Annual Report 2018 Green Energy Makes the World Better Contents Chairman’s Statement 2 Corporate Profile 4 Financial Highlights and Major Operational Data 13 Management Discussion and Analysis 16 Human Resources 32 Biographies of Directors, Supervisors and Senior Management 34 Report of the Board of Directors 40 Corporate Governance Report 61 Report of the Board of Supervisors 77 Independent Auditors’ Report 80 Consolidated Statement of Profit or Loss and Other Comprehensive Income 86 Consolidated Statement of Financial Position 87 Consolidated Statement of Changes in Equity 89 Consolidated Statement of Cash Flows 90 Notes to Financial Statements 92 Definitions 208 Corporate Information 211 2 Chairman’s Statement China Suntien Green Energy Corporation Limited Annual Report 2018 Chairman’s Statement 3 Dear Shareholders, 2018 was an important year for the implementation of China’s “13th Five-Year Plan”. With the speeding up of the pace of ecological civilization construction, effective implementation of green development and the continuous promotion of structural reform of energy supply, the development of clean energy was further accelerated. Leveraging on the government’s strong support for renewable energy and clean energy industries, in 2018, the Group strived to expand its wind power and natural gas business, and persistantly enlarged its industrial scale so as to continue to enhance the profitability of the Group. In 2018, the asset structure of the Group remained stable and its economic indicators improved continuously. As of the end of 2018, the Group realized a total sales of wind and photovoltaic generation of 7,397 million kWh; sold 2,631 million cubic meters of natural gas; the consolidated total assets of the Group amounted to RMB39,161 million; realized revenue of RMB9,975 million, total profit of RMB1,743 million and net profit of RMB1,575 million, of which the net profit attributable to the owners of the Group amounted to RMB1,269 million. In 2019, further efforts will be made towards building a beautiful China, promoting energy production and consumption revolution, and establishing a clean and low carbon energy system in a safe and efficient manner. The Group will make good use of the upcoming new opportunities and will continue to focus on renewable energy and clean energy as its business development direction, actively take advantage of new energy resources, promote the establishment of natural gas production, supply, storage and sales systems, closely monitor the consolidated engineering inspection process, ensure all major projects are put into production on schedule, adopt a people-oriented approach to improve the experts’ training mechanisms in order to develop an echelon of talents, broaden financing channels, strengthen financial management and control levels, consolidate the safety foundation, and strengthen information construction to improve the results in order to deliver better performance to shareholders. Cao Xin Chairman Shijiazhuang, PRC, 12 March 2019 China Suntien Green Energy Corporation Limited Annual Report 2018 4 Corporate Profile China Suntien Green Energy Corporation Limited was established on 9 February 2010 by 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 primarily engaged in the exploration and utilization of new energy and clean energy, with two major business segments: the wind power business and the natural gas business. The Group is engaged in the planning, development and operation of wind farms as well as the sale of electricity. The Group owns wind power projects in 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 has actively sought suitable investment projects overseas. As at 31 December 2018, the Group had wind power consolidated installed capacity of 3,858.15 MW as well as attributable installed capacity of 3,482.75 MW. In 2018, the gross wind power generation of the Group was 7,676 million kWh with 2,482 utilization hours. The Group possesses and operates natural gas transmission and ancillary facilities in Hebei province, and sells natural gas through natural gas distribution channels. As of 31 December 2018, the Group owned 6 long-distance natural gas transmission pipelines, 14 high-pressure branch pipelines, 30 urban gas projects, 19 distribution stations, 11 gate stations, 7 CNG refilling stations, and 7 CNG primary filling stations. In 2018, the sales volume of natural gas of the Group was 2,631 million cubic meters. In 2018, various measures for green development were effectively implemented given the acceleration of the construction of an ecologically civilized society. With the continuous promotion of the supply side structural reform of the energy sector, as well as the commencement of international cooperation for energy production based on the “One Belt One Road” initiative, China’s energy production and consumption revolution continually underwent progress and the progress in the use of clean energy was further accelerated. Supported by stable energy supply in general, the structure of energy consumption was further optimized and energy conservation and emission reduction attained new achievements. The Group will actively follow the direction of government policies to develop its business with full efforts, expand its business scale, focus on the development of wind power and natural gas, and explore other renewable energy and clean energy, with a view to constantly improving the profitability of the Group. China Suntien Green Energy Corporation Limited Annual Report 2018 Corporate Profile 5 China Suntien Green Energy Corporation Limited Annual Report 2018 6 Corporate Profile 1. CORPORATE STRUCTURE As at 31 December 2018, the corporate structure of the Group was as follows(1): 100% 100% 100% 70% 100% 100% HECIC Jianshui Suntien Yunnan Pushi Chaoyang Suntien Suntien Hebei HECIC New-energy New-energy Wind Energy Natural Gas New Energy Electricity Sales Co., Ltd. (Tangshan) Co., Ltd. Co., Ltd. Co., Ltd. Co., Ltd. Co., Ltd. 100% 55% 92% 100% 99.08% 100% 100% Caofeidian Suntien Hebei Natural Gas Suntien Green Guangxi Suntien Heilongjiang Suntien Suntien Green Ruoqiang Suntien Liquefied Natural Company Ltd. Energy (Fengning) Green Energy Hadian New Energy Energy Investment Green Energy Gas Co.,Ltd. Co., Ltd. Co., Ltd. Investment Co., Ltd. (Beijing) Co., Ltd. Co., Ltd. 70% 51.4% 100% 100% 51% 100% Ruian Xin Yun HECIC Offshore Hebei Fengning Fangchenggang Huludao Liaohe Fuping Jixin New Energy Co.,Ltd. Wind Power CIC New Energy Suntien Green Oil Field Gas New Green Co., Ltd. Co., Ltd. Energy Co., Ltd. Co., Ltd. Energy Co., Ltd. China Suntien Green Energy Corporation Limited Annual Report 2018 Corporate Profile 7 100% 100% 70% 70% 55% 49% Xingyang Suntien Wulian County Suntien Green Suntien Liquefied Chengde Dayuan Wind Energy Suntien Wind Energy Xuyi Natural Gas Heibei Gas Co.,Ltd. New Energy Co., Ltd. Energy Co., Ltd. Co., Ltd. Shahe Co., Ltd. Co., Ltd.(4) 100% 100% 100% 69% 50% 10% Weihui Suntien Junan Suntien Suntien Green Suntien Hebei Hebei Suntien HECIC Group Green Energy Wind Energy Energy (Hong Kong) Solar Energy Guohua Gas Finance Company Development (2) (6) Co., Ltd. Co., Ltd. Corporation Limited Co., Ltd. Co., Ltd. Limited 100% 100% 100% 75% 30% 20% Tongdao Suntien Fuliang Zhongling Shenzhen Suntien Suntine Green Hebei Jinjianjia Hebei Fengning Green Energy Suntien Green Green Energy Energy Lianyungang Natural Gas Pumped Storage Co., Ltd. Energy Co., Ltd. Investment Co., Ltd. Co.,Ltd. Co., Ltd.(3) Co., Ltd.(5) Notes: (1) Please note that the corporate structure chart covers first-tier subsidiaries of the Company only. (2) Hebei Suntien Guohua Gas Co., Ltd. is a joint venture of the Company. (3) Hebei Jinjianjia Natural Gas Co., Ltd. is an associated company of the Company. (4) Chengde Dayuan New Energy Co., Ltd. is a joint venture of the Company. (5) Hebei Fengning Pumped Storage Co., Ltd. is an associated company of the Company. (6) HECIC Group Finance Company Limited is a long-term investment company of the Company. China Suntien Green Energy Corporation Limited Annual Report 2018 8 Corporate Profile 2. WIND POWER AND NATURAL GAS PROJECTS OF THE GROUP (1) Summary of the wind and photovoltaic power generation projects of the Group (1) Summary of the consolidated wind power projects Installed capacity Province Project name (by regional) (MW) Hebei Province Zhangjiakou Regional Wind Farm 1,437.3 Chengde Regional Wind Farm 1,338.15 Cangzhou Regional Wind Farm 49.5 Baoding Regional Wind Farm 99 Qinhuangdao Regional Wind Farm 48 Tangshan Regional Wind Farm 160 Shanxi Province Lingqiu Regional Wind Farm 150.7 Xinjiang Uyghur Autonomous Ruoqiang Regional Wind Farm 100 Region Yunnan Province Jianshui Regional Wind Farm 193.6 Inner Mongolia Autonomous Inner Mongolia Regional Wind Farm 99.3 Region Shandong Province Junan Regional Wind Farm 40 Guangxi Autonomous Region Wuming Regional Wind Farm 50 Henan Province Henan Regional Wind Farm 46.6 Jiangsu Province Xuyi Regional Wind Farm 46 Total 3,858.15 Note: Wind farms in which the Group has shareholding include Weichang Zhangjiawan Wind Farm, Weichang Guangfayong Wind Farm, Weichang Shanwanzi Wind Farm, Weichang Zhuzixia Wind Farm and Weichang Dishuihu Wind Farm, each of which has an installed capacity of 49.5 MW. (2) Summary of the photovoltaic power generation projects Installed capacity Province Project name