Annual Report 2014 Annual Report 2014 .suntien.com w ww Contents Chairman’s Statement 2 Corporate Profile 4 Financial Highlights and Major Operational Data 14 Management Discussion and Analysis 17 Human Resources 30 Biographies of Directors, Supervisors and Senior Management 32 Report of the Board of Directors 38 Corporate Governance Report 50 Environmental, Social and Governance Report 65 Report of the Board of Supervisors 76 Independent Auditors’ Report 79 Consolidated Statement of Comprehensive Income 81 Consolidated Statement of Financial Position 82 Consolidated Statement of Changes in Equity 84 Consolidated Statement of Cash Flows 85 Statement of Financial Position 87 Notes to Financial Statements 88 Definitions 191 Corporate Information 195 China Suntien Green Energy Corporation Limited Annual Report 2014 Chairman’s Statement 2 China Suntien Green Energy Corporation Limited Annual Report 2014 Chairman’s Statement Dear Shareholders: In 2014, due to the effect of adverse factors such as the slowdown of macro-economic growth, price adjustment of natural gas and obvious reduction of wind speed, the growth of the Group’s natural gas sales slowed down and the wind power generation reduced as compared with last year. Facing with the complicated operating environment, the Group accelerated in exploring new markets, seized new resources and made substantial results in exploring gas and wind power markets in Hebei Province and other provinces. Breakthroughs were made in gas business in other provinces, the approved capacity of wind power projects hit historic high, and the business layout tended to be more reasonable, thus laying a solid foundation for a new round of performance growth for the Group. In 2014, the Group sold 1,523 million cubic meters of natural gas; realized a total sales of wind and photovoltaic power generation of 2,740 million kWh; realized revenue of RMB 5,149 million, a total profit of RMB 675 million and a net profit of RMB 498 million, of which the net profit attributable to the owners of the Group amounted to RMB 335 million. Looking forward to 2015, the Group will continue to vigorously develop clean energy businesses such as gas, wind power and solar energy, further improve its business structure, constantly accelerate the construction of projects, promote the production and operation of Approved Projects as soon as possible, and improve the overall management level of operation and maintenance, making itself a listed company with more solid foundation in basic management, more efficient management mechanism, more reasonable business structure, more diversified profit growth points and more healthy and sustainable development capacity, and creating greater values for shareholders. Cao Xin Chairman Shijiazhuang, PRC, 24 March 2015 3 China Suntien Green Energy Corporation Limited Annual Report 2014 Corporate Profi le China Suntien Green Energy Corporation Limited was established on 9 February 2010 with contribution made by the promoter shareholders HECIC and HECIC Water. The Company was listed on the Main Board of the Hong Kong Stock Exchange on 13 October 2010. The Group is a leading company in the development and utilization of clean energy in northern China and is the largest natural gas distributor in Hebei Province, as well as the largest wind power operator in the province. The Group is primarily engaged in the exploration and utilization of clean energy and new resources, with two major business segments: the natural gas business and the wind power business. The Group possesses natural gas transmission and ancillary facilities in Hebei Province, and sells natural gas through natural gas distribution channels. As at 31 December 2014, the Group owned 2 long-distance natural gas transmission pipelines, 4 high-pressure branch pipelines, 25 urban gas projects, 10 distribution stations, 4 gate stations, 4 CNG refilling stations, 2 CNG primary filling stations and 1 CNG primary and secondary filling station. In 2014, the sales volume of natural gas of the Group was 1,523 million cubic meters. With a stable natural gas wholesale business, the Group vigorously develop the peripheral and downstream markets by taking advantage of its pipelines network and facilities. Engaged in the planning, development and operation of wind farms as well as the sale of electricity, the Group owns wind power projects in the regions of Hebei, Shanxi, Xinjiang, Shandong, Yunnan and Inner Mongolia, etc. Based in Hebei, the Group has invested and developed wind power projects across the country, and actively seeks suitable investment projects overseas. As at 31 December 2014, the Group operated 27 wind farms in which it has controlling interests, with a consolidated installed capacity of 1,696.80 MW as well as interests in installed capacity of 1,544.07 MW. In 2014, the gross wind power generation of the Group was 2,740 million kWh with 1,996 utilization hours. In 2014, China has experienced a slowdown in economic growth and was under downward pressure. However, the government constantly promulgated a series of measures to actively support the development of clean energy and new energy. In the critical period that requires for the urgent need for air pollution control, structural upgrade of domestic industries and energy structure adjustment, the Group will be in line with the direction of government policies at the right time to actively develop its business, expand the industrial scale, focus on the development of natural gas and wind power, and to explore any other clean energy and new energy, with a view to constantly improving the profitability of the Group. 4 China Suntien Green Energy Corporation Limited Annual Report 2014 Corporate Profi le 5 China Suntien Green Energy Corporation Limited Annual Report 2014 Corporate Profi le 1. CORPORATE STRUCTURE As at 31 December 2014, the corporate structure of the Group is as follows: 100% 100% 100% 92% 80% 100% 51% Suntien Green Energy Investment Suntien Green Energy Jianshui Suntien Wind Energy Suntien Green Energy Heilongjiang Suntien Hadian Ruoqiang Suntien Green Huludao Liaohe (Beijing) Co., Ltd. (Hong Kong) Corporation Limited Co., Ltd. (Fengning) Co., Ltd. New Energy Investment Co., Ltd. Energy Co., Ltd. Oilfield Gas Co., Ltd. 70% 100% 100% Suntien Liquefied Natural Wuming Suntien Green Hebei Fengning CIC Gas Shahe Co., Ltd. Energy Co., Ltd. New-energy Co., Ltd. 100% HECIC New-energy Co., Ltd. Hebei Suntien Kechuang 100% New Energy Technology Co., Ltd. 100% HECIC Zhangjiakou Kangbao Branch Wind Energy Co., Ltd. Guyuan Suntien Wind Energy 100% Co., Ltd. 100% CIC Yanshan (Guyuan) Guyuan Branch Wind Energy Co., Ltd. Shangyi Suntien 100% Wind Energy Co., Ltd 100% Kangbao Suntien Wind Energy Co., Ltd. Yuxian Suntien 100% Wind Energy Co., Ltd. 100% Keyouqianqi Suntien Wind Energy Co., Ltd. Zhangbei Suntien 100% Wind Energy Co., Ltd. 100% Laoting CIC Wind Energy Co., Ltd. Changli Suntien 100% Wind Energy Co., Ltd. 100% Laiyuan Suntien Wind Energy Co., Ltd. Suntien Green Energy 100% Weichang Co., Ltd. 70% HECIC Zhongxing Wind Energy Co., Ltd. Chengde Yujing 60% New Energy Co., Ltd. 55.92% HECIC Yuzhou Chengde Yuyuan 60% Wind Energy Co., Ltd Wind Energy Co., Ltd. 51% Chongli CIC Huashi Wind Energy Co., Ltd. Lingqiu CIC Hengguan 55% Wind Energy Co., Ltd. 49% Zhangbei Huashi CIC Wind Energy Co., Ltd. Zhangbei CIC Huashi 51% Wind Energy Co., Ltd. 50% Hebei Weichang Longyuan CIC (1) HECIC Longyuan 50% Wind Energy Generation Co., Ltd. Chongli Wind Energy Co., Ltd. 45% Longyuan CIC (Chengde Weichang) Wind Energy Generation Co., Ltd.(3) Longyuan CIC (Chengde) 45% Wind Energy Generation Co., Ltd.(2) 100% CIC New-energy (Tangshan) Co., Ltd. Chongli Suntien 100% Wind Energy Co., Ltd Yudaokou Wind Energy Branch Kangbao Sanxiatian Wind Energy Branch 6 China Suntien Green Energy Corporation Limited Annual Report 2014 Corporate Profi le 100% 100% 100% 55% 100% 51% 50% Xingyang Suntien Wind Energy Wulian County Suntien Junan Suntien Wind Energy Hebei Natural Gas Shenzhen Suntien Green Energy Shandong Suntien Yuanjian Hebei Suntien Co., Ltd Wind Energy Co., Ltd. Co., Ltd. Company Ltd. Investment Co., Ltd. Wind Energy Co., Ltd. Guohua Gas Co., Ltd(4) 100% 51% Suntien Hebei Solar Energy 60% Shijiazhuang Suntien Shenyu Hejing Suntien Green Energy Development Co., Ltd. Photovoltaic Power Co., Ltd. 100% Co., Ltd. Xinji CIC Gas Co., Ltd. 100% Lulong County Laoting Branch Photovoltaic Power Co., Ltd. 100% Jinzhou CIC Gas Co., Ltd. Zhao County Anda 100% Gas Co., Ltd. Pingquan Branch Shijiazhuang CIC 100% Pingshan County Natural Gas Co., Ltd. Huajian Gas Co., Ltd. 100% Changli Branch Chengde City CIC 90% Natural Gas Co., Ltd. Anping Branch 41% Chengde City Shuangluan CIC Shijiazhuang Huabo 55% Liquefied Natural Gas Natural Gas Co., Ltd. Co., Ltd.(7) Chengde Branch PetroChina Jingtang Liquefied 20% Luanping Branch Natural Gas Co., Ltd.(5) Lulong Branch Hebei Zhaodu 52.5% Feixiang Branch Natural Gas Co., Ltd 100% Gaoyi Branch Handan County Langtuo Natural Baoding PetroChina 17% Gas Sales Company Kunlun Gas Co., Ltd.(6) 100% Shenzhou CIC 51% Gas Co., Ltd. Dacaozhuang Branch Ningjin County CIC Natural Gas Co., Ltd. 60% Shijazhuang Jiran Pipeline Engineering Co., Ltd. Laiyuan Branch 100% Baoding CIC Natural Gas Co., Ltd. Shahe Branch 51% Anguo Huagang Gas Co., Ltd. Qinghe Branch 60% Li County CIC Natural Gas Co., Ltd. Hengshui 51% CIC Natural Gas Co., Ltd.(8) Xingtai Jiran Auto Gas 55% Co., Ltd. Neiqiu First Branch Notes: (1) Hebei Weichang Longyuan CIC Wind Energy Co., Ltd. is an associated company of the Company (2) Longyuan CIC (Chengde) Wind Energy Generation Co., Ltd. is an associated company of the Company (3) Longyuan CIC (Chengde Weichang) Wind Energy Generation Co., Ltd. is an associated company of the Company (4) Hebei Suntien Guohua Gas Co., Ltd is a joint venture of the Company (5) PetroChina Jingtang Liquefied Natural Gas Co., Ltd. is an associated company of the Company (6) Baoding PetroChina Kunlun Gas Co., Ltd. is a long-term investment company of the Company (7) Chengde City Shuangluan CIC Liquefied Natural Gas Company Limited is an associated company of the Company (8) Hengshui CIC Natural Gas Co., Ltd.