Full text of The Semi-Annual Report 2023 of Shenzhen Nanshan Power Co., Ltd.
Stock code: 000037, 200037 Stock abbreviation: Shennandian A, Shennandian B Announcement No.: 2023-031
Shenzhen Nanshan Power Co., Ltd.
The Semi-Annual Report 2023
August 25, 2023
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Full text of The Semi-Annual Report 2023 of Shenzhen Nanshan Power Co., Ltd.
Section I Important Notes, Table of Contents and Interpretations
The Board of Directors, the Board of Supervisors, directors, supervisors
and senior officers of the Company guarantee that the contents of the semi-
annual report are true, accurate and complete, and do not contain false
records, misleading statements or major omissions, and that they bear
individual and joint legal liabilities.
Chairman Kong Guoliang, person in charge of accounting and GM Chen
Yuhui, CFO Zhang Xiaoyin and head of accounting department (chief
accountants) Lin Xiaojia declare that the financial reports in this semi-annual
report are true, accurate and complete.
Except director Mr. Sun Huirong was unable to attend the Board Meeting
personally to review annual report due to work reasons, authorized director
Mr. Huang Qing to attend the meeting and exercise voting rights on his behalf.
All other directors attended the Board Meeting for annual report deliberation.
The Company plans not to distribute cash dividends, issue bonus shares,
or increase share capital through capitalization of reserves.
Any forward-looking statements in this semi-annual report, including
future plans, do not constitute a material commitment of the Company to
investors. Investors are kindly requested to pay attention to investment risks.
The semi-annual report is prepared in Chinese and English respectively.
In case of any ambiguity between the two versions, the Chinese version shall
prevail. Investors are advised to read the full text of this semi-annual report
carefully.
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Table of Contents
Section I Important Notes, Table of Contents and Interpretations ................. 2
Section II Company Profile and Financial Indicators ....................................... 6
Section III Management's Discussion and Analysis ........................................... 9
Section IV Corporate Governance....................................................................... 19
Section V Environment and Social Responsibilities .......................................... 21
Section VI Important Matters .............................................................................. 24
Section VII Changes in Shares and Shareholders .............................................. 28
Section VIII Preferred Shares .............................................................................. 33
Section IX Bonds.................................................................................................... 34
Section X Financial Report ................................................................................... 35
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List of Reference Documents
I. Original of the semi-annual report 2023 bearing the signature of the Company's legal representative.
II. Financial statements signed and sealed by the Company's legal representative, chief accountant (General Manager), CFO and
head of the accounting department (accounting officer).
III. The originals of all the Company's documents and announcements that have been publicly disclosed on the designated media
during the reporting period.
IV. Place of inspection: Shenzhen Stock Exchange, the office of the Company's Board of Directors.
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Interpretation
Item of interpretation Refers to Content of interpretation
Company, the Company, Shenzhen
Refers to Shenzhen Nanshan Power Co., Ltd.
Nanshan Power, listed company
Shenzhen New Power Industrial Co.,
New Power Company Refers to
Ltd.
Shen Nan Dian Zhongshan Company, Shen Nan Dian (Zhongshan) Electric
Refers to
Zhongshan Nanlang Power Plant Power Co., Ltd.
Shenzhen Shennandian Turbine
Shen Nan Dian Engineering Company Refers to
Engineering Technology Co., Ltd.
Shen Nan Dian Environment Protection Shenzhen Shen Nan Dian Environment
Refers to
Company Protection Co., Ltd.
Shenzhen Server Petrochemical
Server Company Refers to
Supplying Co., Ltd.
Singapore Company Refers to Shen Nan Energy (Singapore) Co., Ltd.
Xindesheng Company Refers to Hong Kong Xingdesheng Co., Ltd.
Shenzhen Nanshan Power Warehousing Refers to Zhongshan Shen Nan Dian Warehousing
Company Co., Ltd.
Nanshan Thermal Power Station of
Nanshan Thermal Power Station Refers to
Shenzhen Nanshan Power Co., Ltd.
Currency units are RMB yuan, RMB ten
RMB yuan, RMB ten thousand yuan, and thousand yuan, RMB one hundred
Refers to
RMB one hundred million yuan million yuan, except for the currency
units otherwise expressed.
Reporting period Refers to From January 1, 2023 to June 30, 2023
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Section II Company Profile and Financial Indicators
I. Company profile
Stock name Shen Nan Dian A, Shen Nan Dian B Stock code 000037、200037
Stock exchange where the
Shenzhen Stock Exchange
Company's stocks are listed
Chinese name of the Company Shenzhen Nanshan Power Co., Ltd.
Chinese abbreviation of the
Shen Nan Dian
Company (if any)
Foreign name of the Company
Shenzhen Nanshan Power Co., Ltd.
(if any)
Legal representative of the
Kong Guoliang
Company
II. Contact person and contact information
Secretary of the Board of Directors Securities affairs representative
Name Zhou Yi
16th and 17th Floor, Hantang Building,
Contact address Overseas Chinese Town, Nanshan District,
Shenzhen City, Guangdong Province
Telephone 0755-26003611
Fax 0755-26003684
Email investor@nspower.com.cn
III. Other information
1. Contact information of the Company
Whether the Company's registered address, office address, postal code, website, e-mail address, etc. have changed during the
reporting period
Applicable Not applicable
The Company's registered address, office address and postal code, website and e-mail address have not changed during the
reporting period. For details, please refer to the 2022 Annual Report.
2. Place of information disclosure and provision
Whether the place of information disclosure and provision has changed during the reporting period
Applicable Not applicable
The stock exchange website and the name and URL of the media where the Company discloses its semi-annual report, and the
place of provision of the Company's semi-annual report have not changed during the reporting period. For details, please refer to
the 2022 Annual Report.
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3. Other relevant information
Whether other relevant information has changed in the reporting period
Applicable Not applicable
IV. Key accounting data and financial indicators
Whether it has retroactive adjustment or re-statement on previous accounting data or not
Yes No
The reporting period Same period last year Changes YoY
Operating revenue (RMB) 271,268,185.05 229,243,542.07 18.33%
Net profit attributable to the
shareholders of listed -37,240,739.56 -94,098,149.09 60.42%
company (RMB)
Net profit attributable to
shareholders of the listed
-54,877,330.63 -127,505,554.48 56.96%
company after deducting non-
recurring profit or loss (RMB)
Net cash flows from operating
-57,016,489.54 200,588,083.30 -128.42%
activities (RMB)
Basic earnings per share
-0.0618 -0.1561 60.41%
(RMB/share)
Diluted earnings per share
-0.0618 -0.1561 60.41%
(RMB/share)
Weighted average rate of
-2.59% -6.00% Increasing by 3.41%
return on net assets
At the end of the reporting Change compared to the end
At the end of last year
period of the previous year.
Total assets (RMB) 1,982,518,782.62 2,606,216,345.99 -23.93%
Net assets attributable to
shareholders of the listed 1,418,108,591.22 1,455,129,894.84 -2.54%
company (RMB)
V. Differences in accounting data under domestic and foreign accounting standards
1. Differences in net profit and net assets in the financial reports disclosed in accordance with the
international accounting standards and the Chinese accounting standards
Applicable Not applicable
During the reporting period of the Company, there was no difference in net profit and net assets in financial reports disclosed in
accordance with international accounting standards and Chinese accounting standards
2. Differences in net profit and net assets in financial reports disclosed in accordance with both the
international accounting standards and Chinese accounting standards
Applicable Not applicable
During the reporting period of the Company, there was no difference in net profit and net assets in financial reports disclosed in
accordance with the international accounting standards and Chinese accounting standards
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VI. Non-recurring profit or loss items and amounts
Applicable Not applicable
Unit: RMB
Item Amount Description
Profit or loss on disposal of non-current
assets (including write-off of provision 106,021.61
for asset impairment)
Government subsidies included in the
current profit or loss (except for the
government subsidies closely related to
Mainly apportionment of government
the Company's normal business, in line 4,065,271.26
subsidies related to assets
with national policies and regulations,
and continuously enjoyed according to a
certain standard quota or quantity)
Profit or loss from changes in fair value
arising from holdings of trading financial
assets and trading financial liabilities and
investment income from disposal of
trading financial assets, trading financial 9,342,507.91 Mainly wealth management income
liabilities and available-for-sale financial
assets, except for the effective hedging
business related to the Company's normal
business operations
Other non-operating revenue and Mainly power outage compensation and
4,993,878.46
expenses other than the above items insurance claim compensation
Less: Affected amount of minority equity
871,088.17
(after tax)
Total 17,636,591.07
Specific circumstances of other profit or loss items that meet the definition of non-recurring profit or loss:
Applicable Not applicable
The Company had no specific profit or loss items that meet the definition of non-recurring profit or loss.
Notes on the definition of the non-recurring profit or loss items listed in the "Interpretive Announcement No. 1 on Information
Disclosure of Companies Issuing Securities to the Public - Non-recurring Profit or Loss" as recurring profit or loss items
Applicable Not applicable
The Company had no circumstances of definition of the non-recurring profit or loss items listed in the "Interpretive Announcement
No. 1 on Information Disclosure of Companies Issuing Securities to the Public - Non-recurring Profit or Loss" as recurring profit
or loss items.
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Section III Management's Discussion and Analysis
I. Main business engaged in by the Company during the reporting period
According to data released by the China Electricity Council, in the first half of 2023, the national electricity consumption of
the whole society was 4.31 trillion kWh, up 5.0% year-on-year, and the growth rate was 2.1% higher compared to the same period
last year. The recovery and improvement of national economy in the first half of the year has driven a year-on-year increase in the
growth rate of electricity consumption. In terms of industries, the electricity consumption of the primary industry was 57.8 billion
kWh, up 12.1% year on year; The electricity consumption of the secondary industry was 2,867 billion kWh, up 4.4% year on year.
the electricity consumption of the tertiary industry was 763.1 billion kWh, up 9.9% year on year; The domestic electricity
consumption of urban and rural residents was 619.7 billion kWh, up 1.3% year on year. In the first half of the year, the power
generation output of power plants above designated size in China was 4.17 trillion kWh, up 3.8% year-on-year. Among them, the
hydropower generation output of power plants above designated size dropped by 22.9% year-on-year. Insufficient water storage in
the main reservoirs and persistent low precipitation since the beginning of this year, coupled with the factors such as a high base in
the same period of the previous year, have led to a continuous year-on-year decline in hydropower output since the beginning of
this year, and the decline has expanded, with hydropower output falling by 32.9% and 33.9% year-on-year in May and June,
respectively. In the first half of the year, the thermal power and nuclear power generation outputs of power plants above
designated size increased by 7.5% and 6.5% year-on-year, respectively Full-scale grid-connected wind power generation output
increased by 21.2% year-on-year. Coal-fired power output accounted for 58.5% of the total energy output, and coal-fired power
remains the primary source of electricity supply in China. It effectively compensates for the significant decline in hydropower
output and fully plays its role in ensuring basic power supply.
The main business of the Company is production and operation of power supply and heat supply, technical consulting and
technical services related to power plants (stations). At the end of the reporting period, the Company had two wholly-owned and
controlled gas turbine power plants with a total of five set 9E gas-steam combined cycle generating units with a total installed
capacity of 900,000 kilowatts (including 3×180,000 kilowatts of Nanshan Thermal Power Station and 2×180,000 kilowatts of
Zhongshan Nanlang Power Plant). Both gas turbine power plants are located in the electricity load center area of the Pearl River
Delta, are the main peak-shaving power sources in the region, and are currently in normal production and operation. On February
21, 2022, upon the deliberation and approval of the Fifth Interim Meeting of the Ninth Session of the Board of Directors of the
Company, the Company initiated the matter of the shutdown and decommissioning of the two 9E gas turbines of the Zhongshan
Nanlang Power Plant of Shenzhen Nanshan Thermal Power, and formally submitted an application for shutdown and
decommissioning of the units to the Energy Bureau of Guangdong Province on November 24, 2022. Before obtaining the relevant
approvals and opinions, the Zhongshan Nanlang Power Plant will continue to carry out the electricity generation business, which
will have no material impact on the current production and operation of the Company and the Zhongshan Nanlang Power Plant for
the time being.
In the first half of 2023, the economic situations at home and abroad were grim. Facing an extraordinarily complex and
challenging environment, the Company diligently implemented the relevant requirements from competent government authorities
at all levels regarding the security and supply of energy and electricity, took effective and efficient measures, and spared no effort
to ensure the safety and reliability of power generation, thus providing robust electricity assurance for the development of the
economy and society. From January to June 2023, the two subordinate power generation enterprises of the Company generated a
total of 299 million kWh of actual on-grid power and 595 million kWh of settlement contract power. The respective power
generation outputs of the Company's subordinate enterprises are as follows: Nanshan Thermal Power Plant generated 255 million
kWh of on-grid power and 460 million kWh of settlement contract power. Zhongshan Nanlang Power Plant generated 44 million
kWh of actual on-grid power, and 135 million kWh of settlement contract power.
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The Company shall comply with the disclosure requirements for "power supply industry" as set out in "Self-Regulation and
Supervision Guidelines No. 3 for Shenzhen Stock Exchange-Listed Companies - Industry Information Disclosure ".
II. Core competitiveness analysis
In recent years, the Company's main business has been facing increasing difficulties and challenges due to the
macroeconomic situation and common issues in the gas turbine power generation industry. However, the fundamental core
competitiveness formed over more than thirty years of operation and development, along with strong support from the major
shareholders, innovative management practices adopted by the Company's Board of Directors and management team, have laid a
necessary foundation for the Company's ongoing operations and pursuit of transformative development. During the reporting
period, the Company adopted "activating stocks, introducing increments, transforming development" as its business objectives,
and adhered to the management principles of being regulated, scientific, pragmatic, efficient and impartial, diligently carried out
various work, and made every effort to promote the high-quality development of the Company. The Company's core
competitiveness has been further consolidated and improved.
1. A management culture of hard work and innovation. The Company has a group of operation and management talents with
innovative consciousness and hard working spirit. By deepening the human resources reform and building a performance-oriented
performance assessment and incentive mechanism, the Company advocates and fosters a management culture of unity, hard work,
innovation and progressiveness throughout the Company, In addition, the Company attaches great importance to and vigorously
promotes the construction of its institutional, management, and compliance systems. It adheres to a standardized management that
is law-abiding, regulation-compliant scientific, rigorous, efficient and orderly. Through refined and standardized management
guidance, the Company has established a solid foundation for deeply tapping into internal potential and actively seeking external
opportunities.
2. Professional and enterprising technical talents. With over thirty years of dedicated efforts and the influence in the gas
turbine power generation industry, the company has attracted and cultivated a group of technical experts and professionals in the
gas turbine industry, and has accumulated rich experiences in the construction and operation management of gas turbine power
plants. In order to align with the market situation of deepened and progressive power marketization reform in Guangdong
Province , the company has established a professional power marketing team, carried out in-depth research on power trading
strategies, explored the construction of power marketing mathematical models, and accumulated a wealth of experience in power
marketing, which has laid a solid foundation for the company to participate in the construction of a new type of power market and
to integrate itself into the wave of power marketization reform. In addition, Shen Nan Dian Engineering Company has
cumulatively provided dozens of domestic and overseas gas turbine power stations with professional services such as technical
consulting, commissioning and operation guarantee; The Company's training center has successively undertaken the technical
personnel training business for dozens of domestic and foreign power plants, has become a well-known professional talent training
base in in the domestic gas turbine industry, and has established a good reputation and professional brand image in the same
industry.
3. Professional technical expertise that keeps pace with the times. The Company has a number of independent utility model
patents and software copyrights, has jointly drafted and compiled one national standard, and has a number of invention patents that
under review by the State Intellectual Property Office. It has been recognized as a national high-tech enterprise on December 23,
2021. The Company's research and innovation work has been continuously carried out and has received unanimous recognition
from society. During the reporting period, the Company filed to the State Intellectual Property Office a total of 7 utility model
patents and 1 invention patent applications, of which 1 utility model patent has been granted. The Company has been granted a
total of 39 patents (including 4 invention patents) and 8 software copyrights, which has greatly enhanced the company's brand
image and industry competitiveness.
4. Rich experiences in industrial exploration. The Company has fully leveraged its own advantages, accumulated experience
in the construction and operation of new energy industry projects such as electrochemical energy storage and photovoltaic, and
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actively explored technological projects such as virtual power station platforms. Through technical transformation, the company's
subordinate Nanshan Thermal Power Station has filled the gap in the application of energy storage systems in the field of "black
start" of 9E-grade units in China. Through the successful operation of black start projects, the preliminary work of independent
energy storage power stations and the construction and operation of photovoltaic projects, the Company has accumulated certain
experience in the preliminary preparation, construction, commissioning, operation and maintenance of energy storage projects, and
trained a group of professional talents. In addition, the company's talent reserves and technological advantages in the traditional
power industry have laid a solid foundation for the Company to continuously tap the existing potential and rely on the power
market and its technical strength to enter the field of new energy services.
5. Leading environmental protection level. The Company's subordinate power plants all use gas-fired power generation units,
adopting natural gas as fuel, and the CO2 emission in the flue gas is about 42% of that of the coal-fired power plants, providing
strong support for the national "double carbon" (carbon peaking and carbon neutrality) construction, According to the
requirements of the "2018 'Shenzhen Blue' Sustainable Action Plan" of the Shenzhen Municipal People's Government, the
Company has fully completed the "Shenzhen Blue" transformation of #3, #10 and #1 gas turbines of Nanshan Thermal Power
Plant. After the transformation, the nitrogen oxides emissions of each unit have been reduced to less than 15mg/m3, reaching the
world's most advanced level. Nanshan Thermal Power Plant was also selected as the best power plant of the Top Plant Award by
Power Magazine, the most authoritative magazine in the global power industry, founded in 1882.
III. Main business analysis
Overview
Year-on-year changes in key financial data
Unit: RMB
The reporting period Same period last year Year-on-year change Reasons for changes
Mainly due to the
increase in power
generation output and
Operating revenue 271,268,185.05 229,243,542.07 18.33%
the increase in
electricity bill
settlement revenue
Operating costs 285,367,929.90 282,486,432.21 1.02%
Mainly due to the
Selling and distribution growth of electricity
897,707.82 100.00%
expenses sales business and the
increase in expenses
Mainly due to reducing
and eliminating losses,
G&A expenses 34,513,202.72 43,777,644.68 -21.16%
and strengthening cost
control
Mainly due to the
decrease in financing
Financial expenses 6,730,365.12 16,729,716.11 -59.77%
scale and the decrease
in financing cost
Income tax expenses 479.55
Mainly due to the
cyclical impact of
R&D input 13,297,926.31 17,072,589.13 -22.11%
R&D project
settlement
Net cash flow from Mainly due to VAT
-57,016,489.54 200,588,083.30 -128.42%
operating activities credit refund received
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in the same period of
the previous year, and
no such cash inflow in
the current year
Mainly due to the
increase in cash inflow
from investing
activities as a result of
recovery of wealth
management products
Net cash flow from in the current period
262,106,770.11 -730,434,844.43 135.88%
investing activities and the decrease in
payments for
investment in wealth
management products
in the same period
Mainly due to the
Net cash flow from
-592,949,390.25 309,964,533.04 -291.30% decrease in financing
financing activities
scale
Mainly due to the
significant decrease in
net cash flow from
Net increase in cash
-387,622,035.71 -219,586,524.40 -76.52% financing activities as
and cash equivalents
compared to the same
period of the previous
year
Major changes in the Company's profit composition or profit sources during the reporting period
Applicable Not applicable
There were no major changes in the profit composition or profit source of the Company during the reporting period.
Composition of operating revenue
Unit: RMB
The reporting period Same period last year
Year-on-year
Percentage of Percentage of change
Amount Amount
operating revenue operating revenue
Total operating
271,268,185.05 100% 229,243,542.07 100% 18.33%
revenue
By industry
Energy industry 260,794,861.20 96.14% 205,738,094.27 89.75% 26.76%
Engineering
9,833,593.03 3.63% 22,901,068.56 9.99% -57.06%
service
Others 639,730.82 0.24% 604,379.24 0.26% 5.85%
By product
Electricity sales 260,794,861.20 96.14% 205,738,094.27 89.75% 26.76%
Engineering
9,833,593.03 3.63% 22,901,068.56 9.99% -57.06%
service
Others 639,730.82 0.24% 604,379.24 0.26% 5.85%
By region
Domestic 271,268,185.05 100% 229,243,542.07 100% 18.33%
Industries, products or regions that account for more than 10% of the Company's operating revenue or operating profit
Applicable Not applicable
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Unit: RMB
Year-on-year
Gross Year-on-year Year-on-year
change in
Operating revenue Operating costs profit change in change in gross
operating
margin operating costs profit margin
revenue
By industry
Energy industry 260,794,861.20 281,263,633.98 -7.85% 26.76% 4.64% 22.80%
By product
Electricity sales 260,794,861.20 281,263,633.98 -7.85% 26.76% 4.64% 22.80%
By region
Domestic 271,268,185.05 285,367,929.90 -5.20% 18.33% 1.02% 18.03%
Under the circumstances that the calculation method of the Company's main business data is adjusted during the reporting period,
the Company's main business data for the latest period is adjusted according to the calculation method at the end of the reporting
period
Applicable Not applicable
IV. Non-primary business analysis
Applicable Not applicable
Unit: RMB
Percentage of total Whether it is
Amount Formation reasons
profit sustainable
Mainly wealth
Shareholding
management income
companies' equity
and shareholding
Investment income 19,725,870.53 -46.21% investment income
companies' equity
(including dividends) is
investment income
sustainable
(including dividends)
Mainly power outage
Non-operating revenue 4,994,213.17 -11.70% No
compensation
Non-operating Non-current asset
6,208.32 -0.01% No
expenses retirement losses, etc.
V. Analysis of assets and liabilities
1. Major changes in asset composition
Unit: RMB
At the end of the reporting period At the end of last year Explanation of
Increase/decrea
Percentage of Percentage of significant
Amount Amount se in percentage
total assets total assets changes
Mainly due to
Cash and cash the increase in
293,314,664.92 14.80% 675,496,266.40 25.92% -11.12%
equivalents debt
repayments
Accounts
144,831,860.55 7.31% 135,833,492.64 5.21% 2.10%
receivable
Contract assets 89,848.39 0.00% 217,009.58 0.01% -0.01%
Inventories 84,996,198.57 4.29% 85,279,298.35 3.27% 1.02%
Investment 1,748,955.40 0.09% 1,833,344.20 0.07% 0.02%
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properties
Long-term
equity 83,924,704.73 4.23% 83,496,098.24 3.20% 1.03%
investments
Fixed assets 578,426,240.23 29.18% 591,290,204.31 22.69% 6.49%
Projects under
6,222,095.21 0.31% 4,861,062.16 0.19% 0.12%
construction
Right-of-use
4,987,282.16 0.25% 7,707,617.90 0.30% -0.05%
assets
Mainly due to
Short-term
226,612,655.38 11.43% 879,957,857.44 33.76% -22.33% the decrease in
borrowings
financing scale
Contract
0.00 0.00% 0.00 0.00% 0.00%
liabilities
Long-term
105,274,084.45 5.31% 28,019,758.68 1.08% 4.23%
borrowings
Lease liabilities 0.00% 2,262,160.03 0.09% -0.09%
Mainly due to
the decrease in
Trading the liquidity
145,000,000.00 7.31% 440,013,571.10 16.88% -9.57%
financial assets management
scale of idle
funds
Other current
238,256,408.74 12.02% 188,248,840.44 7.22% 4.80%
assets
2. Main overseas assets
Applicable Not applicable
3. Assets and liabilities measured at fair value
Applicable Not applicable
Unit: RMB
Profit or
loss from Cumulative Impairment Amount
Amount
changes in changes in provision purchased
Opening sold in the Other Ending
Item fair value fair value in the in the
balance current changes balance
in the included in current current
period
current equity period period
period
Financial
assets
1. Trading
financial
assets
440,013,57 295,013,57 145,000,00
(excluding
1.10 1.10 0.00
derivative
financial
assets)
2. 0.00
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Derivative
financial
assets
3. Other
debt
0.00
investment
s
4. Other
investment 300,615,00 300,615,00
s in equity 0.00 0.00
instruments
Sub-total of
740,628,57 295,013,57 445,615,00
financial
1.10 1.10 0.00
assets
Total of the 740,628,57 295,013,57 445,615,00
above 1.10 1.10 0.00
Financial
0.00 0.00 0.00 0.00 0.00
liabilities
Other changes
None
Whether there were significant changes in the measurement attributes of the Company's major assets during the reporting period
Yes No
4. Restrictions on asset rights as of the end of the reporting period
Item Ending balance (RMB) Balance at end of previous year (RMB)
Bank acceptance bill margin 27,474,594.34 27,474,594.34
Performance bond 5,440,434.23
Total 32,915,028.57 27,474,594.34
VI. Investment status analysis
1. Overall situation
Applicable Not applicable
Investment amount during the reporting Investment amount in the same period of
Range of change
period (RMB) previous year (RMB)
0.00 100,000,000.00 -100.00%
2. Major equity investments acquired during the reporting period
Applicable Not applicable
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3. Major non-equity investments in progress during the reporting period
Applicable Not applicable
4. Investment in the financial assets
(1) Securities investment
Applicable Not applicable
The Company had no securities investment during the reporting period.
(2) Derivatives investment
Applicable Not applicable
The Company had no derivative investment during the reporting period.
5. Use of funds raised
Applicable Not applicable
The Company had no use of funds raised during the reporting period.
VII. Sale of major assets and equity
1. Sales of major assets
Applicable Not applicable
The Company did not sell major assets during the reporting period.
2. Sale of major equity
Applicable Not applicable
VIII. Analysis of major holding and shareholding companies
Applicable Not applicable
Major subsidiaries and shareholding companies with an impact of 10% or more on the Company's net profit
Unit: RMB
Com Register
Company Operating Operation
pany Main business ed Total assets Net assets Net profit
name revenue profit
type capital
Technology
development of waste
heat utilization
Shenzhen
Subsi (excluding restricted RMB11 - -
New Power 124,581,81 - 94,131,560.
diarie projects): power 3.85 27,851,853. 27,851,853.
Industrial 6.73 497,023.45 49
s generation by waste million 46 46
Co., Ltd.
heat utilization; gas
turbine power
generation.
Shen Nan Subsi Gas turbine power RMB74 258,720,30 - 43,549,971. - -
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Dian diarie generation, waste heat 6.8 6.42 524,787,26 34 28,135,239. 23,988,910.
(Zhongsha s power generation, million 0.65 81 88
n) Electric power supply and heat
Power Co., supply (excluding
Ltd. heat supply pipe
networks), wharves,
oil depots (excluding
refined oil, hazardous
chemicals and
flammable and
explosive products)
and lease of power
equipment and
facilities; land use
rights lease; non-
residential real estate
lease.
Information on acquisition and disposal of subsidiaries during the reporting period
Applicable Not applicable
Notes to main holding and shareholding companies
Not applicable
IX. Structured entities controlled by the Company
Applicable Not applicable
X. Risks faced by the Company and countermeasures
1. Main business: In the first half of 2023, the Guangdong Province continued to implement the trial operation of the spot
market of electricity in the south (starting with Guangdong). In a situation where the natural gas prices have not decreased
significantly compared to the same period last year, the two subordinate power plants of the Company were not only required to
fulfill their social responsibility of ensuring power supply with a high political stance, but also faced significant operational
pressure brought about by the inversion of power generation costs and electricity selling prices. In the face of the aforementioned
unfavorable policy and industry situations, in order to minimize the losses of the main business of electric power, the Company, on
the one hand, has relied on the Gas Turbine Special Committee, the natural gas Power Generation Supply Chain Special
Committee and other industry associations, to actively advocate to the relevant government departments for the implementation of
the gas-electricity price linkage mechanism and the promotion of policies such as capacity compensation and dual pricing system,
according to relevant documents as well as the actual operation situation. On the other hand, the two subordinate power plants
have continued to strengthen the overall planning of equipment management and economic operation, striving to enhance the
marginal contribution level of the power generation business.
2. Safety management: in the context of a market-oriented electricity generation model, power plants will encounter more
flexible dispatching methods and stricter assessment policies, which places higher demands on the operation and maintenance of
the aging power generation equipment. By formulating scientific and reasonable maintenance and technical transformation plans,
and allocating corresponding funds and technical resources, the Company will continuously improve the maintenance and
governance level of equipment, implement the main responsibility for work safety, and ensure the safe and stable operation of
production facilities. At the same time, it will further strengthen training and emergency response capacity building to achieve
"five in place", namely, putting work safety responsibilities, management, investment, training and emergency rescue in place, to
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Full text of The Semi-Annual Report 2023 of Shenzhen Nanshan Power Co., Ltd.
ensure that no human-induced work safety accidents occur in the company system, and continue to play the supporting role of the
key peak-shaving power point.
3. Fuel procurement: in the first half of 2023, demand for natural gas was weak and supply was abundant. Meanwhile,
domestic natural gas prices weakened due to factors such as the downward trend of international natural gas prices, and the
Company's natural gas purchase price was slightly lower than that of the same period last year. Taking into account factors such as
increased demand during the traditional peak power generation period and winter heating demand reserves, the Company's natural
gas purchase price is expected to remain at the current level or slightly higher in the second half of 2023. Under the electricity spot
trading rules, the estimated power generation output cannot match the actual power generation output. Since the natural gas
purchase contract must be signed in advance, and the contracted gas volume has been determined at the time of signing, it is
difficult to match the contracted natural gas volume with the actual extracted volume. If the gas cannot be extracted as agreed due
to factors such as electricity spot trading in a later period, it may lead to related risks such as default of under-extraction of contract
volume or an increase in incremental gas prices. The Company will continue to optimize the upstream and downstream
partnerships, and exert its best efforts to reduce natural gas procurement costs while ensuring to meet the gas demand for power
generation.
4. Land of Nanshan Thermal Power Station: according to the announcement, 2023 Urban Renewal and Land Preparation Plan
of Shenzhen City and the relevant content of its exhibits, issued by Shenzhen Municipal Bureau of Planning and Natural
Resources, the 2023 Urban Renewal and Land Preparation Plan of Shenzhen City still includes the land acquisition and reserve as
well as related content of the Nanshan Thermal Power Station, a subordinate unit of the Company. The Company will closely
maintain communication with the relevant functional departments of Shenzhen and Nanshan District and the Shenzhen Qianhai
Administration Bureau, actively follow up on the progress of the government's relevant land preparation plan, conduct diligent
studies to formulate response strategies and work programs, and make every effort to safeguard the legitimate rights and interests
of the listed company and all shareholders.
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Section IV Corporate Governance
I. Relevant information of the annual general meeting and extraordinary general meeting
held during the reporting period
1. General meetings during the reporting period
Investor
Date of Date of
Session Meeting type attendance Resolution of the meeting
convening disclosure
ratio
For details, please refer to the
Announcement on the Resolution of the
The First
First Extraordinary General Meeting in
Extraordinary Extraordinary March 23, March 23,
38.36% 2023 (Announcement No.: 2023-011)
General general meeting 2023 2023
disclosed by the Company on March
Meeting in 2023
23, 2023 in the Securities Times and
CNINF.
For details, please refer to the
Announcement on the Resolution of the
2022 Annual 2022 Annual General Meeting
Annual general
General 38.40% May 05, 2023 May 05, 2023 (Announcement No.: 2023-022)
meeting
Meeting disclosed by the Company on May 5,
2023 in the Securities Times and
CNINF.
2. The preferred shareholders whose voting rights have been restored requested to convene an
extraordinary general meeting.
Applicable Not applicable
II. Changes in the Company's directors, supervisors and senior officers
Applicable Not applicable
Name Position Change type Date Reason
Chairman of the Board
Zhai Baojun Elected March 23, 2023
of Supervisors
Chairman of the Board
Ye Qiliang Resigned February 27, 2023 Retired
of Supervisors
Deputy General
Zhang Jie Resigned March 20, 2023 Retired
Manager
III. Profit distribution and conversion of capital reserves into share capital during the
reporting period
Applicable Not applicable
The Company has planned not to distribute cash dividends, bonus shares or convert capital reserves into share capital in the half
year.
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IV. Implementation of the Company's equity incentive plans, employee stock ownership
plans or other employee incentive measures
Applicable Not applicable
During the reporting period, the Company had no equity incentive plan, employee stock ownership plan or other employee
incentive measures and their implementation.
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Section V Environment and Social Responsibilities
I. Major environmental protection issues
Whether the listed company and its subsidiaries are among the key pollutant discharge entities announced by the environmental
protection department
Yes No
Environmental protection related policies and industry standards
The Company operates in the Sub-category 4411 thermal power generation industry as defined in the Industrial Classification
for National Economic Activities (GB/T 4754-2017), and currently implements the Emission Standard of Air Pollutants for
Thermal Power Plants (GB-13223-2011). Meanwhile, its affiliate, Nanshan Thermal Power Station, strictly controls nitrogen oxide
emissions in accordance with the relevant requirements of the 2018 "Shenzhen Blue" Sustainable Action Plan.
Environmental protection administrative licensing
The Company's affiliate, Nanshan Thermal Power Station, has obtained the pollutant discharge license issued by Nanshan
Administration Bureau of the Bureau of Ecology and Environment of Shenzhen City with the license number:
91440300764983799T001P. The Company's affiliate, Shen Nan Dian (Zhongshan) Electric Power Co., Ltd. has obtained the
pollutant discharge license issued by the Bureau of Ecology and Environment of Zhongshan City, license number:
914420007564567614001P.
Type of Name of
Executiv
Name of main main
Emissio e Exceedi
the pollutant pollutant Number Distribut Approve
Emissio n pollutant Total ng
Compan s and s and of ion of d total
n concentr discharg emission emission
y or particula particula emission emission emission
method ation/int e s standard
subsidiar r r outlets outlets s
ensity standard s
ies pollutant pollutant
s
s s
In the
Centraliz "Shenzh
Shenzhe plant site
ed en Blue"
n of
Nitrogen Nitrogen emission <15 emission 457.5
Nanshan 2 Nanshan 22 tons 0
oxides oxides through mg/m standard tons/year
Power Thermal
boiler < 15
Co., Ltd. Power
stack mg/m
Station
In the
Shenzhe Centraliz "Shenzh
plant site
n New ed en Blue"
of
Power Nitrogen Nitrogen emission <15 emission 7.18 228.75
1 Nanshan 0
Industria oxides oxides through mg/m standard tons tons/year
Thermal
l Co., boiler < 15
Power
Ltd. stack mg/m
Station
Shen Centraliz Within
Nan ed Zhongsh
Dian Nitrogen Nitrogen emission an <50 GB1322 6.7523 803.06
2 0
(Zhongs oxides oxides through Nanlang mg/m 3 tons tons/year
han) boiler Power
Electric stack Plant
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Power
Co., Ltd.
Treatment of pollutants
The Company and its controlling subsidiaries have 5 sets of 9E units, Shenzhen Nanshan Power Co., Ltd. has 2 sets of 9E
units and Shenzhen New Power Industrial Co., Ltd. has 1 set of 9E units, all with GE DLN1.0 + low nitrogen combustion system.
Shen Nan Dian (Zhongshan) Electric Power Co., Ltd. has two sets of 9E units with GE DLN1.0 low nitrogen combustion system.
During the reporting period, the Company and its controlling subsidiaries strictly complied with the national laws and
regulations on environmental protection, and all the pollutants emitted met the national emission standards. There was no
environmental pollution accident, nor was there any punishment imposed by the relevant departments due to major environmental
protection issues.
Emergency plan for unexpected environmental events
The emergency plan for environmental emergencies has been filed with the Department of Ecology and Environment of
Guangdong Province and corresponding municipal environmental protection bureaus.
Investment in environmental governance and protection and relevant information on payment of environmental protection tax
The Company attaches great importance to the environmental protection work, and strengthens on-site management by
carrying out special work such as investigation of environmental risks and standardized management of hazardous waste. In
addition, the Company has continuously increased its investment in the maintenance of environmental protection facilities,
continuously improved and perfected the environmental protection infrastructure, and continuously improved the level of pollution
prevention and control.
The Company has paid environmental protection tax in strict accordance with the Chairman Order No. 61 for the
Environmental Protection Tax Law of the People's Republic of China and other relevant laws and regulations.
Environmental self-monitoring plan
The Company has prepared environmental self-monitoring plan which has been reviewed and approved by competent
environmental protection department; it has timely disclosed the monitoring data on the website of the environmental protection
department.
Administrative penalties imposed due to environmental problems during the reporting period
None
Other environmental information that should be disclosed
None
Measures taken to reduce its carbon emissions during the reporting period and their effects
Applicable Not applicable
During the reporting period, the Company’s affiliated power stations continuously improved the efficiency of unit and
reduced carbon emissions by taking technical transformation measures such as technical transformation of unit condenser.
Other information related to environmental protection
None
The Company shall comply with the disclosure requirements for "power supply industry" as set out in "Self-Regulation and
Supervision Guidelines No. 3 for Shenzhen Stock Exchange-Listed Companies - Industry Information Disclosure ".
Environmental protection related accidents occurred in the listed company
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None
II. Undertaking of social responsibilities
In 1H23, despite of significant challenges in production, operation, and management it faced, the Company bravely assumed
social responsibility, actively ensured electricity supply against of the inversion of power generation costs and sales prices, and
conscientiously fulfilled its social responsibilities within its capabilities. In terms of work safety, the Company strictly complied
with the Law of the People's Republic of China on Work Safety and other relevant laws and regulations. In accordance with the
principle of "common responsibility among the party and administration teams, dual responsibilities for one position, joint
management and involvement, and accountability for dereliction of duty", the Company took multiple measures to strengthen
safety management, allocated safety responsibilities to all levels layer by layer, and continued to maintain the "five-without" safety
goals. In terms of environmental protection, the Company strictly abided by the national and local environmental protection laws
and regulations, always adhered to the concept of clean power generation and recyclable economy development, and all
environmental protection work has been effectively implemented. The environmental protection emission standards have been met,
and no environmental pollution accidents have occurred. In terms of caring assistance, the Company actively implemented the
consumption poverty alleviation policy of Shenzhen, and participated in consumption poverty alleviation totaling an amount of
RMB72,000 during the reporting period, and actively fulfilled social responsibilities within its capablities.
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Section VI Important Matters
I. Commitments made by the Company's actual controller, shareholders, related parties,
acquirers, the Company and other related parties that have been fulfilled within the
reporting period and those that have not been fulfilled within the time limit as of the end of
the reporting period
Applicable Not applicable
During the reporting period, there were no commitments that were made by the actual controllers, shareholders, related parties,
acquirers, and other related parties of the Company to be fulfilled during the reporting period but failed to be fulfilled as of the end
of the reporting period.
II. Non-operational occupation of funds by the controlling shareholders and other related
parties of the listed company
Applicable Not applicable
During the reporting period, there were no non-operational funds occupied by the controlling shareholders and other related parties
for the listed company.
III. Illegal external guarantees
Applicable Not applicable
The Company had no illegal external guarantee during the reporting period.
IV. Appointment and dismissal of accounting firms
Whether the semi-annual report has been audited.
Yes No
The Company's semi-annual report has not been audited.
V. Explanation of the Board of Directors and the Board of Supervisors on the "modified
report" of the accounting firm during the Reporting Period
Applicable Not applicable
VI. Explanation of the Board of Directors on the "modified report" of the previous year
Applicable Not applicable
VII. Bankruptcy and restructuring related matters
Applicable Not applicable
During the reporting period, the Company had no bankruptcy restructuring related matters.
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VIII. Litigation
Major litigation and arbitration matters
Applicable Not applicable
During the reporting period, the Company had no major litigation or arbitration matters.
Other matters of litigation
Applicable Not applicable
IX. Penalties and rectification
Applicable Not applicable
X. Integrity status of the Company and its controlling shareholders and actual controller
Applicable Not applicable
During the reporting period, the Company did not fail to comply with effective court judgments or incur significant debts that were
not repaid upon maturity, and its integrity was in good condition. During the reporting period, the Company had no controlling
shareholder or actual controller.
XI. Major related party transactions
1. Related party transactions related to daily operations
Applicable Not applicable
During the reporting period, the Company had no related party transactions related to daily operations.
2. Related party transactions arising from the acquisition and sale of assets or equity
Applicable Not applicable
During the reporting period, the Company had no related party transactions arising from the acquisition or sale of assets or equity.
3. Related party transactions arising from joint foreign investment
Applicable Not applicable
During the reporting period, the Company had no related party transactions arising from joint external investment.
4. Related claims and debts
Applicable Not applicable
During the reporting period, the Company had no related debt transactions.
5. Information on transactions with finance companies with association
Applicable Not applicable
There was no deposit, loan, credit or other financial business between the Company and the finance companies with association
and their related parties.
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6. Transactions between the Company's holding finance companies and its related parties
Applicable Not applicable
There was no deposit, loan, credit or other financial business between the Company's holding finance companies and its related
parties.
7. Other major related transactions
Applicable Not applicable
The Company had no other major related transactions during the reporting period.
XII. Major contracts and their performance
1. Custody, contracting and lease matters
(1) Custody
Applicable Not applicable
During the reporting period, the Company had nothing under custody.
(2) Contracting
Applicable Not applicable
During the reporting period, the Company had no contracting.
(3) Lease
Applicable Not applicable
During the reporting period, the company had no leases.
2. Significant guarantees
Applicable Not applicable
During the reporting period, the Company had no significant guarantees.
3. Entrusted wealth management
Applicable Not applicable
Unit: RMB10,000
Delinquent
Sources of funds uncollected
Amount of Delinquent
for entrusted amount of
Specific type entrusted wealth Undue balance uncollected
wealth financial assets
management amount
management with provision for
impairment
Bank wealth
management Self-owned fund 21,001.37 0 0 0
products
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Total 21,001.37 0 0 0
Specific conditions of high-risk entrusted wealth management with significant single amount, low safety and poor liquidity
Applicable Not applicable
Entrusted wealth management that may fail to recover the principal or other circumstances that may lead to impairment
Applicable Not applicable
4. Other major contracts
Applicable Not applicable
XIII. Explanation of other major matters
Applicable Not applicable
Nanshan Thermal Power Station's land-related matters: in Jun. 2023, the Company learned the Notice of the Shenzhen
Planning and Natural Resources Bureau on Issuing the 2023 Urban Renewal and Land Preparation Plan for Shenzhen on the
website of the Shenzhen Bureau of Planning and Natural Resources. According to the relevant contents of the attached table, the
land preparation project of Qianhai Cooperation Zone in 2023 still includes the land purchase and storage of the Company's
affiliated Nanshan Thermal Power Station and other related contents. (For details, please refer to the Announcement on the
Issuance of the 2023 Urban Renewal and Land Preparation Plan for Shenzhen by the Shenzhen Bureau of Planning and Natural
Resources (Announcement No.: 2023-023) disclosed by the Company in the Securities Times and CNINF.)
Except for the above matters, there was no progress or change in the refundable funds of the Company's "Project Technical
Transformation Benefit Fund" during the reporting period.
XIV. Major matters of the Company's subsidiaries
Applicable Not applicable
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Section VII Changes in Shares and Shareholders
I. Changes in shares
1. Changes in shares
Unit: share
Before the change Increase or decrease in this change (+, -) After the change
Convers
New
Bon ion of
share
us provide
Quantity Ratio s Others Sub-total Quantity Ratio
issu nt fund
issue
e into
d
shares
I. Shares with
restrictive conditions 12,994 0.0022% 4,331 4,331 17,325 0.0029%
for sales
1. State-owned
shares
2. Shares held by
the state-owned legal
persons
3. Other domestic
12,994 0.0022% 4,331 4,331 17,325 0.0029%
holdings
Including: shares
held by domestic legal
persons
Shares held by
domestic natural 12,994 0.0022% 4,331 4,331 17,325 0.0029%
persons
4. Foreign
shareholding
Including: shares
held by overseas legal
persons
Shares held by
overseas natural
persons
II. Shares without
602,749,6 602,745,2
restrictive conditions 99.9978% -4,331 -4,331 99.9971%
02 71
for sales
1. RMB ordinary 338,895,1 338,890,8
56.2236% -4,331 -4,331 56.2229%
shares 56 25
2. Foreign shares 263,854,4 263,854,4
43.7742% 43.7742%
listed domestically 46 46
3. Foreign shares
listed overseas
4. Others
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III. Total number of 602,762,5 602,762,5
100.00% 0 0 100.00%
shares 96 96
Reasons for changes in shares
Applicable Not applicable
On March 20, 2023, Ms. Zhang Jie resigned from the position of the Company's Deputy General Manager due to reaching the
statutory retirement age, and all the 17,325 A-shares of the Company held by her were locked within 6 months from the date of her
resignation.
Approval of changes in shares
Applicable Not applicable
Transfer of changes in shares
Applicable Not applicable
Implementation progress of share repurchase
Applicable Not applicable
Implementation progress of reducing and repurchasing shares through centralized bidding
Applicable Not applicable
Effect of changes in shares on financial indicators such as basic earnings per share and diluted earnings per share in the latest year
and the latest period, and net assets per share attributable to the Company's ordinary shareholders
Applicable Not applicable
Other contents deemed necessary by the Company or required by the securities regulators to be disclosed
Applicable Not applicable
2. Changes in restricted shares
Applicable Not applicable
Unit: share
Number
Increase
of
Beginning in Ending
Shareh restricted
number of restricted number of Date of lifting sales
older shares Reasons for sales restriction
restricted shares in restricted restrictions
name lifted in
shares the current shares
the current
period
period
All the 17,325 A-shares
held by Ms. Zhang Jie
On March 20, 2023, Ms. Zhang Jie will be locked within
resigned from the position of the half a year from the date
Company's Deputy General of her resignation, and
Manager of the Company due to she still needs to
Zhang
12,994 0 4,331 17,325 reaching the statutory retirement comply with the
Jie
age, and all the 17,325 A-shares of relevant provisions on
the Company held by her were the restriction of the
locked within 6 months from the sale of shares of
date of her resignation. directors, supervisors
and senior officers after
half a year.
Total 12,994 0 4,331 17,325 -- --
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II. Issuance and listing of securities
Applicable Not applicable
III. Number of the Company's shareholders and shareholding status
Unit: share
Total number of ordinary Total number of preferred shareholders with
shareholders at the end of 78,421 restoration of voting rights at the end of the 0
the reporting period. reporting period (if any) (see Note 8)
Shareholdings of ordinary shareholders or top 10 ordinary shareholders holding 5% or more shares
Quantity of Quantity of Number of Pledge, marking or
ordinary Change ordinary ordinary shares freezing
Shareholder Shareholder Sharehol shares held during the shares with without
name nature ding ratio at the end of reporting restrictive restrictive Share
the reporting period conditions conditions for Quantity
status
period for sales sales
HONG
KONG
NAM HOI Foreign
15.28% 92,123,248 92,123,248
(INTERNA legal person
TIONAL)
LTD.
Shenzhen
Guangju State-owned
12.22% 73,666,824 73,666,824
Industrial legal person
Co., Ltd.
Shenzhen
Energy State-owned
10.80% 65,106,130 65,106,130
Group Co., legal person
Ltd.
BOCI
SECURITI Foreign
2.34% 14,104,038 -5,000 14,104,038
ES legal person
LIMITED
Domestic
Zeng Ying natural 1.19% 7,159,600 7,159,600
person
China
Merchants
Securities Foreign
0.90% 5,425,628 -5,100 5,425,628
(Hong legal person
Kong) Co.,
Ltd.
Meiyi
Domestic
Investment
non-state-
and 0.87% 5,223,200 5,223,200
owned legal
Property
person
Co., Ltd.
Haitong
Internationa
l Securities Foreign
0.65% 3,908,357 3,908,357
Company legal person
Limited-
Account
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Client
Domestic
Huang
natural 0.64% 3,866,500 3,866,500
Yilong
person
Domestic
Li Baoqin natural 0.51% 3,048,150 3,048,150
person
Strategic investors or general legal
persons becoming the top 10
ordinary shareholders due to None
placement of new shares (if any)
(see Note 3)
1. Shenzhen Energy Group Co., Ltd., holds 100% equity of the HONG KONG NAM HOI
Association or concerted action of (INTERNATIONAL) LTD.
the above shareholders 2. The Company does not know whether the above-mentioned other public shareholders
have any association or are persons acting in concert.
Explanation of the above
shareholders' involvement in
None
entrusting/being entrusted voting
rights and waiver of voting rights
Special explanation for the
existence of repurchase accounts
None
among the top 10 shareholders (if
any) (see Note 11)
Shareholding of the top 10 ordinary shareholders without restrictive conditions for sales
Ending number of ordinary shares Classes of shares
Shareholder name without restrictive conditions for
sales Classes of shares Quantity
HONG KONG NAM HOI Foreign shares listed
92,123,248 92,123,248
(INTERNATIONAL) LTD. domestically
Shenzhen Guangju Industrial Co.,
73,666,824 RMB ordinary shares 73,666,824
Ltd.
Shenzhen Energy Group Co., Ltd. 65,106,130 RMB ordinary shares 65,106,130
BOCI
Foreign shares listed
SECURITIES 14,104,038 14,104,038
domestically
LIMITED
Foreign shares listed
Zeng Ying 7,159,600 7,159,600
domestically
China Merchants Securities (Hong Foreign shares listed
5,425,628 5,425,628
Kong) Co., Ltd. domestically
Meiyi Investment and Property Co.,
5,223,200 RMB ordinary shares 5,223,200
Ltd.
Haitong
Foreign shares listed
International Securities Company 3,908,357 3,908,357
domestically
Limited-Account Client
Huang Yilong 3,866,500 RMB ordinary shares 3,866,500
Foreign shares listed
Li Baoqin 3,048,150 3,048,150
domestically
Description of association or
concerted action among the top 10 1. Shenzhen Energy Group Co., Ltd., holds 100% equity of the HONG KONG NAM HOI
ordinary shareholders without (INTERNATIONAL) LTD.
restrictive condition for sales and 2. The Company does not know whether the above-mentioned other public shareholders
that between the top 10 ordinary have any association or are persons acting in concert.
shareholders without restrictive
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condition for sales and the top 10
ordinary shareholders
Description of the top 10 ordinary
shareholders' participation in
margin financing and securities None
lending business (if any) (see Note
4)
Whether the Company's top 10 ordinary shareholders and the top 10 ordinary shareholders without restrictive condition for sales
conduct any agreed repurchase transactions during the reporting period
Yes No
The Company's top 10 ordinary shareholders, and top 10 ordinary shareholders without restrictive condition for sales did not
conduct any agreed repurchase transaction during the reporting period.
IV. Changes in shareholding of directors, supervisors and senior officers
Applicable Not applicable
There were no changes in the shareholdings of the Company's directors, supervisors and senior officers during the reporting period.
For details, please refer to the 2022 Annual Report.
V. Changes in the controlling shareholder or the actual controller
Changes in controlling shareholders during the reporting period
Applicable Not applicable
There was no change in the controlling shareholder of the Company during the reporting period.
Changes in actual controller during the reporting period
Applicable Not applicable
There was no change in the actual controller of the Company during the reporting period.
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Section VIII Preferred Shares
Applicable Not applicable
During the reporting period, the Company had no preferred shares.
33
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Section IX Bonds
Applicable Not applicable
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Section X Financial Report
I. Auditor's report
Whether the semi-annual report has been audited.
Yes No
The Company's semi-annual report has not been audited.
II. Financial statements
The unit in the notes to the financial statements is: RMB
1. Consolidated balance sheet
Prepared by: Shenzhen Nanshan Power Co., Ltd.
Unit: RMB
Item June 30, 2023 January 1, 2023
Current assets:
Cash and cash equivalents 293,314,664.92 675,496,266.40
Settlement reserve
Loans to other banks and other
financial institutions
Trading financial assets 145,000,000.00 440,013,571.10
Derivative financial assets
Notes receivable
Accounts receivable 144,831,860.55 135,833,492.64
Receivables financing
Advances to suppliers 53,931,606.71 45,448,287.86
Premium receivable
Reinsurance accounts receivable
Reinsurance contract reserves
receivable
Other receivables 18,852,212.98 18,314,003.84
Including: interest receivable
Dividends receivable
Purchase of financial assets under
resale agreements
Inventories 84,996,198.57 85,279,298.35
Contract assets 89,848.39 217,009.58
Assets held for sale
Non-current assets maturing within
one year
35
Full text of The Semi-Annual Report 2023 of Shenzhen Nanshan Power Co., Ltd.
Other current assets 238,256,408.74 188,248,840.44
Total current assets 979,272,800.86 1,588,850,770.21
Non-current assets:
Loans and advances
Claim investments
Other claim investments
Long-term receivables
Long-term equity investments 83,924,704.73 83,496,098.24
Other investments in equity
300,615,000.00 300,615,000.00
instruments
Other non-current financial assets
Investment properties 1,748,955.40 1,833,344.20
Fixed assets 578,426,240.23 591,290,204.31
Projects under construction 6,222,095.21 4,861,062.16
Productive biological assets
Oil and gas assets
Right-of-use assets 4,987,282.16 7,707,617.90
Intangible assets 19,454,429.10 19,799,355.12
R&D expenses
Goodwill
Long-term deferred expenses 970,463.62 1,219,129.18
Deferred tax assets 1,172,366.49 1,172,366.49
Other non-current assets 5,724,444.82 5,371,398.18
Total of non-current assets 1,003,245,981.76 1,017,365,575.78
Total assets 1,982,518,782.62 2,606,216,345.99
Current liabilities:
Short-term borrowings 226,612,655.38 879,957,857.44
Borrowing from the Central Bank
Borrowings from banks and other
financial institutions
Trading financial liabilities
Derivative financial liabilities
Notes payable 137,298,902.17 137,298,902.17
Accounts payable 4,121,762.97 5,227,836.22
Advances from customers
Contract liabilities
Sale of financial assets under
repurchase agreements
Deposits from customers and
interbank
Funds from vicariously traded
securities
Funds from vicariously underwritten
securities
36
Full text of The Semi-Annual Report 2023 of Shenzhen Nanshan Power Co., Ltd.
Employee compensation payable 29,287,941.48 29,296,815.07
Taxes payable 7,269,477.80 5,107,666.73
Other payables 22,785,089.94 22,997,466.80
Including: Interest payable
Dividends payable
Service fee and commission payable
Reinsurance premium payable
Liabilities held for sale
Non-current liabilities maturing within
5,495,936.70 6,014,119.95
one year
Other current liabilities 12,787.72 21,600.00
Total current liabilities 432,884,554.16 1,085,922,264.38
Non-current liabilities:
Reserves for insurance contracts
Long-term borrowings 105,274,084.45 28,019,758.68
Bonds payable
Including: preferred shares
Perpetual bond
Lease liabilities 2,262,160.03
Long-term payables
Long-term employee compensation
payable
Estimated liabilities 15,000,000.00 15,000,000.00
Deferred income 78,966,632.06 82,145,596.60
Deferred tax liabilities
Other non-current liabilities 45,112.54 47,511.72
Total non-current liabilities 199,285,829.05 127,475,027.03
Total liabilities 632,170,383.21 1,213,397,291.41
Owner's equity:
Share capital 602,762,596.00 602,762,596.00
Other equity instruments
Including: preferred shares
Perpetual bond
Capital reserves 362,770,922.10 362,770,922.10
Less: treasury stock
Other comprehensive income -2,500,000.00 -2,500,000.00
Special reserves 219,435.94
Surplus reserves 332,908,397.60 332,908,397.60
General risk reserves
Undistributed profit 121,947,239.58 159,187,979.14
Total equity attributable to the owners of
1,418,108,591.22 1,455,129,894.84
parent company
Minority equity -67,760,191.81 -62,310,840.26
Total owner's equity 1,350,348,399.41 1,392,819,054.58
Total liabilities and owners' equity 1,982,518,782.62 2,606,216,345.99
Legal representative: Kong Guoliang Chief accountant: Chen Yuhui CFO: Zhang Xiaoyin Head of the accounting department: Lin
Xiaojia
37
Full text of The Semi-Annual Report 2023 of Shenzhen Nanshan Power Co., Ltd.
2. Balance sheet of the parent company
Unit: RMB
Item June 30, 2023 January 1, 2023
Current assets:
Cash and cash equivalents 264,152,583.51 652,703,545.21
Trading financial assets 145,000,000.00 440,013,571.10
Derivative financial assets
Notes receivable
Accounts receivable 54,764,958.01 47,995,982.82
Receivables financing
Advances to suppliers 22,319,802.97 29,715,650.29
Other receivables 919,550,297.33 851,189,111.89
Including: interest receivable
Dividends receivable
Inventories 79,038,144.88 79,504,053.32
Contract assets
Assets held for sale
Non-current assets maturing within
one year
Other current assets 230,188,501.37 180,501,049.31
Total current assets 1,715,014,288.07 2,281,622,963.94
Non-current assets:
Claim investments
Other claim investments
Long-term receivables
Long-term equity investments 352,264,960.27 352,171,153.27
Other investments in equity
160,615,000.00 160,615,000.00
instruments
Other non-current financial assets
Investment properties
Fixed assets 272,700,853.74 279,587,315.87
Projects under construction 3,337,206.33 1,976,173.28
Productive biological assets
Oil and gas assets
Right-of-use assets 4,987,282.16 7,707,617.90
Intangible assets 168,431.13 193,607.19
R&D expenses
Goodwill
Long-term deferred expenses 902,817.19 1,106,385.13
Deferred tax assets
Other non-current assets
Total of non-current assets 794,976,550.82 803,357,252.64
38
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Total assets 2,509,990,838.89 3,084,980,216.58
Current liabilities:
Short-term borrowings 226,612,655.38 285,705,357.36
Trading financial liabilities
Derivative financial liabilities
Notes payable 137,298,902.17 737,298,902.17
Accounts payable 1,590,154.08 3,759,009.04
Advances from customers
Contract liabilities
Employee compensation payable 21,000,126.20 18,905,560.54
Taxes payable 3,154,830.93 1,203,569.67
Other payables 167,052,061.36 170,451,537.10
Including: Interest payable
Dividends payable
Liabilities held for sale
Non-current liabilities maturing within
5,495,936.70 6,014,119.95
one year
Other current liabilities
Total current liabilities 562,204,666.82 1,223,338,055.83
Non-current liabilities:
Long-term borrowings 105,274,084.45 28,019,758.68
Bonds payable
Including: preferred shares
Perpetual bond
Lease liabilities 2,262,160.03
Long-term payables
Long-term employee compensation
payable
Estimated liabilities
Deferred income 47,245,826.04 48,978,528.78
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 152,519,910.49 79,260,447.49
Total liabilities 714,724,577.31 1,302,598,503.32
Owner's equity:
Share capital 602,762,596.00 602,762,596.00
Other equity instruments
Including: preferred shares
Perpetual bond
Capital reserves 289,963,039.70 289,963,039.70
Less: treasury stock
Other comprehensive income
Special reserves 219,435.94
Surplus reserves 332,908,397.60 332,908,397.60
Undistributed profit 569,412,792.34 556,747,679.96
Total owner's equity 1,795,266,261.58 1,782,381,713.26
39
Full text of The Semi-Annual Report 2023 of Shenzhen Nanshan Power Co., Ltd.
Total liabilities and owners' equity 2,509,990,838.89 3,084,980,216.58
Legal representative: Kong Guoliang Chief accountant: Chen Yuhui CFO: Zhang Xiaoyin Head of the accounting department: Lin
Xiaojia
3. Consolidated income statement
Unit: RMB
Item 1H23 1H22
I. Total revenue 271,268,185.05 229,243,542.07
Including: operating revenue 271,268,185.05 229,243,542.07
Interest income
Premiums earned
Income from service fee and
commission
II. Total operating costs 342,848,838.47 362,962,644.74
Including: operating costs 285,367,929.90 282,486,432.21
Interest expenses
Expenses on service fee and
commission
Surrender value
Net amount of compensation
payout
Net change in insurance
contract reserves
Policy dividend payout
Cost of reinsurance
Taxes and surcharges 2,041,706.60 2,896,262.61
Selling and distribution
897,707.82
expenses
G&A expenses 34,513,202.72 43,777,644.68
R&D expenses 13,297,926.31 17,072,589.13
Financial expenses 6,730,365.12 16,729,716.11
Including: interest expenses 11,768,338.22 20,539,845.79
Interest income 3,020,964.70 3,594,848.74
Plus: other income 4,065,271.26 4,440,645.78
Investment income (loss
19,725,870.53 27,741,227.07
expressed with "-")
Including: income from
investment in associates and joint 1,643,156.49 -1,471,602.77
ventures
Gain from
derecognition of financial assets
measured at amortized cost
Foreign exchange gains (loss
expressed with "-")
Net exposure hedging gains (loss
40
Full text of The Semi-Annual Report 2023 of Shenzhen Nanshan Power Co., Ltd.
expressed with "-")
Gains from changes in fair value
(losses expressed with "-")
Credit loss (loss expressed with
"-")
Asset impairment loss (loss
expressed with "-")
Gains from disposal of assets
111,895.22
(losses expressed with "-")
III. Operation profit (loss expressed with
-47,677,616.41 -101,537,229.82
"-")
Plus: non-operating revenue 4,994,213.17
Less: non-operating expenses 6,208.32 228,495.85
IV. Total profit (total loss expressed with
-42,689,611.56 -101,765,725.67
"-")
Less: income tax expenses 479.55
V. Net profit (net loss expressed with "-
-42,690,091.11 -101,765,725.67
")
(i) Classified as per business
continuity
1. Net profit from continuing
-42,690,091.11 -101,765,725.67
operations (net loss expressed with "-")
2. Net profit from discontinued
operations (net loss expressed with "-")
(II) Classified as per attribution of
ownership
1. Net profit attributable to
shareholders of the parent company (net -37,240,739.56 -94,098,149.09
loss expressed with "-")
2. Minority interest (net loss
-5,449,351.55 -7,667,576.58
expressed with "-")
VI. Net after-tax amount of other
comprehensive income
Net amount of other comprehensive
income after tax attributed to parent
company owners
(i) Other comprehensive income
that cannot be reclassified into the profit
or loss
1. Changes arising from re-
measurement of defined benefit plans
2. Other comprehensive income
that cannot be transferred to profit or loss
under the equity method
3. Other changes in fair value of
investments in equity instruments
4. Changes in fair value of the
enterprise's own credit risk
5. Others
(ii) Other comprehensive income
that will be reclassified into profit or loss
1. Other comprehensive income
of convertible profit or loss under the
equity method
41
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2. Changes in fair value of other
claim investments
3. Amount of financial assets
reclassified into the other comprehensive
income
4. Credit provision for
impairment of other claim investments
5. Hedging reserves for cash flow
6. Differences arising from
foreign currency financial statements
7. Others
Net amount of other comprehensive
income after tax attributable to minority
shareholders
VII. Total comprehensive income -42,690,091.11 -101,765,725.67
Total comprehensive income
attributable to the owner of the parent -37,240,739.56 -94,098,149.09
company
Total comprehensive income
-5,449,351.55 -7,667,576.58
attributable to the minority shareholders
VIII. Earnings per share:
(I) Basic earnings per share -0.0618 -0.1561
(II) Diluted earnings per share -0.0618 -0.1561
In case of any business combination under the same control in the current period, the net profit realized by the combinee before the
combination was RMB0.00, and the net profit realized by the combinee in the previous period was RMB0.00.
Legal representative: Kong Guoliang Chief accountant: Chen Yuhui CFO: Zhang Xiaoyin Head of the accounting department: Lin
Xiaojia
4. Income statement of the parent company
Unit: RMB
Item 1H23 1H22
I. Operating revenue 167,763,232.36 129,074,352.66
Less: operating costs 167,385,274.90 153,243,699.14
Taxes and surcharges 797,742.96 1,561,901.55
Selling and distribution expenses 333,513.64
G&A expenses 13,560,282.42 14,624,528.90
R&D expenses 8,859,406.25 11,637,676.90
Financial expenses -15,313,487.00 1,145,966.46
Including: interest expenses 6,443,539.09 18,356,302.31
Interest income -22,272,424.92 17,449,061.98
Plus: other income 2,014,744.97 2,453,965.18
Investment income (loss
17,708,671.86 28,915,295.59
expressed with "-")
Including: income from
investment in associates and joint 1,308,357.00
ventures
Gains from
derecognition of financial assets
measured by amortized cost (losses
42
Full text of The Semi-Annual Report 2023 of Shenzhen Nanshan Power Co., Ltd.
expressed with "-")
Net exposure hedging gains (loss
expressed with "-")
Gains from changes in fair value
(losses expressed with "-")
Credit loss (loss expressed with
"-")
Asset impairment loss (loss
expressed with "-")
Gains from disposal of assets
-40,000.01
(losses expressed with "-")
II. Operation profit (loss expressed with
11,823,916.01 -21,770,159.52
"-")
Plus: non-operating revenue 847,884.24
Less: non-operating expenses 6,208.32 218,495.85
III. Total profit (total losses expressed
12,665,591.93 -21,988,655.37
with "-")
Less: income tax expenses 479.55
IV. Net profit (net losses expressed with
12,665,112.38 -21,988,655.37
"-")
(I) Net profit from continuing
12,665,112.38 -21,988,655.37
operations (net losses expressed with "-")
(II) Net profit from discontinued
operations (net losses expressed with "-")
V. Net after-tax amount of other
comprehensive income
(i) Other comprehensive income
that cannot be reclassified into the profit
or loss
1. Changes arising from re-
measurement of defined benefit plans
2. Other comprehensive income
that cannot be transferred to profit or loss
under the equity method
3. Other changes in fair value of
investments in equity instruments
4. Changes in fair value of the
enterprise's own credit risk
5. Others
(ii) Other comprehensive income
that will be reclassified into profit or loss
1. Other comprehensive income
of convertible profit or loss under the
equity method
2. Changes in fair value of other
claim investments
3. Amount of financial assets
reclassified into the other comprehensive
income
4. Credit provision for
impairment of other claim investments
5. Hedging reserves for cash flow
6. Differences arising from
foreign currency financial statements
43
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7. Others
VI. Total comprehensive income 12,665,112.38 -21,988,655.37
VII. Earnings per share:
(I) Basic earnings per share
(II) Diluted earnings per share
Legal representative: Kong Guoliang Chief accountant: Chen Yuhui CFO: Zhang Xiaoyin Head of the accounting department: Lin
Xiaojia
5. Consolidated statement of cash flows
Unit: RMB
Item 1H23 1H22
I. Cash flows from operating activities:
Cash received from sales of goods and
296,915,732.81 210,746,338.10
rendering of services
Net increase in deposits from
customers and due from other banks and
financial institutions
Net increase in borrowings from the
Central Bank
Net increase in borrowings from banks
and other financial institutions
Cash received from receiving
insurance premium of original insurance
contract
Net cash receipts from reinsurance
business
Net increase in policyholders' deposits
and investments
Cash receipts from interest, service fee
and commission
Net increase in loans from banks and
other financial institutions
Net increase in funds from repurchase
business
Net cash receipts from acting trading
securities
Refund of taxes and surcharges 321,785,326.40
Other cash receipts relating to
12,296,599.09 45,493,756.61
operating activities
Sub-total of cash inflows from operating
309,212,331.90 578,025,421.11
activities
Cash paid for purchase of goods and
280,708,443.46 283,749,702.63
receiving of services
Net increase in customer loans and
advances
Net increase in deposits with central
bank and other banks and financial
institutions
Cash payments for original insurance
contract claims
Net increase in loans to banks and
44
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other financial institutions
Cash payments for interest, service fee
and commission
Cash payments for policyholder
dividend
Cash paid to and on behalf of
54,829,117.40 64,322,418.53
employees
Cash payments for taxes 12,312,023.45 7,023,037.32
Cash paid for other operating activities
18,379,237.13 22,342,179.33
related
Sub-total of cash outflows from
366,228,821.44 377,437,337.81
operating activities
Net cash flow from operating activities -57,016,489.54 200,588,083.30
II. Cash flows from the investing
activities:
Cash receipts from investment
285,010,220.37
withdrawal
Cash received from the investment
29,300,616.97 19,707,290.27
income
Net cash received from the disposal of
fixed assets, intangible assets and other 550,880.00
long-term assets
Net cash received from the disposal of
subsidiaries and other business units
Other cash received in connection with
investing activities
Sub-total of cash inflows from investing
314,861,717.34 19,707,290.27
activities
Cash paid for acquiring and
constructing fixed assets, intangible 2,754,947.23 2,242,860.09
assets and other long-term assets
Cash paid for investments 747,899,274.61
Net increase in pledged loans
Net cash paid for acquisition of
subsidiaries and other business units
Cash paid for other investing activities 50,000,000.00
Sub-total of cash outflows from investing
52,754,947.23 750,142,134.70
activities
Net cash flow from investing activities 262,106,770.11 -730,434,844.43
III. Cash flows from the financing
activities:
Cash received from the absorption of
investments
Including: Cash received from
absorption of investments of minority
shareholders by subsidiaries
Cash received from borrowings 265,878,587.77 1,021,949,358.06
Cash received in connection with other
financing activities
Sub-total of cash inflows from financing
265,878,587.77 1,021,949,358.06
activities
Cash paid for debt repayments 847,229,358.05 706,518,623.08
Cash paid for the distribution of
dividends and profits or the payment of 6,158,185.74 5,466,201.94
interests
Including: dividends and profits paid
45
Full text of The Semi-Annual Report 2023 of Shenzhen Nanshan Power Co., Ltd.
to minority shareholders by subsidiaries
Cash paid for other financing activities 5,440,434.23
Sub-total of cash outflows from
858,827,978.02 711,984,825.02
financing activities
Net cash flow from financing activities -592,949,390.25 309,964,533.04
IV. Effect of fluctuation in exchange rate
237,073.97 295,703.69
on cash and cash equivalents
V. Net increase in cash and cash
-387,622,035.71 -219,586,524.40
equivalents
Plus: beginning balance of cash and
648,021,672.06 689,604,633.59
cash equivalents
VI. Ending balance of cash and cash
260,399,636.35 470,018,109.19
equivalents
Legal representative: Kong Guoliang Chief accountant: Chen Yuhui CFO: Zhang Xiaoyin Head of the accounting department: Lin
Xiaojia
6. The statement of cash flows of the parent company
Unit: RMB
Item 1H23 1H22
I. Cash flows from operating activities:
Cash received from sales of goods and
238,785,052.21 195,459,447.73
rendering of services
Refund of taxes and surcharges 317,508,755.71
Other cash receipts relating to
56,464,858.58 882,162,936.47
operating activities
Sub-total of cash inflows from operating
295,249,910.79 1,395,131,139.91
activities
Cash paid for purchase of goods and
169,853,255.01 139,104,100.10
receiving of services
Cash paid to and on behalf of
33,292,463.79 42,760,321.94
employees
Cash payments for taxes 4,813,280.65 366,550.16
Cash paid for other operating activities
129,718,913.30 358,690,786.29
related
Sub-total of cash outflows from
337,677,912.75 540,921,758.49
operating activities
Net cash flow from operating activities -42,428,001.96 854,209,381.42
II. Cash flows from the investing
activities:
Cash receipts from investment
285,010,220.37
withdrawal
Cash received from the investment
27,618,217.79 19,707,290.27
income
Net cash received from the disposal of
fixed assets, intangible assets and other
long-term assets
Net cash received from the disposal of
subsidiaries and other business units
Other cash received in connection with
investing activities
Sub-total of cash inflows from investing
312,628,438.16 19,707,290.27
activities
Cash paid for acquiring and
constructing fixed assets, intangible 2,608,372.23 780,194.99
assets and other long-term assets
46
Full text of The Semi-Annual Report 2023 of Shenzhen Nanshan Power Co., Ltd.
Cash paid for investments 747,899,274.61
Net cash paid for acquisition of
subsidiaries and other business units
Cash paid for other investing activities 63,500,000.00
Sub-total of cash outflows from investing
66,108,372.23 748,679,469.60
activities
Net cash flow from investing activities 246,520,065.93 -728,972,179.33
III. Cash flows from the financing
activities:
Cash received from the absorption of
investments
Cash received from borrowings 265,878,587.77 439,191,858.06
Cash received in connection with other
financing activities
Sub-total of cash inflows from financing
265,878,587.77 439,191,858.06
activities
Cash paid for debt repayments 847,229,358.05 706,518,623.08
Cash paid for the distribution of
dividends and profits or the payment of 6,155,786.56 5,466,201.94
interests
Cash paid for other financing activities 10,578,867.57
Sub-total of cash outflows from
863,964,012.18 711,984,825.02
financing activities
Net cash flow from financing activities -598,085,424.41 -272,792,966.96
IV. Effect of fluctuation in exchange rate
1,964.51 1,767.29
on cash and cash equivalents
V. Net increase in cash and cash
-393,991,395.93 -147,553,997.58
equivalents
Plus: beginning balance of cash and
625,228,950.87 592,751,213.88
cash equivalents
VI. Ending balance of cash and cash
231,237,554.94 445,197,216.30
equivalents
Legal representative: Kong Guoliang Chief accountant: Chen Yuhui CFO: Zhang Xiaoyin Head of the accounting department: Lin
Xiaojia
7. Consolidated statement of changes in owner's equity
Current amount
Unit: RMB
1H23
Owner's equity attributable to the parent company
Other equity Oth Tota
instruments Less er Und l
Gen Min
Item Shar Capi : com Spe Surp istri ority own
Pref Perp eral
e tal treas preh cial lus bute Oth Sub- equi er's
erre etua risk
capi Oth rese ury ensi rese rese d ers total ty equi
d l rese
tal ers rves stoc ve rves rves prof ty
shar bon rves
k inco it
es d me
-
602, 362, - 332, 159, 1,45 1,39
I. Ending 62,3
762, 770, 2,50 908, 187, 5,12 2,81
balance last 10,8
596. 922. 0,00 397. 979. 9,89 9,05
year 40.2
00 10 0.00 60 14 4.84 4.58
6
47
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Add:
changes of
accounting
policies
Ad
justments for
correction of
accounting
errors in
prior year
Bu
siness
combination
under the
same control
Ot
hers
-
602, 362, - 332, 159, 1,45 1,39
II. Beginning 62,3
762, 770, 2,50 908, 187, 5,12 2,81
balance this 10,8
596. 922. 0,00 397. 979. 9,89 9,05
year 40.2
00 10 0.00 60 14 4.84 4.58
6
III. Current - - -
-
increases/dec 219, 37,2 37,0 42,4
5,44
reases ("-" 435. 40,7 21,3 70,6
9,35
for 94 39.5 03.6 55.1
1.55
decreases) 6 2 7
- - -
-
(I) Total 37,2 37,2 42,6
5,44
comprehensi 40,7 40,7 90,0
9,35
ve income 39.5 39.5 91.1
1.55
6 6 1
(II) Capital
contributed
or reduced
by owners
1. Ordinary
shares
contributed
by owners
2. Capital
contributed
by holders of
other equity
instruments
3. Amounts
of share-
based
payments
included in
the owner's
equity
4. Others
(III) Profit
48
Full text of The Semi-Annual Report 2023 of Shenzhen Nanshan Power Co., Ltd.
distribution
1.
Withdrawal
of surplus
reserves
2.
Withdrawal
of general
risk reserves
3. Profit
distributed to
owners (or
shareholders)
4. Others
(IV) Internal
carry-
forward of
owner's
equity
1.
Conversion
of capital
reserves into
capital (or
share capital)
2.
Conversion
of surplus
reserves into
capital (or
share capital)
3. Making up
losses with
surplus
reserves
4. Carry-
forward of
changes in
benefit plans
to retained
earnings
5. Carry-
forward of
other
comprehensi
ve income to
retained
earnings
6. Others
219, 219, 219,
(V) Special
435. 435. 435.
reserves
94 94 94
5,08 5,08 5,08
1.
6,97 6,97 6,97
49
Full text of The Semi-Annual Report 2023 of Shenzhen Nanshan Power Co., Ltd.
Withdrawal 3.52 3.52 3.52
in this period
4,86 4,86 4,86
2. Use in this
7,53 7,53 7,53
period
7.58 7.58 7.58
(VI) Others
-
602, 362, - 332, 121, 1,41 1,35
IV. Ending 219, 67,7
762, 770, 2,50 908, 947, 8,10 0,34
balance in 435. 60,1
596. 922. 0,00 397. 239. 8,59 8,39
this period 94 91.8
00 10 0.00 60 58 1.22 9.41
1
Amount last year
Unit: RMB
1H22
Owner's equity attributable to the parent company
Other equity Oth Tota
instruments Less er Und Min l
Gen
Item Shar Capi : com Spe Surp istri ority own
Pref Perp eral
e tal treas preh cial lus bute Oth Sub- equi er's
erre etua risk
capi Oth rese ury ensi rese rese d ers total ty equi
d l rese
tal ers rves stoc ve rves rves prof ty
shar bon rves
k inco it
es d me
-
602, 362, - 332, 319, 1,61 1,57
I. Ending 36,9
762, 770, 2,50 908, 351, 5,29 8,34
balance last 51,2
596. 922. 0,00 397. 219. 3,13 1,91
year 20.0
00 10 0.00 60 81 5.51 5.44
7
Add:
changes of
accounting
policies
Ad
justments for
correction of
accounting
errors in
prior year
Bu
siness
combination
under the
same control
Ot
hers
-
602, 362, - 332, 319, 1,61 1,57
II. Beginning 36,9
762, 770, 2,50 908, 351, 5,29 8,34
balance this 51,2
596. 922. 0,00 397. 219. 3,13 1,91
year 20.0
00 10 0.00 60 81 5.51 5.44
7
III. Current - - - -
increases/dec 94,0 94,0 7,66 101,
reases ("-" 98,1 98,1 7,57 765,
50
Full text of The Semi-Annual Report 2023 of Shenzhen Nanshan Power Co., Ltd.
for 49.0 49.0 6.58 725.
decreases) 9 9 67
- - -
-
(I) Total 94,0 94,0 101,
7,66
comprehensi 98,1 98,1 765,
7,57
ve income 49.0 49.0 725.
6.58
9 9 67
(II) Capital
contributed
or reduced
by owners
1. Ordinary
shares
contributed
by owners
2. Capital
contributed
by holders of
other equity
instruments
3. Amounts
of share-
based
payments
included in
the owner's
equity
4. Others
(III) Profit
distribution
1.
Withdrawal
of surplus
reserves
2.
Withdrawal
of general
risk reserves
3. Profit
distributed to
owners (or
shareholders)
4. Others
(IV) Internal
carry-
forward of
owner's
equity
1.
Conversion
of capital
reserves into
capital (or
51
Full text of The Semi-Annual Report 2023 of Shenzhen Nanshan Power Co., Ltd.
share capital)
2.
Conversion
of surplus
reserves into
capital (or
share capital)
3. Making up
losses with
surplus
reserves
4. Carry-
forward of
changes in
benefit plans
to retained
earnings
5. Carry-
forward of
other
comprehensi
ve income to
retained
earnings
6. Others
(V) Special
reserves
1.
Withdrawal
in this period
2. Use in this
period
(VI) Others
-
602, 362, - 332, 225, 1,52 1,47
IV. Ending 44,6
762, 770, 2,50 908, 253, 1,19 6,57
balance in 18,7
596. 922. 0,00 397. 070. 4,98 6,18
this period 96.6
00 10 0.00 60 72 6.42 9.77
5
Legal representative: Kong Guoliang Chief accountant: Chen Yuhui CFO: Zhang Xiaoyin Head of the accounting department: Lin
Xiaojia
8. Statement of changes in owner's equity of parent company
Current amount
Unit: RMB
1H23
Other equity instruments Other
Capita Less: Specia Surplu Undist Total
Item compr
Share Prefer Perpet l treasu l s ribute owner'
ehensi Others
capital red ual Others reserv ry reserv reserv d s
ve
shares bond es stock es es profit equity
incom
52
Full text of The Semi-Annual Report 2023 of Shenzhen Nanshan Power Co., Ltd.
e
I. Ending 602,7 289,9 332,9 556,7 1,782,
balance last 62,59 63,03 08,39 47,67 381,7
year 6.00 9.70 7.60 9.96 13.26
Add:
changes of
accounting
policies
Ad
justments for
correction of
accounting
errors in
prior year
Ot
hers
II. Beginning 602,7 289,9 332,9 556,7 1,782,
balance this 62,59 63,03 08,39 47,67 381,7
year 6.00 9.70 7.60 9.96 13.26
III. Current
increases/dec 12,66 12,88
219,4
reases ("-" 5,112. 4,548.
35.94
for 38 32
decreases)
(I) Total 12,66 12,66
comprehensi 5,112. 5,112.
ve income 38 38
(II) Capital
contributed
or reduced
by owners
1. Ordinary
shares
contributed
by owners
2. Capital
contributed
by holders of
other equity
instruments
3. Amounts
of share-
based
payments
included in
the owner's
equity
4. Others
(III) Profit
distribution
1.
Withdrawal
of surplus
53
Full text of The Semi-Annual Report 2023 of Shenzhen Nanshan Power Co., Ltd.
reserves
2. Profits
distributed to
owners (or
shareholders)
3. Others
(IV) Internal
carry-
forward of
owner's
equity
1.
Conversion
of capital
reserves into
capital (or
share capital)
2.
Conversion
of surplus
reserves into
capital (or
share capital)
3. Making up
losses with
surplus
reserves
4. Carry-
forward of
changes in
benefit plans
to retained
earnings
5. Carry-
forward of
other
comprehensi
ve income to
retained
earnings
6. Others
(V) Special 219,4 219,4
reserves 35.94 35.94
1. 3,810, 3,810,
Withdrawal 328.3 328.3
in this period 2 2
3,590, 3,590,
2. Use in this
892.3 892.3
period
8 8
(VI) Others
IV. Ending 602,7 289,9 332,9 569,4 1,795,
219,4
balance in 62,59 63,03 08,39 12,79 266,2
35.94
this period 6.00 9.70 7.60 2.34 61.58
54
Full text of The Semi-Annual Report 2023 of Shenzhen Nanshan Power Co., Ltd.
Amount last year
Unit: RMB
1H22
Other equity instruments Other
Capita Less: compr Specia Surplu Undist Total
Item Share Prefer Perpet l treasu ehensi l s ribute owner'
Others
capital red ual Others reserv ry ve reserv reserv d s
shares bond es stock incom es es profit equity
e
I. Ending 602,7 289,9 332,9 562,7 1,788,
balance last 62,59 63,03 08,39 39,67 373,7
year 6.00 9.70 7.60 6.37 09.67
Add:
changes of
accounting
policies
Ad
justments for
correction of
accounting
errors in
prior year
Ot
hers
II. Beginning 602,7 289,9 332,9 562,7 1,788,
balance this 62,59 63,03 08,39 39,67 373,7
year 6.00 9.70 7.60 6.37 09.67
III. Current
- -
increases/dec
21,98 21,98
reases ("-"
8,655. 8,655.
for
37 37
decreases)
- -
(I) Total
21,98 21,98
comprehensi
8,655. 8,655.
ve income
37 37
(II) Capital
contributed
or reduced
by owners
1. Ordinary
shares
contributed
by owners
2. Capital
contributed
by holders of
other equity
instruments
3. Amounts
of share-
based
payments
55
Full text of The Semi-Annual Report 2023 of Shenzhen Nanshan Power Co., Ltd.
included in
the owner's
equity
4. Others
(III) Profit
distribution
1.
Withdrawal
of surplus
reserves
2. Profits
distributed to
owners (or
shareholders)
3. Others
(IV) Internal
carry-
forward of
owner's
equity
1.
Conversion
of capital
reserves into
capital (or
share capital)
2.
Conversion
of surplus
reserves into
capital (or
share capital)
3. Making up
losses with
surplus
reserves
4. Carry-
forward of
changes in
benefit plans
to retained
earnings
5. Carry-
forward of
other
comprehensi
ve income to
retained
earnings
6. Others
(V) Special
reserves
1.
56
Full text of The Semi-Annual Report 2023 of Shenzhen Nanshan Power Co., Ltd.
Withdrawal
in this period
2. Use in this
period
(VI) Others
IV. Ending 602,7 289,9 332,9 540,7 1,766,
balance in 62,59 63,03 08,39 51,02 385,0
this period 6.00 9.70 7.60 1.00 54.30
Legal representative: Kong Guoliang Chief accountant: Chen Yuhui CFO: Zhang Xiaoyin Head of the accounting department: Lin
Xiaojia
57
Shenzhen Nanshan Power Co., Ltd.
Notes to the 2023 Semi-Annual Financial Statements
(Expressed in RMB unless otherwise stated)
I. Basic information of the Company
1. Company profile
Shenzhen Nanshan Power Co., Ltd. (hereinafter referred to as "Company") is a joint stock
limited company restructured and established by foreign-invested enterprises on
November 25, 1993 with the approval of the document Shen Fu Ban Fu [1993] No.897
issued by the General Office of the People's Government of Shenzhen.
Upon the approval of the document (Shen Zheng Ban Fu [1993] No. 179) issued by the
Shenzhen Securities Regulatory Office, the Company issued 40 million RMB ordinary
shares and 37 million domestically listed foreign shares to domestic and overseas
investors respectively on January 3, 1994. On July 1, 1994 and November 28, 1994, the
Company's RMB ordinary shares (A shares) and domestically listed foreign shares (B
shares) were listed and traded in the Shenzhen Stock Exchange successively.
The Company is headquartered at the 16th and 17th floors of Hantang Building, Overseas
Chinese Town, Nanshan District, Shenzhen, Guangdong Province, China.
The financial statements have been approved by the Company's Board of Directors for
disclosure on August 23, 2023.
2. Scope of financial statements
a) There are 9 subsidiaries included in consolidated financial statements in this period,
including:
Shareholding
Name of subsidiaries Remarks
ratio %
Shen Nan Dian (Zhongshan) Electric Power Co., Ltd.
80.00
("Zhongshan Electric Power")
Shenzhen Shennandian Turbine Engineering Technology Co.,
100.00
Ltd. ("Engineering Company")
Shenzhen Shen Nan Dian Environment Protection Co., Ltd.
100.00
("Environmental Protection Company")
Shenzhen Server Petrochemical Supplying Co., Ltd. ("Shenzhen
50.00
Server")
Shenzhen New Power Industrial Co., Ltd. ("New Power") 100.00
Shen Nan Energy (Singapore) Co., Ltd. (the "Singapore
100.00
Company")
Hong Kong Hing Tak Shing Limited ("Hing Tak Shing") 100.00
Notes to the financial statements Page 1
Shareholding
Name of subsidiaries Remarks
ratio %
Zhongshan Shennan Electric Storage Co., Ltd. ("Shennan
80.00
Storage")
Zhuhai Hengqin Zhuozhi Investment Partnership (Limited
99.96
Partnership) (" Zhuhai Hengqin")
See Notes "6. Changes in the scope of consolidation" and "7. Equity in other entities" for
details of the scope of the current consolidated financial statements and the changes.
II. Basis of preparation for the financial statements
1. Basis of preparation
Based on the continuing operation and according to the actual transactions and events, the
Company prepares the financial statements in accordance with "the Accounting Standards
for Business Enterprises - Basic Standards " promulgated by the Ministry of Finance and
various specific accounting standards, application guidelines for accounting standards for
business bnterprises, interpretations and other relevant provisions for accounting
standards for business enterprises (hereinafter collectively referred to as the "Accounting
Standards for Business Enterprises"), as well as the disclosure provisions by " General
Provisions on Financial Reporting, No. 15 of the Rules for Information Disclosure and
Presentation by Companies that Publically Issue Securities" issued by the China
Securities Regulatory Commission.
2. Continuing operation
The Company has the ability of continuing operation for at least 12 months as of the end
of the reporting period, and there are no major events may affect the ability of continuing
operation.
III. Significant accounting policies and accounting estimates
The Company and its subsidiaries are engaged in electricity and thermal power
production, power station construction, fuel oil trading, engineering and technical
consulting and sludge drying business. The Company and its subsidiaries have formulated
several specific accounting policies and accounting estimates for revenue recognition and
other transactions and events according to the actual production and operation
characteristics and the relevant provisions of Accounting Standards for Business
Enterprises. See Note III.XXIV "Revenue" and other descriptions for details.
1. Statement in compliance with the Accounting Standards for Business Enterprises
Notes to the financial statements Page 2
The financial statements comply with the Accounting Standards for Business Enterprises
promulgated by the Ministry of Finance, and truly and completely reflect the Company's
financial position, operating results, changes in owners' (shareholders') equity, cash flows
and other relevant information during the reporting period.
2. Accounting period
The fiscal year is from January 1 to December 31 of each calendar year.
3. Operating cycle
The Company takes 12 months as a normal operating cycle, and as the classification
standard for the liquidity of assets and liabilities.
4. Recording currency
The Company adopts RMB as its recording currency.
5. Accounting treatment method of business combination under the same control and
not under the same control
Business combination under the same control: the assets and liabilities acquired by the
combining party in the business combination are measured at the book value of the assets
and liabilities (including the goodwill formed by the acquisition of the combined party by
the ultimate controller) of the combined party in the consolidated financial statements of
the ultimate controller on the combination date. The difference between the book value of
net assets acquired from the combination and the book value of the consideration paid for
the combination (or the total nominal value of shares issued) shall be adjusted to the
capital stock premium in the capital reserves, and the retained earnings shall be adjusted if
the capital stock premium in the capital reserves is insufficient to be offset.
Business combination not under the same control: the acquirer shall, on the acquisition
date, measure the assets surrendered and liabilities incurred or assumed as the
consideration for the business combination at the fair value, and the difference between
the fair value and its book value shall be included in the current profit or loss. The
difference of the combination cost in excess of the acquiree's share of fair value of net
identifiable assets is recognized as goodwill. The difference of the combination cost in
short of the share of fair value of net identifiable assets of the acquiree obtained in the
combination shall be included in the current profit or loss.
Costs directly attributable to the business combination shall be included in the current
profit or loss as occurred; Transaction costs for the issuance of equity securities or debt
securities for the business combination shall be included in the initially recognized
amount of the equity securities or debt securities.
Notes to the financial statements Page 3
6. Preparation method of the consolidated financial statements
a) Scope of consolidation
The scope of consolidated financial statements is determined on the basis of control,
including the Company and all subsidiaries.
b) Procedures of consolidation
The Company prepares the consolidated financial statements based on the financial
statements of the Company and all subsidiaries with reference to other relevant
materials. In preparing the consolidated financial statements, the Company treats
the whole enterprise group as an accounting entity to reflect the overall financial
position, operating results and cash flows of the enterprise group in accordance
with the recognition, measurement and presentation requirements of the relevant
Accounting Standards for Business Enterprises and in accordance with the unified
accounting policies.
The accounting policies and accounting period adopted by all subsidiaries included
in the scope of the consolidated financial statements shall be consistent with those
of the Company; if not inconsistent with those of the Company, necessary
adjustments shall be made according to the accounting policies and accounting
period of the Company at preparation. For subsidiaries acquired from business
combination not under the same control, the financial statements shall be adjusted
on the basis of the fair value of the identifiable net assets on the acquisition date.
For subsidiaries acquired from business combination under the same control,
adjustments shall be made to the financial statements based on the book value of its
assets and liabilities (including the goodwill formed by the acquisition of the
subsidiary by the ultimate controller) in the financial statements of the ultimate
controller.
The owner's equity, current net profit or loss and share attributable to minority
shareholders in current comprehensive income of subsidiaries shall be separately
presented under the owner's equity in the consolidated balance sheet, net profit and
total comprehensive income in the consolidated income statement. The balance
resulting from the excess of the minority shareholders' share of the current loss of a
subsidiary over the minority's share of the subsidiary's owners' equity at the
beginning of the period is eliminated to reduce the minority equity.
(1) Addition of subsidiaries or business
During the reporting period, if there is a new subsidiary or business due to the
Notes to the financial statements Page 4
business combination under the same control, the beginning amount of
consolidated balance sheet shall be adjusted; The revenues, expenses and profits
from the beginning of the consolidation period to the end of the reporting period of
the subsidiary or business shall be included in the consolidated income statement;
The cash flow of subsidiaries or business combination from the beginning of the
current period to the end of the reporting period shall be included in the
consolidated statement of cash flows, and the relevant items of the comparative
statements shall be adjusted as if the consolidated reporting entity has always
existed since the time point when the ultimate controller begins to control it.
Where the Company can exercise control over the investee under common control
due to additional investment or other reasons, adjustments shall be made as if all
parties involved in the combination exist at the beginning of the control by the
ultimate controller. For equity investments held prior to the acquisition of control
of the combinee, the related gains or losses, other comprehensive income and other
changes in net assets recognized between the later of the date of acquisition of the
original equity interest and the date on which the combining party and the
combinee are under the same control and the date of consolidation are eliminated
against retained earnings at the beginning of the comparative statement period or
against current profit or loss, respectively.
During the reporting period, if there is a new subsidiary or business due to business
combination not under the same control, the beginning amount of the consolidated
balance sheet will not be adjusted. The revenues, expenses and profits of the
subsidiary or business from the purchase date to the end of the reporting period
shall be included in the consolidated income statement. The cash flow of the
subsidiaries or business from the purchase date to the end of the reporting period
shall be included in the consolidated statement of cash flows.
Where the Company can exercise control over the investee not under the same
control due to additional investment or other reasons, the Company shall re-
measure the equity of the acquiree held before the purchase date at the fair value of
the equity on the purchase date, and the difference between the fair value and the
book value shall be included in the current investment income. If the equity of the
acquiree held before the purchase date involves the other comprehensive income
under the accounting by equity method and changes in owners' equity other than
net profit or loss, other comprehensive income and profit distribution, other
Notes to the financial statements Page 5
comprehensive income and other changes in owners' equity shall be transferred to
the investment income of the period to which the purchase date belongs, except for
other comprehensive income arising from the investee's re-measurement of
changes in net liabilities or net assets under defined benefit plans.
(2) Disposal of subsidiaries or business
① General treatment methods
During the reporting period, if the Company disposes of subsidiaries or business,
the revenues, expenses and profits of such subsidiaries or business shall be
included in the consolidated income statement from the beginning of the period to
the disposal date. The cash flow from the beginning period of the subsidiaries or
business to the disposal date shall be included in the consolidated statement of cash
flows.
When the Company loses the right of control over the investee due to disposal of
part of the equity investments or other reasons, the remaining equity investments
after disposal will be re-measured by the Company at their fair value on the date of
loss of control. The difference between the sum of the consideration obtained from
disposal of equities and the fair value of the remaining equities, less the sum of the
share of net assets and goodwill of the original subsidiaries calculated continuously
from the purchase date or combination date according to the original shareholding
ratio, shall be included in the investment income at the period of loss of control.
Other comprehensive incomes related to the original equity investments in
subsidiaries or changes in owner's equity other than net profit or loss, other
comprehensive income and profit distribution are transferred to the current
investment income at loss of control, except for other comprehensive income
arising from the investee's re-measurement of changes in net liabilities or net assets
under defined benefit plans.
Where the decrease in the Company's shareholding ratio leads to loss of control
due to the increase of capital by other investors in the subsidiaries, the accounting
treatment shall be carried out in accordance with the above principles.
② Disposal of subsidiaries step by step
Where the equity investments in subsidiaries are disposed of step by step through
multiple transactions until the loss of control, and the terms, conditions and
economic impact of the disposal on various transactions of the equity investments
in subsidiaries meet one or more of the following circumstances, it generally
Notes to the financial statements Page 6
indicates that multiple transactions shall be taken as a package of transactions for
accounting treatment:
i. The transactions are concluded at the same time or under the consideration of
mutual effect;
ii. The transactions can reach a complete business result only as a whole;
iii. One transaction occurs on the precondition of the occurrence of one or more
transactions;
iv. One single transaction is uneconomical but it is economical when considered
together with other transactions.
If a transaction to dispose of an equity investment in a subsidiary up to the point of
loss of control is a package transaction, the Company accounts for the transaction
as a single transaction to dispose of a subsidiary and lose control; However, before
the loss of control, the difference between each disposal price and the share of net
assets of the subsidiaries corresponding to the disposal of investments shall be
recognized as other comprehensive income in the consolidated financial statements
and transferred to the current profit or loss at the time of loss of control.
Where the disposal of various transactions from the equity investments in
subsidiaries until the loss of control are not a package deal, before the loss of
control, accounting treatment shall be carried out according to the relevant policies
on partial disposal of equity investments of subsidiaries without loss of control;
When loss of control, the accounting treatment shall be carried out in accordance
with the general treatment of the disposal of subsidiaries.
(3) Purchase of minority interest in the subsidiaries
The capital stock premium in the capital reserves in the consolidated balance sheet
shall be adjusted at the difference between the long-term equity investments
acquired by the Company for the purchase of minority interests and the share of net
assets of the subsidiaries calculated continuously from the purchase date (or
combination date) according to the newly increased shareholding ratio; if the
capital stock premium in the capital reserves is insufficient to be offset, the retained
earnings shall be adjusted.
(4) Partial disposal of equity investments to the subsidiaries without loss of control
The capital stock premium in the capital reserves in the consolidated balance sheet
will be adjusted at the difference between the disposal price obtained from partial
disposal of long-term equity investments to the subsidiaries without loss of control
Notes to the financial statements Page 7
and the share of net assets of the subsidiaries calculated continuously from the
purchase date or combination date corresponding to the disposal of the long-term
equity investments; if the capital stock premium in the capital reserve is insufficient
to be offset, the retained earnings will be adjusted.
7. Classification and accounting treatment method of joint venture arrangements
The joint venture arrangements are divided into joint operation and joint ventures.
When the Company is the joint venturer of the joint venture arrangements, enjoys the
relevant assets and assumes the relevant liabilities of the arrangement, it is a joint
operation.
The Company recognizes the following items related to the share of interests in the joint
operation, and carries out accounting treatment in accordance with the relevant
accounting standards for business enterprises:
(1) To recognize the assets held separately, and to recognize the assets held jointly by the
shares of the Company;
(2) To recognize the liabilities held separately, and to recognize the liabilities held jointly
by the shares of the Company;
(3) To recognize the revenue arising from the sale of the share of output from joint
operations owned by the Company;
(4) To recognize the revenue arising from the sale of output from joint operations on a
share basis of the Company;
(5) To recognize expenses incurred separately and expenses incurred by joint operations
on a share basis.
See Note "III.XIII Long-term equity investments" for the accounting policies of the
Company's investment in the joint ventures.
8. Recognition criteria for cash and cash equivalents
For the purpose of preparing the statement of cash flows, the cash on hand and the
deposits that can be readily available for payment of the Company are recognized as cash.
The term "cash equivalents" refers to short-term (maturing within three months from
acquisition) and highly liquid investments that are readily convertible to known amounts
of cash and which are subject to an insignificant risk of change in value.
9. Translation of foreign currency transactions and financial statements denominated
in foreign currency
Notes to the financial statements Page 8
a) Foreign currency transactions
Foreign currency transactions of the Company are translated into RMB and
recorded in the recording currency translated at the spot exchange rates on the
transaction date.
The foreign currency monetary items on the balance sheet date are translated at the
spot exchange rate on the balance sheet date. The exchange differences arising
from the difference between the spot exchange rate on that date and the spot
exchange rate on the initial recognition or the previous balance sheet date are
included in current profit or loss, except for the exchange differences arising from
special borrowings in foreign currencies related to the acquisition and construction
of assets eligible for capitalization are recognized in profit or loss for the current
period in accordance with the principle of capitalization of borrowing costs.
b) Conversion of foreign currency financial statements
The assets and liabilities items in the balance sheet shall be converted at the spot
exchange rate on the balance sheet date. And the owner's equity shall be converted
at the spot exchange rate when the transactions occur except for the "undistributed
profits". The revenue and expense items in the income statement shall be
converted at the spot exchange rate when the transactions occur.
On disposal of foreign operations, the translation difference of foreign currency
financial statements related to the foreign operations shall be transferred from the
item of owner's equity to the profit or loss of the current period of disposal.
10. Financial instruments
The financial instruments include the financial assets, financial liabilities and equity
instruments.
a) Classification of financial instruments
According to the business model of the Company's management of financial assets
and the contract cash flows characteristics of financial assets, financial assets are
classified into: financial assets measured at amortized cost, the financial assets
measured at fair value through other comprehensive income (debt instruments) and
financial assets measured at fair value through current profit or loss.
If the business model is aimed at collecting contract cash flows and the contract
cash flows are only for the payment of principal and interest based on the
outstanding principal amount, it is classified as financial assets measured at the
amortized cost. Financial assets (debt instruments) whose business model is aimed
Notes to the financial statements Page 9
at both collecting contract cash flows and selling the financial assets, and whose
contract cash flows are only for the payment of principal and interest based on the
outstanding principal amount, are classified as the financial assets measured at fair
value through other comprehensive income (debt instruments). Other financial
assets are classified as financial assets measured at fair value through current profit
or loss.
For non-trading investments in equity instruments, the Company determines
whether to designate them as the financial assets (equity instruments) measured at
fair value through other comprehensive income.
Financial liabilities are classified at initial recognition as: financial liabilities
measured at fair value through current profit or loss and financial liabilities
measured at amortized cost upon initial recognition.
The financial liabilities meeting one of the following conditions may be designated
as the financial liabilities measured at fair value through current profit or loss at
initial measurement:
1) Such designation can eliminate or significantly reduce accounting mismatches.
2) According to the enterprise risk management or investment strategies stated in
formal written documents, the Company manages and evaluates the performance of
the financial liabilities portfolio or the portfolio of financial assets and financial
liabilities on the basis of the fair value, and reports to the key officers within the
enterprise on this basis.
3) The financial liabilities contain embedded derivative instruments that need to be
separately split.
In accordance with the above conditions, such financial liabilities designated by the
Company mainly include: (specifically describe the circumstances specified)
b) Recognition basis and measurement method of financial instruments
(1) Financial assets measured at amortized cost
Financial assets measured at amortized cost include notes receivable, accounts
receivable, other receivables, long-term receivables, claim investments, etc., which
are initially measured at the fair value, and the relevant transaction costs are
included in the initially recognized amount. The accounts receivable excluding the
significant financing component and the accounts receivable that the Company
decides not to consider the financing component of less than one year shall be
initially measured at the contract price.
Notes to the financial statements Page 10
The interest calculated by using the effective interest method during the holding
period is included in the current profit or loss.
Upon recovery or disposal, the difference between the purchase price obtained and
the book value of the financial assets is included in the current profit or loss.
(2) The financial assets measured at fair value through other comprehensive
income (debt instruments)
The financial assets measured at fair value through other comprehensive income
(debt instruments) include receivables financing and other claim investments, etc.,
which are initially measured at the fair value, and the relevant transaction costs are
included in the initially recognized amount. Such financial assets are subsequently
measured at fair value. changes in fair value are included in the other
comprehensive income, except for interest income calculated using the effective
interest method, impairment loss or gains and foreign exchange profit or loss.
Upon derecognition, the accumulated gains or losses previously included in the
other comprehensive income shall be transferred out of the other comprehensive
income and included in current profit or loss.
(3) Financial assets (equity instruments) measured at fair value through other
comprehensive income
Financial assets (equity instruments) measured at fair value through other
comprehensive income include other investments in equity instruments, which are
initially measured at the fair value, and the relevant transaction costs shall be
included in the initially recognized amount. Financial assets shall be subsequently
measured at the fair value and changes in fair value shall be included in the other
comprehensive income. The dividends obtained shall be included in current profit
or loss.
Upon derecognition, the cumulative gains or losses previously included in the other
comprehensive income shall be transferred out of the other comprehensive income
and included in the retained earnings.
(4) Financial assets measured at fair value through current profit or loss
Financial assets measured at fair value through current profit or loss include trading
financial assets, derivative financial assets, other non-current financial assets, etc.,
which are initially measured at the fair value, and the relevant transaction costs are
Notes to the financial statements Page 11
included in current profit or loss. Financial assets shall be subsequently measured
at fair value, and changes in fair value shall be included in the current profit or loss.
(5) Financial liabilities measured at fair value through current profit or loss
Financial liabilities measured at fair value through current profit or loss include
trading financial liabilities, derivative financial liabilities, etc., which are initially
measured at the fair value, and the relevant transaction costs shall be included in
current profit or loss. Financial liabilities shall be subsequently measured at fair
value, and changes in fair value shall be included in current profit or loss.
Upon derecognition, the difference between the book value and the consideration
paid shall be included in the current profit or loss.
(6) Financial liabilities measured at the amortized cost
Financial liabilities measured at amortized cost include short-term borrowings,
notes payable, accounts payable, other payables, long-term borrowings, bonds
payable and long-term payables, which are initially measured at fair value and the
relevant transaction costs shall be included in the initially recognized amount.
The interest calculated by using the effective interest method during the holding
period is included in the current profit or loss.
Upon derecognition, the difference between the consideration paid and the book
value of the financial liabilities shall be included in the profit or loss of the current
period.
c) Recognition basis and measurement method of transfer of financial assets
When a financial asset is transferred, the Company assesses the extent of the risks
and rewards associated with the ownership of the financial assets it retains, and
deals with them according to the following circumstances:
(1) Where the Company transfers substantially all the risks and rewards related to
the ownership of a financial assets, the financial assets shall be derecognized, and
the rights and obligations arising from or retained in the transfer shall be separately
recognized as assets or liabilities.
(2) If the Company retains nearly all the risks and rewards related to the ownership
of the financial assets, the financial assets shall continue to be recognized.
(3) Where the Company neither transfers nor retains almost all the risk and reward
on the ownership of the financial assets (i.e. other circumstances except for (1) and
(2) of this Article), they shall be treated according to the following circumstances
according to whether the Company retains the control over the financial assets:
Notes to the financial statements Page 12
1) If the Company doesn't retain the control over the financial assets, the financial
assets shall be derecognized, and the rights and obligations arising from or retained
in the transfer shall be separately recognized as assets or liabilities.
2) If the Company retains the control over the financial assets, it shall continue to
recognize the relevant financial assets according to the extent of its continuous
involvement in the transferred financial assets, and recognize the relevant liabilities
accordingly. The degree of continuous involvement in the transferred financial
assets refers to the degree of the risk or reward of changes in the value of
transferred financial assets undertaken by the Company.
The principle of substance over form shall be adopted when judging whether the
transfer of financial assets satisfies the above-mentioned derecognition criteria of
financial assets. The Company divides the transfer of financial assets into the
overall transfer and the partial transfer of financial assets.
(1) If the overall transfer of the financial assets meets the derecognition criteria, the
difference between the following two amounts shall be included in the current
profit or loss:
1) The book value of the transferred financial assets on the derecognition date.
2) The sum of the consideration received from the transfer of financial assets and
the amount corresponding to the derecognized portion of the accumulated amount
of changes in fair value originally and directly included in the other comprehensive
income (the financial assets involved in the transfer are classified as the financial
assets measured at fair value through the other comprehensive income).
(2) If the financial assets are partially transferred and the transferred portion
satisfies the derecognition criteria as a whole, the entire book value of the financial
assets before the transfer shall be amortized between the derecognized portion and
the continuously recognized portion (in this case, the retained service assets shall
be deemed as part of the continuously recognized financial assets) according to
their respective relative fair values on the transfer date, and the underecognized
part according to their respective relative fair values on the transfer date, and then
the difference between the following two amounts shall be recorded into the
current profit or loss:
1) The book value of the derecognized portion on the derecognition date.
2) The sum of the consideration received from the derecognized portion and the
corresponding amount of derecognized portion in the accumulated amount of
Notes to the financial statements Page 13
changes in fair value originally included in the other comprehensive income (the
financial assets involved in the transfer are classified as the financial asset
measured at fair value through other comprehensive income).
If the transfer of financial assets does not satisfy the derecognition criteria, the
financial assets shall continue to be recognized, and the consideration received
shall be recognized as a financial liability.
d) Derecognition criteria of financial liabilities
If the current obligation of the financial liability or part thereof has been discharged,
the financial liabilities or part thereof shall be derecognized. If the Company enters
into an agreement with a creditor to replace the existing financial liabilities by
undertaking a new financial liabilities, and the new financial liabilities is
substantially different from the contract terms of the existing financial liabilities,
the existing financial liabilities shall be derecognized, and the new financial
liabilities shall be recognized at the same time.
Where substantial modification is made to all or part of the contract terms of the
existing financial liabilities, the existing financial liabilities or part thereof shall be
derecognized, and the financial liabilities with the modified terms shall be
recognized as a new financial liability.
When financial liabilities are derecognized in whole or in part, the difference
between the book value of the derecognized financial liabilities and the
consideration paid (including non-cash assets transferred out or new financial
liabilities borne) shall be included in the current profit or loss.
If the Company repurchases part of the financial liabilities, the entire book value of
the financial liabilities will be allocated on the repurchase date according to the
relative fair value of the continuously recognized part and the derecognized portion.
The difference between the book value allocated to the derecognized portion and
the consideration paid (including non-cash assets transferred out or new financial
liabilities assumed) shall be included in the current profit or loss.
e) Determination method of the fair value of financial assets and financial
liabilities
Where there is an active market for financial instruments, the fair value shall be
determined based on the quoted price in the active market. Where there is no active
market for financial instruments, the fair value thereof shall be determined by using
valuation techniques. At the time of valuation, the Company adopts the techniques
Notes to the financial statements Page 14
that are applicable in the current situation and supported by enough available data
and other information, selects the input values that are consistent with the features
of assets or liabilities as considered by market participants in relevant asset or
liability transactions, and gives priority to use relevant observable inputs.
Unobservable input values are used only when relevant observable input values
cannot be available or such values obtained are impracticable.
f) Test method and accounting treatment method of financial assets impairment
The Company considers all reasonable and well-founded information, including
forward-looking information, and estimates the expected credit loss of financial
assets measured at amortized cost and the financial assets measured at fair value
through other comprehensive income (debt instruments) in an individual or
combined manner. The measurement of expected credit loss depends on whether
there has been a significant increase in credit risk of financial assets since initial
recognition.
If the credit risk of the financial instrument has increased significantly since the
initial recognition, the Company shall measure its provision for losses at the
amount equivalent to the expected credit loss of the financial instruments during
the entire duration. If the credit risk of the financial instrument has not increased
significantly since the initial recognition, the Company measures its provision for
losses at the amount equivalent to the expected credit loss of the financial
instruments in the next 12 months. The increase or reversal amount of the provision
for losses arising therefrom shall be included in the current profit or loss as
impairment loss or profit.
Generally, if it is overdue for more than 30 days, the Company shall consider that
the credit risk of the financial instrument has increased significantly, unless there is
conclusive evidence to prove that the credit risk of the financial instrument has not
increased significantly since the initial recognition.
If the credit risk of the financial instrument on the balance sheet date is low, the
Company considers that the credit risk of the financial instruments has not
increased significantly since the initial recognition.
For notes receivable, accounts receivable, receivables financing, whether
significant financing component is included or not, the Company always measures
its provision for losses at the amount equivalent to the expected credit loss during
the entire duration.
Notes to the financial statements Page 15
For the lease receivables and the long-term receivables formed by the Company
through the sale of goods or rendering of services, the Company chooses to always
measure its provision for losses at the amount equivalent to the expected credit loss
during the entire duration.
For notes receivable, accounts receivable, other receivables, receivables financing
and long-term receivables applicable to individual assessment, if there is objective
evidence that they are impaired, separate impairment test shall be made; expected
credit loss shall be recognized and provision for impairment shall be made; For
notes receivable, accounts receivable, other receivables, receivables financing for
which there is no objective basis for impairment, or when there is sufficient
evidence that the expected credit loss cannot be evaluated at reasonable cost at the
level of individual instruments, the Company divides the notes receivable, accounts
receivable, other receivable, receivables financing and long-term receivables into
several portfolios according to the characteristics of credit risk by reference to the
experience of historical credit losses, in combination with the current situation and
the judgment on future economic conditions, and calculates the expected credit loss
on the basis of the portfolio. The details are as follows:
(1) Notes receivable
Name of portfolios Methods of measuring credit losses
For the notes receivable classified into bank acceptance bill
Bank acceptance bill of state-owned portfolio, the management evaluates that such funds have low
banks credit risk and low expected credit loss rate, so no provision
for impairment is made;
(2) Accounts receivable
Name of portfolios Methods of measuring credit losses
Receivables from electricity For accounts receivable classified as electricity trading,
transactions engineering operation and maintenance, and environmental
Receivables from project operation and protection services, our company refers to the experience of
maintenance historical credit losses, combining with the current situation
Receivables from environmental and the forecast of future economic conditions, and calculates
protection services the expected credit loss.
(3) Other receivables
Name of portfolios Methods of measuring credit losses
Portfolio of export tax rebate, refund Except for the portfolios of related parties within the
upon collection of VAT and other taxes consolidation scope, tax refunds receivable and other
Portfolio of deposit, security deposit receivables without significant recovery risks, for other
and reserve fund receivables classified into other portfolios, the Company
Notes to the financial statements Page 16
calculates the expected credit loss by reference to the
Other receivables and temporary historical credit loss experience, combining the current
payments except for the above situation and the forecast of future economic conditions, and
portfolios by default risk exposure and the expected credit loss rate in
the next 12 months or over the life.
(4) Receivables financing
Name of portfolios Methods of measuring credit losses
Bank acceptance bill with lower credit The expected credit loss is calculated by reference to
risk historical credit loss experience, combined with current
conditions and projections of future economic conditions,
Trade accptance bill through default risk exposure and expected credit loss rate
over the life.
11. Inventories
a) Classification of inventories
Inventories mainly include fuel, raw materials, etc.
b) Pricing method of inventories dispatched
Inventories are measured at the weighted average method when dispatched.
c) Basis for determining the net realizable value of different inventory categories
For commodity inventories for direct sale, including finished goods, stock
commodities and materials for sale, the net realizable value shall be recognized at
the estimated selling price less the estimated selling and distribution expenses and
the relevant taxes and surcharges of the inventories in the normal production and
operation process. For material inventories to be processed, the net realizable value
shall be recognized at the estimated selling price of finished goods less estimated
costs to completion, estimated selling and distribution expenses and relevant taxes
and surcharges in the normal production and operation process. The net realizable
value of the inventories held for the execution of the sales contract or service
contract shall be calculated on the basis of the contract price; if the quantity of the
inventories held is more than the quantity ordered in the sales contract, the net
realizable value of the excess inventories shall be calculated on the base of the
general selling price.
At the end of the period, the provision for inventory falling price reserves is made
on an individual basis. However, for inventories with large quantity and low unit
price, the provision for inventory falling price reserves shall be made according to
the inventory categories. For inventories related to the series of products
manufactured and sold in the same area, with the same or similar final use or
purpose, and difficult to be measured separately from other items, the provision for
Notes to the financial statements Page 17
inventory falling price reserves shall be made on a consolidated basis.
d) Inventory system of inventories
Perpetual inventory system is adopted.
e) Amortization method of low-cost consumables and packaging materials
(1) Low-value consumables adopt one-off amortization method;
(2) Packaging materials adopt one-off amortization method
12. Contract assets
Where the Company has transferred goods to the customer and has the right to receive
consideration, and the right depends on factors other than the passage of time, it is
recognized as contract assets. The Company's right to receive consideration from the
customer unconditionally (i.e. subject only to the passage of time) is separately presented
as accounts receivable.
For the determination method and accounting treatment method of the Company's
expected credit loss for contract assets, please refer to Note III.(X) 6. Test method and
accounting treatment method for impairment of financial assets
13. Long-term equity investments
a) Judgement criteria for common control and significant influence
The term "common control" refers to the control shared over an arrangement in
accordance with the relevant provisions, and the relevant activities of the
arrangement can be decided only after the unanimous consent of the participants
sharing the right of control. Where the Company and other joint ventures jointly
exercise common control on the investees and have the right to the net assets of the
investees, the investees shall be the joint ventures of the Company.
Significant influence refers to the power to participate in making decisions on the
financial and operating policies of an enterprise, but without the power to control
or common control the formulation of these policies with other parties. Where the
Company is able to exert significant influence on the investees, the investees shall
be the associates of the Company.
b) Determination of the initial investment cost
(1) Long-term equity investments formed by business combination
Business combination under common control: if the Company makes payment in
cash, transfers non-cash assets or bears debts and issues equity securities as the
consideration for the business combination, the initial investment cost of the long-
term equity investments shall be the book value share of the owner's equity of the
Notes to the financial statements Page 18
combinee in the consolidated financial statements of the ultimate controller on the
combination date. Where control can be exercised over the investee under common
control due to additional investment or other reasons, the initial investment cost of
the long-term equity investments shall be determined at the book value share of the
net assets of the combinee in the consolidated financial statements of the ultimate
controller on the combination date. The capital stock premium shall be adjusted
according to the difference between the initial investment cost of the long-term
equity investments on the combination date and the sum of the book value of the
long-term equity investments before the combination plus the book value of the
newly paid consideration for shares obtained on the combination date; if the share
premium is insufficient to be offset, the retained earnings shall be offset.
Business combination not under common control: the Company takes the
combination cost determined on the purchase date as the initial investment cost of
the long-term equity investments. Where the investees not under common control
can be controlled due to additional investment or other reasons, the sum of the
book value of the equity investment originally held and the newly increased
investment cost shall be recognized as the initial investment cost calculated under
the cost method.
(2) Long-term equity investments obtained by other means
For long-term equity investments acquired by making payments in cash, the
actually paid purchase price shall be taken as the initial investment cost.
Long-term equity investments obtained from the issuance of equity securities shall
be taken as the initial investment cost according to the fair value of the issuance of
equity securities.
On the premise that the exchange of non-monetary assets has commercial
substance and the fair values of both assets received and surrendered can be
measured reliably, the initial investment cost of the long-term equity investments
received are determined based on the fair values of the assets surrendered and the
relevant taxes and surcharges payable, unless there is any conclusive evidence that
the fair values of assets received are more reliable. For exchange of non-monetary
assets that do not meet the above prerequisites, the book value of the assets
surrendered and the relevant taxes and surcharges payable shall be taken as the
initial investment cost of the long-term equity investments received.
For long-term equity investments acquired from debt restructuring, the entry value
Notes to the financial statements Page 19
shall be recognized at the fair value of the creditor's right waived, taxes and other
costs directly attributable to the asset, and the difference between the fair value of
the creditor' s right waived and the book value shall be included in the current
profit or loss.
c) Subsequent measurement and recognition of profit or loss
(1) Long-term equity investments calculated by cost method
The Company adopts the cost method to account for the long-term equity
investments of subsidiaries. Besides the actual price paid for acquisition of
investment or the cash dividends or profits contained in the consideration that have
been declared but not yet distributed, the Company recognizes the current
investment income according to the cash dividends or profit declared to be
distributed according to the investees.
(2) Long-term equity investments calculated by equity method
For the long-term equity investments of associates and joint ventures, equity
method shall be adopted. If the initial investment cost is greater than the difference
of the share of fair value of net identifiable assets of the investee at the time of
investment, the initial investment cost of the long-term equity investments shall not
be adjusted. The difference between the initial investment cost and the share of fair
value of net identifiable assets of the investee at the time of investment shall be
included in current profit or loss.
The Company shall respectively recognize the investment income and the other
comprehensive income according to the net profit or loss realized by the investees
and the share of the other comprehensive income to be enjoyed or shared, and
adjust the book value of the long-term equity investments. The book value of the
long-term equity investments shall be reduced correspondingly according to the
profits declared to be distributed by the investees or the part to be enjoyed
calculated by cash dividends; For other changes in owner's equity other than net
profit or loss, other comprehensive income and profit distribution of the investees,
the book value of long-term equity investments shall be adjusted and included in
owners' equity.
When recognizing the share of investees net profit or loss that shall be enjoyed, the
Company shall recognize the net profit of the investees after adjustment based on
the fair value of the identifiable net assets investees when the investment is
obtained and in accordance with the Company's accounting policies and accounting
Notes to the financial statements Page 20
period. During the period of holding the investment, if the consolidated financial
statements are prepared by the investees, it shall be accounted for on the basis of
the net profit, other comprehensive income and the amount attributable to the
investees in the changes in other owners' equity in the consolidated financial
statements.
When the Company recognizes the losses incurred by the investees to be shared,
the treatment shall be carried out in the following order: firstly, the book value of
the long-term equity investments shall be offset. Secondly, if the book value of the
long-term equity investments is insufficient to offset, the investment losses shall
continue to be recognized to the extent of other long-term equity book value that
substantially constitute the net investment in the investees to offset the book value
of long-term receivables and other items. Finally, after the above treatment, if the
enterprise still undertakes additional obligations as agreed in the investment
contract or agreement, the estimated liabilities shall be recognized according to the
estimated obligations and included in the current investment loss.
(3) Disposal of long-term equity investments
For disposal of long-term equity investments, the difference between the book
value and the actual purchase price shall be included in the profit or loss of the
period.
For long-term equity investments accounted for using the equity method,
accounting treatment shall be made for the part originally included in the other
comprehensive income according to the corresponding ratio on the same basis as
that for the investees to directly dispose of the relevant assets or liabilities when
disposing of the investment. Owners' equity recognized from investees changes in
other owners' equity other than net profit or loss, other comprehensive income and
profit distribution shall be carried forward to the current profit or loss by ratio,
except for other comprehensive income arising from the re-measurement of net
liabilities under defined benefit plans or changes in net assets by the investee.
Where common control or significant influence on the investees is lost due to
disposal of part of equity investments or other reasons, the remaining equity after
disposal shall be changed to be accounted for according to the recognition and
measurement standards of financial instruments, and the difference between the
fair value and the book value on the date of loss of common control or significant
influence shall be included in the current profit or loss. For the other
Notes to the financial statements Page 21
comprehensive income of the original equity investments recognized by adopting
the accounting by equity method, the accounting treatment shall be made on the
same basis for the direct disposal of the relevant assets or liabilities by the
investees when the accounting by equity method is terminated. Owner's equity
recognized from the investee's changes in other owner's equity other than net profit
or loss, other comprehensive income and profit distribution should all be
transferred to the current profit or loss when the accounting by equity method is
terminated.
Where the Company loses the right of control over the investees due to the disposal
of part of the equity investments, the decrease in the shareholding ratio of the
Company due to the increase of capital by other investors in the subsidiaries and
other reasons, in the preparation of individual financial statements, if the remaining
equity can exercise common control or significant influence on the investees, the
equity method shall be adopted, and the remaining equity shall be deemed to have
been adjusted by using the accounting by equity method since acquisition. Where
the remaining equity cannot common control or exert significant influence on the
investees, it shall be subject to accounting treatment in accordance with the
relevant provisions on the recognition and measurement standards of financial
instruments, and the difference between its fair value on the date of loss of control
and its book value shall be included in the current profit or loss.
If the equity disposed of is acquired through business combination due to
additional investment and other reasons, when preparing individual financial
statements, if the remaining equity after disposal adopts the cost method or the
accounting by equity method, the other comprehensive income recognized from the
use of accounting by equity method for the equity investment held before the
acquisition date and other owner's equity shall be carried forward in proportion. If
the remaining equity after disposal is changed to be accounted for according to the
recognition and measurement standards of the financial instruments, the other
comprehensive income and other owner's equity shall be fully carried forward.
14. Investment properties
Investment properties refer to the real estates held for earning rentals or capital
appreciation, or both, including leased land use right, land use right held for transfer upon
appreciation, and leased buildings (including self-constructed or developed buildings used
for renting and buildings under construction to be used for renting in the future or in the
Notes to the financial statements Page 22
process of development).
The Company adopts the cost model to measure the existing investment properties. For
investment properties measured under the cost model - buildings for lease shall adopt the
same depreciation policy as the fixed assets of the Company, and the land use right for
lease shall be subject to the same amortization policy as the intangible assets.
15. Fixed assets
a) Conditions for recognizing fixed assets
Fixed assets refer to the tangible assets held for the purpose of producing
commodities, providing services, renting or business management, and the service
life exceeds one fiscal year. The fixed assets shall be recognized when all the
following conditions are satisfied:
(1) It is probable that the economic benefits related to the fixed assets will flow to
the Company;
(2) The cost of the fixed assets can be measured reliably.
b) Method of depreciation
Depreciation of fixed assets is provided on a category basis by using the straight-
line method, and the depreciation rate is determined according to the category of
fixed assets, estimated service life and estimated net residual value. If the
components of the fixed assets have different service life or provide economic
benefits for the enterprise in different ways, different depreciation rates or methods
shall be selected to provide for depreciation separately.
The depreciation methods, depreciation lives, residual value rates and annual
depreciation rates of various types of fixed assets are as follows:
Annual
Method of Depreciation life Residual value
Category depreciation rate
depreciation (year) rate (%)
(%)
Straight-line
Houses and buildings 20 years 10 4.5
method
Gas turbine generator Units-of-
unit of machinery production 10
equipment (Note) method
Machinery equipment
Straight-line
(except for gas turbine 15 - 20 years 10 4.5-6
method
generator unit)
Straight-line
Means of transport 5 years 10 18
method
Others Straight-line 5 years 10 18
Notes to the financial statements Page 23
Annual
Method of Depreciation life Residual value
Category depreciation rate
depreciation (year) rate (%)
(%)
method
Note: the gas turbine generator unit is depreciated by the workload method; that is, the depreciation
amount of power generation per hour of the gas turbine generator unit is determined according to the
equipment value, estimated net residual value rate and total estimated hours of power generation. Details
are set out as follows:
Company name Fixed assets Depreciation amount (RMB/hour)
No. 1 generator unit 538.33
The Company
No. 3 generator unit 601.21
New electricity No. 10 generator unit 520.61
No. 1 generator unit 960.04
Zhongshan Electric Power
No. 3 generator unit 837.29
16. Projects under construction
The initial book value of construction in progress is stated at necessary expenditures
incurred before preparing the asset to reach the working condition for its intended use.
Where the constructed fixed assets have reached their intended state of use, but the final
accounts for completion have not been handled, they shall be transferred into the fixed
assets at the estimated value according to the project budget, construction cost or actual
cost, etc. from the date when the assets reach the working condition for their expected use,
and the depreciation of the fixed assets shall be provided in accordance with the
Company's fixed assets depreciation policy. After the final accounts for completion are
handled, the original provisional estimated value shall be adjusted according to the actual
cost, but the depreciation already provided will not be adjusted.
17. Borrowing costs
a) Recognition principles for capitalization of borrowing costs
Borrowing costs, including interest on borrowings, amortization of discounts or
premiums on borrowings, auxiliary expenses and exchange differences arising
from foreign currency borrowings.
Where the borrowing costs incurred by the Company can be directly attributable to
the acquisition and construction or production of assets eligible for capitalization,
Notes to the financial statements Page 24
such costs shall be capitalized and included in the costs of relevant assets. Other
borrowing costs are recognized as expenses at the amount incurred and included in
the profit or loss of the current period.
Assets eligible for capitalization refer to the fixed assets, investment properties,
inventories and other assets that can reach the working conditions for their intended
use or sales only after a long period of acquisition, construction or production
activities.
The capitalization of borrowing costs shall commence when the following
conditions are simultaneously met:
(1) The asset disbursement has already occurred which includes expenditures in the
form of cash payment, transferring non-cash assets, or assuming interest-bearing
debts for the purchase, construction or production of assets that meet the conditions
for capitalization;
(2) The borrowing costs have been incurred;
(3) Acquisition, construction or production activities for preparing the assets ready
for their intended use or sale have begun.
b) During the capitalization of borrowing costs
Capitalization period refers to the period from the commencement of capitalization
to the cessation of capitalization of borrowing costs, excluding the period of
suspending capitalization of borrowing costs;
When the acquired and constructed or produced assets eligible for capitalization
have reached the working conditions for their intended use or sale, the
capitalization of borrowing costs shall be ceased.
When part of the acquired and constructed or produced assets eligible for
capitalization are completed and can be used separately, the capitalization of the
borrowing costs shall be ceased in terms of such part of assets.
Where all parts of the acquired and constructed or produced assets are completed
separately, but the assets cannot be used or sold externally until the overall
completion, the capitalization of borrowing costs of such assets shall be ceased
upon the overall completion.
c) Period of suspension of capitalization
Where the acquisition and construction or production of assets eligible for
Notes to the financial statements Page 25
capitalization are interrupted abnormally and the interruption lasts for more than
three consecutive months, the capitalization of borrowing costs shall be suspended;
If the interruption is a necessary procedure for the acquired and constructed or
produced assets eligible for capitalization to reach the working conditions for their
intended use or sale, the borrowing costs shall continue to be capitalized. The
borrowing costs occurred during the interruption period are recognized as the
current profit or loss and continue to be capitalized until the acquisition,
construction or production activities of the assets restart.
d) Calculation method of the rate and amount of capitalization of borrowing
costs
As for special borrowings borrowed for acquiring and constructing or producing
assets eligible for capitalization, the capitalization amount of borrowing costs
should be recognized at the amount of borrowing costs of special borrowings
actually incurred in the current period, less the interest income of unused
borrowings deposited in bank or the investment income of temporary investment.
As for general borrowings used for acquiring and constructing or producing assets
eligible for capitalization, the amount of borrowing costs of general borrowings to
be capitalized should be calculated based on the weighted average of accumulated
expenditure on assets in excess of special borrowings, multiplied by the
capitalization rate of used general borrowings. The capitalization rate is calculated
and recognized as per the weighted average interest rate of general borrowing.
18. Intangible assets
a) Valuation method of intangible assets
(1) The Company shall initially measure the intangible assets at cost when
obtaining the same;
The costs of an externally acquired intangible asset comprise its purchase price,
relevant taxes and any other expenditure directly attributable to bringing the asset
to its intended use. If the purchase price of an intangible asset is delayed beyond
the normal credit conditions and is substantially in the nature of financing, the cost
of the intangible asset shall be determined on the basis of the present value of the
purchase price.
For intangible assets obtained in debt restructuring by the debtor for repayment of
Notes to the financial statements Page 26
debts, the book-entry value shall be recognized at the fair value of the waived
creditor's rights and taxes and other costs directly attributable to preparing the
assets for their intended use. The difference between the fair value of the waived
creditors' rights and the book value shall be included in the current profit or loss.
On the premise that the exchange of non-monetary assets has commercial
substance and the fair value of both the assets received and surrendered can be
measured reliably, the book-entry value of the intangible assets received from
exchange of non-monetary assets is determined based on the fair value of the assets
surrendered, unless there is any conclusive evidence that the fair value of the assets
received is more reliable. If the exchange of non-monetary assets does not meet the
above criteria, the book value of the assets surrendered and the relevant taxes
payable shall be recognized as the cost of the intangible assets received, and no
profit or loss will be recognized.
(2) Subsequent measurement
Analyze and judge the service life of the intangible assets when obtaining the same.
Intangible assets with limited service life shall be amortized at the straight-line
method within the period when it can bring economic benefits to the enterprise; If
it is impossible to predict the period when the intangible assets can bring economic
benefits to the enterprise, they are deemed as intangible assets with uncertain
service life and shall not be amortized.
b) Estimated service life of intangible assets with limited service life
For intangible assets with limited service life, the accumulated amount of its
original value less estimated net residual value and accrued provision for
impairment shall be evenly amortized by using the straight-line method within the
estimated service life from the date when it is available for use. The intangible
assets with uncertain service life shall not be amortized.
At the end of the period, the service life and amortization method of the intangible
assets with limited service life shall be reviewed, and any change shall be handled
as a change in accounting estimates.
c) Basis for determining intangible assets with uncertain service life and the
procedures for reviewing the service life
The service life of intangible assets with uncertain service life shall be reviewed,
Notes to the financial statements Page 27
and if there is evidence that the period for the intangible assets to bring economic
benefits to the enterprise is foreseeable, the service life shall be estimated and
amortized in accordance with the amortization policy of intangible assets with
limited service life.
d) Specific criteria for classifying research and development stages
Internal research and development expenditures of the Company include those
incurred in the research stage and those in the development stage.
Research stage: the stage when creative and planned investigations and research
activities are carried out to acquire and understand new scientific or technological
knowledge.
Development stage: a stage in which research results or other knowledge are
applied to a plan or design for obtaining new or substantially improved materials,
apparatuses and products prior to commercial manufacture or use.
Specific criteria for development expenditures eligible for capitalization
Expenditures in the development stage of an internal research and development
project shall be recognized as intangible assets when all the following conditions
are met:
1. It is technically feasible to complete the intangible assets so that they can be
used or sold;
2. It has the intention to complete the intangible assets and use or sell them;
3. The means of generating economic benefits by intangible assets, including being
able to prove that there is a market for the products produced by applying the
intangible assets or the intangible assets having their own market, and intangible
assets to be used internally, being able to prove their usefulness;
4. With the support of sufficient technology, financial resources and other
resources, it is able to complete the development of the intangible assets, and it is
able to use or sell the intangible assets;
5. The expenditures attributable to the intangible assets in the development stage
can be measured reliably.
19. Impairment of long-term assets
For long-term equity investments, investment properties, fixed assets, construction in
progress, intangible assets with limited service life and other long-term assets measured at
Notes to the financial statements Page 28
cost model, if there is any indication of impairment on the balance sheet date, an
impairment test shall be conducted. If the results of the impairment test show that the
recoverable amount of the assets is lower than the book value, the provision for
impairment shall be made at the difference and included in the impairment loss. The
recoverable amount is the higher of the net amount of the asset's fair value less the
disposal expenses and the present value of the asset's estimated future cash flow. The
provision for asset impairment shall be calculated and recognized on the basis of
individual assets. If it is difficult to estimate the recoverable amount of the individual
assets, the recoverable amount of the asset group shall be determined at the asset group to
which the assets belong. The asset group is the minimum asset group that can
independently generate cash inflow.
Goodwill, intangible assets with uncertain service life and intangible assets that have not
reached the serviceable condition shall be tested for impairment at least annually at year
end.
If the Company conducts an impairment test on goodwill, the book value of goodwill
arising from the business combination shall be amortized to the relevant asset group by a
reasonable method as of the purchase date. If it is difficult to apportion to the relevant
asset group, it shall be apportioned to the relevant portfolio of asset groups. When the
Company amortizes the book value of goodwill, it shall amortize it according to the
relative benefits that the relevant asset group or portfolio of asset groups can obtain from
the synergy effect of business combination, and a goodwill impairment test shall be
performed on this basis.
When an impairment test is performed on the relevant asset group or portfolio of asset
groups containing goodwill, if there is any indication that the asset group or portfolio of
asset groups related to the goodwill may be impaired, the asset group or portfolio of asset
groups excluding goodwill shall be tested for impairment first, and the recoverable
amount shall be calculated, and compared with the relevant book value to recognize the
corresponding impairment loss. Then an impairment test shall be performed on the asset
group or portfolio of asset groups containing goodwill and compare the book value of
these relevant asset group or portfolio of asset groups (including the book value of the
goodwill apportioned) with their recoverable amount. If the recoverable amount of the
relevant asset group or portfolio of asset groups is lower than their book value, the
impairment loss of goodwill will be recognized. The above-mentioned asset impairment
loss will not be reversed in subsequent accounting periods once recognized.
Notes to the financial statements Page 29
20. Long-term deferred expenses
Long-term deferred expenses of the Company refer to the expenses that have been paid
but have a benefit period of more than one year (excluding one year). Long-term deferred
expenses are amortized by stages according to the benefit period of expense items. If an
item of long-term deferred expenses cannot benefit the subsequent accounting periods, the
amortized value of the item that has not been amortized shall be fully transferred to the
current profit or loss.
21. Contract liabilities
Contract liabilities refer to the obligations of the Company to assign goods or services to
customers for which the Company has received or shall receive consideration from the
customers. The contract assets and contract liabilities under the same contract shall be
presented on a net basis.
22. Employee compensation
a) Accounting treatment of short-term compensation
During the accounting period when employees provide services for the Company,
the Company recognizes short-term compensation actually incurred as liabilities
and includes it in the current profit or loss or related asset costs.
The social insurance premiums and housing provident funds paid by the Company
for employees, as well as labor union dues and employee education funds
withdrawn in accordance with the provisions, shall be calculated and determined
according to the prescribed accrual basis and accrual ratio during the accounting
period when employees provide services for the Company.
If the employee welfare expenses are non-monetary benefits and can be reliably
measured, they shall be measured at fair value.
b) Accounting treatment of post-employment benefits
(1) Defined contribution plans
The Company pays basic endowment insurance and unemployment insurance for
employees according to the relevant provisions of the local government. During the
accounting period when employees provide services for the Company, the amount
payable calculated at the payment base and the ratio as stipulated in the local
Notes to the financial statements Page 30
provisions is recognized as liabilities and included in the current profit or loss or
related asset costs.
In addition to the basic endowment insurance, the Company has also set up
enterprise annuity system (supplementary endowment insurance)/corporate annuity
plan in accordance with relevant national policies on enterprise annuity system.
The Company pays premiums to the local social insurance institutions/annuity plan
at a certain ratio of the total wages of employees, and the corresponding expenses
are included in the current profit or loss or related asset costs.
(2) Defined benefit plans
According to the formula determined by the expected cumulative welfare unit
method, the Company attributes the welfare obligations arising from the defined
benefit plans to the period during which the employees provide services, and
includes them in the current profit or loss or relevant assets costs.
The deficit or surplus arising from the present value of obligations under the
defined benefit plans less the fair value of assets under the defined benefit plans is
recognized as net liabilities or net assets under defined benefit plans. If there is a
surplus in the defined benefit plans, the Company shall measure the net assets of
defined benefit plans at the lower of the surplus in the defined benefit plans and the
upper limit of assets.
All obligations under the defined benefit plans, including those expected to be paid
within 12 months after the end of the annual reporting period in which the
employees provide services, are discounted according to the market yield of
treasury bonds or high-quality corporate bonds in the active market that match the
term and currency of the obligations under the defined benefit plans on the balance
sheet date.
Service costs arising from the defined benefit plans and the net interest on the net
liabilities or net assets under defined benefit plans are included in the current profit
or loss or related asset costs. The changes arising from the re-measurement of net
liabilities or net assets under defined benefit plans are included in the other
comprehensive income, and will not be reversed to the profit or loss in the
subsequent accounting periods. When the original defined benefit plans terminates,
the part originally included in the other comprehensive income will be fully carried
forward to the undistributed profits to the extent of equity.
Upon the settlement of defined benefit plans, the settlement gains or losses shall be
Notes to the financial statements Page 31
recognized according to the difference between the present value of obligations
under the defined benefit plans and the settlement price determined on the
settlement date.
c) Accounting treatment of dismissal welfare
When the Company cannot unilaterally withdraw the dismission welfare provided
due to the plan to terminate labor relations or the layoff proposal, or recognizes the
costs or expenses related to the restructuring involving the payment of dismission
welfare (whichever is earlier), the employee compensation liabilities arising from
the dismission welfare are recognized and included in the current profit or loss.
23. Estimated liabilities
a) Criteria for recognition of estimated liabilities
The obligations related to contingencies such as litigation, debt guarantee, onerous
contract and restructuring matters shall be recognized as estimated liabilities by the
Company when all the following conditions are met:
(1) The obligation is the current obligation assumed by the Company;
(2) The fulfillment of the obligation is likely to lead to outflow of economic
benefits from the Company;
(3) The amount of the obligation can be measured in a reliable way.
b) Measurement methods of various types of estimated liabilities
The Company's estimated liabilities shall be initially measured at the best estimate
of the expenses required to fulfill the relevant present obligations.
When determining the best estimate, the Company shall comprehensively consider
the risks, uncertainties and time value of money and other factors related to
contingencies. For those that have a significant impact on the time value of money,
the best estimate shall be determined by discounting the relevant future cash
outflows.
The best estimate will be handled according to the following circumstances:
If there is a continuous range (or interval) of the required expenses, and the
probabilities of occurrence of all the outcomes within this range are the same, the
best estimate shall be determined according to the middle value of this range, that
is, the average of the upper and lower limit amounts.
Notes to the financial statements Page 32
If there is no continuous range (or interval) of the required expenses, or the
probabilities of occurrence of all the outcomes within this range are not the same
although there is a continuous range, if the contingency involves a single item, the
best estimate shall be determined according to the most likely amount; If the
contingency involves more than one item, the best estimate shall be calculated and
determined based on various possible outcomes and relevant probabilities.
If all or part of the expenses required by the Company to pay off the estimated
liabilities are expected to be compensated by a third party, the compensation
amount shall be separately recognized as an asset when it is basically certain that it
can be received, and the recognized compensation amount shall not exceed the
book value of the estimated liabilities.
24. Revenue
General principles
The Company has fulfilled the performance obligations in the contract; namely, the
revenue is recognized when the customer obtains the right of control of the relevant
goods or services. Performance obligations refer to the contractual commitments in
which the Group transfers clearly distinguishable goods or services to the
customers. "Obtaining the right of control of the relevant goods or services" refers
to the ability to dominate the use of the goods or the provision of the services and
obtain almost all the economic benefits from them.
If one of the following conditions is met, it is the performance obligation to be
fulfilled within a certain period of time, and the Company recognizes the revenue
within a certain period of time according to the performance progress: (1) the
customer obtains and consumes the economic benefits brought by the Company's
performance at the same time as the Company performs the contract; (2) The
customer can control the goods under construction during the performance of the
Company; (3) The goods produced during the performance of the Company have
irreplaceable uses, and the Company has the right to collect payment for the
accumulated part that has been completed so far during the entire contract period.
Otherwise, the Company will recognize revenue at the time when the customer
obtains the right of control of the relevant goods or services.
Variable consideration
Some of the contracts between the Company and its customers have arrangements
Notes to the financial statements Page 33
for sales rebates, quantity discounts, commercial discounts, performance bonuses
and claims, which form the variable consideration. The Company determines the
best estimate of the variable consideration according to the expected value or the
most likely amount, but the transaction price including the variable consideration
does not exceed the amount of accumulated recognized revenue which is unlikely
to be significantly reversed when the relevant uncertainty is eliminated.
Significant financing component
If there is a significant financing component in the contract, the Company
determines the transaction price according to the payable amount that is assumed to
be paid in cash by the customer when the customer obtains the right of control of
the goods or services. The difference between the transaction price and the contract
consideration is amortized over the contract period by using the effective interest
method.
On the commencement date of the contract, if the enterprise expects that the
interval between the customer's acquisition of the right of control of the goods and
the customer's payment will not exceed one year, significant financing components
existing in the contract will not be considered.
Non-cash consideration
If the customer pays non-cash consideration, the Company shall determine the
transaction price according to the fair value of the non-cash consideration. If the
fair value of the non-cash consideration cannot be reasonably estimated, the
Company shall indirectly determine the transaction price by reference to the
individual selling price of the goods promised to be transferred to the customer.
Where the fair value of a non-cash consideration changes due to reasons other than
the form of consideration, it shall be accounted for as a variable consideration in
accordance with the relevant provisions.
Consideration payable to customers
For the consideration payable to customers, the Company shall offset the
transaction price of the consideration payable to customers, and offset the current
revenue at the later of the recognition of the relevant revenue or the commitment to
pay the consideration, unless the consideration payable is for the purpose of
obtaining other clearly distinguishable goods from the customers.
Sales with sales return clauses
For sales with sales return clauses, when the customer obtains the right of control
Notes to the financial statements Page 34
of relevant goods, the Company recognizes the revenue according to the amount of
consideration expected to receive due to the transfer of goods to the customer (i.e.,
excluding the amount expected to be refunded due to the sales return) and
recognizes liabilities according to the amount expected to be returned due to the
sales return; At the same time, the balance of the book value of the expected goods
to be returned at the time of transfer after deducting the expected cost of recovering
the goods (including the impairment of the value of the returned goods) is
recognized as an asset. The net amount after deducting the cost of the above asset
will be transferred as cost based on the book value of the transferred goods. On
each balance sheet date, the future sales returns are re-estimated, and if there is any
change, it will be conducted with accounting treatment as a change in accounting
estimate.
Sales with quality assurance clauses
For sales with quality assurance clauses, if the quality assurance provides a
separate service in addition to assuring the customer that the goods or services sold
meet the established standards, the quality assurance constitutes a single
performance obligation. Otherwise, the Company shall conduct accounting
treatment on the quality assurance responsibilities in accordance with the
Accounting Standards for Business Enterprises No.13 - Contingencies.
Principal responsible person and agent
The Company determines whether it is the principal responsible person or the agent
when engaging in the transaction based on whether it has the right of control of the
goods or services before transferring them to the customers. If the Company is able
to control the goods or services before transferring the goods or services to the
customers, the Company is the principal responsible person, and the revenue is
recognized according to the total consideration received or receivable. Otherwise,
the Company, as the agent, shall recognize revenue according to the amount of
commission or service fee expected to receive, which shall be determined
according to the net amount of the total consideration received or receivable after
deducting the price payable to other relevant parties, or according to the established
amount or ratio of commission.
Sales with additional call option for customers
For sales with additional call option for the customer, the Company evaluates
whether this option provides the customer with a significant right. If an enterprise
Notes to the financial statements Page 35
provides significant rights, it shall, as a single performance obligation, allocate the
transaction price to the performance obligations in accordance with the relevant
provisions of the standards, and recognize the corresponding revenue when the
customer exercises the call option to obtain the right of control of the relevant
goods in the future, or when the option expires. If the separate selling price of the
additional call option for customer cannot be directly observed, the Company shall
make a reasonable estimate after comprehensively considering all relevant
information such as the difference between the discounts that the customer can
obtain if he/she exercises or does not exercise the option, the possibility that the
customer exercises the option, etc. Although the customer has the option to
purchase additional goods, the price at the time when the customer exercises the
option to purchase the goods reflects the separate selling price of these goods and it
shall not be regarded as that the Company has provided the customer with a
significant right.
Grant of intellectual property license to customers
If the intellectual property license is granted to the customer, the Company shall
evaluate whether the intellectual property license constitutes a single performance
obligation in accordance with the relevant provisions of the Standards, and if it
constitutes a single performance obligation, it shall further determine whether it is
performed within a certain period of time or at a certain point in time.
When the following conditions are met at the same time, the relevant revenue shall
be recognized as a performance obligation to be fulfilled within a certain period of
time. Otherwise, the relevant revenue is recognized as a performance obligation
fulfilled at a certain point in time:
(I) The contract requires or the customers can reasonably expect that the enterprise
will engage in activities that have a significant impact on the intellectual property;
(II) The activity will have a favorable or unfavorable impact on the customers;
(III) The activity will not result in the transfer of a certain goods to the customer.
Transactions of sales with buyback agreements
For the transactions of sales with buyback agreements, the Company conducts
accounting treatment respectively under the following two circumstances:
(I) If the Company has the obligation to repurchase or the Company enjoys the
right to repurchase due to the existence of forward arrangements with customers,
the Company shall carry out corresponding accounting treatment as a lease
Notes to the financial statements Page 36
transaction or a financing transaction. In this case, if the repurchase price is lower
than the original selling price, it shall be deemed as a lease transaction, and
accounting treatment shall be carried out in accordance with the relevant provisions
of the Standards; If the repurchase price is not lower than the original selling price,
it shall be regarded as a financing transaction, and the financial liabilities shall be
recognized when the customer's payment is received, and the difference between
the payment and the repurchase price shall be recognized as interest expenses, etc.
during the repurchase period. If the Company fails to exercise the repurchase right
upon expiration, the financial liabilities shall be derecognized upon the expiration
of the repurchase right, and the revenue shall be recognized at the same time.
(II) If the Company has the obligation to repurchase the goods at the request of the
customer, it shall assess whether the customer has a significant economic
motivation to exercise the right of request on the commencement date of contract.
If the customer has a significant economic motivation to exercise the right of
request, the enterprise shall take the sales with buyback agreements as a lease
transaction or a financing transaction and conduct accounting treatment in
accordance with the provisions of Item 1 of this Article; Otherwise, the Company
will treat it as a sales transaction with a sales return clause, and conduct accounting
treatment in accordance with the relevant provisions of the Standards.
Rights not exercised by customers
If the Company receives the payment for sales of goods from customers in advance,
it shall first recognize the payment as the liabilities, and then transfer it to the
revenue when the relevant performance obligations are fulfilled. When the advance
payment does not need to be returned, and the customer may waive all or part of
his/her contractual rights, the Company expects to be entitled to the amount related
to the contractual rights waived by the customer, the above amount shall be
recognized as the revenue at the ratio to the mode of the customer exercising the
contractual rights; Otherwise, the Company can only transfer the relevant balance
of the above liabilities to revenue when the possibility of the customer requiring it
to perform the remaining performance obligations is extremely low.
Initial costs no to be returned.
The non-refundable initial costs collected by the Company from the customer on
the commencement date of the contract (or close to the commencement date) shall
be included in the transaction price, and the Company shall assess whether the
Notes to the financial statements Page 37
initial costs are related to the transfer of the promised goods to the customer. If the
initial costs are related to the transfer of the promised goods to the customer, and
the goods constitute a single performance obligation, the Company recognizes the
revenue at the transaction price allocated to the goods when transferring the goods;
If the initial costs are related to the goods promised to transfer to the customer, but
the goods do not constitute a single performance obligation, the Company will
recognize the revenue at the transaction price allocated to the single performance
obligation when the single performance obligation containing the goods is fulfilled.
If the initial costs are not related to the goods promised to transfer to the customer,
it shall be used as an advance payment for the goods to be transferred in the future
and shall be recognized as revenue when the goods are transferred in the future.
If the Company has collected an initial cost that does not need to be returned and
shall carry out initial activities to perform the contract, but these activities do not
transfer the promised goods to the customer, the initial cost is related to the goods
promised to be transferred in the future, and shall be recognized as revenue when
transferring the goods in the future. The Company does not consider these initial
activities when determining the progress of the contract. The Company's
expenditures for such initial activities shall be recognized as an asset or included in
the current profit or loss in accordance with the relevant provisions of the
Standards.
Specific principles
The Company has fulfilled the performance obligations in the contract; namely, the
revenue is recognized when the customer obtains the right of control of the relevant
goods or services. "Obtaining the right of control of the relevant goods or services"
refers to the ability to dominate the use of the goods or the provision of the services
and obtain almost all the economic benefits from them.
(1) Revenue from sales of goods
The sales contract between the Company and its customers generally includes only
the performance obligations of the transferred goods. The Company usually
recognizes revenue at a certain point in time on the basis of comprehensive
consideration of the following factors: obtaining the current right to receive
payment for the goods, the transfer of major risks and rewards in the ownership of
the goods, the transfer of the legal ownership of the goods, and the transfer of the
Notes to the financial statements Page 38
physical asset of the goods and the customer's acceptance of the goods.
Revenue from sales of electricity
The Company produces electric energy through thermal power and sells it by
integrating it into the Guangdong power grid. For sales of electricity, the Company
shall recognize revenue when the electric energy has been produced and the
statistical form of net energy output confirmed by the electric power bureau has
been obtained.
(2) Revenue from the provision of service
Service contracts between the Company and the customers usually include
performance obligations such as operation and maintenance services, labor services,
etc.,
The Company evaluates the contract on the contract commencement date,
identifies each single performance obligation contained in the contract, and
determines whether each individual performance obligation is performed within a
certain period or at a certain time point. If one of the following conditions is met, it
is a performance obligation performed within a certain period of time and the
Company recognizes revenue within a period of time according to the progress of
the contract:
(1) The customer obtains and consumes the economic benefits brought by the
Company's performance at the same time as the Company's performance;
(2) The customer can control the goods under construction during the performance
of the Company;
(3) The goods produced during the performance of the Company have irreplaceable
uses, and the Company has the right to collect payment for the accumulated part
that has been completed so far during the entire contract period. Otherwise, the
Company will recognize revenue at the time when the customer obtains the right of
control of the relevant goods or services.
○1 Recognition of revenue from services provided by the Environmental Protection
Company:
The Company recognizes revenue based on the obtained sludge treatment
settlement statement jointly confirmed with the Transportation Company, the water
purification unit, and the Company.
○2 Specific standards for revenue recognition of the Engineering Company:
Commissioning projects: when the commissioning is successful, obtain the
Notes to the financial statements Page 39
confirmation of successful commissioning, and recognize revenue according to the
contract;
Operation and maintenance, management projects: monthly revenue is temporarily
estimated and recognized based on attendance time and labor prices of attendants,
and the temporarily estimated revenue will be adjusted after obtaining the monthly
statement confirmed by the supplier's stamp and signature, the progress
confirmation letter, and the attendance sheet.
25. Contract cost
Cost of obtaining the contract
If the incremental cost (that is, the cost that would not be incurred without obtaining the
contract) incurred by the Company to obtain the contract is expected to be recovered, it
will be recognized as an asset, amortized on the same basis as the revenue recognition of
goods or services related to the asset for sales, and be included in the current profit or loss.
If the asset amortization period does not exceed one year, the asset shall be included in the
current profit or loss when it occurs. Other expenses incurred by the Group to obtain the
contract will be included in the current profit or loss when incurred, except for those
clearly borne by the customer.
Cost of fulfilling the contract
The cost incurred by the Company for the performance of the contract that does not fall
within the scope of other accounting standards for business enterprises except the revenue
standard and meets the following conditions at the same time is recognized as an asset: (1)
the cost is directly related to a current or expected contract; (2) the cost increases the
resources of the Group for fulfilling the performance obligations in the future; (3) The
cost is expected to be recovered. The above-mentioned assets are amortized on the same
basis as the recognition of the revenue of goods or services related to the asset and
included in the current profit or loss.
Contract cost impairment
When the Company determines loss of impairment of assets related to the contract cost, it
first determines the impairment loss of other assets related to the contract that are
confirmed in accordance with other relevant accounting standards for business enterprises.
Then, if the book value is higher than the difference between the remaining consideration
expected to be obtained by the Company from the transfer of the asset-related goods and
the estimated cost to be incurred for the transfer of the relevant goods, the excess shall be
Notes to the financial statements Page 40
subject to provision for impairment and recognized as the asset impairment loss.
If the factors of impairment in the previous period change after that, making the aforesaid
difference higher than the book value of the asset, the provision for asset impairment that
has been withdrawn shall be reversed and included in the current profit or loss, but the
book value of the asset after reversal shall not exceed the book value of the asset on the
reversal date assuming that no provision for impairment is made.
26. Government subsidies
a) Change type
Government subsidies are monetary and non-monetary assets obtained by the
Company from the government for free. They can be divided into government
subsidies related to assets and government subsidies related to revenue.
Government subsidies related to assets are government subsidies that the Company
acquires for acquisition, construction, or otherwise forms long-term assets.
Government subsidies related to revenue refer to government subsidies other than
government subsidies related to assets. Government subsidies related to revenue
refer to those other than government subsidies related to assets.
b) Timing of recognition
If there is evidence at the end of the period that the Company can meet the relevant
conditions stipulated in the financial support policy and is expected to receive
financial support funds, the government subsidies will be recognized according to
the amount receivable. In addition, all government subsidies shall be recognized
when actually received.
The government subsidies considered as monetary assets are measured at the
amount received or receivable. If government subsidies are non-monetary assets,
they will be measured at fair value. If the fair value cannot be obtained reliably, it
shall be measured at a nominal amount (RMB1). Government subsidies measured
according to the nominal amount are directly included in current profit or loss.
c) Accounting treatment
Government subsidies related to assets are used to offset the book value of relevant
assets or recognized as deferred income. If they are recognized as a deferred
income, they will be included in the current profit or loss by stages according to a
reasonable and systematic method within the service life of the relevant assets (if
Notes to the financial statements Page 41
they are related to the daily activities of the Company, they are included into other
income; if irrelevant to the daily activities of the Company, they will be included
into non-operating revenue).
If the government subsidies related to revenue are used to compensate the
Company's relevant costs or losses in subsequent periods, they are recognized as
deferred income, and will be included in the current profit or loss (if they are
related to the Company's daily activities, they are included in other income; if
irrelevant to the Company's daily activities, they are included into the non-
operating revenue) or offset the relevant costs or losses during the period when the
relevant costs or losses are recognized; Those used to compensate the Company for
the relevant costs or losses incurred will be directly included in the current profit or
loss (those related to the Company's daily activities will be included in other
income; those irrelevant to the Company's daily activities will be included in the
non-operating revenue) or used to offset the relevant costs or losses.
The discount interest of the policy-based preferential loans obtained by the
Company will be accounted for respectively according to the following two
situations:
(1) If the finance department appropriates the discount interest funds to the lending
bank, and the lending bank provides the loan to the Company at the policy-based
preferential interest rate, the Company shall take the loan amount actually received
as the entry value of the loan, and calculate the relevant borrowing costs according
to the loan principal and the policy-based preferential interest rates.
(2) If the finance department directly appropriates the discount interest funds to the
Company, the Company will offset the corresponding borrowing costs with the
corresponding discount interest.
27. Deferred tax assets and deferred tax liabilities
Deferred tax assets are recognized for deductible temporary differences to the extent that
they do not exceed the taxable income probably obtained in the future period that can be
used to offset the deductible temporary differences. For deductible loss and tax credits
that can be carried forward to subsequent years, the corresponding deferred tax assets
arising therefrom are recognized to the extent that future taxable income will be probable
to be available against deductible losses and tax credits.
Taxable temporary differences are recognized as deferred tax liabilities, except for special
circumstances.
Notes to the financial statements Page 42
Special circumstances in which deferred tax assets or deferred tax liabilities shall not be
recognized include: the initial recognition of goodwill. Other transactions or matters
excluding business combinations, which affect neither accounting profits nor taxable
income (or deductible loss) when occurred.
If the Company has the legal right of netting and intends to settle in net amount or to
obtain assets and discharge liabilities simultaneously, the income tax assets and income
tax liabilities of the Company for the current period shall be presented based on the net
amount after offset.
When the Company has the legal right to settle current income tax assets and current
income tax liabilities on a net basis, and the deferred tax assets and deferred tax liabilities
are related to the income tax levied by the same tax collection authority on the same tax
entity or to different tax entities, but in each future period when important deferred tax
assets and liabilities are reversed, the involved tax entity intends to settle current income
tax assets and liabilities on a net basis or to acquire assets and settle liabilities at the same
time, deferred tax assets and deferred tax liabilities are listed and reported on a net basis
after offsetting.
28. Lease
Leases refers to a contract in which the lessor transfers the right to use the asset to the
lessee for consideration within a certain period of time.
a) The Company as the lessee
The Company recognizes the right-of-use assets on the lease commencement date
and recognizes the lease liabilities at the present value of the outstanding lease
payments. Lease payments include fixed payments and payments to be made in
circumstances where it is reasonably certain that the call option or the right to
terminate the lease will be exercised. The variable rent determined based on a
certain ratio of sales is not included in the lease payment, and is included in the
current profit or loss when it actually occurs.
The Company's right-of-use assets include leased houses and buildings, machinery
equipment, means of transport, computers and electronic equipment, etc.
For short-term leases with a lease term of less than 12 months and low-value asset
leases with a low value when a single asset is brand-new, the Company chooses not
to recognize the right-of-use assets and lease liabilities, and includes the relevant
rental expenses into current profit or loss or the relevant asset cost in each period of
Notes to the financial statements Page 43
the lease term according to the straight-line method.
b) The Company as the lessor
Leases that substantially transfer substantially all of the risks and rewards
associated with the ownership of leased assets are finance leases Other leases are
operating leases.
i. Operating lease
When the Company operates leased buildings, machinery and equipment, and
means of transport, the rental revenue from operating leases shall be recognized in
accordance with the straight-line method during the lease term. The Company will
include variable rent determined based on a ratio of sales in rental revenue when it
actually incurs.
ii. Financing lease
On the lease commencement date, the Company recognizes the finance lease
receivable for finance leases and derecognizes related assets. The Company
presents the finance lease receivables as long-term receivables, and the finance
lease receivables received within one year (including one year) from the balance
sheet date are presented as non-current assets due within one year.
29. Special reserves
The Group includes the work safety costs in accordance with the national provisions in
the cost of the related products or the current profit or loss and in the account of "special
reserves" at the same time. When the Group uses the special reserves, the special reserves
shall be directly offset if it belongs to the expense. If fixed assets are formed, they shall be
recognized as fixed assets when the relevant assets reach the working condition for their
intended use. Meanwhile, special reserves shall be offset according to the costs of fixed
assets and the accumulated depreciation of the same amount shall be recognized.
Depreciation of such fixed assets will not be made in subsequent periods.
30. Changes in significant accounting policies and accounting estimates
a) Changes in significant accounting policies
There were no changes in significant accounting policies during the reporting
period.
Notes to the financial statements Page 44
b) Changes in significant accounting estimates
There were no changes in significant accounting estimates during the reporting
period.
IV. Taxation
1. Major types of tax and tax rates
Type of tax Taxation basis Tax rate
The output tax is calculated on the basis of the sales of goods
and the taxable service income calculated in accordance with 13% 、 9% 、
VAT
the tax law, and the difference shall be the VAT payable after 6%、5%、3%
deducting the deductible input tax for the current period.
Urban
maintenance and Paid on the basis of the actual VAT and consumption tax paid 7%
construction tax
Education
Paid on the basis of the actual VAT and consumption tax paid 3%
surcharges
Local education
Paid on the basis of the actual VAT and consumption tax paid 2%
surcharges
Corporate 25% 、 15% 、
Levied based on taxable income
income tax 16.5%、17%
Calculated and paid at RMB 2-8/square meter for the actual
Urban and rural land area occupied by the industrial land in Nanshan District,
land use tax Shenzhen; Calculated and paid at RMB1/square meter for the
actual land area occupied by the industrial land in Zhongshan.
Remarks: refer to explanations (II) and (III) below for the rate of corporate income tax
2. Notes to the rate of income tax of the corporate income tax taxpayers
Name of taxpayer Income tax rate
The Company 15%
New Power Company 25%
Shen Nan Dian Engineering Company 15%
Server Company 25%
Shen Nan Dian Environment Protection Company 25%
Shen Nan Dian Zhongshan Company 25%
Singapore Company 17%
Shenzhen Nanshan Power Warehousing Company 25%
Xindesheng Company 16.5%
Notes to the financial statements Page 45
3. Preferential tax policies and basis
1. Preferential policies for corporate income tax:
(1) According to the Record-filing List of the Second Batch of High-tech Enterprises
Recognized by Shenzhen in 2021, Shenzhen Nanshan Power Co., Ltd. has obtained the
National High-tech Enterprise Accreditation Certificate (No. GR202144204080), which is
valid for 3 years. From 2021 to 2023, the Company will enjoy preferential policies for
high-tech corporate income tax and its corporate income tax will be calculated and paid at
a reduced rate of 15.00%.
(2) According to the document Guo Ke Huo Zi (2020) No.46, Shenzhen Shennandian
Turbine Engineering Technology Co., Ltd. has obtained the National High-tech Enterprise
Accreditation Certificate (No. GR202044200352), which is valid for 3 years. From 2020
to 2023, the Company will enjoy preferential policies for high-tech corporate income tax
and its corporate income tax will be calculated and paid at a reduced rate of 15.00%.
2. Preferential policies for VAT:
Comp
Type of Relevant regulations and Approving Approval Exemptio Term of
any
tax policy basis authority number n range validity
name
Refund
Qianhai upon
Notice on the Catalogue
Enviro Office of collection
of VAT Preferential
nment Shenzhen SQSST of VAT
Policies for Products and From
al Tax Service, No. for
VAT Labor Services for August 01,
Protec State [2018] comprehe
Comprehensive 2020 to July
tion Taxiation 18302 nsive
Utilization of Resources 31, 2023
Comp Administrati utilization
(CS No. [2015] 78)
any on of
resources
Qianhai Announce
Office of ment of VAT
Administrative Measures
Engin Shenzhen the State exemption
for VAT Exemption for
eering Tax Service, Taxation for cross-
VAT Cross-boarder Taxable
Comp State Administr border
Activities of VAT in Lieu
any Taxiation ation taxable
of Business Tax
Administrati [2016] activities
on No.29
V. Notes to items of the consolidated financial statements
1. Cash and cash equivalents
Item Ending balance Ending balance last year
Cash on hand 30,624.14 37,698.63
Notes to the financial statements Page 46
Item Ending balance Ending balance last year
Bank deposit 260,369,004.01 647,983,965.23
Other cash and cash equivalents 32,915,036.77 27,474,602.54
Total 293,314,664.92 675,496,266.40
Including: total amount of deposit abroad 6,222,045.22 6,016,949.57
Details of the cash and cash equivalents which are restricted for use due to mortgage,
pledge or freezing, and which are placed overseas with restrictions on fund repatriation
are as follows:
Item Ending balance Ending balance last year
Bank acceptance bill margin 27,474,594.34 27,474,594.34
Performance bond 5,440,434.23
Total 32,915,028.57 27,474,594.34
2. Trading financial assets
Item Ending balance Ending balance last year
Financial assets measured at fair value and
the changes of which are included in the 145,000,000.00 440,013,571.10
current profit or loss
Including: investment in debt instruments
Investments in equity instruments
Derivative financial assets
Others 145,000,000.00 440,013,571.10
Financial assets designated to be measured
at fair value through current profit or loss
Including: investment in debt instruments
Investments in equity instruments
Total 145,000,000.00 440,013,571.10
3. Accounts receivable
a) Accounts receivable disclosed by aging
Aging Ending balance Ending balance last year
Within 1 year (including 1 year) 88,354,422.85 103,306,168.76
1-2 years (including 2 years) 58,189,402.12 34,239,288.30
2-3 years (including 3 years) -
More than 3 years 5,558,673.67 5,558,673.67
Notes to the financial statements Page 47
Aging Ending balance Ending balance last year
Sub-total 152,102,498.64 143,104,130.73
Less: provision for bad debts 7,270,638.09 7,270,638.09
Total 144,831,860.55 135,833,492.64
b) Disclosure of accounts receivable by category based on provision method for
bad debts
Ending balance
Book balance Provision for bad debts
Category
Ratio of Book value
Amount Ratio (%) Amount provision
(%)
Accounts
receivable with
provision for bad 5,558,673.67 3.65 5,558,673.67 100.00 -
debts made on an
individual basis
Provision for bad
debts by portfolio
146,543,824.97 96.35 1,711,964.42 1.17 144,831,860.55
of risk
characteristics
Including: low-
146,543,824.97 96.35 1,711,964.42 1.17 144,831,860.55
risk portfolio
Total 152,102,498.64 100.00 7,270,638.09 4.78 144,831,860.55
Ending balance last year
Book balance Provision for bad debts
Category
Ratio of Book value
Amount Ratio (%) Amount provision
(%)
Accounts receivable
with provision for
5,558,673.67 3.88 5,558,673.67 100.00 -
bad debts made on
an individual basis
Provision for bad
debts by portfolio of 137,545,457.06 96.12 1,711,964.42 1.24 135,833,492.64
risk characteristics
Including: low-risk
137,545,457.06 96.12 1,711,964.42 1.24 135,833,492.64
portfolio
Total 143,104,130.73 100.00 7,270,638.09 5.08 135,833,492.64
Provision for bad debts accrued on an individual basis
Name Ending balance
Notes to the financial statements Page 48
Ratio of
Book Provision for Reason for
provisio
balance bad debts provision
n (%)
Shenzhen Petrochemical Products Estimated to be
3,474,613.06 3,474,613.06 100.00
Bonded Trading Co., Ltd. irrecoverable
Estimated to be
China Soilbase Engineering Co., Ltd. 1,137,145.51 1,137,145.51 100.00
irrecoverable
Shenzhen Fuhuade Electricity Co., Estimated to be
800,000.00 800,000.00 100.00
Ltd. irrecoverable
Estimated to be
Others 146,915.10 146,915.10 100.00
irrecoverable
Total 5,558,673.67 5,558,673.67 100.00
c) Provision, reversal or recovery of provision for bad debts in the current
period
Changes in current period
Ending balance
Category Ending balance
last year Recovery
Provision Others
or reversal
Accounts
receivable with
provision for bad
5,558,673.67 5,558,673.67
debts made on
an individual
basis
Provision for
bad debts by
1,711,964.42 1,711,964.42
portfolio of risk
characteristics
Total 7,270,638.09 7,270,638.09
d) Top 5 accounts receivable in terms of ending balances due from debtors
Ending balance
Ratio in the balance of
of the
Company name Book balance accounts receivable
provision for
(%)
bad debts
No.1 79,629,858.86 52.35 1,711,964.42
No.2 54,764,958.01 36.01
No.3 7,264,100.00 4.78
No.4 4,957,000.00 3.26
No.5 3,474,613.06 2.28 3,474,613.06
Total 150,090,529.93 98.68 5,186,577.48
4. Advances to suppliers
a) Presentation of advances to suppliers by aging
Notes to the financial statements Page 49
Ending balance Ending balance last year
Aging
Book balance Ratio (%) Book balance Ratio (%)
Within 1 year (including
52,803,240.38 97.91 44,506,222.90 97.93
1 year)
1-2 years (including 2
622,841.10 1.15 514,851.14 1.13
years)
2-3 years (including 3
465,000.00 0.86 389,626.88 0.86
years)
More than 3 years 40,525.23 0.08 37,586.94 0.08
Total 53,931,606.71 100.00 45,448,287.86 100.00
b) Top 5 prepayments in terms of ending balance due to payee
Ratio in the balance of
Company name Book balance
prepayments (%)
No.1 21,657,139.77 40.16
No.2 18,038,674.04 33.45
No.3 11,955,099.62 22.17
No.4 458,593.30 0.85
No.5 436,337.40 0.81
Total 52,545,844.13 97.43
5. Other receivables
Item Ending balance Ending balance last year
Interest receivable
Dividends receivable
Other accounts receivable 18,852,212.98 18,314,003.84
Total 18,852,212.98 18,314,003.84
a) Other accounts receivable
(1) Disclosure by aging
Aging Ending balance Ending balance last year
Within 1 year 5,052,627.80 1,058,183.07
Notes to the financial statements Page 50
Aging Ending balance Ending balance last year
1-2 years 842,636.66 36,436.71
2-3 years 172,169.92 243,391.13
More than 3 years 44,825,166.21 49,016,380.54
Sub-total 50,892,600.59 50,354,391.45
Less: provision for bad debts 32,040,387.61 32,040,387.61
Total 18,852,212.98 18,314,003.84
(2) Disclosure by category
Ending balance
Book balance Provision for bad debts
Category
Ratio of Book value
Amount Ratio (%) Amount provision
(%)
Accounts
receivable with
provision for bad 32,328,502.39 63.52 32,040,387.61 99.11 288,114.78
debts made on an
individual basis
Provision for bad
debts based on
18,564,098.20 36.48 18,564,098.20
portfolio of credit
risk characteristics
Including: low-risk
18,564,098.20 36.48 18,564,098.20
portfolio
Total 50,892,600.59 100.00 32,040,387.61 62.96 18,852,212.98
Ending balance last year
Book balance Provision for bad debts
Category
Ratio of Book value
Amount Ratio (%) Amount provision
(%)
Accounts
receivable with
provision for bad 32,328,502.39 64.20 32,040,387.61 99.11 288,114.78
debts made on an
individual basis
Provision for bad
debts based on
18,025,889.06 35.80 18,025,889.06
portfolio of credit
risk characteristics
Including: low-risk
18,025,889.06 35.80 18,025,889.06
portfolio
Total 50,354,391.45 100.00 32,040,387.61 63.63 18,314,003.84
Provision for bad debts accrued on an individual basis
Notes to the financial statements Page 51
Ending balance
Name Ratio of
Provision for Reason for
Book balance provision
bad debts provision
(%)
Huiyang County Kangtai Industrial Estimated to be
14,311,626.70 14,311,626.70 100.00
Company irrecoverable
Estimated to be
Individual income tax 2,470,039.76 2,470,039.76 100.00
irrecoverable
Estimated to be
Dormitory amounts receivable 1,736,004.16 1,736,004.16 100.00
irrecoverable
Accounts receivable from Estimated to be
7,498,997.87 7,498,997.87 100.00
individuals irrecoverable
Estimated to be
Jinan Power Equipment Co., Ltd. 3,560,000.00 3,560,000.00 100.00
irrecoverable
Zuo Hao Garment (Shenzhen) Co., Estimated to be
43,068.31 43,068.31 100.00
Ltd. irrecoverable
Shenzhen Guanhua Printing and Estimated to be
53,591.75 53,591.75 100.00
Dyeing Co., Ltd. irrecoverable
Shenzhen Nanhua Printing and Estimated to be
41,407.01 41,407.01 100.00
Dyeing Co., Ltd. irrecoverable
Huizhou Bangdenong Ecological Estimated to be
25,788.00 25,788.00 100.00
Organic Fertilizer Co., Ltd. irrecoverable
Huizhou Lvhuan Fertilizer Co., Estimated to be
44,112.10 44,112.10 100.00
Ltd. irrecoverable
Estimated to be
Others 2,543,866.73 2,255,751.95 88.67
irrecoverable
Total 32,328,502.39 32,040,387.61 99.11
(3) Provision for bad debts
First stage Second stage Third stage
Provision for bad Expected credit loss Expected credit loss
Expected credit Total
debts over the whole life over the whole life
loss for the next
(without credit (with credit
12 months
impairment) impairment)
Beginning
32,040,387.61 32,040,387.61
balance
Beginning
balance in the
current period
- Carried forward
to the second
stage
- Carried forward
to the third stage
- Reversal to the
second stage
- Reversal to the
first stage
Provision in the
current period
Reversal in the
current period
Charge-off in the
current period
Write-off in
current period
Notes to the financial statements Page 52
First stage Second stage Third stage
Provision for bad Expected credit loss Expected credit loss
Expected credit Total
debts over the whole life over the whole life
loss for the next
(without credit (with credit
12 months
impairment) impairment)
Other changes
Ending balance 32,040,387.61 32,040,387.61
(4) Classification by the nature of payment
Book balance at the end of the
Nature of payment Book balance at the end of period
previous year
Deposit and security deposit 1,654,712.69 2,784,868.96
Withholding payments 9,393,549.05 8,077,850.31
Accounts receivable from
15,817,190.04 14,740,501.44
Huidong Server
Current accounts and others 24,027,148.81 24,751,170.74
Sub-total 50,892,600.59 50,354,391.45
Less: provision for bad debts 32,040,387.61 32,040,387.61
Total 18,852,212.98 18,314,003.84
(5) Top 5 of other accounts receivable in terms of ending balances due from
debtors
Ratio in the
total ending Ending balance
Nature of
Company name Book balance Aging balance of of the provision
payment
accounts for bad debts
receivable (%)
Current
No.1 14,911,484.45 1-3 years 29.30
accounts
Current More than 3
No.2 14,311,626.70 28.12 14,311,626.70
accounts years
Security More than 3
No.3 3,560,000.00 7.00 3,560,000.00
deposit years
More than 3
No.4 Deposit 1,460,919.00 2.87
years
Current More than 3
No.5 1,408,866.89 2.77 1,408,866.89
accounts years
Total 35,652,897.04 70.06 19,280,493.59
6. Inventories
a) Classification of inventories
Notes to the financial statements Page 53
Ending balance Ending balance last year
Item Inventory
Book Book Inventory
falling price Book value Book value
balance balance falling price
reserves
reserves
Raw 144,075,420.62 59,079,222.05 84,996,198.57 144,000,440.38 59,079,222.05 84,921,218.33
materials
Sporadic 358,080.02 358,080.02
spare parts
Total 144,075,420.62 59,079,222.05 84,996,198.57 144,358,520.40 59,079,222.05 85,279,298.35
b) Inventory falling price reserves
Increase in the current Decrease in the current
Ending balance period period
Item Ending balance
last year Reversal or
Provision Others Others
charge-off
Raw
59,079,222.05 59,079,222.05
materials
Total 59,079,222.05 59,079,222.05
7. Contract assets
Item Ending balance Ending balance last year
Operation and maintenance project settlement
receivable
Quality guarantee deposit receivable 89,848.39 217,009.58
Sub-total 89,848.39 217,009.58
Provision for contract assets impairment
Total 89,848.39 217,009.58
8. Other current assets
Item Ending balance Ending balance last year
Negotiable certificate of deposit 230,000,000.00 180,000,000.00
Input tax of VAT to be deducted 1,423,597.61 1,103,481.37
Prepaid income tax 6,583,089.98 6,583,089.98
Interest receivable on time deposits 237,900.37 496,849.31
Others 11,820.78 65,419.78
Total 238,256,408.74 188,248,840.44
Notes to the financial statements Page 54
9. Long-term equity investments
Ending
Increase/decrease in the current period
balance of
Ending balance Profit or loss of Adjustment of Cash dividends the
Investees Decrease Changes Provision Ending balance
last year Additional investment other or profits provision
in in other for Others for
investment recognized under comprehensive declared and
investment equity impairment impairment
the equity method income distributed
1. Associates
Huidong Server
Harbor
Comprehensive
Development
Company 4,414,021.80 334,799.49 4,748,821.29
(hereinafter
referred to as the
"Huidong
Server")
Jiangsu Liaoyuan
Environmental
Protection
Technology Co.,
Ltd. (hereinafter 79,082,076.44 1,308,357.00 1,214,550.00 79,175,883.44
referred to as
"Liaoyuan
Environmental
Protection")
Total 83,496,098.24 - - 1,643,156.49 - - 1,214,550.00 - - 83,924,704.73
Notes to the financial statements Page 55
10. Other investments in equity instruments
a) Details of other investments in equity instruments
Ending balance of this year Ending balance last year
Item Original book Changes in Ending Original book Changes in
Ending balance
value fair value balance value fair value
Jiangxi Nuclear
60,615,000.00 60,615,000.00 60,615,000.00 60,615,000.00
Power Co., Ltd.
Sunpower Tech 140,000,000.0
140,000,000.00 140,000,000.00 140,000,000.00
(Jiangsu) Co., Ltd. 0
Shenzhen
-
Petrochemical -
2,500,000.00 2,500,000.00 2,500,000.0
Products Bonded 2,500,000.00
0
Trading Co., Ltd.
Shenzhen Yuanzhi
Ruixin New
Generation
Information
100,000,000.0
Technology Private 100,000,000.00 100,000,000.00 100,000,000.00
0
Equity Investments
Fund Partnership
(Limited
Partnership)
-
- 300,615,000.0
Total 303,115,000.00 303,115,000.00 2,500,000.0 300,615,000.00
2,500,000.00 0
0
b) Investment in non-trading equity instruments
Reasons
Amount
for the
transferre Reasons for
Dividend transfer
d from being designated
income of other
the other to be measured
recognized Cumulativ Cumulative comprehe
Item comprehe at fair value
in the e gains loss nsive
nsive through other
current income
income to comprehensive
period into
retained income
retained
earnings
earnings
Jiangxi Nuclear Power Planned to hold
Co., Ltd. for a long term
Shenzhen Petrochemical
Planned to hold
Products Bonded Trading -2,500,000.00
for a long term
Co., Ltd.
Sunpower Tech (Jiangsu) Planned to hold
8,400,000.00
Co., Ltd. for a long term
Shenzhen Yuanzhi
Ruixin New Generation
Information Technology
Planned to hold
Private Equity 340,206.13
for a long term
Investments Fund
Partnership (Limited
Partnership)
Total 8,740,206.13 -2,500,000.00
11. Investment properties
a) Investment properties measured at the cost mode
Notes to the financial statements Page 56
Item Houses and buildings Total
1. Original book value
(1) Balance at the end of last year 9,708,014.96 9,708,014.96
(2) Increase during the current period
(3) Decrease during the current period
(4) Ending balance 9,708,014.96 9,708,014.96
2. Accumulated depreciation and
amortization
(1) Balance at the end of last year 7,874,670.76 7,874,670.76
(2) Increase during the current period 84,388.80 84,388.80
(3) Decrease during the current period -
(4) Ending balance 7,959,059.56 7,959,059.56
3. Provision for impairment
(1) Balance at the end of last year
(2) Increase during the current period
(3) Decrease during the current period
(4) Ending balance
4. Book value
(1) Book value at the end of the period 1,748,955.40 1,748,955.40
(2) Book value at the end of the previous
1,833,344.20 1,833,344.20
year
12. Fixed assets
a) Fixed assets and disposal of fixed assets
Item Ending balance Ending balance last year
Fixed assets 577,934,944.24 591,290,204.31
Disposal of fixed assets 491,295.99
Total 578,426,240.23 591,290,204.31
Notes to the financial statements Page 57
b) Details of fixed assets
Item Houses and buildings Machinery equipment Means of transport Others Total
1. Original book value
(1) Balance at the end of last year 424,154,183.71 2,725,092,344.93 8,138,535.02 44,622,476.80 3,202,007,540.46
(2) Increase during the current
1,209,282.24 177,917.45 1,387,199.69
period
- Purchase 177,917.45 177,917.45
- Transfer-in from projects under
1,209,282.24 1,209,282.24
construction
-Others -
(3) Decrease during the current
1,537,429.89 39,051.73 1,576,481.62
period
- Disposal or scrapping 1,537,429.89 39,051.73 1,576,481.62
- Others -
(4) Ending balance 424,154,183.71 2,726,301,627.17 6,601,105.13 44,761,342.52 3,201,818,258.53
2. Accumulated depreciation
(1) Balance at the end of last year 294,778,055.90 1,912,442,654.22 5,011,870.15 33,757,207.10 2,245,989,787.37
(2) Increase during the current
4,846,599.33 7,215,954.91 595,886.75 1,215,680.50 13,874,121.49
period
—Provision 4,846,599.33 7,215,954.91 595,886.75 1,215,680.50 13,874,121.49
-Others
(3) Decrease during the current
1,160,387.61 39,051.73 1,199,439.34
period
- Disposal or scrapping 1,160,387.61 39,051.73 1,199,439.34
Notes to the financial statements Page 58
Item Houses and buildings Machinery equipment Means of transport Others Total
-Others
(4) Ending balance 299,624,655.23 1,919,658,609.13 4,447,369.29 34,933,835.87 2,258,664,469.52
3. Provision for impairment
(1) Balance at the end of last year 22,573,968.96 341,888,879.56 53,176.48 211,523.78 364,727,548.78
(2) Increase during the current
period
—Provision
(3) Decrease during the current
period
- Disposal or scrapping
(4) Ending balance 22,573,968.96 341,888,879.56 53,176.48 211,523.78 364,727,548.78
4. Book value
(1) Book value at the end of the
101,955,559.52 464,754,138.48 2,100,559.36 9,615,982.87 578,426,240.23
period
(2) Book value at the end of the
106,802,158.85 470,760,811.15 3,073,488.39 10,653,745.92 591,290,204.31
previous year
Notes to the financial statements Page 59
c) Details of the fixed assets without certificate of title
Reasons for failure to
Item Book value
obtain the certificate of title
Circulating water pump house 804,495.56 Procedures uncompleted
Cooling tower 673,259.25 Procedures uncompleted
Complex building 443,246.19 Procedures uncompleted
Canteen of the complex building 227,979.99 Procedures uncompleted
Chemical water treatment
workshop
232,960.00 Procedures uncompleted
Main entrance mail room 57,339.98 Procedures uncompleted
Total 2,439,280.97
13. Projects under construction
a) Projects under construction
Item Ending balance Ending balance last year
Projects under construction 6,222,095.21 4,861,062.16
Total 6,222,095.21 4,861,062.16
Notes to the financial statements Page 60
b) Details of projects under construction
Ending balance Ending balance last year
Provision
Item Provision
Book Book for
Book balance for Book value
value balance impairme
impairment
nt
Cogeneration
60,307,712.44 59,515,356.69 792,355.75 60,307,712.44 59,515,356.69 792,355.75
project
Oil-to-gas
9,441,286.39 9,441,286.39 9,441,286.39 9,441,286.39
project
Technical
renovation 7,034,739.46 1,605,000.00 5,429,739.46 5,673,706.41 1,605,000.00 4,068,706.41
project
Total 76,783,738.29 70,561,643.08 6,222,095.21 75,422,705.24 70,561,643.08 4,861,062.16
Notes to the financial statements Page 61
c) Changes in significant projects under construction in the current period
Includi
Ratio of
ng: Capital
accumul
Amount Other amount ization
ated
transferred decreases Accumulated of rate of
Ending project Source
Budgeted Increase in the into fixed in the Ending Rate of capitalization capitali interest
Project name balance last investm of
amount current period assets in current balance progres amount of zed in the
year ent in funds
the current period s (%) interest interest current
the
period (note) in the period
budget
current (%)
(%)
period
Self-
raised
Cogeneration
60,000,000.00 60,307,712.44 60,307,712.44 100.51 100.00 6,476,185.46 and
project
borrowi
ng
Self-
Oil-to-gas
9,441,286.39 9,441,286.39 raised
project
funds
Technical Self-
renovation 5,673,706.41 1,361,033.05 7,034,739.46 raised
project funds
Total 60,000,000.00 75,422,705.24 1,361,033.05 - - 76,783,738.29 6,476,185.46 -
Notes to the financial statements Page 62
14. Right-of-use assets
Item Buildings Total
I. Original book value
1. Beginning balance 16,322,014.37 16,322,014.37
2. Increase in the current period -
3. Decrease in the current period -
4. Ending balance 16,322,014.37 16,322,014.37
II. Accumulated depreciation
1. Beginning balance 8,614,396.47 8,614,396.47
2. Increase in the current period 2,720,335.74 2,720,335.74
(1) Provision 2,720,335.74 2,720,335.74
3. Decrease in the current period
(1) Disposal
4. Ending balance 11,334,732.21 11,334,732.21
III. Provision for impairment
IV. Book value
1. Book value at the end of period 4,987,282.16 4,987,282.16
2. Book value at the beginning of
the year
7,707,617.90 7,707,617.90
Note: the right-of-use assets in the current period refer to the Company's operating lease
of the 16-17th floors of Hantang Building Property for office use.
15. Intangible assets
a) Details of intangible assets
Item Land use right Patent right Software Total
1. Original book value
(1) Balance at the end of last
60,813,994.76 138,625.07 3,782,983.49 64,735,603.32
year
(2) Increase during the current
period
- Purchase
(3) Decrease during the current
period
-Others
(4) Ending balance 60,813,994.76 138,625.07 3,782,983.49 64,735,603.32
2. Accumulated amortization
(1) Balance at the end of last
41,265,885.15 31,817.30 3,638,545.75 44,936,248.20
year
(2) Increase during the current
311,314.80 10,133.06 23,478.16 344,926.02
period
—Provision 311,314.80 10,133.06 23,478.16 344,926.02
Notes to the financial statements Page 63
Item Land use right Patent right Software Total
(3) Decrease during the current
period
- Disposal
(4) Ending balance 41,577,199.95 41,950.36 3,662,023.91 45,281,174.22
3. Provision for impairment
(1) Balance at the end of last
year
(2) Increase during the current
period
—Provision
(3) Decrease during the current
period
- Disposal
(4) Ending balance
4. Book value
(1) Book value at the end of
19,236,794.81 96,674.71 120,959.58 19,454,429.10
the period
(2) Book value at the end of
19,548,109.61 106,807.77 144,437.74 19,799,355.12
the previous year
b) Details of land use right without certificate of title
Reasons for failure to
Item Book value obtain the certificate of
title
Land use right of the wharf and pipe
482,221.57 Procedures uncompleted
gallery
Total 482,221.57
16. Long-term deferred expenses
Ending Amortization
Increase in the Other Ending
Item balance last amount for the
current period decreases balance
year current period
Decoration
1,219,129.18 248,665.56 970,463.62
fees
Total 1,219,129.18 248,665.56 970,463.62
17. Deferred tax assets and deferred tax liabilities
Non-offset deferred tax assets
Item Ending balance Ending balance last year
Notes to the financial statements Page 64
Deductible Deductible
Deferred tax Deferred tax
temporary temporary
assets assets
differences differences
Provision for bad
3,649,109.93 547,366.49 3,649,109.93 547,366.49
debts
Changes in fair value
of investments in other 2,500,000.00 625,000.00 2,500,000.00 625,000.00
equity instruments
Total 6,149,109.93 1,172,366.49 6,149,109.93 1,172,366.49
18. Other non-current assets
Item Ending balance Ending balance last year
Quality guarantee deposit for projects 5,724,444.82 5,371,398.18
Total 5,724,444.82 5,371,398.18
19. Short-term borrowings
a) Classification of short-term borrowings
Item Ending balance Ending balance last year
Credit borrowings 226,482,574.59 885,229,358.05
Accrued interest 130,080.79 1,806,895.30
Interest on bill discounting -7,078,395.91
Total 226,612,655.38 879,957,857.44
20. Notes payable
Category Ending balance Ending balance last year
Bank acceptance bills 137,298,902.17 137,298,902.17
Total 137,298,902.17 137,298,902.17
21. Accounts payable
a) List of accounts payable
Item Ending balance Ending balance last year
Payment for materials 393,610.51 292,422.50
Notes to the financial statements Page 65
Item Ending balance Ending balance last year
Electricity charge 1,359,094.94 937,613.72
Service charge 2,369,057.52 3,997,800.00
Total 4,121,762.97 5,227,836.22
As at the end of the reporting period, the Company had no significant accounts payable
with aging of over one year.
22. Employee compensation payable
a) Presentation of employee compensation payable
Ending balance Increase in the Decrease in the
Item Ending balance
last year current period current period
Short-term
29,296,815.07 49,737,665.86 51,861,501.45 27,172,979.48
compensation
Post-employment
benefits - defined 7,632,523.28 5,517,561.28 2,114,962.00
contribution plans
Dismissal welfare
Other benefits maturing
within one year
Total 29,296,815.07 57,370,189.14 57,379,062.73 29,287,941.48
b) List of short-term compensation
Ending balance Increase in the Decrease in the
Item Ending balance
last year current period current period
(1) Salaries, bonuses,
allowances and 28,806,319.36 38,074,252.95 40,085,028.49 26,795,543.82
subsidies
(2) Employee welfare
107,277.20 3,032,981.38 3,140,258.58
expenses
(3) Social insurance
2,857,262.39 2,857,262.39
premiums
Including: medical
2,570,908.59 2,570,908.59
insurance premiums
Work-related injury
118,648.42 118,648.42
insurance premiums
Maternity insurance
167,705.38 167,705.38
premiums
(4) Housing provident
4,960,520.44 4,960,520.44
fund
(5) Union funds and
employee education 383,218.51 812,648.70 818,431.55 377,435.66
funds
(6) Short-term
compensated absences
(7) Short-term profit
sharing plans
(8) Others
Notes to the financial statements Page 66
Ending balance Increase in the Decrease in the
Item Ending balance
last year current period current period
Total 29,296,815.07 49,737,665.86 51,861,501.45 27,172,979.48
c) Presentation of defined contribution plans
Ending balance Increase in the Decrease in the Ending
Item
last year current period current period balance
Basic endowment insurance 5,446,193.55 5,446,193.55
Unemployment insurance
71,367.73 71,367.73
premium
Enterprise annuity payment 2,114,962.00 2,114,962.00
Total 7,632,523.28 5,517,561.28 2,114,962.00
23. Taxes payable
Taxes and duties Ending balance Ending balance last year
VAT 3,938,360.24 2,068,236.33
Individual income tax 925,601.29 1,825,992.00
Urban maintenance and construction tax 17,117.99 2,464.98
Education surcharges 6,760.78 630.08
Local education surcharges 4,507.19 420.06
House tax 1,957,288.05 996,166.86
Stamp duty 170,883.69
Environmental protection duty
Others 419,842.26 42,872.73
Total 7,269,477.80 5,107,666.73
24. Other payables
Item Ending balance Ending balance last year
Interest payable
Other payables 22,785,089.94 22,997,466.80
Total 22,785,089.94 22,997,466.80
a) Other payables
Notes to the financial statements Page 67
(1) Presented by the nature of payment
Item Ending balance Ending balance last year
Project funds 8,463,575.53 7,525,391.28
Quality guarantee deposit 4,952,004.54 6,973,652.54
Accrued expenses 4,548,310.37 7,429,154.13
Payment for materials 52,087.65 52,087.65
Others 4,769,111.85 1,017,181.20
Total 22,785,089.94 22,997,466.80
(2) Top 5 of other payables
Ratio in the balance of
Company name Book balance
other payables (%)
No.1 3,108,638.60 13.64
No.2 2,172,495.58 9.53
No.3 1,280,336.71 5.62
No.4 860,190.12 3.78
No.5 387,621.83 1.70
Total 7,809,282.84 34.27
25. Non-current liabilities maturing within one year
Item Ending balance Ending balance last year
Lease liabilities maturing within one year 5,624,540.90 6,279,115.44
Less: unrecognized financing expenses 128,604.20 264,995.49
Total 5,495,936.70 6,014,119.95
26. Other current liabilities
Item Ending balance Ending balance last year
Output tax to be carried forward in the
12,787.72 21,600.00
VAT
Total 12,787.72 21,600.00
Notes to the financial statements Page 68
27. Long-term borrowings
Item Ending balance Ending balance last year
Credit borrowings 105,274,084.45 28,019,758.68
Total 105,274,084.45 28,019,758.68
28. Lease liabilities
a) Details of lease liabilities
Item Ending balance Ending balance last year
Lease liabilities 2,291,614.01
Less: unrecognized financing expenses 29,453.98
Total - 2,262,160.03
b) Maturity analysis of lease liabilities
Item Ending balance Ending balance last year
1-2 years 2,262,160.03
Total - 2,262,160.03
29. Estimated liabilities
Reasons
Ending balance Increase in the Decrease in the Ending
Item for
last year current period current period balance
formation
Pending
15,000,000.00 15,000,000.00
litigation
Total 15,000,000.00 15,000,000.00
Note: On November 29, 2013, Shenzhen Server and Jiahua Building Products (Shenzhen) Co., Ltd.
("Jiahua Building") signed a supplementary agreement to the equity transfer agreement with respect to
the historical issues regarding the ownership and division of the equity of Yapojiao Wharf among
Shenzhen Server, Huidong Server, Huidong Renshan Town Government and its subordinate Renshan
Group. In order to solve the historical issues, Shenzhen Server deposited RMB 12,500,000.00 into the
co-managed account for guarantee, and pledged 20% equity of Huidong Server held by it to Jiahua
Building for two years, with the amount of claims guaranteed by pledge not exceeding RMB
15,000,000.00. The Company predicted a loss related to this matter of RMB 27, 500,000.00, and the
balance at the end of 2019 was RMB 26,646,056.28.
Notes to the financial statements Page 69
On November 12, 2020, Huidong Server reached a preliminary settlement agreement with other
relevant parties on the land disputes in the estimated liabilities, and Shenzhen Server reversed the
estimated liabilities of RMB 6,584,816.78 accordingly. In 2020, Shenzhen Server bore the lawyer and
other expenses of RMB 137,731.22 in accordance with the agreed ratio, and the total decrease in
estimated liabilities in 2020 was RMB 6,722,548.00. The balance of RMB 19,923,508.28 is the
repayment obligation that is likely to occur before the completion of the above matters.
On November 12, 2020, Huizhou Commercial Construction and Development Company and
Huidong Server Harbor Comprehensive Development Company signed the Agreement on Transfer of
Claims and the record of enforcement and compromise of the People's Court of Huidong County,
partially resolving the historical issues concerning the ownership and division of the equity of Yapojiao
Wharf. On January 20, 2021, Shenzhen Server received the refund of RMB 5,000,000.00 from the co-
managed account, and it reversed the estimated liabilities RMB 4,573,508.28 accordingly. In 2021,
Shenzhen Server bore the legal and other expenses of RMB 350,000 in accordance with the agreed ratio,
with a total decrease of RMB 4,923,508.28 in estimated liabilities in 2021. The balance of RMB
15,000,000.00 is a repayment obligation likely to occur before the completion of the above matters.
30. Deferred income
Increase in
Ending balance Decrease in the Reasons for
Item the current Ending balance
last year current period formation
period
Government Government
82,145,596.60 - 3,178,964.54 78,966,632.06
subsidies subsidies
Total 82,145,596.60 - 3,178,964.54 78,966,632.06
Items involving government subsidies:
Amount
New included in
Ending subsidies the current
Other Ending Related to
Liabilities balance last in the profit or loss
changes balance assets/revenue
year current at the
period current
period
Government
subsidies for
Related to
low nitrogen 23,615,664.69 252,422.00 23,363,242.69
assets
equipment
modification
Subsidies for
the motor
Related to
energy 298,080.00 17,280.00 280,800.00
assets
efficiency
improvement
Notes to the financial statements Page 70
funding
scheme
Support fund
for sludge
Related to
drying project 5,510,265.19 323,501.46 5,186,763.73
assets
circular
economy
Government
bond
Related to
subsidies for 2,061,250.00 127,500.00 1,933,750.00
assets
sludge drying
project
Special funds
for energy
Related to
conservation 342,111.34 57,018.66 285,092.68
assets
and emission
reduction
Subsidies for
the
improvement
of Related to
49,330,169.80 2,365,909.09 46,964,260.71
atmospheric assets
environment
quality in
Shenzhen
Funding for
technological
transformation Related to
988,055.58 35,333.33 952,722.25
investment assets
project in
2021-2022
Total
82,145,596.60 - 3,178,964.54 - 78,966,632.06
31. Other non-current liabilities
Item Ending balance Ending balance last year
Equity of the other partners in the
45,112.54 47,511.72
partnership
Total 45,112.54 47,511.72
32. Share capital
Increase (+) or decrease (-) in the current period
Conversion
Ending balance
Item New of Ending balance
last year Bonus Sub-
shares provident Others
issue total
issued fund into
shares
Total
number of 602,762,596.00 602,762,596.00
shares
Notes to the financial statements Page 71
33. Capital reserves
Ending balance Increase in the Decrease in the
Item Ending balance
last year current period current period
Capital premiums
(capital stock 233,035,439.62 233,035,439.62
premium)
Other capital reserves 129,735,482.48 129,735,482.48
Total 362,770,922.10 362,770,922.10
Notes to the financial statements Page 72
34. Other comprehensive income
Current amount
Less: included
Less: included
in other
Amount in other Amount
Ending comprehensive
Beginning before comprehensive Less: attributable Attributable Ending
Item balance last income in
balance income tax income in income to the to minority balance
year prior periods
in the prior periods tax parent shareholders
and transferred
current and transferred expenses company after tax
to current
period to current after tax
retained
profit or loss
earnings
1. Other comprehensive income that
cannot be reclassified into the profit or
loss
Including: changes in re-measurement
of defined benefit plans
Other comprehensive income that
cannot be transferred to the profit or
loss under the equity method
Changes in fair value of investments in
-2,500,000.00 -2,500,000.00
other equity instruments
Total of other comprehensive income -2,500,000.00 -2,500,000.00
Notes to the financial statements Page 73
35. Special reserves
Ending balance Increase in the Decrease in the
Item Ending balance
last year current period current period
Work safety
3,810,328.32 3,590,892.38 219,435.94
expenses
Total 3,810,328.32 3,590,892.38 219,435.94
36. Surplus reserves
Ending balance Increase in the Decrease in the
Item Ending balance
last year current period current period
Statutory surplus
310,158,957.87 310,158,957.87
reserves
Discretionary
22,749,439.73 22,749,439.73
surplus reserves
Total 332,908,397.60 332,908,397.60
37. Undistributed profit
Amount for the
Item Current amount
previous period
Undistributed profit at the end of the previous
159,187,979.14 319,351,219.81
year before adjustment
Total adjusted undistributed profit at the
beginning of the year ("+" for increases and "-"
for decreases)
Adjusted undistributed profit at the beginning of
159,187,979.14 319,351,219.81
the year
Plus: net profit attributable to owners of the parent
-37,240,739.56 -94,098,149.09
company in the current period
Less: withdrawal of statutory surplus reserves
Dividends payable for ordinary shares
Undistributed profit at the end of period 121,947,239.58 225,253,070.72
38. Operating revenue and operating costs
Current amount Amount for the previous period
Item
Revenue Costs Revenue Costs
Main
270,628,454.23 285,268,563.82 228,639,162.83 282,392,283.22
business
Other
639,730.82 99,366.08 604,379.24 94,148.99
business
Total 271,268,185.05 285,367,929.90 229,243,542.07 282,486,432.21
Notes to the financial statements Page 74
39. Taxes and surcharges
Amount for the previous
Item Current amount
period
House tax 961,121.19 1,521,117.59
Vehicle and vessel tax 1,080.00
Land use tax 376,969.53 452,503.02
Stamp duty 150,371.40 335,629.10
Urban maintenance and construction
323,664.43 335,501.06
tax
Education surcharges 136,671.47 142,789.14
Local education surcharges 91,114.32 96,152.80
Environmental protection tax 714.26 12,569.90
Total 2,041,706.60 2,896,262.61
40. Selling and distribution expenses
Amount for the previous
Item Current amount
period
Employee compensation 683,687.41
Business entertainment expenses 60,438.80
Agency fee 17,924.52
Property premium 0.00
Others 135,657.09
Total 897,707.82 -
41. G&A expenses
Amount for the previous
Item Current amount
period
Employee compensation 16,678,744.54 20,629,642.95
Lease fee 149,208.80 3,046,301.79
Depreciation cost 5,836,834.84 3,949,187.75
Business entertainment expenses 709,926.13 913,815.31
Agency fee 1,040,133.44 697,476.86
Repair cost 359,247.29 218,372.10
Environmental protection fee 63,096.10 77,142.71
Notes to the financial statements Page 75
Amount for the previous
Item Current amount
period
Vehicle expenses 128,763.36 1,198,452.90
Administrative expenses 195,789.57 200,798.79
Expenses of the Board of Directors 227,754.47 313,528.29
Communication expenses 381,621.13 521,423.22
Amortization of intangible assets 31,717.80 36,421.38
Property management fee 491,101.02 493,842.17
Travel expenses 304,075.94 53,447.95
Share certificate fee 19,713.42 238,083.50
Others 7,895,474.87 11,189,707.01
Total 34,513,202.72 43,777,644.68
42. R&D expenses
Amount for the previous
Item Current amount
period
Employee compensation 11,392,275.80 15,356,997.69
Depreciation cost 969,806.88 1,306,880.89
Others 935,843.63 408,710.55
Total 13,297,926.31 17,072,589.13
43. Financial expenses
Amount for the previous
Item Current amount
period
Interest expenses 11,766,633.92 20,539,845.79
Including: interest capitalized
Expensed interest expense 11,766,633.92 20,539,845.79
Less: interest income 5,205,492.86 3,594,848.74
Foreign exchange losses (gains are
-199,804.29 -273,651.02
listed with "-")
Service fee 203,183.08 58,370.08
Amortization of financing charges
165,845.27
unrecognized
Total 6,730,365.12 16,729,716.11
Notes to the financial statements Page 76
44. Other income
Amount for the previous
Item Current amount
period
Government subsidies 4,065,271.26 4,440,645.78
Total 4,065,271.26 4,440,645.78
Government subsidies included in other income
Amount for the Related to
Subsidy items Current amount
previous period assets/revenue
Subsidies for transformation of low Related to
252,422.00 234,909.80
nitrogen projects assets
Support fund for sludge drying project Related to
127,500.00 323,501.46
circular economy assets
Government bond subsidies for sludge Related to
323,501.46 127,500.00
drying project assets
Subsidies for the improvement of
Related to
atmospheric environment quality in 2,365,909.08 2,365,909.08
assets
Shenzhen
Special funds for energy conservation Related to
57,018.66 57,018.66
and emission reduction assets
Funding scheme for the motor energy Related to
17,280.00 17,280.00
efficiency improvement assets
Funding for technological transformation Related to
35,333.34 22,333.32
investment project in 2021-2022 assets
National high-tech enterprises Related to
100,000.00 643,800.00
multiplication plan revenue
Refund of personal income tax Related to
74,806.72 243,753.86
revenue
Lump-sum subsidies for training of Related to
- 128,000.00
workers on post revenue
Subsidies for pilot demonstration of Related to
- 200,000.00
industrial "carbon peaking" revenue
Subsidies for stabilizing posts Related to
115,000.00 76,639.60
revenue
Sci-tech innovation voucher Related to
296,500.00
revenue
Subsidies for supporting green and low-
Related to
carbon development projects of 300,000.00
revenue
enterprises
Total 4,065,271.26 4,440,645.78
45. Investment income
Amount for the previous
Item Current amount
period
Income from long-term equity
investments accounted for by using the 1,643,156.49 -1,471,602.77
equity method
Investment income during the holding
9,342,507.91 29,212,829.84
period of trading financial assets
Notes to the financial statements Page 77
Amount for the previous
Item Current amount
period
Dividend income earned during the
holding period of investments in other 8,740,206.13
equity instruments
Total 19,725,870.53 27,741,227.07
46. Income from asset disposal
Amount charged to
Amount for the the non-recurring
Item Current amount
previous period profit or loss of the
current period
Profit or loss from disposal of
111,895.22 111,895.22
fixed assets
Total 111,895.22 111,895.22
47. Non-operating revenue
Amount charged to
Amount for the the non-recurring
Item Current amount
previous period profit or loss of the
current period
Compensation for power
4,335,500.00 4,335,500.00
outage
Indemnity from insurance
432,328.93 432,328.93
companies
Others 226,384.24 226,384.24
Total 4,994,213.17 4,994,213.17
48. Non-operating expenses
Amount charged to
Amount for the the non-recurring
Item Current amount
previous period profit or loss of the
current period
External donation 10,000.00
Losses due to damage and scrapping
5,873.61 880.34 5,873.61
of non-current assets
Others 334.71 217,615.51 334.71
Total 6,208.32 228,495.85 6,208.32
49. Income tax expenses
Table of income tax expenses
Notes to the financial statements Page 78
Amount for the previous
Item Current amount
period
Income tax expenses of the current
479.55
period
Deferred income tax expenses
Total 479.55
50. Earnings per share
a) Basic earnings per share
Basic earnings per share are calculated by dividing the consolidated net profit
attributable to ordinary shareholders of the parent company by the weighted
average of the Company's outstanding ordinary shares:
Amount for the
Item Current amount
previous period
Consolidated net profit attributable to ordinary
-37,240,739.56 -94,098,149.09
shareholders of the parent company
Weighted average of the Company's outstanding
602,762,596.00 602,762,596.00
ordinary shares
Basic earnings per share -0.0618 -0.1561
b) Diluted earnings per share
Amount for the
Item Current amount
previous period
Consolidated net profit (diluted) attributable to
-37,240,739.56 -94,098,149.09
ordinary shareholders of parent company
Weighted average of the Company's outstanding
602,762,596.00 602,762,596.00
ordinary shares (diluted)
Diluted earnings per share -0.0618 -0.1561
51. Items of statement of cash flows
a) Other cash received related to operating activities
Amount for the
Item Current amount
previous period
Interest income 5,037,876.59 4,800,937.34
Government subsidies 693,966.28 1,048,439.60
Current accounts received - 38,142,088.17
Others 6,564,756.22 1,502,291.50
Total 12,296,599.09 45,493,756.61
Notes to the financial statements Page 79
b) Cash paid for other operating activities related
Amount for the
Item Current amount
previous period
Cash paid for G&A expenses, R&D expenses and
17,969,237.13 21,958,179.33
selling and distribution expenses
Current accounts paid 410,000.00 384,000.00
Total 18,379,237.13 22,342,179.33
c) Cash paid for other investing activities
Amount for the
Item Current amount
previous period
Cash paid for the purchase of negotiable
50,000,000.00
certificates of deposit
Cash paid for the disposal of fixed assets
Total 50,000,000.00
d) Cash paid for other financing activities related
Amount for the
Item Current amount
previous period
Performance bond 5,440,434.23
Total 5,440,434.23
52. Supplementary information to statement of cash flows
a) Supplementary information to statement of cash flows
Amount for the
Supplementary information Current amount
previous period
1. Adjust the net profit to the cash flow of
operating activities
Net profit -42,690,091.11 -101,765,725.67
Plus: credit impairment loss
Provision for asset impairment
Depreciation and amortization of the investment
84,388.80 91,318.80
properties
Depreciation of fixed assets 13,874,121.49 14,917,695.19
Depreciation of right-of-use assets 2,720,335.74
Amortization of intangible assets 344,926.02 344,440.86
Notes to the financial statements Page 80
Amount for the
Supplementary information Current amount
previous period
Amortization of long-term deferred expenses 248,665.56 248,665.56
Losses from disposal of fixed assets, intangible
assets and other long-term assets (gains are listed -111,895.22
with "-")
Losses on write-off of fixed assets (gains are listed
5,873.61 880.34
with "-")
Losses from changes in fair value (gains are listed
with "-")
Financial expenses (gains are listed with "-") 11,768,338.22 20,539,845.79
Investment loss (gains are listed with "-") -19,725,870.53 -27,741,227.07
Decreases in deferred tax assets (increases are
listed with "-")
Increases in deferred tax liabilities (decreases are
listed with "-")
Decreases in inventories (increases are listed with
283,099.78 2,347,438.40
"-")
Decreases of operating receivables (increase are
-25,420,031.99 314,198,626.07
listed with "-")
Increase of operating payables (decrease are listed
1,601,650.09 -22,593,874.97
with “-”)
Others
Net cash flow from operating activities -57,016,489.54 200,588,083.30
2. Significant investing and financing activities
not involving cash inflows and outflows
Conversion of debt into capital
Convertible corporate bonds maturing within one
year
Fixed assets acquired under financing leases
3. Net change in cash and cash equivalents
Ending balance of cash 260,399,636.35 470,018,109.19
Less: beginning balance of cash 648,021,672.06 456,751,614.75
Plus: Ending balance of cash equivalents
Less: beginning balance of cash equivalents - 232,853,018.84
Net increase in cash and cash equivalents -387,622,035.71 -219,586,524.40
b) Composition of cash and cash equivalents
Ending balance last
Item Ending balance
year
I. Cash 260,399,636.35 648,021,672.06
Including: cash on hand 30,624.14 37,698.63
Bank deposit available for payment at any time 260,369,004.01 647,983,965.23
Other cash and cash equivalents available for payment
8.20 8.20
at any time
Notes to the financial statements Page 81
Ending balance last
Item Ending balance
year
Deposits in the central bank available for payment
Deposit of interbank amount
Loans to banks and other financial institutions
II. Cash equivalents
Including: Bond investments maturing within three
months
III. Ending balance of cash and cash equivalents 260,399,636.35 648,021,672.06
Including: cash and cash equivalents with restricted
use by parent company or subsidiaries within the
group
53. Assets with restrictions on the ownership or use right
Book value at the end of
Item Reason for restriction
the period
Note guarantee deposits and
Cash and cash equivalents 32,915,028.57
performance guarantee deposits
Total 32,915,028.57
54. Monetary items in foreign currency
a) Monetary items in foreign currency
Ending balance of Exchange rate Ending balance of
Item
foreign currency of conversion translated RMB
Cash and cash equivalents
Including: USD 836,529.86 7.22580 6,044,597.46
EUR 1,017.87 7.87710 8,017.86
HKD 268,947.70 0.92198 247,964.40
SGD 3,573.03 5.3442 19,094.99
55. Government subsidies
a) Government subsidies related to assets
Items Amount included in the current Items
Category Amount presented profit or loss or used to offset the included in
on the losses of relevant costs the current
Notes to the financial statements Page 82
balance profit or
sheet loss or
used to
Amount for the
Current amount offset the
previous period
losses of
related
costs
Subsidies for
Deferred Other
transformation of low 43,032,780.00 252,422.00 234,909.80
income income
nitrogen projects
Support fund for
Deferred Other
sludge drying project 11,750,000.00 127,500.00 323,501.46
income income
circular economy
Government bond
Deferred Other
subsidies for sludge 5,100,000.00 323,501.46 127,500.00
income income
drying project
Subsidies for the
improvement of
Deferred Other
atmospheric 70,977,273.00 2,365,909.08 2,365,909.08
income income
environment quality
in Shenzhen
Special funds for
energy conservation Deferred Other
1,530,000.00 57,018.66 57,018.66
and emission income income
reduction
Funding scheme for
the motor energy Deferred Other
518,400.00 17,280.00 17,280.00
efficiency income income
improvement
Funding for
technological
Deferred Other
transformation 1,060,000.00 35,333.34 22,333.32
income income
investment project in
2021-2022
Total 133,968,453.00 3,178,964.54 3,148,452.32
b) Government subsidies related to revenue
Amount included in the current profit
Items included in the
or loss or used to offset the losses of
current profit or loss
Category Amount relevant costs
or used to offset the
Amount for the
Current amount losses of related costs
previous period
National High Multiplication
100,000.00 100,000.00 643,800.00 Other income
Plan
Refund of personal income
74,806.72 74,806.72 243,753.86 Other income
tax
Lump-sum subsidies for
128,000.00 Other income
training of workers on post
Subsidies for pilot
demonstration of industrial 200,000.00 Other income
"carbon peaking"
Subsidies for stabilizing
115,000.00 115,000.00 76,639.60 Other income
posts
Sci-tech innovation voucher 296,500.00 296,500.00 Other income
Subsidies for supporting
green and low-carbon
300,000.00 300,000.00 Other income
development projects of
enterprises
Notes to the financial statements Page 83
Amount included in the current profit
Items included in the
or loss or used to offset the losses of
current profit or loss
Category Amount relevant costs
or used to offset the
Amount for the
Current amount losses of related costs
previous period
Total 886,306.72 886,306.72 1,292,193.46
VI. Changes in the scope of consolidation
There were no changes to the companies included in the scope of consolidated statements
during the reporting period.
VII. Equity in other entities
1. Equity in subsidiaries
a) Structure of the enterprise group
Shareholding ratio
Main
Place of Nature of (%) Method of
Name of subsidiaries place of
registration business acquisition
business Direct Indirect
Shen Nan Dian (Zhongshan) Electricity
Zhongshan Zhongshan 55.00 25.00 Establishment
Electric Power Co., Ltd.
Shenzhen Shennandian Turbine Engineering
Engineering Technology Co., Shenzhen Shenzhen service 60.00 40.00 Establishment
Ltd.
Shenzhen Shen Nan Dian Sludge drying
Environment Protection Co., Shenzhen Shenzhen 70.00 30.00 Establishment
Ltd.
Shenzhen Server Petrochemical Energy trade
Shenzhen Shenzhen 50.00 Establishment
Supplying Co., Ltd.
Shenzhen New Power Industrial Electricity
Shenzhen Shenzhen 75.00 25.00 Establishment
Co., Ltd.
Shen Nan Energy (Singapore) Investment
Singapore Singapore 100.00 Establishment
Co., Ltd.
Hong Kong Xingdesheng Co., Hong Hong Investment
100.00 Establishment
Ltd. Kong Kong
Zhongshan Shen Nan Dian Warehousing
Zhongshan Zhongshan 80.00 Establishment
Warehousing Co., Ltd.
Zhuhai Hengqin Zhuozhi Investment
Investment Partnership Zhuhai Zhuhai 99.96 Establishment
Enterprise (Limited Partnership)
b) Significant non-wholly-owned subsidiaries
Shareholding
Current profit or
ratio of
loss attributable to Ending balance of
Name of subsidiaries minority
minority minority equity
shareholders
shareholders
(%)
Shen Nan Dian (Zhongshan) Electric
20.00 -4,797,782.18 -104,957,452.13
Power Co., Ltd.
Notes to the financial statements Page 84
c) Key financial information of major non-wholly-owned subsidiaries
Ending balance /RMB Balance at the end of last year/RMB
Name of
Non- Non- Non-
subsidiaries Current Total Current Total Current Non-current Total Current Total
current current current
assets assets liabilities liabilities assets assets assets liabilities liabilities
assets liabilities liabilities
Shen Nan Dian
(Zhongshan)
Electric Power Co., 46,730,850.08 211,989,456.34 258,720,306.42 778,465,223.72 5,042,343.35 783,507,567.07 43,407,571.96 216,418,067.18 259,825,639.14 755,501,588.98 5,122,399.93 760,623,988.91
Ltd. ("Zhongshan
Electric Power")
Current amount/RMB Amount for the previous period/RMB
Name of
Total Total
subsidiaries Operating Cash flow from Operating Cash flow from
Net profit comprehensive Net profit comprehensive
revenue operating activities revenue operating activities
income income
Shen Nan Dian
(Zhongshan) Electric
Power Co., Ltd. 43,549,971.34 -23,988,910.88 -23,988,910.88 -1,700,627.90 16,508,874.54 -30,324,465.11 -30,324,465.11 -53,373,996.76
("Zhongshan Electric
Power")
Notes to the financial statements Page 85
2. Equity in the joint venture arrangements or associates
a) Significant joint ventures or associates
Accounting
Shareholding ratio (%)
Name of joint Main treatment for
Place of Main business
ventures or place of investment in joint
registration activities
associates business Direct Indirect ventures or
associates
Huidong Server
Renshan Renshan
Harbor
Town, Town,
Comprehensive Wharf operation 40.00 Equity method
Huidong Huidong
Development
County County
Company
Jiangsu
Liaoyuan
Environmental Yixing, Yixing, Environmental
9.935 Equity method
Protection Jiangsu Jiangsu protection
Technology Co.,
Ltd.
b) Key financial information of joint ventures or associates
Balance at the end of the previous
Ending balance/Current amount
year/Amount for the previous period
Liaoyuan Liaoyuan
Environmental Huidong Server Environmental Huidong Server
Protection Protection
Total of investment book
79,175,883.44 4,748,821.29 79,082,076.44 4,414,021.80
value
Total amounts of the
following items calculated
at shareholding ratio
- Net profit 1,308,357.00 334,799.49 6,208,396.44 -2,572,633.39
- Other comprehensive
income
- Total comprehensive
1,308,357.00 334,799.49 6,208,396.44 -2,572,633.39
income
VIII. Risks associated with financial instruments
The Company's main financial instruments include equity investments, notes receivable,
long-term and short-term borrowings, accounts receivable, accounts payable, other
payables, etc. See details of each financial instrument in related items of Note III (X).
Risks associated with these financial instruments and the risk management policies
adopted by the Group to mitigate these risks are described below. The Group's
management manages and monitors these exposures to ensure that the risks are controlled
within certain limits.
The Company adopts the sensitivity analysis technique to analyze the possible impact of
reasonable and possible changes in risk variables on the current profit or loss or
Notes to the financial statements Page 86
shareholders' equity. As any risk variable seldom changes in isolation, and the correlation
between the variables will have a significant effect on the final affected amount of the
change of a risk variable, the following contents are carried out under the assumption that
the change of each variable is independently:
1. Credit risk
The credit risk refers to the risk of financial loss to the other party due to the failure of one
party to perform its obligations financial instruments. The Company mainly faces
customer credit risks caused by sales on account. Prior to the conclusion of a new contract,
the Company will evaluate the credit risk of the new customer, including external credit
ratings and bank reference certificate under some circumstances (if it is readily available).
The Company has set a credit limit for each customer, which is the maximum amount
without additional approval.
The Company ensures its overall credit risk remains within a controllable range through
quarterly monitoring of existing customers' credit ratings and monthly review of accounts
receivable aging analysis. When monitoring the customers' credit risks, the Company will
divide them into groups by their credit characteristics. Customers classified as "high risk"
are placed on the restricted customer list, and the Company can extend credit to them in
future periods only with additional approval. Otherwise, the Company must request
advance payment for the corresponding amounts.
2. Market risk
Market risk associated with financial instruments refers to the risk that fair value or future
cash flows of financial instruments fluctuate due to variations in market prices, and it
includes exchange rate risk, interest rate risk and other price risks.
(1) Interest rate risk
The Company's risk of changes in cash flows of financial instruments due to changes in
interest rates is mainly related to bank borrowings with floating interest rates.
Sensitivity analysis of interest rate risk:
Sensitivity analysis of interest rate risk is based on the following assumptions:
Changes in market interest rates affect the interest income or expenses of the variable rate
financial instruments. For fixed-rate financial instruments measured at fair value, changes
in market interest rates only affect their interest income or expenses. For derivative
financial instruments designated as hedging instruments, changes in market interest rates
Notes to the financial statements Page 87
affect their fair value and all interest rate hedges are highly effective. Changes in the fair
value of derivative financial instruments and other financial assets and liabilities are
calculated using the cash flow discount method at the market interest rate on the balance
sheet date.
As of June 30, 2023, the Company's bank loan interest calculated at floating interest rates
amounted to RMB1,644,773.76. On the basis of the above assumptions and with other
variables unchanged, it is assumed that the pre-tax impact of a 5% change in interest rate
on the current profit or loss and shareholders' equity is as follows:
Current amount Same period last year
Change in
interest rate Impact on Impact on
Impact on profit Impact on profit
shareholders' equity shareholders' equity
Increasing
by 5%
-82,238.69 -82,238.69 -188,647.52 -188,647.52
Decreasing
by 5%
82,238.69 82,238.69 188,647.52 188,647.52
(2) Exchange rate risk
Foreign exchange risk refers to the risk of losses arising from the exchange rate
fluctuation. The Company's exposure to foreign exchange risk is mainly related to US
dollars. As at June 30, 2023, except for the balance of foreign currency monetary items in
Note V(XLVI), the Company's assets and liabilities were the balance in RMB. The
foreign exchange risk arising from the assets and liabilities of such foreign currency
balances may have an impact on the Company's operating results.
3. Liquidity risk
The term "liquidity risk" refers to the risk of shortage of funds when an enterprise fulfills
its obligations of settlement by delivery of cash or other financial assets. It is the
Company's policy to ensure that it has sufficient cash to repay its debts as they fall due.
The liquidity risk is under the centralized control of the Company's Finance Department.
The Finance Department ensures that the Company has sufficient funds to repay its debts
under all reasonable forecast circumstances by monitoring its cash balance, marketable
securities that can be realized at any time and rolling forecast of the cash flow in the next
12 months.
IX. Related parties and related party transactions
Notes to the financial statements Page 88
1. Parent company of the Company
None of the shareholders of the Company holds a stake exceeding 50%, and control over
the Company cannot be established through other means. Therefore, the Company does
not have a parent company.
2. Subsidiaries of the Company
For details of the Company's subsidiaries, please refer to "VII. (I) Equity in Subsidiaries".
3. Joint ventures and associates of the Company
For details of significant joint ventures or associates of the Company, please refer to "VII.
(II) Equity in joint venture arrangements or associates".
4. Other related parties
Relationships between other related parties
Name of other related parties
and the Company
Shenzhen Energy Group Co., Ltd. (hereinafter referred Legal person holding more than 5% of the
to as "Energy Group") Company's shares
Legal person holding more than 5% of the
Shenzhen Guangju Industrial Co., Ltd.
Company's shares
Legal person holding more than 5% of the
HONG KONG NAM HOI (INTERNATIONAL) LTD.
Company's shares
Legal person who indirectly holds more than
Shenzhen Capital Holdings Co., Ltd. 5% of the Company's shares through Energy
Group
Directors, supervisors, senior officers of the Company Key management personnel
5. Receivables from and payables to related parties
a) Receivables
Book balance at the end of Book balance at the end
Project name Related party
period of the previous year
Other
receivables
Huidong Server 14,911,484.45 14,740,501.44
Huidong Server co-
905,705.59 900,414.01
managed account
Total 15,817,190.04 15,640,915.45
X. Commitments and contingencies
Notes to the financial statements Page 89
1. Significant commitments
There were no commitments required to be disclosed by the Company as at June 30, 2023.
2. Contingencies
There were no contingencies required to be disclosed by the Company as at June 30, 2023.
XI. Events after the balance sheet date
The Company had no subsequent events that need to be disclosed as of the reporting date.
1. Significant non-adjusting events
None
2. Notes to other events after the balance sheet date
None
XII. Other significant matters
Segment information
1、 Determination basis and accounting policies for reporting segments
According to the Company’s internal organizational structure, management
requirements and internal reporting system, the Company's operating business is
divided into three business divisions, i.e. electricity generation, electricity
engineering and other businesses. The Company’s management regularly evaluates
the business performance of these divisions to determine the allocation of resources
and evaluate their performance.
Information on segment reporting is disclosed according to the accounting policies
and measurement standards adopted by each segment when reporting to the
management, and these measurement bases are consistent with the accounting and
measurement bases when preparing the financial statements.
2、 Financial information of reporting segments
Electricity
Electricity generation
Item engineering Other segments Inter-segment offset Total
division
division
Operating
revenue
260,912,625.36 19,368,926.99 550,285.74 9,563,653.04 271,268,185.05
Notes to the financial statements Page 90
Electricity
Electricity generation
Item engineering Other segments Inter-segment offset Total
division
division
Operating
costs
281,278,611.26 13,411,721.57 84,388.80 9,406,791.73 285,367,929.90
Total assets 1,970,158,049.37 96,168,091.09 396,943,342.40 480,750,700.24 1,982,518,782.62
Total
liabilities
757,736,515.40 59,459,733.17 36,353,724.25 221,379,589.61 632,170,383.21
XIII. Notes to the main items of the parent company's financial statements
1. Accounts receivable
a) Accounts receivable disclosed by aging
Aging Ending balance Ending balance last year
Within 1 year 54,764,958.01 47,995,982.82
More than 3 years
Sub-total 54,764,958.01 47,995,982.82
Less: provision for bad debts
Total 54,764,958.01 47,995,982.82
b) Disclosure of accounts receivable by category based on provision method for
bad debts
Ending balance
Book balance Provision for bad debts
Category
Ratio of Book value
Amount Ratio (%) Amount provision
(%)
Provision for bad
debts accrued on an
individual basis
Provision for bad
debts by portfolio of 54,764,958.01 100 54,764,958.01
risk characteristics
Including: risk-free
54,764,958.01 100 54,764,958.01
portfolio
Total 54,764,958.01 100 54,764,958.01
Ending balance last year
Category
Book balance Provision for bad debts Book value
Notes to the financial statements Page 91
Ratio of
Amount Ratio (%) Amount provision
(%)
Provision for bad
debts accrued on an
individual basis
Provision for bad
debts by portfolio of 47,995,982.82 100 47,995,982.82
risk characteristics
Including: risk-free
47,995,982.82 100 47,995,982.82
portfolio
Total 47,995,982.82 100 47,995,982.82
Provision for bad debts made by portfolio:
Ending balance
Name
Accounts receivable Provision for bad debts Ratio of provision (%)
Electricity charges
54,764,958.01
receivable
Total 54,764,958.01
c) Top 5 accounts receivable in terms of ending balances due from debtors
Ratio in the
Ending balance
balance of
Company name Book balance of the provision
accounts
for bad debts
receivable (%)
No.1 54,764,958.01 100
Total 54,764,958.01 100
2. Other receivables
Item Ending balance Ending balance last year
Interest receivable
Dividends receivable
Other accounts receivable 919,550,297.33 851,189,111.89
Total 919,550,297.33 851,189,111.89
a) Other accounts receivable
(1) Disclosure by aging
Aging Ending balance Ending balance last year
Notes to the financial statements Page 92
Aging Ending balance Ending balance last year
Within 1 year 520,717,149.91 452,449,473.00
1-2 years 94,734,608.45 94,733,821.40
2-3 years 19,926.83 19,926.83
More than 3 years 331,408,255.58 331,315,534.10
Sub-total 946,879,940.77 878,518,755.33
Less: provision for bad debts 27,329,643.44 27,329,643.44
Total 919,550,297.33 851,189,111.89
(2) Disclosure by category
Ending balance
Book balance Provision for bad debts
Category
Ratio of Book value
Amount Ratio (%) Amount provision
(%)
Provision for
bad debts
27,617,758.22 2.92 27,329,643.44 98.96 288,114.78
accrued on an
individual basis
Provision for
bad debts by
919,262,182.55 97.08 919,262,182.55
portfolio of risk
characteristics
Including: low-
919,262,182.55 97.08 919,262,182.55
risk portfolio
Total 946,879,940.77 100 27,329,643.44 3.11 919,550,297.33
Ending balance last year
Book balance Provision for bad debts
Category
Ratio of Book value
Amount Ratio (%) Amount provision
(%)
Provision for
bad debts
27,617,758.22 3.14 27,329,643.44 98.96 288,114.78
accrued on an
individual basis
Provision for
bad debts by
850,900,997.11 96.86 850,900,997.11
portfolio of risk
characteristics
Including: low-
850,900,997.11 96.86 850,900,997.11
risk portfolio
Total 878,518,755.33 100.00 27,329,643.44 3.11 851,189,111.89
Notes to the financial statements Page 93
Provision for bad debts made on an individual basis:
Ending balance
Name
Provision for Ratio of Reason for
Book balance
bad debts provision (%) provision
Estimated to be
Individual income tax 2,470,039.76 2,470,039.76 100.00
irrecoverable
Dormitory amounts Estimated to be
1,736,004.16 1,736,004.16 100.00
receivable irrecoverable
Huiyang County
Estimated to be
Kangtai Industrial 14,311,626.70 14,311,626.70 100.00
irrecoverable
Company
Accounts receivable Estimated to be
7,498,997.87 7,498,997.87 100.00
from individuals irrecoverable
Estimated to be
Others 1,601,089.73 1,312,974.95 82.01
irrecoverable
Total 27,617,758.22 27,329,643.44 98.96
(3) Provision for bad debts
First stage Second stage Third stage
Expected credit Expected
Provision for bad debts Expected credit loss over the credit loss over Total
loss for the next whole life the whole life
12 months (without credit (with credit
impairment) impairment)
Beginning balance 27,329,643.44 27,329,643.44
Beginning balance in the
current period
- Carried forward to the
second stage
- Carried forward to the
third stage
- Reversal to the second
stage
- Reversal to the first stage
Provision in the current
period
Reversal in the current
period
Charge-off in the current
period
Write-off in current period
Other changes
Ending balance 27,329,643.44 27,329,643.44
(5) Classification by nature of payment
Notes to the financial statements Page 94
Book balance at the end of Book balance at the end of the
Nature of payment
period previous year
Transactions beween related parties 919,379,250.99 850,503,678.18
Dormitory amounts receivable 1,736,004.16 1,736,004.16
Deposits receivable 1,601,089.73 1,601,089.73
Accounts receivable from
individuals
7,591,575.29 7,615,145.44
Others 16,572,020.60 17,062,837.82
Sub-total 946,879,940.77 878,518,755.33
Less: provision for bad debts 27,329,643.44 27,329,643.44
Total 919,550,297.33 851,189,111.89
3. Long-term equity investments
Ending balance Ending balance last year
Item Provision
Book Provision for Book
Book value for Book value
balance impairment balance
impairment
Investments
in 718,091,322.09 445,002,245.26 273,089,076.83 718,091,322.09 445,002,245.26 273,089,076.83
subsidiaries
Investments
in joint
ventures 79,175,883.44 79,175,883.44 79,082,076.44 79,082,076.44
and
associates
Total 797,267,205.53 445,002,245.26 352,264,960.27 797,173,398.53 445,002,245.26 352,171,153.27
a) Investments in subsidiaries
Provision for
Ending balance
Increase in Decrease in impairment
Ending balance of the
Investees the current the current Ending balance made in the
last year provision for
period period current
impairment
period
Shenzhen Server
Petrochemical
26,650,000.00 26,650,000.00
Supplying Co.,
Ltd.
Shen Nan Energy
(Singapore) Co., 6,703,800.00 6,703,800.00
Ltd.
Shenzhen New
Power Industrial 71,270,000.00 71,270,000.00 13,709,556.49
Co., Ltd.
Shen Nan Dian
(Zhongshan)
410,740,000.00 410,740,000.00 410,740,000.00
Electric Power
Co., Ltd.
Shenzhen
6,000,000.00 6,000,000.00
Shennandian
Notes to the financial statements Page 95
Provision for
Ending balance
Increase in Decrease in impairment
Ending balance of the
Investees the current the current Ending balance made in the
last year provision for
period period current
impairment
period
Turbine
Engineering
Technology Co.,
Ltd.
Shenzhen Shen
Nan Dian
Environment 55,300,000.00 55,300,000.00 20,552,688.77
Protection Co.,
Ltd.
Zhuhai Hengqin
Zhuozhi
Investment
Partnership 141,427,522.09 141,427,522.09
Enterprise
(Limited
Partnership)
Total 718,091,322.09 - - 718,091,322.09 - 445,002,245.26
Notes to the financial statements Page 96
b) Investments in associates, joint ventures
Increase/decrease in the current period
Profit or loss Ending
of Cash balance of
Ending Adjustment of
Decrease investment Changes dividends or Provision the
Investees balance last Additional other Ending balance
in recognized in other profits for Others provision
year investment comprehensive
investment under the equity declared and impairment for
income
equity distributed impairment
method
1. Associates
Jiangsu Liaoyuan
Environmental
Protection 79,082,076.44 1,308,357.00 1,214,550.00 79,175,883.44
Technology Co.,
Ltd.
Sub-total 79,082,076.44 - - 1,308,357.00 - - 1,214,550.00 - - 79,175,883.44
Total 79,082,076.44 - - 1,308,357.00 - - 1,214,550.00 - - 79,175,883.44
Notes to the financial statements Page 97
4. Operating revenue and operating costs
Current amount Amount for the previous period
Item
Revenue Costs Revenue Costs
Main business 123,160,499.18 167,370,297.62 96,445,440.00 153,240,868.95
Other business 44,602,733.18 14,977.28 32,628,912.66 2,830.19
Total 167,763,232.36 167,385,274.90 129,074,352.66 153,243,699.14
5. Investment income
Amount for the
Item Current amount
previous period
Income from long-term equity investments accounted for
1,308,357.00
by using the equity method
Investment income from trading financial assets during the
9,342,507.91 28,915,295.59
holding period
Dividend income earned during the holding period of
340,206.13
investments in other equity instruments
Dividends from long-term equity investments 6,717,600.82
Total 17,708,671.86 28,915,295.59
XIV. Supplementary information
1. Breakdown of the current non-recurring profit or loss
Item Amount Description
Profit or loss from disposal of non-current assets 106,021.61
Tax returns, deduction and exemption approved beyond
the authority or without official approval documents
Government subsidies included in the current profit or loss
(except for government subsidies closely related to the
4,065,271.26
enterprise business, obtained by quota or quantity at
unified state standards)
Expenses for using funds charged from non-financial
enterprises and included in the current profit or loss
Gains arising from the difference between the investment
costs of acquiring subsidiaries, associates and joint
ventures in short of the fair value of the identifiable net
assets of the investees enjoyed by the enterprise at the time
of acquiring investment
Profit or loss from exchange of non-monetary assets
Profit or loss from entrusting others to invest in or manage
assets
Various provision for asset impairment made due to force
majeure factors, such as natural disasters
Profit or loss from debt restructuring
Notes to the financial statements Page 98
Item Amount Description
Enterprise reorganizing expenses, such as employee
accommodation costs and integration expenses, etc.
Profit or loss in excess of the fair value arising from
transactions with obviously unfair transaction price
Current net profit or loss of the subsidiaries from business
combination under the same control from the beginning of
the period to the merger date
Profit or loss from contingencies unrelated to the
Company's normal business
Profit or loss from changes in fair value arising from
holdings of trading financial assets and trading financial
liabilities and investment income from disposal of trading
financial assets, trading financial liabilities and available- 9,342,507.91
for-sale financial assets, except for the effective hedging
business related to the Company's normal business
operations
Reversal of provision for impairment of accounts
receivable subject to separate impairment test
Profit or loss from external entrusted loans
Profit or loss from changes in fair value of investment
properties subsequently measured using the fair value
model
Impact of one-off adjustment to the current profit or loss in
accordance with laws and regulations on taxation and
accounting on the current profit or loss
Revenue of trusteeship fees from entrusted operation
Other non-operating revenue and expenses other than the
4,993,878.46
above items
Other profit or loss that meet the definition of non-
recurring profit or loss
Sub-total 18,507,679.24
Less: effect of income tax
Less: minority equity impact 871,088.17
Total 17,636,591.07
2. Rate of return on net assets and earnings per share
Weighted
Earnings per share (RMB)
average rate of
Profit during the reporting period
return on net Basic earnings per Diluted earnings per
assets (%) share share
Net profit attributable to ordinary
-2.59 -0.0618 -0.0618
shareholders of the Company
Net profit attributable to ordinary
shareholders of the Company after
-3.82 -0.0910 -0.0910
deducting non-recurring profit or
loss
Shenzhen Nanshan Power Co., Ltd.
August 23, 2023
Notes to the financial statements Page 99
