingly.
(19) Impairment of long-term assets
The Group will judge if there is any indication of impairment as at the balance sheet date in respect of non-currentnon-financial assets such as fixed assets, construction in progress, intangible assets with an infinite useful life,investment properties measured at cost, and long-term equity investments in subsidiaries, joint ventures andassociates. If there is any evidence indicating that an asset may be impaired, recoverable amount shall be estimatedfor impairment test. Goodwill, intangible assets with an indefinite useful life and intangible assets beyond workingconditions will be tested for impairment annually, regardless of whether there is any indication of impairment.
If the impairment test result shows that the recoverable amount of an asset is less than its carrying amount, theimpairment provision will be made according to the difference and recognized as an impairment loss. The
recoverable amount of an asset is the higher of its fair value less costs of disposal and the present value of thefuture cash flows expected to be derived from the asset. An asset’s fair value is the price in a sale agreement in anarm’s length transaction. If there is no sale agreement but the asset is traded in an active market, fair value shall bedetermined based on the bid price. If there is neither sale agreement nor active market for an asset, fair value shallbe based on the best available information. Costs of disposal are expenses attributable to disposal of the asset,including legal fee, relevant tax and surcharges, transportation fee and direct expenses incurred to prepare the assetfor its intended sale. The present value of the future cash flows expected to be derived from the asset over thecourse of continued use and final disposal is determined as the amount discounted using an appropriately selecteddiscount rate. Provisions for assets impairment shall be made and recognized for the individual asset. If it is notpossible to estimate the recoverable amount of the individual asset, the Group shall determine the recoverableamount of the asset group to which the asset belongs. The asset group is the smallest group of assets capable ofgenerating cash flows independently.
For the purpose of impairment testing, the carrying amount of goodwill presented separately in the financialstatements shall be allocated to the asset groups or group of assets benefiting from synergy of businesscombination. If the recoverable amount is less than the carrying amount, the Group shall recognize an impairmentloss. The amount of impairment loss shall first reduce the carrying amount of any goodwill allocated to the assetgroup or set of asset groups, and then reduce the carrying amount of other assets (other than goodwill) within theasset group or set of asset groups, pro rata on the basis of the carrying amount of each asset.
Once an impairment loss of these assets is recognized, it is not allowed to be reversed even if the value can berecovered in subsequent period.
(20) Long-term unamortized expenses
Long-term unamortized expenses are those already occurred and amortizable to the current term and successiveterms for over one year. Long-term amortizable expenses are amortized by straight-line method to the benefitperiod.
(21) Staff remuneration
Staff remuneration includes short term staff remuneration, post office benefit, dismissal benefitand other long term staff benefits, among which:
Short term staff remuneration mainly consists of salary, bonus, allowance and subsidy, staffbenefits, medical insurance, maternity insurance, work related injury insurance, housing funds,labor unit fee and education fee, non-monetary benefits, etc. short term staff remuneration actuallyhappened during the accounting period in which staff provides services to the Company isrecognized as liability, and shall be included in current gains and losses or relevant asset cost.Non-monetary benefits are measured at fair value.
Post office benefits mainly consist of defined withdraw plan and defined benefit plan. Definedwithdraw plan mainly includes basic pension insurance, unemployment insurance and annuity, andthe contribution payable is included in relevant asset cost or current gains and losses when occurs.
When the Company terminates the employment relationship with employees before the end of the employmentcontracts or provides compensation as an offer to encourage employees to accept voluntary redundancy, theCompany shall recognize employee compensation liabilities arising from compensation for staff dismissal andincluded in profit or loss for the current period, when the Company cannot revoke unilaterally compensation fordismissal due to the cancellation of labor relationship plans and employee redundant proposals; and the Companyrecognize cost and expenses related to payment of compensation for dismissal and restructuring, whichever isearlier. However, if the compensation for termination of employment is not expected to be fully paid within 12months from the reporting period, it shall be accounted for other long-term staff remuneration.
The early retirement plan shall be accounted for in accordance with the accounting principles for compensation fortermination of employment. The salaries or wages and the social contributions to be paid for the employees whoretire before schedule from the date on which the employees stop rendering services to the scheduled retirementdate, shall be recognized (as compensation for termination of employment) in the current profit or loss by theGroup if the recognition principles for provisions are satisfied.
For other long-term employee benefits provided by the Company to its employees, if satisfy with the establishedwithdraw plan, then the benefits are accounted for under the established withdraw plan, otherwise accounted forunder defined benefit scheme.
(22) Accrual liability
1. Recognition criteria
The obligations with contingencies concerned as litigation, debt guarantee and contract in loss arerecognized as accrual liability when the following conditions are met simultaneously:
(1) the liability is the current liability that undertaken by the Company;
(2) the liability has the probability of result in financial benefit outflow; and
(3) the responsibility can be measured reliably for its value.
2. Measurement on vary accrual liability
At balance sheet day, with reference to the risks, uncertainty and periodic value of currency that connected to thecontingent issues, the predicted liabilities are measured according to the best estimation on the payment to fulfillthe current responsibility.
If the expenses for clearing of predictive liability is fully or partially compensated by a third party, and thecompensated amount can be definitely received, it is recognized separated as asset. The compensated amount shallnot be greater than the book value of the predictive liability.
(1) Contact in loss
Contact in loss is identified when the inevitable cost for performance of the contractual obligation exceeds theinflow of expected economic benefits. When a contract in loss is identified and the obligations there under arequalified by the aforesaid recognition criterion for contingent liability, the difference of estimated loss undercontract over the recognized impairment loss (if any) of the subject matter of the contract is recognized ascontingent liability.
(2) Restructuring obligations
For detailed, official and publicly announced restructuring plan, the direct expenses attributable to the restructuringare recognized as contingent liabilities, provided that the aforesaid recognition criterion for contingent liability ismet. For restructuring obligations arising from disposal of part business, the Company will recognize theobligations relating to restructuring only when it undertakes to dispose part business (namely entering intofinalized disposal agreement).
(23) Revenue
When significant risks and rewards of ownership of goods have been transferred to buyer, no continuousmanagement right regularly related to ownership is retained, no effective control is conducted on goods sold,moreover, amount of income may be measured in a reliable way, relevant economic profit may have flown intoenterprise and relevant incurred cost or to be incurred may be measured in a reliable way, implementation of goodssales revenue will be confirmed. Detail recognition according to specific revenue:
(1) Power sales revenue
The Group generates electricity by thermal power, and realizes sales through incorporation into Guangdong powergrid. As for power sales, the Group realizes revenue when it produces electricity and obtains the grid powerstatistics table confirmed by the power bureau.
(2) Revenue from providing labor service
Under the condition of service providing business can be estimated in a reliable way, relevant economic benefit islikely to flow into enterprise, completion degree of business may be estimated in a reliable way and relevantincurred cost and to be incurred may be measured in a reliable way, the revenue from labor service providingrecognized. Relevant service revenue may be confirmed by the Company as percentage-of-completion method onbalance sheet date. Completion degree of service business will be determined as share of incurred service cost inestimated general cost.
If result of service providing business can’t be estimated in a reliable way, service revenue should be confirmed asamount of incurred service cost expected to be compensated, where incurred service cost is taken as period charge.If no compensation is expected for incurred service cost, income won’t be confirmed.
3. Specific criteria for revenue recognition of the Environment Protection Company
At the end of each month, the company confirms the monthly income based on the initially confirmed sludgetransportation volume and sludge treatment price, and revises the revenue confirmed last month after checkingwith the relevant units in the next month, and the correction proportion is relatively small.
4. Specific criteria for revenue recognition of the Engineering Company
(1)Debugging projects: When the debugging is successful, obtain the confirmation of successful debugging, andconfirm the income according to the contract;
(2) Operation and maintenance and management projects: Temporarily estimate and confirm the income everymonth according to the attendance time and labor service price of attendance staff, and adjust the temporarilyestimated income after obtaining the monthly settlement statement sealed and signed by suppliers, the confirmationof progress, and the attendance form.
(24) Government subsidy
Government subsidy refers to the monetary asset and non-monetary asset that the Company obtains from thegovernment free of charge, excluding the capital that the government invests as an investor and enjoys thecorresponding owner's equity. Government subsidies are divided into the asset-related government subsidy and theincome-related government subsidy.
If the government subsidy is a monetary asset, it shall be measured according to the received or receivable amount.If the government subsidy is a non-monetary asset, it shall be measured at fair value. If the fair value cannot beobtained reliably, it shall be measured according to the nominal amount. Government subsidy measured bynominal amount is directly included in the current profits and losses.
The government subsidy related to the assets is recognized as deferred income and is recorded into the currentprofits and losses or the book value of the relevant assets in a reasonable and systematic manner within the usefullife of the relevant assets. Revenue-related government grants are used to compensate for the related costs or lossesincurred during the subsequent period and are recognized as deferred income and are recognized in the currentprofit or loss or related expenses during the period of recognition of the relevant cost expense or loss; Incurredcosts or losses incurred, directly included in the current profits and losses or offset the relevant costs.
For the government subsidy containing both asset-related parts and income-related parts at the same time,distinguish the different parts and make the accounting treatment, classify the parts which are difficult to bedistinguished as the income-related government subsidy.
The government subsidy related to the Company’s daily activities is included in other incomes or offsets relatedcosts in accordance with the essence of economic business; while the government subsidy unrelated to theCompany’s daily activities is included in non-operating income and expenditure.
When the recognized government subsidy needs to be refunded or has balance of related deferred income, offsetthe book balance of related deferred income, and include the excess parts in the current profits and losses or (theasset-related government subsidy for offsetting the book value of underlying assets in initial recognition) adjust thebook value of assets; directly include these belong to other situations in the current profits and losses.
(25) Deferred income tax asset/ deferred income tax liability
1. Current income tax
On balance sheet date, current income tax liability (or asset) formed during and before current period will bemeasured as amount of income tax payable (or repayable) as specified by tax law. The taxable income forcalculating the current income tax expenses is based on the pre-tax accounting profit of the current year afteradjustment according to relevant regulations of taxation.
2. Deferred income tax asset & deferred income tax liabilityFor balance of book value of some asset/liability item and its tax base, or temporary difference derived frombalance of book value and tax base of the item, which is not confirmed as asset or liability but tax base can befixed as specified by tax law, deferred income tax asset & deferred income tax liability will be confirmed inbalance sheet liability approach.
Deferred income tax liabilities are not recognized for taxable temporary differences related to: the initialrecognition of goodwill; and the initial recognition of an asset or liability in a transaction which is neither abusiness combination nor affects accounting profit or taxable profit (or deductible loss) at the time of thetransaction. In addition, the Group recognizes the corresponding deferred income tax liability for taxabletemporary differences associated with investments in subsidiaries, associates and joint ventures, except when bothof the following conditions are satisfied: the Company able to control the timing of the reversal of the temporarydifference; and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are not recognized for deductible temporary differences related to the initial recognitionof an asset or liability in a transaction which is neither a business combination nor affects accounting profit ortaxable profit (or deductible loss) at the time of the transaction. In addition, the Group recognizes thecorresponding deferred income tax asset for deductible temporary differences associated with investments insubsidiaries, associates and joint ventures to the extent that it is probable that taxable profits will be availableagainst which the deductible temporary differences can be utilized, except when both of the following conditionsare satisfied: it is not probable that the temporary difference will reverse in the foreseeable future; and it is notprobable that taxable profits will be available in the future, against which the temporary difference can be utilized.
For deductible loss and taxation decrease which can be carried over to following fiscal year, relevant deferredincome tax asset may be confirmed subject to amount of taxable income which is likely to be acquired to deductdeductible loss and taxation decrease in the future.On balance sheet day, those deferred income tax assets and income tax liabilities, according to the tax law,calculation will be on tax rate applicable to retrieving period of assets or clearing of liabilities.On balance sheet day, verification will be performed on the book value of differed income tax assets. If it is notpossible to obtain enough taxable income to neutralize the benefit of differed income tax assets, then the bookvalue of the differed income tax assets shall be reduced. Whenever obtaining of taxable income became possible,the reduced amount shall be restored.
3. Income tax expenses
Income tax expense includes current income tax and deferred income tax.
Current deferred income tax and deferred income tax expenses or income shall reckoned into current gains/losses
other that those current income tax and deferred income tax with transactions and events concerned, that reckonedinto shareholder’s equity directly while recognized as other comprehensive income; and the book value of thegoodwill adjusted for deferred income tax arising from enterprise combination.
4. Offset of income tax
When the Group has a legal right to settle on a net basis and intends either to settle on a net basis or to realize theassets and settle the liabilities simultaneously, current tax assets and current tax liabilities are offset and presentedon a net basis.
When the Group has a legal right to settle current tax assets and liabilities on a net basis, and deferred tax assetsand deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxableentity or different taxable entities which intend either to settle current tax assets and liabilities on a net basis or torealize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred taxassets or liabilities are expected to be reversed, deferred tax assets and deferred tax liabilities are offset andpresented on a net basis.
(26) Leasing
Finance lease is to virtually transfer all risks and rewards related to ownership of asset, the ownership is maytransfer ultimately or not. Leases other than finance lease are operating leases.
1.Lease business with the Company as the rentee
The rental is reckoned into the relevant assets cost or the current loss/gain in the straight-line method. The initialdirect expenses are reckoned into the current gain/loss, or the actual rental into the current loss/gain.
2.Lease business with the Company as the renter
The rental is reckoned into the relevant assets cost or the current loss/gain in the linear way. The initial directsubstantive expenses are capitalized and reckoned into the current gain/loss, or the actual rental into the currentloss/gain. The initial direct small expenses are reckoned into the current actual gain/loss, or the actual rental intothe current loss/gain.
3. Financing lease business with the Group recorded as lessee
On the beginning date of the lease, the entry value of leased asset shall be at the lower of the fair value of theleased asset and the present value of minimum lease payment at the beginning date of the lease. Minimum leasepayment shall be the entry value of long-term accounts payable, with difference recognized as unrecognizedfinancing expenses. In addition, initial direct costs attributable to leased items incurred during the process of leasenegotiation and signing of lease agreement shall be included in the value of leased assets. The balance of minimumlease payment after deducting unrecognized financing expenses shall be accounted for long-term liability andlong-term liability due within one year.
Unrecognized financing expenses shall be recognized as financing expenses for the current period using effectiveinterest method during the leasing period. Contingent rent shall be included in profit or loss for the current periodat the time it incurred.
4.Financing lease business with the Group recorded as lessor
On the beginning date of the lease, the entry value of lease receivable shall be the aggregate of minimum leasereceivable and initial direct costs at the beginning date of the lease. The unsecured balance shall be recorded. Theaggregate of minimum lease receivable, initial direct costs and unsecured balance and the different between theirpresent value shall be recognized as unrealized financing income. The balance of lease receivable after deductingunrecognized financing income shall be accounted for long-term debt and long-term debt due within one year.
Unrecognized financing income shall be recognized as financing income for the current period using effectiveinterest method during the leasing period. Contingent rent shall be included in profit or loss for the current period
(27) Other major accounting policies and estimations
The discontinued operation refers to the component that meets one of following conditions and has been disposedby the Company or classified as held-for-sale and can be individually distinguished when operating and preparingthe financial statements: 1- the component represents an independent main Business or a major operating area; 2-the component is a parts that intends to dispose or arrange an independent main business or a major operating area;3- the component is a subsidiary obtained only for re-sale.
(28) Changes of major accounting policy and accounting estimation
1. Change of major accounting policies
(1) Implementing the Accounting Standards for Business Enterprises No. 22 - Recognition andMeasurement of Financial Instruments, Accounting Standards for Business Enterprises No. 23 -Transfer of Financial Assets, Accounting Standards for Business Enterprises No. 24 - HedgeAccounting, and the Accounting Standards for Business Enterprises No. 37 – FinancialInstruments Presentation (Revised in 2017).
(2) The Ministry of Finance revised the Accounting Standards for Business Enterprises No. 22 -Recognition and Measurement of Financial Instruments, Accounting Standards for BusinessEnterprises No. 23 - Transfer of Financial Assets, Accounting Standards for Business EnterprisesNo. 24 - Hedge Accounting, and the Accounting Standards for Business Enterprises No. 37 –Financial Instruments Presentation in 2017. According to the revised standards, for financialinstruments whose recognition has not been terminated on the first execution date, if the previousrecognition and measurement are inconsistent with the requirements of the revised standards, theyshall be adjusted retroactively. If the data in comparison financial statement in the earlier period isinconsistent with the revised standards, no adjustment is required. The cumulative impact amountresulting from retroactive adjustment shall be adjusted to retained earnings and othercomprehensive income, main impacts of the above standards implementation are as follows:
Content / causes for the changes ofaccounting policies
Approval procedures
Items and amount impacts in statement
Non-tradable equity instrument
The Implementation of New
Financial assets available-for-sale:
decreased RMB 60,615,000.00;
investment available-for-sale isdesignated as “Financial assetsmeasured at fair value and whosechanges reckoned into othercomprehensive income”
Financial Instruments Standardswas deliberated and approved bythe 5
th session of 8
th
BOD and 5
th
session of 8
thSupervisoryCommittee on 14 August 2019
Other equity instrument investment:
increased RMB 60,615,000.00;Other comprehensive income:
decreased RMB 2,500,000.00;Retained profit at year-end: increasedRMB 2,500,000.00.
(2) Implement the Revising and Printing the Format of Financial Statements for GeneralEnterprises in 2019 from Ministry of Finance.On 30 April 2019 and 19 September 2019, the Revising and Printing the Format of FinancialStatements for General Enterprises in 2019 (CK (2019) No.6) and Notice on Revising andPrinting the Format of Consolidated Financial Statements (2019) [CK(2019) No.16] are issued bythe Ministry of Finance, financial statement’s format for general enterprise are being revised. TheCompany has prepared the financial statement in line with the requirement of new formats forfinancial statements.
(3) Implement the Accounting Standards for Business Enterprises No. 7 - Non-monetary assetsexchange (Revised in 2019)The Accounting Standards for Business Enterprises No. 7 - Non-monetary assets exchange(Revised in 2019)[CK(2019)No.8] is issued by the Ministry of Finance on 9 May 2019, and comeinto effect since 10 June 2019. For the non-monetary assets exchange occurred to the executiondate of the provision since 1
stJan. 2019 shall be adjusted in line with the provisions of this code.For the non-monetary assets exchange occurred before 1
stJan. 2019, no retroactive adjustment isrequired in accordance with the provisions of this code. There is no significant influence whileexercising the above provision during the reporting period.
(4) Implement the Accounting Standards for Business Enterprises No. 12 - debt restructuring(Revised in 2019)The Accounting Standards for Business Enterprises No. 12 - debt restructuring (Revised in 2019)is issued by the Ministry of Finance on 16 May 2019, and come into effect since 17 June 2019.For the debt-restructuring occurred to the execution date of the provision since 1
stJan. 2019 shallbe adjusted in line with the provisions of this code. For the debt-restructuring occurred before 1
st
Jan. 2019, no retroactive adjustment is required in accordance with the provisions of this code.There is no significant influence while exercising the above provision during the reporting period.
2. Change of accounting estimation
No change of accounting estimation occurred in the reporting period
3. Adjustment of the financial statement items for the first time at the beginning of the yearwhen implementing the new financial instrument standards
Consolidate balance sheet
Item
Year-end balance
of last year
Year-begin
balance
Number adjusted
Current assets:
Monetary funds 925,829,404.44
925,829,404.44
Settlement provisions
Lending funds
Trading financial assets Not applicable
Financial assets measured at fairvalue and whose changes reckonedinto current gains/losses
Not applicable
Derivative financial assets
Note receivable
Account receivable 132,430,024.97
132,430,024.97
Receivables financing Not applicable
Accounts paid in advance 53,655,777.12
53,655,777.12
Receivable premium
Reinsurance account receivable
Provision of cession receivable
Other account receivable 40,133,297.74
40,133,297.74
Buying back the sale of financialassets
Inventory 124,758,334.97
124,758,334.97
Assets holding for sale
Non-current assets due within oneyear
Other current assets 390,108,844.11
390,108,844.11
Item
Year-end balanceof last year
Year-beginbalance
Number adjusted
Total current assets1,666,915,683.35
1,666,915,683.3
Non-current assets:
Loan release and advance
Debt investment Not applicable
Financial assets available-for-sale 60,615,000.00
Not applicable
-60,615,000.00
Other debt investment Not applicable
Held-to-maturity investment
Not applicable
Long-term account receivable
Long-term equity investment 16,049,044.95
16,049,044.95
Other equity instrumentinvestment
Not applicable
60,615,000.00
60,615,000.00
Other non-current financial assets Not applicable
Investment real estate 2,606,302.71
2,606,302.71
Fixed assets 1,405,649,989.24
1,405,649,989.2
Construction in progress 82,348,008.39
82,348,008.39
Productive biological assets
Oil-and-gas assets
Intangible assets 45,987,255.24
45,987,255.24
Development expenditure
Goodwill
Long-term unamortized expenses
Deferred income tax assets 2,071,324.26
2,071,324.26
Other non-current assets 24,905,681.78
24,905,681.78
Total non-current assets1,640,232,606.57
1,640,232,606.5
Item
Year-end balance
of last year
Year-beginbalance
Number adjusted
Total assets3,307,148,289.92
3,307,148,289.9
Current liability:
Short-term loans 1,000,000,000.00
1,000,000,000.0
Borrowings from central bank
Borrowings funds
Trading financial liability Not applicable
Financial liability measured at fairvalue and whose changes reckonedinto current gains/losses
Not applicable
Derivative financial liability
Note payable
Account payable 18,065,898.69
18,065,898.69
Account received in advance
Financial assets sold forrepurchase
Deposits from customers andinterbank
Acting trading securities
Acting underwriting securities
Payroll payable 44,912,599.66
44,912,599.66
Taxes payable 16,000,039.55
16,000,039.55
Other account payable 63,091,881.43
63,091,881.43
Handling charges andcommissions payable
Reinsurance payable
Item
Year-end balance
of last year
Year-begin
balance
Number adjusted
Liabilities held-for-sale
Non-current liability due withinone year
Other current liability
Total current liability1,142,070,419.33
1,142,070,419.3
Non-current liability:
Provision for insurance contracts
Long-term loans 25,940,000.00
25,940,000.00
Bonds payable
Including: preferred stock
Perpetual bond
Long-term account payable
Long-term payroll payable
Accrual liability 26,726,232.38
26,726,232.38
Deferred income 75,612,259.33
75,612,259.33
Deferred income tax liability
Other non-current liability
Total non-current liability128,278,491.71
128,278,491.71
Total liability1,270,348,911.04
1,270,348,911.0
Total owners equity:
Share capital 602,762,596.00
602,762,596.00
Other equity instrument
Including: preferred stock
Perpetual bond
Capital reserve 362,770,922.10
362,770,922.10
Item
Year-end balanceof last year
Year-beginbalance
Number adjusted
Less: treasury stock
Other comprehensive income
-2,500,000.00
-2,500,000.00
Reasonable reserve
Surplus reserve 332,908,397.60
332,908,397.60
General risk preparation
Retained profit 679,429,935.81
681,929,935.81
2,500,000.00
Total owners equity attributable toparent company
1,977,871,851.51
1,977,871,851.5
Minority equity 58,927,527.37
58,927,527.37
Total owners equity 2,036,799,378.88
2,036,799,378.8
Total liability and owners equity 3,307,148,289.92
3,307,148,289.9
Balance sheet of parent company
Item
Year-endbalance of lastyear
Year-beginbalance
Number adjusted
Current assets：
Monetary fund 766,041,463.01
766,041,463.01
Trading financial assets Not applicable
Financial assets measured atfair value and whose changesreckoned into currentgains/losses
Not applicable
Derivative financial assets
Note receivable
Item
Year-endbalance of lastyear
Year-beginbalance
Number adjusted
Account receivable 50,415,180.20
50,415,180.20
Receivables financing Not applicable
Accounts paid in advance 33,326,061.81
33,326,061.81
Other account receivable 1,048,357,217.53
1,048,357,217.5
Inventory 111,279,675.08
111,279,675.08
Assets holding for sale
Non-current assets due withinone year
Other current assets 362,678,678.87
362,678,678.87
Total current assets2,372,098,276.50
2,372,098,276.5
Non-current assets:
Debt investment Not applicable
Financial assetsavailable-for-sale
60,615,000.00
Not applicable
-60,615,000.00
Other debt investment Not applicable
Held-to-maturity investment
Not applicable
Long-term account receivable
Long-term equity investment
303,341,165.00
303,341,165.00
Other equity instrumentinvestment
Not applicable
60,615,000.00
60,615,000.00
Other non-current financialassets
Not applicable
Investment real estate
Fixed assets 284,572,482.22
284,572,482.22
Item
Year-endbalance of last
year
Year-begin
balance
Number adjusted
Construction in progress 16,490,240.75
16,490,240.75
Productive biological assets
Oil-and-gas assets
Intangible assets 1,518,096.75
1,518,096.75
Development expenditure
Goodwill
Long-term unamortizedexpenses
Deferred income tax assets
Other non-current assets
Total non-current assets666,536,984.72
666,536,984.72
Total assets3,038,635,261.22
3,038,635,261.2
Current liability:
Short-term loans 860,000,000.00
860,000,000.00
Trading financial liability Not applicable
Financial liability measured atfair value and whose changesreckoned into currentgains/losses
Not applicable
Derivative financial liability
Note payable
Account payable 5,349,562.56
5,349,562.56
Account received in advance
Payroll payable 26,953,632.92
26,953,632.92
Taxes payable 11,962,377.72
11,962,377.72
Item
Year-endbalance of lastyear
Year-beginbalance
Number adjusted
Other account payable
157,816,358.94
157,816,358.94
Liabilities held-for-sale
Non-current liability duewithin one year
Other current liability
Total current liability1,062,081,932.14
1,062,081,932.1
Non-current liability:
Long-term loans
Bonds payable
Including: preferred stock
Perpetual bond
Long-term account payable
Long-term payroll payable
Accrual liability
Deferred income 41,337,945.14
41,337,945.14
Deferred income tax liability
Other non-current liability
Total non-current liability41,337,945.14
41,337,945.14
Total liability1,103,419,877.28
1,103,419,877.2
Total owners equity:
Share capital 602,762,596.00
602,762,596.00
Other equity instrument
Including: preferred stock
Item
Year-endbalance of lastyear
Year-beginbalance
Number adjusted
Perpetual bond
Capital reserve 289,963,039.70
289,963,039.70
Less: treasury stock
Other comprehensive income
Reasonable reserve
Surplus reserve 332,908,397.60
332,908,397.60
Retained profit
709,581,350.64
709,581,350.64
Total owners equity
1,935,215,383.94
1,935,215,383.9
Total liability and ownersequity
3,038,635,261.22
3,038,635,261.2
(29)Major accounting judgment and estimation
When using the accounting policies, the Company needs to made judgment, estimation and assumption forcarrying value of certain items which cannot be measured adequately due to inherent uncertainty of economicactivities. Such judgment, estimation and assumption are based on historical experiences of the Group’smanagement, together with consideration of other relevant factors. These judgments, estimations and assumptionwould affect the reported amount of income, expense, asset and liability and disclosure of contingent liabilities onbalance sheet date. However, actual results resulting from the uncertainty of these estimates may differ from thecurrent estimation made by management of the Company, which would in turn lead to material adjustments to thecarrying value of assets or liabilities which will be affected in future.
The Group conducts regular re-review on the aforesaid judgment, estimation and assumption on a continuedoperation basis. If the change of accounting estimation only affect current period, the affected amount isrecognized in the period when change occurs. If the change affects current and future periods both, the affectedamount is recognized in the period when change occurs and future periods.
On balance sheet date, major aspects in the statement need to judge, estimate and consumption by the Companyare as:
1.Fixed assets are provided for depreciation by output method
The Group recognizes depreciation for unit electricity based on values of power generation machine sets, projected
power sales volume and projected net remaining value, and provides for depreciation according to depreciation ofunit electricity and actual power sales volume. Taking into account the prevailing industry policies, technologies,consumption, allocation method of power management authorities and past experiences, and the Groupmanagement believes that it is adequate for utilization life of such power generation machine sets, projected powersales volume, projected net remaining value and provision method for depreciation. If the future actual power salesvolume differs substantially from the projected one, the Group would make adjustment to unit electricitydepreciation, which would bring affects to the depreciation expenses included in profit and loss for the current andfuture periods.
2.Provision for bad debts
The Group use allowance method to state bad debt losses according to the accounting policies of accountsreceivable. Impairment of receivables is based on the assessment of the collectibility of accounts receivable.Identification of impairment of receivables requires management judgments and estimates. The differencesbetween actual results and the original estimate will affect the book value of accounts receivable as well as therecognition or reversal of provision for bad debts in the period in which the estimate is changed.
3.Allowance for inventories
Under the accounting policies of inventories and by measuring at the lower of cost and net realizable value, theGroup makes allowance for inventories that have costs higher than net realizable value or become obsolete andslow moving. Write-down of inventories to their net realizable values is based on the salability of the evaluatedinventory and their net realizable values. Identification of inventories requires management to make judgments andestimates on the basis of obtaining conclusive evidence, and considering the purpose of holding inventory and theevents after balance sheet date. The differences between actual results and the original estimate will affect the bookvalue of inventories as well as the recognition or reversal of provision for inventories in the period in which theestimate is changed.
4. Impairment provision for long-term assets
The Company makes judgment on each balance sheet date on whether there is indication of impairment in respectof non-current assets other than financial assets. Intangible assets with indefinite useful life shall also be furthertested for impairment when there is indication of impairment, in addition to the annual impairment test. Othernon-current assets other than financial assets would be test for impairment when there is indication showing itscarrying value in not likely to be recovered.
Impairment exists when carrying value of asset or assets group is higher than recoverable amount, namely thehigher of fair value less disposal cost and present value of expected future cash flow.
The calculation of the fair value less costs of disposal is based on available data from binding sales transactions inan arm’s length transaction of similar assets or observable market prices less incremental costs for disposing of theasset.
In assessing value in use, significant judgments are exercised over the asset’s production, selling price, relatedoperating expenses and discount rate to calculate the present value. All relevant materials which can be obtainedare used for estimation of the recoverable amount, including the estimation of the production, selling price andrelated operating expenses based on reasonable and supportable assumptions.
The Group determines whether goodwill is impaired at least on an annual basis. This requires an estimation of thevalue in use of the cash-generating units to which the goodwill is allocated. Estimating the value in use requires theGroup to make an estimate of the expected future cash flows from the cash-generating units and also to choose asuitable discount rate in order to calculate the present value of those cash flows.
5. Depreciation and amortization
Assets such as investment real estate and intangible assets are depreciated and amortized over their useful livesunder straight line method after taking into account residual value. The estimated useful lives of the assets areregularly reviewed to determine the depreciation and amortization costs charged in each reporting period. Theuseful lives of the assets are determined based on historical experience of similar assets and the estimated technicalchanges. If there have been significant changes in the factors used to determine the depreciation or amortization,the rate of depreciation or amortization is revised prospectively.
6. Deferred income tax assets
Deferred tax assets are recognized for all unused tax losses to the extent that it is probable that taxable profit willbe available against which the losses can be utilized. Significant management judgment is required to determinethe amount of deferred income tax assets that can be recognized, based upon the likely timing and level of futuretaxable profits together with future tax planning strategies.
7. Accrual liability
Provision for product quality guarantee, estimated onerous contracts, and delay delivery penalties shall berecognized in terms of contract, current knowledge and historical experience. If the contingent event has formed apractical obligation which probably results in outflow of economic benefits from the Group, a projected liabilityshall be recognized on the basis of the best estimate of the expenditures to settle relevant practical obligation.Recognition and measurement of the accrual liability significantly rely on the management’s judgmentsinconsideration of the assessment of relevant risks, uncertainties, time value of money and other factors related tothe contingent events.
In addition, the Company would accrual liability for after-sale quality maintenance commitment provided tocustomers in respect of goods sold, maintained and reconstructed by the Company. Recent maintenance experienceof the Company has been considered when projecting liabilities, while the recent maintenance experience may notreflect the future maintenance. Any increase or decrease of this provision may affect profit or loss for future years.
IV. Taxes
(1) Main taxation and rates
Taxation items Taxation basis Tax rateVAT
Calculate the output tax based on the sales of goods andtaxable service income calculated according to the taxlaw, after deducting the input tax allowable for deductionin the current period, the difference is the VAT payable.
6%, 9%, 10%,11% , 13%,16%
Taxation items Taxation basis Tax rateCity maintenance tax
According to the actual payment of VAT andconsumption tax
5%, 7%Education surtax
According to the actual payment of VAT andconsumption tax
3%Local education surtax
According to the actual payment of VAT andconsumption tax
2%Enterprise income tax
According to the taxable income amount
16.5%, 17%,
25%, 15%
Land-use tax of town
2 Yuan ~ 8Yuan per square meter of the actual occupied are for the industrialland located in Nanshan District, Shenzhen City; 1Yuan ~ 5 Yuan per squaremeter of the actual occupied are for the industrial land located in DongguanCity; 1Yuan per square meter of the actual occupied are for the industrialland located in Zhongshan CityLand VAT
Tax by the Value-added amount from transferring state-owned land use right,landing construction and its affiliates with four super-rate progressive taxrate
As for the taxpaying bodies have different enterprise income tax rate, explanation as:
Taxpaying body Rate of income tax
The Company 25%New Power Company25%Engineering Company25%Shenzhen Server25%Environment Protection Company15%Zhongshan Electric Power25%Weimei Electric Power25%Singapore Company17%Shen Storage25%Syndisome 16.5%
(2) Taxes preferential
1. VAT
Tax
Name of the
company
Relevant regulation and
policies basis
Approvalinstitution
Approvaldocuments
Exemptionrange
Period ofvalidity
VATEnvironment
ProtectionCompany
Notice on "contents ofproducts withcomprehensive utilizationof resources andvalue-added tax privilegeof labor service" (CS No.[2015] 78)
ShenzhenProvincialOffice, SAT(QianhaiSAT)
SQSST[2018]No.: 18302
Resourcecomprehensiveutilizationof VATrefund
31 Aug.2018 to 31July 2022
2. Income tax
According to the announcement (No. 60 of 2019) of the Ministry of Finance, the StateAdministration of Taxation, the National Development and Reform Commission, and the Ministryof Ecological Environment, and the Announcement on Issues Concerning Income Tax Policies forThird-Party Enterprises Engaged in Pollution Prevention and Control of the Ministry of Financeand the State Administration of Taxation, from January 1, 2019 to December 31, 2021, thecorporate income tax will be levied at a reduced rate of 15% on eligible third-party enterprisesengaged in pollution prevention and control. The Company’s subordinate Environment ProtectionCompany enjoys the above preferential policy and levies corporate income tax at a rate of 15%
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第183页
V. Annotation of the items in consolidate financial statement
(1) Monetary fund
Item
Ending Balance
Year-end balance of last year
Cash on hand
84,307.60
75,645.92
Bank savings
731,339,856.01
574,808,236.06
Other monetary fund
41,785,691.23
350,945,522.46
Total
773,209,854.84
925,829,404.44
Including: total amount saving aboard
6,242,072.77
6,240,695.02
Note: among the above mentioned “other monetary fund”, the restricted monetary fund includingcash deposit of 1,719,853.88 Yuan in total (on 31 Dec. 2018, the restricted monetary fund includecash deposit of 10,872,792.74 Yuan)
(2) Account receivable
1. Age analysis
Account age
Ending Balance
Year-end balance of last yearWithin one year
178,147,691.32
131,858,563.21
1 to 2 years
2 to 3 years
Over 3 years
5,769,529.84
5,769,529.84
Subtotal
183,917,221.16
137,628,093.05
Less: Bad debt provision
5,766,640.84
5,198,068.08
Total
178,150,580.32
132,430,024.97
2. According to accrual method for bad debts
Category
Ending BalanceBook balance Bad debt provision Book valueAmount
Proportion
(%)
Amount
Accrualproportion(%)
With single provision5,766,640.84
3.14
5,766,640.84
100.00
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第184页
Category
Ending BalanceBook balance Bad debt provision Book valueAmount
Proportion(%)
Amount
Accrualproportion(%)
for bad debtsWith bad debtprovision accrual basedon similar credit riskcharacteristics of aportfolio
178,150,580.32
96.86
178,150,580.32
Total
183,917,221.16
100.00
5,766,640.84
3.14
178,150,580.32
Category
Year-end balance of last yearBook balance
Bad debtprovision
Book valueAmount Ratio (%) Amount
Accrualratio (%)
Account receivable withindividual major amountand withdrawal bad debtprovision independently
3,474,613.06
2.52
3,474,613.06
100.00
Account receivable withbad debt provision accrualbased on similar credit riskcharacteristics of a portfolio
131,861,452.21
95.81
131,861,452.21
Account receivable withindividual minor amountbut withdrawal bad debtprovision independently
2,292,027.78
1.67
1,723,455.02
75.19
568,572.76
Total
137,628,093.05
100.00
5,198,068.08
3.78
132,430,024.97
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第185页
With single provision for bad debts:
Name
Ending BalanceBook amount Bad debt provision
Accrual proportion (%)
CausesShenzhenPetrochemical ProductsBonded Trading Co.,Ltd.
3,474,613.06
3,474,613.06
100.00
Uncollectible in excepted
Zhongji ConstructionDevelopment Co., Ltd.
1,137,145.51
1,137,145.51
100.00
Uncollectible in exceptedShenzhen FuhuadePower Co., Ltd
800,000.00
800,000.00
100.00
Uncollectible in exceptedOther 354,882.27
354,882.27
100.00
Uncollectible in exceptedTotal 5,766,640.84
| 5,766,640.84 |
100.00
Provision for bad debts by portfolio：
Provision by portfolio：
Name
Ending balanceAccount receivable
Bad debt provision
Accrual proportion (%)
With minorcredit risk
178,150,580.32
0.00
Recognition standards and specifications on provisions by portfolio:
The account receivable with provision for bad debts by portfolio mainly refers to the amount fromGuangdong Power Grid Co., Ltd., Shenzhen Power Supply Bureau Co., Ltd. and Shenzhen WaterBureau etc., which have minor credit risk and no provision for bad debts.
3. Bad debt provision accrual collected or switch back
Category
Year-end balance oflast year
Current amount changed
Ending Balance
Accrual
Collected orswitch back
Rewrite orwrite-offWith singleprovision for baddebts
5,198,068.08
568,572.76
5,766,640.84
There is no receivable with significant recovery or reversal amount of bad debt provision in the
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第186页
current period.
4. Account receivable without actual charge off in the period
5. Top 5 receivables at ending balance by arrears party
Total period-end balance of top five receivables by arrears party amounting to 171,019,558.28 Yuan, takes
92.99 percent of the total account receivable at period-end, bad debt provision accrual correspondingly atperiod-end amounting as 0 Yuan
6. No accounts receivable terminated recognition due to transfer of financial assets at the end of the period
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第187页
(III) Account paid in advance
1. Account paid in advance classified according to age
Age
Ending Balance Year-end balance of last yearBook balance Proportion (%) Book balance
Proportion (%)Within 1year
69,896,494.56
99.84
53,317,190.18
99.37
1 to 2years
15,600.00
0.02
277,000.00
0.52
2 to 3years
32,000.00
0.05
Over 3 years
61,586.94
0.09
61,586.94
0.11
Total
70,005,681.50
100.00
53,655,777.12
100.00
2. Top five accounts paid in advance at period-end balance listed by object
Paid in advance to Book balance
Proportion in total bookbalance of accounts paid in
advance (%)Shenzhen Gas Corporation Ltd. 33,213,297.85
47.44
Guangdong sales branch of CNOOC GasPower Group Co., Ltd.
31,826,002.77
45.46
Guangzhou Zike Environmental ProtectionTechnology Co., Ltd.
802,500.00
1.15
Nanjing Nangang Power EquipmentInstallation Co., Ltd
753,000.00
1.08
Hangzhou Xingyuan Installation Co., Ltd. 669,000.00
0.96
Total
67,263,800.62
96.08
(4) Other account receivable
Item Book balance
Year-end balance of last year
Interest receivable
Dividend receivable
Other account receivable
32,321,826.94
40,133,297.74
Total
32,321,826.94
40,133,297.74
1. Other account receivable
(1) Age analysis
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第188页
Account age
Book balance Year-end balance of last year
Within one year
4,589,653.32
5,465,474.63
1 to 2 years
1,223,336.54
8,224,869.28
2 to 3 years
3,414,019.37
2,112,308.80
Over 3 years
56,175,065.47
| 54,927,238.15 |
Subtotal
64,154,247.38
71,977,718.18
Less: Bad debt provision
31,832,420.44
31,844,420.44
Total
32,321,826.94
40,133,297.74
(2) By category
Category
Book balanceBook balance Bad debt provision
Book valueAmount
Proportion(%)
Amount
Accrualproportion(%)With single provisionfor bad debts
32,525,936.22
50.70
31,832,420.44
97.87
693,515.78
With bad debtprovision accrual basedon similar credit riskcharacteristics of aportfolio
31,628,311.16
49.30
31,628,311.16
Total64,154,247.38
100.00
31,832,420.44
49.62
32,321,826.94
Category
Year-end balance of last yearBook balance Bad debt provision
Book valueAmount
Proportion(%)
Amount
Accrualproportion (%)Account receivable withindividual majoramount and withdrawalbad debt provision
20,341,666.46
28.26
| 20,341,666.46 |
100.00
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第189页
Category
Year-end balance of last yearBook balance Bad debt provision
Book valueAmount
Proportion
(%)
Amount
Accrualproportion (%)independentlyAccount receivable withbad debt provisionaccrual based on similarcredit riskcharacteristics of aportfolio
39,543,015.85
54.94
39,543,015.85
Account receivable withindividual minoramount but withdrawalbad debt provisionindependently
12,093,035.87
16.80
11,502,753.98
95.12
590,281.89
Total
71,977,718.18
100.00
| 31,844,420.44 |
44.24
40,133,297.74
With single provision for bad debts:
Name
Book balanceBook balance Bad debt provision
Accrual ratio （%）
Accrual reasonsHuiyang KangtaiIndustrial Company
14,311,626.70
14,311,626.70
100.00
Un-collectable in exceptedShandong JinanGeneration EquipmentPlant
3,560,000.00
3,560,000.00
100.00
Un-collectable in exceptedIndividual income tax
2,470,039.76
2,470,039.76
100.00
Un-collectable in exceptedDormitory amountreceivable
2,083,698.16
1,736,004.16
83.31
Some un-collectable in excepted
Personal receivables 7,498,997.87
7,498,997.87
100.00
Un-collectable in exceptedDeposit receivable
1,658,796.73
1,312,974.95
79.15
Some un-collectable in excepted
Other
942,777.00
942,777.00
100.00
Un-collectable in excepted
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第190页
Name
Book balanceBook balance Bad debt provision
Accrual ratio （%）
Accrual reasonsTotal32,525,936.22
31,832,420.44
97.87
Provision for bad debts by portfolio：
Provision by portfolio：
Name
Ending balanceOther account receivable Bad debt provision Accrual proportion (%)With minor credit risk
31,628,311.16
0.00
Recognition standards and specifications on provisions by portfolio:
The Company believes that the credit risk of other account receivable with no impairment in thesingle assessment is relatively low, no provision for bad debts, unless there is an evidence that acertain other account receivable is at greater credit risk.
(3) Accrual of bad debt provision
Bad debt provision
Phases I Phases II Phases III
TotalExpected creditlosses over next 12months
Expected creditlosses for the entireduration (withoutcredit impairmentoccurred)
Expected credit
losses for theentire duration
(with creditimpairmentoccurred)Balance at year-begin
31,844,420.44
31,844,420.44
Book balance of other accountreceivable at year-begin
——Turn to phase II
——Turn to phase III
——Return to Phase II
——Return to Phase I
Current accrual
Current switch back
12,000.00
12,000.00
Rewrite in the period
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第191页
Bad debt provision
Phases I Phases II Phases III
TotalExpected creditlosses over next 12
months
Expected creditlosses for the entireduration (withoutcredit impairmentoccurred)
Expected creditlosses for theentire duration(with creditimpairmentoccurred)Write-off in the period
Other changes
Book balance
31,832,420.44
31,832,420.44
(4) Bad debt provision accrual collected or switch-back in the period
Category
Year-end balance
of last year
Current amount changed
Book balanceAccrual
Collected orswitch back
Rewrite orwrite-offBad debtprovision forother receivables
31,844,420.44
12,000.00
31,832,420.44
(5) No other accounts receivable that had actually written off in the period
(6) By nature
Nature Ending book balance Book balance at last year-endDormitory receivables 2,083,698.16
2,083,698.16
Deposit receivable 8,114,769.72
12,298,576.24
Personal receivables 10,625,884.03
10,766,320.69
Co management account 13,114,012.69
12,933,737.96
accounts receivable ofHuidong Server
9,060,361.44
10,205,161.44
Other 21,155,521.34
23,690,223.69
Total 64,154,247.38
71,977,718.18
(7) Top five other account receivables at period-end balance listed by arrears party
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第192页
Name of the companyNature Ending blanceAge
Proportion intotal period-endbalance ofother accountreceivable (%)
Period-endbalance of baddebt provision
Huidong Server HarborComprehensiveDevelopment Co., Ltd.
Mortgage,loan andinterest
22,174,374.13
Over 3years
34.56
Huiyang County KangtaiIndustrial Company
Other 14,311,626.70
Over 3years
22.31
14,311,626.70
China MachineryEngineering Corporation
Guaranteemoney
4,833,938.24
Within 4years
7.53
Shandong Jinan PowerEquipment Factory
Other 3,560,000.00
Over 3years
5.55
3,560,000.00
Asset ManagementBranch of ShenzhenOverseas Chinese TownCo., Ltd.
Deposit forrenting officebuilding
1,518,624.00
Within 5years
2.37
46,398,563.07
72.32
17,871,626.70
(8) No receivables involving government subsidies at the end of the period
(9) No other receivables terminated recognition due to transfer of financial assets
(5) Inventory
1. Classification
Item
Ending Balance
Year-end balance of last yearBook balance
Inventoryfalling pricereserves
Book value Book balance
Inventoryfalling price
reserves
Book valueRawmaterials
171,828,426.19
47,141,982.58
124,686,443.61
177,479,127.97
52,720,793.00
124,758,334.97
2. Inventory falling price reserves
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第193页
Item
Year-endbalance of lastyear
Current increased Current decreased
EndingBalanceAccrual
Other
Switch-back orwrite-off
Other
Raw materials52,720,793.00
5,578,810.42
47,141,982.58
3. Accrual basis for the depreciation provision of inventory and reasons of switch-back orwrite-off in the year
Item Accrual basis
Reasons ofswitch-back
Reasons of write-offRaw materialsCost higher the net realizable value
Not applicableSpare parts on sale
(6) Other current assets
Item Ending Balance
Year-end balance
of last yearVAT input tax deductible
349,953,491.34
383,495,754.13
| 349,953,491.34 |
Enterprise income tax paid in advance
6,583,089.98
6,583,089.98
Financial products 86,000,000.00
Accrual interest of time deposit 2,670,150.01
Other30,000.00
30,000.00
Total
445,236,731.33
390,108,844.11
(7) Financial assets available for sale
Item
Year-end balance of last yearBook balance Depreciation reserves
Book valueDebt instrument available forsale
Equity instrument availablefor sale
63,115,000.00
2,500,000.00
60,615,000.00
Including: measured by fairvalue
measured by cost 63,115,000.00
2,500,000.00
60,615,000.00
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第194页
Item
Year-end balance of last yearBook balance Depreciation reserves
Book valueTotal63,115,000.00
2,500,000.00
60,615,000.00
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第195页
(8) Long-term equity investment
The investedentity
Year-endbalance of last
year
Changes +,-
EndingBalance
Period-endbalance ofdepreciation
reservesAdditionalinvestment
Disinvestment
Investment gains/losses
recognized by equitymethod
Othercomprehensive
incomeadjustment
Otherchanges in
equity
Declaration of
profits
Provision
forimpairment
cash dividends or
Other
1. Joint venture
Huidong ServerHarbor ComprehensiveDevelopment Company(“Huidong Server” for short)
16,049,044.95
-1,429,841.92
14,619,203.03
Total 16,049,044.95
-1,429,841.92
14,619,203.03
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第196页
(9) Other equity instrument investment
1. Other equity instrument investment
Item Book balanceCPI Jiangxi Nuclear Power Company
60,615,000.00
Shenzhen Petrochemical Oil Bonded TradeCo., Ltd. - investment cost
2,500,000.00
Shenzhen Petrochemical Oil Bonded TradeCo., Ltd. - change in fair value
-2,500,000.00
Total 60,615,000.00
2. Non trading equity instrument investment
Item
Dividendincomerecognizedin thecurrentperiod
Accumulatedgain
Accumulatedloss
Retainedearningstransferredfrom othercomprehensive
income
Designated as theinvestment measured at fairvalue and whose changesreckoned into othercomprehensive income
(explain reasons)
Reasons ofretained earningstransferred fromothercomprehensiveincome
JiangxiNuclearPower Co.,Ltd.
intents to holding for along-term
ShenzhenPetrochemical Oil BondedTrade Co.,Ltd.
-2,500,000.00
intents to holding for along-term
Total
-2,500,000.00
(10) Investment real estate
1. Investment real estate measured at cost
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第197页
Item
House and
building
Land use
right
Construction inprogress
Total
1. Original book value
(1) Year-end balance of last
year
9,708,014.96
9,708,014.96
(2) Current increased
(3) Current decreased
(4) Ending Balance
9,708,014.96
9,708,014.96
2. Accumulated depreciation
and accumulated amortization
(1) Year-end balance of last
year
7,101,712.25
7,101,712.25
(2) Current increased
204,975.71
204,975.71
—Accrual oramortization
204,975.71
204,975.71
(3) Current decreased
(4) Book balance 7,306,687.96
7,306,687.96
3. Depreciation provision
(1) Year-end balance of last
year
(2) Current increased
(3) Current decreased
(4) Book balance
4. Book value
(1) Period-end book value
2,401,327.00
2,401,327.00
(2) Year-begin book value
2,606,302.71
2,606,302.71
(11) Fixed assets
1. Fixed assets and disposal of fixed assets
Item Ending Balance
Year-end balance of last year
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第198页
Item Ending BalanceYear-end balance of last yearFixed assets
1,381,675,872.68
1,405,648,674.64
Disposal of fixed assets
1,314.60
Total
1,381,675,872.68
1,405,649,989.24
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第199页
2. Fixed assets
Item
House andbuildings
Machineryequipment
Transportationtools
Otherequipment
Total
1. Original book value
493,659,821.94
4,011,690,503.45
21,694,643.51
50,934,529.40
4,577,979,498.30
(1) Year-end balance of
last year
7,666,365.02
67,311,484.15
3,697,195.36
5,608,394.73
84,283,439.26
(2) Current increased
7,646,129.62
3,313,084.99
3,697,195.36
3,680,576.84
18,336,986.81
—Purchase 20,235.40
63,998,399.16
1,927,817.89
65,946,452.45
—Constructionin progresstransfer-in
—Inventorytransfer-in
5,085.48
9,055,154.68
735,361.22
9,795,601.38
(3) Current decreased 5,085.48
9,055,154.68
735,361.22
9,795,601.38
—Disposal orscrapping
—Otherdecreased
501,321,101.48
4,079,001,987.60
16,336,684.19
55,807,562.91
4,652,467,336.18
(4) Ending Balance
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第200页
Item
House andbuildings
Machineryequipment
Transportationtools
Otherequipment
Total
2. Accumulated
depreciation
295,042,092.71
2,680,198,815.48
14,840,509.71
41,115,495.64
3,031,196,913.54
(1) Year-end balance of
last year
13,665,474.17
88,027,147.55
1,201,540.33
2,666,999.33
105,561,161.38
(2) Current increased
13,665,474.17
88,027,147.55
1,201,540.33
2,666,999.33
105,561,161.38
—Accrual 2,710.93
6,795,691.70
302,118.91
7,100,521.54
(3) Current decreased 2,710.93
6,795,691.70
302,118.91
7,100,521.54
—Disposal orscrapping
—Otherdecreased
308,704,855.95
2,768,225,963.03
9,246,358.34
43,480,376.06
3,129,657,553.38
（4）Book balance
3. Impairment
provision
14,860,025.13
126,273,884.99
141,133,910.12
（1）Year-end balance
of last year
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第201页
Item
House andbuildings
Machineryequipment
Transportation
tools
Otherequipment
Total
(2) Current increased
—Accrual
(3) Current decreased
—Disposal orscrapping
14,860,025.13
126,273,884.99
141,133,910.12
（4）Book balance
4. Book value
177,756,220.40
1,184,502,139.58
7,090,325.85
12,327,186.85
1,381,675,872.68
(1) Closing book value
183,757,704.10
1,205,217,802.98
6,854,133.80
9,819,033.76
1,405,648,674.64
(2) Book value at the
end of last year
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第202页
3. Idle fixed assets temporary
Item
Original bookvalue
Accumulateddepreciation
Impairmentprovision
Book value NoteHousing &buildings
137,799,917.53
101,832,783.51
19,008,224.87
16,958,909.15
Machineryequipment
598,963,723.77
503,982,327.70
53,845,307.96
41,136,088.11
Transportationequipment
256,300.00
230,670.00
25,630.00
Total737,019,941.30
606,045,781.21
72,853,532.83
58,120,627.26
4. No fixed assets acquired by financing lease
5. No fixed assets acquired by operating lease
6. Fixed assets without property rights certificate
Item Book value
Reasons for failing to complete theproperty rights certificateBooster station
3,962,705.44
Procedures uncompletedSteam turbine workshop
1,437,359.56
Procedures uncompletedChemical water tower
2,363,171.86
Procedures uncompletedTreatment shop for heavy oil
464,359.97
Procedures uncompletedStart-up boiler house
104,559.07
Procedures uncompletedFire pump room
242,318.01
Procedures uncompletedCirculating water pump house
1,520,701.82
Procedures uncompletedComprehensive building
4,037,328.94
Procedures uncompletedProduction and inspection building
4,396,371.57
Procedures uncompletedAdministrative building
4,520,121.49
Procedures uncompletedMail room of the main entrance
183,112.49
Procedures uncompletedTurbine building and annex building
9,051,072.01
Procedures uncompletedPlant’s ventilating system
470,359.99
Procedures uncompleted
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第203页
Item Book value
Reasons for failing to complete theproperty rights certificateOffice building
4,580,219.04
Procedures uncompletedDraft cooling tower
2,908,057.70
Procedures uncompletedChemical water workshop andfoundation of water tank
1,382,109.49
Procedures uncompletedIndustry pool and industry pump house
606,581.28
Procedures uncompletedStart-up boiler house
101,354.77
Procedures uncompletedOil treatment room and oil un
337,538.98
Procedures uncompletedComprehensive building canteen
285,713.55
Procedures uncompletedChemical water treatment workshop 232,960.00
Procedures uncompletedCooling tower 673,259.25
Procedures uncompletedTotal 43,861,336.28
7. Fixed assets disposal
Item Ending Balance
Year-end balance of last
yearOther
1,314.60
(12) Construction in progress
1. Construction in progress and Engineering materials
Item Ending Balance
Year-end balance of last year
Construction in progress 66,474,630.23
82,348,008.39
Engineering materials
Total 66,474,630.23
82,348,008.39
2. Construction in progress
Item
Ending Balance
Year-end balance of last yearBook balance
Impairmentprovision
Book value Book balance
Impairmentprovision
Book valueCogeneration
63,151,182.64
63,151,182.64
64,754,943.63
64,754,943.63
Oil to GasWorks32,871,600.26
32,871,600.26
32,871,600.26
32,871,600.26
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第204页
Item
Ending BalanceYear-end balance of last yearBook balance
Impairmentprovision
Book value Book balance
Impairmentprovision
Book valueTechnicalinnovation3,061,557.07
3,061,557.07
17,021,868.33
17,021,868.33
Other
261,890.52
261,890.52
571,196.43
571,196.43
Total
99,346,230.49
32,871,600.26
66,474,630.23
115,219,608.65
32,871,600.26
82,348,008.39
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第205页
3. Changes of significant projects in construction in the year
Item Budget
Year-endbalance of lastyear
Increase ofthis period
Transferredfixed assets inthis period
Otherdecrease inthe period
EndingBalance
Proportion ofaccumulative
projectinvestment in
budget (%)
Projectprogress(%)
Accumulative
amount ofcapitalization
of interest
Including:
capitalization
of interest
Rate ofinterestcapitalization
(%)
Capitalsources
Cogeneration
Accumulative
120,000,000.00
64,754,943.63
14,011,631.75
15,615,392.74
63,151,182.64
65.64
65.64
| 6,476,185.46 | 1,362,031.20 |
5.16
Self-raisedandborrowing
Oil to GasWorks
74,400,000.00
32,871,600.26
32,871,600.26
63.76
63.76
Self-raised
Technicalinnovation
17,021,868.33
30,006,744.20
43,967,055.46
3,061,557.07
Notapplicable
Notapplicable
Self-raised
Other
571,196.43
6,592,566.48
6,364,004.25
537,868.14
261,890.52
Self-raised
Total194,400,000.00
115,219,608.65
50,610,942.43
| 65,946,452.45 |
537,868.14
99,346,230.49
| 6,476,185.46 | 1,362,031.20 |
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第206页
4. No accrual of impairment provision for Construction in progress in the period
(13) Intangible assets
1. Intangible assets
Item Land use right
Software Total
1. Original book value
(1) Year-end balance of last year
91,398,125.27
3,533,609.85
94,931,735.12
(2) Current increased
43,978.95
43,978.95
—Purchase
43,978.95
43,978.95
(3) Current decreased 42,129.81
42,129.81
—Disposal 42,129.81
42,129.81
(4) Book balance
91,355,995.46
3,577,588.80
94,933,584.26
2. Accumulated amortization
(1) Year-end balance of last year
45,923,214.98
3,021,264.90
48,944,479.88
(2) Current increased 2,199,246.16
229,821.59
2,429,067.75
—Purchase 2,199,246.16
229,821.59
2,429,067.75
(3) Current decreased 42,129.81
42,129.81
—Disposal
-
（4）Book balance
48,080,331.33
3,251,086.49
51,331,417.82
3. Depreciation reserves
（1）Year-end balance of last
year
(2) Current increased
—Purchase
(3) Current decreased
—Disposal
（4）Book balance
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第207页
Item Land use right
Software Total
4. Book value
(1) Closing book value
43,275,664.13
326,502.31
43,602,166.44
(2) Book value at the end of last
year
45,474,910.29
512,344.95
45,987,255.24
2. Land use rights without property rights certificate
Item Book value
Reasons for failing tocomplete the property rights
certificateLand use right of the wharf and pipegallery
530,733.25
Property rights certificate is
undergoing
(14) Long-term deferred expenses
Item
Year-end balanceof last year
Current increasedamount
Amortized in thePeriod
Other decrease
Book balanceExhibition halldecorationamount
1,259,714.03
85,542.87
1,174,171.16
(15) Deferred income tax assets and deferred income tax liabilities
1. Deferred income tax assets without offsetting
Item
Ending Balance
Year-end balance of last yearDeductibletemporary difference
Deferred incometax assets
Deductibletemporarydifference
Deferred incometax assetsBad debt provision foraccount receivbale
5,628,573.77
1,400,153.44
5,060,001.01
1,265,000.26
Bad debt provision forother receivable
723,585.00
180,896.25
723,585.00
180,896.25
Changes in fair value ofother equity instrumentinvestments
2,500,000.00
625,000.00
2,500,000.00
625,000.00
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第208页
Item
Ending BalanceYear-end balance of last yearDeductibletemporary difference
Deferred incometax assets
Deductibletemporarydifference
Deferred incometax assetsOther
1,711.00
427.75
Total8,852,158.77
2,206,049.69
8,285,297.01
2,071,324.26
2. Details of unrecognized deferred income tax assets
Item Ending Balance
Year-endbalance of lastyearDeductible temporary difference
252,394,395.47
| 276,187,603.06 |
Deductible loss
195,054,252.98
395,069,735.26
Total
447,448,648.45
671,257,338.32
3. Deductible losses of un-recognized deferred income tax assets expired on the followed year
Year Ending Balance
Year-endbalance of last
year
Note2019
178,967,165.82
2020
51,262,905.45
47,718,047.63
2021
74,575,975.11
83,592,334.40
2022
23,638,284.56
41,344,372.81
2023
41,640,520.44
43,447,814.60
2024
3,936,567.42
Total
195,054,252.98
395,069,735.26
(16) Other non-current assets
Item
Ending Balance
Year-end balance of last yearBook balance
Depreciation
reserve
Book value Book balance
| Depreciation | ||
Depreciationreserve
Book valueAdvancepayment on
2,023,500.00
2,023,500.00
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第209页
Item
Ending BalanceYear-end balance of last yearBook balance
Depreciation
reserve
Book value Book balance
| Depreciation | ||
Depreciationreserve
Book valueconstructionandequipment
Project ofLNG (Note)
| 22,882,181.78 | 22,882,181.78 | ||||||
22,882,181.78
22,882,181.78
Total
22,882,181.78
| 22,882,181.78 | 22,882,181.78 |
24,905,681.78
24,905,681.78
Note: the project was jointly constructed by Weimei Electric Power Company and GuangdongDapeng Liquid Natural Gas Co., Ltd.(hereinafter referred to as Dapeng LNG). According to thecontract signed between the two parties, before the project involved by this construction acquiredapproval from the relevant national authorities, the ownership belongs to both parties. After suchapproval, Dapeng LNG will acquire LNG project. Thus, Weimei Electric Power Companyrecorded under the item of “other non-current assets”.
(17) Short-term loans
1. Classification
Item Ending Balance
Year-end balanceof last yearGuarantee loans300,000,000.00
140,000,000.00
Credit loans
580,000,000.00
860,000,000.00
Accrued interest 1,075,378.48
Total
881,075,378.48
1,000,000,000.00
(18) Account payable
1. Account payable
Item Ending Balance
Year-end balance oflast yearMaterials
12,180,417.48
8,545,427.20
Electricity
1,760,985.99
906,278.78
Labor3,102,530.32
6,068,363.67
Others
2,827,168.62
2,545,829.04
Total19,871,102.41
18,065,898.69
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第210页
2. There is no major amount payable with over one year age at end of the period
(19)Payroll payable
1. Payroll payable
Item
Year-end balanceof last year
Current increased
CurrentDecreased
Ending Balance
Short-term remuneration
44,673,492.37
| 138,627,937.35 |
128,500,425.30
| 54,801,004.42 |
Post-employmentwelfare-defined contributionplans
239,107.29
16,911,675.17 16,743,354.35
407,428.11
Severance Pay
Other welfare due within oneyear
Total44,912,599.66
155,539,612.52
| 145,243,779.65 |
55,208,432.53
2. Short-term remuneration
Item
Year-end balanceof last year
Current increased
CurrentDecreased
Book balance
(1) Wages , bonuses, allowances and
subsidies
43,587,594.10
117,553,789.15
107,562,266.27
53,579,116.98
(2) Welfare for workers and
staff
709,174.26
646,124.26
63,050.00
(3) Social insurance
123,634.93
6,494,524.64
6,418,814.58
199,344.99
Including: Medicalinsurance
102,720.39
6,229,146.09
6,164,047.74
167,818.74
Work injuryinsurance
11,021.84
86,760.12
84,642.62
13,139.34
Maternityinsurance
9,892.70
178,618.43
170,124.22
18,386.91
(4) Housing accumulation fund 503,857.94
11,881,690.26
11,770,767.62
614,780.58
(5) Labor union expenditure
and personnel education
458,405.40
1,756,403.04
1,870,096.57
344,711.87
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第211页
Item
Year-end balanceof last year
Current increased
CurrentDecreased
Book balance
expense
(6) Short-term paid absence
(7) Short-term profit sharing
plan
(8) Other short-term
remuneration
232,356.00
232,356.00
Total
44,673,492.37
138,627,937.35
128,500,425.30
54,801,004.42
3. Defined contribution plans
Item
Year-end balanceof last year
Current increased
CurrentDecreased
Book balanceBasic endowment insurance 231,340.48
11,650,093.39
11,487,153.74
394,280.13
Unemployment insurance 7,907.83
148,287.76
143,345.61
12,849.98
Enterprise annuity -141.02
5,113,294.02
5,112,855.00
298.00
Total
239,107.29
16,911,675.17
16,743,354.35
407,428.11
(20) Taxes payable
Item Ending Balance
Year-end balance of
last yearEnterprise income tax3,407,074.02
11,215,405.89
Real estate tax
996,166.86
2,211,605.38
Individual income tax1,550,858.52
1,251,539.31
Land-use tax of town
603,884.89
VAT
508,589.03
| 15,053,172.64 |
Other
762,001.73
209,015.05
Total21,769,273.77
16,000,039.55
(21) Other account payable
Item Ending Balance
Year-end balance of last year
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第212页
Item Ending Balance
Year-end balance of last year
Interest payable
1,608,290.72
Dividends payable
Other account payable
61,483,590.71
Total
63,091,881.43
1. Interest payable
Item Ending BalanceYear-end balance of last year
Amortization of long-term loan’s interest andrepayment of principal at maturity
50,826.19
Interest payable for short-term loans
1,557,464.53
Total
1,608,290.72
2. Other account payable
(1) Other payable by nature
Item Book balance
Year-end balance oflast yearEngineering funds
13,045,165.88
30,866,827.67
Quality assurance
6,825,475.53
8,285,192.04
Accrued expenses
10,301,185.40
6,867,153.90
Material payment
| 5,453,034.68 |
Equipment fund
3,718,050.65
457,760.33
Land use fee
348,534.19
Board expenses
Other
9,205,087.90
| 9,801,594.60 |
Total43,691,472.06
61,483,590.71
(2) Other account payable of more than one year is of 18,303,816.84 Yuan (December 31, 2018:
21,287,389.24 Yuan), which is mainly the engineering equipment fund payable and guaranteemoney.
(22) Long-term loans
Classification of long-term loans:
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第213页
ItemBook balance Year-end balance of last year
Guarantee loans
25,940,000.00
(23) Accrual liability
Item
Book balance
Year-end balance of last
year
ReasonGuarantee offering outside26,646,056.28
26,726,232.38
Total
26,646,056.28
26,726,232.38
Note: On 29 November 2013, Shenzhen Server and Jiahua Building Products (Shenzhen) Co., Ltd.(Jiahua Building) signed a supplementary term aiming at equity transfer over equity attributionand division of Yapojiao Dock, which belongs to Shenzhen Server, Huidong Server, and HuidongNianshan Town Government as well as its subordinate Nianshan Group. In order to solve thisremaining historic problem, Shenzhen Server saved RMB 12,500,000.00 in condominium depositaccount as guarantee. In addition, Server pledged its 20% of equity holding from Huidong Serverto Jiahua Architecture with pledge duration of 2 years. The amount of collateral on loans could notexceed RMB 15,000,000.00. Relevant losses with the event concerned predicted amounting toRMB 27, 500,000.00 by the Group. The costs for lawyers from 2014 to 2019 and the costs forproblem left over by history amounting to 853,943.72 Yuan, ending balance amounted as26,646,056.28 Yuan.
(24) Deferred income
Item
-end balance oflast year
Current increased
| Year | ||
Currentdecreased
Ending Balance
ReasonsGovernmentsubsidy
75,612,259.33
38,097,273.00
5,201,848.81
108,507,683.52
Items with government subsidy involved:
Liability
Year-endbalance of lastyear
Subsidy amountnewly increased inthe current period
Amount includedin current profitand loss
Otherchange
Book balance
Assetsrelated/incomerelatedSubsidy forlow-nitrogentransformation
25,687,642.10
522,511.46
25,165,130.64
Assets relatedInformationconstruction
147,843.08
61,176.48
86,666.60
Assets relatedSupport fund of
8,098,276.87
647,002.92
7,451,273.95
Assets related
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第214页
Liability
Year-endbalance of last
year
Subsidy amountnewly increased inthe current period
Amount includedin current profit
and loss
Otherchange
Book balance
Assetsrelated/incomerelatedrecyclingeconomy forsludge dryingTreasury subsidiesfor sludge drying
3,081,250.00
255,000.00
2,826,250.00
Assets relatedSpecial funds forenergyconservation andemissionreduction
798,260.62
114,037.32
684,223.30
Assets relatedFunded of energyefficiencyimprovement forelectric machine
436,320.00
34,560.00
401,760.00
Assets relatedSubsidy forquality promotionof the airenvironment inShenzhen
32,732,666.66
38,097,273.00
3,567,560.63
67,262,379.03
Assets relatedCogeneration
4,630,000.00
4,630,000.00
Assets relatedTotal
75,612,259.33
38,097,273.00
5,201,848.81
108,507,683.52
(25) Share capital
Item
Year-end balance
of last year
Changes in this period(+ -) Ending Balance
New shares
New sharesissued
Bonusshares
Capitalizingfrom reserves
| issued |
Other
Subtotal
Total shares
| 602,762,596.00 |
602,762,596.00
(26) Capital reserve
Item
Year-end balance of last
year
Currentincreased
Currentdecreased
Book balanceCapital premium（Sharepremium）
233,035,439.62
233,035,439.62
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第215页
Item
Year-end balance of last
year
Currentincreased
Currentdecreased
Book balanceOther capitalreserve
129,735,482.48
129,735,482.48Total362,770,922.10
362,770,922.10
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第216页
(27) Other comprehensive income
Item
Year-end balance
of last year
Current period
Book balance
Account beforeincome tax in theyear
Less: written inothercomprehensive
| income in previous |
period and carriedforward to gains
and losses incurrent period
Less : income taxexpense
Belong to parentcompany after tax
Belong to minority
shareholders aftertax
1. Other comprehensive income items which will not be
reclassified subsequently to profit of loss
-2,500,000.00
Belong to minority
-2,500,000.00
Including: changes of the defined benefit plans thatre-measured
Other comprehensive income under equity methodthat cannot be transfer to gain/loss
Change of fair value of investment in other equityinstrument
-2,500,000.00
-2,500,000.00
Fair value change of enterprise's credit risk
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第217页
Item
Year-end balance
of last year
Current period
Book balance
Account beforeincome tax in theyear
Less: written in
othercomprehensive
| income in previous |
period and carried
forward to gains
and losses incurrent period
Less : income taxexpense
Belong to parentcompany after tax
Belong to minority
shareholders after
tax
2. Other comprehensive income items which will be
reclassified subsequently to profit or loss
Belong to minority
including: other comprehensive income under equitymethod that can transfer to gain/loss
Change of fair value of other debt investment
Amount of financial assets re-classify to othercomprehensive income
Credit impairment provision for other debtinvestment
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第218页
Item
Year-end balance
of last year
Current period
Book balance
Account beforeincome tax in theyear
Less: written in
othercomprehensive
| income in previous |
period and carried
forward to gains
and losses incurrent period
Less : income taxexpense
Belong to parentcompany after tax
Belong to minority
shareholders aftertax
Cash flow hedging reserve
Belong to minority
Translation differences arising on translation offoreign currency financial statements
Total other comprehensive income -2,500,000.00
-2,500,000.00
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第219页
(28) Surplus reserve
Item
Year-end balance oflast year
Current increased Current decreased Book balanceLegal surplus reserve 310,158,957.87
310,158,957.87
Discretionary surplusreserve
22,749,439.73
22,749,439.73
Total
332,908,397.60
332,908,397.60
Note: according to the Company Law and the Articles of Association, the Company takes 10% ofthe net profit aside as legal surplus reserve. No more provision is made when the accumulatedlegal surplus reserve exceeds 50% of the registered capital.After provision for legal surplus reserve, the Company can make provision for other surplus reserve. As approved,other surplus reserve can be used to make up for previous loss or increase share capital.
(29) Retained profit
Item Current amount
Last-period amountRetained profit of last year before adjusted679,429,935.81
660,176,169.69
Total retained profit adjusted (increased with +,decreased with -)
2,500,000.00
Retained profit at beginning of the year after adjusted681,929,935.81
660,176,169.69
Add: net profit attributable to shareholders of parentcompany
24,900,956.73
19,253,766.12
Less: withdrawal of statutory surplus reserve
Surplus reserves withdrawal
General risk reserve withdrawal
Common Stock dividend payable
Dividend of common shares transfer as share capital
Retained profit at period-end
706,830,892.54
679,429,935.81
Details of adjustment of undistributed profits at the beginning of the year:
Due to the retroactive adjustment for implementing the New Financial Instrument Standards andother relevant regulations, affected the retained profit at year beginning of the year of2,500,000.00 Yuan.
(30) Operating income and operating cost
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第220页
Item
Current amount Last-period amountIncome Cost Income CostMain business1,215,058,062.82
| 1,061,104,493.35 |
1,878,841,697.58
1,750,795,731.12
Other business
7,519,891.71
812,220.50
6,095,411.42
1,357,596.08
Total
1,222,577,954.53
| 1,222,577,954.53 | 1,061,916,713.85 |
1,884,937,109.00
1,752,153,327.20
(31) Tax and surcharge
Item Current amount Last-period amount
City maintenance tax
1,350,602.20
3,738,452.65
Education surtax1,120,703.54
2,992,379.14
Real estate tax
2,821,267.33
2,773,508.22
Stamp tax924,912.41
1,278,024.52
Environmental protection tax
186,572.41
408,455.52
Land holding tax1,141,596.06
216,473.76
Vehicle and vessel usage tax
31,316.56
36,026.56
Other 63,814.32
Total 7,640,784.83
11,443,320.37
(32) Sales expense
Item Current amount Last-period amountSludge treatment costs
4,031,523.46
2,544,476.93
Salary, welfare and social insurance
996,151.70
691,816.59
Social expenses
268,359.94
201,223.00
Agency engagement fee
75,971.70
116,509.43
Property insurance
49,130.74
50,318.44
Fleet cost
30,638.59
22,500.00
Travel expenses
28,899.36
13,014.07
Rental fee
28,800.00
18,000.00
Labor insurance fee
27,960.33
18,102.82
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第221页
Item Current amount Last-period amountHousing fund
24,528.10
15,087.50
Food expenses
16,800.00
10,500.00
Inspection charges
15,141.51
9,764.17
Communication expenses5,400.00
4,500.00
Total
5,599,305.43
3,715,812.95
(33) Administration expense
Item Current amount Last-period amount
Wages
58,981,116.34
47,890,400.95
Rental fee
6,580,207.65
6,323,522.54
Depreciation
5,649,591.19
4,764,036.42
Social expenses
3,771,769.48
3,411,512.74
Food expenses
3,592,575.99
3,120,617.29
Agency fee
3,095,141.29
2,350,265.20
Repairing cost
2,969,577.00
2,930,434.16
Eco fee
2,106,321.81
143,781.56
Fleet cost
1,845,751.95
3,665,196.55
Office fee
1,814,835.07
1,063,065.17
Board charges
1,524,267.12
796,816.58
Communication expenses
1,215,924.18
1,169,925.27
Amortization of intangible assets
1,167,628.79
1,876,332.67
Corporate culture fee
1,131,607.97
946,618.31
Property management fee
976,311.67
941,367.40
Business travel expenses
961,610.72
946,488.78
Fee for stock certificate
897,478.35
627,503.93
Other
11,260,183.61
10,561,812.35
Total109,541,900.18
93,529,697.87
(34) Financial expense
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第222页
Item Current amount Last-period amountInterest expenses
50,574,483.78
51,698,416.45
Less: capitalized interest
1,362,031.20
3,117,772.76
Expenses interest
49,212,452.58
48,580,643.69
Less: interest income
26,884,777.55
9,503,215.24
Exchange loss (gains is listed with ”-”)
-88,809.42
-285,596.77
Other
71,842.43
814,411.75
Total
39,606,243.43
| 22,310,708.04 |
(35) Other Income
Item
Currentamount
Last-periodamountGovernment grants 10,137,838.38
8,428,575.96
Additional deduction on input tax
Commission for withholding the individual income tax
Income from debt restructuring
Total 10,137,838.38
8,428,575.96
Government subsidies included in other income
ItemCurrent amount
Last-period amount
Asset related /income relatedVAT rebates
3,734,989.56
4,381,604.17
Income relatedSubsidy for low-nitrogen transformation
522,511.47
2,586,861.73
Asset relatedSupport fund of recycling economy forsludge drying
647,002.92
647,002.92
Asset relatedTreasury subsidies for sludge drying
255,000.00
255,000.00
Asset relatedSubsidy for quality promotion of the airenvironment in Shenzhen
3,567,560.63
147,333.34
Asset relatedSpecial funds for energy conservation andemission reduction
114,037.32
114,037.32
Asset relatedSpecial funds for the development ofindependent innovation industries
100,000.00
Asset related
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第223页
ItemCurrent amount
Last-period amount
Asset related /income relatedFunds for energy conservation andemission reduction in 2018
100,000.00
Asset relatedInformation construction
61,176.48
61,176.48
Asset relatedFunded of energy efficiency improvementfor electric machine
34,560.00
34,560.00
Asset relatedEmployment and unemploymentmonitoring subsidy
1,000.00
1,000.00
Income relatedSupporting funds of office occupancy forlisted companies
200,000.00
Income relatedReward to encouraging small andmedium-sized enterprise to growth as ascale-sized company
1,000,000.00
Income relatedTotal
10,137,838.38
8,428,575.96
(36) Investment income
Item
Currentamount
Last-periodamountLong-term equity investment income by equity
-1,429,841.92
-2,205,628.45
(37) Credit impairment loss
Item Current amountBad debt loss of accounts receivable -568,572.76
Bad debt loss of other receivables 12,000.00
Total -556,572.76
(38) Assets impairment loss
Item Current amount Last-period amountBad debt losses
-385,343.65
(39)Income from disposal of assets
Item Current amount
Last-periodamount
Amount reckoned into non-recurringgains/losses of the PeriodProfit and loss on disposal of fixed-279,099.94
-279,099.94
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第224页
Item Current amount
Last-periodamount
Amount reckoned into non-recurringgains/losses of the Periodassets
(40) Non-operating revenue
Item Current amount Last-period amount
Amount reckoned into
non-recurringgains/losses of thePeriodGovernment subsidy withoutroutine operation concerned
1,078,000.00
Account no need to paid
37,862,169.31
Sales of waste materials 1,512,577.78
1,512,577.78
Selling the carbon emission quota 2,383,489.15
2,383,489.15
Other
1,705,150.00
324,276.72
1,705,150.00
Total
5,601,216.93
39,264,446.03
5,601,216.93
(41) Non-operating expenditure
Item Current amount Last-period amount
Amount reckoned into
non-recurringgains/losses of thePeriodExternal donation 10,000.00
10,000.00
10,000.00
Extraordinary loss
Inventory loss
Loss of scrap from non-currentassets
248,009.08
1,019,608.30
248,009.08
Other
12,339.71
111,924.20
12,339.71
Total
270,348.79
1,141,532.50
270,348.79
(42) Income tax expense
1. Income tax expense
Item Current amount Last-period amount
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第225页
Item Current amount Last-period amountCurrent income tax 3,213,516.91
15,145,687.43
Deferred income tax -134,725.43
850,712.39
Total
3,078,791.48
15,996,399.82
2. Adjustment on accounting profit and income tax expenses
Item Current amountTotal profit 28,771,734.10
Income tax measured by statutory/applicable tax rate
7,192,933.53
Impact on subsidiary with different rates adaption-1,630,811.16
7,192,933.53
Impact on income tax after adjustment for previous period
-2,246,824.86
Impact on non-taxable income-135,300.44
Impact on cost, expenses and losses that unable to deducted
606,672.23
Effect of deductible losses of deferred tax assets unconfirmed at theearlier stage of use
-
2,745,141.37
Impact on deductible temporary differences or losses deductible whichwas un-recognized as deferred income tax assets
2,030,273.54
2,745,141.37
Change of the balance of deferred income assets/liabilities atperiod-begin after tax rate adjustment
6,990.01
Income tax expenses
3,078,791.48
(43) Cash flow statement
1. Cash received with other operating activities concerned
Item Current amount Last-period amountGovernment subsidy collected39,298,273.00
| 38,789,000.00 |
Interest income
23,690,836.55
9,503,215
| .24 |
Intercourse funds collected
7,534,398.30
9,251,524.96
Other
| 8,214,304.81 |
Total
78,737,812.66
| 57,543,740.20 |
2. Other cash paid in relation to operation activities
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第226页
Item Current amount Last-period amountOut-of-pocket expenses
48,649,620.63
40,262,754.26
Other
25,662,072.31
| 9,032,309.97 |
Total
57,681,930.60
65,924,826.57
3. Cash received from other investment activities
Item Current amount Last-period amountRepayment of loan from Huidong Serve 1,489,600.00
4. Other cash received in relation to financing activities
Item Current amount Last-period amountMargin received
5,170,000.00
21,000,000.00
Total5,170,000.00
21,000,000.00
5. Cash paid related with financing activities
Item Current amount Last-period amountMargin paid
5,170,000.00
Total
5,170,000.00
(44) Supplementary information to statement of cash flow
1. Supplementary information to statement of cash flow
Supplementary information Current amount Last-period amount
1. Net profit adjusted to cash flow of operation activities
Net profit
12,452,824.75
| 25,692,942.62 |
Add: credit impairment loss 556,572.76
Assets impairment provision
385,343.65
Depreciation of fixed assets 105,561,161.38
116,342,237.54
Amortization of intangible assets
2,429,067.75
2,483,245.36
Amortization of long-term deferred expenses
85,542.87
Loss from disposing fixed assets, intangible assets andother long-term assets (income listed with “-“)
279,099.94
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第227页
Supplementary information Current amount Last-period amountLoss on retirement of fixed assets (gain is listed with “-”)
248,009.08
1,019,608.30
Loss from changes of fair value (income listed with “-“)
Financial expense (gain listed with “-”)
48,887,169.51
48,377,859.72
Investment loss (gain listed with “-”)
1,429,841.92
2,205,628.45
Decrease of deferred income tax asset( (increase is listed with“-”)
-134,725.43
850,712.39
Decrease of inventory (increase is listed with “-”)
Decrease of inventory (increase is listed with “-”)
5,650,701.78
-22,553,190.20
Decrease of operating receivable accounts (increase islisted with “-”)
-34,099,159.37
63,686,744.28
Increase of operating payable accounts (decrease is listedwith “-”)
13,462,259.61
11,312,146.14
Other32,895,424.19
Net cash flow arising from operating activities
236,563,160.38
| 202,943,908.61 |
2. Material investment and financing not involved in cashflow
Debt capitalization
Convertible company bond due within one year
Fixed assets acquired under finance leases
3. Net change of cash and cash equivalents:
Balance of cash at period end
381,490,000.96
574,956,611.70
Less: Balance of cash at year-begin574,956,611.70
411,613,377.07
Add: Ending balance of cash equivalent
390,000,000.00
340,000,000.00
Less: Opening balance of cash equivalent
340,000,000.00
Net increasing of cash and cash equivalents
-143,466,610.74
503,343,234.63
2. Composition of cash and cash equivalent
Item
Book balance
Year-end balance of last
year
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第228页
ItemBook balance
Year-end balance of last
yearI. Cash
381,490,000.96
574,956,611.70
Including: Cash on hand84,307.60
75,645.92
Bank savings available for payment needed 381,339,856.01
574,808,236.06
Other monetary capital available for payment needed 65,837.35
72,729.72
Account due from central bank available for payment
Amount due from banks
Amount call loans to banks
II. Cash equivalent390,000,000.00
340,000,000.00
including: bond investment due within three months
III. Balance of cash and cash equivalent at period-end771,490,000.96
914,956,611.70
Including: Cash and cash equivalent of the parent companyor subsidiaries with use restricted
(45) Assets of ownership or use right restricted
Item
Book value atperiod-end
Restricted reasonMonetary Fund1,719,853.88
Cash deposit
(46) Foreign currency
1. Foreign currency
Item
Balance of foreigncurrency at period-end
Conversion rate
Balance of RMB convertedat period-endMonetary fund
Including: USD 845,635.96
6.9762
5,899,325.58
HKD 483,355.23
0.8958
432,989.62
Euro 1,017.87
7.8155
7,955.16
SGD 4,509.81
5.1739
23,333.31
VI. Change of consolidate scope
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第229页
There are no change of consolidate scope in the period.VII. Equity in other entity
(1) Equity in subsidiaries
1. Composition of the Group
Subsidiary
Mainoperation
place
Registrationplace
Businessnature
Shareholding ratio(%)
Acquired way
Directly
Indirectly
ShenzhenServer (note)
Shenzhen Shenzhen Trading
50.00
Establishment
New Power Shenzhen Shenzhen
Powergeneration
75.00
25.00
Establishment
ZhongshanElectricPower
Zhongshan
Zhongshan
Powergeneration
55.00
25.00
Establishment
EngineeringCompany
Shenzhen Shenzhen
Engineeringconsulting
60.00
40.00
Establishment
WeimeiElectricPower
Dongguan
Dongguan
Powergeneration
40.00
30.00
Establishment
EnvironmentProtectionCompany
Shenzhen Shenzhen Engineering
70.00
30.00
Establishment
SingaporeCompany
Singapore
Singapore Trading
100.00
Establishment
ShenzhenStorage
Zhongshan
Zhongshan Storage
80.00
Establishment
Syndisome
Hong Kong
Hong Kong
| Hong Kong | |
Exp. & imp.Trading
100.00
UnderdifferentcontrolNote : The Company holds 50% equity of Shenzhen Server, and takes majority voting rights inShenzhen Server, thus, the Company owes substantial control; Shenzhen Server included in theconsolidate scope of the financial statement.
2. Important non-wholly-owned subsidiary
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第230页
Subsidiary
Share-holding ratioof minority (%)
Gains/lossesattributable tominority in thePeriod
Dividendannounced todistribute forminority in thePeriod
Ending equity ofminority
Zhongshan ElectricPower
20.00
131,217.48
-18,867,757.62
Weimei Electric Power
30.00
3,010,287.14
32,527,707.33
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第231页
3. Main finance of the important non-wholly-owned subsidiary
Subsidiary
Ending Balance
Year-end balance of last year
C
urrentassets
C
Non-currentassets
Total assets
Currentliability
on-currentliability
N
Totalliability
Current assets
Non-currentassets
Total assets
Currentliability
Non-currentliability
Total liability
ZhongshanElectricPower
7,810,211.5
9,800,968.4
7,611,180.0
6,312,294.7
,637,673.3
1,949,968.1
,062,301.06
4,996,045.4
3,058,346.4
6,297,767.9
,755,453.99
8,053,221.9
WeimeiElectricPower
61,785,250.
9,372,832.9
1,158,083.3
8,102,392.2
,630,000.0
2,732,392.2
,642,222.01
6,340,540.5
2,982,762.5
9,961,361.9
4,630,000.00
4,591,361.9
Subsidiary
Current amount Last-year amount
Shenzhen Nanshan Power Co., Ltd.2019Notes to Financial Statement
财务报表附注 第232页
Operation Income
Netprofit
Totalcomprehensive
income
Cashflow fromoperation
activity
Operation Income
Netprofit
Totalcomprehensive
income
Cashflow fromoperationactivityZhongshanElectric Power
171,254,
894.37
656,0
87.40
656,08
7.40
88,204,
730.40
342,354,122.68
-32,577,118.56
-32,577,118.56
87,221,
436.27
WeimeiElectric Power
464,032,
241.35
10,034,290.45
10,034,
290.45
21,397,
958.08
373,748,319.27
-2,135,
324.42
-2,135,
324.42
80,088,
365.15
(2) Equity in joint venture and cooperative enterprise
1. Major joint venture and cooperative enterprise
Name
Main operation
place
Registered place
Businessnature
Share-holding ratio（%） Accounting
treatment oninvestment for jointventure andcooperativeenterpriseDirectly Indirectly
Huidong Server Huizhou Huizhou
Wharfoperation
40.00
Equity method
2. Financial summary for un-important joint venture or cooperative enterprise
Ending Balance /Current
amount
Year-end balance of lastyear /Last-year amountJoint venture:
Total book value of the investment
14,619,203.03
16,049,044.95
Total numbers measured by share-holdingratio
—Net profit
-1,429,841.92
-2,205,628.45
—Other comprehensive income
—Total comprehensive income
-1,429,841.92
-2,205,628.45
VIII. Risks relating to financial instrumentsThe Company's main financial instruments include equity investment, borrowings, accounts receivable, accounts payable, etc., seedetails of each financial instrument in related items of this annotation VIII. The risks associated with these financial instruments andthe risk management policies adopted by the Company to reduce these risks are described as below. The management of theCompany manages and monitors these risk exposures to ensure that the above risks are controlled within the limit range.The Company uses the sensitivity analysis technique to analyze the possible impact of the risk variable on the current profit and lossor the shareholders' equity. Since any risk variable rarely changes in isolation, and the correlation existing among the variables shallhave a significant effect on the final amount of changes about a certain risk variable, therefore, the following proceeds by assumingthat the change in each variable is independent.The objective of the Company's risk management is to gain a proper balance between risks and profits, minimize the negative impactof risks on the Company's operating results, and maximize the benefits of shareholders and other equity investors. Based on the riskmanagement objective, the basic strategy of the Company's risk management is to identify and analyze the risks faced by theCompany, establish appropriate bottom line to bear the risks and carry out risk management, and timely and reliably supervise therisks so as to control the risks within the limit range.
(1) Credit risk
On 31 December 2019, the maximum credit risk exposure that could cause financial loss to the Company is mainly due to the failureof the other party to fulfill the obligations, resulting in losses to the Company's financial assets, including:
Carrying value of financial assets recognized in consolidated balance sheet. As for financial instrument at fair value, carrying valuereflects its risk exposure, while not the largest risk exposure. The largest risk exposure will vary as fair value changes in future.In order to bring down credit risk, the Company establishes a special working team to take charge of determining credit limit, makingcredit approval and implementing other monitor procedures to ensure necessary measures are adopted to collect overdue debts. Inaddition, recovery of each single account receivable is reviewed on each balance sheet date to ensure adequate bad debt provision ismade for unrecoverable amount. Therefore, management believes that the Company has substantially reduced the credit risks itassumes.Our current capital is deposited with highly-rated banks, thus credit risk arising from current capital is relatively low.
(2) Market risk
Market risks of financial instruments refers to the risks that the fair value or future cash flow of such financialinstruments will fluctuate due to the changes in market prices, including FX risks, interest rate risks and otherprice risks.
1. Interest rate risk
The Company's cash flow change risk of financial instruments arising from interest rate change is mainly related to the floatinginterest rate bank loans (see details in Note V (17); Note V(22).Interest rate risk sensitivity analysis:
The interest rate risk sensitivity analysis is based on the following assumptions:
Changes in market interest rates affect the interest income or expense of financial instruments with variable interest rate; Forfinancial instruments with fixed rate by fair value measurement, the changes in market interest rates only affect their interest incomeor expense; For derivative financial instruments designated as hedging instruments, the changes in market interest rates affect theirfair value, and all interest rate hedging prediction is highly effective; Calculate the changes in fair value of derivative financialinstruments and other financial assets and liabilities by using the cash flow discount method at the market interest rate at the balancesheet date.On the basis of above assumptions, in case that other variables keep unchanged, the pre-tax effect of possible reasonable changes ininterest rates on current profits and losses and shareholders' equity is as follows:
Rate changes
Current year Last yearImpact on profit
Impact on shareholders’ equity Impact on profit
Impact on shareholders’
equity5% increased
-1,192,987.50
-1,192,987.50
-946,679.70
-946,679.70
5% decreased
1,192,987.50
1,192,987.50
946,679.70
946,679.70
(2) FX risks
Foreign exchange risk refers to the risk of losses due to exchange rate changes. The Company’s foreign exchange risk is mainlyrelated to the US dollar. On Dec. 31, 2019, except for the balance of foreign currency monetary items of 46. Foreign currencymonetary in Note V, the assets and liabilities of the Company are RMB balance. The foreign exchange risk arising from the assetsand liabilities of such foreign currency balances may have an impact on the Company's operating results.
(3) Liquidity risk
In managing the liquidity risk, the Company keeps the cash and cash equivalents that the management considers to be sufficient and
supervise them so as to meet the Company's operating needs and reduce the impact of fluctuations in cash flows. The Company’smanagement monitors the use of bank loans and ensures to comply with the loan agreement.The Company uses bank loans as the main source of funds.IX. Related party and related party transactions
(1) Parent company of the Group
Share holding proportion of any shareholder of the Company didn't reach 50%, and couldn't form a holding relationship of theCompany through any methods. The Company has no parent company.
(2) Subsidiaries of the Company
See details in Note VII. Equity in other entity
(3) Joint venture and affiliated enterprise of the Group
See details in Note VII. Equity in other entity
(4) Other related party
Other related party Relationship with the CompanyShenzhen Energy Group Co., Ltd. (“Shenzhen Energy Group”for short)
Legal person holding more than 5% of the company's sharesShenzhen Guangju Industrial Co., Ltd. Legal person holding more than 5% of the company's sharesHONG KONG NAM HOI (INTERNATIONAL) LTD. Legal person holding more than 5% of the company's sharesShenzhen Capital Co., Ltd. Legal person indirectly holding more than 5% of the company's
shares through Shenzhen Energy GroupWanhe Securities Co., Ltd. Other related partiesShenzhen Energy Group Co., Ltd. Other related partiesFuel branch of Shenzhen Energy Group Co., Ltd. Other related partiesShenzhen Energy and Gas Investment Holding Co., Ltd. Other related partiesDirectors, supervisors and senior management of the company
Key managers
(5) Related party transaction
1. Related party guarantees
The company as guarantor:
Guaranteed
Amount guaranteed Starting date Maturity date
Whether theguarantee hasbeen fulfilled(Y/N)Weimei Electric Power 200,000,000.00
2019/6/24 2020/6/24 NWeimei Electric Power 200,000,000.00
2019/6/26 2020/6/26 N
Guaranteed
Amount guaranteed Starting date Maturity date
Whether theguarantee hasbeen fulfilled(Y/N) 400,000,000.00
2. Remuneration of key manager
ItemCurrent amount Last amountRemuneration of key manager
RMB 5,404,200
RMB 5,808,900
(6) Receivable/payable items of related parties
1. Receivable
Item
Related party
Ending Balance
Year-end balance of last yearBook balance Bad debt
provision
Book balance Bad debt
provisionOther accountreceivable
Huidong Server
9,060,361.44
10,205,161.44
Huidong Server managedaccount
13,114,012.69
12,933,737.96
Total
22,174,374.13
23,138,899.40
X. Government subsidies
(1) Government subsidies related to assets
Type Amount Balance sheet
The amount included in currentgain/loss or loss resulting from related
costs off-setting
Item of theamount includedin currentgain/loss or lossresulting fromrelated costsoff-setting
Current amount Last amountSubsidy for low-nitrogen transformation
43,032,780.00
Deferred income
522,511.46
2,586,861.73
Other incomeInformationconstruction
520,000.00
Deferred income
61,176.48
61,176.48
Other income
Type Amount Balance sheet
The amount included in currentgain/loss or loss resulting from related
costs off-setting
Item of theamount included
in currentgain/loss or lossresulting from
related costs
off-settingCurrent amount Last amountSupport fund of recycling economy forsludge drying
10,000,000.00
Deferred income
647,002.92
647,002.92
Other incomeTreasury subsidies for sludge drying
5,100,000.00
Deferred income
255,000.00
255,000.00
Other incomeSpecial funds for energy conservation andemission reduction
1,530,000.00
Deferred income
114,037.32
114,037.32
Other incomeFunded of energy efficiency improvementfor electric machine
518,400.00
Deferred income
34,560.00
34,560.00
Other incomeSubsidy for quality promotion of the airenvironment in Shenzhen
70,977,273.00
Deferred income
3,567,560.62
147,333.34
Other incomeCogeneration
4,630,000.00
Deferred income
Total
136,308,453.00
5,201,848.81
3,845,971.79
(2) Government subsidies related to income
Type Amount
The amount included in currentgain/loss or loss resulting fromrelated costs off-setting
Item of the amount includedin current gain/loss or lossresulting from related costs
off-settingCurrent amount Last amountEmployment/unemployment monitoringsubsidy
1,000.00
1,000.00
1,000.00
Other incomeVAT refund 3,734,989.57
3,734,989.57
4,381,604.17
Other incomeReward for the small and medium-sizedenterprise on the scale received
200,000.00
200,000.00
Other incomeSupporting funds for office buildings oflisted company received
1,000,000.00
1,000,000.00
Other incomeSubsidy of industrial added value award inNanshan District
1,000,000.00
Non operating
income
Type Amount
The amount included in currentgain/loss or loss resulting fromrelated costs off-setting
Item of the amount includedin current gain/loss or lossresulting from related costs
off-settingCurrent amount Last amountSpecial funds for the developmentinnovation industry
100,000.00
Other incomeFunds for energy conservation and emissionreduction for 2018
100,000.00
Other incomeOther
78,000.00
Non operating
incomeTotal
4,935,989.57
| 4,935,989.57 |
4,935,989.57 5,660,604.17XI. Commitment and Contingency
(1) Major Commitment
Till the balance sheet day, the condition of irrevocable operating lease contract the Group externally signed is as follow:
Item Balance at year-end Balance at year-beginMinimum lease payments of irrevocable operating leas
e:
The first year after balance sheet day
1,557,680.33
1,557,680.33
The second year after balance sheet day
1,557,680.33
1,557,680.33
The third year after balance sheet day
1,557,680.33
1,557,680.33
Subsequent years 55,055,740.74
| 56,613,421.07 | |
Total 59,728,781.73
61,286,462.06
(2) Contingency
NilXII. Events Occurring after the Balance Sheet Date(i) Important non-adjusting items
1. On 5 March 2020, the Proposal of Agreement Transferring 70% Equity of Shen Nan Dian (Dongguan) WeimeiElectric Power Co., Ltd was deliberated and approved by 11
th
extraordinary meeting of 8
th
BOD, the 70% equityof Weimei Power, directly and indirectly held by the Company, are agreed to transfer with consideration of
104.98 million Yuan (including equity agreement price 87.5 million Yuan and interim gains and losses of 17.48million Yuan) to Shenzhen Gas Group Co., Ltd. The Company will hold no stock of the Weimei Power after thetransaction completed.
2. On 5 March 2020, the Proposal of Investment for Shenzhen Asset New Generation IT Equity Fund and RelatedParty Transactions was deliberated and approved by 11
th extraordinary meeting of 8
thBOD, the Company agreedto invested 200 million Yuan in the Shenzhen Asset New Generation IT Equity Fund with own funds. TheCompany intents to jointly establish a Shenzhen Asset New Generation IT Equity Fund for 200 million Yuanown fund with Shenzhen Asset Equity Investment Management Co., Ltd., Shenzhen Capital Group Co. Ltd.,Shenzhen Kunpeng Equity Investment Co., Ltd. and other potential investors. Total size of the Fund is planned tobe one billion Yuan, and to be set up in the form of a limited partnership.
3. The Proposal of Implementing the New Revenue Standards was deliberated and approved by the 6th session of8th BOD and 6th session of 8th Supervisory Committee of the Board held on 18 March 2020, the new revenuestandards will implement by the Company since 1 Jan. 2020.(ii) Profit distributionIn accordance with relevant regulation of Company Law and Article of Association, the Company plans to carryout profit distribution scheme for year of 2019, that is: based on the Company’s share capital of 602,762,596shares on 31
stDecember 2019, distribute RMB 0.2 (tax included) cash dividends for every ten stocks to wholeshareholders, RMB 12,055,251.92 are distributed in total. The aforesaid distribution plan was deliberated andapproved by 6
th session of 8
thBOD on 18 March 2020.XIII. Other important events
(1) Segment information
1. Determining basis and accounting policies of reportable segmentsAccording to the Group's internal organization structure, management requirements and internal reporting system, the Group's business isdivided into three operating segments including power and heat supply, fuel oil trade and other business, the Group's managementperiodically evaluates the operating results of these segments so as to determine the allocation of resources and assess theirperformances.Segmental reporting information is disclosed in accordance with the accounting policies and measurement standards adopted by eachsegment for reporting to the management, the measurement basis keep pace with the accounting and measurement basis used forpreparing financial statements.
2. Financial information of the reportable segment
Item
Power supply & heating
Fuel trading
Other Fuel trading
TotalOperation income1,104,277,122.15 1,174,190.48 133,077,443.26 15,950,801.36 1,222,577,954.53
Operation cost989,580,108.85 220,437.60 91,600,684.05 19,484,516.65 1,061,916,713.85Total assets3,295,964,828.73 274,088,194.24 218,274,991.81 569,066,294.23 3,219,261,720.55
Total liabilities1,190,376,504.01 32,092,698.50 57,228,968.41 122,928,771.87 1,156,769,399.05XIV.Note to main items of financial statements of the Company
(1) Account receivable
1. Age analysis
Account age Book balance Year-end balance of last yearWithin one year
31,821,804.69
50,412,291.20
1 to 2 years
2 to 3 years
Over 3 years
2,889.00
2,889.00
Subtotal
31,824,693.69
50,415,180.20
Less: Bad debt provision
Total
31,824,693.69
50,415,180.20
2. According to accrual method for bad debts
Category
Book balanceBook balance Bad debt provision
Book valueAmount Proportion (%)
Amount
Accrualproportion (%)
With single provision forbad debts
With bad debt provisionaccrual based on similarcredit risk characteristicsof a portfolio
31,824,693.69
100.00
31,824,693.69
Total
31,824,693.69
100.00
31,824,693.69
Category
Year-end balance of last yearBook balance Bad debt provision
BookvalueAmount
Proportion (%)
Amount
Accrualproportion(%)Account receivablewith individual major amountand withdrawal bad debt
Category
Year-end balance of last yearBook balance Bad debt provision
BookvalueAmount
Proportion (%)
Amount
Accrualproportion(%)provision independently
Account receivablewith bad debt provisionaccrual based on similar creditrisk characteristics of aportfolio
50,415,1
80.20
0.00
50,415,18
0.20
Account receivablewith individual minor amountbut withdrawal bad debtprovision independently
Total
50,415,1
80.20
0.00
50,415,18
0.20
3. No account receivable with single provision for bad debtsProvision for bad debts by portfolio：
Provision by portfolio：
Name
Book balanceAccount receivable
Bad debt provision Accrual proportion (%)With minor credit risk 31,824,693.69
Recognition standards and specifications on provisions by portfolio:
The account receivable with provision for bad debts by portfolio mainly refers to the amount from ShenzhenPower Supply Bureau Co., Ltd etc., which has minor credit risk and no provision for bad debts.
4. No provision for bad debts in the current period
5. Top 5 receivables at ending balance by arrears party
Total period-end balance of top five receivables by arrears party amounting to 31,824,693.69 Yuan, takes 100 percent of the totalaccount receivable at period-end, bad debt provision accrual correspondingly at period-end amounting as 0 Yuan
6. No accounts receivable terminated recognition due to transfer of financial assets at the period
(2) Other account receivable
Item Ending Balance Last year-end balance
Item Ending Balance Last year-end balance
Interest receivable
Dividend receivable
Other account receivable873,861,071.55
1,048,357,217.53
Total
873,861,071.55
1,048,357,217.53
1. Other account receivable
Account age
Ending BalanceLast year-end balanceWithin one year
239,265,595.88
149,794,796.18
1 to 2 years
89,264,291.59
279,937,466.31
2 to 3 years
100,729,690.00
224,125,985.68
Over 3 years
421,828,612.80
| 471,931,137.52 |
Subtotal
901,190,714.99
1,075,686,860.97
Less: Bad debt provision
27,329,643.44
27,329,643.44
Total
873,861,071.55
1,048,357,217.53
(1) Disclosure by category
Category
Book balanceBook balance Bad debt provision
Book valueAmount
Proportion(%)
Amount
Accrualproportion (%)
With single provision forbad debts
28,023,159.22
3.11
27,329,643.44
97.53
693,515.78
With bad debt provisionaccrual based on similarcredit risk characteristicsof a portfolio
873,167,555.77
96.89
873,167,555.77
Total
901,190,714.99
100.00
27,329,643.44
3.03
873,861,071.55
Category
Year-end balance of last yearBook balance Bad debt provision Book value
Amount
Proportion(%)
Amount
Accrualproportion(%)Account receivable withindividual major amountand withdrawal bad debtprovision independently
16,781,666.46
1.56
16,781,666.46
100.00
Account receivable withbad debt provisionaccrual based on similarcredit risk characteristicsof a portfolio
1,047,804,935.64
97.41
1,047,804,935.64
Account receivable withindividual minor amountbut withdrawal bad debtprovision independently
11,100,258.87
1.03
10,547,976.98
95.02
552,281.89
Total1,075,686,860.97
100.00
27,329,643.44
2.54
1,048,357,217.53
With single provision for bad debts:
Name
Book balanceBook amount Bad debt provision Accrual proportion (%) CausesHuiyangKangtaiIndustrialCompany
14,311,626.70
14,311,626.70
100.00
Un-collectable in excepted
Individualincome tax
2,470,039.76
2,470,039.76
100.00
Un-collectable in exceptedDormitoryamountreceivable
2,083,698.16
1,736,004.16
83.31
Some un-collectable in excepted
Personalreceivables
7,498,997.87
7,498,997.87
100.00
Un-collectable in exceptedDepositreceivable
1,658,796.73
1,312,974.95
79.15
Some un-collectable in excepted
Name
Book balanceBook amount Bad debt provision Accrual proportion (%) CausesTotal28,023,159.22
27,329,643.44
97.53
Provision for bad debts by portfolio:
Provision by portfolio:
Name
Book balanceOther account receivable Bad debt provision Accrual proportion (%)With minor credit risk 873,167,555.77
Recognition standards and specifications on provisions by portfolio:
The Company believes that the credit risk of other account receivable with no impairment in the single assessmentis relatively low, no provision for bad debts, unless there is an evidence that a certain other account receivable is atgreater credit risk.
(3) Accrual of bad debt provision
Bad debt provision
Phases I Phases II Phases III
TotalExpected creditlosses over next 12months
Expected creditlosses for the entireduration (withoutcredit impairment
occurred)
Expected creditlosses for the entireduration (withcredit impairment
occurred)Balance at year-begin
27,329,643.44
27,329,643.44
Book balance of other accountreceivable at year-begin
——Turn to phase II
——Turn to phase III
——Return to Phase II
——Return to Phase I
Current accrual
Current switch back
Rewrite in the period
Write-off in the period
Other changes
Bad debt provision
Phases I Phases II Phases III
TotalExpected creditlosses over next 12months
Expected creditlosses for the entireduration (withoutcredit impairmentoccurred)
Expected creditlosses for the entireduration (withcredit impairmentoccurred)Book balance
27,329,643.44
27,329,643.44
(4) No provision for bad debts in the current period
(5) No other accounts receivable that had actually written off in the period
(6) By nature
Nature Ending book balance Book balance at last year-endDormitory receivables 2,083,698.16
2,083,698.16
Deposit receivable 1,658,796.73
1,517,562.84
Related party transactions 866,978,723.13
1,044,339,768.72
Personal account 10,008,932.63
9,969,037.63
Other 20,460,564.34
17,776,793.62
Total 901,190,714.99
1,075,686,860.97
(7) Top 5 other account receivables at period-end listed by arrears party
Name of the company
Relationship withthe Company
Ending Balance
Age
Proportion in totalother accountreceivable(%)
Ending balanceof bad debt
provisionShen Nan Dian (Zhongshan)Electric Power Co., Ltd.
Intercourse funds
667,589,972.37
0-3 year
74.08
Shen Nan Dian (Dongguan)Weimei Electric Power Co.,Ltd
Intercourse funds
182,344,193.85
2-3 year
20.23
Shenzhen ShennandianTurbine EngineeringTechnology Co., Ltd.
Intercourse funds
16,494,890.35
Within 1year
1.83
14,311,626.70
Huiyang County KangtaiIndustrial Company
Other 14,311,626.70
Over 3years
1.59
Name of the company
Relationship withthe Company
Ending Balance
Age
Proportion in totalother accountreceivable(%)
Ending balanceof bad debtprovisionShenzhen Shen Nan DianEnvironment Protection Co.,Ltd.
Intercourse funds
3,889,796.03
Over 3years
0.43
Total 884,630,479.30
98.16
14,311,626.70
(8) No receivables involving government subsidies
(9) No other receivables terminated recognition due to transfer of financial assets
(3) Long-term equity investment
Item
Ending Balance Last year-end balanceBook balance
Impairmentprovision
Book value Book balance
Impairmentprovision
Book valueInvestmentto subsidiary
691,982,849.76 388,641,684.76 303,341,165.00691,982,849.76 388,641,684.76 303,341,165.00Investmentto jointventure andaffiliateenterprise
Total
691,982,849.76 388,641,684.76 303,341,165.00691,982,849.76 388,641,684.76 303,341,165.00
1. Investment to subsidiary
The investedentity
Last year-end balance
Increase inthe period
Decrease inthe period
EndingBalance
Impairmentprovisionaccrual in thePeriod
Period-endbalance of
depreciationreservesShenzhen Server26,650,000.00
26,650,000.00
New PowerCompany
71,270,000.00
71,270,000.00
Zhongshan410,740,000.00
410,740,000.00
347,745,035.00
The investedentity
Last year-end balance
Increase inthe period
Decrease inthe period
EndingBalance
Impairment
provisionaccrual in the
Period
Period-endbalance ofdepreciation
reservesElectric PowerEngineeringCompany
6,000,000.00
6,000,000.00
Weimei ElectricPower
115,319,049.76
115,319,049.76
40,896,649.76
SingaporeCompany
6,703,800.00
6,703,800.00
EnvironmentProtectionCompany
55,300,000.00
55,300,000.00
Total
691,982,849.76
691,982,849.76
388,641,684.76
(4) Operation revenue/operation cost
Item
Current amount Last-period amountRevenue Cost Revenue CostMain business311,287,934.22
377,618,823.17
652,426,185.97
730,133,603.64
Other business94,716,587.06
10,591,679.27
133,534,765.04
14,000,614.54
Total406,004,521.28
388,210,502.44
785,960,951.01
744,134,218.18
XV. Supplementary information
(1) Statement of non-recurring gains/losses
Item Amount NoteGains and losses from disposal of non-current assets -527,109.02
Tax refund or mitigate due to examination-and-approval beyondpower or without official approval document
Governmental subsidy reckoned into current gains/losses(notincluding the subsidy enjoyed in quota or ration, which are closelyrelevant to enterprise’s normal business
6,402,848.81
Item Amount NoteCapital occupancy expense, collected from non-financial enterprisesand recorded in current gains and losses
Income from the exceeding part between investment cost of theCompany paid for obtaining subsidiaries, associates andjoint-ventures and recognizable net assets fair value attributable tothe Company when acquiring the investment
Gains and losses from exchange of non-monetary assets
Gains and losses from assets under trusted investment or management
Various provision for impairment of assets withdrew due to act ofGod, such as natural disaster
Gains and losses from debt restructuring
Enterprise restructuring costs, such as expenses for staff placement,integration costs, etc
Gains and losses of the part arising from transaction in which price isnot fair and exceeding fair value
Current net gains and losses occurred from period-begin tocombination day by subsidiaries resulting from business combinationunder common control
Gains and losses arising from contingent proceedings irrelevant tonormal operation of the Company
Except for effective hedge business relevant to normal operation ofthe Company, gains and losses arising from fair value change oftradable financial assets and tradable financial liabilities, andinvestment income from disposal of tradable financial assets, tradablefinancial liabilities and financial assets available for sale
Switch-back of provision of impairment of account receivable whichare treated with separate depreciation test12,000.00
Gains and losses obtained from external trusted loans
Gains and losses arising from change of fair value of investment realestate whose follow-up measurement are conducted according to fairvalue pattern
Affect on current gains and losses after an one-time adjustmentaccording to requirements of laws and regulations regarding totaxation and accounting
Trust fee obtained from trust operation
Item Amount NoteOther non-operating income and expenditure except for theaforementioned items5,578,877.22
Other gains and losses items complying with definition fornon-recurring gains and losses
Impact on income tax-195,823.19
Impact on minority shareholders’ equity
-1,055,582.25
Total10,215,211.57
(2) ROE and EPS
Profit in the Period
Weighted average ROE
(%)）
EPSBasic EPS Diluted EPSNet profit attributable to shareholders of the listedcompany
1.2511%
0.0413
0.0413
Net profit attributable to shareholders of the listedcompany after deducting non-recurring gains andlosses
0.7379%
0.0244
0.0244
Shenzhen Nanshan Power Co., Ltd.
（Company Seal）18 March 2020