广东电力发展股份有限公司
GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
2011 年年度报告 ANNUAL REPORT 2011
March 8, 2012
- 1 - Important Notice The Board of Directors , Supervisory Committee ,Directors, Supervisors and Senior Executives of the Company hereby guarantees that there are no misstatement, misleading representation or important omissions in this report and shall assume joint and several liability for the authenticity, accuracy and completeness of the contents hereof. Directors including Li Zhuoxian, Zhong Weimin, Zhang Xueqiu absented of meeting of board, Director Li Zhuoxian and Director Zhong Weimin all respectively authorized Director Hong Rongkun，Director Zhang Xueqiu respectively authorized Independent Director Liu Tao to attend the meeting and exercise voting right on their behalf. PricewaterhouseCoopers Zhongtian Certified Public Accountants Co., Ltd. Has auditors’ the Company’s financial report and produced a standard unqualified audit report for the Company. Chairman of the Board of Directors, Pan Li, General Manager, Financial Deputy General Manager, Li Xiaoqing and Financial Manager ,Qin Jingdong represent and warrant the financial and accounting report in the annual report is true and complete.
- 2 -
Contents I. Brief Introduction of the Company II. Highlights of Accounting Data and Business Data III. Particulars about Changes in Share Capital and Shareholders. IV. Directors, Supervisors, Senior Executives and Employees V. Corporate Governance Structure VI. Brief Introduction of Shareholders' General Meeting VII. Report of the Board of Directors VIII. Report of the Supervisory Committee IX. Important Events X. Financial Report Auditor's report issued by PricewaterhouseCoopers Zhongtian Certified Public Accountants Co.,Ltd. and financial statements XI. List of Documents Available for Inspection
- 3 - I. Brief Introduction of the Company
(I) Statutory Chinese name of the Company：广东电力发展股份有限公司
Statutory English name of the Company: GUANGDONG ELECTRIC POWER
DEVELOPMENT CO., LTD.
[Abbreviation of English name: GED]
(II) Legal representative of the Company: Mr. Pan Li
(III)General manager: Mr. Lin Shizhuang
(IV) Secretary to the Board of Directors: Mr. Liu Wei
Contact Tel: (020)87570276
E-mail: [email protected]
Securities affair representative: Ms.Zhang Shaomin
Contact Tel: (020)87570251
Fax: (020)85138084
E-mail: [email protected] Contact address: 26/F, South Tower, Yudean Plaza, No.2 Tianhe Road East, Guangzhou,
Zip code:510630
(V) Registered address of Company：23-26/F Yudean Plaza, No.2 Tianhe Road East ,
Guangzhou,Guangdong Province
Business address of Company：23-26/F Yudean Plaza, No.2 Tianhe Road East ,
Guangzhou,Guangdong Province
Zip code:510630
E-mail: [email protected]
Website：www.ged.com.cn
(VI) Name of newspapers selected by the Company for information disclosure:
China Securities Daily, Securities Times and Hong Kong Commercial Daily (overseas newspaper for English version).
- 4 - Internet website for publishing the annual report of the Company: http：
//www.cninfo.com.cn
The place for preparing and placing the annual report of the Company: Offair Dept. of the board of directors of the Company
(VII) The exchange for listing the stocks of the Company, stock abbreviation and stock code
The exchange for listing the stocks of the Company: Shenzhen Stock Exchange
Stock abbreviation: Yue Dian Li A, Yue Dian Li B Stock code: 000539 , 200539
(VIII) Other information
1. The date of first registration of the Company: November 3, 1992
Registered address: 10/F, Baili Commercial Center, Guangfa Garden, 498 Huanshi
Road East, Guangzhou
2. Date of change in registration of the Company: June 28, 2005
Registered address after change: 23-26/F, South Tower, Yudean Plaza, No.2 Tianhe
Road East, Guangzhou, Guangdong Province
3. Registration No. of Legal Entity Business License: Qi Gu Yue Zong Zi Di No.
003503
4. Tax registration number: Yue Guo Shui Zi 440102617419493 Yue Di Shui Zi
440100617419493
5. Organization Code：61741949-3
6. Certified public accountants of the Company:
PricewaterhouseCoopers Zhongtian Certified Public Accountants Co., Ltd.
Office Address: 11/F, PricewaterhouseCoopers Center, 202 Hubin Road , Shanghai
7. The legal adviser of the Company: Guangdong Xinyang Law Office
Office address: Room 1209-1212, Daxin Building, 538 Dezheng Road North,
Guangzhou
- 5 - II. Highlights of Accounting Data and Business Data
(I) Main profit indicators of the report year 1.. Operation performance of the report year
Unit: RMB
Operation profit 394,403,441.00
Total profit 406,106,142.00
Net profit attributable to shareholders of the listed company 356,321,879.00 Net profit after deducting of non-recurring gain/loss attributable to the 485,190,547.00 shareholders of the listed company
Cash flow generated by business operation , net 2,028,885,759.00
2. Items and amount of non-recurring gains and loss
Unit：RMB Items and amount of non-recurring Notes（If Amount(2011) Amount (2010) Amount (2009) gains and loss applicable） The loss for disposal of non-current -3,573,165.00 -6,883,957.00 -8,376,144.00 assets Guangdong Yuejia Electric Power Co., Ltd., of which the Company holds Non-recurring gain and loss items -283,359,377.00 58% equity, made 0.00 -227,965,475.00 a provision of RMB 283359377 for assets impairment due to operating loss. Enterprise reorganizing expenses, such as employee placement fee and integration 0.00 -94,279,857.00 0.00 fee Entrusted loans 31,421,117.00 25,585,586.00 22,708,930.00 Governmental Subsidy accounted as current gain/loss, except for those subsidies at with amount or quantity 10,216,923.00 4,726,923.00 3,076,923.00 fixed by the national government and closely related to the Company’s business operation. Single impairment test for impairment of 763,039.00 1,838,934.00 1,188,008.00
- 6 - receivables transferred back to preparation Net gain/loss of current term from consolidation of subsidiaries under 0.00 0.00 186,498.00 common control from beginning of term to the consolidation date Net amount of non-operating income and 120,447.00 -4,638,138.00 -4,899,484.00 expense except the aforesaid items Amount of influence of income tax -2,043,693.00 15,657,606.00 42,241,266.00 Amount of influence of minority interests 117,586,041.00 34,239,278.00 77,885,854.00 Total -128,868,668.00 - -23,753,625.00 -93,953,624.00
3. Notes to the difference between audit of net profit for the report year by domestic and foreign certified public accountants:
Unit：RMB Net profit attributable to shareholders of Owners’ Equity attributable to shareholders listed company of listed company
Amount in the report Amount in Amount in last period Amount in period-end period period-begin IAS 348,915,879.00 758,632,461.00 10,305,406,366.00 10,271,943,201.00 CAS 356,321,879.00 765,806,461.00 10,206,623,366.00 10,165,754,201.00 Sub-items and total adjusted based on IAS Deferred housing reform loss -7,472,000.00 -7,472,000.00 8,444,000.00 15,916,000.00 amortization Land use right 0.00 0.00 64,623,000.00 64,623,000.00 amortization The difference arising from recognition of goodwill after merger -630,000.00 -630,000.00 22,010,000.00 22,640,000.00 of enterprises under the same control Difference arising from recognition of 696,000.00 928,000.00 3,706,000.00 3,010,000.00 land use value after enterprise merger Influence on minority -7,406,000.00 -7,174,000.00 98,783,000.00 106,189,000.00 interests 1. Land use right amortization Total amount of The difference formed by different period of land use right amortization. differences betweend 2.The difference arising from recognition of goodwill after merger of enterprises under the CAS and IAS same control and recognition of land value after enterprise merger. As required by new Chinese accounting standards, the goodwill formed by the merger of
- 7 - enterprises under the same control shall not be recognized and capital surplus shall be adjusted. Under IFRS, the golldwill formed by the merger of enterprises under the same control shall be recognized and equal to the difference between merger cost and share of fair value of recognizable net assets of the purchased party obtained in merger. Meanwhile, all assets of the purchased party obtained in merger shall be accounted for according to their fair value while such assets shall be accounted for according to their book value according to original Chinese accounting standards for business enterprises. Therefore, this difference will continue to exist. 3. Influence on minority interests Housing reform loss occurred to the Company and some holding subsidiaries. Therefore, there’s some influence on minority interests. (II) Highlights of accounting data and financial indicators in the latest three years 1. Main Accounting data: Unit：RMB 2011 2010 Changed over last year（％） 2009 Total income operating 14,620,140,721.00 12,642,208,069.00 15.65% 12,234,717,490.00 Operating profit 394,403,441.00 1,168,796,316.00 -66.26% 1,671,533,492.00 Total profit 406,106,142.00 1,169,096,199.00 -65.26% 1,661,334,787.00 Net profit attributable to the shareholders of the 356,321,879.00 765,806,461.00 -53.47% 1,165,352,428.00 listed company Net profit after deducting of non-recurring gain/loss attributable to the 485,190,547.00 789,560,086.00 -38.55% 1,259,306,052.00 shareholders of listed company Cash flow generated by 2,028,885,759.00 635,497,704.00 219.26% 5,692,012,223.00 business operation, net End of 2010 Changed over last year（％） End of 2011 After End of 2009 Before adjustment After adjustment adjustment Gross assets 39,480,195,392.00 35,046,543,051.00 34,596,318,255.00 12.65% 30,163,552,152.00 Gross Liabilities 26,228,692,492.00 21,962,166,175.00 21,511,941,379.00 19.43% 18,108,732,485.00 Shareholders’ equity attributable to 10,206,623,366.00 10,165,754,201.00 0.40% 9,271,838,984.00 shareholders of the listed company Capital stock 2,797,451,138.00 2,797,451,138.00 0.00% 2,659,404,000.00 Notes：To accurately implement the country’s accounting audit policy, the Board of Directors agrees the company to adjust the pending deduct VAT taxes into the presentation of “the balance sheet——assets class——other current assets” by the ways of input subject presentation of “the balance sheet——liability and shareholders’ equity class——the payable taxes” since December 31, 2011. Also, a retrospective adjustment to the 2011 annual financial statements should be conducted for the previous annual payable taxes. At the end of 2010, total liabilities increased
- 8 - from RMB 21,511,941,379.00 to RMB 21,962,166,175 and total assets increased from RMB 34,596,318,255.00 to RMB 35,046,543,051. This accounting adjustment will neither change the total amount of all kinds of taxes and levies actually payable nor affect the Company's shareholders' equity, net profit and cash flow.
2 Major Financial indexes
Unit: RMB Changed over last 2011 2010 2009 year（％） Basic gains per 0.13 0.28 -53.57% 0.44 share(RMB/Share) Diluted gains per 0.13 0.28 -53.57% 0.44 share(RMB/Share) Basic earning per share after deducting of 0.17 0.29 -41.38% 0.47 non-recurring gains/losses(RMB/Share) Weighted average net 2.72% 5.58% -2.86% 12.24% asset earning ratio（%） Net income on asset, weighted and deducted 3.70% 5.75% -2.05% 13.22% non-recurring gain/loss(%) Net cash flow per share generated by business 0.73 0.23 217.39% 2.14 operation (RMB/Share) Changed over last End of 2011 End of 2010 End of 2009 year（％） Net asset per share attributable to 3.65 3.63 0.55% 3.49 shareholders of the listed company(RMB/Share) 3. Return Ratio and Earnings per share Unit：RMB
Earnings per share Return Ratio on Net Profit in the report peirod Basic gains per Diluted gains asset, Weighted(%) share per share
Net profit attributable to the 2.72% 0.13 0.13 shareholders of the parent Company Net profit after deducting non-recuring gains and losses 3.70% 0.17 0.17 attributable to the shareholders
- 9 - III. Particulars about Cha，nges in Share Capital and Shareholders (1) The changes in share capital 1.Statement of changes in shares Unit: Shares
- 10 - Before this change Increase or decrease this time (+/-) After this change Quantity Proportion Share Bonus Capitalizatio Other Quantity Proportion
allotment shares n of common Subtotal reserve fund I. Share with conditional 143,496,965 5.13% -32,750 -32,750 143,464,215 5.13% subscription 1.State-owned shares 2.Staee-owned legal 138,189,742 4.94% 26,580 26,580 138,216,322 4.94% person shares 3.Other domestic shares 5,270,776 0.19% -26,580 -26,580 5,244,196 0.19% Of which：Non-state -114,33 owned domestic legal 5,254,555 0.19% -114,330 5,140,225 0.18% 0 person shares Domestic natural 16,221 0.00% 87,750 87,750 103,971 0.01% person shares 4.Foreign shareholding Of which：Foreign legal person shares Foreign natural person shares 5. Executive shares 36,447 0.00% -32,750 -32,750 3,697 0.00% II. Shares with unconditional 2,653,954,173 94.87% 32,750 32,750 2,653,986,923 94.87% subscription 1.Common shares in 1,988,646,923 71.09% 1,988,646,923 71.09% RMB 2.Foreign shares in 665,307,250 23.78% 32,750 32,750 665,340,000 23.78% domestic market 3.Foregin shares in overseas market 4.Other III. Total of capital shares 2,797,451,138 100.00% 2,797,451,138 100.00% Notes：Liu Xuemao, the former person in charge of financial affairs, and director Wu Bin resigned respectively on September 30, 2010 and May 18, 2011. The shares of the Company held by them were listed for trading respectively from March 30, 2011 and November 18, 2011. 2.Changes of shares subject to moratorium Unit：shares Shares subject Terminate Shares subject Name of to moratorium Increase in d in this to moratorium Conditional reason Date of terminating shareholder at the this year year at the year-end year-begin Guangdong Restricted shares May 25, 2013, Yudean Group 138,189,742 0 26,580 138,216,322 introduction，the introduction Co., Ltd. sales restriction of 138,047,138 shares, shares reform. Unkown shareholding reform 169,184 shares Guangdong International Trus Investment Company（now Part of the The prices paid in business is 1,790,100 0 -175,500 1,614,600 advance which Unknown undertook by are not repaid Guangzhou Yuexiu Yuexin Trade Development Co., Ltd.） Guangdong The prices paid in Rural 877,500 0 0 877,500 advance which Unknown Telephone are not repaid Division Guangdong Prison The prices paid in administrative 351,000 0 0 351,000 advance which Unknown Bureau .Labour are not repaid union Committee China Merchants Bank （ the former China The prices paid in North optical 263,250 0 -19,935 243,315 advance which Unknown electron are not repaid Company, Shenzhen Branch ） Dongguan The prices paid in Material Trade 175,500 0 0 175,500 advance which Unknown Center are not repaid Nanhai Xinlian The prices paid in Security 175,500 0 0 175,500 advance which Unknown Equipment are not repaid Plant Guangzhou The prices paid in Yuexiu Yuexin 0 0 175,500 175,500advance which Unknown Trade are not repaid
- 12 - Development Co., Ltd. Guangdong Disabled The prices paid in Persons’ 156,000 0 0 156,000 advance which Unknown Welfare are not repaid Foundation Guangdong The prices paid in Liyi Matter 115,830 0 0 115,830 advance which Unknown Engneering are not repaid Company Part of shares defrozen The prices paid in is Executive shares/ advance which The shares held by Other 1,402,543 32,750 -6,645 1,363,148 are not repaid/ senior executive Executive shares will be defrozen year by year Total 143,496,965 32,750 0 143,464,215 － －
3.Share issuance and listing The Company issued corporate bonds of RMB 2 billion with face interest rate of 5.5% on March 10, 2008. The corporate bonds were listed for trading at Shenzhen Stock Exchange on March 27, 2008.Stock code: 112001, Stock Abbreviation:08 Yudean Bond, and with the put provisions, The term of corporate bonds is 7 years. March 3, 2015 is transaction termination day (Subject to the final announcement of the Company). On May 25, 2010, The Company issued 138,047,138 A shares which is tradable in Shenzhen Stock Exchange to controlling shareholder of our company Guangdong Yudean group Co. Ltd., the fundraising amount is RMB 820 million. Above issued newly added shares are tradable shares with restricted condition. The restricted period for sales is 36 months. There are no employees’ shares in the Company. (II) Introduction to shareholders (1) As of December 31, 2011, the Company had 142,570 shareholders in total including 88,160 shareholders of A shares and 54,410 shareholders of B shares. (2) Introduction to the Company's top ten shareholders (As of December 31, 2011)
Unit：Shares
Quantity of Increase or Number of Type of share Name of shareholder Proportio pledged or Nature of decrease in shares held at (Negotiable or (full name) n (%) frozen shareholder the year the end of year non-negotiable) shares Guangdong Yudean State-owned legal 26,580 1,370,472,480 48.99% 138,216,322 0 Group Co., Ltd. person shares Shenzhen Guangfa 0 101,777,185 3.64% 0 0 State-owned legal
- 13 - Electric Power person shares Investment Co., Ltd. Guangdong Electric State-owned legal Power Development 0 78,639,451 2.81% 0 0 person shares Company Guangdong Domestic non Guangkong Group 0 23,610,428 0.84% 0 0 State-owned Co., Ltd. Legal person 102 Portfolio of Domestic non National Social 13,992,401 19,892,401 0.71% 0 0 State-owned Security Fund Legal person China Construction Bank－Penghua Value Advantage Stock-linked Security Investment Domestic non Fund China 7,015,585 15,447,184 0.55% 0 0 State-owned Construction Bank－ Legal person Penghua Value Advantage Stock-linked Security Investment Fund Domestic non State-owned Boshi Increase Legal person securities Investment -3,372,429 12,000,000 0.43% 0 0 Domestic Fund non State-owned Legal person National Domestic non SecialInsurance Fund 3,999,952 11,999,893 0.43% 0 0 State-owned 103 Combination Legal person Natio Securities Foreign legal -1,018,152 10,897,090 0.39% 0 0 Co.,Ltd. person China Construction Domestic non Bank－Boshi Theme 5,499,837 10,499,707 0.38% 0 0 State-owned industry securities Legal person investment fund Guangdong Electric Power Development Co., Ltd. the Third of the top 10 Notes to the related relationship between shareholders, is a subsidiary of Yudean Group, Which is the No.3 the top ten shareholders or their shareholder; its is unknown whether relationship exists between other concerted action shareholders. 3.Information of holding Company
- 14 - Yudean Group Co., Ltd. Holding 48.99% shares of the Company and is the major shareholder of the Company. State-owned Assets Regulatory Commission under the People's Government of Guangdong Province holds 76% equity of Guangdong Yudean Group Co., Ltd. and is the actual controller of the Company. According to the Business License of Incorporated Enterprise verified and issued by Guangdong Administration for Industry and Commerce, Yudean Group is a wholly Limited Liability Company. Its registered capital is RMB 20,000,000,000 and its registered address is 33-36/F Yudean Plaza, No.2 Tianhe Road East , Guangzhou,Guangdong Province. Its legal representative is Mr. Pan Li. Its is mainly engaged in management and sales of the electricity investment，construction，operation management，electricity power(Thermal Power)，The the industry of transportation，resources，environmental protection，new source of energy，electricity investment; investment planning and consulting ; information consulting service; sales of production materials.
- 15 - The property rights and control relationship between the actual controller and the Company
State-owned Assets Regulatory Commission under the People's Government of Guangdong Province
100%
Guangdong Hengjian Investment China Huaneng Group Company Co., Ltd. 76% 24%
Guangdong Yudean Group Co., Ltd.
100% 100% Chaokang Investment Co., Guangdong Electric Power Ltd. Development Co.
0.71 48.99% 2.81%
Guangdong Electric Power Development Co.,Ltd
4.No other legal person shareholders who hold more than 10%(10% inclusive)of the Company’s shares.
5. Top 10 holders of unconditional shares
Unit：Shares Quantity of negotiable shares Name of shareholder Type of share held Guangdong Yudean Group Co., Ltd. 1,232,256,158 RMB Common shares Shenzhen Guangfa Electric Power 101,777,185 RMB Common shares Investment Co., Ltd. Guangdong Electric Power Development 78,639,451 RMB Common shares Company Guangdong Guangkong Group Co., Ltd. 23,610,428 RMB Common shares 102 Portfolio of National Social Security 19,892,401 RMB Common shares Fund
- 16 - China Construction Bank－Penghua Value Advantage Stock-linked 15,447,184 RMB Common shares Security Investment Fund Boshi Increase securities Investment Fund 12,000,000 RMB Common shares National SecialInsurance Fund 103 11,999,893 RMB Common shares Combination Natio Securities Co.,Ltd. 10,897,090 Foreign shares placed in domestic China Construction Bank－Boshi Theme 10,499,707 RMB Common shares industry securities investment fund Notes to the related Guangdong Electric Power Development Co., Ltd. the Third of the top 10 shareholders, relationship between the is a subsidiary of Yudean Group, Which is the No.3 shareholder; its is unknown top ten shareholders or whether relationship exists between other shareholders. their concerted action 6.The top 10 shareholders and the conditions for limit on sale
Unit：Shares Shares with Date when Newly added No Name conditioned trading tradable Conditions subscription allowed shares Guangdong Yudean Group 1 138,047,138 Unknown 0 Restricted shares introduction Co., Ltd. Guangdong The prices paid in advance which 2 International Trust 1,614,600 Unknown 0 are not repaid. Investment Company Guangdong Rural The prices paid in advance which 3 877,500 Unknown 0 Telephone Division are not repaid. Guangdong Prison administrative The prices paid in advance which 4 351,000 Unknown 0 Bureau .Labour union are not repaid. Committee China Merchants Bank（the former China North optical Shareholding reform didn’t lift the 5 243,315 Unknown 0 electron Company, sales restriction of shares. Shenzhen Branch ） Dongguan Material Trade The prices paid in advance which 6 175,500 Unknown 0 Center are not repaid. Nanhai Xinlian Security The prices paid in advance which 7 175,500 Unknown 0 Equipment Plant are not repaid. Guangzhou Yuexiu Yuexin Shareholding reform didn’t lift the 8 Trade Development Co., 175,500 Unknown 0 sales restriction of shares. Ltd. Guangdong Disabled The prices paid in advance which 9 156,000 Unknown 0 Persons’ Welfare are not repaid.
- 17 - Foundation Guangdong Liyi Matter The prices paid in advance which 10 115,830 Unknown 0 Engneering Company are not repaid.
7. Bond holding by top 10 corporate bond holders
Name Number（shares）
Taiping Life insurance Co., Ltd. niversal－Universal insurance Group 2,450,000 China People's Life Insurance Co., Ltd. 2,388,140 Xinhua Life Insurance Co., Ltd.－Universal－－Deyi Management 2,200,000 -018L-WN001Shen Zhongying Life insurance Co., ltd. 2,114,775 China Post Office Saving Bank Co., Ltd. 2,000,000 China Ping An Life Insurance Co., Ltd. 1,600,000 Zhongyou Financial Co., Ltd 1,336,678 Taikang Life insurance Co., Ltd － Dividend Distribution － Group 1,000,000 Dividends-019L-FH001Shen Taikang Life insurance Co., Ltd－Universal--Universal individual 1,000,000 insurance China Ping An Insurance (Group) Co., Ltd. 800,000
IV. Directors, Supervisors, Senior Executives and Employees （I）Basic information about directors, supervisors and senior executives 1.Basic information
Whether Receive Sharehol Remuneration Remuneration Beginning Expiration Shareholdi Reason ding at received from the from a Name Position Sex Age date of office date of office ng at of the year-begi company (in shareholder or term term year-end change nning RMB’0000) other related -parties Board May May Pan Li Male 57 0 0 Nil 0.00 Yes chairman 18,2011 18,2014 Liu Vice Board May May Male 57 0 0 Nil 0.00 Yes Qian chairman 18,2011 18,2014 Li May May Zhuoxi Director Male 48 0 0 Nil 0.00 Yes 18,2011 18,2014 an Hong May May Rongku Director Male 54 0 0 Nil 0.00 Yes 18,2011 18,2014 n Zhong May May Director Male 55 0 0 Nil 0.00 Yes Weimin 18,2011 18,2014
- 18 - Gao May May Shiqian Director Male 54 0 0 Nil 0.00 Yes 18,2011 18,2014 g Gong May May Director Male 55 0 0 Nil 0.00 Yes Huitian 18,2011 18,2014 Li May May Minglia Director Male 47 0 0 Nil 0.00 Yes 18,2011 18,2014 ng Li Director, May May Shizhua General Male 50 0 0 Nil 64.44 No 18,2011 18,2014 ng Manager Wang May May Director Male 48 0 0 Nil 0.00 Yes Jin 18,2011 18,2014 Rao May May Director Male 47 0 0 Nil 68.23 No Subo 18,2011 18,2014 Zhang May May Director Male 45 0 0 Nil 0.00 Yes Xueqiu 18,2011 18,2014 Wang Independent May May Male 53 0 0 Nil 5.00 No Jun director 18,2011 18,2014 Song Independent May May Xianzh Male 48 0 0 Nil 4.05 No director 18,2011 18,2014 ong Zhu Independent May May Weipin Male 54 0 0 Nil 7.14 No director 18,2011 18,2014 g Feng Independent Fema May May Xiaomi 56 0 0 Nil 7.68 No director le 18,2011 18,2014 ng Independent May May Liu Tao Male 40 0 0 Nil 5.06 No director 18,2011 18,2014 Yang Independent May December Male 46 0 0 Nil 4.58 No Zhishan director 18,2011 8,2011 Zhang Independent December May Male 46 0 0 Nil 0.00 No Hua director 9,2011 18,2014 Chairman of Qiu the May May Male 47 0 0 Nil 0.00 Yes Jianyi Supervisory 18,2011 18,2014 Committee Fema May May Zhao Li Supervisor 39 0 0 Nil 0.00 Yes le 18,2011 18,2014 Sha Independent May May Male 51 0 0 Nil 6.41 No Qilin Supervisor 18,2011 18,2014 Xiang Independent Fema May May 58 0 0 Nil 4.63 No Ying Supervisor le 18,2011 18,2014
- 19 - Lin Employee May May Weifen Male 43 3,930 3,930 Nil 35.06 No supervisor 18,2011 18,2014 g Tong Employee May May Male 56 0 0 Nil 37.58 No Jianjun supervisor 18,2011 18,2014 Lou Secretary , May May Zhihen Male 44 1,000 1,000 Nil 62.09 No Deputy GM 18,2011 18,2014 g Li Deputy GM, Fema May May Xiaoqin Finance 40 0 0 Nil 58.61 No le 18,2011 18,2014 g manager Fema May May Liu Hui Deputy GM 46 0 0 Nil 56.93 No le 18,2011 18,2014 Board May May Liu Wei Male 32 0 0 Nil 37.60 No secretary 18,2011 18,2014 Total - - - - - 4,930 4,930 - 465.09 - 2. The main job experience of current directors, supervisors and senior executives and the posts or concurrent posts held by them at the units other than corporate shareholders Mr. Pan Li: Male, born in June 1954, is a CPC member ,Han nationality, from Shunde Guangdong, bachelor's degree, Senior engineer. He had served as the technician in dispatching station of Guangzhou Power Supply Bureau, deputy section chief and Deputy president of Health and Technology Department, Deputy general manager in Guangdong Provincial Power Group Corporation and other positions,He now serves as the Chairman and party secretary in Guangdong Power Group Co., Ltd., Government Counsultant and Members of the CPPCC of Guangdong. And board Chairman of the Guangdong Electric Power Development Co., Ltd. Mr.Li Zhuoxian, Male, born in June 1963, a CPC member ,Han nationality, from Meixian Guangdong, bachelor’s degree, Senior engineer. Starting work in 1983, He had served as the technician staff of the Chemical department, Deputy-department director, director, Deputy-Section Chief of the technique and production section, Vice-General Engineer, and Vice-factory director in the shaoguan Electric Power Plant, director, General Manager of Guandong Yudean Group Co., Ltd. He now serves as director ,Deputy General manager and vice secretary of CCP of Guandong Yudean Group Co., Ltd. And director of the Guangdong Electric Power Development Co., Ltd. Mr. Liu Qian: Male ,born in October 1954, a CPC member ,Han nationality, from Zhongshan Guangdong , bachelor’s degree, MBA and senior economist, Senior engineer. Starting work in 1970,He had served as deputy section chief of Health and Technology Department ,assistant Manager of Business Dept ,Deputy general Manager of Huaneng Guangdong Power Company and general manager of Guangdong Development Co., Ltd. He now serves as director ,Deputy general Manager and member of CCP of Guangdong Yudean Group Co., Ltd. and vice board chairman of Guangdong Electric Power Development Co., Ltd.
- 20 - Mr. Hong Rongkun, Male, born in September 1957 , a CPC member ,Han nationality, from Zhanjiang Guangdong, bachelor’s degree, Senior engineer. Starting work in 1978, He had served as the Party Branch Secretary for boiler department and Deputy director of the Maoming Thermal Power Co., Ltd., deputy director of Health and Technology Department and Vice General engineer for the Power industry Bureau , He now serves as director ,Deputy General manager and member of CCP of Guangdong Yudean Group Co., Ltd. And director of the Guangdong Electric Development Co., Ltd. Mr. Zhong Weimin: Male, born in August 1956, a CPC member ,Han nationality, from Huadu Guangdong, bachelor’s degree, Starting work in 1974,He had served as deputy head of Cadre Appointment, Dismissal and Transfer Division of Organization Dept. of Guangdong Provincial Party Committee, acting mayor of Sanshui City and investigator of the same division and No. 1 Cadre Division of the same department. He now serves as director ,Vice secretary of Party committee, secretary of Committee for Disciplinary inspection and Chairman of Labour union of Guangdong Yudean Group Co., Ltd. and director of Guangdong Electric Power Development Co., Ltd. Mr. Gao Shiqiang: Male, born in December 1957, a CPC member ,Han nationality, from Dapu Guangdong, a postgraduate, A master’s degree in engineering ,Senior engineer. Starting work in 1974, He had served as deputy manager and deputy director of Lianping County Power Supply Company, deputy director and director of Engineering Dept. and deputy director general of Heyuan Power Industry Bureau, director general of Shanwei Power Industry Bureau, head of preparation team of Shanwei Power Plant and head of Cadre Division of Guangdong Electric Power Group Company. He now serves as director, deputy General manager ,member of CCP and Chief Counselor of Guangdong Yudean Group Co., Ltd. and director of Guangdong Electric Power Development Co., Ltd. Mr. Kong Huitian：Male，Born in November 1956，A CPC member , Han Nationality，from Wuhua Guangdong，bachelor’s degree, Senior political, Starting work in 1974,He had served as deputy secretary of Party committee and secretary of discipline committee of Huangpu Power Plant and director of Human Resource Dept. Guangdong Yudean Group Co., Ltd. He now serves as chief economic engineer, He now serves as chief economic manager, the member of the Party Committee, immediate secretary of the Party Committee of Guangdong Yudean Group Co., Ltd， and director of Guangdong Electric Power Development Co., Ltd. Mr.Li Mingliang: Male, Born in October 1964, A CPC member, Han Nationality, Form Fuping Shanxi, bachelor’s degree, He is a senior engineer (professor level) with master's degree. Starting work in 1985, he once served as director of Operation Dept., deputy chief engineer, deputy plant director, plant director of Zhuhai Power Plant and member of Party committee, deputy chief engineer and director of Human Resource Dept. of Guangdong Yudean Group Co., Ltd. He now serves as deputy general manager, member of Party committee of Guangdong Yudean Group Co., Ltd. and Director of Guangdong Electric Power Development Co., Ltd. Mr. Lin Shizhuang, Male, born in July 1961,a CPC member, Han nationality,
- 21 - form Haikou Haonan, a postgraduate, Lin Shizhuang is an on-the-job postgraduate and senior engineer. He once served as maintenance supervisor and director of Maintenance Dept. of C Plant of Shajiao Central Plant, deputy general manager and secretary of discipline committee of Shajiao Power Generation Branch of Guangdong Electric Power Group and manager and secretary of Party committee of Shajiao C Power Plant. He is a candidate for director and general manager of Guangdong Electric Power Development Co., Ltd. He now serves as director and general manager of Guangdong Electric Power Development Co., Ltd. and concurrently serves as board chairman of Guangdong Shaoguan Yuejiang Power Generation Co., Ltd. Mr.Wang Jin: Male, born in May 1963, a CPC member, Han nationality, from Dianbai Guangdong, bachelor’s degree, Starting work in 1974 ,He once served as section chief assistant, deputy workshop director and workshop director of Shaoguan Power Plant, person in charge of Operation Dept. and deputy plant director of Zhuhai Wangwan Combustion Engine Power Plant, deputy plant director of Zhuhai Power Plant and general manager of Guangzhu Power Generation Co., Ltd. and Guangdong Zhuhai Jinwan Power Generation Co., Ltd. He now serves as deputy chief engineer , director of Operation Dept. of Guangdong Yudean Group Co., Ltd. and Director of Guangdong Electric Power Development Co., Ltd. Mr. Rao Subo, Male, born in May 1964, a CPC member, Han nationality, from Chongqing, a postgraduate, Senior engineer (Professor). He had served as Technician , Engineer, Deputy-department director , Vice General engineer of Shaoguan Power plant , deputy manager and deputy director of Lianping County Power Supply Company, Deputy-Section Chief of the technique and production security Dept of Guangdong Yudean Group Co., Ltd. He now serves as vice General Engineer of Guangdong Yudean Group Co., Ltd. Director of Guangdong Electric Power Group Co., Ltd. ,Manager of Shaojiao A plant. Mr.Zhang Xueqiu: Male born in January 1966, a CPC member, Han nationality, from Hunan, He is an economic engineer with master's degree. Starting work in 1989,He once served as clerk, deputy section chief, section chief and manager assistant of Management Dept., deputy general manager and general manager of Guangzhou Development Group Co., Ltd. He now serves as vice president of administration and board secretary of Guangzhou Development Industrial Holding Group Co., Ltd. and Director of Guangdong Electric Power Development Co., Ltd. Mr.Wang Jun: Male born in October 1958, Han nationality, from Fengnan Hebai, He is a professor and doctorial tutor with doctor's degree in management science. He once served as director of Institute of Economics of Zhongshan University and vice president and president assistant of Lingnan College. He now serves as president of Higher Social Science Research Institute of Zhongshan University and economics professor of Lingnan College and concurrently serves as chairman of Guangdong Institute of Economics, independent director of Midea Electrical Appliances and Tianlun Property. And independent director of Guangdong Electric Power Development Co., Ltd. Mr. Song Xianzhong: Male, born in September 1963, Han nationality, from Ningxiang Hunan, He is an accounting professor and doctorial tutor with doctor's
- 22 - degree in economics. He once served as dean of Accounting Department, vice president of Management School and International School of Jinan University. He now serves as president assistant and chief of Development Planning Division of Jinan University and concurrently serves as director of Accounting Society of China and vice chairman of Guangzhou Accounting Association and Guangzhou Auditing Society. And independent director of Guangdong Electric Power Development Co., Ltd. Ms.Feng Xiaoming, Female, born in January 1955, Han nationality, from Tieling Liaoning, master degree in International Finance, with professional title of economist. Feng was the office director of Bank of China Guangzhou Branch, general manager of Public Relationship Department of Yuexiu (Hong Kong) Group, vice general manager of Financial Department of Yuexiu Investment (listed) and finance team leader of Yuexiu Group. Feng was the director and chief auditor of Guangzhou Securities Co., Ltd.She new serves as General Counsel ,independent director of Guangdong Securities Co., Ltd. And independent director of Guangdong Electric Power Development Co., Ltd. Mr.Zhu Weiping,Male, born in May 1957, Han nationality, from Yiyang Hunan, doctor degree in Economics, professor and tutor of Ph. D. students. Zhu was a professor of the Management College of Jinan University. Now he is the executive dean of Industrial Economy Institute of Jinan University, executive member of Chinese Industrial Economic Association and Guangdong Economic Association, deputy secretary-general of Guangdong Non-state-owned Economic Association and executive member of Guangdong Young & Middle-aged Economic Association., independent director of Baiyun Airport and Zhongjin Lingnan . And independent director of Guangdong Electric Power Development Co., Ltd. Mr.Liu Tao: Male , born in March 1971, Han nationality, from Henan, He is a level-1 lawyer with doctor's degree in laws. He now serves as a partner of Guangdong Junhou Law Office and member of the Ninth and Tenth CPPCC of Guangdong Province and Social and Legal Affairs Committee of CPPCC of Guangdong Province and concurrently serves as member of Expert Consultation Committee of Guangdong People's Procuratorate, supervisor of registration of letters and visits for Guangdong Higher People's Court, arbitrator of Guangzhou Arbitration Commission. And independent director of Guangdong Electric Power Development Co., Ltd. Mr. Zhang Hua: Male, born in March 1965, Han nationality, From Jiangxi, Master of Economics, an Economist, He once served as Business Manager of Credit Dept of Nation Development Bank. Guangzhou Branch, Senior Analyst of Guangdong Gold Finger Investment Consultants Co., Ltd.,Deputy Manager of Fanincial Dept of Guangdong Baoxin Holding Group Co., Ltd. Majordomo of Investment Bank and Assistant of president of Junhua Group. He now serves as Deputy General Manager of Guangzhou Yingzhi Chaihua Investment Co., Ltd. and concurrently serves as independent director of Guangzhou Yuyin Technology Co., Ltd and Guangdong Electric Power Development Co., Ltd. Mr. Qiu Jianyi: Male, born in March 1964, a CPC member ,Han nationality, from Xingning Guangdong, bachelor’s degree, a engineer, He once served as chief of
- 23 - Appointment and Dismissal Section of Cadre Division of Guangdong Power Industry Bureau and deputy director of Human Resource Dept. of Guangdong Yudean Group Co., Ltd. He now serves as director of Audit & Supervision Dept. and deputy secretary of discipline committee of Guangdong Yudean Group Co.， Ltd. and chairman of the supervisory committee of Guangdong Electric Power Development Co., Ltd. Ms. Zhaoli, born in October 1972, a CPC member, Han nationality, from Tieling Liaoning, bachelor’s degree, Master’s degree, Senior accountant, She once served as Manager of Financial Dept and of Guangdong Yudean Group Co., Ltd.She Now serves as Vice Minister of Finanical Dept of Guangdong Yudean Group Co., Ltd.and concurrently serves as Superviser of Supervisory committee of Guangdong Electric Power Development Co., Ltd. Mr. Sha Qilin: Male, born in October 1960, a CPC member ,Han nationality, from Honghu Hubei, doctor's degree, Associate professor, A lawyer. He once served as associate professor of Automobile Engineering Dept. of Wuhan Engineering College (now named as Wuhan Science and Engineering University) and person in charge of Investment and Development Dept., deputy chief engineer and head of overseas listing leading team of China Huandao Group Company. He now serves as the lawyer of Nanguo Desai Lawyer Office and independent superviser director of Guangdong Electric Power Development Co., Ltd. Mr.Xiang Ying, Female, born in December 1953, a CPC member ,Han nationality, from Shanghai, certified public accountant. Xiang was a teaching fellow and deputy division chief of Hunan Political Law Administration College, division chief and deputy commissioner at Changsha, Guangzhou and Chengdu offices of National Audit Office. Now Xiang is the Deputy general manager of China Huarong Asset Management Corporation Guangzhou Office. and independent supervisor of Guangdong Electric Power Development Co., Ltd. Mr. Lin Weifeng: Male, born in February 1968, a member of CCP , Han nationality , from Jiexi Guangdong, bachelor’s degree, Senior Accountant, He once worked at Xinfengjiang Hydroelectric Power Plant and Shanjiao Power Plant and served as audit director of Shajiao General Power Plant and director of finance department of Shajiao A Power Plant. He now serves as employee supervisor of Guangdong Electric Power Development Co., Ltd. and deputy chief economic engineer of Shajiao A Power Plant. Mr. Tong Jianjun：Male, born in February 1955, a member of CCP, Han， fromWutaishan Shanxi, bachelor’s degree, an economist, He once served as Technician of Engineering Dept of Guangdong Nuclear power Co., Ltd.Manager of Foshan Economy Technology Cooperation Corporation.He now serves as assistant Manager of Project Management Dept and Employee supervisor of Guangdong Electric Power Development Co., Ltd. Mr. Luo Zhiheng, Male, born in July 1967, a member of CCP , Han nationality , from Guang zhou, Guangdong, bachelor’s degree, Senior Accountant, with professional title of economist. He once served as merchandiser of Guanghua Industry Import and Export Company, merchandiser and deputy manager of Energy Investment
- 24 - Dept., manager assistant and manager of Enterprise Planning Dept. of Guangdong Electric Power Development Co., Ltd., deputy general manager of the Company and deputy director and director of Beijing Representative Office of Guangdong Yudean Group Co., Ltd. He now serves as secretary of Party branch and deputy general manager of Guangdong Electric Power Development Co., Ltd. and concurrently serves as board chairman of Guangdong Yudean Bohe Coal Power Co., Ltd. Mr. Luo Zhiheng, Male, born in July 1967, a member of CCP , Han nationality , from Guang zhou, Guangdong, bachelor’s degree, Senior Accountant, with professional title of economist. He once served as merchandiser of Guanghua Industry Import and Export Company, merchandiser and deputy manager of Energy Investment Dept., manager assistant and manager of Enterprise Planning Dept. of Guangdong Electric Power Development Co., Ltd., deputy general manager of the Company and deputy director and director of Beijing Representative Office of Guangdong Yudean Group Co., Ltd. He now serves as secretary of Party branch and deputy general manager of Guangdong Electric Power Development Co., Ltd. and concurrently serves as board chairman of Guangdong Yudean Bohe Coal Power Co., Ltd. Ms Li Xiaoqing, Female, born in September 1971, a CPC member ,Han nationality, from Chongqing, A master’s degree, a Senior Economist engineer . Ms. Li has took the position as person in charge being responsible to the General Manager Secretary of the Board of Directors and Manager of Offair Dept of Board of Directors of Guangdong Electric Power Development Co., Ltd, she now serves as General Manager ,Manager of Financial Dept of Secretary of the Board of Directors of Guangdong Electric Power Development Co., Ltd. And director of Shenzhen Guang qian electricity Co., Ltd. Ms Liu Hui：Female, born in October 1965，a CPC member ,Han nationality, From Wusheng Sichuan, bachelor’s degree, a senior engineer,She had served as Deputy General Manager and director of Budoet Dept of Guangdong Thermal power Engineering Corroration and Manager of Project Management Dept of Guangdong Electric Power Development Co., Ltd. She now serves as Deputy General Manager of Guangdong Electric Power Development Co., Ltd. and concurrently serves as vice board chairman of Guangdong Oil shale Power Company. Mr. Liu Wei: Male, born in April 1979, a CPC member ,Han nationality, from Wuhan Hubei, bachelor’s degree, a Economist engineer. He once served as secretary of Supervises committee, securities affair representative and special responsible person of Board Affair Dept. of Guangdong Electric Power Development Co., Ltd. and Preparation Team of Guangdong Yudean Finance Co., Ltd. He now serves as board secretary and manager of Board Affair Dept. of Guangdong Electric Power Development Co., Ltd. and concurrently serves as collector of Supervisory committee of Guangdong Yudean Shipping Co., Ltd. 3. Particulars of Remunerations The salary and welfare of directors, supervisors and senior management of the Company are determined by their position in the Company and are in accordance with the Company’s principle on staff payroll and welfare. No additional salary and
- 25 - welfare are paid. Allowance of independent directors, independent supervisors are paid according to the standard approved by the General Shareholders’ Meeting. 4. In the reporting period, there were no staff leave, employment, and election of directors, supervisors and senior Executives. In the report period, The Company reelected the board of directors, the supervisory committee and senior executives. 2010 annual shareholders' general meeting elected the seventh board of directors and supervisory committee. Pan Li, Liu Qian, Li Zhuoxian, Hong Rongkun, Zhong Weimin, Gao Shiqiang, Kong Huitian, Li Mingliang , Lin Shizhuang,Wang Jin, Rao Subo and Zhang Xueqiu were elected as non-independent directors of the Company. Wang Jun , Song Xianzhong, Zhu Weiping , Feng Xiaoming, Yang Zhishan and Liu Tao were elected as independent directors of the Company. Qiu Jianyi and Zhao Li were elected as non-independent supervisors ,Sha Qilin and Xiang Ying were elected as independent supervisors, Lin Weifeng and Tong Jianjun acted as employee-representing supervisors after democratic recommendation by staff and workers. The 1st meeting of the seventh board of directors elected Pan Li as board chairman and Liu Qian as vice board chairman and appointed Lin Shizhuang as general manager, Luo Zhiheng ,Li Xiaoqing and Liu Hui as deputy general managers, Li Xiaoqing concurrently as person in charge of financial affairs and Liu Wei as board secretary. The seventh supervisory committee elected Qiu Jianyi as chairman of the supervisory committee. Relevant resolutions were disclosed on China Securities Daily, Securities Times, Hong Kong Commercial Daily (English version for overseas areas) and www.cninfo.com.cn on May 19, 2011 Mr. Yang Zhishan no longer acted as an independent director of the Company for reason of health. The fourth provisional shareholders' general meeting of the Company in 2011 held on December 9, 2011 elected Mr. Zhang Hua as an independent director of the Company. (2) Particulars of employees At the end of 2011, the Company had 1,896 employees, including 240 technicians, 1018 production workers,35 finance staffs, 210 administrative and management staffs and 393 retired staffs. Current employees consisted of 804 college graduates or above, 568 technical secondary school or high school graduates. Except for few staff working in headquarters of the Company(accounts for 2%), most of the staff work in Shajiao A Power Plant. V. Corporate Governance Structure (I) The status quo of corporate governance structure Our company will strictly follow requirements of the Company Act, the Securities Law, and the Code of Corporate Governance for Listed Companies in China, the Stock Listing Rules, etc., and keep improving in governing the structure by the legal person, and enhance in regulating its operational level. Our company has instituted the Articles of Association, the Rules of Procedure of the Three Conferences, the board special committee work instruction, the general manager work instruction, etc., which are basically covering in all respects of the management which contains
- 26 - the financial management, the investment management, the information disclosure, the affiliated transaction, the provision of security to foreign parties, and the funds raising, etc., and then the institution can be executed better. During the reporting, the company based on the related regulations and has amended some items of the Articles of Association, and improved the profit sharing arrangements, the shareholder proposal, and the related cumulative voting regulation of director and supervisors election. The company has completed
（II）The independent director duty performance The board of directors currently has 18 board members and there are 6 independent directors among them, the number of people in board of directors and the constitution of people are in accordance with the requirement of law & regulation and < Articles of association>. Within report period, the 6th board of directors totally held 7 site meetings and 5 conference meeting. Within report period, the 7th board of directors totally held 6 site meetings and 1 conference meeting.Each board member implemented duty according to < Rules of procedure of board meeting> and carefully reviewed & discussed each proposal of board meeting, all of them are dedicated and made their effort in working & protecting the maximum interests of company and all shareholders.
Number of meetings Whether on the Number of Number of Times of attendance Times of reasons why not Name Position should field attendance by means of absence personally attend present meetings by proxy communicat the meeting of the ion board of director
- 27 - for twice successively.
Pan Li Board chairman 11 6 3 2 0 No Vice Board Liu Qian 1183 0 0No chairman Li Zhuoxian Director 11 4 3 4 0 Yes Hong Rongkun Director 11 6 3 2 0 Yes Zhong Weimin Director 11 4 3 4 0 Yes Gao Shiqiang Director 11 3 3 5 0 Yes Kong Huitian Director 11 6 3 2 0 Yes Li Mingliang Director 7 2 1 4 0 Yes Director, General Lin Shizhuang 1183 0 0 No Manger Wang Jin Director 7 4 1 2 0 No Rao Subo Director 11 7 3 1 0 No Zhang Xueqiu Director 7 3 1 3 0 Yes Independent 7 Wang Jun 51 1 0 No director Independent 7 Song Xianzhong 51 1 0 No director Independent 11 Feng Xiaoming 73 1 0 No director Independent Yang Zhishan 1163 2 0 No director Independent Zhu Weiping 1183 0 0 No director Independent Liu Tao 7610 0No director Notes ：Director Li Zhuoxian did not attend the 18th meeting of sixth board of director , 2nd meeting and 4th meeting and 5th meeting of seventh Board of Director ,Who respectively authorized Vice Board chairman Liu Qian and director Li Mingliang to attend the meeting and exercise voting right on their behalf ; Director Zhong Weimin did not attend the 18 meeting and 19 meeting of sixth Board of Director ,4th meeting and 6th meeting of sixth board of director,Who respectively authorized Vice Board chairman Liu Qian and Board chairman Pan Li to attend the meeting and exercise voting right on their behalf; Director Gao Shiqiang did not attend the 1st meeting , 3rd meeting and 6th meeting of seventh Board of Director ,Who respectively authorized Vice Board chairman Liu Qian and director Li Zhuoxian to attend the meeting and exercise voting right on their behalf；Director Li Mingliang did not attend the 1st meeting,2nd meeting ,4th meeting and 6th meeting of of seventh Board of Director ,Who respectively authorized director Director Lin Shizhuang, Director Wang Jin and Director Hong Rongkun to attend the meeting and exercise voting right on their behalf；Director Zhang Xueqiu did not attend the 2nd
- 28 - meeting, 3rd Meeting and 6th Meeting of seventh Board of Director ,Who authorized Independent director Liu Tao to attend the meeting and exercise voting right on his behalf； （III）The independent director duty performance The Company has 6 independent directors which occupy one third of the board directors, Our company has instituted the Working System of Independent Directors , and the said system is the protection to the qualification and procedures, responsibiliti es, executive authority of the independent director. In particular it has specified the in dependent director's responsibilities to its annual report and procedures. During the re porting,The 6 independent directors can attend or authorize other directors to attend th e meeting and to exercise the right for voting, and not to raise an objection to the boar d’s consideration issues. In the procedure of editing the annual report, the independent directors hear the company management operating report, and communicate the annu al auditing with accountants, and verify and confirm the annual report. The independent directors of the Company earnestly performed the requirement assig ned by laws and regulations and Articles of Association of the Company, cared for the Company's production and business and financial performance and corporate governa nce structure , expressed independent opinions on the Company's operation and decisi on making and all related transactions, According to the regulation, conducting verific ation & giving independent opinion on important issues such as company’s internal co ntrol, external guarantee performance, connected transaction and appointing or dismis sing of executives, company’s management level had been improved.and definitely en sure the lawful rights and interests of most shareholders. (IV).Separation of operation with the holding company (a) Separation of human resource: the General Manager and all his subordinates, Secretary to the Board of Directors, Financial Manager are paid by the Company and take no position in the holding company. (b) Separation of assets: the Company has independent production system, supporting system and other facilities. The Company owns its intangible assets such as intellectual property rights, trademarks and non-patent technology, except that the procedures to apply land use right certificate of Shajiao A Power Plant are still in progress. (c) Financial independence: the Company has an independent financial department and has established independent accounting system and financial management system. It opened independent bank accounts for its own operation. (d) Separation of organization: the Company has established integrated operating institution of its own. (e)Separation of operation: the Company is principally engaged in the electricity generation and sales to Guangdong Electric Power Holding Co.(“GPHC”) directly. The Company has subcontracted the subsidiary of Yudean, the holding company, to purchase the fuels, which is solely for the purpose of better utilization of large-scale purchase and cost control. （V）The integrity establishing situation of our internal control 1. Implementation of Internal Control Construction
- 29 - For strengthening the internal control of the listed company and promoting the standardized operation and healthy development of the listed company, the company, in accordance with the resolution of the 18th meeting of the sixth Board of Directors, has carried out the construction work of internal control and accomplished all kinds of tasks as per the preset work plan. (1) The company abides by the basic principle of “separation from the incompatible duties” to divide the internal control into two levels of the construction business and the supervision business, and then respectively sets up the organization and leadership structure on the levels of consolidated financial statements, the headquarters, the branches and the subsidiaries. The company, on the basis of the existing management system and management mode of YudeanLi, follows the “Fundamental Norms for Enterprise Internal Control”, “Application Guidelines of Enterprise Internal Control”, “Evaluation Guidelines of Enterprise Internal Control” and “Audit Guidelines of Enterprise Internal Control” to pertinently work out the practical risk control measures through the full and thorough analysis and understanding of its own situation. In accordance with the provisions of policy and regulations, the company conducts the systematic summary of all kinds of management system, and makes the supplement, amendment and perfection again for preparing to form the internal control manual of the company. Also, the company establishes the internal control self-evaluation system that complies with the requirements of regulations and policy and meets the demands of the company’s control.
(3) Summary of Internal Control Construction for all Units, and the focus of work measures and nodes are as follows: Time Work Nodes November 9,2010 Organize into the leadership structure and organization of internal control construction. December 21,2010 Select and appoint the advisory services by the bidding and determine the advisory services of internal control construction. April 29,2011 Hold the launch meeting of internal control construction on the level of consolidated financial statements for the company, and officially deploy all the works of internal control construction for the units. May 8, 2011 The advisory services enter into all the holdings subsidiaries to carry out the works on site. June 13-June 17,2011 Organize to hold the training meeting of internal control knowledge, and complete the training for 154 persons. August 16,2011 Organize to hold the work meeting for the first batch of internal control construction units on the spot. September 30,2011 All the field works of internal control construction of the units has ended basically. Since October, all units have respectively transferred to conduct the review of the first draft of internal control results and the internal acceptance and inspection. November 29,2011 Hold the summary meeting of internal control construction and the 2nd meeting
- 30 - of the internal control committee of the Board of Directors. December 1, 2011 All the internal control results are put into commissioning. January 1, 2012 All the internal control construction results are implemented officially. (4) As per the preset work plan, the internal control construction covers the headquarters, the branches and all the holdings subsidiaries of the company, and forms a total of 5 work results that respectively are the compilation, flow chart, risk library, risk matrix of internal control system and the manual of internal control, up to the words of 2.48 million. The main workflow is as follows:
Work Steps Work Target Work Measures
Summary of Grasp the differences of the The company collects and assorts the existing system, and
Original company’s existing system, then submits to the advisory firm with unity. Also, the firm
System “Application Guidelines of sorts out the system directory that complement and perfect to
Enterprise Internal Control” and the internal control construction after comparing the
other national mandatory company’s existing system to the “Application Guidelines of
requirements. Enterprise Internal Control”, “Fundamental Norms for
Enterprise Internal Control”, “Evaluation Guidelines of
Enterprise Internal Control”, “Standardized Operation
Guidelines of Main-Board Listed Company” and other
national mandatory standards.
Staff Understand the company’s internal The advisory services firm grasps the basic employee’s
Interviews control environment and hear the situation, such as the risk awareness, internal control
staff’s requests for the internal environment and business processes through on-site
control construction with aiming to interviews, the survey questionnaire and analysis.
the management objectives of
internal control.
Summary of Master the main workflow and the All the company’s internal control work groups and the
Flow and current risk points of workflow. advisory services firm conduct the decomposition of
Test of Risk processes by comparing the existing system to 18 business
objects specified in the “Application Guidelines of Enterprise
- 31 - Internal Control”, carefully test the key risk control points for
each process, and form the company’s risk matrix.
Revision of Supplement the internal control All the company’s internal control work groups cooperate
System system of the company on the basis with the advisory services firm to supplement the deficient
of the summary of flow, test of risk internal control system and improve the internal control
and research. system that needs to revise.
Preparation Prepare the complete internal The advisory services firm and the work groups abide by the of Internal manual in accordance with theme to classify all the internal control system according to
Control “Application Guidelines of the requirements of the “Guidelines”, and split and
Manual Enterprise Internal Control” and consolidate all the systems a total of 8 elements, including
“Evaluation Guidelines of the overview, responsibility departments, control objectives,
Enterprise Internal Control”. key risks, control contents, reference documents and main
records, in order to form a unified format of the internal
control manual.
Drawing of Draw the flow chart for the key Supplement the deficient flow chart and perfect the existing
Flow Chart business processes in order to flow chart based on the system and the manual and combined
convenient for the flow check and with the requirements of “Evaluation Guidelines of Internal
the risk measures. Control”. (5) The internal control construction is a systematic and long-term work; the company will continue to well do the following two points in the next works. First, well implement all the results of the internal control construction in the actual management, and summarize the experience, improve the internal control system and internal control manual, supplement and revise the flow chart and the risk matrix according to the self-assessment results of the internal control and the firm’s audit opinions, in order to make the internal control construction is more in line with the actual management of the enterprise. Also, establish the self-improvement of internal control construction follow-up work system and aim to the company’s new business and situation to continue to supplement and improve the internal control construction. Second, conscientiously sum up and arrange the work procedures and materials of the internal control construction to ensure that the company’s internal control construction meets the relevant requirements of regulatory department. 2．Self-assessment report about internal control
- 32 - Company followed the requirement of
- 33 - senior management The Company is in the process of establishing a fair, visible performance evaluation scheme and incentive system for directors, supervisors and management. The management is appointed openly and fairly to be compliant with laws and regulations. （ VII ） Company reduced connected transaction to prevent horizontal competition. In July 2011, the significant asset reorganization concerning issuing shares to Guangdong Yudean Group Co., Ltd., the controlling shareholder, to purchase assets was not approved by CSRC after examination. Then, the 3rd meeting of the seventh board of directors decided to continue this significant asset reorganization, and adjust, revise and perfect the reorganization scheme according to relevant opinions of CSRC. The new scheme was approved by the shareholders' general meeting in December 2011. So far, the application has been submitted to CSRC for examination and approval. Continuing this reorganization complies with the Company's long-term development target. Besides, it meets the interests of all shareholders and it will effectively reduce the horizontal competition between controlling shareholder and our company.
VI. Brief Introduction of Shareholders' General Meeting
In the report period, the Company held 5 shareholders' general meetings in total: the first provisional shareholders' general meeting in 2011, the shareholders' general meeting in 2010, the Second provisional shareholders' general meeting in 2011 ,The Third provisional shareholders’ general meeting in 2011 and the Fourth provisional shareholders’ general meeting in 2011 were held on Fubruary 16, April 25,May 18, July 20 and December 8 respectively. The resolutions of the meetings were disclosed on China Securities Daily, Securities Times, Hong Kong Commercial Daily(overseas newspaper for English version)and www.cninfo.com.cn respectively on February 17,April 26, May 19,July 21 December 9.
VII. Report of the Board of Directors (I) Operating status of the Company in the report period 1. Summary of overall operation status of the Company 2011, which is the first year of “the 12th Five-Year Plan” of China, and the year of more complex and changeable domestic and international economic situation. The Chinese economy has withstood the European debt crisis, inflation and many other negative factors, and achieved the stable and rapid development. Also, the economy of Guangdong has been maintaining a good development momentum, and keeping the steady growth in the demands of power. Social power consumption of the Province was 439.902 billion kwh, a year-on-year increase of 8.35%. Affected by electricity transmission from west to east, the power output of the Province was 369.66 billion kwh, a year-on-year increase of 17.49%. Benefit from the external environment of the slowdown for the new added
- 34 - installation, the less hydropower and reducing of West-East transmission power in the province, the power plant subjected to the company strengthens the power production management and optimizes the units’ operation mode to realize the positive growth of power generation over the same period of last year. Social power consumption of the Province was 406.01 billion kwh, a year-on-year increase of 12.48%. Affected by electricity transmission from west to east, the power output of the Province was 314.64 billion kwh, a year-on-year increase of 18%. With the driving of macro-economic growth and based on good production management of subsidiary power plant, the generated energy of company achieved positive growth year on year. While, due to the close down of generator set #3 and generator set #4 of Meixian power plant, the growth rate did not reach the growth level of whole province. In terms of consolidated statements, the accumulative power output of the Company was 35.305 billion kwh, Generated energy increased for 13.02% comparing with 31.238 billion KWH in year 2011，Its on-grid electricity volume was 32.929 billion kwh,，Generated energy increased for 13.15% comparing with 29.102 billion KWH IN year 2010，106.81% of the power generation plan for the year was fulfilled., On equity basis (including joint venture power plants), the power output and on-grid electricity volume of the Company were 33.782 billion kwh and 31.654 billion kwh, which respectively increased by 14.17% and 14.22 year on year. The growth of power generation drove the growth of operating income,the operating income of the Company for the report period was RMB million, a year-on-year increase of %. But subject to the influence of the adverse factors, including rising operation cost because of the high fuel prices, the apparent increase of financial expenses because of loan rate moving up many times, and the asset impairment of the holding company of Guangdong YueJia Electric Power Co. Ltd., the increase of business revenue brought by the growth of power capacity generating is unable to offset the substantial growth of the costs.So, the operating profit and the net profit attributable to parent company within report period are RMB xx and RMB xx respectively which had slight decline.which respectively decreased by % and % year on year. Continue to focus on the development concept of “Main Bigger and Stronger Industry, Adjustment and Optimization of Power Structure” to orderly promote the engineering construction of the projects under construction. Through the preliminary design and budget of the project, the strict review of tender documents and other measures to control the project investment and strongly coordinate to solve various problems encountered in projects construction, in order to ensure the project’s quality, safety and progress controlled or in the control. During the report period, units #3 and # 4 (2 x 660MW) of Shanwei Power Plant and Yunnan Baoshan BingLangJiang Hydropower project (483MW) have successfully put into the commercial operation, Zhanjiang ZhongYue “Coal for Oil” project (2 x 600MW) has owned the production conditions, units #7 of Maoming project (60MW) and Zhanjiang Xuwen Warrior Wind Power project (49.5MW) are expected to put into production in 2012. By the end of 2011, the company has put into production for the controllable installed
- 35 - capacity of 8.08 million kilowatts, an increase of 20.78% over the same period of last year. Focus on changing the mode of development, adjust and optimize the investment structure in according with the development outline target of “the 12th Five-Year Plan” of the company, the main power industry and the relevant diversification industry have made significant progress. During the report period, Guangdong Yudean Zhanjiang Wind Power Co., Ltd. is agreed to raise capital by the company for investing the demonstration project of Xuwen Offshore Wind Power, the preparatory group of Guangdong Wind Power development has been set up, the 10% shares of participation in the formation of South Haishang Wind Power Joint Development Co., Ltd. are accomplished, and the Wind Power project of Zhuhai Guishan Haishang is developed and invested jointly by China Southern Power Grid Energy Development Co., Ltd. with the company. Also, the company is agreed to replenish the investment for Maoming Zhenneng Thermoelectric Co., Ltd. and Guangdong Yudean Holding West Investment Co., Ltd., provide the funds support for the project construction and ensure the project is put into production as scheduled. During the report period, the item of the material assets reorganization that the company issued shares to the controlling shareholders to buy the assets, failed to obtain the review and approval of China Securities Regulatory Commission. The company timely organized the meeting of the Board of Directors, and examined and passed the resolution of continually promoting the material assets reorganization, and carefully adjusted the proposal of material assets reorganization according to the feedback, rapidly organized and developed the new audit and assessment. On December 2011, the reorganization program after adjustment has been reviewed and passed by the 4th Temporary Shareholders’ Meeting of the Company in 2011, and the relevant reorganization materials should apply the approval to China Securities Regulatory Committee. 2.Operating status of the Company in the report period （1）Main operating The company business is the electric power investment, development and management, electric power producing and selling, electric power technical advice and services. As of the end of the report period, the in-operation controllable installed generating capacity and installed capacity on equity basis were 6.68 million KW and 8.08 million KW respectively. （2）Main operating income Unit RMB’0000 Gross Increase Increase Increase /decrease of Operating Operating Profit /decrease of /decrease of Industry Area Gross profit ratio Income cost Ratio(% operating operating （％） ) income（％） cost（％） Sales Guangdo Electric 1,440,678.00 1,308,784.00 9.15% 14.76% 20.97% Decreased by 4.67% ng Power Provision Guangdo 6,374.00 5,149.00 19.22% 1.24% -0.68% Increased by 2.64
- 36 - services ng % - Decreased by 4.63 Total 1,447,052.00 1,313,933.00 9.20% 14.65 20.81% % In the report period,.therefore owing to the price fall of the coal and transport, the profitability of the electric power business has significant decline. (3)Electricity rate In the report period, During the report period, our country raises the on-grid price twice for easing the difficulties of power generation business and ensuring the normal order of power production and operation. The on-grid price raised has a positive effect on the company’s operations, but unable to fully compensate for the fuel costs increased by the raised coal price yet. the on-grid electricity rate (including tax) of the existing coal-fired units (including cogeneration units) of the Company has no changed and is as follows: Unit： RMB/ megawatt hour Iterm up-grid electricity price #1—#4 0.5210（Including desulfuration） Sha A plant #5 0.5212（Including desulfuration） Zhanjiang Power plant #1—#4 0.5406（Including desulfuration） Yuejia Meixian #5、#6 0.5492（Including desulfuration） Power plant #10 0.6019（Including desulfuration） Yuejiang Shaoguan Power Plant #11 0.5692（Including desulfuration） 0.5210（Including desulfuration） Jinghai Huilai Power Plant#1—#2 0.5210（Including desulfuration） Red Bay Shanwei Power Plant #1—#2 0.5210（Including desulfuration） Guangdong Zhanjiang Aoliyou Power 0.5060（Non including desulfuration） (4)Main suppliers and customers In 2011, the Company's power products were all sold to Guangdong Power Grid Company of China South Power Grid Co., Ltd. The total amount of purchase from the top five suppliers accounted for about 81.77% of the total purchase amount of the year. 3. The capital structure
Unit：RMB
December 31,2011 December 31,2010
Amount Proportion Amount Proportion Causes for major changes than
Items to total to total in the same period last year
assets assets
- 37 - Account No importance changes 1,657,325,697 4.20% 1,841,038,374 5.32% receivables Fuel price and amount 1,410,576,820 3.57% 852,247,851 2.46% Inventories increase
Investment real No importance changes 12,110,227 0.03% 12,743,846 0.04% estates
Long-term No importance changes
equity 5,812,518,793 14.72% 5,469,169,354 15.81%
investment Parts of the projects under c 14,866,672,176 37.66% 11,207,225,955 32.39% Fixed assets onstruction
Projects under No importance changes 9,159,945,080 23.20% 9,964,066,605 28.8% construction
Short –term No importance changes 9,318,000,000 23.60% 8,327,500,000 24.07% borrowings
Long-term No importance changes 7,167,153,408 18.15% 6,320,720,000 18.27% borrowings 4 Management expenses, Financial expenses and income tax.
Unit: RMB
Items 2011 2010 Increase & Causes for major changes than in the same
Decrease period last year
rate
Management Decrease of benefits paid for inside retired 597,530,138 669,469,282 -10.75% expenses employees by one-time.
Financial The loan rate and amount raised expenses—Net 613,819,863 452,190,821 35.74%
amount
Income tax 146,988,249 380,704,425 -61.39% the declining profitability of the company.
5. Analysis of relevant data of Cash Flow statement
Unit: RMB
- 38 - Items 2011 2010 Increase Causes for major changes than in the same period
& last year Decrease
rate power capacity and on-grid price raised. Net cash flow
from operating 2,028,885,759 635,497,704 219.26%
activities No importance changes Net cash flow
from investing -3,887,659,665 -4,368,938,367 11.02%
activities
Net cash flow the increment of inflow investment fund
from financing 2,147,413,216 3,888,627,681 -44.78%
activities 6. The situation of the measurement attributes of the main assets using, adopting the fair value measurement project, the accounting restatement, and holding the foreign currency financial assets （1）Besides the special explanation of the measurement attributes for adopting the fair value, net realizable value, and present value, etc., it generally adopts the historical cost measurement. （2）Concerning to adopt the fair value measurement project a.The company and the internal control system of the fair value measurement have been showed in the Internal Control Financial Management. b. Investment in real estate is measured by cost, since obtaining fair value relies on assessment, and it is hard to acquire the price of the same or similar estate from market in a continuous and accurate manner. The real estate investment of the company involves leasing of office. c. The available-for-sale financial assets of the company are measured by fair value. Variations in fair value and book value are adjusted through capital reserve and do not affect profits for the period. The available-for-sale financial assets of the company include 8,400,000 shares of Shenzhen Energy Co., Ltd. and 55,532,250 shares of Shenergy Co., Ltd. d.Items related to measurement of fair value Unit ：RMB Item Amount at the Gains and losses Accumulative Provision for Amount at the beginning of from change of change of fair impairment end of period period fair value in value accounted made in current current period for as rights and period interests Financial assets：
- 39 - Of which：1. Financial assets calculated according to fair value whose change is accounted for as profits or losses for current period Including: Derived financial asset 2. Trading financial assets 353,104,045 -46,971,017 54,404,412 306,133,028 Subtotal of financial assets 353,104,045 -46,971,017 54,404,412 306,133,028 Financial liabilities Property investment Production physical assets Other Total 353,104,045 -46,971,017 54,404,412 306,133,028 （3）In the report period, the Company did not hold financial assets in foreign currency. 7. Subsidiaries of the Company. (1)The Company's wholly-owned plant and subsidiaries Shajiao A Power Plant, the Company's wholly-owned plant, achieved electricity generation volume of 8.619 billion KWH and on-grid electricity generation volume of 8.001 billion KWH, increase by 5.94% and 6.24% respectively as compared to those of last year. Zhanjiang Electric Power Co., Ltd. (“Zhanjiang Electric”), a 76% held subsidiary with a registered capital of RMB 2875.44 million, is mainly engaged in power generation and construction of power plant . For the end of report period, its total assets, net assets were RMB 4111.68 million and RMB 3859.02million respectively. In the report period, ,Its Main business income ,Main business profit and net profit were RMB 3195.22 million, RMB420.09 million and RMB238.93 million respectively. The Zhanjiang Power Plant owned by Zhanjiang Electric has achieved power generation of 7.587 billion KWH and on-grid electricity of 7.134 billion KWH, increases by 8.11% and 7.70% respectively compared to those of last year. Guangdong Yuejia Electric Power Co., Ltd. (“Yuejia Electric”), a 58% held subsidiary, with a registered capital of RMB 1200 million, is mainly engaged in power generation. For the end of report period, its total assets and net assets were RMB840.60million, RMB 587.03respectively. In the report period, Its Main business income, Main business profit and net profit were RMB660.53million,RMB-13.27 million and RMB-358.99 million respectively.The Meixian Power Plant owned by Guangdong Yuejia Electric has achieved power generation of 1.574 billion KWH and on-grid electricity volume of 1.443 billion KWH, decrease by 39.20 % and 38.81% respectively compared to those of last year. Guangdong Shaoguan Yuejiang Power Generation Co., Ltd. ("Yuejiang Electric Power") of which the Company holds 65% equity has registered capital of RMB 770 million.It is mainly engaged in power generation. For the end of report period, its total assets and net assets were RMB 3397.36 million and RMB318.99million
- 40 - respectively.In the report period, Its main business income ,main business profit and Net profit were RMB170.90million , RMB-36.23million and RMB-160.87 million respectively.The power output and on-grid electricity volume of #10 and #11 unit of subsidiary Shaoguan Power Plant were 3.848 billion kwh and 3.548 billion kwh, a respective increase of 13.80% and 14.26 % year on year. Maoming Zhenneng Thermal Power Co., Ltd. of which our company holds 56.39% equity has registered capital of RMB 757.83 million and mainly engaged in power generation. For the end of report period, its total assets and net assets were RMB 3231.40million and RMB757.25million respectively. In the report period, its main business income ,main business profit and Net profit were RMB1381.42 million, RMB45.19 million and RMB -33.72 million respectively.The power output and on-grid electricity volume of #5 and #6 unit of subsidiary Maoming Ruineng Thermal Power Plant were 3.497 billion kwh and 3.230 billion kwh, a respective increases of 6.69% and 6.84 % year on year. Guangdong Yudean Jinghai Power Co., Ltd. , a 65% held subsidiary with a registered capital of RMB 2919.27 million.It is mainly engaged in power generation. For the end of report period, its total assets and net assets were RMB12423.75million and RMB3170.34 million respectively. In the report period, Its Main business income, Main business profit and net profit were RMB3019.46 million , RMB488.48 million and RMB 200.33 million respectively. Huilai Power Plant owned by Yudean Jinghai Electric Power has achieved power generation of 7.503 billion KWH and on-grid electricity volume of 7.068 billion KWH, increases by 2.99 % and 3.00% respectively compared to those of last year. Guangdong Yudean Anxin Electric Inspection & Installation Co., Ltd., a wholly-owned subsidiary of the Company, registered capital of RMB 20 million. It is mainly engaged in undertaking the installation and maintenance of electric power facilities. For the end of report period, its total assets and net assets were RMB 68.57 million and RMB 40.49 million respectively.In the report period, its Main business iincome ,main business profit and net profit were RMB 112.92 million , RMB17.61 million and RMB 6.94million respectively. Guangdong Yudean Zhanjiang Wind Power Co., Ltd. which our company has 70% of its original holding,registered capital of RMB 346.11 million, the main business is new energy development and power production. For the end of report period, its total assets and net assets were RMB 862.30million and RMB367.92 million respectively. In the report period, Its Main business income, Main business profit and net profit were RMB62.91million , RMB32.87million and RMB20.36 million respectively. The power output and on-grid electricity volume of subsidiary Yang Qian Wind Farm were 0.114 billion kwh and 0.107 billion kwh, a respective increases by 3.51 % and 2.80% respectively compared to those of last year. The registered capital is RMB 1454.30 million of Zhanjiang Zhongyue Energy Co., Ltd. which our company has 90% of its original holding. For the end of report period, its total assets and net assets were RMB 5922.60 million and RMB1185.17 million respectively. In the report period, Its Main business income, Main business profit and net profit were RMB969.29million,RMB62.49 million and RMB-61.11
- 41 - million respectively. The affiliated company Zhanjiang orimulsion-fired power plant has finished the “oil c hanges coal” building and transformation by the second half of the year,has achieved power generation of 25.63 billion KWH and on-grid electricity volume of 23.98 billio n KWH. The registered capital is RMB 23.5 million of Guangdong Yue Dian Oil Shale Power Co., Ltd. which our company has 83.66% of its original holding. Its main business is oil shale resources exploitation and power generation. For the end of report period, its total assets and net assets were RMB207.26 million and RMB204.55 million respectively. This company is still in the early development of the oil shale exploitation. and the net loss is RMB 9.93 million during the report. The registered capital is RMB 15 million of Guangdong Yudean Humen Power Co., Ltd. which our company has 60% of its original holding, its main business is power generation and business. For the end of report period, its total assets and net assets were RMB 146.90 million and RMB 145.84million respectively. This company is still in the early development of the third stage in the Saojiao A power plant. and the net loss is RMB 1.31 million during the report. The registered capital is RMB 190 million of Guangdong Yudean Bohe Coal & electricity Co., Ltd which our company has 100% of its original holding,its main Business is coal dock construction and power pant construction .For the end of report period, its total assets and net assets were RMB169.64 million and RMB168.44 million respectively. This company is still in the early development of the coal terminal construction and power pant construction. and the net loss is RMB4.96 million during the report.
（2）The business performance of the subsidiary shares Please see the financial report of “the 6th The financial merger statements with annotation (9) to the investment on associates” (II) Prospects 1. Situation and Measures During the report period, the coal price remains high, and the fuel cost is substantially increased. Although the country has raised the on-grid price twice, the growth of electricity price far failed to offset the sharp increase of fuel costs, the overall thermal power losses is difficult to reverse. Thus, the company will continue to optimize the power structure, invest in the high capacity and parameter of thermal power generation projects, and the power generation projects of clean and renewable energy. At the same time, moderately expand the upstream industrial chain of power generation, and enhance the cost control and overall ability of anti-risks. As the country continues to implement the active fiscal policy and the prudent monetary policy, the external financing environment is not optimistic. After the large scale of investment in the project construction in the recent years, the company’s liabilities are further expanded and the financial cost pressure substantially increases. Thus, the company, on one hand, actively innovates the finance ways for the funds raising by multi-channel; on the other hand, strengthens the capital program
- 42 - management, improves the accuracy of the capital revenue and expenditure plans, and enhances the capital operation rate and efficiency. 2. Production and Operation Plan of 2012 (1) Production plan: In 2012, the Company plans to produce grid power of 36.952 billion KWH, increases by 4.023 billion KWH compared with that of 2011. (2) Investment plan: In 2012, the Company plans to make an investment of RMB 2643.30 million in projects. The planned investment amount is estimated according to the required capital of total investment of projects. The actual investment amount is adjusted according to the project approval and construction schedule. The funds will be raised by the company’s own reserves and bank loans. 3. Focus on the economic efficiency, strictly control all the costs, orderly control the investment scale, and optimize the investment structure. Also, sustain to pay attention to the capital market development, and further strengthen the capital operation efforts. 4. Accelerate the material assets reorganization, strongly coordinate various problems in the reorganization process, and strive for early gaining the approval of China Securities Regulatory Commission to achieve the important strategic development steps. 5. Continue to perfect the corporate governance structure, improve the management and control level of risk. Fully implement the internal control system of the company, carry out the internal control self-assessment and risk assessment, and safeguard the healthy operation of the company’s operation management. (III )Investment of the Company in the report period 1.Use of proceeds Company’s nonpublic issuing of 138,047,138 A shares was conducted on May 25th, 2010, fundraising amount is RMB 820 million. As of December 31, 2011, Above-mentioned raise fund has been completely used.
- 43 - 2. Application of Raised Capital Total Amount of Raised Capital 80,981.00 Total Amount Of Raised Total Amount of Raised Capital Capital Invested in the 51,431.00 for Use Changed in the Reporting 45,000.00 Reporting Period Period Total Amount for Accumulative 45,000.00 Changed Raised Capital Total Amount Of Accumulated Total Amount Proportion for 80,981.00 Raised Capital Invested Accumulative Changed Raised 56% Capital Balance between Total Total Proje Total Amou Amount cts Amou nt for for Access Chan nt of Total Total Achiev Change Accu Accumul to ged Raised Amount Amount e the Greatly mulati ative Benefits Promised Projects of （Inc Capita of Invested Usable Date Expect for ve Put Invested in the Investment ludin l For Adjusted within the For Projects ed Projects up to & Reporti g Part Invest Investmen Reporting Benefit Feasibilit the Promised ng of ment t Period s y End of Up To Period Chan Promi Period The End ging） sed (2) of Period (3)＝ (2)-(1)
- 44 - Promised Projects of
Investment Replenish Capital for Weixin Yuntou 45,000 45,00 May 1, Yes 45,000.00 45,000.00 100.00% 0.00 No No Yudean Zaxi Energy .00 0.00 2012 Co., Ltd. Replenish Capital for Guangdong 12,000 12,00 Yudean Zhanjiang No 12,000.00 7,450.00 100.00% July 1, 2012 0.00 No No .00 0.00 Wind Power Co., Ltd. 25,000 25,00 June Repay yhe Load No 25,000.00 0.00 100.00% 0.00 Yes No .00 0.00 30,2011 Subtotal of the 82,000 82,00 committed - 82,000.00 52,450.00 - - 0.00 - - .00 0.00 investment projects Intended investment with unbooked proceeds Repayment of bank - - - - - loan（If any） Replenishing the working capital（If - - - - - any） Subtotal of intended - 0.00 0.00 0.00 0.00 - - 0.00 - - investment with
- 45 - unbooked proceeds 82,000 82,00 Total - 82,000.00 52,450.00 - - 0.00 - - .00 0.00 Analysis For Failure In the report period，The company has completely used the raise funds. As the coal-electricity To Reach The integration project invested by Weixin Yuntou Yudean Zhaxi Energy Co., Ltd. and the Xuwen Planned Schedule Yongshi Wind Power Project invested by Zhanjiang Wind Power Company are still under And Earnings construction, has not yet to benefit （Specific Projects） Notes to significant change in feasibility Nil of the project Amount, application and application Not applicable progress of the unbooked proceeds About the change of the implementation site of the projects Not applicable invested with the proceeds About the change of the implementation method of the Not applicable projects invested with the proceeds About the initial Not applicable
- 46 - investment in the projects planned to be invested with the proceeds and the replacement Using the idle proceeds to supplement the Not applicable working capital on temporary basis Balance of the proceeds in process of project Not applicable implementation and the cause About application and status of the Nil proceeds unused Problems existing in application of the proceeds and the Nil information disclosure or other issues
3. Particulars about change of investment projects using raised proceeds
- 47 - Unit：RMB’0000
Actual Whet Whether Total amount Actual accumulati Investment her project of raised amount of ve amount progress as earnin feasibility Corresponding proceeds to Date of getting Earnings in Project after investment of of the end g will originally be invested ready for this report change in this investment of period target change promised project in the project intended use period report as of the (%) (3) = is materially after change period end of (2) / (1) fulfill after (1) period (2) ed change Increase the capital of Weixin Yuntou Yudean Zhaxi Energy Increasing the Co., Ltd. by capital of Weixin RMB 190 Yuntou Yudean 45,000.00 45,000.00 45,000.00 100.00% May 1, 2012 0.00 No No million and Zhaxi Energy provision of Co., Ltd. entrusted loan of RMB 260 million Total - 45,000.00 45,000.00 45,000.00 - - 0.00 - - Reason for In order to enhance the efficiency of use of raised proceeds and promote the coal-electricity reason, integration project of Weixin Power Plant, the first meeting of the sixth board of directors of the decision-maki Company by correspondence adopted the Proposal for Changing Partial Investment Projects Using ng procedure Raised Proceeds and agreed to change the original plan for increasing the capital of Weixin Yuntou
- 48 - and statement Yudean Zhaxi Energy Co., Ltd. by RMB 450 million to construct Erjing project of Kwan-yin of information Mountain coal mine of Yunnan Weixin Zhaxi coal-electricity integration project to "increasing the disclosure capital of Weixin Yuntou Yudean Zhaxi Energy Co., Ltd. by RMB 190 million and providing statement entrusted loan of RMB 260 million". In total, RMB 450 million will be specially used to construct (project by the power plant project of Yunnan Weixin Zhaxi coal-electricity integration project. This matter was project) examined and approved at the first provisional shareholders' general meeting of the Company in 2011 on February 16, 2011. Refer to relevant announcements of the board of directors and shareholders' general meeting published on January 28, 2011 and February 17, 2011 for details. Particulars about failure to fulfill planned progress or Nil profit target and its reason (project by project) Statement on material change of Nil project feasibility after change
- 49 -
4. Investment with non-IPO proceeds and its progress and income In the report period, The Company plans to invest RMB1358.723 million in the projects shown in the following table.
Unit : RMB’0000 Name Amount Project progress Income from project This company is operating the #1 and RMB 130.21 million of #2 generators (2 x 600 MW) of Huilai period earnings Guangdong Yudean Jinghai Power power plant and implementing the discounted as per 65% 44,501.00 Co., Ltd. preparatory work for constructing the Equities, Without the #3 and #4 generators (2 x 100 MW) of operational efficiency Huilai power plant. brought yet "Oil-to-coal" renovation project (2×600 Zhanjiang Zhongyue Energy MW) has the ability to operate by the se No operation profit was 22,887.00 Co.,Ltd. cond half of 2011 obtained.
Business registration procedures had been completed.,and implementingthe Guangdong Yudean Hebo Coal No operation profit was 4,000.00 preparatory work for constructing the &Electricity Co., Ltd. obtained. Coal Dock and power pant (2×1000MW) RMB 11.41 million of This company is operating the Nanao period earnings Huaneng Shantou Wind Power Wind Power project （53X850 KW) discounted as per 25% 511.00 Co.,Ltd. and constructing the Dongdao wind Equities, Without the power project（15MW） operational efficiency brought yet At present, #5& #6 units（1×200MW＋ 1×300MW) of Maoing power plant are Maoming Zhenneng No operation profit was 14,450.00 being operating, and #7 & #4 units Theroelectricity Co., Ltd. obtained. （1×6000MW) of pre-stage works are being constructed. Guangdong Yudean Zhanjiang This company is operating the Xuwen RMB 14.25 million of Wind Power Co., Ltd. Yangqian Wind Power project period earnings （ 49.5MW) and constructing the discounted as per 70% 7,573.30 Yongshi wind power project（49.5MW) Equities, Without the The project is planned to be compl operational efficiency eted and start operation at the first brought yet half of this year Guangdong Yudean Finance Co, Till the end of report period, the amount RMB 61.50 million of Ltd. 12,500.00 of deposit taking is RMB 9.98 billion, period earnings the amount of lending is RMB 8.245 discounted as per 25%
- 50 - billion. Equities, Without the operational efficiency brought yet Guangdong Yudean Holding West This company is operating the #1 and RMB 10.37 million of Investment Co., Ltd. #2 generators （2×600MW) of Pannan period earnings power plant and implementing the discounted as per 26% 7,020.00 preparatory work for constructing the Equities, Without the #3 and #4 generators (2 x 600 MW) of operational efficiency Huilai power plant. brought yet Weixin Yuntou Yudean Zhaxi Now, the coal power integration project Energy Co., Ltd. is under construction, The construction of power plant pr No operation profit was 19,000.00 oject (2×600MW) are expected to obtained. be completed at the second half of 2012 Lincang Yuntou Yudean This company is operating the Xint Hydroelectricity Development Co., ang generator (18 MW) of Huilai p Ltd. ower plant and implementing the p No operation profit was 3,430.00 reparatory work for constructing th obtained. e Dayakou generator (102 MW).
Total 135,872.30.00 - - （IV）The implementation status of insider management system of inside information In order to standardize the inside information management of company, enhance confidential work of inside information and maintain the principle of fairness on information disclosure, according to the requirement of relevant regulations and combined with actual situation, company stipulated
- 51 - auditors’ the Company’s financial report and produced a standard unqualified audit report for the Company. 2. For details about the difference between onshore accounting principles and offshore accounting principles described by the board of directors, see section 2 “Accounting Data and Business Data”. （V）Routine work of the board of directors 1. Board meetings and resolutions in the report period In the report period, the Company held 2 board Locale meetings and 2 board Communication meetings of sixth board of directors . the Company held 6 board Locale meetings and 1 board Communication meetings of seventh board of directors.18 and 19 meetings of the sixth board of directors were held on March 8 and April 25 respectively. 1-6 meetings of the seventh board of directors were held on May 19, July 28, August 5, August 26, October 27 and November 10 respectively.The resolutions of the meetings were disclosed on China Securities Daily, Securities Times, ,Hong Kong Commercial Daily (overseas newspaper for English version) and www.cninfo.com.cn respectively on March 10, April 27,May 20, July 29, August 6, August 31, October 31 and November 23. 1 and 2 communication meetings of the sixth board of directors of 2011 were held on January 27 and April 8 respectively. First communication meetings of the seventh board of directors of 2011 was held on November 29.The resolutions of the meetings were disclosed on China Securities Daily, Securities Times, ,Hong Kong Commercial Daily (overseas newspaper for English version) and www.cninfo.com.cn respectively on January 28, April 9 and December 1. 2. Implementation by the board of directors of the resolutions of the shareholders' general meeting 2010 annual shareholders' general meeting held on May 18, 2011 examined and adopted the Company's Plan for Profit and Dividend Distribution for 2010. The resolution concerning dividend distribution plan is as follows: RMB 1 is to be paid for every 10 A shares (Including tax ) RMB 1 is to be paid for every 10 B shares. The said dividend distribution was completed in July 2011 except that part of original shareholders holding non-negotiable shares did not receive dividends. The stock right registration date for dividend distribution for A shares is July 7 2011, The last trading day for B shares is July 7, 2011. Ex-dividend date is July 8, 2011. Refer to the foregoing (III) The Company's investment in the report period for the details of the status of implementation by the board of directors of the resolutions of the shareholders' general meeting concerning investment. Refer to the following "IX. Important Matters--(VIII) Significant Contracts and Status of Their Performance --2. Significant Guarantee" for the details of the implementation status of the resolutions on matters concerning external guarantee. Refer to "IX. Important Matters--(VII) Significant Related Transactions" for the details of implementation status of the resolutions on related transactions. 3. Annual statement working procedure and performance summary of audit committee (1) Annual statement working procedure of audit committee The audit committee of board of directors strictly followed the rules of
- 52 - company’s annual report.Annual statement working procedure of audit committee – The committee shall negotiate with accountant to agree upon a schedule for the audit of annual financial statement; push the accountant to submit the audit report within time limit, and log the manner, times and result of pushing in writing as well as the signature approval by the responsible person. Audit committee shall review the financial statements of the company before the certified public accountant (CPA) and form a written comment. Once the auditing CPA has started to work, the audit committee shall strengthen communication with CPA and review the statements again once the CPA has submitted the preliminary audit opinions and form a written comment. The audit committee shall vote on the annual financial statements and submit the resolution to the board of directors for approval. Meanwhile, the committee shall submit a performance report of the CPA to directors along with the resolution of extension or change of the CPA’s appointment for the next year. The abovementioned documents formed by audit committee shall be disclosed in the annual Report. 2. Summary report of duty performance of audit commission. On November 28, 2011，The Audit Committee of the Sixth Board of Directors (the “Audit Committee”) held the 13th meeting , The independent directors of company, accounting firm and managements of company attended the meeting and listened to
- 53 - c. Agree the “Internal Control Self-evaluation Reports” issued by the company, and believe that the self-evaluation of the internal control has fully, truly and accurately reflected the actual situation of the company’s internal control, also agree to submit to the Board of Directors of the company for examining.
d.Annual audit CPA had strictly followed the regulations of the independent auditing standard for Chinese certified public accountants and conducted audit, the auditing time is sufficient, the auditor allocation is reasonable, practice capability is qualified. The audit report issued can fully reflect company’s financial status and operation performance in 2011. The audit conclusion issued is in accordance with the actual situation of company. e.It agreed to recommend PricewaterhouseCoopers Zhongtian Certified Public Accountants Co., Ltd. to continue its responsibility for audit of the Company in 2012. 4. Summary report of the performance of Salary and Examination Commission. Salary and assessment committee had audited the salary situation of directors, supervisors and senior managements disclosed by this report and considered that the salary standard and the confirmation & payment of the total annual salary can be combined with the duty performance of each position and it meets the rules of company’s salary management. (VII) Description for the Reasons and Impact of Accounting Policy and Accounting Estimation Change by the Board of Directors
On December 8, 2011, the Accounting Division of the Ministry of Finance has issued “Accounting Standards Description for Enterprise No.5 (Draft for Comment)” which provides that “The payable taxes of enterprise income tax and VAT in accordance with the tax law, in accordance with the provisions of “Enterprise Accounting Standards No.30 - Financial Statements”, should be listed and shown in the balance sheet as per the nature of the balance. Of which, the amount of pending deduct VAT should be listed and displayed on the item of “Other Current Assets” or “Other Non-current Assets” in the in the balance sheet according to the mobility. Before this description is issued, the payable tax charges are not disclosed as per above provisions, which should be adjusted retrospectively, except for the impracticable retroactive adjustment. In view of this, when the company prepares 2011 annual financial statements, the pending deduct taxes payable of RMB 969,425,199.00 is listed into “the balance sheet——assets class——other current assets”. And adjust the pending deduct VAT taxes of RMB 450,224,796.00 at the end of 2010 into “the balance sheet——assets class——other current assets”. For this, the accounting will adjust and increase the total liabilities of RMB 21,511,941,379.00 into RMB 21,962,166,175 and the total assets of RMB 34,596,318,255.00 into RMB 35,046,543,051 at the beginning of 2011. The accounting adjustments will not change the actual total payment of various taxes and fees, and not affect the company’s shareholders’ equity and the company’s net incomes and cash flow. To accurately implement the country’s accounting audit policy, the Board of Directors agrees the company to adjust the pending deduct VAT taxes into the presentation of “the balance sheet——assets class——other current assets” by the ways of input subject presentation of “the
- 54 - balance sheet——liability and shareholders’ equity class——the payable taxes” since December 31, 2011. Also, a retrospective adjustment to the 2011 annual financial statements should be conducted for the previous annual payable taxes. （VIII）The Proposal Concerning Preplan for Profit Distribution for 2010. In accordance with the financial statement according to Chinese accounting standards and international accounting standards, the principle of distributing dividends based on the lower of two results of net profit, the suggested profit distribution plan is as follows: The distributable profit for the report year is RMB 348.92 million and the undistributed profit carried forward from previous year is RMB 905.57 million. the total amount of the profit available for distribution to shareholders for current year is RMB 1254.49 million. According to corporate articles, 10% of the statutory surplus reserve is extracted, that is RMB 51.454 million , and 25% of the discretionary surplus reserve is extracted, that is RMB 128.634 million in the current year. Total profits for distribution to shareholders are RMB 1074.402 million in the current year. The preplan for dividend distribution suggested by the board of directors is as follows: Dividend of RMB 0.60 (including tax) is to be distributed for every 10 shares.
Particulars about the cash bonus of the Company in previous three years Unit：RMB
Net profit attributable Ratio of net profit to shareholders of attributable to Year for bonus Amount of cash Distributable profit listed company in shareholders of listed distribution bonus(Included Tax) dring the year consolidated statement company in of bonus year consolidated statement 2010 279,745,114.00 765,806,461.00 36.53% 943,263,400.00 2009 559,490,228.00 1,165,352,428.00 48.01% 1,094,360,000.00 2008 159,564,240.00 28,981,240.00 550.58% 291,198,800.00 The proportion of accumulative cash bonus during recent three 50.96% years in latest annual average net profit（%）
(IX). Other reported events 1. The situations of company accumulation and external guarantee in the current period of the independent directors and the implementation of company has secured external current situation and the special description and independent views for implementation of the Notice on Regulating Capital Exchanges between the Company and Related Parties and Issues on External Guarantee of Listed Company (Zhengjianfa [2003] 56). and the Notice on regulation Capital Exchanges and Issues on External Guarantee of listed Company(Zhengjianfa [2005] 120). According to the spirit of the Notice on Regulating Capital Exchanges between the Company and Related Parties and Issues on External Guarantee of Listed Company (Zhengjianfa [2003] 56) and the Notice on regulation Capital Exchanges and Issues on External Guarantee of listed Company(Zhengjianfa [2005] 120). , the
- 55 - independent directors made verification on the capital exchanges between the company and the related parties and the situation of external guarantee, and believed that: By the end of the reporting period, the company did not illegally provide capital to the related parties, the company did not provide guarantee for the controlling shareholders, and other related parties, and did not provide guarantee illegally. Chairman of the board of directors: Pan Li
VIII. Report of the Supervisory Committee (I) Work of the supervisory committee in 2011 In 2011, the members of the sixth supervisory committee attended 2 board meetings as non-voting delegates, Cleck and approed the relevant data of 2 communication meeting of the board of directors, attended 2 shareholders' general meetings and held 2 locale meetings of the supervisory committee, the members of the seventh supervisory committee attended 6 board meetings as non-voting delegates, Cleck and approed the relevant data of one communication meeting of the board of directors, attended 3 shareholders' general meetings and held 3 locale meetings of the supervisory committee, and one communication meeting of the committees of supervisors.，Main situations of each meeting of the committees of supervisors are as follows: The 12nd meeting of the sixth supervisory comittee was held in Foshan on Marth 8, 2011. The meeting examined and adopted the Proposal Concerning Work Report of the General Manager for 2010, the Proposal Concerning Financial Report for 2010, the Proposal Concerning Preplan for Profit Distribution and Dividend Distribution for 2010, the Proposal Concerning Work Report of the Supervisory Committee for 2010, the Proposal Concerning 2010 Annual Report and Summary of 2010 Annual Report, the Proposal the report on self-evaluation of the Company's internal control. the proposal Concerning the Company's Report on Social Responsibility for 2010, the Proposal for Recommending Candidates for Supervisor of the seventh Supervisory Committee and the Proposal for Recommending Candidates for Independent Supervisor of the seventh Supervisory Committee.
The 13rd meeting of the sixth supervisory committee was held in Guangzhou on April 25, 2011. The meeting examined and adopted the Proposal Concerning Work Report of the General Manager for the First Quarter of 2011, the Proposal Concerning Financial Report for the First Quarter of 2011 and the Proposal Concerning Full Text of Report for the First Quarter of 2011 and Text of Quarterly Report.
The First meeting of the seventh supervisory committee was held in Guangzhou on May 19, 2011. The meeting examined and adopted the Proposal for Electing the Chairman of the supervisory Committee of the Company and the Proposal for Appointing the Secretary of the supervisory Committee of the Company .
The 2nd meeting of the seventh supervisory committee was held in Guangzhou on
- 56 - August 26, 2011. The meeting examined and adopted the Proposal Concerning Semiannual Work Report of the General Manager for 2011, the Proposal Concerning Semiannual Financial Report for 2011 and the Proposal Concerning 2011 Semiannual Report and Summary of 2011 Semiannual Annual Report. The 3rdth meeting of the seventh supervisory committee was held in Guangzhou on October 27,2011. was held in Guangzhou on October 27, 2010. The meeting examined and adopted the Proposal Concerning Work Report of the General Manager for the Third Quarter of 2011, the Proposal Concerning Financial Report for the Third Quarter of 2011 and the Proposal Concerning Full Text of Report for the Third Quarter of 2011 and Text of Quarterly Report. In addition, the supervisory committee combined supervision with internal audit, strengthened daily supervision and management, improved internal control system and promoted the further improvement of financial work. (II) The independent opinions of the supervisory committee on the following matters 1. The supervisory committee effectively supervised the holding procedure and resolutions of board meetings and shareholders' general meetings, the status of implementation of the resolutions of shareholders' general meetings by the board of directors, the duty performance of senior executives of the Company and the management system of the Company according to relevant laws and regulations and Articles of Association of the Company. In its opinion, the Company followed the principle of honest and standardized operation, operated according to law, made decisions according to legal procedure and established sound internal control system in the report period. No act of directors and managers of the Company that violated laws and regulations and the Articles of Association of the Company or harmed the interests of the Company and shareholders was found when they performed their duties. 2. In the opinion of the supervisory committee, the financial affairs of the Company were handled strictly according to the financial management and internal control system of the Company. The standard unqualified audit opinions on the Company issued by PricewaterhouseCoopers Zhongtian Certified Public Accountants Co., Ltd. were objective and fair and the financial report truly reflected the Company's financial position and operating results. 3.On May 25,2010，Company issued 138,047,138 A shares which can be trade in Shenzhen Stock Exchange to our company’s controlling shareholder Guangdong Yudean Group Co., Ltd. fundraising amount is RMB 820 million, above mentioned newly issued shares are circulating Shares with limited conditions for sale. The limited period for sale is 36 months. In 2011, the company has modified and improved the major assets reorganization pro posal and this proposal has been approved by the 4th provisional shareholders' meetin g on December 8, 2011. The related documents of assets reorganization had been sent to China Securities Regulatory Commission for approval.
4. The board of supervisor thought that the latest actual usage of fundraising capital was true ,In the report period, the examination and approval procedure was performed according
- 57 - to relevant regulations in respect of the change of the promised investment project using raised proceeds and relevant information was disclosed. 5. The board of supervisors carefully reviewed the internal control self assessment report issued by company and think this company internal control self assessment fully, truly and accurately reflected the actual situation of company’s internal control. 6. In the opinion of the supervisory committee, the related transactions occurred in 2011 were fair and reasonable, the decision making and information disclosure procedure was standardized and no act harmed the interests of the Company. Chairman of the Supervisory Committee Qiu Jianyi
IX. Important Events (I) Matters Related to Corporate Bonds China Construction Bank authorized its Guangdong branch to provide the full amount, unconditional, and irrevocable joint and several liability guarantee for the principal and interests payment of corporate bonds issued by the Company. In the report period, The guarantor makes profits continuously. Assets of the guarantor grow and credit conditions of the guarantor are not adversely changed. In the report period, The credit standing of the Company is not adversely changed. As of the end of the report, the asset-liability ratio of the Company is 66.44%. On March 10, 2009 ,March 10, 2010, March 10, 2011 and March 10, 2012, the Company has paid for the interests of corporate bonds for the first, the second , the third and the fourth interest periods respectively. In the future, the Company will continue to develop businesses as the guarantee to pay for the interests of corporate bonds. China International Capital Corporation Limited, as a custodian of corporate bonds, will announce a bond custody report before June 30, 2012. The report will include the Company's operation, assets, use of proceeds from corporate bonds, and corporate bond tracing and rating. I.The Company has no significant lawsuits or arbitrations during the reporting period. (II). Shareholdings of other listed companies Unit：RMB
- 58 - Proportio Stock Investment Profit & loss Change of Subject of Stock n of Book Value at Resource abbreviati amount at the in the report owner’s equity in accounting Code shareholdi the end of report of share on: beginning period the report period calculation ng Financial as Shen 000027 16,949,674.00 0.32% 51,240,001.00 700,000.00 -19,390,000.00 sets availab Initiated Energy A le for sale Financia l assets Transfere 600642 SHENERGY 235,837,987.50 1.28% 254,893,027.00 3,702,150.00 -27,581,017.00 available e for sale Total 252,787,661.50 - 306,133,028.00 4,402,150.00 -46,971,017.00 - -
(IV) Equity of non-listed financial enterprises and companies to be listed held by the
Company
Unit：RMB Proportio Changes of n in Profits or losses owners’ Subject of Amount of initial Amount of Book value at Resource Name of object equity of in the report equity in accounting investment shares held period-end of share the period the report calculation Company period Long-term Stratage Guoyi Tendering 3,600,000.00 1,800,00 1.97% 3,600,000.00 540,000.00 0.00investment msurcha Co., Ltd. on stocks s Sun Property Long-term Initiated Insurance Group 356,000,000.00 350,000,000 5.34% 356,000,000.00 0.00 0.00 investment establish Co., Ltd. on stocks ment Long-term Initiated Guangdong Yuecai 500,000,000.00 375,000,000 25% 500,000,000.00 245,999,321.00 0.00 investment establish Finance Co., Ltd. on stocks ment Total 859,600,000.00 726,800,000 - 859,600,000.00 246,539,321.00 0.00 - - (V). Trading the stocks of other listed companies In the report period, our company didnt trade the stocks of other listed companies (VI). Matters related to purchasing assets during the reporting period In the report period, The company doesnt have Matters related to purchasing assets. (VII) Major related transactions 1. Related-party transactions relating to daily operations For details about the related-party transactions relating to daily operations, see No. (5) “Related-Party Transaction” in section 8 “Relations of Related Parties and Their Transactions”. Related-party transactions between the Company and the related parties are caused by features of the electric power industry and historical reasons, Due to the
- 59 - characteristics of power industry and historic reasons, the power plants of the Company have close connection with related parties in production and operating activities. It is hard to avoid the said related transactions and they satisfy the actual demand of operation and management of the Company and are necessary daily transactions. The said transactions have occurred continuously for a long time, which guarantee the Company's normal production and operating activities. This kind of transactions are expected to continue. As Guangdong YudEan Group Co., Ltd. has great advantage in respect of fuel purchase, production technology and management of power plants and relationship with related parties has been formed by objective factors, the occurrence of the said related transactions meets the actual conditions of the Company and helps the Company utilize advantageous resources, save cost and enhance efficiency. The said related transactions were agreed upon and followed the principle of fairness, openness and impartiality. Related parties enjoyed rights and performed obligations as agreed and did not harm the interests of the Company. This kind of related transactions have no adverse influence on the Company's financial position and operating results in current period and in the future. The Company is much dependent on the controlling shareholder in respect of fuel purchasing. However, the said related transactions have no significant adverse influence on the independence of the Company's key business. 2. The Company conducts investment with related parties. In the report period, The Company increased the capital of Maoming Zhenneng Thermal Power Co., Ltd., one of its controlled subsidiaries, in equity proportion of 53.28%, together with Guangdong Electric Power Development Company, the wholly-owned subsidiary of the controlling shareholder Guangdong Yudean Group Co., Ltd. The amount of additional investment to be made by the Company is RMB 144.50 million (including RMB 20.14 million acquired from other shareholders who abandoned the share of additional investment). After capital increase, the ratio of the Company's shareholding in Maoming Zhenneng Thermal Power Co., Ltd., rose to 56.39%. Business scope of Maoming Zhenneng Thermal Power Co., Ltd.: Construction, production and operation concerning electric power, sales of steam and byproducts, power projects contracting, technical consultation and technical services and technical consulting services related to heat supply. As of the end of the report, The registered capital of RMB757.83 million, total assets of RMB3231.40 million, net assets of RMB757.25 million, and net profits of RM-33.72 million. At present, #5& #6 units（1×200MW＋1×300MW) of Maoming power plant are being operating, and #7 units（1×6000MW) of pre-stage works are being constructed. In the report period, Guangdong Yudean Zhanjiang Wind Power Co., Ltd. which our company has 70% of its original holding,registered capital of RMB 75.733 million, The business scope of Guangdong Yudean Zhanjiang Wind Power Generation Co., Ltd. is “the investment, construction and operation of power plant, wind power generation and investment, development, operation and management on other new energy projects, power generation and sales of electricity, power project consultancy offering and other relevant services.” The registered capital of RMB346.11 million, total assets of RMB862.30 million, net assets of RMB367.92 million, and net profits
- 60 - of RM20.36 million.For the end of report period, its total assets and net assets were RMB 862.30million and RMB367.92 million respectively. In the report period, Its Main business income, Main business profit and net profit were RMB62.91million , RMB32.87million and RMB20.36 million respectively.This company is operating the Xuwen Yangqian Wind Power project（49.5MW) and constructing the Yongshi Wind power project （49.5MW) In the report period, The Company and its controller Guangdong Yudean Group Co., Ltd increased capital to the jointly-controlled company Guangdong Yudean Finance Co., Ltd.. The Company increased RMB125 million capital based on 25% of total equity held by the Company in Guangdong Yudean Finance Co., Ltd.. According to the approval for the business scope of Guangdong Yudean Finance Co., Ltd. by China Banking Regulatory Commission [No. (2006) 398], Guangdong Yudean Finance Co., Ltd. can operate the following businesses: providing finance and fundraising consultancy for member units, credit verification and related consulting and agency business; assisting the member units in the receipt and payment of transaction funds; providing guarantee for member units; processing the bill acceptance and discount for member units; handling the internal transfer settlement and corresponding settlement between member units, and preparing clearance program; absorbing deposits from member units; processing loans and financing lease for member units; processing interbank lending. As of the end of the report, Guangdong Yudean Finance Co., Ltd. has the registered capital of RMB2000 million, total assets of RMB12652.22 million, net assets of RMB2296.73 million, and net profits of RMB 246 million . As of the end of the report, Guangdong Yudean Finance Co., Ltd. absorbed deposit balance of RMB9.98 billion million and launched loan balance of RMB8.245 billion. In the report period, Guangdong Yudean Holding West Investment Co., Ltd.which is the fully owned subsidiary company of our company’s controlling shareholder Guangdong Yudean Group Co., Ltd. , will jointly conduct capital increased RMB 70.20 million capital based on 26% of total equity held by the company in Guangdong Yudean Group. The business scope of Guangdong Yudean Holding West Investment Co., Ltd . is “ele ctricity and other related projects, energy projects investment". As of the end of the report, the registered capital of RMB847.40 million, total assets of RMB8915.72 million, net assets of RMB1858.07 million, and net profits of RMB 39.88 million . At present, #1& #2 units(2×600MW) of Pannan power plant are being operating, and #3 & #4 units(2×1000MW) of pre-stage works are being constructed. 3. Related parties Debts and guarantee Unit：RMB’0000 Selling products and offering labor Purchasing product and accepting labor Name of related party service to related parties service from related parties Transaction amount Proportion% Transaction amount Proportion% Guangdong Yudean Finance Co., 0.00 0.00 409,500.00 399,500.00 Ltd Shanxi Yuduan Enerty Co., Ltd. 514.00 2,084.00 0.00 0.00
- 61 - Guangdong Yudean Holding 354.00 2,651.00 0.00 0.00 West Investment Co., Ltd. Total 868.00 4,735.00 409,500.00 399,500.00 For details about providing guarantee for related parties, see No. 2 “Material Guarantee” in section (8) “Material Contracts and Implementation”. The credit and debt occurred between the Company and the related parties, and the guarantee provided by the Company for the related parties, are activities according to the requirements of the Company’s operation and project development of the related parties. These activities play a positive role in promoting the development of the Company and driving the progress of invested projects. These activities do not damage the interests of the Company. (VII).Significant contracts and implementation (1) The Company is not involved in trustee, sub-contract or lease with other companies in the reporting period. (2) Significant guarantee: Unit RMB’0000
External Guarantee (Exclude controlled subsidiaries) Compl Date of ete Guarantee Related Amount happening Actually Name of the Guarantee Guarantee imple for related announcemen of (Date of guarantee company guaranteed type Term mentati party (Yes or t date and No. guarantee signing amount on or No) agreement) not Lincang July 22, 2006 YuntouYudean Guaranteein （Announce December Hydroelectricity 3,430.00 3,430.00 g of joint 15 years No No ment 25,2006 Development Co., liabilities. No.:2006-25） Ltd. Yunnan Baoshan May 24, 2007 Binlangjiang Guaranteein （Announce November Hydroelectricity 2,900.00 2,900.00 g of joint 14 years No No ment 30,2007 Development Co., liabilities. No.:2007-19） Ltd. Yunnan Baoshan May 24, 2007 Binlangjiang Guaranteein （Announce December Hydroelectricity 1,305.00 1,305.00 g of joint 11 years No No ment 30,2007 Development Co., liabilities. No.:2007-19） Ltd. Yunnan Baoshan May 24, 2007 Guaranteein Binlangjiang （Announce December 1,450.00 1,450.00 g of joint 8 years No No Hydroelectricity ment 30,2007 liabilities. Development Co., No.:2007-19）
- 62 - Ltd. Yunnan Baoshan May 24, 2007 Binlangjiang Guaranteein （Announce December Hydroelectricity 4,350.00 4,350.00 g of joint 17 years No No ment No.： 19,2007 Development Co., liabilities. 2007-19） Ltd. Yunnan Baoshan December 19, Binlangjiang 2007 Guaranteein December Hydroelectricity （Announce 4,350.00 4,350.00 g of joint 15 years No No 25,2007 Development Co., ment liabilities. Ltd. No.:2007-44） May 16, 2008 Guaranteein Guangdong Yudean （Announce September 20,580.00 20,580.00 g of joint 6 years No Yes Shiping Co., Ltd. ment 27,2008 liabilities. No.:2008-24） Yunnan Baoshan December Binlangjiang 19,2007 Guaranteein March Hydroelectricity （Announce 12,000.00 12,000.00 g of joint 20 years No No 18,2008 Development Co., ment liabilities. Ltd. No.:2007-44） Lincang July 22, 2006 YuntouYudean Guaranteein （Announce July Hydroelectricity 1,372.00 1,372.00 g of joint 12 years No No ment No.： 29,2008 Development Co., liabilities. 2006-25） Ltd. Yunnan Baoshan August 22, Binlangjiang 2008 Guaranteein October 31, Hydroelectricity （Announce 5,800.00 5,800.00 g of joint 17 years No No 2008 Development Co., ment liabilities. Ltd. No.:2008-44） Yunnan Baoshan November 12, Binlangjiang 2008 Guaranteein November Hydroelectricity （Announce 7,250.00 7,250.00 g of joint 12 years No No 14,2008 Development Co., ment liabilities. Ltd. No.:2008-54） August 29, Weixin Yuntou 2009 Guaranteein March Yudean Zhaxi Energy （Announce 8,800.00 8,800.00 g of joint 3 years No No 19,2009 Co., Ltd. ment liabilities. No.:2009-28） Yunnan Baoshan May 27, 2009 Guaranteein Binlangjiang （Announce May 27, 17,400.00 7,250.00 g of joint 14 years No No Hydroelectricity ment 2009 liabilities. Development Co., No.:2009-17）
- 63 - Ltd. Yunnan Baoshan May 27, 2009 Binlangjiang Guaranteein （Announce June 22, Hydroelectricity 11,600.00 9,367.00 g of joint 20 years No No ment 2009 Development Co., liabilities. No.:2009-17） Ltd. August 29, Weixin Yuntou 2009 Guaranteein September Yudean Zhaxi Energy （Announce 20,000.00 20,000.00 g of joint 5 years No No 22, 2009 Co., Ltd. ment liabilities. No.:2009-28） Fubruary 3, Weixin Yuntou 2010 Guaranteein March 15, Yudean Zhaxi Energy （Announce 20,000.00 12,000.00 g of joint 4 years No No 2010 Co., Ltd. ment liabilities. No.:2010-05） Yunnan Baoshan May 27, 2010 Binlangjiang Guaranteein （Announce June 23, Hydroelectricity 7,250.00 7,250.00 g of joint 5 years No No ment 2010 Development Co., liabilities. No.:2010-30） Ltd. Yunnan Baoshan September Binlangjiang 10, 2010 Guaranteein December Hydroelectricity （Announce 14,500.00 14,500.00 g of joint 10 years No No 16, 2010 Development Co., ment liabilities. Ltd. No.:2010-49） Total amount of approved Total actually amount of external guarantee in the report 88,180.00 external guarantee in the 0.00 period(A1) report period(A2) Total amount of approved Total actually amount of external guarantee at the end of 351,737.00 external guarantee at the 143,954.00 the report period(A3) end of the report period(A4) Guarantee of the company for its subsidiaries Date of Related Complete Guarantee Name of the happening(d Actually announcem Amount of Guarantee Guarantee implement for related company ate of guarantee ent date guarantee type term ation or party(yes or guaranteed signing amount and no. not no) agreement) November1 1, 2010 Guaranteein Zhongyue Energy （Annou September 117,000.00 60,000.00 g of joint 12 years No No Co., Ltd. ncement 29,2010 liabilities. No.:2010- 57）
- 64 - November 11, 2010 Guaranteein Zhongyue Energy （Annou January 117,000.00 10,000.00 g of joint 12 years No No Co., Ltd. ncement 3,2011 liabilities. No.:2010- 57） April 29, Guangdong 2009 Guaranteein Yudean （Announc March 4, 15,700.00 13,200.00 g of joint 20 years No Yes Zhanjiang Wind ement 2011 liabilities. Power Co., Ltd. No.:2009-1 3） June 29, Guangdong 2011 Guaranteein Shaoguan Yuejiang （Announc July 28, 32,500.00 23,075.00 g of joint 7 years No No Generate electricity ement 2011 liabilities. Co., Ltd. No.:2011-3 2） Total of guarantee for Total of actual guarantee for subsidiaries approved in the 32,500.00 subsidiaries in the period 46,275.00 period(B1) (B2) Total of guarantee for Total of actual guarantee for subsidiaries approved at 165,200.00 subsidiaries at 106,275.00 period-end(B3) period-end(B4) Total of company’s guarantee(namely total of the large two aforementioned) Total of guarantee approved in Total of Actual guarantee in 120,680.00 46,275.00 the period(A1+B1) the period(A2+B2 Total of guarantee approved at Total of actual guarantee at 516,937.00 250,229.00 the period-end(A3+B3) the period-end（A4+B4） The proportion of the total amount guarantee in the net assets of 24.52% the company(that is A4+B4) Including： Amount of guarantee for shareholders, Actual controller and its 33,780.00 associated parties(C) The debts guarantee amount provided for the guaranteed parties 216,449.00 whose assets-liability ratio exceed 70% directly or indirectly(D) Proportion of total amount of guarantee in net assets of the 0.00 company exceed 50%(E) Total guarantee Amount of the abovementioned 250,229.00 guarantees(C+D+E) Explorations on possibly bearing joint and several liquidating Nil responsibilities for undue guarantees The said guarantees were examined and approved at the shareholders' general meeting of the Company.
- 65 - (3) In the reporting period, there were no events of entrusting others to conduct cash management and no events happened in previous reporting period and extended to this reporting period. (IX) Compared with the most recent annual report, specific description of changes in the consolidation scope The consolidated scope has not changed in 2011. （X）The situation of controlling shareholder and the occupancy and repayment in related parties' non-operating fund. In the report period, it's not appear that the situation of controlling shareholder and the occupancy and repayment in related parties' non-operating fund. PricewaterhouseCoopers Zhongtian Certified Public Accountants Co., Ltd. made a special explanation on the situation of controlling shareholder and the occupancy and repayment in related parties' non-operating fund. (XI) The commitments of the Company or shareholders holding over 5% equity of the Company in the report period Items of commitments Promisee Content of commitments Implementation Promise in share holding N/A N/A N/A structure reform Commitments made in Acquisition Report or Reports N/A N/A N/A on Change in interests Commitments made in N/A N/A N/A Material assets Reorganization Commitments made in issuing N/A N/A N/A 138,047,138 RMB ordinary shares (A shares) privately issued by the Company to Guangdong Yudean Group Co., Ltd., its Other commitments Guangdong controlling shareholder, were listed at （Including: supplementary Yudean Group Under fulfillment Shenzhen Stock Exchange from May 25, commitments） Co., Ltd. 2010. Yudean Group promised not to assign the stocks of Yue Dian Li owned by it within 36 months from the said day of listing. (XII) The Company's acceptance of investigation and research and interview 1. In the report period, the Company received 5 institutional investors for investigation and research, held 1 telephone conference and attended one communication meeting organized by a third party mainly for the purpose of communication in respect of the Company's production and operation status in current period and future development plan and the current status of production,management,construction and development in progress of the company
- 66 - 2.The registration form of acceptance of investigation, communication and interview in the report period for future reference Date Place Mode Visitor Content of discussion and materials provided Telephone Current status of production,management,construction Office of the Franklin Templeton March 25,2011 Consultatio and development in progress of the company Company Investments n Onsite Current status of production,management,construction Office of the May 11, 2011 investigatio Changsheng Fund and development in progress of the company Company n Onsite Current status of production,management,construction Office of the May 12, 2011 investigatio Huaxia Fund and development in progress of the company Company n Onsite Current status of production,management,construction Office of the CITIC Securities and May 13, 2011 investigatio and development in progress of the company Company Its clients n Onsite Current status of production,management,construction Office of the China Galaxy October 20,2011 investigatio and development in progress of the company Company Securities n Onsite Current status of production,management,construction Office of the China merchants December 15, 2011 investigatio and development in progress of the company Company securities n
(XIII) Engagement and removal of certified public accountants' firm In the report period, the Company engaged PricewaterhouseCoopers Zhongtian Certified Public Accountants Co., Ltd.as its auditing bodies. In 2011, the Company paid audit fee of RMB 1.89 million. PricewaterhouseCoopers started to provide overseas financial statement audit service to company since year 2000 and it started to provide domestic financial statement audit service to company since year 2007.
- 67 - X. Financial Report
GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
FINANCIAL STATEMENTS AND REPORT OF THE AUDITORS FOR THE YEAR ENDED 31 DECEMBER 2011
[English Translation for Reference Only. Should there be any inconsistency between the Chinese and English versions, the Chinese version shall prevail.]
- 1 -
5800511/JWE
- 2 -
GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
FINANCIAL STATEMENTS AND REPORT OF THE AUDITORS FOR THE YEAR ENDED 31 DECEMBER 2011 [English translation for reference only]
Contents Page
Financial Statements and Report of the Auditors for the year ended 31 December 2011
Report of the auditors 1 - 2
Consolidated and Company’s balance sheets 3 - 4
Consolidated and Company’s income statements 5
Consolidated and Company’s cash flow statements 6
Consolidated statement of changes in owners’ equity 7
Company’s statement of changes in owners’ equity 8
Notes to financial statements 9 - 98
Supplementary information 99 - 102
[English Translation for Reference Only]
Report of the Auditors
PwC ZT Shen Zi (2011) No. 10038
(Page 1 of 2)
TO THE SHAREHOLDERS OF
GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
We have audited the accompanying financial statements of Guangdong Electric Power Development Co., Ltd. (“Guangdong Electric Company”), which comprise the consolidated and company balance sheets as at 31 December 2011, and the consolidated and company income statements, the consolidated and company cash flow statements and the consolidated and company statements of changes in equity for the year then ended, and notes to these financial statements.
Management’s responsibility for the financial statements
Management of Guangdong Electric Company is responsible for the preparation and fair presentation of these financial statements in accordance with the requirements of Accounting Standards for Business Enterprises, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with the China Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
PwC ZT Shen Zi (2011) No. 10038 (Page 2 of 2)
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control . An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. .
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the accompanying financial statements present fairly, in all material respects, the consolidated and company’s financial position of Guangdong Electric Company as of 31 December 2011, and of their financial performance and their cash flows for the year then ended in accordance with the requirements of Accounting Standards for Business Enterprises.
PricewaterhouseCoopers Zhong Tian CPAs Limited Company
Shanghai, the People’s Republic of China
6 March 2012
GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
CONSOLIDATED AND COMPANY BALANCE SHEETS AS AT 31 DECEMBER 2011 (All amounts in RMB Yuan unless otherwise stated) [English translation for reference only]
31 December 31 December 31 December 31 December 2011 2010 2011 2010 ASSETS Note(s) consolidated consolidated company company
Current assets Cash at bank and on hand 6(1) 2,182,660,514 1,894,021,204 417,749,940 659,395,980 Accounts receivable 6(2), 15(1) 1,657,325,697 1,841,038,374 348,032,141 442,971,470 Advances to suppliers 6(4) 321,693,491 668,596,257 178,078,582 177,510,400 Interest receivable 1,071,844 223,800 5,701,784 - Dividends receivable 6(5) 96,079,553- 105,234,649 9,155,096 Other receivables 6(3), 15(2) 97,964,732 572,285,959 273,092,240 553,478,108 Inventory 6(6) 1,410,576,820 852,247,851 192,183,732 147,588,932 Other current assets 6(7),14 969,425,199 450,224,796 35,837,879 8,164,555 Total current assets 6,736,797,850 6,278,638,241 1,555,910,947 1,998,264,541
Non-current Assets Available-for-sale investments 6(8) 306,133,028 353,104,045 306,133,028 353,104,045 Long-term receivable 6(9) 482,006,891 33,326,446 423,780,000 15,580,000 Long-term equity investments 6(10), 15(3) 5,812,518,793 5,469,169,354 13,118,857,714 12,138,988,785 Investment properties 6(12) 12,110,227 12,743,846 12,110,227 12,743,846 Fixed assets 6(13) 14,866,672,176 11,207,225,955 1,086,238,084 1,230,337,302 Construction in progress 6(14) 9,159,945,080 9,964,066,605 88,123,240 21,272,816 Construction materials 6(13) 1,023,682,015 1,154,219,103 - - Disposal of fixed assets 6(14) 4,164,516 13,259,341 - - Intangible assets 6(17) 491,722,772 471,880,558 107,842,409 111,321,196 Deferred tax assets 6(31) 96,909,186 88,909,557 - - Other non-current assets 6(18) 487,532,858- - - Total non-current assets 32,743,397,542 28,767,904,810 15,143,084,702 13,883,347,990
Total assets 39,480,195,392 35,046,543,051 16,698,995,649 15,881,612,531
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GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
CONSOLIDATED AND COMPANY BALANCE SHEETS AS AT 31 DECEMBER 2011 (CONTINUED) (All amounts in RMB Yuan unless otherwise stated) [English translation for reference only]
31 December 31 December 31 December 31 December 2011 2010 2011 2010 LIABILITIES AND OWNERS’ EQUITY Note consolidated consolidated company company
Current liabilities Short-term borrowings 6(19) 9,318,000,000 8,327,500,000 3,075,000,000 3,670,000,000 Notes payable 6(20) 343,083,604 110,000,000 - - Accounts payable 6(21) 3,449,859,930 2,636,633,053 469,788,433 362,866,001 Advances from customers 2,315,543 2,091,859 1,831,135 1,629,002 Employee benefits payable 6(22) 205,462,922 248,689,441 42,398,999 53,486,508 (Prepay taxes)/Taxes payable 6(23) 65,250,662 153,361,073 14,826,004 33,866,535 Interest payable 6(24) 122,666,756 108,347,024 110,857,332 99,039,629 Dividends payable 6(25) 15,552,964 12,042,196 7,323,298 7,112,529 Other payables 6(26) 817,248,933 878,339,481 47,816,643 60,544,841 Current portion of non-current liabilities 6(27) 940,141,518 627,733,453 40,000,000 - Total current liabilities 15,279,582,832 13,104,737,580 3,809,841,844 4,288,545,045
Long-term liabilities Long-term borrowings 6(28) 7,167,153,408 6,320,720,000 1,090,000,000 - Debentures payable 6(29) 1,991,442,304 1,988,739,874 1,991,442,304 1,988,739,874 Long-term payable 6(30) 1,741,163,487 498,657,613 - - Deferred tax Liabilities 6(31) 2,619,939 5,251,421 2,619,939 3,906,557 Other long-term liabilities 6(32) 46,730,522 44,059,687 29,508,307 24,615,385 Total long-term liabilities 10,949,109,660 8,857,428,595 3,113,570,550 2,017,261,816
Total liabilities 26,228,692,492 21,962,166,175 6,923,412,394 6,305,806,861
Owners' equity Share capital 6(34) 2,797,451,138 2,797,451,138 2,797,451,138 2,797,451,138 Capital surplus 6(35) 1,848,718,571 1,884,426,171 1,782,543,554 1,817,556,816 Surplus reserve 6(36) 3,775,481,032 3,425,241,041 3,775,481,032 3,425,241,041 Undistributed profits 6(37) 1,784,972,625 2,058,635,851 1,420,107,531 1,535,556,675 Total capital and reserves attributable to equity holders of the Company 10,206,623,366 10,165,754,201 9,775,583,255 9,575,805,670 Minority interest 6(38) 3,044,879,534 2,918,622,675 - - Total owners' equity 13,251,502,900 13,084,376,876 9,775,583,255 9,575,805,670
Total liabilities and owners’ equity 39,480,195,392 35,046,543,051 16,698,995,649 15,881,612,531
The accompanying notes form an integral part of these financial statements.
- 4 -
Legal representative: Principal in charge of accounting: Head of accounting department:
- 5 -
GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
CONSOLIDATED AND COMPANY INCOME STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB Yuan unless otherwise stated) [English translation for reference only]
2011 2010 2011 2010 Note(s) Consolidated Consolidated Company Company
Operating revenue 6(39), 15(4) 14,620,140,721 12,642,208,069 3,479,626,128 3,192,526,320 Less: Operating costs 6(39), 15(4) (13,216,297,469) (10,877,414,004) (3,126,771,168) (2,697,591,072) Taxes and surcharges 6(40) (77,681,223) (24,850,919) (16,925,999) 15,751,312 Sales expenses (1,260,714) (682,742) (299,627) (299,734) General and administrative expenses 6(41) (597,530,138) (669,469,282) (157,045,150) (157,604,147) Finance expenses – net 6(42) (613,819,863) (452,190,821) (339,405,791) (235,152,557) Asset impairment losses 6(43) (303,096,397) (34,531,344) (296,833,827) 12,433,800 Add: Investment income 6(44), 15(5) 583,948,524 585,727,359 982,286,511 927,692,845 Including: Share of profit of associates 6(44), 15(5) 538,205,457 536,517,223 538,205,457 536,517,223
Operating profit 394,403,441 1,168,796,316 524,631,077 1,057,756,767 Add: Non-operating income 6(45)(a) 22,480,219 24,356,366 3,865,850 4,087,137 Less: Non-operating expenses 6(45)(b) (10,777,518) (24,056,483) (3,504,828) (2,449,488) Including: Losses on disposal of non-current assets (7,397,309) (17,921,715) (489,575) (958,929)
Total profit 406,106,142 1,169,096,199 524,992,099 1,059,394,416 Income tax expenses 6(46) (146,988,249) (380,704,425) (10,456,138) (58,708,727)
Net profit 259,117,893 788,391,774 514,535,961 1,000,685,689
Attributable to: Equity holders of the Company 356,321,879 765,806,461 514,535,961 1,000,685,689 Minority interest (97,203,986) 22,585,313 - -
Earnings per share for profit attributable to the equity holders of the Company during the year Basic earnings per share 6(47)(a) 0.13 0.28 NA NA Diluted earnings per share 6(47)(b) 0.13 0.28 NA NA
Other comprehensive (loss)/income 6(48) (35,228,262) (122,340,469) (35,228,262) (122,340,469)
Total comprehensive income 223,889,631 666,051,305 479,307,699 878,345,220
Attributable to equity holders of the Company 321,093,617 643,465,992 479,307,699 878,345,220 Minority interest (97,203,986) 22,585,313 - -
The accompanying notes form an integral part of these financial statements.
Legal representative: Principal in charge of accounting: Head of accounting department:
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CONSOLIDATED AND COMPANY CASH FLOW STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB Yuan unless otherwise stated) [English translation for reference only]
2011 2010 2011 2010 Note Consolidated Consolidated Company Company Note 5(2) Cash flows from operating activities Cash received from sales of goods or rendering of services 17,391,539,217 14,342,072,730 4,162,886,511 3,682,686,096 Refund of taxes and surcharges 4,938,496 4,919,526 - - Cash received relating to other operating activities 6(49)(a) 55,536,330 59,066,391 18,253,577 88,097,382 Sub-total of cash inflows 17,452,014,043647 4,181,140,08814,406,058, 3,770,783,478 Cash paid for goods and services (12,990,856,931) (11,343,738,140) (3,067,044,977) (2,943,799,223) Cash paid to and on behalf of employees (1,209,128,412) (1,068,35 7,956) (356,832,429) (347,657,554) Payments of taxes and levies (958,149,899) (1,122,259,615) (224,235,009) (309,960,984) Cash paid relating to other operating activities 6(49)(b) (264,993,042) (236,205,232) (89,578,901) (70,967,679) Sub-total of cash outflows (15,423,128,284) (13,770,560,943) (3,737,691,316) (3,672,385,440) 6(50)(a), Net cash flows from operating activities 15(6)(a) 2,028,885,759 635,497,704 443,448,772 98,398,038
Cash flows from investing activities Cash received from disposal of investments 526,400,000 75,513,025 626,400,000 75,513,025 Cash received from returns on investments 570,747,505 309,375,099 963,536,830 651,340,584 Net cash received from disposal of fixed assets, intangible assets and other long-term assets 19,821,527 12,571,217 - 136,063 Net cash received from acquisition of subsidiaries 154,800- 154,800 - Sub-total of cash inflows 1,117,123,832 401,816,115 1,590,091,630 726,989,672 Cash paid to acquire fixed assets, intangible assets and other long-term assets (4,132,969,772) (4,094,220,907) (100,111,499) (84,397,060) Cash paid to acquire investments (871,813,725) (673,439,775) (2,105,930,084) (1,493,952,575) Cash paid relating to other investing activities - (3,093,800) - (3,093,800) Sub-total of cash outflows (5,004,783,497) (4,770,754,482) (2,206,041,583) (1,581,443,435) Net cash flows from investing activities (3,887,659,665) (4,368,938,367) (615,949,953) (854,453,763)
Cash flows from financing activities Cash received from capital contributions 398,111,144 1,069,522,300 - 810,400,000 Include ： Capital contribution from minority shareholders 398,111,144 259,122,300 - - Cash received from borrowings 11,828,103,408 14,591,500,000 5,435,000,000 6,470,000,000 Proceeds from issue of long term debts 12(1) 1,655,000,000 600,000,000 - - Cash received relating to other financing activities - 650,000 - - Sub-total of cash inflows 13,881,214,552 16,261,672,300 5,435,000,000 7,280,400,000 Cash repayments of amounts borrowed (9,915,840,000) (10,824,491,742) (4,900,000,000) (5,350,000,000) Cash payments for interest expenses and distribution of dividends or profits (1,486,492,495) (1,498,642,170) (604,144,859) (802,046,770) Include: Dividends paid to minority interest (172,044,637) (146,065,621) - - Cash payments for finance leasing (331,468,841) (49,317,660) - - Cash payments relating to other financing activities - (593,047) - (593,047) Sub-total of cash outflows (11,733,801,336) (12,373,044,619) (5,504,144,859) (6,152,639,817) Net cash flows from financing activities 2,147,413,216 3,888,627,681 (69,144,859) 1,127,760,183
Effect of foreign exchange rate changes on cash and cash equivalents --- -
6(50)(b), Net increase in cash and cash equivalents 15(6)(b) 288,639,310 155,187,018 (241,646,040) 371,704,458 Add：Cash and cash equivalents at beginning of year 6(1) 1,894,021,204 1,738,834,186 659,395,980 287,691,522
Cash and cash equivalents at end of year 6(1) 2,182,660,514 1,894,021,204 417,749,940 659,395,980
The accompanying notes form an integral part of these financial statements.
Legal representative: Principal in charge of accounting: Head of accounting department:
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GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB Yuan unless otherwise stated) [English translation for reference only]
Attributable to equity holders of the Company
Undistributed Minority
Note Paid-in capital Capital Reserves Surplus Reserves profits interest Total owners' equity
Balances at 1 January 2010 2,659,404,000 1,334,874,325 3,159,617,944 2,117,942,715 2,782,980,683 12,054,819,667
Movement for the year ended 31
December 2010
Net profit - - - 765,806,461 22,585,313 788,391,774
Other comprehensive income 6(48) - (122,340,469) - - - (122,340,469)
Shareholder investment and 138,047,138 671,892,315 - - 259,122,300 1,069,061,753 reducing capital
Issue of share 6(34) 138,047,138 671,759,815 - - - 809,806,953
Purchase of minority shares - - - - 259,122,300 259,122,300
Others 6(35) - 132,500 - - - 132,500
Profit distribution - - 265,623,097 (825,113,325) (146,065,621) (705,555,849)
Surplus accumulation 6(36) - - 265,623,097 (265,623,097) - -
Profit distribution to equity owners 6(37) - - - (559,490,228) (146,065,621) (705,555,849)
Balances at 31 December 2010 2,797,451,138 1,884,426,171 3,425,241,041 2,058,635,851 2,918,622,675 13,084,376,876
Balances at 1 January 2011 2,797,451,138 1,884,426,171 3,425,241,041 2,058,635,851 2,918,622,675 13,084,376,876
Movement for the year ended 31
December 2011
Net profit - - - 356,321,879 (97,203,986) 259,117,893
Other comprehensive loss 6(48) - (35,228,262) - - - (35,228,262)
Shareholder investment and reducing - (479,338) - - 398,805,482 398,326,144 capital
Purchase of minority shares - - - - 398,111,144 398,111,144
Transaction with minority shares 6(38) - (694,338) - - 694,338 -
Others 6(35) - 215,000 - - - 215,000
Profit distribution - - 350,239,991 (629,985,105) (175,344,637) (455,089,751)
Appropriation to surplus reserves 6(36) - - 350,239,991 (350,239,991) - -
Profit distribution to equity owners 6(37) - - - (279,745,114) (175,344,637) (455,089,751)
Balances at 31 December 2011 2,797,451,138 1,848,718,571 3,775,481,032 1,784,972,625 3,044,879,534 13,251,502,900
The accompanying notes form an integral part of these financial statements.
Legal representative: Principal in charge of accounting: Head of accounting department:
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GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
COMPANY STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB Yuan unless otherwise stated) [English translation for reference only]
Surplus Undistributed Total owners' NOTE Paid-in capital Capital Reserves Reserves profits equity
Balances at 1 January 2010 2,659,404,000 1,268,004,970 3,159,617,944 1,359,984,311 8,447,011,225
Movement for the year ended 31 December 2010
Net profit - - - 1,000,685,689 1,000,685,689
Other comprehensive income 6(48) - (122,340,469) - - (122,340,469)
Pruchase by shareholder 138,047,138 671,892,315 - - 809,939,453
Issure of share 6(34) 138,047,138 671,759,815 - - 809,806,953
Other 6(35) - 132,500 - - 132,500
Profit distribution - - 265,623,097 (825,113,325) (559,490,228)
Surplus accumulation 6(36) - - 265,623,097 (265,623,097) -
Profit distribution to equity owners 6(37) - - - (559,490,228) (559,490,228)
Balances at 31 December 2010 2,797,451,138 1,817,556,816 3,425,241,041 1,535,556,675 9,575,805,670
Balances at 1 January 2011 2,797,451,138 1,817,556,816 3,425,241,041 1,535,556,675 9,575,805,670
Movement for the year ended 31 December 2011
Net profit - - - 514,535,961 514,535,961
Other comprehensive income 6(48) - (35,228,262) - - (35,228,262)
Shareholder investment and reducing 215,000 215,000 capital 6(35) - - -
Profit distribution - - 350,239,991 (629,985,105) (279,745,114)
Appropriation to surplus reserves 6(36) - - 350,239,991 (350,239,991) -
Profit distribution to equity owners 6(37) - - - (279,745,114) (279,745,114)
Balances at 31 December 2011 2,797,451,138 1,782,543,554 3,775,481,032 1,420,107,531 9,775,583,255
The accompanying notes form an integral part of these financial statements.
Legal representative: Principal in charge of accounting: Head of accounting department:
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
1 General Information
Guangdong Electric Power Development Co., Ltd. (the “Company”) is joint stock limited company incorporated by Guangdong Electric Power Holding Co. (“GPHC”), China Construction Bank, Guangdong Trust and Investment Corporation, Guangdong Province Electric Power Development Co., Ltd., Guangdong International Trust and Investment Corporation and Guangdong Province Guangkong Group Ltd. (formerly Guangdong Development Bank). The ordinary share capital was 356,250,000 when the Company was incorporated art Renminbi (“RMB”) 1 per share.
The Company issued 44,000,000 RMB Denominated Domestic Shares (“A Shares”) and 105,000,000 Domestically Listed Foreign Shares (“B Shares”) on Shenzhen Stock Exchange on 26 November 1993 and 28 June 1995 respectively. After this issuance, the share capital of the Company increased to RMB 505,250,000.
In 2001, pursuant to the Approval on the Implementation Plan of Guangdong Province’s Reform of Power Industry Structure Relating to Restructuring of Generation and Transmission Assets, a document issued by Guangdong Provincial Government and referred to as Yue Fu Han 2001 No. 252, GPHC, the former major shareholder of the Company, was split into two separate companies, namely, Guangdong Power Grid Corporation (“GPGC”, formerly Guangdong Guangdian Group Co., Ltd.) and Guangdong Yudean Group Co., Ltd. (“Yudean”, formerly Guangdong Yuedian Assets Management Co., Ltd.). After restructuring, the electricity transmission and distribution in Guangdong Province, the PRC, were controlled and managed by GPGC, while Yudean concentrated in the investment and management of power plants. According to the Reply to Issues in the Restructuring of Provincial Power Companies Assets with a document number of Yue Cai Qi [2001] No. 247, the Company’s 50.15% equity interest formerly held by GPHC was transferred to Yudean on 1 August 2001.
Pursuant to the Approval on the Share Reform Scheme of the Company, a document issued by the State-owned Assets Supervision and Administration Commission of Guangdong and referred to as Yue Guo Zi Han2005 No. 452, the Company carried out the non-tradable share reform on 18 January 2006. The non-tradable shareholders paid 3.1 shares per 10 shares to the tradable A share shareholders, who are registered on the date for the equity change registration (18 January 2006), and then a total amount of 121,357,577 shares of legal shares are paid. Since 19 January 2006, all the legal shares can be traded on Shenzhen Stock Exchange, although the restricted stock trade periods are settled ranging from 1 to 3 years. Due to these restricted conditions, by 31 December, 2011, there were still 5,413,380 shares of legal shares not traded which were originally held by the non-tradable shareholders. After the non-tradable share reform, the stock shares which were owned by Yudean reduced from 50.15% to 46.34%.
According to the Approval on the Private Issue of Guangdong Electric Power Development Co., LTD, with a document number of China Securities Regulatory Commission (CSRC) No. 376 issued in 2010, the Company issued 138,047,138 A shares to the “Group” in April 2010. After the issuance, the stock shares which were owned by Yudean increased from 46.34% to 48.99%..
- 10 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
1 General Information (Cont’d)
The Company and its subsidiaries (the “Group”) are principally engaged in the business of developing electric power plants in Guangdong Province, the PRC. The Company’s registered address is 23rd to 26th floor, Yudean Plaza, 2 Tianhe East Road, Guangzhou City, Guangdong Province, the PRC. Yudean is the parent company of the Company.
The financial statements have been approved for issue by the Board of Directors on 6 March 2011.
2 Summary of significant accounting policies and accounting estimates
(1) Basis of Preparation
The Group adopted the Basic Standard and 38 specific standards of the Accounting Standards for Business Enterprises issued by the Ministry of Finance on 15 February 2006, the Application Guidance for Accounting Standard for Business Enterprises, Interpretation of Accounting Standards for Business Enterprises and other relevant regulations issued thereafter, and the No. 15 Information Disclosure Regulation on Companies which publicly issued shares – General Regulation of Financial Reports issued by China Securities Regulatory Commission(2010 edition) (hereafter referred to as “the Accounting Standard for Business Enterprises” or “CAS”).
The Group had net current liabilities of approximately RMB 8,542,784,982 as of 31 December 2011. It is mainly due to the fact that certain capital expenditures of the Group are financed by short-term borrowings.
Notwithstanding the foregoing, the directors have adopted the going concern basis in the preparation of the financial statements based on the following assessment::
(a) The Group has been maintained long-term good relationships with various financial institutions, allowing the Group to obtain sufficient financing facility. As at 31 December 2011, the available bank facilities of the Group approximately amounted to 16,613,000,000, including of the contracted available bank facilities amounted to 3,901,000,000 and the specified unused bank facility amounted to 12,712,000,000. The specified available bank facilities could be approved and utilized after obtaining the reverant approval documents on the construction of new power generators. Considering the satisfactory procedure on approval, Management expects the approval documents could be obtained within planned the schedule; and (b) With the decreasing influence of the international financial crisis, both producing electricity and residential electricity are increasing. Management expects that the Group will maintain a good level of profitability and also acquire a stable cash flow from future operations; and As at 31 December 2011, the Group has capital commitments approximately amounted to RMB6,900,000,000 (Note 10(1), (3)). These capital expenditures will be mainly used for the construction of new power plants and the purchase of new generator sets. The construction cycle of the power plant is generally very long, and it usually takes 3 to 5 years to build the large generator sets, therefore, the management predicts that these capital commitments will happen in the next 2 to
- 11 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only] 4 years. However, with the supporting of the funds generated from the producing activities of the existing generator sets and the bank borrowings, these commitments will not have significant adverse effects on the Group's cash flows in the coming year.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(1) Basis of Preparation (Cont’d)
In light of the above and the principal assumptions adopted in forecasting the cash flows of 2011, the directors considered that the Group will have sufficient working capital to finance its operations and remain as a going concern in the coming 12 months. Therefore, the directors believe that the going concern basis adoption for the Company and the Group’s financial statements is appropriate.
(2) Statement of compliance with the Accounting Standards for Business Enterprises
The financial statements of the Company for the year ended 31 December 2011 truly and completely present the financial position as of 31 December 2011 and the operating results, cash flows and other information for the year then ended of the Group and Company in compliance with the Accounting Standards for Business Enterprises.
(3) Accounting period
Accounting year starts on 1 January and ends on 31 December.
(4) Recording currency
The recording currency of the Company is the Renminbi (RMB).。
(5) Preparation of consolidated financial statements
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries.
Subsidiaries are fully consolidated from the date on which the Group obtains control and are de-consolidated from the date that such control ceases. For a subsidiary acquired in a business combination involving enterprises under common control, it is included in the consolidated financial statements from the date when it, together with the Company, came under common control of the ultimate controlling party. The portion of the net profits realized before the combination date is presented separately in the consolidated income statement.
The financial statements of subsidiaries are adjusted in accordance with the accounting policies and accounting period of the Company during the preparation of the consolidated financial statements, where the accounting policies and the accounting periods are inconsistent between the Company and subsidiaries. For subsidiaries acquired from a business combination involving enterprises not under common control, the individual financial statements of the subsidiaries are adjusted based on the fair value of the identifiable net assets at the acquisition date.
All significant inter-group balances, transactions and unrealised profits are eliminated in the
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only] consolidated financial statements. The portion of a subsidiary’s equity and the portion of a subsidiary’s net profits and losses for the period not held by the Company are recognized as minority interests and presented separately in the consolidated balance sheet within equity and net profits respectively.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(6) Cash and cash equivalents
For the purpose of the cash flow statement, cash and cash equivalents comprise cash in hand, deposits held at call with bank and short-term and highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
(7) Foreign currency translation
Foreign currency transactions are translated into RMB using the exchange rates prevailing at the dates of the transactions.
At the balance sheet date, monetary items denominated in foreign currency are translated into RMB using the spot exchange rate on the balance sheet date. Exchange differences arising from these translations are recognised in profit or loss for the current period, except for those attributable to foreign currency borrowings that have been taken out specifically for the acquisition or construction of qualifying assets, which are capitalised as part of the cost of those assets. Non-monetary items denominated in foreign currency that are measured in terms of historical cost are translated at the balance sheet date using the spot exchange rate at the date of the transaction. The effect of exchange rate changes on cash is presented separately in the cash flow statement.
(8) Financial instrument
(a) Financial assets
(i) Classification
Financial assets are classified into the following categories at initial recognition: financial assets at fair value through profit or loss, receivables, available-for-sale financial assets and held-to-maturity investments. The classification of financial assets depends on the Group’s intention and ability to hold the financial assets. During 2011, other than receivables and available-for-sale financial assets, the Group did not hold any financial assets in other categories.
Receivables
Receivables, including accounts receivable and other receivables, are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(9) Financial instrument (Cont’d)
(a) Financial assets (Cont’d)
(i) Classification (Cont’d)
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either designated in this category or not classified in any of the other categories at initial recognition. Available-for-sale financial assets are included in other current assets in the balance sheet if management intends to dispose of them within 12 months of the balance sheet date.
(ii) Recognition and measurement
Financial assets are recognised at fair value on the balance sheet when the Group becomes a party to the contractual provisions of the financial instrument. For receivables and available-for-sale financial assets, transaction costs that are attributable to the acquisition of the financial assets are included in their initial recognition amounts.
Financial assets at fair value through profit or loss and available-for-sale financial assets are subsequently measured at fair value. Investments in equity instruments are measured at cost when they do not have a quoted market price in an active market and whose fair value cannot be reliably measured. Receivables are measured at amortised cost using the effective interest method.
A gain or loss arising from a change in fair value of an available-for-sale financial asset is recognised directly in equity, except for impairment losses and foreign exchange gains and losses arising from the translation of monetary financial assets. When such financial asset is derecognised, the cumulative gain or loss previously recognised in equity is recognised in profit or loss for the current period. Interests on available-for-sale investments in debt instruments calculated using the effective interest method during the period in which such investments are held and cash dividends declared by the investee on available-for-sale investments in equity instruments are recognised as investment income in profit or loss.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(9) Financial instrument (Cont’d)
(a) Financial assets (Cont’d)
(iii) Impairment of financial assets
The Group assesses the carrying amount of a financial asset other than that at fair value through profit or loss at each balance sheet date. If there is objective evidence that the financial asset is impaired, the Group shall determine the amount of any impairment loss.
If an impairment loss on a financial asset carried at amortised cost has been incurred, the amount of loss is measured at the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred). If there is objective evidence that the value of the financial asset recovered and the recovery is related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed and the amount of reversal is recognised in profit or loss.
In the case of a significant or prolonged decline in the fair value of an available-for-sale financial asset, the cumulative loss arising from the decline in fair value that had been recognised directly in equity is removed from equity and recognised in impairment loss. For an investment in debt instrument classified as available-for-sale on which impairment losses have been recognised, if, in a subsequent period, its fair value increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the previously recognised impairment loss is reversed and recognised in profit or loss for the current period. For an investment in an equity instrument classified as available-for-sale on which impairment losses have been recognised, if, in a subsequent period, its fair value increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the previously recognised impairment loss is reversed and directly recognised in equity.
(iv) Derecognition of financial assets
Financial assets are derecognised when: i) the contractual rights to receive the cash flows from the financial assets have expired; or ii) all substantial risks and rewards of ownership of the financial assets have been transferred; or iii) the control over the financial asset has been waived even if the Group does not transfer or retain nearly all of the risks and rewards relating to the ownership of a financial asset.
On derecognition of a financial asset, the difference between the carrying amount and the aggregate of consideration received and the accumulative amount of the changes of fair value originally recorded in the owner’s equity, is recognised in profit or loss.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(9) Financial instrument (Cont’d)
(b) Financial liabilities
Financial liabilities are classified into the following categories at initial recognition: the financial liabilities at fair value through profit or loss and other financial liabilities. During 2011, the financial liabilities in the Group mainly comprise other financial liabilities, including payables and borrowings.
Payables comprise accounts payable and other payables, which are recognised initially at fair value and measured subsequently at amortised cost using the effective interest method. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.
Borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently carried at amortised costs using the effective interest method.
Borrowings are classified as the short-term borrowings if they mature within one year (one year included); others are classified as long-term borrowings; long-term borrowings due for repayment within one year since the balance sheet day are classified as current portion of non-current liabilities.
A financial liability (or a part of financial liability) is derecognised when and only when the obligation specified in the contract is discharged or cancelled. The difference between the carrying amount of a financial liability (or a part of financial liability) extinguished and the consideration paid is recognised in profit of loss.
(c) Determination of fair value of financial instruments
The fair value of a financial instrument that is traded in an active market is determined at the quoted price in the active market. The fair value of a financial instrument for which the market is not active is determined by using a valuation technique. Valuation techniques include using prices of recent market transactions between knowledgeable, willing parties, reference to the current fair value of another financial asset that is substantially the same with this instrument, and discounted cash flow analysis. When a valuation technique is used to establish the fair value of a financial instrument, use market data as much as possible and avoid use of data that is particularly related to the Group.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(9) Receivables
Receivables comprise accounts receivable and other receivables. Accounts receivable arising from sale of goods or rendering of services are initially recognised at fair value of the contractual payments from the buyer.
Bad debt recognition and measurement method
— Bad debt recognition criterion
For all receivables, separately perform impairment testing. When objective evidence indicates the Group can't receive money according original terms, provision for bad debts recognized
— Bad debt provision method
The bad debt will be recognized when the present value of estimated future cash flow below their book value
(10) Inventory
(a) Classification
Inventories mainly include fuel and spare parts, and are presented at the lower of cost and net realisable value.
(b) The valuation method of inventories
Cost is determined using the weighted average method.
(c) The method of determination of net realizable value of inventory and impairment
Provisions for declines in the value of inventories are determined at the carrying value of the inventories net of their net realisable value. Net realisable value is determined based on the estimated selling price in the ordinary course of business, less the estimated costs to completion and estimated costs necessary to make the sale and relevant taxes.
(d) The group adopts perpetual inventory system.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(11) Long-term Equity Investments
Long-term equity investments comprise the Company’s long-term equity investments in its subsidiaries, the Group’s long-term equity investments in its associates as well as the long-term equity investments where the Group does not have control, joint control or significant influence over the investees, and which are not quoted in an active market and whose fair value cannot be reliably measured.
Subsidiaries are all investees over which the Company is able to control; Associates are all investees that the Group has significant influence on their financial and operating policies.
Investments in subsidiaries are measured using the cost method in the Company’s financial statements, and adjusted using the equity method when preparing the consolidated financial statements; Investments in associates are accounted for using the equity method; Other long-term equity investments where the Group does not have control, joint control or significant influence over the investee, and which are not quoted in an active market and whose fair value cannot be reliably measured are accounted for using the cost method.
(a) Determining initial investment cost
Long-term equity investments accounted for using the cost method are measured at the initial investment cost. Long-term equity investments accounted for using the equity method, where the initial investment cost exceeds the Group’s share of the fair value of the investee’s identifiable net assets at the time of acquisition, the investment is initially measured at cost. Where the initial investment cost is less than the Group’s share of the fair value of the investee’s identifiable net assets at the time of acquisition, the difference is included in profit or loss for the current period and the cost of the long-term equity investment is adjusted accordingly.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(12) Long-term Equity Investments (Cont’d)
(b) Subsequent accounting and recognition of profit or loss
For long-term equity investments accounted for using the cost method, investment income is recognised in profit or loss for the cash dividends or profit declared by the investee.
When using the equity method of accounting, the Group recognised the investment income based on its share of net profit or loss of the investee. The Group discontinues recognising its share of net losses of an investee after the carrying amount of the long-term equity investment together with any long-term interests that, in substance, form part of the investor’s net investment in the investee are reduced to zero. However, if the Group has obligations for additional losses and the conditions on recognition of provision are satisfied in accordance with the accounting standards on contingencies, the Group continues to recognise the investment losses and the provision. For changes in owner’s equity of the investee other than those arising from its net profit or loss, the Group record directly in capital surplus its proportion, provided that the Group’s proportion of shareholding in the investee remains unchanged. The carrying amount of the investment is reduced by the Group’s share of the profit or cash dividends declared by an investee. The unrealised profits or losses arising from the intra-group transactions between the Group and its investees are eliminated to the extent of the Group’s interest in the investees, on the basis of which the investment gain or losses are recognised. The loss on the intra-group transaction between the Group and its investees, of which the nature is asset impairment, is recognised in full amount, and the relevant unrealised gain or loss is not allowed to be eliminated.
(c) Determining control, joint control, significant influence over investees
Control means that the investor has the power to govern the financial and operating policies so as to obtain benefits from their operating activities. The existence and effect of potential voting rights (including that derived from the convertible bonds and warrants that are currently convertible or exercisable) are considered to determine whether the Group has control over the investee.
Joint control means that the investor has contractual obligation to control a certain economic activity, while such control only exists when the significant financial and operating policies relating to that activity are agreed upon by all investors sharing that control.
Significant influence means that the investor has the right to participate in the determination of the investee’s financial and operating policies, but cannot control or joint control with other parties on the determination of these policies.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(12) Long-term Equity Investments (Cont’d)
(d) Impairment of long-term equity investments
The carrying amount of long-term equity investments in subsidiaries and associates is reduced to the recoverable amount when the recoverable amount is less than the carrying amount (Note 2(17)). When the long term investments which are not quoted in an active market and whose fair value cannot be reliably measured have impairment, the impairment loss is recognised at the differences between carrying amounts and the present value of future cash flow discounted using the prevailing market return rate on similar financial assets. Once the impairment loss is recognised, it is not allowed to be reversed for the value recovered in the subsequent periods.
(12) Investment property
Investment property, including land use rights that have already been leased out buildings that are held for the purpose of lease and buildings that is being constructed or developed for future use for leasing, are measured initially at cost. Subsequent expenditures incurred for an investment property is included in the cost of the investment property when it is probable that economic benefits associated with the investment property will flow to the Group and its cost can be reliably measured, otherwise the expenditure is recognised in profit or loss in the period in which they are incurred.
The Group adopts the cost model for subsequent measurement of the investment property. Buildings and land use rights are depreciated or amortised to their estimated net residual values over their estimated useful lives. The estimated useful lives, the estimated net residual values expressed as a percentage of cost and the annual depreciation rates of the investment properties are as follows:
Estimated Estimated Annual useful lives residual value depreciation rate
Buildings 30~41 years 5% 2.32~3.17%
When an investment property is changed to an owner-occupied property, it is transferred to fixed asset at the date of the change. When an owner-occupied property is changed to be held to earn rentals or for capital appreciation, the fixed asset is transferred to investment property at the date of the change at the carrying amount of the property.
The estimated useful life, net residual value of the investment property and the depreciation method applied are reviewed, and adjusted as appropriate at each financial year-end.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(13) Investment property (Cont’d)
An investment property is derecognised on disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from its disposal. The amount of proceeds on sale, transfer, retirement or damage of an investment property less its carrying amount and related taxes and expenses is recognised in profit or loss for the current period.
When the recoverable amount of investment real estate less than its carrying value, book value is reduced to its recoverable amount (Note 2 (17)).
(13) Fixed assets
(a) Initial reorganization and measurement
Fixed assets comprise buildings, electric utilities in service, motor vehicles and other equipments.
A fixed asset is recognized when it is probable that the economic benefits associated with the fixed assets will flow to the Group and its cost can be reliably measured. Fixed assets purchased or constructed by the Group are initially measured at cost at the time of acquisition. Fixed assets contributed by the State-owned shareholders at the incorporation of a limited company are initially recorded at the valuation amount recognized by the State-owned assets supervision and administration department.
Subsequent expenditures incurred for a fixed asset are included in the cost of the fixed asset when it is probable that the economic benefits associated with the fixed asset will flow to the Group and its cost can be reliably measured. The carrying amount of those parts that are replaced is derecognized and all the other subsequent expenditures are recognised in profit or loss in the period in which they are incurred.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(14) Fixed assets (Cont’d)
(b) Depreciation method
Fixed assets are depreciated using the straight-line method to allocate the cost of the assets to their estimated residual values over their estimated useful lives. For the fixed assets being provided for impairment loss, the related depreciation charge is prospectively determined based upon the adjusted carrying amounts over their remaining useful lives. The estimated useful lives, the estimated residual values expressed as a percentage of cost and the annual depreciation rates are as follows:
Estimated Estimated Annual useful lives residual value depreciation rate
Buildings 10-35 years 5%-10% 2.57% to 9.5% Electric utilities in service 8-18 years 5%-10% 5% to 11.88% Motor vehicles 8-10 years 5%-10% 9% to 11.88% Other equipment 5-10 years 5%-10% 9% to 19%
The estimated useful life, the estimated net residual value of a fixed asset and the depreciation method applied to the asset are reviewed, and adjusted as appropriate at least at each financial year-end.
(c) When the recoverable amount of investment real estate less than its carrying value, book value is reduced to its recoverable amount (Note 2 (17)).
(d) Basis for identification of fixed assets held under finance leases and related measurement
A lease that in substance transfers substantially all the risks and rewards incidental to ownership of an asset is a finance lease. The leased asset is recognised at the lower of the fair value of the leased asset and the present value of the minimum lease payments. The difference between the recorded amount of the leased asset and the minimum lease payments is accounted for as unrecognised finance charge (Note 2 (24)(b)).
Fixed assets held under a finance lease is depreciated on a basis consistent with the depreciation policy adopted for fixed assets that are self-owned. When a leased asset can be reasonably determined that its ownership will be transferred at the end of the lease term, it is depreciated over the period of expected use; otherwise, the leased asset is depreciated over the shorter period of the lease term and the period of expected use.
(e) Fixed assets disposal
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only] A fixed asset is derecognised on disposal or when no future economic benefits are expected from its use or disposal. The amount of proceeds on sale, transfer, retirement or damage of a fixed asset net of its carrying amount and related taxes and expenses is recognised in profit or loss for the current period.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(14) Construction in progress
Construction in progress is measured at actual cost. Actual cost comprises construction costs, installation cost, borrowing costs that are eligible for capitalization and other costs necessary to bring the fixed assets ready for their intended use. Actual cost also consists of the net amount of revenue generated and expenses that incurred in the test running period.
Construction in progress is transferred to fixed assets when the assets are ready for their intended use, and depreciation begins from the following month. The carrying amount of construction in progress is reduced to the recoverable amount when the recoverable amount is less than the carrying amount (Note 2(17)).
(a) Approach of defining financial leases and pricing of the construction in progress
Essentially, leases that involve the transfer of all risks and income related to the ownership of assets can be defined as financial lease. When determining the recorded value of the leased construction in progress, the fair value of the leased asset and the lowest payment of the lease are compared and the lower will be applied. The difference between the recorded value of the leased asset and the lowest payment of the lease is termed as unconfirmed financing costs (Note 2(24)(b)).
(15) Borrowing costs
The borrowing costs that are directly attributable to the acquisition and construction of a fixed asset that needs a substantially long period of time of acquisition and construction for its intended use commence to be capitalised and recorded as part of the cost of the asset when expenditures for the asset and borrowing costs have been incurred, and the activities relating to the acquisition and construction that are necessary to prepare the asset for its intended use have commenced. The capitalisation of borrowing costs ceases when the asset under acquisition or construction becomes ready for its intended use, the borrowing costs incurred thereafter are recognised in profit or loss for the current period. Capitalisation of borrowing costs is suspended during periods in which the acquisition or construction of a fixed asset is interrupted abnormally and the interruption lasts for more than 3 months, until the acquisition or construction is resumed.
For a borrowing specific for the acquisition, construction or production activities for preparing an asset eligible for capitalisation, the to-be-capitalised borrowing costs shall be determined according to the actual borrowing costs incurred less any income earned on the unused borrowing fund as a deposit in the bank or as a temporary investment.
For the other borrowings related to acquisition, construction and production of a qualifying asset, the amount of to-be-capitalised borrowing costs shall be the lower of the actual borrowing costs incurred and the amount of qualifying asset not financed by specific borrowings multiplying capitalisation rate. The capitalisation rate is the weighted average interest rate of these borrowings.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(16) Intangible assets
Intangible assets including land use rights, sea use rights, software and associated projects for electricity transmission and transformation are measured at cost. Intangible assets contributed by the state-owned shareholders at the incorporation of a limited company are initially recorded at the valuation amount recognized by the state-owned assets supervision and administration department.
(a) Land use rights (“LUR”) and sea use lights
LUR acquired are amortized on the straight-line basis over 20 to 50 years. If the purchase costs of LUR and attached buildings cannot be reliably allocated between the LUR and buildings, for the purchase costs are recognised as fixed assets.
Sea use rights acquired are amortized on the straight-line basis in 50 years.
(b) Other Intangible assets
Other intangible assets acquired except for LUR and sea use rights are amortized on the straight-line basis over 2 to 20 years according to their estimated useful lives.
(c) Periodical review of useful life and amortisation method
For an intangible asset with a finite useful life, review and adjustment on useful life and amortization method are performed at each year-end.
(d) Impairment of intangible assets
The carrying amount of intangible assets is reduced to the recoverable amount when the recoverable amount is less than the carrying amount (Note 2(17)).
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(17) Impairment of long-term assets
Fixed assets, construction in progress, intangible assets with finite useful lives, investment properties measured using the cost model and long-term equity investments in subsidiaries and associates are tested for impairment if there is any indication that an asset may be impaired at the balance date. If the result of the impairment test indicates that the recoverable amount of the asset is less than its carrying amount, a provision for impairment and an impairment loss are recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and the present value of the future cash flows expected to be derived from the asset. A provision for asset Impairment is determined and recognised on an individual asset basis. If it is not possible to estimate the recoverable amount of an individual asset, the recoverable amount of the group of assets to which the asset belongs is determined. A group of assets is the smallest group of assets that is able to generate independent cash inflows.
Separately recognised goodwill is tested at least annually for impairment, irrespective of whether there is any indication that the asset may be impaired. During the test, the carrying value of goodwill is allocated to the related asset group or groups of asset group which is expected to benefit from the synergies of the business combination. If the result of the test indicates that the recoverable amount of an asset group or groups of asset group including the goodwill allocated is lower than its carrying amount, the corresponding impairment loss is recognized. The impairment loss is first deducted from the carrying amount of goodwill allocated to the asset group or groups of asset group, and then deducted from the carrying amount of the remaining assets of the asset group or groups of asset group pro rata with goodwill.
Once the asset impairment loss mentioned above is recognised, it is not allowed to be reversed for the value recovered in the subsequent periods.
(18) Employee benefits
Employee benefits mainly include wages or salaries, bonuses, allowances and subsidies, staff welfare, social security contributions, housing funds, labour union funds, employee education funds and other expenditures incurred in exchange for service rendered by employees.
If the Group terminates the labour relationship with any employee prior to the expiration of the relevant labour contract or makes a severance package proposal with the purpose of enticing the employees to willingly accept such a termination, and the following conditions are concurrently satisfied, the Group shall recognize the liabilities to be incurred due to severance pay, and shall at the same time record them in the profit and loss of the current period.
Except for the compensation for termination of labour relationship, employee benefits are
- 28 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only] recognised as a liability in the accounting period in which an employee has rendered service, and as costs of assets or expenses to whichever the employee service is attributable.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(19) Profit distribution
Proposed profit distribution is recognised as a liability in the period in which it is approved by the shareholders’ meeting.
(20) Provisions
Provisions for product warranties, onerous contracts are recognised when the Group has a present obligation, and it is probable that an outflow of economic benefits will be required to settle the obligation, and the amount of the obligation can be measured reliably.
A provision is initially measured at the best estimate of the expenditure required to settle the related present obligation. Factors surrounding a contingency such as the risks, uncertainties and the time value of money are taken into account as a whole in reaching the best estimate of a provision. Where the effect of the time value of money is material, the best estimate is determined by discounting the related future cash outflows. The increase in the discounted amount of the provision arising from passage of time is recognised as interest expense.
The carrying amount of provisions is reviewed at each balance sheet date and adjusted to reflect the current best estimate.
(21) Revenue recognition
The amount of revenue is determined in accordance with the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the Group’s activities. Revenue is shown net of value-added tax, rebates, discounts and returns.
Revenue is recognised when the economic benefits associated with the transaction will flow to the Group, the relevant revenue can be reliably measured and specific revenue recognition criteria have been met for each of the Group’s activities as described below:
(a) Sale of electricity and heat energy
Revenue is recognised upon transmission of electricity or heat energy.
(b) CER revenues
The group sold by the wind power production facilities certified carbon emission reduction (" CERs" ).The wind has according to the" Kyoto Protocol" to the United Nations Executive Board of the clean development mechanism (" CDM EB" ) for the registration of the clean development mechanism (" CDM" ) project.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
CERs related income will be in line with the following conditions shall be confirmed: - The other has a commitment to buy CERs - Both sides agreed to the sale price - The company has production and power; - CERs has been the UN certified
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(22) Revenue recognition (Cont’d)
(c) Rendering of services
The Group provides repair service to external parties. The related revenue is recognised using the percentage of completion method, with the stage of completion being determined based on proportion of costs incurred to date to the estimated total costs.
(d) Transfer of asset use rights
Interest income is recognised on a time-proportion basis using the effective interest method.
Income from an operating lease is recognised on a straight-line basis over the period of the lease.
(22) Government subsidies
Government subsidy means the monetary or non-monetary assets obtained freely by an enterprise from the government, including tax returns, financial subsidies.
Government subsidy is recognized unless the additional condition can be met and the subsidy can be received by the corporation. If the government subsidy is a monetary asset, it will be measured in the light of the received or receivable amount, if the government subsidy is a non-monetary asset, it shall be measured at its fair value. If its fair value cannot be obtained in a reliable way, it will be measured at its nominal amount.
The government subsidies pertinent to assets will be recognized as other non-current debt-deferred income, equally amortized within the useful lives of the relevant assets and recognized as profit and loss at the same time. The government subsidies measured at their nominal amounts will be directly recognized as profit and loss in the current period.
The government subsidies pertinent to incomes, those subsidies used for compensating related future expenses or losses will be recognized as deferred income and recognized as profit and loss during the period when the relevant expenses are recognized; those subsidies used for compensating related expenses or losses already existed will be directly recognized as income or cost in the current period.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(23) Deferred tax assets and liabilities
Deferred tax assets and deferred tax liabilities are calculated and recognised based on the differences arising between the tax base of assets and liabilities and their carrying amount (temporary differences). Deferred tax asset is recognized for the deductible losses that can be carried forward to subsequent years for deduction of the taxable profit in accordance with the tax law. No deferred tax liability is recognised for a temporary difference arising from the initial recognition of goodwill. No deferred tax asset or deferred tax liability is recognized for the temporary differences resulting from the initial recognition of assets or liabilities due to a transaction other than a business combination, which affects neither accounting profit nor taxable profit (or deductible loss) At the balance sheet date, deferred tax assets and deferred tax liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled.
Deferred tax assets are only recognised for deductible temporary differences, deductible losses and tax credits to the extent that it is probable that taxable profit will be available in the future against which the deductible temporary differences, deductible losses and tax credits can be utilised.
Deferred tax liabilities are recognised for temporary differences arising from investments in subsidiaries and associates, except where the Group is able to control the timing of the reversal of the temporary difference, and it is probable that the temporary difference will not reverse in the foreseeable future. When it is probable that the temporary differences arising from investments in subsidiaries, joint ventures and associates will be reversed in the foreseeable future and that the taxable profit will be available in the future against which the temporary differences can be utilized, the corresponding deferred tax assets are recognized.
Deferred tax assets and liabilities are offset and presented on net basis when:
(a) The deferred taxes are relate to the same tax payer within the group and same fiscal authority, and; (b) That tax payer has a legally enforceable right to offset current tax assets against current tax liabilities.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(24) Leases
A finance lease is a lease that transfers substantially all the risks and rewards incidental to ownership of an asset. An operating lease is a lease other than a finance lease.
(a) Operating lease
Lease payments under an operating lease are recognised on a straight-line basis over the period of the lease, and are either capitalised as part of the cost of related assets, or charged as an expense for the current period.
(b) Finance lease
The leased asset is recorded at the amounts equal to the lower of the fair value of the leased asset and the present value of the minimum lease payments. The difference between the recorded amount of the leased asset and the minimum lease payments is accounted for as unrecognised finance charge and is amortised using the effective interest method over the period of the lease. A long-term payable is recorded at the amount equal to the minimum lease payments less the unrecognised finance charge.
(25) Segment information
The Group identify operating segments based on the internal organization structure, management requirement and internal reporting, then disclose segment information of reportable segment which is based on operating segment.
An operating segment is the component of the Group that all of the following conditions are satisfied: (1) that component can earn revenues and incur expenses from ordinary activities; (2) whose operating results are regularly reviewed by the Group’s management to make decisions about resources to be allocated to the segment and assess its performance, and (3) for which the information of financial position, operating results and cash flows is available to the Group. If two or more operating segments have similar economic characteristics, and certain conditions are satisfied, they may be aggregated into a single operating segment.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(26) Critical accounting estimates and judgments
The Group continually evaluates the critical accounting estimates and key judgments applied based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The critical accounting estimates and key assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are outlined below:
(a) The estimates of the depreciable lives of property, plant and equipments
The estimate of depreciable lives of property, plant and equipments was made by the directors with reference to the practice of industry, their expected physical wear and tear, and the durability assessment performed. The evaluation of estimated useful lives is assessed by the directors annually.
Change of estimated useful lives may cause significant impact on the Group’s net profit.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
2 Summary of significant accounting policies and accounting estimates (Cont’d)
(26) Critical accounting estimates and judgments (Cont’d)
(b) Estimated impairment of other long-term assets
As disclosed in Note 2(17), the Group’s long-term assets, such as fixed assets, construction in progress, intangible assets with finite useful lives, investment properties measured using the cost model and long-term equity investments, are tested for impairment if there is any indication that an asset may be impaired at the balance date.
In determining whether there is any indication of potential asset impairment, management mainly evaluate and analyze from the following aspects: (1) whether the issues affecting the asset impairment have occurred; (2) whether the present value of cash flows, which is expected to receive for the sustained use of the asset or disposal of the asset, is less than the net book value; and (3) whether the key assumptions used for the present value of projected future cash flow is appropriate.
The relevant assumptions used to determine asset impairment, such as the discount rate used in present value of future cash flow method, the variation of the growth rate assumptions and so on, may have a significant impact on the present value which is employed in the impairment testing, resulting the impairment of long-term assets of the Group.
(c) Income taxes
The Group is subject to income taxes in numerous jurisdictions. There are many transactions and events for which the ultimate tax determination is uncertain during the ordinary course of business. Significant judgment is required from the Group in determining the provision for income taxes in each of these jurisdictions. The Group recognises income taxes in each jurisdiction based on estimates. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.
As at Dec 31 2011, the group recognized a deferred tax asset of RMB 88,911,530 according to deductable losses (Note6 (31)). If the group can’t realize profit as forecasted, income tax expense will increase and deferred tax asset will be reversed in next year.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
3 Financial risk management
The Group’s expose it to a variety of financial risks: price risk, cash flow and fair value interest rate risk, credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance.
(1) Exchange risk
Exchange risks that the Group is exposed to are generally related to USD and HKD. The Group settles all major business transactions in RMB except for receiving capital contribution from foreign investors and distributing dividends to them. RMB is still not able to exchange into other currencies because of the restrictions announced by Chinese government in its regulations of RMB exchange rate and foreign currency control. Therefore, all foreign-currency-dominated monetary assets and liabilities are exposed to exchange risks.
The amount of foreign currency that the Group held on 31 December, 2011 and 31 December, 2010, is shown in the following table:
31 December 2011 31 December 2010 Translated to RMB Translated to RMB
Cash at bank and on hand USD (Note 6(1)) 15,684,831 7,253,241 HKD 13,714 12,870 15,698,545 7,266,111
Cash at bank and on hand USD (Note 6(28)) 125,467,037 -
During 2011 and 2010, the Group did not enter into any financial instrument swap agreements. As at 31 December 2011, if the currency had weakened/strengthened by 10% against the USD while all other variables had been held constant, the Group’s net profit for the year would have been approximately RMB 8,234,000 (2009: RMB 544,000) lower/higher for various financial assets and liabilities denominated in USD. Exchange risk subjected to HKD is not significant.
(2) Interest rate risk
The Group’s interest bearing assets are mainly cash at banks and entrusted loans granted to related parties. The Group earns interest income from cash at banks at floating rates published by the banks from time to time. Any change in the interest rate published by the banks is not considered to have significant impact to the Group. The Group’s interest income from entrusted loans bear fixed interest rates (Note 6(3) and (9)).
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
3 Financial risk management (Cont’d)
(2) Interest rate risk (Cont’d)
The Group's interest rate risk arises from long-term interest bearing borrowings including long-term borrowings and debentures payable. Financial liabilities issued at floating rates expose the Group to cash flow interest rate risk. Financial liabilities issued at fixed rates expose the Group to fair value interest rate risk. The Group determines the relative proportions of its fixed rate and floating rate contracts depending on the prevailing market conditions. As at 31 December 2011, the Group’s long-term interest bearing borrowings were mainly RMB-denominated with floating rates, amounting to RMB 19,166,458,413 (31 December 2009: RMB 15,774,611,066).
For the year ended 31 December 2011, if interest rates on the floating rate borrowings had risen/fallen by 50 basis points while all other variables had been held constant, the Group’s net profit would have increased/decreased by approximately RMB 95,832,000 (2010: approximately RMB 78,873,000).
(3) Credit risk
Credit risk mainly arises from cash at bank and on hand, accounts receivable, other receivables, Notes receivable etc.
The Group expects that there is no significant credit risk associated with cash at bank since they are deposited at state-owned banks and other medium or large size listed banks. Management does not expect that there will be any significant losses from non-performance by these counterparties.
Accounts receivable of the Group is mainly due form GDGC. Management keeps continuous credit assessment on Debtors’ financial situation, but usually does not require pledge for unpaid debts. Base on the assessment of liquidity of unpaid amounts, Management accrual bad debt provision accordingly, and accrual bad debt occurrence is within expectation. Base on the cooperate record with the debtors and favorable returns of receivables, management believe the Group has no significant credit risk over accounts receivables.
No other financial assets carry a significant exposure to credit risk.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
3 Financial risk management (Cont’d)
(4) Liquidity risk
As disclosed in Note 2(1), the Group reported net current liabilities of approximately RMB8,542,784,982 as at 31 December 2011. Certain liquidity risk exists. Based on the following relevant measures which will be adopted by management, the directors are of the opinion that liquidity risk is still manageable:
a. Use the unutilised borrowing facilities and the capital from A share private placement to repay the Group’s liabilities in the coming year and fulfil the requirement of the Group’s capital expenditure; b. The need for new units to obtain the relevant approval documents before using the credit line, accelerate the relevant approval documents of approval process; c. Derive profits and stable cash inflow from operating activities; d. Closely monitor and control the capital expenditure payment amount and payment schedule for the new power station construction and purchase of new equipments.
The financial assets and liabilities of the Group at the balance sheet date are analysed by their maturity date below at their undiscounted contractual cash flows:
31 December 2011 Within 1 year 1 to 2 years 2 to 5 years Over 5 years Total
Financial assets denominated in foreign currency - Cash at bank and on hand 2,182,660,514-- - 2,182,660,514 Receivables 1,853,670,419-- - 1,853,670,419 Available-for-sale financial assets --- 306,133,028 306,133,028 Long term receivables 27,557,448 32,519,969 426,014,715 100,000,000 586,092,132 4,063,888,381 32,519,969 426,014,715 406,133,028 4,928,556,093
Financial liabilities denominated in foreign currency - Short-term borrowings 10,721,653,011-- - 10,721,653,011 Notes Payables 343,083,604-- - 343,083,604 Payables 4,405,328,582-- - 4,405,328,582 Long-term borrowings 1,102,857,549 870,321,458 3,361,314,719 5,176,795,457 10,511,289,183 Debentures payable 110,000,000 110,000,000 2,131,388,889 - 2,351,388,889 Long-term payables 314,471,518 357,197,278 980,860,337 1,024,648,906 2,677,178,039 16,997,394,264 1,337,518,736 6,473,563,945 6,201,444,363 31,009,921,308
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
3 Financial risk management (Cont’d)
(4) Liquidity risk (Cont’d)
31 December 2010 Within 1 year 1 to 2 years 2 to 5 years Over 5 years Total
Financial assets denominated in foreign currency - Cash at bank and on hand 1,894,021,204-- - 1,894,021,204 Receivables 2,403,559,814 8,287,397 10,431,923 313,082 2,422,592,216 Available-for-sale financial --- 353,104,045 353,104,045 assets Long term receivables 897,408 5,849,408 11,420,288 30,000,000 48,167,104 4,298,478,426 14,136,805 21,852,211 383,417,127 4,717,884,569
Financial liabilities denominated in foreign currency - Short-term borrowings 8,516,117,875-- - 8,516,117,875 Notes Payables 110,000,000-- - 110,000,000 Payables 2,934,841,751 523,269,480 34,319,473 22,541,830 3,514,972,534 Long-term borrowings 565,254,214 397,320,960 138,672,000 5,956,650,624 7,057,897,798 Debentures payable 110,000,000 110,000,000 2,241,388,889 - 2,461,388,889 Long-term payables 77,393,453 78,325,657 234,976,971 371,506,871 762,202,952 12,313,607,293 1,108,916,097 2,649,357,333 6,350,699,325 22,422,580,048
(5) Fair value
(a) Financial instruments not measured at fair value
Financial assets and liabilities not measured at fair value mainly represent receivables, held-to-maturity investments, short-term borrowings, payables, Long-term borrowings, and long-term payables. Except for financial assets and liabilities listed below, the carrying amount of the other financial assets and liabilities not measured at fair value is a reasonable approximation of their fair value.
(b) Financial instruments measured at fair value
Based on the lowest level input that is significant to the fair value measurement in its entirety, the fair value hierarchy has the following levels:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only] Level 3: Inputs for the asset or liability that is not based on observable market data (that is, unobservable inputs).
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
3 Financial risk management (Cont’d)
As at 31 December 2011 and 31 December 2010, the group measured the financial assets at fair value of level 1:
31 December 2011 31 December 2010
Financial assets - Available-for-sale financial assets - Available-for-sale equity instruments 306,133,028 353,104,045
4 Taxation
(1) The types and rates of taxes applicable to the Group are set out below:
Type Taxable base Tax rate
Enterprise income tax Taxable income 12%, 24% or 25% Value added tax (“VAT”) Taxable value added amount (Tax payable is 17% calculated using the taxable sales amount multiplied by the effective tax rate less deductible VAT input of current period) Business tax Taxable turnover 5% City maintenance and Value added tax and Business tax amount 5% or 7% construction tax Surcharge for education Value added tax and Business tax amount 3% Local surcharge for education Value added tax and Business tax 2% amount(effective from 1 January 2011)
Except for the two subsidiaries, Guangdong Yuejia Electric Power Co., Ltd. (“Yuejia Electric”) and Guangdong Yudean Zhanjiang Wind Power Co., Ltd. (“Zhanjiang Wind Power”) (as disclosed in the following notes), the enterprise income tax rate applicable to the Group is 25%.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
4 Taxation (Cont’d)
(2) Tax preferential and approval
According to the approval of the Guangzhou Municipal Office of State Administration of Taxation Foreign Tax Center Guoshuifa [1997] No. 185 and the Guangzhou Municipal Office of State Administration of Taxation Foreign Tax Center Waifa [1998] No. 045, the corporate income tax rate of YueJia Electric is 15%. Based on the new CIT law, the corporate income tax rate of YueJia Electric will apply from 2009 to 2012 as period of 5 years and gradual transition to 25%. The enterprise income tax rate of the YueJia Electric is 24% for 2011(2010: 22%).
According to the approval of the Zhanjiang Municipal Office of State Administration of Taxation Direct Taxation Office Zhangguoshui [2007] No. 15, the enterprise income tax rate of Zhanjiang Wind Power is 15%, and from the profit-making year, the first and second year exemption from enterprise income tax, the third to fifth year business income tax reduced by half. In 2008, Zhanjiang Wind Power has not profitable. Under the provisions of the new CIT Law, which will continue to apply the preferential policies, but was identified 2008 as the first profitable year. Therefore, in 2011, the enterprise income tax rate of Zhanjiang Wind Power is 12%. (2010:11%).
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
5 Business combination and consolidation
(1) Subsidiaries
(1) Subsidiaries acquired through business combination under common control
Type of Place of Nature of Registered Legal Organization subsidiaries registration business capital Scope of business Business type Representative code
Zhanjiang Electric Power Co., Ltd. Direct Zhanjiang Electric 2,875,440,000 Generation of Electricity, Limited liability Liu Qian 23210093-2 (“Zhanjiang Electric”) power plant operating company Yuejia Electric Direct Meizhou Electric 1,200,000,000 Generation of Electricity, Foreign-funded Lin Shizhuang 61741361-4 power plant operating enterprise Guangdong Shaoguan Yuejiang Electric Direct Shaoguan Electric 770,000,000 Generation of Electricity, Limited liability Lin Shizhuang 70752208-0 Power Co., Ltd. (“Yuejiang Electric”) power plant operating company Zhanjiang Zhongyue Engergy Co. Ltd. Direct Zhanjiang Electric 1,454,300,000 Generation of Electricity, Limited liability Liu Qian 74367331-0 (“Zhongyue Energy”) power plant operating company
Minority interests of minority Essentially constitute shareholder's net The actual amounts of a subsidiary the balance of the net Whether consolidate the income used to capital in the year end investment in other projects % interest held % voting rights financial statements or not Minority interest offset the amount
Zhanjiang Electric 2,185,334,400- 76% 76% Yes 919,833,824 919,833,824 Yuejia Electric 701,279,338- 58% 58% Yes 246,552,637 246,552,637 Yuejiang Electric 500,500,000- 65% 65% Yes 111,645,401 111,645,401
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only] Zhongyue Energy 1,532,578,100 - 90% 90% Yes 118,516,806 118,516,806 4,919,691,838 - 1,396,548,668 1,396,548,668
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
5 Business combination and consolidation (Cont’d)
(1) Subsidiaries (Cont’d)
(2) Subsidiaries established or invested by the Group
Type of Place of Nature of Registered Legal Organization subsidiaries registration business capital Scope of business Business type Representative code
Maoming Zhenneng Thermoelectric Power Direct Maoming Electric Generation of Electricity Limited liability Hu Xiaolei 76656459-8 Co., Ltd. (“Maoming Zhenneng”) (i) 757,825,090 company Guangdong Yudean Jinghai Electric Power Direct Jieyang Electric 2,919,272,000 Generation of Electricity Limited liability Wang Jia 77307022-X Development Co., Ltd. (“Jinghai Electric”) company Zhanjiang Wind Power Direct Zhanjiang Electric 346,110,000 Generation of Electricity Foreign-funded 79295197-0 enterprise Lin Shizhuang Guangdong Oil Shale Power Generation Direct Maoming Electric 235,000,000 Generation of Electricity Limited liability 78488120-4 Co., Ltd. (“Oil Shale Power”) company Lin Shizhuang Guangdong Yudean Anxin electric power Direct Dongguan Electric 20,000,000 Providing repair and Limited liability 66498489-0 maintenance and installation Co., Ltd. maintenance service company (“Anxin”) Rao Subo Guangdong Yudean Humen Electric Power Direct Dongguan Electric 150,000,000 Generation of Electricity Limited liability 68056908-0 Co., Ltd. (“Humen Electric”) company Lin Shizhuang Guangdong Yudean Bohe Electric Power Direct Dongguan Electric Coal dock construction, Limited liability Co., Ltd. (“Bohe Electric”) power plant construction, company electric project technique 190,000,000 consulting and service Luo Zhiheng 55168364-5 Zhanjiang Yuheng Power Repair Co., Ltd. Indirect Zhanjiang Electric 20,000,000 Providing repair and Limited liability 78942832-9 (“Zhanjiang Yuheng”) maintenance service company Shen Mingde Guangdong Xuwen Wind Electric Power Indirect Zhanjiang Electric 173,190,000 Generation of Electricity Limited liability 69473177-1 Co.,Ltd (“Xuwen Wind’) company Lin Shizhuang
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
5 Business combination and consolidation (Cont’d)
(1) Subsidiaries (Cont’d)
(b) Subsidiaries established or invested by the Group (Cont’d)
Minority interests of minority Essentially constitute shareholder's net The actual amounts of a subsidiary the balance of the net Whether consolidate the income used to capital in the year end investment in other projects % interest held % voting rights financial statements or not Minority interest offset the amount
Maoming Zhenneng 433,060,946 - 56.39% 56.39% Yes 330,238,876 (15,432,241) Jinghai Electric 1,930,395,668 - 65% 65% Yes 1,109,620,079 - Zhanjiang Wind Power 242,277,000 - 70% 70% Yes 58,267,408 - Oil Shale Power 196,398,200 - 83.66% 83.66% Yes 33,425,388 (1,622,815) Anxin 20,000,000 - 100% 100% Yes - - Humen Electric 90,000,000 - 60% 60% Yes 58,337,090 (523,924) Bohe Electric 190,000,000 - 100% 100% Yes - - Zhanjiang Yuheng 15,200,000 - 76% 76% Yes 6,332,155 - Xuwen Wind 121,233,000 - 70% 70% Yes 52,109,870 - 3,238,564,814- 1,648,330,866 (17,578,980)
[The English names of all companies listed above are direct translations of their registered name in Chinese.]
- 46 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
5 Business combination and consolidation (Cont’d)
(2) Business combination under common control
From the opening date of the year the combination occurred to the Actual combination date controller of the Cash flow from Judgment basis of the business combination common operating under common control control Revenue Net profit activities
Zhongyue The Company and Zhongyue Energy are both Yudean - 186,498 595,255,747 Energy controlled by Yudean before and after this combination, and this control is not temporary.
At 18 December 2009, the Company acquired 51% equity interests of Zhongyue Energy from Yudean. After this transaction, the Company owns 90% of Zhongyue Energy’s equity interests. The combination date was 18 December 2009, which is the actual date the Company could control Zhongyue Energy.
(i) The combination cost and carrying amount of net assets acquired of the above business combination are listed as follows:
18 December 2009 Combination date Combination cost - Paid in Cash 733,708,100 Carrying amount of non-cash assets transfer 321,263,850 Total combination cost 1,054,971,950 Less: carrying amount of net assets acquired (741,378,115) Capital surplus reduction 313,593,835
- 47 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
5 Business combination and consolidation (Cont’d)
(2) Business combination under common control (Cont’d)
(ii) Carrying amount of assets and liabilities, acquisition related cash flow of Zhongyue Energy as at combination date are listed as follows:
18 December 2009 Carrying amount
Cash and cash equivalents 101,815,134 Other current assets 197,300,931 Fixed assets 37,869,091 Construction in process 2,906,962,091 Other non-current assets 56,152,865 Less: Loan (2,400,000,000) Accounts payable (67,524,029) Payroll Payable (314,663) Other Liabilities (8,507,959) Net Assets 823,753,461 Less: Minority interests (82,375,346) Net assets acquired 741,378,115
(iii) Revenue, net profit and cash flow for the period from 1 January 2009 to combination date and 2009 of Zhongyue Energy are listed as follows:
From 1 January 2009 to combination date
Revenue - Net Profit 186,498 Cash generated from operating activities 595,255,747 Net Cash Flow (69,398,975)
- 48 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements
(1) Cash at bank and on hand
31 December 2011 31 December 2010 Foreign Foreign currency Exchange RMB currency Exchange RMB amount rate equivalent amount rate equivalent
Cash on hand - RMB 413,124 385,446
Cash at bank - RMB 619,475,647 1,128,362,608 USD 2,489,300 6.3009 15,684,831 1,095,209 6.6227 7,253,241 HKD 16,917 0.8107 13,714 15,125 0.8509 12,870
Cash at Guangdong Yudean Finance Co., Ltd. (“Yudean Finance”) (Note 8(5)(k)) RMB 1,547,073,198 758,007,039 2,182,660,514 1,894,021,204
It is the same as cash listed in the cash flow statement.
(2) Accounts receivable
31 December 2011 31 December 2010
Accounts receivable 1,657,325,697 1,841,038,374 Less: provision for bad debts -- 1,657,325,697 1,841,038,374
(a) As at 31 December 2011 and 31 December 2010, the ageing of accounts receivable are all within 1 year.
- 49 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(2) Accounts receivable (Cont’d)
(b) Accounts receivable are analysed by customers categories as follows:
31 December 2011 31 December 2010
% of % of % of total Provision withdrawing % of total Provision for withdrawing Amount balance for bad debts bad debts Amount balance bad debts bad debts
Individual material 1,647,388,766 99.4% - - 1,831,238,519 99.47% - -
Others 9,936,931 0.6% - - 9,799,855 0.53% - -
1,657,325,697 100% - - 1,841,038,374 100% - -
(c) As at 31 December 2011, no balances included in above accounts receivable are due from the shareholders of the Company who hold over 5% (including 5%) shares with voting rights (31 December 2010: Nil).
(d) As at 31 December 2011, the Group’s five largest accounts receivable balances are analysed as follows:
Ratio of Total Relation with our Account group Amount Period Receivable
GPGC Third Party 1,326,900,375 Less than 1 Year 80.06% GDGC Zhanjiang Third Party 289,933,771 Less than 1 Year 17.49% Shajiao Power Plant C (“Shajiao C”) Related Party 12,876,382 Less than 1 Year 0.78% Shenzhen Guang Qian Power Limited Company (“Shenzhen Guang Qian”) Related Party 9,563,928 Less than 1 Year 0.58% Yudean Environment Protection Related Party 8,114,310 Less than 1 Year 0.49% 1,647,388,766 99.40%
(e) As at 31 December 2011, accounts receivable with carrying amount of RMB 228,681,637 (31 December 2010: RMB 395,465,174) is pledged as collateral for the Group’s long-term borrowings of RMB 1,479,430,000 (including the current portion) (31 December 2010: RMB 1,619,920,000) and the Group’s short-term borrowings of RMB 298,000,000 (31 December 2010: Nil) (Note 6(19), (27), (28))
- 50 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(2) Accounts receivable (Cont’d)
(f) Accounts receivable de from related parties are analysed as follows:
31 December 2011 31 December 2010
(%)Ratio of (%)Ratio of Total provision Total provision Accounts for bad Accounts for bad Relationship with the Group amount Receivable debts amount Receivable debts
Shajiao C Controlled by Yudean 12,876,382 0.78%- 12,876,382 0.78% - Shenzhen Guang Qian The Group’s associate and Controlled by Yudean 9,563,928 0.58%- 6,534,224 0.35% - Yudean Environment Protection Controlled by Yudean 8,114,310 0.49% - - Guangdong Zhuhai Jinwan Power Generation Company(“Zhuhai Jinwan”) Controlled by Yudean 3,853,987 0.23% - - Guangdong Huizhou LNG Power Co., Ltd.
(“Huizhou LNG”) Controlled by Yudean 3,352,133 0.20% - 2,400,177 0.13% - Zhanjiang Biological Power Generation Company(“Biological
Generation”) Controlled by Yudean 88,011 0.01% - - Yudean Group Zhuhai Electric Plant Controlled by Yudean 1,802,225 0.10% - 1,802,225 0.10% -
37,848,751 2.29% - 24,908,064 1.35% -
(g) As at 31 December 2011 and 31 December 2010, no accounts receivable balances are dominated in foreign currencies.
(3) Other receivables
31 December 31 December 2009 2010
Entrust loans (a) 542,159,228 52,362,567 Advance for construction suppliers 3,607,797 6,621,529 Petty cash 7,836,751 8,344,218 Withhold and remit tax 1,635,277 1,421,803
- 51 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only] Others 19,018,123 31,215,494 574,257,176 99,965,611 Current year Current year addition reversal
Less: provision for bad debts (1,971,217) (29,662) - (2,000,879) 572,285,959 97,964,732
- 52 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(3) Other receivables (Cont’d)
(a) The entrust loans, which the Group provides for associates through the trustee, are listed as follows:
Annual Annual 31 December Accumulative Provision for
Trustee Borrower Principal interest rate Due date interest 2010 accrued interest bad debts
China Construction Guangdong Yudean
Bank Holding Western
Investment Co., Ltd.
(“Yudean Western”) 26,000,000 6.41% 12/03/2012 508,842 26,508,842 508,842 -
GPGC Finance Shanxi Yudean Energy 6,000,000 5.76% 15/06/2012 323,096 6,012,119 12,119 -
Co., Ltd. (“Shanxi 6,800,000 5.99% 21/11/2012 352,595 6,813,735 13,735 -
Energy”) 8,000,000 5.68% 09/05/2012 297,832 8,016,159 16,159 -
Industrial Bank Lincang Yuntou Yudean 2,500,000 6.90% 30/10/2012 167,303 2,505,856 5,856 -
Co.,Ltd hydroelectric develop -
Co., Ltd(“Lincang
Yuntou”) 2,500,000 6.90% 30/11/2012 166,635 2,505,856 5,856
51,800,000 1,816,303 52,362,567 562,567 -
(b) The ageing of other receivables are analyzed as follows:
31 December 2011 31 December 2010
Within 1 year 92,727,906 553,253,557 Between 1 and 2 years 3,299,900 8,287,397 Between 2 and 3 years 20,000 6,532,041 Between 3 and 4 years 391,925 2,552,842 Between 4 and 5 years 325,001 1,347,040 Over 5 years 1,200,000 313,082 97,964,732 572,285,959
- 53 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(3) Other receivables (Cont’d)
(c) Other receivables are analysed by customers categories as follows:
31 December 2011 31 December 2010
% of % of % of total Provision withdrawing % of total Provision for withdrawing Amount balance for bad debts bad debts Amount balance bad debts bad debts
Individual material 72,489,477 72.51% - - 548,159,228 95.46% - - Others 27,476,134 27.49% (2,000,879) 7.85% 26,097,948 4.54% (1,971,217) 7.55%
99,965,611 100% (2,000,879) 2.04% 574,257,176 100% (1,971,217) 0.34%
(d) As at 31 December 2011, the banlance of other receivables accounts of Yudean Group is amount to RMB5,210,000 for government grant (31 December 2010: Nil).
(e) In 2011, the Group withdrew before the annual verification of bad loans of 763,039 yuan has been. (f) In 2011, the group without actual verification of other receivables.
- 54 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(3) Other receivables (Cont’d)
(g) As at 31 December 2010, the Group’s five largest other receivables balances are as follows:
Relationship with % of total other Yudean Group Amount Period receivables
Yudean Western Associates 26,508,842 Less than 1 Year 27.06% Shanxi Energy Associates 20,842,013 Less than 1 Year 21.28% Yudean Environment Less than 1 Year Protection Associates 5,853,102 5.97% GP Power Parent company 5,210,000 Less than 1 Year 5.32% Lincang Yuntou Controlled by Yudean 5,011,712 Less than 1 Year 5.12% 63,425,669 64.75%
(h) Other receivables due from related parties are as follows:
31 December 2010 31 December 2009
(%) (%)
Ratio of Total Provision Ratio of Total Provision
Relationship with Account for bad Account for bad Yudean Group Amount Receivable debts Amount Receivable debts
Yudean Western Associates 26,508,842 27.06% - 72,114,584 12.60% - Shanxi Energy Associates 20,842,013 21.28% - 204,333,143 35.70%- Yudean Environment Protection Controlled by Yudean 5,853,102 5.97% - 766,176 0.13% - GP Power Holding Company 5,210,000 5.32% - - - - Lincang Yuntou Associate 5,011,712 5.12% - 5,009,946 0.88% - Shajiao C Controlled by Yudean 2,651,692 2.71% - 1,635,277 0.29% - Yudean Properties Associate 536,768 0.55% - - - - Weixin Associate - - - 260,701,555 45.55% - Yudean Zhiye Associate 180,320 0.18% - - - - Shenzhen Guang Qian The Group’s associate and Controlled by Yudean 35,000 0.04%- - -- Guangdong Huizhou Controlled by Yudean Power Generation Company (Huizhou Power) 20,000 0.02%- - --
544,560,681 95.15% - 508,894,938 87.96% -
(i) As at 31 December 2011 and 31 December 2010, no other receivables balances are dominated in foreign currencies.
- 55 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(4) Advances to suppliers
(a) The ageing of advances to suppliers is analysed below:
31 December 2011 31 December 2010 %of total %of total amount balance amount balance
Within 1 year 143,475,165 44.60% 455,391,128 68.11% 1-2 years 176,858,200 54.98% 181,184,160 27.10% 2-3 years 630,134 0.20% 31,593,891 4.73% Over 3 years 729,992 0.22% 427,078 0.06% 321,693,491 100% 668,596,257 100%
The balances with ageing over one year represent the prepayment or deposits paid to construction and equipment suppliers.
(b) As at December 31 2011, the Group’s largest five advances to suppliers balances are as follow:
Relationship with the Group Amount % of total Prepaid year Reasons for unsettling
Guangdong Electric Related party 2010 and 2011 Purchase deposits, has not expired Fuel Supply Co., Ltd according to the contract (“Fuel Supply”) 250,772,991 77.95% 韶关发电厂 同受粤电集团 公司控制 50,000,000 15.54% 2011 年 预付材料款 中国太平洋财产保险 第三方 股份有限公司广东 分公司 4,163,736 1.29% 2011 年 预付财产保险未摊完的余额 深圳天鑫保险经纪有 同受粤电集团 限公司“深圳天鑫”( ) 公司控制 4,065,598 1.26% 2011 年 预付财产保险未摊完的余额 湛江宁铁物流有限责 任公司 第三方 3,870,000 1.20% 2011 年 预付运输费 546,650,006 81.77%
(c) At 31 December 2011, no prepaid in prepayments of our company hold above 5% (including 5%) voting shares’ Shareholders funds: (31 December 2011: Nil)
- 56 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(4) Advances to suppliers (Cont’d)
(d) Prepayments to related parties as follows:
31 December 2011 31 December 2010 Provi Provi Relationship with the Group Amount % of total sion Amount % of total sion
Fuel Supply Associate and under common control by Yudean 396,810,766 59.35%- 477,688,698 60.07%- Shaoguan under common Power control by Yudean Plant D Co., Ltd. (“Shaogua n Plant D”) 50,000,000 15.54%- - -- Shenzhen under common Tianxin control by Yudean Company 4,065,598 1.26%- - --
(e) As at 31 December 2010 and 31 December 2009, no prepayments balances are dominated in foreign currencies.
(5) Inventory
(a) Inventory categories are listed as follows:
31 December 2011 31 December 2010 Provision for Provision for Original cost inventory Book value Original cost inventory Book value
Fuel 1,098,814,992 - 1,098,814,992 606,778,427 - 606,778,427 Spare parts 312,333,938 (21,580,149) 290,753,789 241,105,399 (8,630,653) 232,474,746 Others 21,008,039 - 21,008,039 12,994,678 - 12,994,678 1,432,156,969 (21,580,149) 1,410,576,820 860,878,504 (8,630,653) 852,247,851
(b) Movement of inventory provision is as follows:
31 December Reduction 31 December 2010 Addition Reversal Write off 2011
- 57 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only] Spare parts (8,630,653) (12,949,496) - - (21,580,149)
- 58 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(5) Inventory (Cont’d)
(c) Inventory provision is analysed as follows:
Reason of accrual Inventory provision % of reversal reversal during accounting for the year yearend total balance
Spare parts The difference of the net realizable - - value lower than the carrying amount
(6) Available-for-sale financial assets
31 December Change of fair 31 December 2010 Sold in 2011 value 2011 Note 8.26 Available-for-sale financial assets Investment in Shenzhen Energy Investment Co., Ltd. ("Shenzhen Energy") (i) 70,630,001- (19,390,000) 51,240,001 Investment in Shenergy Co. Ltd. (“Shenergy”) (ii) 282,474,044- (27,581,017) 254,893,027 353,104,045- (46,971,017) 306,133,028
(i) As at 31 December 2011, the Company hold Shenzhen Energy A share amounted to 7,000,000, and the investment cost is RMB15,890,628. The Company states this investment at fair value determined by reference to the quoted price in an active market. During the year, a fair value gain of approximately RMB19,390,000 (2010: loss of RMB24,290,000), was recognized in equity.
(ii) The Company purchased 37,021,500 shares of Shenergy on 11 June 2007, with the investment cost of RMB235,837,988. As of 31 December 2010, this investment was stated at fair value determined by reference to the quoted price in an active market. A fair value gain of RMB27,581,017 (2010: loss of RMB138,830,625) was recognised in equity.
- 59 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(7) Long-term receivable and non-current assets maturing within one year
31 December 2011 31 December 2010
Deposit of financial lease (a) 58,226,891 17,746,446 Long-term receivable(b) 423,780,000 15,580,000 482,006,891 33,326,446
(a) As at 31 December 2012, the deposit of finance lease are the present value of Zhongyue Energy's deposit of RMB50,000,000(note 12) and the deposit of RMB50,000,000 of Jinhai Power for the finance lease of fixed assets. (note 12) (Note 6(12) (a)).
(b) The long-term receivable balances are all entrust loans that the Group provides to associates, details are listed as follows:
Accumulat Annual 31 ive interest Annual December accrued Trustee Borrower Principal rate Due date interest 2010 interest Provision
GPGC Finance Shanxi Energy 153,200,000 6.72% 29/05/2014 6,177,024 153,200,000 - -
Industrial Bank Weixin Yuntou 100,000,000 6.41% 03/03/2014 5,408,667 100,000,000 - - 160,000,000 6.41% 03/03/2014 8,340,733 160,000,000 - - Industrial Bank Lincang Yuntou Yudean Wate Power Co., Ltd. (“Lincang Yuntou”) 2,500,000 6.90% 30/10/2013 167,303 2,500,000 - - 3,280,000 6.90% 30/10/2014 219,502 3,280,000 - -
2,500,000 6.90% 30/11/2013 166,635 2,500,000 - - 2,300,000 6.90% 30/11/2014 153,304 2,300,000 - -
423,780,000 20,633,168 423,780,000 - -
(8) Long-term equity investment
31 December 2011 31 December 2010
Associates (a) 5,337,015,086 4,991,865,647 Other long-term equity investments (b) 475,503,707 477,303,707 5,812,518,793 5,469,169,354 Less: Provision for iimpairment of long-term equity investments -- 5,812,518,793 5,469,169,354
- 60 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only] The long-term investments of the Group are not subject to restriction on conversion into cash or restriction on remittance of investment income.
The associates of the group are without quoted prices.
- 61 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(8) Long-term equity investment (Cont’d)
(a) Associates
本年增减变动 Current year Net profit Cash dividends voting impairme accrual Accounting Original 31 December Addition or adjusting by equity declared this Other equity 31 December interest rights nt impairment method investment cost 2010 reduction method year movement 2011 held held provision provision (Note 6(41))
Shenzhen Guang Qian Equity Method 414,882,600 619,994,288 - 116,627,197 (253,412,830) - 483,208,655 40% 40% - - Guangdong Huizhou LNG Power Co., Ltd. Equity Method (“Huizhou LNG”) 308,160,000 550,598,195 - 161,305,658 (201,995,800) - 509,908,053 32% 32% - - Guangdong Red Gulf Electric Power Co., Ltd. Equity Method (“Red Gulf”) 687,437,500 745,213,406 - 20,377,936 (62,985,277) 215,000 702,821,065 25% 25% - - Fuel Supply Equity Method 220,500,000 383,058,799 - 49,887,996 (33,678,914) - 399,267,881 35% 35% - - Yunnan Baoshan Binglang River Hydroeletric Equity Method Power Co., Ltd. (“Binglang River”) 252,858,100 227,320,553 - 990,316 - - 228,310,869 29% 29% - - Shanxi Energy Equity Method 400,000,000 455,397,500 - 73,748,943 - - 529,146,443 40% 40% - - Yudean Finance Equity Method 500,000,000 433,063,516 125,000,000 61,499,830 (32,221,946) - 587,341,400 25% 25% - - Yudean Western Equity Method 220,324,000 166,900,461 70,200,000 10,368,845 - - 247,469,306 26% 26% - - Guangdong Yudean Shipping Co., Ltd. Equity Method (“Yudean Shipping”) 863,030,000 912,818,731 - 28,345,763 (19,417,800) - 921,746,694 35% 35% - - Guangdong Yudean Shibeishan Wind Power Equity Method Co., Ltd. (“Shibeishan”) 69,510,000 71,322,774 - 5,098,719 (1,560,422) - 74,861,071 30% 30% - - Lincang Yuntou Equity Method 93,100,000 57,925,467 34,300,000 (2,657,236) - - 89,568,231 49% 49% - - Weixin Yuntou Equity Method 494,000,000 303,952,215 190,000,000 (24,384) - - 493,927,831 40% 40% - - Huaneng Shantou Wind Power Co., Ltd. Equity Method (“Shantou Wind Power”) 48,547,500 50,714,660 5,113,725 11,412,282 (10,792,500) - 56,448,167 25% 25% - - Yangshan Jiangkeng Hydroelectric Station Equity Method (“Jiangkeng”) 5,000,000 5,997,810 - 495,434 (630,628) - 5,862,616 25% 25% - -
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only] Yangshan Zhongxinkeng Power Co., Ltd. Equity Method (“Zhongxinkeng”) 6,060,000 7,587,272 - 728,158 (1,188,626) - 7,126,804 40% 40% - - 4,991,865,647 424,613,725 538,205,457 (617,884,743) 215,000 5,337,015,086 - -
- 63 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(8) Long-term equity investment (Cont’d)
(b) Other long-term equity investments
Current year accrual Cash dividends Accounting Original 31 December Current year 31 December voting rights impairment impairment declared this method investment cost 2009 movement 2010 interest held held provision provision year, (Note 6(41)(b))
Sunshine Insurance Group Corporation Limited Cost method 356,000,000 356,000,000 - 356,000,000 5.34% 5.34% - - - Shenzhen Capital Group Co., Ltd (“Shenzhen Cost method Capital”) 115,000,000 115,000,000 - 115,000,000 3.67% 3.67% - - 11,025,000 Maoming Energy-saving Coral Water Mixture Cost method Co.,Ltd (“Maoming Energy-saving”) 1,800,000 1,800,000 (1,800,000) - 0.00% 0.00% - - - Maoming Electric Water Supply Co., Ltd Cost method (“Maoming Electric Water Supply”) 903,707 903,707 - 903,707 15.00% 15.00% - - - GMG International Tendering Co., Ltd (“GMG”) Cost method 3,600,000 3,600,000 - 3,600,000 1.97% 1.97% - - 540,000
477,303,707 (1,800,000) 475,503,707 - - 11,565,000
- 64 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(9) Investment in associates
31 December 2011 2011 % interest hold % voting rights Total asset Total liability Net Asset Revenue Net profit/(loss)
Shenzhen Guang Qian 40% 40% 2,811,031,566 1,606,284,760 1,204,746,806 1,706,453,199 291,567,991 Shanxi Energy 32% 32% 3,034,398,456 1,515,972,087 1,518,426,369 1,797,846,716 504,080,181 Red Gulf 25% 25% 11,613,407,471 8,740,261,413 2,873,146,058 4,002,151,498 81,511,744 Huizhou LNG 35% 35% 5,057,166,986 4,127,868,867 929,298,119 29,034,367,075 142,537,131 Fuel Supply 29% 29% 3,755,892,999 3,023,601,090 732,291,909 328,576,933 3,414,879 Yudean Finance 40% 40% 1,822,875,867 437,196,532 1,385,679,335- 184,372,356 Binglang River 25% 25% 12,652,216,240 10,355,487,904 2,296,728,336 587,796,306 245,999,321 Yudean Shipping 26% 26% 8,915,716,979 7,057,646,260 1,858,070,719 3,717,539,980 39,880,168 Yudean Western 35% 35% 6,675,656,243 4,042,174,978 2,633,481,265 1,475,979,674 80,987,891 Shibeishan 30% 30% 535,682,007 285,182,013 250,499,994 86,593,582 16,995,731 Weixin Yuntou 49% 49% 482,359,454 299,825,236 182,534,218 16,931,643 (5,422,932) Shantou Wind Power 40% 40% 5,311,277,282 4,146,297,180 1,164,980,102 44,599 (60,959) Lincang Yuntou 25% 25% 532,734,055 283,997,590 248,736,465 94,212,298 45,649,129 Jiangkeng 25% 25% 27,722,391 4,883,315 22,839,076 6,682,366 1,981,735 Zhongxinkeng 40% 40% 28,175,052 9,334,507 18,840,545 6,955,800 1,820,396
- 65 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(9) Investment in associates (Cont’d)
31 December 2010 Year 2010
Legal %
Type of Place of Representativ Organization Principle Registered interest % voting
corporation registration e code activities capital hold rights Total Assets Total Liabilities Net Assets Revenue Net Profit
Shenzhen Guang Qian State-holding Shenzhen Lu Ningxian 70842633-0 Electricity 1,030,292,500 40% 40% 2,811,031,566 1,606,284,760 1,204,746,806 1,706,453,199 291,567,991 Shanxi Energy State-holding Taiyuan Liang Jian 790216374 Coal 1,000,000,000 40% 40% 3,034,398,456 1,515,972,087 1,518,426,369 1,797,846,716 504,080,181 Red Gulf State-holding Shanwei Wen Lianhe 76061818-8 Electricity 2,549,750,000 25% 25% 11,613,407,471 8,740,261,413 2,873,146,058 4,002,151,498 81,511,744 5,057,166,986 4,127,868,867 929,298,119 29,034,367,07 142,537,131 Huizhou LNG State-holding Huizhou Gao Shiqiang 76380066-3 Electricity 963,000,000 32% 32% 5 Fuel Supply State-holding Guangzhou Zhu Dejun 190326035 Fuel 630,000,000 35% 35% 3,755,892,999 3,023,601,090 732,291,909 328,576,933 3,414,879 Yudean Finance State-holding Guangzhou Yang Xuanxing 71226867-0 Finance 1,000,000,000 25% 25% 1,822,875,867 437,196,532 1,385,679,335 - 184,372,356 Binglang River State-holding Baoshan Liu Yibin 75066253-X Electricity 613,000,000 29% 29% 12,652,216,240 10,355,487,904 2,296,728,336 587,796,306 245,999,321 Yudean Shipping State-holding Guangzhou Liang Jian 775555474 Shipping 1,600,000,000 35% 35% 8,915,716,979 7,057,646,260 1,858,070,719 3,717,539,980 39,880,168 Yudean Western State-holding Guangzhou Li Zhuoxian 75285691-X Electricity 577,400,000 26% 26% 6,675,656,243 4,042,174,978 2,633,481,265 1,475,979,674 80,987,891 Shibeishan State-holding Guangzhou Li Chengjun 763848720 Electricity 231,700,000 30% 30% 535,682,007 285,182,013 250,499,994 86,593,582 16,995,731 Weixin Yuntou State-holding Shaotong Chen Yixun 77859169-X Electricity 602,400,000 40% 40% 482,359,454 299,825,236 182,534,218 16,931,643 (5,422,932) Shantou Wind Power State-holding Shantou Yang Qing 783853842 Electricity 159,267,000 25% 25% 5,311,277,282 4,146,297,180 1,164,980,102 44,599 (60,959) Lincang Yuntou State-holding Lincang Yang Guowen 77048814-5 Electricity 126,600,000 49% 49% 532,734,055 283,997,590 248,736,465 94,212,298 45,649,129 Jiangkeng State-holding Qingyuan Li Guansheng 61806551-9 Electricity 22,839,076 25% 25% 27,722,391 4,883,315 22,839,076 6,682,366 1,981,735 Zhongxinkeng State-holding Qingyuan Lin Yang 70760320-0 Electricity 15,150,000 40% 40% 28,175,052 9,334,507 18,840,545 6,955,800 1,820,396
- 66 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(10) Investment properties
31 December Current year Current year 31 December 2010 addition reduction 2011
Cost －Buildings 20,135,165 - - 20,135,165
Accumulated depreciation －Buildings (7,391,319) (633,619) - (8,024,938)
Net book value －Buildings 12,743,846 (633,619) - 12,110,227
As at 31 December 2011, directors of the Group considered that no need to provide provision for impairment for investment properties (31 December 2010: Nil).
For the year 2011, the accumulated depreciation of investing properties is RMB632,631 (2010: RMB 632,631).
- 67 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(11) Fixed assets
31 December Current year Sales and lease Other current 31 Decemb 2010 Finance lease addition bank transfer out year deduction 20
Book Value 22,490,960,975 2,262,100,000 4,302,309,456 (2,205,016,047) (199,062,176) 26,651,292,20 Buildings 5,892,659,235 - 1,041,847,773 - (5,587,275) 6,928,919,73 Electric utilities in service 16,119,154,020 2,262,100,000 3,202,046,498 (2,205,016,047) (184,718,588) 19,193,565,88 Motor vehicle 303,890,951 - 9,402,224 - (4,665,671) 308,627,50 Other equipment 175,256,769 - 49,012,961 - (4,090,642) 220,179,08
Current year Transfer to Other current Finance lease accrual Intangible Assets year deduction Accumulated depreciation (11,055,403,657 (1,232,187,158) 813,197,154 176,538,726 (11,297,854,93 Buildings (2,149,196,713 (218,856,005) - 247,325 (2,367,805,39 Electric utilities in service (8,603,140,601 (968,193,218) 813,197,154 168,958,916 (8,589,177,74 Motor vehicle (174,614,981 (25,365,104) - 3,720,219 (196,259,86 Other equipment (128,451,362 (19,772,831) - 3,612,266 (144,611,92
Net Value 11,435,557,318 15,353,437,27 Buildings 3,743,462,522 4,561,114,34 Electric utilities in service 7,516,013,419 10,604,388,13 Motor vehicle 129,275,970 112,367,63 Other equipment 46,805,407 75,567,16
Provision for impairment loss (d) (228,331,363 (266,657,317) 8,223,583 (486,765,09 Buildings (84,289,158 - - (84,289,15 Electric utilities in service (140,283,597 (266,657,317) 8,223,583 (398,717,33 Motor vehicle (2,245,506 - - (2,245,50 Other equipment (1,513,102 - - (1,513,10
Net book value 11,207,225,955 14,866,672,17 Buildings 3,659,173,364 4,476,825,18 Electric utilities in service 7,375,729,822 10,205,670,80 Motor vehicle 127,030,464 110,122,13 Other equipment 45,292,305 74,054,05
- 68 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(11) Fixed assets (Cont’d)
(a) In 2011, the amount of depreciation expense charged to operating costs, general and administrative expenses and construction in progress were RMB1,179,651,814, RMB23,602,625 and RMB28,932,719 (2010: RMB1,173,178,340, RMB26,636,665and RMB10,819,327 respectively).
(b) Original cost of fixed assets transferred from the construction in progress is RMB 5,152,625,801 (2010: RMB 544,658,579).
(c) As two sets 125,000 kilowatts coal-fired generating units of Yuejia Electric have been included in the Guangdong Provincial Development and Reform Commission as the Taepo power plants, "use large and dispose small” coal-fired generating units shut down to supporting the project. Therefore, Yuejia Electric under the two generating units of the shutdown plan, set aside for depreciation in 2011, and to consider the removal of buildings and equipment expenses, in accordance with net book value of fixed assets, full provision for impairment of RMB259,932,877.
- 69 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(12) Construction in progress (“CIP”)
31 December 2010 31 December 2009
Provision Provision for for Book value Impairment Net book value Book value Impairment Net book value
Zhongyue Energy project 5,622,227,874 - 5,622,227,874 4,424,392,334 - 4,424,392,334
Jinhai 3#,4# generate sets 1,040,279,978 - 1,040,279,978 193,894,437 - 193,894,437
Yuejiang 2x600MW upgrade project 1,000,144,266 - 1,000,144,266 461,298,854 - 461,298,854
Zhenneng 30MW#7 set 299,533,138 - 299,533,138 155,668,694 - 155,668,694
Dapu project 279,017,341 - 279,017,341 116,230,328 - 116,230,328
Technology improvement 230,816,938 - 230,816,938 17,229,026 - 17,229,026
Oil Shale Power project 217,138,806 - 217,138,806 156,874,911 - 156,874,911
Humen project 135,208,890 - 135,208,890 118,762,337 - 118,762,337
Jinghai 50KV output 127,286,670 - 127,286,670 118,511,017 - 118,511,017
Coal mixture project 61,426,212 - 61,426,212 50,975,482 - 50,975,482
Bohe project - - - 4,019,991,816 - 4,019,991,816
Zhanjiang Crossroad project - - - 79,207,245 - 79,207,245 Xuwen Yongshi Wind Power - - - 26,473,034 - 26,473,034 Xuwen Yangqian Wind Power 147,661,428 (796,461) 146,864,967 24,557,090 - 24,557,090
Others 9,160,741,541 (796,461) 9,159,945,080 9,964,066,605 - 9,964,066,605
5,622,227,874 - 5,622,227,874 4,424,392,334 - 4,424,392,334
- 70 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(12) Construction in progress (Cont’d)
(a) Movement of major CIP projects
Ratio of Progress Ratio of invest of Accumulated Including： current year Transfer to fixed ment Construc capitalised current year capitalised 31 December Current year assets during 31 December to tion borrowing capitalised borrowing Name of projects Budget 2011 addition the current year 2011 budget （b） costs borrowing costs costs Sources of funds (note6(42))
Jinhai 3#,4# generate sets 7,174,620,000 4,424,392,334 1,197,835,540- 5, 622,227,874 78% 99% 545,316,863 255,027,593 5.70% Borrowing Borrowing、own Zhenneng 30MW#7 set 2,478,750,000 193,894,437 849,582,530 (3,196,989) 1,040,279,978 43% 43% 61,709,740 48,363,136 6.85% capital 2x600MW upgrade project 4,960,000,000 461,298,854 542,527,143 (3,681,731) 1,000,144,266 20% 20% 66,301,318 45,219,734 5.75% Borrowing Technology improvement N/A 155,668,694 385,194,069 (241,329,625) 299,533,138 不适用 不适用 --- Own capital Jinghai 50KV output 352,273,800 116,230,328 162,787,013 - 279,017,341 79% 79%--- Own capital Borrowing、own Xuwen Yongshi Wind Power 494,830,000 17,229,026 213,587,912- 230,816,938 47% 47% 706,636 706,636 1.12% capital Dapu project 5,000,000,000 156,874,911 60,263,895- 217,138,806 4% 4% 18,509 ,338 4,209,138 6.03% Borrowing Oil Shale Power project 3,300,000,000 118,762,337 16,446,553- 135,208,890 4% 4% - - - Own capital Humen project 7,789,510,000 118,511,017 8,775,653 - 127,286,670 2% 2% - - - Own capital 10,936,660,00 Bohe project 0 50,975,482 10,450,730 - 61,426,212 1% 1% - - - Own capital Zhongyue Energy project Borrowing、own (including finance lease)( 4,800,000,000 4,019,991,816 746,721,487 (4,766,713,303) - 99% 100% 618,824,491 159,032,477 5.90% capital Coal mixture project 90,450,000 79,207,245 5,473,145 (84,680,390) - 94% 100%--- Own capital
- 71 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only] Crossroad project 28,000,000 26,473,034 835,225 (27,308,259) - 98% 100%--- Own capital Others N/A 24,557,090 148,023,381 (25,715,504) 146,864,967 N/A N/A--- 1,311,368,38 9,964,066,605 4,348,504,276 (5,152,625,801) 9,159,945,080 6 512,558,714
- 72 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(12) Construction in progress (Cont’d)
(a) As at 31 December 2011, the progress of the major CIP projects are assessed based on their actual completion status. (b) As at 31 December 2011, part of the construction units have not yet obtained the relevant approval documents, in view of the smooth application process for the relevant approval documents, the management is expected to obtain the relevant approval documents in accordance with the scheduled timetable. In addition, management expects that the production of new units will bring stable cash flow in future business activities. Therefore there is lower risk in the impairment of the construction unit
(13) Construction materials
31 December Current year Current year 31 December 2010 addition reduction 2011
Special equipment 1,146,769,252 1,221,740,945 (1,344,879,478) 1,023,630,719 Tools 7,449,851 98,026,209 (105,424,764) 51,296 1,154,219,103 1,319,767,154 (1,450,304,242) 1,023,682,015
(14) Disposal of fixed assets
31 December 201 31 December 201 Disposal cause 1 0
Removed for technical transformation and not Electric utilities in service 4,164,516 13,259,341 yet disposed
As at 31 December 2011, the group does not existed fixed assets which are transferred into disposal of fixed assets more than one year.
The group raised RMB 6,416,927 provision of the above utilities in this year.
- 73 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(15) Intangible assets
Current year Current year 31 December 2010 Addition reduction 31 December 2011
Book Value 947,659,382 70,513,503 - 1,018,172,885 Electric transmission projects 442,517,684 - - 442,517,684 Land use rights 432,411,537 64,504,470 - 496,916,007 Sea use right 26,849,101 - - 26,849,101 Transportation project 22,468,672 - - 22,468,672 Software 23,412,388 6,009,033 - 29,421,421
Accumulated depreciation (475,778,824) (27,244,789) - (503,023,613) Electric transmission projects (374,442,819) (10,598,801) - (385,041,620) Land use rights (63,998,845) (11,183,031) - (75,181,876) Sea use right (2,149,524) (536,982) - (2,686,506) Transportation project (20,218,248) (364,934) - (20,583,182) Software (14,969,388) (4,561,041) - (19,530,429)
Provision - (23,426,500) - (23,426,500) Electric transmission projects - (23,426,500) - (23,426,500) Land use rights - - - - Sea use right - - - - Transportation project - - - - Software - - - -
Net Value 471,880,558 491,722,772 Electric transmission projects 68,074,865 34,049,564 Land use rights 368,412,692 421,734,131 Sea use right 24,699,577 24,162,595 Transportation project 2,250,424 1,885,490 Software 8,443,000 9,890,992
In 2011, the amortization expense is RMB27,244,789 (2010: RMB25,102,655).
125,000 kilowatts coal-fired generating units of Yue Jia Electric Power Plant is to be shut down by Guangdong Province Development and Reform Commission, and management expected that the existing fleet of 135,000 kilowatts of coal-fired generating units will be shut down by the end of the year 2015. Therefore, according to the shut down programs, taking into account of the net realizable value of intangible assets in 2011, the management make RMB 23,426,500 provision for impairment of intangible assets .
(15) Other non current assets
- 74 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
31 December 2011 31 December 2010
Construction Prepayment 148,601,055 - Equipment Prepayment 59,142,351 - Unrealized loss of lease back(a) 279,789,452 - 487,532,858 -
(a) The difference between selling price and book value of the power generation equipment, which will be amortized according to depreciation schedule.
(16) Short-term borrowings
31 December 2011 31 December 2010
Unsecured loans(a) 9,020,000,000 8,327,500,000 Secured loans(b) 298,000,000 - 9,318,000,000 8,327,500,000
As at 31 December 2011, there are no overdue short-term borrowings.
(a) As at 31 December 2011, unsecured borrowings amounted to RMB3,045,000,000 is from Yudean Finance (31 December 2010: RMB2,635,500,000), amounted to RMB 300,000,000 is from Yudean Group (31 December 2010: Nil).
(b) As at 31 December 2011, short-term mortgages for Yuejiang power plant to the National Development Bank borrowing RMB 298000000, with equal electricity charge and accounts receivable as collateral ( December 31, 2010: no ).
In 2011, the weighted average interest rate of short-term borrowings is 5.55 % per annum (2010: 4.53%).
(17) Note Payable
31 December 2010 31 December 2009
Bank acceptance notes 343,083,604 110,000,000
As at 31 December 2011, the balance will due within one year.
- 75 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(18) Accounts payable
31 December 2011 31 December 2010
Fuel payable 2,116,551,880 1,215,184,996 Construction and equipment payable 1,098,131,151 1,295,573,749 Materials payable 158,354,658 86,096,923 Others 76,822,241 39,777,385 3,449,859,930 2,636,633,053
(a) As at 31 December 2011, no balances included in above accounts payable are due to the shareholders of the Company who hold over 5% (including 5%) shares with voting rights (31 December 2009: Nil).
(b) Accounts payable due to related parties:
31 December 2011 31 December 2010
Fuel Supply 1,758,725,434 1,195,469,385 Maoming Thermal 60,178,485 42,726,239 Yudean Environment Protection 6,314,656 3,228,894 Guangdong Yudean Electricity and Water Maintenance and Fixing Co. (“Yudean Electricity and Water”) 737,790 524,881 Yudean Property 608,247 - Yunfu Jinhui Electric Service Co., Ltd (“Jinhui Electric”) 90,582 90,582 1,826,655,194 1,242,039,981
(c) As at 31 December 2011, the balance with ageing over than one year is RMB209,106,680 (31 December 2009: RMB403,256,050), and it is mainly represent payables to construction, equipment suppliers. Because these projects have not been completed / accepted of completion, such balances have not been finally settled.
(d) As at 31 December 2011and 31 December 2010, no accounts payable balances are denominated in foreign currencies.
- 76 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(19) Employee benefits payable
31 December Current year Current year 31 December 2010 addition reduction 2011
Wages and salaries, bonuses, allowances and subsidies 94,419,843 717,293,159 (774,464,078) 37,248,924 Staff welfare 11,016,578 77,605,509 (77,605,509) 11,016,578 Social security contributions 1,427,860 135,821,887 (130,208,884) 7,040,863 Including: Medical insurance 1,414,642 36,438,512 (30,825,509) 7,027,645 Basic pensions, 9,545 90,752,204 (90,752,204) 9,545 Unemployment insurance 3,673 3,012,329 (3,012,329) 3,673 Work injury insurance - 3,542,951 (3,542,951) - Maternity insurance - 2,075,891 (2,075,891) - Housing funds 124,408 120,153,516 (120,277,924) - Labor union funds and employee education funds 29,254,606 33,517,257 (27,245,043) 35,526,820 Early retirement obligation 109,554,011 10,990,690 (6,149,166) 114,395,535 Others 2,892,135 3,337,167( 5,995,100) 234,202 248,689,441 1,098,719,185 (1,141,945,704) 205,462,922
As at 31 December 2011, there are no payables in default in Employee benefits payable, and the balances is expected to be all distributed and used by 2012, social insurance charges and housing fund will be turned in relative government branch, early retirement obligation is expected to be all distributed and used by 2025.
(20) Tax payable
31 December 2011 31 December 2010
Enterprise income tax payable/(prepaid) 20,757,183 109,229,563 Value-added-tax payable 2,024,111 5,244,609 Business tax payable 1,311,765 1,046,746 City maintenance and construction tax payable 1,181,880 357,838 Educational surcharge payable 1,138,468 573,779 Individual Income tax payable 21,159,117 26,288,702 House tax payable 8,929,719
- 77 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only] 4,580,088 Others 8,748,419 6,039,748 65,250,662 153,361,073
- 78 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(21) Interest Payable
31 December 2011 31 December 2010
Interest payable for short-term borrowings 22,414,662 12,000,092 Interest payable for long-term borrowings that interest are payable by installment and 11,046,615 7,141,453 principal at maturity Interest payable for corporate bond (Note 89,205,479 89,205,479 6(29)) 122,666,756 108,347,024
(22) Dividends payable
31 December 2011 31 December 2010
Non-tradable shareholders payable 7,323,298 7,112,530 Shaoguan Power Plant D Co., Ltd. 3,521,190 3,521,190 (“Shaoguan Plant D”) Qujiang Electric 1,408,476 1,408,476 Chaokang Investment Co., Ltd.(“Chaokang 3,300,000- Investment”) 15,552,964 12,042,196
(23) Other payables
31 December 2011 31 December 2010
Performance guarantee deposits from 601,765,566 576,065,825 construction and equipment suppliers Construction and equipment payable 122,318,121 5,867,230 Advance from Shaoguan Electric Power Plant 30,083,004 224,760,861 Rent fee for Shaoguan Plant D payable 1,750,737 1,750,737 Others 61,331,505 69,894,828 817,248,933 878,339,481
(a) As at 31 December 2011, no balances included in above other payables are due to the shareholders of the Company who hold over 5% (including 5%) shares with voting rights (31 December 2010: Nil).
- 79 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(23) Other payables (Cont’d)
(b) Other payables due to related parties are as follows:
31 December 2011 31 December 2010
Shaoguan Electric Power Plant 30,083,004 224,760,861 Guangdong Yudean Environment Protection 8,004,511 2,561,138 Co. Shaoguan Plant D 1,750,737 1,750,737 Others (Note 8(5)(k)) 1,445,000 140,759 41,283,252 229,213,495
(c) As at 31 December 2011, the balances with ageing over one year amounted to RMB94,500,910 (31 December 2010: RMB176,874,733) are mainly represent the performance guarantee deposits from construction and equipment suppliers, and they have not been settled.
(d) As at 31 December 2011 and 31 December 2010, no other payables balances are denominated in foreign currencies.
(24) Current portion of non-current liabilities
31 December 2011 31 December 2010
Impawned borrowings (a) 625,670,000 550,340,000 Current portion of long term payables (Note 6(27)) 314,471,518 77,393,453 940,141,518 627,733,453
(a) Current portion of long term payables
31 December 2011 31 December 2010
Pledge loan(i) 247,550,000 204,020,000 Credit loan 378,120,000 346,320,000 625,670,000 550,340,000
- 80 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(24) Current portion of non-current liabilities (Cont’d) i. As at 31 December 2011, the long-term borrowing was impawned by the future revenue from power generation and the related trade receivables (Note 6(2)(e)) as follows:
31 December 2011 31 December 2010
Yuejiang Electric 157,550,000 114,020,000 Zhongyue Energy 90,000,000 90,000,000 247,550,000 204,020,000 ii. The largest five current portion balances of long-term borrowings:
Beginning date Expiring date Currency Interest Balance at Balance at Rate 31 December 2010 31 December 2009
China Construction Bank 2006-05-29 2012-12-31 RMB 5.76% 159,600,000 111,000,000 Industrial and Commercial 2006-04-25 2012-12-31 RMB 6.12% 134,480,000 100,000,000 Bank of China RMB Bank of China 1998-06-30 2012-12-31 6.12% 130,590,000 90,000,000 RMB Agricultural Bank Of China 2007-12-04 2012-12-03 5.94% 111,000,000 87,060,000 RMB Yudean Finance 2007-12-10 2012-12-05 6.35% 50,000,000 50,000,000 585,670,000 438,060,000
As at 31 Dec 2011, the weighted average annual interest rate of long-term loans due in one year is 6.17% (31 Dec 2010:5.42%).
- 81 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(25) Loan-term borrowings
Currency 31 December 2011 31 December 2010
Impawned borrowings(a) RMB 1,231,880,000 1,415,900,000 Unsecured borrowings RMB 5,809,806,371 4,904,820,000 Euro Investment Bank USD borrowings(Note6(7)(a)) 125,467,037- 7,167,153,408 6,320,720,000
(a) As at 31 December 2011, the long-term borrowing was impawned by the future revenue from power generation and the related trade receivables (Note 6(2)(e)) as follows:
31 December 2011 31 December 2010
Yuejiang Electric 391,880,000 505,900,000 Zhongyue Energy 840,000,000 910,000,000 1,231,880,000 1,415,900,000
(b) The top five of long-term borrowings
Beginning date Expiring Currency Interest 31 December 2011 31 December 2010 date Rate
China Construction Bank 2006-05-29 2021-01-12 RMB 5.76% 2,417,800,000 1,100,000,000 RMB Agricultural Bank Of China 2007-12-04 2025-12-03 5.94% 2,159,000,000 2,109,000,000 RMB Industrial and Commercial 2006-04-25 2022-04-23 6.12% 1,384,745,000 910,000,000 Bank of China RMB Yudean Finance 2007-07-17 2025-12-05 6.35% 900,000,000 950,000,000
RMB Bank of China 1998-06-30 2020-06-21 6.12% 273,200,000 360,260,000 7,134,745,000 5,429,260,000
The weighted average interest rate of long-term borrowings is 5.89 % per annum (2010: 5.44%).
- 82 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(26) Debentures payable
31 December Current year Current year 31 December 2010 addition deduction 2011
Company bonds 1,988,739,874 2,702,430 - 1,991,442,304
On 10 March 2008 after CSRC’s approval, the Company successfully issued long term debts with an aggregate principal amount of RMB2,000,000,000. The term of long term debts is 7 years, deducted by the issuance related expenses amounted to RMB18,917,012, the total fund financed amounted to RMB1,981,082,988. Interest is calculated from 10 March 2008 with annual interest rate of 5.5%.
As at 31 December 2011, the debentures payable is measured at amortised cost using the effective interest method. The effective interest rate is 5.67%.
Interest payable of the debentures is analysed as below:
31 December Interest Interest 31 December 2010 accrued Paid 2011 (Note 6(42))
Interest payable (Note 6(24)) 89,205,479 110,000,000 (110,000,000) 89,205,479
- 83 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(27) Long term payable
31 December 2011 31 December 2010
Finance leasing payable 2,055,635,005 576,051,066 Less:due within one year finance leasing (314,471,518) (77,393,453) payable 1,741,163,487 498,657,613
Finance leasing payable is the balance of the minimum lease payments of the finance leasing rental expense of Jinghai Electirc, Yuejiang Electric and Zhongyue Energy less the unrecognized financing charges (Note 12). The Company has provided guarantee for Zhongyue Energy and Yuejiang Electric’s finance leasing.
(b) As at 31 December 2011 and 31 December 2010, no long term payables balances are denominated in foreign currencies.
The Long term payable is as follows:
Initial Rate( Interest Conditi
Term Amount %) Payable Balance on
Jinghai Jiaoyin Financial Electric leasing Co., Ltd. ( “ Jiaoyin Financi Financial 10 1,000,000, 51,358,4 929,194,97 ng leasing”) year 000 5.31% 84 7 lease Zhongy Financi ue Jiaoyin Financial 10yea 900,000,00 46,786,2 806,637,31 ng Energy leasing r 0 5.93% 23 8 lease Yuejian Jianxin Financial g leasing Co., Ltd. Electric ( “ Jianxin 7.20% Financi Financial 362,100,00 -7.33 10,327,6 319,802,71 ng leasing”) 5year 0 % 28 0 lease 2,262,100, 108,472, 2,055,635,0 000 335 05
(28) Deferred tax assets and liabilities
(a) Deferred tax assets before offsetting:
31 December 2011 31 December 2010 Deferred tax Deductible Deferred tax Deductible
- 84 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only] assets temporary assets temporary difference difference
Tax deductible losses 88,911,530 355,646,121 63,222,706 252,890,826 Employee benefits payable 11,592,944 46,371,774 15,003,627 60,014,506 Provision for assets impairment 9,267,648 37,070,593 14,736,237 58,944,949 Net income from test run included in CIP 6,352,749 26,137,026 6,526,996 29,041,140 Government grants related to assets 5,384,615 21,538,462 6,153,846 24,615,385 Amortization of pre-operating expenses 2,161,626 9,833,207 5,899,911 26,020,515 123,671,112 496,597,183 111,543,323 451,527,321
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(28) Deferred tax assets and liabilities (Cont’d)
(b) Deferred tax liabilities before offsetting:
31 December 2011 31 December 2010 Taxable Taxable Deferred tax temporary Deferred tax temporary liabilities difference liabilities difference
Available-for-sales investments (Note 6(35)) 13,601,101 54,404,412 25,343,856 101,375,429 Capitalised interest expenses - - 1,344,865 5,603,600 Trial operation expenses in CIP 15,780,764 63,123,048 1,196,466 4,785,860 29,381,865 117,527,460 27,885,187 111,764,889
(c) Unrecognized deferred tax asset for deductable temporary differences and deductable loss of the group is analized as below:
31 December 2011 31 December 2010
Deductable temporary differences 655,071,143 371,711,763 Deductable loss 1,013,499,558 583,266,160 1,668,570,701 954,977,923
(d) Unrecognized deferred tax asset for deductable loss of the group will be expired:
31 December 2011 31 December 2010
2011 - 2,948,397 2012 55,752,164 5,470,569 2013 252,294,713 247,852,340 2014 6,249,504 949,156 2015 332,431,344 326,045,698 2016 366,771,833- 1,013,499,558 583,266,160
- 86 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(16) Other long-term liabilities
31 December 2010 31 December 2009 Government grants related with assets - Desulfurization project for 5# set (i) 24,615,385 27,692,308 Water-freshing project (ii) 2,000,000 2,000,000 unacknowledged financial charges (iii) 17,444,302 - 44,059,687 29,692,308
(i) This represents the government subsidy granted for the 5# generation set desulfurization project of Shajiao Power Plant A (“Shajiao A”), which is a branch of the Company in 2005. It is amortized over the useful lives, 13 years, of related assets.
(ii) This represents the government subsidy granted for water-freshing project of Zhongyue Energy. Until to the approval of these financial statements, this project has not been finished, no amortization accordingly.
(iii) This is the difference of the book value of the Finance lease in facilities and minimum lease payments. Such facilities are under construction, with no amortization.
6 Notes to the consolidated financial statements (Cont’d)
(17) Provision for asset impairment
31 December Current year Current year reductions 31 December 2009 additions Reversal Write-off 2010
Provision for bad debts (17,545,236) (234,560) 10,594,866 5,213,713 (1,971,217) Provision for declines in the value of inventories (6,902,651) (1,728,002)- - (8,630,653) Provision for impairment of fixed assets (236,684,089) (34,407,716)- 42,760,442 (228,331,363) (261,131,976) (36,370,278) 10,594,866 47,974,155 (238,933,233)
(34) Share capital
31 December Current year Current year 31 December 2009 additions decreases 2010 Shares subject to sale restrictions:- Shares held by state-own Companies 141,951 138,047,791 - 138,189,742 Shares held by non-state-own other compan 7,077,786 - (1,770,563) 5,307,223 Including: Shares held by legal persons 5,885,259 - (630,704) 5,254,555 Shares held by individual persons 1,192,527 - (1,139,859) 52,668
- 87 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only] 7,219,737 138,047,791 (1,770,563) 143,496,965
Shares subject to no sale restrictions: - A shares 1,986,857,763 1,789,160 - 1,988,646,923 B shares 665,326,500- (19,250) 665,307,250 2,652,184,263 1,789,160 (19,250) 2,653,954,173 2,659,404,000 139,836,951 (1,789,813) 2,797,451,138
- 88 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(34) Share capital (Cont’d)
31 December Current year Current year 31 December 2008 additions decreases 2009 Shares subject to sale restrictions:- Shares held by state-own Companies 1,232,256,158 - (1,232,114,207) 141,951 Shares held by non-state-own other companies 7,218,987 1,111,196 (1,252,397) 7,077,786 Including: Shares held by legal persons 7,137,656 - (1,252,397) 5,885,259 Shares held by individual persons 81,331 1,111,196 - 1,192,527
1,239,475,145 1,111,196 (1,233,366,604) 7,219,737
Shares subject to no sale restrictions: - A shares 754,602,355 1,232,255,408 - 1,986,857,763 B shares 665,326,500 - - 665,326,500 1,419,928,855 1,232,255,408 - 2,652,184,263 2,659,404,000 1,233,366,604 (1,233,366,604) 2,659,404,000
With the implementation of the share reform scheme on 17 January 2006, the formerly legal person shares were converted into A shares but subject to restrictions of one to three years in their sales. Until 31 December 2010, there are 5,413,380 shares are non-tradable.
According to the Reply of Approval for Non-public Issuance of Stocks by Guangdong Electric Power Development Co., LTD. (issued by CSRC [2010] No. 376) and the signed share purchase agreement between the company and Yudean,
The company issued 138,047,138 shares to the Group. With RMB5.94 per share, the total amount is 820,000,000. Deducting the issuance fee of RMB 10,193,047, the net value is RMB 809,806,953; equity premium is RMB 671,759, 815. These shares are published at Shenzhen Stock Exchange on May 25 2010, and are subject to restrictions of 36 months non-tradable period.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(35) Capital surplus
31 December Current year 31 December 2010 movement 2011
Capital premium (a) 1,667,638,988 (694,338) 1,666,944,650 Revaluation reserves 119,593,718 - 119,593,718 Other capital surplus - Change in fair value of available-for-sale financial assets (Note6(8)) 101,375,429 (46,971,017) 54,404,412 Tax on change in fair value of available-for-sale (Note6 (31)) (25,343,856) 11,742,755 (13,601,101) Transfer from the balance of capital surplus recognised under previous accounting system 20,474,592 - 20,474,592 Others (b) 687,300 215,000 902,300 1,884,426,171 (35,707,600) 1,848,718,571
(a) In 2011, the group purchased 3.11% equity from year Zhenneng Electric, and this caused the increase of capital surplus amounted to RMB 694,338.
(b) In 2011, the associate company of the Group, Red Gulf, has received a subsidy from government for energy conservation, amounted to RMB 860,000(FY 2010：RMB530,000). The Group adopts the surplus according to investment portion, which is RMB 215,500(FY 2010： RMB132,500).
31 December Current year 31 December 2010 movement 2011
Capital premium (a) 995,879,173 671,759,815 1,667,638,988 Revaluation reserves 119,593,718 - 119,593,718 Other capital surplus - - - - Change in fair value of available-for-sale financial assets (Note6(8)) 264,496,054 (163,120,625) 101,375,429 Tax on change in fair value of available-for-sale (Note6 (31)) (66,124,012) 40,780,156 (25,343,856) Transfer from the balance of capital surplus recognised under previous accounting system 20,474,592 - 20,474,592 Others (b) 554,800 132,500 687,300 1,334,874,325 549,551,846 1,884,426,171
- 90 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only] 6 Notes to the consolidated financial statements (Cont’d)
(36) Supplus reserve
31 December Current year Current year 31 December 2010 additions utilised 2011
Statutory surplus reserve(Note 6(37)) 1,451,672,700 100,068,569 - 1,551,741,269 Discretionary surplus reserve 1,973,568,341 250,171,422 - 2,223,739,763 3,425,241,041 350,239,991 - 3,775,481,032
31 December Current year Current year 31 December 2009 additions utilised 2010
Statutory surplus reserve(Note 6(37)) 1,375,780,387 75,892,313 - 1,451,672,700 Discretionary surplus reserve 1,783,837,557 189,730,784 - 1,973,568,341 3,159,617,944 265,623,097 - 3,425,241,041
In accordance with the “Company Law” and the Company’s Articles of Association, the Company should appropriate 10% of net profit for the year to the statutory surplus reserve. The Company can cease appropriation when the statutory surplus reserve accumulated to more than 50% of the registered capital. The Company appropriates discretionary surplus reserve after shareholders’ meeting approves the Board of Director’s proposal. The discretionary surplus reserve can be used to make up for the loss or increase the paid in capital after approval.
(37) Undistributed profits
2011 2010 Extraction and Extraction and Amount allocation ratio Amount allocation ratio
Ending balance of undistributed 2,058,635,851 profits (after adjustment) 2,117,942,715 Add: net profit attributable to the 356,321,879 stockholders of the parent company 765,806,461 Less: appropriation to surplus reserves (100,068,569) 10% (75,892,313) 0% Surplus reserves used to offset (250,171,422) 0% accumulated losses 25% (189,730,784) Common stock dividends payable (279,745,114) (559,490,228) 6% Ending balance of undistributed 1,784,972,625 profits 2,058,635,851
(a) According to the resolution at the general meeting of shareholders on 28 May 2011, the company proposed to appropriate 10% of net profit for the year, amounted to RMB100,068,569, to the statutory surplus reserve, and appropriate 25% of net profit for the year, amounted to RMB250,171,422, to discretionary surplus reserve; And proposed cash dividend at RMB1 per 10 shares to all shareholders, calculated based on total shares at 2,797,451,138 after private placement to Yudean, total cash dividend proposed amounted to RMB279,745,114.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only] (b) According to the resolution at the Board of Director meeting on 6 Mars 2012, Board of Director proposed to appropriate 10% of net profit for the year, amounted to RMB51,453,596, to the statutory surplus reserve, and appropriate 25% of net profit for the year, amounted to RMB128,633,990 to discretionary surplus reserve; And proposed cash dividend at RMB0.6 per 10 shares to all shareholders amounted to RMB167,847,068. The above proposal needs to be approved by shareholders meeting.
(c) As at 31 December 2011, included in the undistributed profits, the amount of RMB840,202,879 is subsidiaries’ surplus reserve attributable to the Company (31 December 2010: RMB808,041,328), among which RMB32,161,551 is appropriated for the current year (2010: RMB41,688,619).
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(38) Minority interest in equity
31 December 2011 31 December 2010 Interest held Owners' equity Interest held Owners' equity
Zhanjiang Electric 24% 919,833,824 24% 922,457,581 Yuejia Electric 42% 246,552,637 42% 397,327,073 Yuejiang Electric 35% 111,645,401 35% 167,951,250 Zhongyue Energy 10% 118,516,806 10% 79,197,884 Maoming Zhenneng 43.61% 330,238,876 46.72% 282,114,536 Jinghai Electric 35% 1,109,620,079 35% 900,553,074 Zhanjiang Wind Power 30% 58,267,408 30% 75,112,060 Oil Shale Power 16.34% 33,425,388 16.34% 35,048,203 Humen Electric 40% 58,337,090 40% 58,861,014 24% 6,332,155 2,918,622,675
- 93 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(39) Operating revenue and operating cost
Year 2011 Year 2010
Main operating revenue 14,470,730,821 12,621,767,359 Other operating revenue 149,409,900 20,440,710 14,620,140,721 12,642,208,069
Year 2011 Year 2010
Main operating cost (13,139,333,769) (10,875,958,027) Other operating cost (76,963,700) (1,455,977) (13,216,297,469) (10,877,414,004)
(a) Revenue and cost from main operations
Analysis by products is as follows:
2011 2010 Main operating Main operating Main operating Main operating revenue cost revenue cost
Electricity income 14,406,778,715 (13,087,840,053) 12,553,489,368 (10,818,837,679) Steam income 211,701 - 5,320,116 (5,275,970) Service income 63,740,405 (51,493,716) 62,957,875 (51,844,378) 14,470,730,821 (13,139,333,769) 12,621,767,359 (10,875,958,027)
The electricity transmission and distribution in Guangdong Province, the PRC, were controlled and managed by GPGC. GPGC is the solitary customer of the electricity generated by the Group, and the Group entered into electric sales contracts with GPGC.
Electricity prices of the Group’s individual entity were approved by the Price Bureau of Guangdong Province. In 2011 and 2010, the volume of electricity purchased by GPGC and the corresponding unit selling prices were summarised as follows:
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(36) Operating revenue and operating cost (Cont’d)
(a) Revenue and cost from main operations (Cont’d)
Electricity prices of the Group’s individual entity were approved by the Price Bureau of Guangdong Province. In 2011 and 2010, the volume of electricity purchased by GPGC and the corresponding unit selling prices were summarised as follows:
Electricity volume Million KWH Unit electricity prices RMB per MWH Before Before December November December 2010 2010 2010 2011 2011
The Company - Shajiao A - No. 1 to 4 Generators 5,985 5,662 424.10 425.64 445.30 - No. 5 Generator 2,016 1,840 424.27 425.81 445.47 Zhanjiang Electric - No. 1 to 4 Generators 7,134 6,585 440.85 442.39 462.05 Yuejia Electric - No. 3 and 4 Generators - 687 431.37 - - - No. 5 and 6 Generators 1,443 1,316 424.10 436.92 469.40 Yuejiang Electric - No. 10 Generator 1,759 1,547 469.15 481.97 514.53 - No. 11 Generator 1,790 1,495 441.20 454.02 486.32 Zhenneng Electric 3,230 3,009 424.10 425.64 445.30 Jinghai Electric 7,068 6,856 424.10 425.64 445.30 Zhanjiang Wind Power 107 104 588.88 588.88 588.88
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(36) Operating revenue and operating cost (Cont’d)
(b) Revenue and cost from other operations
2011 2010 Other operating Other operating Other operating Other operating revenue cost revenue cost
CER revenues 5,183,644 - - - Rental income 3,126,119 (357,974) 2,466,722 (357,974) Coal ash income 128,394,516 (67,238,787) 12,826,273 - Sale of material 5,178,947 (2,282,479) 1,512,722 (18,757) Others 7,526,674 (7,084,460) 3,634,993 (1,079,246) 149,409,900 (76,963,700) 20,440,710 (1,455,977)
(c) Particulars of revenue from the top five customers of the Group
Revenue from the top five customers with aggregate amount of RMB14,502,398,015 (2010: RMB12,144,260,080) accounted for 99.20% (2010: 99.67%) of the Group's total revenue in 2010. Details are as follows:
% of total revenue of Revenue the Group
GPGC 14,406,778,715 98.54% Shajiao C 32,936,432 0.23% Yudean Environment Protection 30,157,387 0.21% Dongguan TaiYang Industry Co., Ltd 20,275,612 0.14% Dongguan Jining Electricity Power Co. Ltd. (“Dongguan Jining”) 12,249,869 0.08% 14,502,398,015 99.20%
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(40) Tax and surcharges
2011 2010 Accrual basis
City maintenance and construction tax 44,872,478 16,109,794 Note 4 Surcharge for education 30,250,636 6,887,299 Note 4 Business tax 2,558,109 1,853,826 Note 4 77,681,223 24,850,919
(41) General and administrative expenses
2011 2010
Labor Cost 226,320,159 313,945,157 Labor Insurance 53,531,391 49,049,729 Charges for disposing pollutants 47,048,725 53,710,983 Taxation Fee 43,214,046 41,209,289 Office expenses 42,598,353 34,148,857 Amortization 27,244,789 25,135,968 Depreciation 23,602,625 25,357,256 Agency fee 16,880,074 9,397,844 Fire safety expenses 14,339,104 13,870,416 Travel expenses 13,706,437 12,654,146 Entertainment expenses 13,599,993 14,069,944 Bank Protection Fee 10,857,480 9,885,268 Traffic expense 8,575,871 7,751,614 Research and developing expense 6,872,335 5,940,159 Rental expenses 5,230,047 5,565,327 Meeting expenses 4,484,741 4,006,138 Insurance expenses 2,392,598 2,695,727 Others 37,031,370 41,075,460 597,530,138 669,469,282
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(42) Financial expense
2011 2010
Interest expenses of debts(Note 6(29)) 110,000,000 108,761,035 Interest expenses of borrowings 1,028,878,867 701,722,508 Less: interest capitalized in CIP (Note 6(14)) (512,558,714) (347,539,503) Interest expenses 626,320,153 462,944,040 Long term debts amortization(Note 6(29)) 2,702,430 2,702,430 Less: interest income (25,352,787) (22,989,883) Bill discount 8,482,410 7,809,696 Net exchange loss 230,909 (626,646) Bank charges and others 1,436,748 2,351,184 613,819,863 452,190,821
(43) Impairment losses
2011 2010
Impairment losses / (reversal) (Note 6(3)) 29,662 234,560 Reversal of write-off bad debt(Note 6(3)) (763,039) (1,838,934) Inventory provision (Note 6(6)) 12,949,496 1,728,002 Provision for impairment of fixed assets(Note 6(13)) 266,657,317- Provision for impairment of Intangible assets(Note 6(17)) 23,426,500- Provision for impairment of CIP (Note 6(14)) 796,461 34,407,716 303,096,397 34,531,344
(44) Investment income
2011 2010
Share of profit of investees under equity method of accounting (a) 538,205,457 536,517,223 Profit/cash dividends declared by investees under cost method of accounting (b) 11,565,000 14,120,250 Entrusted Loan interest income 31,421,117 25,585,586 Income from available-for-sale financial assets 4,402,150 9,504,300 (1,645,200) 585,727,359
There is no significant restriction on the remittance of investment income to the Group.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(41) Investment income (Cont’d)
(a) Share of profit of investees under equity method of accounting
The top five companies invested, from which investment income accounted for the highest proportion of total profits, are set out as follows:
2011 2010 Reasons for changes from last year
Shenzhen Guang Qian 116,627,197 175,053,314 Increase in electricity generation volume Huizhou LNG 161,305,658 122,279,004 Increase in electricity generation volume Red Gulf 73,748,943 69,983,642Increase of coal prices Shanxi Energy 61,499,830 41,381,699 Increase in investment income Fuel Supply 49,887,996 37,421,016 Increase in purchase volume and prices of fuel 463,069,624 446,118,675
(b) Share of profit of investees under cost method of accounting
The top five companies invested, from which investment income accounted for the highest proportion of total profits, are set out as follows:
2011 2010 Reasons for changes from last year
Shenzhen Capital 11,025,000 10,106,250 Increase in dividend declared GMG 540,000 1,440,000 Decrease in dividend declared 11,565,000 11,546,2500
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(45) Non-operating income and expenses
(a) Non-operating income
Recognized in Recognized in nonrecurring loss nonrecurring loss and income in and income in 2011 2011 2010 2010
Gain on disposal of aoliyou - - 10,788,462 10,788,462 machine set(i) Government subsidy 15,155,419 10,216,923 11,821,978 4,726,923 amortization (ii) Gain on disposal of fixed 3,824,144 3,824,144 249,296 249,296 assets Claim income 3,108,000 3,108,000 Others 392,656 392,6561,496,630 1,496,630 22,480,219 17,541,723 24,356,366 17,261,311
(ii) Government subsidies
Recognized in Recognized in nonrecurring nonrecurring loss and loss and 2011 income in 2011 2010 income in 2010
VAT 即征即退收入 4,938,496 - 7,095,055 - Amortization of 3,076,923 3,076,923 3,076,923 3,076,923 government subsidy Dam strengthening 1,450,000 1,450,000 1,000,000 1,000,000 subsidy Interest subsidy 5,210,000 5,210,000 650,000 650,000 Energy saving emission 480,000 480,000 - - reduction special award
15,155,419 10,216,923 11,821,978 4,726,923
(b) Non-operating expenses
Recognized in Recognized in nonrecurring loss nonrecurring loss 2011 and income in 2011 2010 and income in 2010
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only] Loss on disposal of - - 40,091 40,091 aoliyou machine set Loss on disposal of 7,397,309 7,397,309 17,881,624 17,881,624 fixed assets Penalty and late fee 221,600 221,600 85,021 85,021 Others 3,158,609 3,158,609 6,049,747 6,049,747 10,777,518 10,777,518 24,056,483 24,056,483
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(46) Income tax expenses
2011 2010
Current income tax 145,876,605 262,103,394 Deferred income tax (Note 6(31)) 1,111,644 118,601,031 146,988,249 380,704,425
The reconciliation from income tax calculated based on applicable tax rate and total profit/ (loss) presented in the consolidated financial statements to the income tax expenses is as follows:
2011 2010
Total profit 406,106,142 1,169,096,199 Income tax expenses calculated at 25% 101,526,536 292,274,050 Impact from subsidiaries’ tax preferential (2,372,251) (651,149) Reversal of the income tax provision for previous years - (401,093) Non taxable income (138,543,152) (137,659,368) Expenses not deductible for tax purposes 8,027,803 18,455,332 Reversal of deductible losses and temperate differences which deferred income tax asset was recognised 16,602,491 127,223,708 Utilisation of previously unrecognised tax losses (160,906) (48,480) Tax losses for which no deferred income tax asset was recognised 91,692,958 81,511,425 Current unrecognised deferred tax assets of the deductible loss 70,839,845 Current unrecognised deferred tax assets of temporary differences (625,075) Income tax expenses 146,988,249 380,704,425
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(47) Earnings per share
(a) Basic earnings per share
The basic earnings per share is calculated by dividing the current net profits belonging to the shareholders of ordinary shares by the weighted average number of ordinary shares issued to the public.
2011 2010
Net profits belonging to the shareholders of ordinary shares 356,321,879 765,806,461 Weighted average number of ordinary shares issued to the public. 2,797,451,138 2,751,435,425 Basic earnings per share 0.13 0.28
(b) Diluted earnings per share
Diluted earnings per share is calculated by dividing the current net profits belonging to the shareholders of ordinary shares by the weighted average number of ordinary shares and diluted potential ordinary shares issued to the public. In 2010, the Group has no diluted potential ordinary shares (2009: Nil), and basic earnings per share is the same with Diluted earnings per share.
(48) Other comprehensive income
2011 2010
(Losses)/Profits arising from available-for-sale financial assets(Note 6(6)) (46,971,017) (163,120,625) Less: Income tax relating to available-for-sal financial assets(Note 6(28)(b)) 11,742,755 40,780,156 (35,228,262) (122,340,469)
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(49) Notes to consolidated cash flow statement
(a) Cash received relating to other operating activities
2011 2010
Compensation from PetroChina Fuel Oil Company Limited 26,629,846- Interest income 24,504,743 18,633,109 Receipt of coal purchase deposits - 26,990,354 Others 4,401,741 13,442,928 55,536,330 59,066,391
(b) Cash paid relating to other operating activities
2011 2010
Charges for disposing pollutants 47,048,725 53,221,209 Office Expense 49,781,630 34,081,192 Insurance expenses 28,156,471 20,172,153 Traffic expense; 25,764,943 16,403,940 Research and developing expense 6,872,335 10,221,589 Entertainment expenses 13,599,993 13,998,540 Agency fee 16,880,074 13,247,600 Bank Protection Fee 10,857,480 12,873,241 Rental expenses 5,230,047 9,005,172 Travel expenses 11,344,224 8,373,992 Fire safety expenses 14,339,104 6,174,220 Meeting expenses 4,484,741 4,551,138 Others 30,633,275 33,881,246 264,993,042 236,205,232
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
6 Notes to the consolidated financial statements (Cont’d)
(50) Supplementary information of cash flow statements
(a) Reconciliation from net profit to cash flows from operating activities
2011 2010
Net profit 259,117,893 788,391,774 Add: Provisions for assets impairment 303,096,397 34,531,344 Depreciation of fixed assets and 1,203,888,058 1,200,447,636 Amortisation of intangible assets 27,244,789 25,102,655 Losses on scrapping of fixed assets 3,573,165 6,883,957 Financial expenses 637,504,993 473,456,166 Investment losses (583,948,524) (585,727,359) Increase in deferred tax assets 1,111,644 118,601,031 (Increase)/Decrease in inventories (571,278,465) (117,841,462) (Increase)/Decrease in operating receivables (177,715,760) (403,259,918) (Decrease)/Increasing operating payables 926,291,569 (905,088,120) Net cash flows from operating activities 2,028,885,759 635,497,704
(b) Net increase / (decrease) in cash and cash equivalents
2011 2010
Cash at end of year 2,182,660,514 1,894,021,204 Less: cash at beginning of year (1,894,021,204) (1,738,834,186) Net increase in cash and cash equivalents 288,639,310 155,187,018
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
7 Segment information
The reportable segments of the Group are the business units that provide different products or service, or operate in the different areas. Different businesses or areas require different technologies and marketing strategies, the Group, therefore, separately manages the production and operation of each reportable segment and evaluates their operating results respectively, in order to make decisions about resources to be allocated to these segments and to assess their performance.
The Group identified 8 reportable segments, which are generating and saling electricity in different areas in Guangdong.
The management of the Company assesses the operating performance of parent company and subsidiaries. Inter-segment transfers are measured by making reference to the sales to 3rd parties.
The assets are allocated based on the operations of the segment and the physical location of the asset. The liabilities are allocated based on the operations of the segment..
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
7 Segment information (Cont’d)
(a) Segment information as at and for the year ended 31 December 2011 is as follows:
本公司 湛江电力 粤江电力 粤嘉电力 中粤能源 臻能电厂 靖海发电 其他 分部间抵销 合计
对外交易收入 3,479,626,129 3,210,564,111 1,749,588,193 662,028,658 974,002,439 1,385,255,064 3,028,721,334 130,354,793 - 14,620,140,721 分部间交易收入 - 4,003,563 - - 2,688,919 - - 50,682,617 (57,375,099) - 利息收入 6,249,539 7,324,224 2,885,972 1,221,342 553,880 622,620 3,796,805 2,698,405 - 25,352,787 利息费用 (346,027,133) - (82,375,113) - (51,432,589) (45,072,169) (172,039,892) (15,519,809) 74,961,712 (637,504,993) 对联营企业的投资收益 538,205,457 ------538,205,457 资产减值损失 (296,833,827) (20,470,397) (29,662) (283,359,377) - - - - 297,596,866 (303,096,397) 折旧和摊销费用 (174,060,693) (253,819,093) (178,314,397) (76,546,747) (76,612,686) (115,535,872) (323,402,732) (33,539,106) 698,479 (1,231,132,847) 利润总额 524,992,099 319,602,080 (160,873,853) (360,331,617) (64,443,767) (44,167,434) 270,885,556 20,420,207 (99,977,129) 406,106,142 所得税费用 (10,456,137) (80,675,376) - 1,344,864 3,332,986 10,449,446 (70,554,901) (9,318,600) 8,889,469 (146,988,249) 净利润 514,535,962 238,926,704 (160,873,853) (358,986,753) (61,110,781) (33,717,988) 200,330,655 11,101,607 (91,087,660) 259,117,893
资产总额 16,698,995,649 4,111,675,460 3,397,361,962 840,598,642 5,922,604,343 3,231,404,436 12,423,750,367 1,454,676,633 (8,600,872,100) 39,480,195,392
负债总额 (6,923,412,395) (252,650,547) (3,078,375,103) (253,568,553) (4,737,436,284) (2,474,151,071) (9,253,407,239) (527,658,212) 1,271,966,912 (26,228,692,492)
折旧费用和摊销费用以外的其 他非现金费用 (4,483,505) (2,006,279) (14,780,717) (14,436,527) (181,579) - - (91,628) - (35,980,235) 对联营企业的长期股权投资 5,337,015,086------5,337,015,086
长期股权投资以外的其他非流 动资产增加额 93,189,068 378,754,616 635,539,309 62,117,731 1,062,764,758 935,579,101 1,304,410,225 362,160,415 (8,759,959) 4,825,755,264
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
7 Segment information (Cont’d)
(b) Segment information as at and for the year ended 31 December 2010 is as follows:
Zhanjiang Yuejiang Yuejia Zhongyue Zhengneng Jinghai Company Electric Electric Electric Energy Electric Electric Other Elimination Total
Revenue from external customers 3,192,526,320 2,895,802,051 1,386,294,627 853,813,501 2,200 1,275,841,093 2,913,647,360 124,280,917- 12 ,642,208,069 Inter-segment revenue - 1,048,042-- 1,119,944-- 41,299 ,909 (43,467,895) - Interest income (12,892,079) (10,583,144) (2,358,822) (1,086,033) - (370,980) (610,482) (1,632,040) 6,543,697 (22,989,883) Interest expenses 245,739,505- 57,423,586-- 43,367,897 140,912,459 12,856,347( 29,546,058) 470,753,736 Share of profit of associates and joint ventures (536,517,223) ------(536,517,223) Asset impairment loss 12,433,800 (36,365,387) (4,891) -----(10,594,866) (34,531,344) Depreciation and amortisation (196,819,224) (272,147,778) (176,959,822) (97,628,229) (6,686) (116,905,866) (340,000,990) (25,659,326) 577,630 (1,225,550,291) Total profit 1,059,394,416 317,029,323 (174,646,360) (133,661,524) (42,430,802) 57,575,730 425,694,830 7,343,557 (347,202,971) 1,169,096,199 Income tax expenses (58,708,727) (80,177,766) (53,996,873) (72,400,129) 10,656,180 (15,388,226) (106,102,374) (4,586,510) - (380,704,425) Net profit 1,000,685,689 236,851,557 (228,643,233) (206,061,653) (31,774,622) 42,187,504 319,592,456 2,757,047 (347,202,971) 788,391,774
Total assets 15,873,447,976 4,167,681,898 2,486,902,121 1,164,598,331 4,539,734,901 2,262,564,113 10,696,007,395 1,153,094,156 (7,747,712,636) 34,596,318,255
Total liabilities (6,297,642,306) (324,108,645) (2,007,041,407) (218,581,490) (3,567,756,062) (1,658,724,610) (8,122,998,612) (369,587,192) 1,054,498,945 (21,511,941,379)
Non-cash expenses other than depreciation and amortisation 2,702,430 - 17,321,378 94,279,857 -----114,303,665
Long-term equity investments in associates and joint ventures 552,439,775 ------552,439,775
Additions to non-current assets other than long-term equity investments 62,555,506 123,118,531 309,586,780 20,795,394 1,118,000,162 492,957,981 2,241,772,837 137,550,394 (8,500,884) 4,497,836,701
The group’s main operation income largely comes from power plants in China engaged in the development and operation, and all of the assets are in China.
In 2011, the group’s plants generated RMB14,406,778,715 revenue from Guangdong Power Grid (2010: RMB12,553,489,368), accounting for the Group's
- 108 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only] revenues 98.54% (2010: 99.30%).
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
8 Related party relationships and related party transactions
(1) Parent company
(a) General information of the parent company
Form of Place of Legal Organization business registration Representative Nature of business code
Yudean State-owned Guangzhou Panli Power plant operating,electricity 73048602-2 enterprise assets management, electricity generation
(b) Registered capital and changes in registered capital of the parent company
31 December Current year Current year 31 December 2010 addition reduction 2011
Yudean 20,000,000,000 - - 20,000,000,000
(c) The proportion of interests and voting rights in the Company held by the parent company
31 December 2011 31 December 2010 % interest % voting % interest % voting held rights held rights
Yudean 48.99% 48.99% 48.99% 48.99%
(2) Information of subsidiaries
The general information and other related information of the subsidiaries is set out in Note 5(1).
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
8 Related party relationships and related party transactions (Cont’d)
(3) Information of associates
% Form of Place of Legal Organization interest % voting business registration Representative code Nature of Business registered capit held rights
State-owned Shenzhen Guang Qian enterprise Shenzhen Ningxian Lu 70842633-0 Generate electricity 1,030,292,500 40% 40% Huizhou LNG State Huizhou Shiqiang Gao 76380066-3 Generate electricity 963,000,000 32% 32% Red Gulf State Shanwei Lianhe Wen 76061818-8 Generate electricity 2,549,750,000 25% 25% Fuel Supply State Guangzhou Dejun Zhu 190326035 Fuel Supply 630,000,000 35% 35% Binglang River State Baoshan Yibin Yang 75066253-X Generate electricity 613,000,000 29% 29%
Shanxi Energy State Taiyuan Jian Liang 790216374 Coal mining 1,000,000,000 40% 40% Yudean Finance State Guangzhou Xuanxing Yang 71226867-0 Financing 2,000,000,000 25% 25% Yudean Western State Guangzhou Zhuoxian Li 75285691-X Generate electricity 847,400,000 26% 26% Yudean Shipping State Guangzhou Jian Liang 775555474 Shipping 2,465,800,000 35% 35% Shibeishan” State Guangzhou Chengjun Li 763848720 Generate electricity 231,700,000 30% 30% Lincang yuntou State Lincang Guowen Yang 77048814-5 Generate electricity 196,600,000 49% 49% Weixin Yuntou State Zhaotong Yixun Chen 77859169-X Generate electricity 1,168,277,400 40% 40% Shantou Wind Power State Shantou Qing Yang 783853842 Generate electricity 194,190,000 25% 25% Jiangkeng State Qingyuan Guansheng Li 61806551-9 Generate electricity 22,839,076 25% 25% Zhongxinkeng State Qingyuan Yang Lin 70760320-0 Generate electricity 15,150,000 40% 40%
(4) Information of other related parties
Name of entity Relationship with the Company Organization code
Maoming Thermal Controlled by the parent company 19492436-6 Shaoguan Electric Power Plant Controlled by the parent company 61744590-7 Shaoguan Plant D Controlled by the parent company 61744707-2 Shajiao C Controlled by the parent company 74369834-X Xinfengjiang Controlled by the parent company 751086546 Guangdong Yuedean Information technique Co., ltd Controlled by the parent company 69692475-3 (“Yuedean Tech”) Real Estate Investment Controlled by the parent company 73987209-3 Biomass Electric Power Controlled by the parent company 680565944 Property Management Controlled by the parent company 74706406-1 Guangdong Yudean Yufu Electric Co., Ltd (“ Yunfu Controlled by the parent company 19577353-9 Electric”) 锦辉电力 Controlled by the parent company 72785566-7 Yudean Environment Protection Controlled by the parent company 69643858-7 Zhuhai Electric Controlled by the parent company 70812907-X Zhuhai Jinwan Electric Controlled by the parent company 717859111 Shenzhen Tianxin Controlled by the parent company 788338241 Pinghai Electric Controlled by the parent company 791172465 Chaokang Investment Controlled by the parent company Foreign Investment Entity
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
8 Related party relationships and related party transactions (Cont’d)
(5) Related party transactions
(a) Purchase and sale of goods, providing and receiving services
Purchase of goods and receiving services
2011 2010
(%)Ratio of the (%)Ratio of the
same same Type of related-party Pricing policy and related-parties Related-parties Related parties transaction Content of related-party transaction decision-making process Amount transaction Amount transaction
Fuel Supply Purchase of goods Fuel purchase Agreement Price 10,108,221,789 87.97% 7,845,922,436 84.09%
Shaoguan Electric Power Plant Purchase of goods Fuel purchase Agreement Price 860,209,383 7.49% 1,166,715,795 10.89% Yudean Environment Protection Purchase of goods Fuel purchase Agreement Price 24,196,212 0.22% 11,618,452 0.11% Shaoguan Electric Power Plant (i) Receiving services Acceptance of management services Agreement Price 271,117,763 85.66% 205,867,656 76.14%
Maoming Thermal (ii) Receiving services Acceptance of management services Agreement Price 58,837,293 14.34% 58,057,825 21.47% Yudean Shipping Receiving services Acceptance of tugboat services Agreement Price 2,077,963 0.12% 908,853 0.06% Yudean Electricity and Water. Receiving services Acceptance of management services Agreement Price 8,600,000 2.02% 10,725,000 13.02%
(i) Pursuant to the related agreement, Shaoguan Electric Power Plant allocated the actrual general administrative expenses occurred.
(ii) The 5# generation set of Maoming Ruineng is managed by Maoming Thermal. According to the written agreement, the management fee for the whole year is RMB20,360,000, and an additional charge for other fluctuated expenses at RMB4 for each kkwh electricity generated; In addition, the 6# generation set of Maoming Zhenneng is also managed by Maoming Thermal. According to the written agreement, the management fee for the
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only] whole year is RMB25,556,300, with additional charge at RMB4 for each kkwh electricity generated for other fluctuated expenses.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
Related party relationships and related party transactions (Cont’d) (5)Related party transactions (g) Interest payment
2011 2010
Payment to Guangdong electric finance 188,534,938 181,862,507 Percentage of intrist payment 29.69% 22.22%
The Guangdong electric finance have loans to groups with Weighted average interest rates of 5.79% (2010: 5.02%).
(h)Joint investiment The subsidiaries and associated companies at 31 Dec 2011 are asfollow:
粤电集团公司 所占的权益比例
Guangdong finance 65% Fuel company 65% Shanxi energy 60% Guangqian wide power 60% Shibeishan wind power 40% Red Bay 40% Western investment 35% Guangdong shipping 45%
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only] Huizhou gas 35%
(6) Related party transactions (Cont’d)
(a) Purchase and sale of goods, providing and receiving services (Cont’d)
Sale of goods and providing services
2011 2010
(%)Ratio of the (%)Ratio of the same same Type of related-party Pricing policy and related-parties Related-parties Related parties transaction Content of related-party transaction decision-making process Amount transaction Amount transaction
Shajiao C Providing services Providing maintenance services Agreement Price 32,936,432 43.08% 34,347,242 54.56% Shenzhen Guang Qian Providing services Providing maintenance services Agreement Price 12,249,869 16.02% 10,676,524 16.96% Huizhou LNG Providing services Providing maintenance services Agreement Price 12,168,469 15.92% 9,895,034 15.72% Zhuhai Jinwan Electric Providing services Providing maintenance services Agreement Price 2,658,953 3.48% --
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only] Yudean Environment Protection Providing services Providing maintenance services Agreement Price 20,275,612 15.16% -- Zhuhai Electric Providing services Providing maintenance services Agreement Price - - 1,898,547 3.02%
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
8 Related party relationships and related party transactions (Cont’d)
(6) Related party transactions (Cont’d)
(b) Rental expense
2011 2010
Maoming Thermal 520,266 520,266 Guangdong Yudean Real Estate Investment Co., Ltd. 4,539,594 4,328,706 520,266 4,848,972 Percentage 86.8% 53.85%
(c) Guarantee
Whether fulfilled the Gurantor Guarantee Amount The starting date The maturity date guarantee or not
The company Lincang Yuntou 34,300,000 25/12/2006 25/12/2021 No The company Lincang Yuntou 13,720,000 29/07/2008 29/07/2020 No The company Weixin Yuntou 88,000,000 19/03/2009 19/03/2012 No The company Weixin Yuntou 200,000,000 22/09/2009 22/09/2014 No The company Weixin Yuntou 120,000,000 15/03/2010 15/03/2014 No The company Binglang River 29,000,000 30/11/2007 30/11/2021 No The company Binglang River 13,050,000 30/11/2007 30/11/2018 No The company Binglang River 14,500,000 30/11/2007 30/11/2015 No The company Binglang River 43,500,000 25/12/2007 25/12/2022 No The company Binglang River 43,500,000 19/12/2007 18/12/2024 No The company Binglang River 120,000,000 18/03/2008 18/03/2028 No The company Binglang River 58,000,000 31/10/2008 30/10/2025 No The company Binglang River 72,500,000 14/11/2008 14/11/2020 No The company Binglang River 72,500,000 27/05/2009 27/05/2023 No The company Binglang River 93,670,000 22/06/2009 22/06/2029 No The company Binglang River 72,500,000 29/03/2010 29/03/2015 No The company Binglang River 145,000,000 16/12/2010 16/12/2020 No The company Yudean Shipping 205,800,000 27/09/2008 (i) No
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
8 Related party relationships and related party transactions (Cont’d)
(6) Related party transactions (Cont’d)
(c) Guarantee (Cont’d)
(i) The period of validity of this ship manufacturing payment deposits will be expired at the first when the ship is received and accepted by buyer, or all the payment for second, third, forth contracts and related late fee have been settled.
(d) Common expense allocation
The Company’s branches Shajiao A and Shajiao C agreed to allocate certain common expenses according to agreed allocation basis. For the year ended 31 December 2011, the expense reimbursement received from Shajiao C amounted to approximately RMB 4,439,100 (2010: RMB 4,226,191).
(e) Loan of capital
According to the finance contract between Yudean Finance in 2011, Yudean Finance promised to give the company banking facility of 14,000 million .In 2011, considering the actual capital requirement, Yudean Finance lent the Group borrowings with aggregate amounted to RMB 4,095,000,000 (2010: RMB 2,935,500,000), the Group paid interest for such borrowing at RMB188,534,938 (2010: RMB181,862,507)(Note 8(5)(g)).
On March 6, 2012, the seventh of the seventh meeting of the Board of Trustees approved by the
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
8 Related party relationships and related party transactions (Cont’d)
(6) Related party transactions (Cont’d)
(f) Interest income
2011 2010
Interest income from cash in Yudean Finance 20,820,721 14,572,440
14,800,500 Weixin Yuntou (Note 6(3)(a)) 16,407,471 1,914,584 Yudean Western (Note 6(3)(a)) 3,162,975
1,207,510 Lincang Yuntou (Note 6(3)(a),7(b)) 1,245,055
9,343,564 Shanxi Energy (Note 6(3)(a)) 10,605,616 52,241,838 41,838,598 Percentage 73.55% 86.13%
The interest rate of cash in Yudean Finance is the same as the interest rate of cash in bank for the same period.
(g) Interest expense
2010 2010
Interest paid to Yudean Finance for borrowing 188,534,938 181,862,507 1 Percentage 29.69% 22.22%
In 2011, the weighted average interest rate of the borrowings from Yudean Finance is 5.79% (2010: 5.02%)).
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
8 Related party relationships and related party transactions (Cont’d)
(6) Related party transactions (Cont’d)
(h) Joint investments
As at 31 December 2010, the Group invested in the following subsidiaries and associates jointly with Yudean:
Attributable equity interest owned by Yudean (%)
Yudean Finance 65% Fuel Supply 65% Shanxi Energy 60% Shenzhen Guang Qian 60% Shibeishan 40% Red Gulf 40% Yudean Western 35% Yudean Shipping 45% Huizhou LNG 35%
(i) Emoluments of key management
2011 2010
Emoluments of key management 4,487,064 4,616,700
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
8 Related party relationships and related party transactions (Cont’d)
(6) Related party transactions (Cont’d)
(j) Receivables from and payables to related parties
31 December 2010 31 December 2009 Provision for Provision for bad Amount bad debts Amount debts
Cash and cash Yudean Finance equivalent 758,007,039 - 1,125,031,828 -
Accounts Receivable Shajiao C 14,171,438 - 16,086,515 - Shenzhen Guang Qian 6,534,224 - - - Huizhou LNG 2,400,177 - 66,808 - Zhuhai Electric 1,802,225 - 16,500 - 24,908,064 - 16,169,823 -
Other receivables Weixin Yuntou 260,701,555 - 260,406,900 - Shanxi Energy 204,333,143 - 153,423,710 - Yudean Investment 72,114,584 - 90,480,274 - Lincang Yuntou 5,009,946 - - - Shajiao C 1,635,277 - 3,387,831 - Yudean Environmen Protection 766,176- - Yudean Property -- 566,720 - Zhongxinkeng -- 430,125 - Property Management -- 180,320 - Yunfu Electric -- 19,058 - 544,560,681- 508,894,938 -
Advances to suppliers Fuel Supply 396,810,766 - 477,688,698 -
Long-term receivable Lincang Yuntou 15,580,000 - 20,619,670 -
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
8 Related party relationships and related party transactions (Cont’d)
(6) Related party transactions (Cont’d)
(k) Receivables from and payables to related parties (Cont’d)
31 December 2010 31 December 2009
Account payable Fuel Supply 1,195,469,385 607,562,245 Maoming Thermal 42,726,239 52,675,188 Yudean Environment Protection 3,228,894 - Xinfengjiang 524,881 166,182 Jinghui Electric 90,582 - Yudean Shipping - 1,815,000 1,242,039,981 662,218,615
Other payables Shaoguan Electric Power Plant 224,760,861 297,033,465 Shaoguan Plant D 1,750,737 1,750,737 Yudean Environment Protection 2,561,138 1,316,483 Yuedean Tech 88,000 - Yudean Shipping 36,450 - Xinfengjiang 16,309 - Maoming Thermal - 1,112,382 Real Estate Investmen - 7,000 Biomass Electric Power - 111 229,213,495 301,220,178
Dividends payble Shaoguan Plant D 3,521,190 3,521,190
Short-term borrowings Yudean Finance 2,635,500,000 1,969,000,000
Current portion of Yudean Finance non-current liailities 50,000,000 -
Long-term borrowings Yudean Finance 950,000,000 1,000,000,000
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
8 Related party relationships and related party transactions (Cont’d)
(6) Related party transactions (Cont’d)
(k) Commitment to related parties
Capital expenditures contracted for by the Group with related parties at the balance sheet date but are not yet necessary to be recognised on the balance sheet are as follows:
31 December 2010 31 December 2009 Rent in Assets Yudean Property 3,400,320 3,400,320 Maoming Thermal 9,486,385 9,928,948 12,886,705 13,329,268
9 Contingent liability
As disclosed in Note 8(5)(d), as at 31 December 2010, the group provided a guarantee for accounts payable of Yudean Shipping amounted to RMB207,858,000; provides joint and several liability guarantee for bank borrowings amounted to RMB560,220,000, RMB48,020,000 and RMB488,000,000, which belong to Binglang River, Lincang Yuntou and Weixin Yuntou respectively; and provides lease back financing amounted to RMB217,500,000.
10 Commitments
(1) Capital commitments
Capital expenditures contracted for by the Group at the balance sheet date but are not yet necessary to be recognised on the balance sheet are as follows:
31 December 2010 31 December 2009
Buildings and equipments 11,416,496,908 11,986,010,391
The above capital commitments are mainly subjected to new electric plants construction and purchasing new generators. As accessed by management, the commitment will be full filled gradually in the coming 3 to 5 years, with the cash inflow generated by daily operation and bank loans.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
10 Commitments (Con’t)
(2) Operating lease commitments
The future minimum lease payments due under the signed irrevocable operating leases contracts are summarized as follows:
31 December 2010 31 December 2009
Wihin 1 year 4,334,671 1,478,309 1-2 years 364,861 694,194 2-3 years 364,861 480,111 Over 3 years 8,391,802 8,768,330 13,456,195 11,420,944
(3) Investment commitments
(1)External investment commitments
(a)The company in June 28, 2011 seventh held in the second meeting of the board adopted the" about to Maoming Zhen thermal power company limited to increase motion". According to the motion of the company will be in accordance with the share proportion to attain to power plant 263736000 yuan investment, which in 2011 124360000 yuan investment; the company and Guangdong Province Power Development Company in accordance with the respective proportion of capital contribution, to accept the Guangdong Guangdong joint investment and development company limited to abandon the capital share, the company increased the investment amount of 42708400 yuan, which in 2011 20138500 yuan investment. As of December 31, 2011, the company has to attain to the actual 144500000 yuan investment in power plant.
(b)the company in June 28, 2011 at the seventh session of the board of directors of second times the conference passed" about the Guangdong Guangdong Zhanjiang wind power generation limited company to invest offshore wind power project in motion". According to the motion of the company will be to increase 140000000 yuan of investment of Zhanjiang wind energy in Xuwen offshore wind power demonstration project, and according to the actual project progress, installment injection. As of December 31, 2011, the company has invested 75733000 yuan to Zhanjiang wind power.
( c ) the company was held in November 10, 2011 seventh of the sixth board of directors meeting examined and adopted the" on the company to issue shares to buy assets of the major assets restructuring transaction scheme of motion", the company plans through non-public offering of shares to purchase Guangdong power group company holds the following plant stake. After the purchase, the power plant will become the company's subsidiaries, joint venture or joint venture:
Subsidiary
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only] -Shenzhen city before the electric power limited company 60% stockholder's rights;
- Guangdong Huizhou natural gas power generation limited company 35% stockholder's rights;
- Guangdong Huizhou Ping Haifa power plant limited company 45% stockholder's rights;
- the Guangdong Guangdong stone mountain wind energy development limited company 40% stockholder's rights; and
- Guangdong red bay power generation limited company 40% stockholder's rights
Joint venture -Guangdong electric power industry fuel company 15% of the equity
Joint venture enterprise
- Guangdong China Guangdong Taishan power limited company 20% stockholder's rights
In the assessment of the assets of the limited company of group evaluation, the assets to be acquired in June 30, 2011 for the assessment of value of about 7463000000 yuan. The non-public offering of shares in the share price will not less than the benchmark price has 20 trading Japanese company A stock transactions fold, not less than 4.79 yuan / share. According to the proposed acquisition of assets evaluation value and non-public offering of stock prices, the company intends to Guangdong Electric Group Company issued 1558022025 shares of A shares to buy the assets to be acquired.
The company has thereon a major asset reorganization matters to the China Securities Regulatory Commission (" Commission" ) submit the financial statements, as of the date of approval, have not yet achieved the approval of the commission.
( 2) early commitment to implementation
In addition to these things, the group before the December 31, 2011 foreign investment commitment has to fulfill the commitments:
The company in June 29, 2009 at the sixth session of the eight board of directors agreed to the company to increase participation in the Nan'ao island of Shantou wind power, wind power construction project. According to the resolution, the company will be in accordance with the proportion of 25% according to the project construction progress to the wind in Shantou 35000000 yuan investment. As of December 31, 2011, the company has to Shantou wind capital 12472500 yuan. The company in April 15, 2010 sixth held in the eleventh meeting of the board adopted the" about to Guangdong Jinghai power company limited to increase motion". According to the motion, the company will be in accordance with the 65% shareholding ratio of power to increase 565025500 yuan. After the completion of the capital, the company of power of ownership unchanged. As of December 31, 2011, the company has the power to increase
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only] 445014000 yuan.
The company in April 15, 2010 at the sixth session of the board of directors was adopted by the eleventh meeting of Shaoguan power plant" investment" big pressure on the small" coal-fired units engineering bill". According to the motion, the company will participate in investment and construction of Shaoguan power plant the" big pressure on the small" coal-fired unit project, and in accordance with a stake of 65% according to the project construction progress to the river in Guangdong power increase 690690000 yuan. After the completion of the capital, the company on the river in Guangdong power ownership unchanged. As of December 31, 2011, the company has not yet on river in Guangdong power increase.
The company in January 16, 2010 at the sixth session of the board in 2010 the first communication conference adopted the" on the establishment of Bohe Maoming project a wholly owned subsidiary of motion". According to the motion, the company will set up Bo coal subsidiary company, registered capital is tentatively scheduled for 285000000 yuan, the first phase of the registered capital of 150000000 yuan. As of December 31, 2011, the company has invested 150000000 yuan Bo coal was established, the actual investment of the registered capital of 190000000 yuan.
A balance sheet items
( 1) 2011 annual profit distribution plan is set out in note six ( 37) ( B ).
( 2 ) the company in March 6, 2012 at the seventh session of the board of directors of seventh times the conference passed" for the prestige the cloud cast on Guangdong Energy Limited company first phase project to provide security for the motion", according to the motion of the company in accordance with 40% of the equity ratio of the prestige of the cloud cast Guangdong Power Energy Company Limited (" the prestige of a power plant a plant" syndicated programs ) to provide loan guarantees, guarantees the principal does not exceed 936800000 yuan, during a period of guarantee liability for prestige power plant put into operation after two years, and a power plant sign the prestige guarantee contract. The bill would be submitted to the company's 2011 Annual General Meeting of shareholders for deliberation and approval. lease ( Continued) ( 1) financing hires fixed assets ( Continued) On December 31, 2011, book value of $ 2,191,785,262 (was 2,262,100,000) of fixed assets under financing lease (December 31, 2010: none). The analysis are as follows: Power equipment Original price
2011.12.31 2,262,100,000
Depreciation
2011.12.31 (70,314,738)
Net price
2011.12.31 2,191,785,262
( a ) January 5, 2011, the generation and integration of power leasing company is part of the power
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only] equipment signed a leasing agreement. Agreement of power customer service back to the way a number of book value is 1040299568 yuan power equipment transferred to blend the leasing company, the transfer price of 1000000000 yuan, rent for a period of 10 years, each quarter a rent, altogether is divided 40 period settlement. Rental rates in accordance with the bank loan benchmark interest rates downward float 17% of identified. In addition, the power is required annually to blend leasing company to pay the service fee 1200000 yuan, a total of 12000000 yuan. The end of the lease rental payments, payment, the lease by the power according to the nominal price of 3 yuan of hire purchase. This lease another need to pay 50000000 yuan deposit. As of December 31, 2011, the power has received communion leasing companies pay 1000000000 yuan of financing lease. ( b ) in July 21, 2011, Guangdong river power and built letter leasing company is part of the company's power equipment signed a leasing agreement, agreement of the company to customer service rental of the way the number of book value is 351519325 yuan power equipment to transfer the letter to build rental company, the transfer price of 355000000 yuan, rent for a period of 5 years, each quarterly a rent, altogether is divided 20 period settlement. Rental rates in accordance with the bank loan benchmark interest rates downward float 5% of identified. The end of the lease rental payments, payment, the ownership of the lease item automatically belong to Guangdong river power. River in Guangdong power need to pay the rental business 35500000 yuan deposit, the deposit can be offset against the last two rent. In addition, river in Guangdong power required a one-time payment of rental charges 7100000 yuan. As of December 31, 2011, river in Guangdong power has received the letter to build rental companies pay 355000000 yuan financing lease financing, and pay 7100000 yuan fee. ( c ) in September 24, 2010, Guangdong energy and blending of leasing companies on Guangdong energy portion of the built in power generation equipment leasing agreement signed. Agreement in Guangdong energy back to customer service means the number of book value is 582555698 yuan power equipment transferred to blend the leasing company, the transfer price of 600000000 yuan, rent for a period of 10 years, each quarter a rent, altogether is divided 40 period settlement. Rental rates in accordance with the bank loan benchmark interest rates downward float 17% of identified. In addition, the company is required annually to blend leasing company to pay the service fee 720000 yuan, a total of 7200000 yuan. The end of the lease rental payments, payment, the lease from Guangdong energy according to the nominal price of 1 yuan of hire purchase. This lease another need to pay 30000000 yuan deposit. As of December 31, 2010, in Guangdong energy has received communion leasing companies pay 600000000 yuan of financing lease. In 2011, in the construction of power generation equipment complete and transferred to fixed assets business accounting, clearing the completion value is 760091508 yuan, completion of settlement difference between value and price in other non-current assets - not realizing customer service rent loss accounting. ( d ) in January 24, 2011, March 24th and April 24th, in Guangdong energy three times in succession with the blend of leasing companies on Guangdong energy portion of the built in power generation equipment leasing agreement signed. Agreement in Guangdong to after sale leaseback energy such that the three batch of book value for a total of 302467993 yuan power equipment transferred to blend the leasing company, the transfer price of 300000000 Yuan, rent for a period of 10 years, each quarter a rent, altogether is divided 40 period settlement. Rental rates in accordance with the bank loan benchmark interest rates downward float 17% of identified. In addition, the company is required annually to blend leasing company to pay the service fee 360000 yuan, a total of 3600000 yuan. The end of the lease rental payments, payment, the lease from Guangdong energy according to the nominal price of 3 yuan of hire purchase. This lease another need to pay 20000000 yuan deposit. As of December 31, 2011, in Guangdong energy has received communion leasing companies pay 300000000 Yuan of financing lease. In 2011, in the construction of power generation equipment complete and transferred to fixed assets business accounting, clearing the completion value is 386751330 yuan, completion of settlement difference between value and price in other non-current assets - not realizing customer service rent loss accounting.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
10 Commitments (Cont’d)
(4) Implementation of the prior commitments
Except for the following item, the group had full fill all investement commitments made on 31 December 2009:
A capital injection to Shantou Wind Power for involving in the wind power project construction in Nanao East Island is approved in the board meeting of the Company held on 29 June 2010. According to the approval, the Company will inject capital fund of RMB35,000,000 by stage of the project progress at the same shareholding percentage of 25%. Until 31 December 2010, the Company has injected fund amounted to RMB7,358,775.
11 Subsequent events
For the proposal of profit distribution for year 2010, please refer to Note 6(34)(b).
12 Lease
The Group leaseback generation equipments (Note 6(12)(a), (27)) and the future rental expense is listed as follow:
31 December 2011 31 December 2010
Within 1 year 314,471,518 77,393,453 1-2 years 357,197,278 78,325,657 2-3 years 344,872,102 78,325,657 Over 3 years 1,660,637,141 528,158,185 2,677,178,039 762,202,952
As at December 31 2011, the unamortized balance of unrecognized financing charges is RMB 621,543,034 (December 31 2010: RMB186,151,886).
13 Business Combination
Please refer to Note 5(2).
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
14 Assets and liabilities measured at fair value
Impairment Current year fair Current year fair provision 31 December value changes in value changes in made during 31 December 2009 profit or loss equity the year 2010 Note 6(32 Financial assets - Available-fo-ssales financial assets 516,224,670 (163,120,625) 101,375,429 - 353,104,045
15 Reclassification
As at December 31 2011, The group will be value-added tax to be deducted from the amount and payment of tax payable classified as other current assets list and the same as at December 31 2010
16 Notes to the Company’s financial statements
(1) Accounts receivable
31 December 2011 31 December 2010
Account receivable 348,032,141 442,971,470 Less: provision for bad debt - - 348,032,141 442,971,470
(a) As at 31 December 2011and 31 December 2010, all the ageings of accounts receivables balances are within one year.
(b) Accounts receivable are analysed by categories as follows:
31 December 2011 31 December 2010
Book balance Provision for bad debts Book balance Provision for bad debts
% of % of % of % of total withdrawing total withdrawing Amount balance Amount bad debts Amount balance Amount bad debts
Individual material 348,032,141 100% --442,971,470 100% - -
GPGC is the sole customer of the Company. The balances of accounts receivable are all due from GPGC.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only] (c) As at 31 December 2011and 31 December 2010, no accounts receivable balances are dominated in foreign currencies..
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
15 Notes to the Company’s financial statements (Cont’d)
(2) Other receivables (Cont’d)
(2) Other receivables
31 December 31 December 2010 2011
Entrust loans (Note 6(3)(a)) 542,159,228 252,362,565 Advance - 5,604,221 Petty cash 3,283,986 3,153,953 Withhold and remit tax 1,771,755 - Others 6,263,139 11,971,501 553,478,108 273,092,240 Current year Current year addition reversal
Less: provision for bad debt -- - - 553,478,108 273,092,240
(a) The ageing of other receivables are analyzed below:
31 December 2011 31 December 2010
Within 1 year 268,487,545 398,010,068 1-2 years 2,918,900 131,882,582 2-3 years 20,000 12,300,458 3-4 years 1,665,795 11,285,000 273,092,240 553,478,108 (b) Other receivables are analysed by categories as follows:
31 December 2011 31 December 2010
% of % of % of total Provision for withdrawing % of total Provision for withdrawing Amount balance bad debts bad debts Amount balance bad debts bad debts
Individual material 257,735,717 94.38%-- 542,159,228 97.95% - - Others 15,356,523 5.62%-- 11,318,880 2.05% - -
273,092,240 100%-- 553,478,108 100% - -
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
15 Notes to the Company’s financial statements (Cont’d)
(2) Other receivable (Cont’d)
(c) As at 31 December 2011 and 2010, no balances included in above other receivables are due from the shareholders of the Company who hold over 5% (including 5%) shares with voting rights.
(d) As at 31 December 2011, the Company’s five largest other receivables balances are as follows:
% of total other Relationship with the Group Amount Period receivables
Weixin Yuntou Related parties 200,000,000 Less than 1 Year 73.24% Yudean Western Related parties 26,508,842 Less than 1 Year 9.71%
Shanxi Energy Related parties 20,842,013 Less than 1 Year 7.63%
Lincang Yuntou Related parties 5,011,712 Less than 1 Year 1.84%
Shajiao C Related parties 2,651,692 Less than 1 Year 0.97%
255,014,259 93.39%
(e) Other receivables due from related parties are as follows
31 December 2011 31 December 2010
Relatation with Yudean % of total % of total % of total % of total
Group Amount balance balanc Amount balance balanc
Zhongxinkeng Associates 200,000,000 73.24% - - - - Yudean Western The Group’s associate and Controlled by Yudean 26,508,842 9.71% - 72,114,584 13.03% -
Shanxi Energy Associates 20,842,013 7.63% - 204,333,143 36.91% - Lincang Yuntou Associates 5,011,712 1.84% 5,009,946 0.91% Shajiao C Controlled by Yudean 2,651,692 0.97% - 1,635,277 0.30% - Yuedian Environment 1,342,077 0.49% - - Yuedian Property 180,320 0.07% Weixin Yuntou Associates - - - 260,701,555 47.10% -
256,536,656 93.95% - 543,794,505 98.25% -
(f) As at 31 December 2011 and 31 December 2010, no other receivables balances are dominated in foreign currencies..
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
15 Notes to the Company’s financial statements (Cont’d)
(3) Long-term equity investments
31 December 2011 31 December 2010
Subsidiaries (b) 7,639,493,667 6,705,377,308 Associates 5,337,015,086 4,991,865,647 Other long-term equity investments 475,503,707 477,303,707 13,452,012,460 12,174,546,662 Less: Provision for impairment of long-term equity investments (a) (333,154,746) (35,557,877) 13,118,857,714 12,138,988,785
No significant restriction on the receipt of the Company’s investment income.
No quoted value of the Company’s associates.
(a) Impairment of long-term equity investments
31 December Current year Current year 31 December 2010 addition deduction 2011
Investments in Subsidiaries －Yuejia Electric (35,557,877) (297,596,869) - (333,154,746)
In 2009, 2 of the generation sets of Yuejia Electric are listed to be shut down by Guangdong province development and reform commission and this caused the impairement indicator existed for the Company’s long-termequity investments. After the assessment by the Company’s management, the Company provided provision of impairment according to the variance of the Company’s equity holding percentage in Yuejia Electric and the Company’s original investment cost at 31 December 2009.
In 2011, in anticipation of the Guangdong electric power generator 5 and 6 will also be terminated in 2015, Management level believes the company has reduction in long-term investment value. The company management in assessing the recoverable amount of the investment and have made provision for impairment of $ 333,154,746on December 31, 2011
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
15 Notes to the Company’s financial statements (Cont’d)
(3) Long-term equity investments (Cont’d)
(b) Subsidiaries
Current year Cash accrual dividends Accounting 31 December Current year 31 December interest Voting impairment impairment declared this method Investment cost 2010 movement 2011 held rights held provision providion year
Zhanjiang Electric Cost method 2,185,334,400 2,185,334,400- 2,185,334,400 76% 76%-- 169,841,03 4 Yuejia Electric Cost method 701,279,338 701,279,338 - 701,279,338 58% 58% (333,154,746) (297,596,869) Yuejiang Electric Cost method 500,500,000 500,500,000 - 500,500,000 65% 65% - - Maoming Zhenneng Cost method 433,060,946 288,561,587 144,499,359 433,060,946 56.39% 56.39% - - 20,229,752 Jinghai Electric Cost method 1,930,395,668 1,485,381,668 445,014,000 1,930,395,668 65% 65% - - 186,961,587 Oil Shale Power Cost method 196,398,200 196,398,200 - 196,398,200 83.66% 83.66% - - Zhanjiang Wind Power Cost method 242,277,000 166,544,000 75,733,000 242,277,000 70% 70% - - 7,700,000 Anxin Cost method 20,000,000 20,000,000 - 20,000,000 100% 100% - - 4,780,147 Humen Electric Cost method 90,000,000 90,000,000 - 90,000,000 60% 60% - - Zhongyue Energy Cost method 1,532,578,100 921,378,115 228,870,000 1,150,248,115 90% 90% - - Bohe Electric Cost method 190,000,000 150,000,000 40,000,000 190,000,000 100% 100% - - 6,705,377,308 934,116,359 7,639,493,667 (333,154,746) (297,596,869) 389,512,520
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
15 Notes to the Company’s financial statements (Cont’d)
(4) Operating revenue and operating cost
2011 2010
Main operating revenue 3,430,291,842 3,186,193,147 Other operating revenue 49,334,286 6,333,173 3,479,626,128 3,192,526,320
Main operating cost (3,092,174,197) (2,697,487,163) Other operating cost (34,596,971) (103,909) (3,126,771,168) (2,697,591,072)
(a) Revenue and cost from main operation
Analysis by products is as follows:
2011 2010 Main operating Main operating Main operating Main operating revenue cost revenue cost
Electricity income 3,430,291,842 (3,092,174,197) 3,180,873,031 (2,697,487,163) Steam income - - 5,320,116 - 3,430,291,842 (3,092,174,197) 3,186,193,147 (2,697,487,163)
(b) Revenue and cost from other operation
2011 2010 Other operating Other operating Other operating Other operating revenue cost revenue cost
Retal income 2,112,461 (113,128) 1,439,450 (65,490) Sales of material 19,172 (19,172) 1,362,080 (17,513) Coal ash income 43,047,064 (32,039,386) 1,043,436 - Others 4,155,589 (2,425,285) 2,488,207 (20,906) 49,334,286 (34,596,971) 6,333,173 (103,909)
- 136 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
15 Notes to the Company’s financial statements (Cont’d)
(4) Operating revenue and operating cost (Cont’d)
(5) Investment Income
2011 2010
Share of profit of investees under equity method of accounting (a) 538,205,457 536,517,223 4 Profit/ cash dividends declared by investees under cost method of accounting (b) 401,077,520 356,085,736 1 Entrusted Loan interest income 40,246,584 25,585,586 Income from available-for-sale financial assets 4,402,150 9,504,300 Loss of Bankruptcy (1,645,200) 982,286,511 927,692,845 6 No significant restriction on the receipt of the Company’s investment income.
- 137 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
15 Notes to the Company’s financial statements (Cont’d)
(5) Investment Income (Cont’d)
(a) Share of profit of investees under equity method of accounting
The top five companies invested, from which investment income accounted for the highest proportion of total profits, are set out as follows:
2011 2010 Reasons for changes from 2010 to 2011
Shenzhen Guang Qian 116,627,197 175,053,314 maintain fee Huizhou LNG 161,305,658 122,279,004 Increase in electricity generation Shanxi Energy 69,983,642 41,381,699 Increase in investment income Yudean Finance 41,381,699 36,941,240 Increase in interest income Fuel Supply 37,421,016 37,421,016 Increase of volumn of sales 446,118,675 413,076,273
(b) Share of profit of investes under cost method of accounting
The top five companies invested, from which investment income accounted for the highest proportion of total profits, are set out as follows:
2011 2010 Reasons for changes from 2010 to 2011
Jinghai Electric 186,961,587 106,627,558 Increase of dividends declared by investees Zhanjiang Electric 169,841,034 204,310,040 Decrease of dividends declared by investees Maoming Zhenneng 20,229,752 27,520,195 Decrease of dividends declared by investees Shenzhen Chuangtou 11,025,000 10,106,250 Increase of dividends declared by investees Zhanjiang Wind 7,700,000- Increase of dividends declared by investees 395,757,373 348,564,043
- 138 - GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011 (All amounts in RMB unless otherwise stated) [English translation for reference only]
15 Notes to the Company’s financial statements (Cont’d)
(6) Supplemental information of cash flow statements
(a) Reconciliation from the net profit to the cash flow operating activities
2011 2010
Net profit 514,535,961 1,000,685,689 Add: (Refund)/Provisionsfor assets impairment 296,833,827 (12,433,800) Depreciation of fixed assets and investment properties 170,581,908 193,340,436 Amortisation of intangible assets 3,478,787 3,478,788 Losses on fixed assets disposal 489,575 812,867 Financial expenses 339,130,647 246,175,077 Investment losses (982,286,511) (927,692,845) Decrease in deferred tax 10,456,137 5,856,256 Increase in inventories (44,594,800) 31,449,762 (Increase)/Decrease/in operating receivables 86,412,889 (39,329,693) (Decrease)/Increasein operating payables 48,410,352 (403,944,499) Net cash flows from operating activities 443,448,772 98,398,038
(b) Net changes of Cash and cash equivalent
2011 2010
Cash at end of year 417,749,940 659,395,980 Less: Cash at beginning of year (659,395,980) (287,691,522) Net increase in cash (241,646,040) 371,704,458
- 139 - Guangdong Electric Power Development Co.,Ltd. Annual Report 2010
1 Breakdown of extraoidinary gains and losses
2011 2010
Net gain on disposal of non-current assets 3,573,165 6,883,957 8 Provison for impairement of fixed asssets caused by enterprise restruction (a) 283,359,377 -227 Cost of reshuffle of the enterprises (6(19)) - 94,279,857 Capital occupation fee received from non-finance institutions those charged to profit and loss for the current year. (31,421,117) (25,585,586) (22 Government grants in current year profit (10,216,923) (4,726,923) (3 Receivables impairment reversal by individual assessment (763,039) (1,838,934) ( Other non-operating income, net (120,447) 4,638,138 4 244,411,016 73,650,509 214 Tax effects 2,043,693 (15,657,606) (42 Minority interests effects (after tax) (117,586,041) (34,239,278) (77 128,868,668 23,753,625 93
(a) Provison for impairement of fixed asssets caused by enterprise restruction, though incurred by the operation, the nature, amounts or the frequency of such transactions/events will lead to a misleading presentation of the normal performance and profitability of the operation of the entity, the management define it as extraoidinary gains and losses. (b)
The basis of preparation of net profit before extraordinary gains and losses reconciliation
According to the Interpretation Bulletin on Information Disclosure by Public Companies No [2008] 1 – Extraordinary gains and losses, extraordinary gain and losses are the gain and losses resulted from the transactions/events which are not incurred by the operation of the entity, or, though incurred by the operation, the nature, amounts or the frequency of such transactions/events will lead to a misleading presentation of the normal performance and profitability of the operation of the entity.
140 Guangdong Electric Power Development Co.,Ltd. Annual Report 2010
2 Return on equity and earnings per share
Weighted average return on Earnings per share equity (%) Basic earnings per share Diluted earnings per share 2011 2010 2011 2010 2011 2010
Consolidated net profit attributable to shareholders of the Company 2.72% 12.24% 0.13 0.44 0.28 0.44 Consolidated net profit excluding non-routine items attributable to shareholders of the Company 3.70% 13.22% 0.17 0.47 0.29 0.47
141 Guangdong Electric Power Development Co.,Ltd. Annual Report 2010
3 Notes for significant fluctuation of major accounts in financial statements
The following represents analysis to financial statements line items with a fluctuation above 30% (inclusive), or take up 5% of total assets as at balance sheet date (inclusive) or 10% of net profit for the reported period (inclusive), financial statements items those are not specified by CAS, financial statements items for those the names refect different contents:
31 December 2011 31 December 2010 Consolidation Consolidation In. /De.(%)
Advances to suppliers 1 321,693,491 668,596,257 (52%) Interest receivable 2 1,071,844 223,800 379% Other receivables 3 97,964,732 572,285,959 (83%) Inventory 4 1,410,576,820 852,247,851 66% Long-term receivable 3 482,006,891 33,326,446 1346% Fixed assets 5 14,866,672,176 11,207,225,955 33% Notes payable 6 343,083,604 110,000,000 212% Taxes payable 7 65,250,662 153,361,073 (57%) Current portion of non-current liabilities 8 940,141,518 627,733,453 50%
31 December 2011 31 December 2010 Consolidation Consolidation In. /De.(%) Operating revenue 10 14,620,140,721 12,642,208,069 16% Operating costs 11 (13,216,297,469) (10,877,414,004) 22% Taxes and surcharges 12 (77,681,223) (24,850,919) 213% General and administrative expenses 13 (597,530,138) (669,469,282) (11%) Finance expenses – net 14 (613,819,863) (452,190,821) 36% Asset impairment losses 15 (303,096,397) (34,531,344) 778% Operating profit 17 394,403,441 1,168,796,316 (66%) Non-operating expenses 16 (10,777,518) (24,056,483) (55%) Total profit 17 406,106,142 1,169,096,199 (65%) Income tax expenses 7 (146,988,249) (380,704,425) (61%) Net profit 17 259,117,893 788,391,774 (67%) Equity holders of the Company 17 356,321,879 765,806,461 (53%) Minority interest 18 (97,203,986) 22,585,313 (530%) Basic earnings per share 17 0.13 0.28 (54%) Diluted earnings per share 17 0.13 0.28 (54%) Other comprehensive (loss)/income 19 (35,228,262) (122,340,469) (71%) Total comprehensive income 17 223,889,631 666,051,305 (66%) Attributable to equity holders of the Company 17 321,093,617 643,465,992 (50%) Minority interest 18 (97,203,986) 22,585,313 (530%)
142 Guangdong Electric Power Development Co.,Ltd. Annual Report 2010
3 Notes for significant fluctuation of major accounts in financial statements (continued)
1. Advances to suppliers: year procurement of the Zhanjiang electricity to fuel the company's pre-paid in the form into a credit way, prepaid fuel section of the Zhanjiang electricity has decreased by about 150 million yuan. Energy in Guangdong this year a large number of projects completed and settlement, therefore construction prepayment to reduce about 144 million yuan. 2. Interest receivable: Interest receivable: end of bank deposits increased interest receivable also increased. 3. Other receivables and long-term receivables: Other receivables decrease was primarily due to the large external entrusted loan expires this year, the newly signed entrusted loan period longer than one year are reflected in long-term receivable balances. Commissioned loan balance in other receivables decreased by 54200 million yuan to 50 million yuan, commissioned loan balance in the long-term receivables increased from 15 million yuan to 42000 million yuan. 4. Inventory: The increase in inventory is the main fuel increases. In Guangdong energy in 2011 began trial operation, began to buy coal and limestone, the final fuel inventory balance of about 100000000 yuan. Because of the Shaoguan power plant shut down, river in Guangdong power in 2011 September underwent its inventory, makes the final River in Guangdong power fuel inventory increased to about 200000000 yuan.
5. fixed assets: in Guangdong energy in 2011 August and October has estimated to solid 1, unit 2, the fixed assets net value increase of about 4700000000 yuan.
6: 2011, notes payable of power and fuel company coal procurement section part to acceptance clearing, bill from the Guangdong finance acceptance, the final notes payable to add about 190000000 yuan.
7. The 7, should pay tax / tax expense: 2011 with compared 2010, group total profit fell by 65%, so the income tax expenses and taxes payable are greatly reduced.
8, a year of non-current liabilities / long-term payable: both increase is mainly due to deal with the financing lease payments increase induced by. In 2011, the power generation and river in Guangdong power successively occurred in the financing and leasing business, after sale leaseback power equipment will be the minimum lease payments deducted the unrecognized financing charges after the confirmation of balance to deal with the financing lease payments, and within a year and one year above the sum payable due within one year were confirmed in the non-current liabilities and long-term payment.
9, the deferred income tax liabilities: the years of available for sale financial assets at fair value changes caused by the taxable temporary differences are reduced, leading to a deferred income tax liabilities balance year decline.
10, business income: social power demand increases, the group of each power plant electricity amounted to about 32930000000000000 kwh, compared with 29100000000000000 in 2010 grew by about 14% kwh. Development and Reform Commission in 2011, at the beginning and end of the two promote electrovalency, cause income growth of about 1%.
11, operating costs: the cost increase is composed of fuel and artificial caused by the two factors. Generating capacity in 2011 resulted in increased coal consumption increased, at the same time the fuel price increase is about 8%. In addition, the labour cost grows about 5% 2011.
143 Guangdong Electric Power Development Co.,Ltd. Annual Report 2010
12, business taxes and surcharges: in 2011 the Group 's revenue increase, and capital expenditure less than in 2010, therefore should pay value added tax increase, the corresponding business taxes and surcharges increase. In addition, due to the availability of local tax bureau of Dongguan city approval of Shajiao A power plant in 2010, rushed back before the annual provision of about 16000000 yuan of city maintenance and construction tax and education surcharge.
13, management costs: the" big pressure on the small" policy implications, Guangdong Ka power 3, 4 aircrew already shut down in 2010 June. In 2010, Guangdong Ka power depending on the placement of surplus staff, reasonable estimates of the dismissal of the liability formed, and recognize the corresponding management costs about 78000000.
14, the financial cost of - Net: final in 2011, the head of short-term borrowing scale total growth of about 1840000000 yuan, and in 2011 due to the tightening of credit policy, the bank loan interest rate increase, making the group 's funding costs rise.
15, asset impairment losses: 2011 year, due to the anticipated 5, unit 6 in 2015 will be shutting down, Guangdong Ka power of their long-term assets provision about 283000000 impairment, including fixed assets of about 258000000 yuan, intangible assets 25000000 yuan.
16, non-operating expenses: this year the group scrapped fixed assets decreases, the non-operating expenses drop.
17, operating profit / total profit and net profit / attributable to the parent company of the owner of the net profit / earnings per share / diluted earnings per share / total comprehensive income / attributable to shareholders of the parent company of total comprehensive income: this year the profit decline is mainly affected by the following factors: 1) as fuel prices and labour growth, business cost increase is greater than the revenue increase, make the profit of about $360000000 less than in 2010; 2) the year 2011, due to the anticipated Guangdong Ka power active 2 generating units 5, 6 units in 2015 will be shutting down, Guangdong Ka power of their long-term assets provision about 283000000 impairment, including fixed assets of about 258000000 yuan, intangible assets 25000000 yuan.
18, minority stockholder / attributable to the minority shareholders total comprehensive income: since the 2011 coal price rises and the effect of transportation cost, the group of 5 the home is located in more remote power plant is in deficit to manage state. And within this group there are 2 Electrical Appliance Factory is still in the period of construction, no production. So the minority shareholder's net income decline.
19, other comprehensive income: available for sale financial assets at fair value changes caused by the other comprehensive income changes.
144 Guangdong Electric Power Development Co.,Ltd. Annual Report 2010
XI. List of Documents Available for Inspection
1.Financial statements bearing the seal and signature of legal representative, financial controller and the person in charge of the accounting organ.
2. The original of the auditor’s report bearing the seal of the certified public accountants and the signature of C.P.A. 3.All original copies of official documents and notices, which were disclosed in Securities Times, China Securities and Hong Kong Commercial Daily (overseas newspaper for English version). 4..Annual reports in Chinese version. The documents mentioned above are kept in office, and are ready for reference at any time (except public holidays, Saturday and Sunday).
The Board of Directors of Guangdong Electric Power Development Co., Ltd.
Chairman of the board of directors: Pan Li
March 8,2012
145