粤电力Ａ(000539)粤电力Ｂ2004年年度报告摘要（英文版）

GUANGDONG ELECTRIC POWER DEVELOPMENT CO., LTD EXTRACT OF THE ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2004 Chapter 1 Important Notes , 1.1 The Board of Directors assures that there is no significant omission of material facts, nor untrue presentation, nor seriously misleading statements contained in the information hereinto. The Board of Directors severally and jointly accepts responsibility for the veracity, accuracy and completeness of the information contained in this annual report. Extracts of the annual report is extracted from the annual report for the year ended 31 December 2004 .The investor is advised to read the annual report for details. 1.2 No directors claim uncertainty or dissidence on the veracity, accuracy and completeness of the information contained in this annual 1.3 The directors absent the Board of directors Meeting: Name reason consign Lao Qiongjuan Fall ill None Cao Techao Out for bussiness None 1.4 Both Pan-China Certified Public Accountants, Ltd and PricewaterhouseCooperZhong Tian CPAs Co., Ltd.,(“PricewaterhouseCoopers”) have issued auditor’ s report with unqualified opinion for the Company. 1.5 Chairman of the Board of Directors, Pan Li, General Manager, Liu Luoshou, Deputy General Manager Yuan Sujie, Finance Department Manager, Liu Xuemao severally and jointly accept responsibility for the correctness, accuracy and completeness of the information contained in this annual report. The reader is advised that this report has been prepared originally in Chinese. In the event of a conflict between this report and the original Chinese version or difference in interpretation between the versions of the report, the Chinese language report shall prevail. 1 Chapter 2 Company Profile 1.4 General Information of the Company Abbreviation of Yue Dian Li A and Yue Dian Li B Company’ s shares: Code of 000539、200539 Company’ sshares: Place of listing of Shenzhen Stock Exchange Company’ s shares: Company’ s 10/F., Boli Commercial Centre, Guang Fa Garden, 498 Huan Shi Dong Road, registered address Guangzhou, Guangdong Province Company’ s office 23-26/F., Yudean Plaza, 2 Tian He Dong Road, Guangzhou, Guangdong Province address: Postal code of the 510075 registered address Postal code of the 510630 office address Company’ s Web site http://www.ged.com.cn Company’ s E-mail ged@ged.com.cn address: 1.5 Correspondence Secretary to the Board of Directors: Representatives on security issues: Name Li Xiaoqin Liu Wei 26/F., Yudean Plaza, 2 Tian He Dong 26/F., Yudean Plaza, 2 Tian He Dong Address Road, Guangzhou, Guangdong Province Road, Guangzhou, Guangdong Province Telephone (020)87570276 (020)87570251 Fax (020)85138084 (020)85138084 E-mail address lxq@ged.com.cn liuw@ged.com.cn Chapter 3 Extracts of accounting and financial data 3.1 Accountant Highlights Unit: RMB’000 2003 2003 2002 2002 2004 As Restated Before Restated Fluctuation % As Restated Before Restated 0preating Revenue 7,115,657 5,996,285 5,996,285 18.67% 5,586,730 5,586,730 Operating profit 1,661,992 2,013,170 2,013,170 -17.44% 2,079,422 2,060,367 Net profit 936,730 1,127,362 1,127,362 -16.91% 1,179,746 1,160,691 Net cash from 1,610,808 2,009,091 2,009,091 -19.82% 2,592,691 2,573,636 operating activities 31 December 31 December 31 December 31 December 20 31 December 2003 2003 2002 As 02 Before Restat 2004 As Restated Before Restated Fluctuation % Restated ed Total assets 13,543,508 12,547,943 12,547,943 7.93% 11,872,826 11,853,793 Shareholders’equity 3.44% 7,397,470 7,378,397 (excluding MI) 8,165,975 7,894,096 7,894,096 3.2 Financial Highlights 2 2003 2003 2002 2002 2004 As Restated Before Restated Fluctuation % As Restated Before Restated Earnings per share(Rmb) 0.35 0.42 0.44 -16.67% 0.44 0.44 Earnings on net asset (%) 11 14 15 -21.43% 16 16 Net cash flow per share from operating activities 0.6 0.76 0.76 -21.05% 0.97 0.97 31 December 31 December 31 December 31 December 20 31 December 2003 2003 2002 As 02 Before Restat 2004 As Restated Before Restated Fluctuation % Restated ed Net assets per share(Rmb) 3.07 2.97 3.01 3.37% 2.77 2.77 3.3 Differences between the financial reports for domestic and overseas purposes √ Applicable Not applicable RMB’ 000 Consolidated profit Consolidated net attributable to the Group assets Rmb’000 Rmb’000 As per the statutory financial statements (audited by certified public accountants in the PRC) 948,467 8,105,332 Impact of IFRS adjustments: Amortization of deferred staff costs (10,219) 51,091 Difference in amortization of land use rights (3,171) 65,970 Deferred tax (3,801) 32,171 Provision for the early retirement obligation 12,772 (81,408) Difference in Appropriation for Staff and Workers’Bonus and Welfare Fund (8,793) - Others 1,475 (7,181) As restated after IFRS adjustments 936,730 8,165,975 Chapter 4 Changes in share capital and information about shareholders 4.1 Summary of changes in share capital Unit: Share Balance at Changes beginning of during year Balance at end of Type of Shares year （+,-） the year I. Non-listed shares 1. Promoters’shares 1,553,175 - 1,553,175 Including: 3 - - State-owned shares 1,375,007.4 1,375,007.4 - - Domestic legal person shares 178,167.6 178,167.6 - - Foreign legal person shares - - - - Others - - - 2.Subscriber legal person shares 49,413 49,413 3.Employee shares - - - 4.Preferred Shares or others: - - - - Total of non-listed shares 1,602,588 1,602,588 II. Listed shares - 1.Domestic listed RMB ordinary 391,476 391,476 shares 2. Domestic listed foreign shares 665,340 665,340 - 3. Overseas listed foreign shares 4. Others Total of listed shares 1,056,816 1,056,816 - III. Total shares 2,659,404 2,659,404 - 4.2 The top 10 shareholders and details of the share held by the 10 shareholders Proportion Number of Number of to total shares Name of Changes shares held at share capital Nature of impawned or Nature of share shareholders during year end of the year (%) shares held frozen holders Guangdong - 1,333,800,000 50.15 Non-listed - State-owned Electric Power enterprise Holding Co. China Cinda Asset - 87,750,000 3.3 Non-listed Unknown State-owned Management enterprise Corporation Guangdong - 85,082,400 3.2 Non-listed - State-owned Electric Power enterprise Development Co. Ltd Guangdong - 43,875,000 1.65 Non-listed Unknown - Guangkong Group CMBLSA RE FTIF 6,179,260 24,418,494 0.92 Listed Unknown Foreign TEMPLENTON - invested ASIAN GRW FD enterprise GTI 5496 Naito Securities 13,768,030 20,878,536 0.79 Listed Unknown Foreign Co., Ltd Invested enterprise Xiangcai Securities - 17,855,298 0.67 Listed Unknown - 4 Co., Ltd Great Wall -10,436,253 16,843,697 0.63 Listed - - Securities Co., Ltd Toyo Securities 7,349,644 16,132,761 0.61 Foreign Asia Limited – Listed Unknown Invested A/C Client enterprise TEMPLETON - 16,090,315 0.61 Listed UnknownForeign invested WORLD enterprise FUND,INC. The relationship and consistent Guangdong Electric Power Development Co. Ltd, the third of the top 10 of above shareholders shareholders, is a subsidiary of Yudean, which is the No.1 shareholder; it is unknown whether relationship exists between other shareholders. Number of shares Name of shareholders held at year-end Type CMBLSA RE FTIF TEMPLENTON ASIA N GRW 24,418,494 B share FD GTI 5496 Naito Securities Co., Ltd 20,878,536 B share Xiangcai Securities Co., Ltd 17,855,298 A share Great Wall Securities Co., Ltd 16,843,697 A share TOYO SECURITIES ASIA LIMITED-A/C 16,132,761 B share CLIENT. TEMPLETON WORLD FUND,INC. 16,090,315 B share AIZAWA SECTURITIES CO., LTD 11,350,959 B share TEMPLETON DRAGON FUND,INC. 11,135,658 B share TEMPLETON EMERGING MARKETS 10,714,365 B share INVESTMENT TRUST Northwest Securities Co., Ltd 9,606,841 A share 4.3 Notes to major shareholders and actual controllers 4.3.1 Changes of major shareholders and actual controllers Applicable √ Not applicable 4.3.2 Detail information of major shareholders and actual controllers Yudean holds 50.15% shares of the Company and is the major shareholder of the Company. Pursuant to the Business License issued by the Guangdong Commercial Bureau, Yudean is a wholly state-owned limited company. Its registered capital is Rmb 12,000,000,000 and its registered address is 33-36/F., Yudean Plaza, 2 Tian He Dong Road, Its legal representative is Mr. Pan Li. It is mainly engaged in management of power plants and power generation assets; construction of power plants; sales of electricity; repair and maintenance of electricity equipments; technology service on electricity industry; electricity investment; investment planning and consulting; information consulting service; sales of production materials (except for gold, silver, vehicle and dangerous chemistry materials). 5 4.3.2 The chart of the shareholding relationship between the Company and its Related control parties, Guangdong Yudean Group Co.,Ltd 100% 50.15% Guangdong electric power Development Co., Ltd. 3.20% The Company Chapter 5 Information about the Company’s Directors, Supervisors and senior management: 5.1 Changes in the shares held by the Company’ s Directors, Supervisors and Senior management √ Applicable Not applicable Shares held Gend Share held at Reason of Name Position Age Period of service at opening of er year end changes year Pan Li Chairman Male 50From 13/05/2002 on 0 0 Deng An Vice-Chairman Male 55From 13/05/2002 on 0 0 Hong Director Male 47From 13/05/2002 on 0 0 Rongkun Li Director Male 42From 18/08/2004 on 0 0 Zhuoxain LiuQian Director Male 50From 13/05/2002 on 0 0 Director Liu General Male 53From 28/10/2003 on 0 0 Luoshou Manager Cao Director Male 38From 13/05/2002 on 0 0 Techao Yao Director Male 40From 18/08/2004 on 0 0 Jiheng Loa Fema Director 50From 13/05/2002 on 0 0 Qiongjuan le Zou Xiao Director Male 40From 13/05/2002 on 0 0 ping Independent Wang Jun Male 46From 13/05/2002 on 0 0 director Zhang Independent Male 38From 13/05/2002 on 0 0 Zhiyue director Song Independent Male 41From 13/05/2002 on 2,750 2,750 Xianzhong director Cheng Independent Male 51From 13/05/2002 on 0 0 Xinxin director Zhu Independent Male 42From 13/05/2002 on 0 0 Baohe director Chairman of Yang Supervisory Male 39From 13/05/2002 on 0 0 Xuanxing Committee Xu Supervisor Male 59From 13/05/2002 on 0 0 6 Runxiong Xin Independent Male 41From 13/05/2002 on 0 0 Huanping supervisor Liang Independent Male 37From 13/05/2002 on 0 0 Ruyu supervisor Lin Supervisor Male 36From 13/05/2002 on 3,000 3,000 Weifeng Chen Supervisor Male 45From 15/05/2003 on 0 0 Chuyang Vice-General Xu Peijin Male 49From 28/10/2003 on 0 0 Manager Yuan Vice-General Male 44From 13/05/2002 on 0 0 Sujie Manager Luo Vice-General Male 37From 13/05/2002 on 1,128 1,128 Zhiheng Manager Secretary to Li Fema the Board of 33From 15/05/2003 on 0 0 Xiaoqing le Directors Liu Finance Fema 49From 13/05/2002 on 0 0 Xuemao manager le 5.2 Information of the directors and supervisors of the company employed by the shareholders √ Applicable Not applicable Position 9in Remunerations/allow Name Name of shareholder shareholders’ com Period of service ance received (Y/N) pany Guangdong Yudean Pan Li Chairman From 08/05/2001on Y Group Co. Guangdong Yudean Deng An General Manager From 08/05/2001 on Y Group Co. Guangdong Yudean Vice-General Hong Rongkun From 08/05/2001on Y Group Co. Manager Guangdong Yudean Vice-General Li Zhuoxian From 08/05/2001 on Y Group Co. Manager Guangdong Yudean Vice-General Liu Qian From 10/08/2003 on Y Group Co. Manager Guangdong Yudean Cao Techao Financial Minister From 08/08/2001 on Y Group Co. China Cinda Asset Management Co., Lao Qiongjuan Executor From 08/06/2002 on Y Guangzhou representative office Guangdong Zou Xiaoping Chairman From 08/08/2001on Y Guangkong Group Audit and Inspection Yang Xuanxing Yudean From 01/08/2001 on Y Minister of Yudean 5.3 Remuneration of directors, supervisors and senior managements of the Company Unit RMB √ Applicable Not applicable Total remuneration 2,840,000 Total amount paid to the top 660,000 7 three directors Total amount paid to the top 910,000 three senior managers Allowance for independent Person per 80,000 directors annum Other remunerations for Nil independent directors Name of the Directors and supervisors who did not Pan Li, Deng An, Hong Rongkun, Li Zhuoxian, Liu Qian, Chao Techao, Lao receive remuneration or Qiongjuan, Zou Xiaoping, Yang Xuanxin, and Xu Runxiong. allowance from the Company Remuneration band Number of people Above RMB 30.000 1 Between RMB10,000- 10 30,000 Below RMB 10,000 7 Chapter 6 REPORT OF THE BOARD OF DIRECTORS 6.1 Discussion and Analysis on the General Operating Activity during the Reporting Period In the year of 2004, the Company undergone the difficult times for shortage of coal supply, continuously rising of fuel transporting price and lack of high quality coal. The Company ensured its coal supply through professional management and reliable supply chain, and no suspending of electricity generation occurred; meanwhile, the Company was also aware of generator inspection and technology innovation, in order to maintain the stable operating and enhance the effectiveness of the generators. As a result, the Company satisfactorily accomplished its annual electricity generating tasks and even exceeded the budget. At the end of 2004, the total generation volume of the Company amounted to 21.887 billion KWH, and on-grid volume totalled 20.457 billion KWH, increased by 14.85% and 15.04% respectively as compared to those of last year. The continuously increasing price of fuel and transporting has imposed large pressure on the Company’ s achievement and exaltation, especially for those companies locate in remote regions, which lack of coal resources. In 2004 the average unit price of coal increased by 40% as compared with the same period in last year, and which was resulted in turn affected the Company’ s profit margin. To overcome those problems, the Company focuses on secure manufacturing management, increasing electric power generating, enhancing control over budget and cost, exploring its internal potential, accelerating its construction in process and enlarge its profitability through manufacturing scale expansion. With the efforts the Company has made, its financial condition, total assets and operating income maintain at a stable level. Besides, its decrease of profit was less than increase of cost. At the end of 2004, the Company’ s total assets amounted to RMB 13.54 billion, and net assets amounted to RMB 8.166 billion, with 6.54% and 3.44% increase respectively, as compared to last year’ s figure. The operating revenue amounted to RMB 7.116 billion. The net profit was RMB 0.937 billion. As calculated on basis of 2,659,404,000 shares issued by the Company, the earnings per share was RMB 0.35, with decrease of 16.67% in comparison to last year’ s figure. With the reformation of electric power system, the Company has clarified its position and development strategy within the new industry. After more than 1 year’ s solid work, the Company has formed a continuable development status that mainly bases on electric power generation. Recently, the Company has 5 electric power generation projects in production and the installed generation capacity is 3,285 MWH; 9 projects in progress and the installed generation capacity is 2,250 MWH; 3 projects in exploration, and the installed generation 8 capacity is 7,000 MWH. The total generation capacity of projects in progress and exploration is 2.8 times of projects in production. From that we can infer that the Company has great continuable development ability. Beyond those mentioned above, the Company achieved splendid performance in expanding business into backward and forward industries. Furthermore, the Company also succeeded in exploring business in resourceful provinces. Although it is estimated that the shortage of electric power and coal supply, difficulty in security production and persistent high price of coal-transporting will continuously exist, the company still face opportunities together with challenges. The Company will consistently exert efforts on maximizing corporation’ s value and shareholders’benefit through increasing its competitiveness on core business and enhancing integrated continuable development ability. 6.2 Information of operating revenue by industry or by product Unit：RMB’ 000 Operating Fluctuation GP Fluctuation Fluctuation Industry/ revenue from Operating of the margin of the cost of the GP Product sales of cost revenue (%) (%) margin (%) power (%) Electricity, Steam, Hydrother 7,115, 657 5,453, 665 23.36 18.67 36.92 -10.21 mal Water Industry Including: related - - - - - - party transaction Electricity 7,115, 657 5,453, 665 23.36 18.67 36.92 -10.21 Including: related - - - - - - party transaction Principle of transferring Fair price Explanation on necessity and persistence of related No party transaction 6.3 Information of operating revenue by geographic segment Unit：RMB’ 000 Net revenue generated from the Fluctuation of the revenue Geographic segment sales of power (%) Guangdong Province 7,115, 657 18.67 6.4 Information of the suppliers and customers Unit：RMB’000 Total purchase amount from the Accounting for the 3,741,318 90.78% top five suppliers percentage of total purchase Total sales amount to the top Accounting for the 7,115, 657 100.00% five customers percentage of total sales 9 6.5 Information of invested companies’operation (applicable to the companies of which the Company holds more than 10% of the equity interest) Applicable √ Not applicable 6.6 Explanation of the significant changes in operation and its structure Applicable √ Not applicable 6.7 Explanation on the significant change in the profitability (GP margin) as compared to last year Applicable √ Not applicable Being affected by the significant rising price of coal and transportation, the Company’ s GP margin decreased from 33. 57% to 23.36% (10. 21% decrease, in comparison to last year’ s figure). Besides, the profitability slightly decreased too. 6.8 Analysis of the significant changes in the components of the operating results and profit Applicable √ Not applicable Analysis of the effects of significant change in the general financial status Applicable √ Not applicable 6.9 Explanations on the significant changes of the operating environment, macro economic policy and regulation, which already have affected /are affecting / will affect the Company’ s financial status and operation results. √ Applicable Not applicable th On 15 December 2004, the State Renovation and Development Committee issued a notice [Fa Gai Jia Ge (2004) No. 2909]. It suggests building up price linkage system between coal and eletricity. The first price linkage is supposed to base on the of electric coal at the end of May 2004. According to the average mark-up of electric coal from June to November, and the calculation formula of price linkage, the electric power supplying enterprises should bear 30% of the mark-up price. This regulation will help relieve cost pressure and allow the Company to maintain comparative stable profitability. 6.10 Information of the compliance with the profit forecast Applicable √ Not applicable 6.11 Information of the compliance with the business plan Applicable √ Not applicable 6.12 Information of the usage of proceeds from listing Applicable √ Not applicable Information of changes in project Applicable √ Not applicable 6.13 Information of the funds other than proceeds from listing 10 √ Applicable Not applicable Unit: RMB ’ 000 Percentage of completion Proceeds from Project name Project Amount the project The whole project is in progress as scheduled. The milestone node Shaoguan #11 39,000.00 completeness rate is Nil generator 68.42%. It is expected to put into trial-operation in first half year of 2005. Have signed construction Maoming Thermal contracts and some ‘ 辅机 Power Plant #6 100,510.00 合同’ . Have completed Nil Generators land acquisition and piling in plant areas etc. Meixian #5 and #6 0.00 The #5 generator has been The #5 generators put into operation in generator October 2004. Its total achieved total power generation was 0.14 power billion KWH. The generation construction of #6 amounted to generator has been almost 0.14 billion completed. It is expected KWH in 2004. to be put into trial- operation in 2005. Shanwei Electric Construction of the whole Power Plant Phase 330,890.00 project has been Nil 1 developed. Feasibility Report of LNG project has been approved by the government. Qianwan LNG Installed generator has Electric Power 120,900.00 Nil been enhanced to 3*390 Plant MW, and the company’ s investment interest increased to 40%. Feasibility Report of LNG project has been approved Huizhou LNG by the government. Electric Power 210,530.00 Nil Installed generator has Plant been enhanced to 3*390MW. Feasibility Report has been Zhanjiang Aoli Oil 183,370.00 submitted to the State Nil Electic Power Plant Department for approval. Guizhou Pannan The #1 generator will be Electric Power 62,420.00 put into trial-operation Nil Plant before the end of 2005. Shibei Mountain 69,510.00 Completed public bidding Nil Wind Power Project and some construction work. Huilai Electric 108,120.00 Established project Nil Power Plant company and started prophase preparation. Expansion project 2,030.00 Starting prophase Nil of Meixian Electric preparation. 11 Power Plant Maoming Bohe 1,300.00 Starting prophase Nil Electric Power preparation. Plant Desulfuration 224,890.00 The #5 generator group Nil project of Power desulfuration project has Plant been put into operation; the rest generator groups’ desulfuration projects are well progress as scheduled. Total 1,423, 470.00 - - 6.14 Board of Directors’explanation on the qualified audit opinion of auditors. Applicable √ Not applicable 6.15 Board of Directors’business plan for the new year(if any) Applicable √ Not applicable Profit forecast of 2005(if any) Applicable √ Not applicable 6.16 Profit appropriation or capital surplus transfer plan proposed by the Board of Directors Applicable √ Not applicable According to the operation result of 2004 and the future requirement of the company developement, the Board of Directors proposed following Profit Appropriation and Dividend Distribution Plan of 2004: The Company will set aside 10% of the net profit amounting to approximately RMB 939,674,100 to statutory surplus reserve totalling approximately RMB 93,944,710; 25% totalling approximately RMB 234,918,500 to discretionary surplus reserve and 5% totalling approximately RMB 46,983,700 million to statutory public welfare fund. The distributable reserve for 2004 is approximately RMB 563,804,500. Plus retained earning of RMB 230,419,400 brought forward from last year, the total distributable reserve for 2004 is RMB 794,223,900(According to the audit result of PricewaterhouseCoopers, the total distributable reserve for 2004 is RMB 765,496,400) . Board of Directors proposed the following plan for dividends: RMB 0.18(tax inclusive) per share for A shares and RMB 0.18 per share for B shares. Although the Company made profit during the reporting period, it has not issued dividend distribution plan yet. Applicable √ Not applicable Chapter 7 Significant Events 7.1 Acquisition of assets Applicable √ Not applicable 7.2 Sales of assets 12 Applicable √ Not applicable 7.3 Significant guarantee √ Applicable Not applicable Unit: RMB ‘ 000 Guarant e Guarantee Guarantee Guarantee Guarantee Guarante Guarantee e for related d object day amount e period complete party(Y/N) category d(Y/N) 1 January st Zhanjiang 1 Jan Normal 2002- 20 Electric 2002 1,500,000 guarantee August 2006 N N Total incurred guarantee amount 412,000 Total residual guarantee amount 263,000 Including: total residual related party - guarantee amount Total incurred guarantee amount 412,000 offered to subsidiary of listed company Total residual guarantee amount 263,000 offered to subsidiary of listed company Total amount of illegal guarantee - Percentage of guarantee amount to 3.24% net asset (%) 7.4 Capital transactions of related parties 7.4.1 Purchase and Sales to Related Parties Applicable √ Not applicable Unit: RMB’ 000 Related Sales and service to related Purchase and service from parties parties related parties Amount % Amount % Guangdong 0.00 0.00% 3,196,255.9 77.55 Electric Fuel Co Ltd Maoming 0.00 0.00% 26,068.7 100.00 Thermal Power Shaoguan 0.00 0.00% 297,274.1 7.21 Electric Power Plant Shaoguan 0.00 0.00% 28,472.7 85.21 Electric Power Plant Total 0.00 0.00% 3,548, 071.4 84.86 7.4.2 Amount due to and Amount due from related parties Applicable √ Not applicable 13 7.5 Entrust financial management Applicable √ Not applicable 7.6 Information of the commitments √ Applicable Not applicable Maoming Ruineng, a subsidiary of the Company, entered into a long-term loan contract with Shanghai Pudong Development Bank Guangzhou Branch for an amount of RMB 650 million on 1 March 2002. The Company issued a supporting letter for the loan and committed as follows: (1) Unless written consent by the creditor, the Company shall maintain its 51% equity interest in Maoming Ruineng. Before the rescission day, the disposition of the relevant equity interests should obtain the written consent by the creditor. (2) The Company was forbidden from any mortgage, pledge, retain or other guarantee on the direct or indirect equity interests held in Maoming Ruineng. (3) Except for requirement by law or regulation, the Company was forbidden from modifying the Articles of Association of Maoming Ruineng without written consent by the creditor. The balance of borrowings is RMB 483 million as at 31 December 2004. 7.7 Significant litigation or arbitration Applicable √ Not applicable 7.8 Information about the independent directors’work Name of Number of Number of Number of Number Note Independent meetings meetings meetings of Directors should be were consigned absence attended attended attended Wang Jun 5 3 1 1 Zhang Zhiyue 5 5 0 0 Song Xianzhong 5 5 0 0 Cheng Xinxin 5 2 3 0 Zhu Baohe 5 3 2 0 Objection raised by independent directors Applicable √ Not applicable Chapter 8 Report of the Supervisory Committee Applicable √ Not applicable (1) Summary of the Supervisory Committee’ s work done in 2004 In 2004, the Supervisors attended five meetings of the Board of Directors, the 2003 annual General Shareholders’Meetings, and three extraordinary General Shareholders’ Meetings of 2004. Details are as follows: The Supervisory Committee convened its first meeting of year 2004 on 8 April 2004 in 14 Shenzhen. The meeting has passed The Supervisory Committee’ s Annual Working Report, The Company’ s Annual Report and Extracts of Annual Report of 2003, the Proposal on Amendments of the Company’ s Article of Associations, the Proposal on the Increase of Investment in Guangdong Yudean Holding Western Investment Co., Ltd. (“Yudean Western”). The Supervisory Committee convened its second meeting of year 2004 on 16 July 2004 in Guangzhou, and reviewed and approved the proposal on establishing Maoming Zhenneng Thermal Power Ltd., Reviewed and approved the proposal on office renting in Yudean Park. The Supervisory Committee held its third meeting of year 2004 on 29 October 2004 in Guangzhou, and reviewed and approved the proposal on establishing Guangdong Yudean Jinghai Electric Power Plant; reviewed and approved the proposal on increasing the equity proportion of the Company in Shenzhen Guangqian Ltd; Reviewed and approved the proposal of Ruineng Ltd on purchasing fuel; Reviewed and approved the proposal of Zhanjiang Ltd on purchasing fuel; Reviewed and approved the proposal of Shaoguan Electric Power Plant on common production expenses apportionment; Reviewed and approved the proposal of Shaoguan Electric Power Plant on renting Long Huang Chong Ash Ground; Reviewed and approved the proposal on repayment of capital occupancy fees to Yudean Group. The Supervisors have assessed and monitored the operation of the Company during all the above meetings and considered the control system of the Company was efficient and the operation of the Company was prudent and compliant with relevant laws and regulations. In addition, the supervisors have enhanced the control on the daily operation by the monitoring control and the internal audit. They have enhanced the monitoring and supervision on the power of the senior management by attending the general meeting of the management and performing the audit procedures when there was resignation of the senior management. (2) Independent Opinion from the Supervisory Committee i. In accordance with relevant laws and regulations, as well as the Articles of Association, the Supervisory Committee exerted supervisions on the convening procedures and resolutions of Board of Directors’meetings and shareholders’meetings, the Board of Director’ s execution for the resolutions passed by shareholders’meetings, the performance of the Company’ s senior management, and the management system of the Company. The Supervisory Committee is of the opinion that during the reporting period, the operation of the Company and its decision-making procedures were noted legally, the system of internal controls was improved, and no illegal or improper activities in violation of the Company’ s Articles of Association and the interests of the Company and the shareholders by the Directors or General Manager were noted. ii In the Supervisory Committee’ s opinion, the auditor’ s reports with unqualified opinion issued by Pan-China Certified Public Accountants and PricewaterhouseCoopers Zhong Tian CPAs Co., Ltd. are true and fair, while the financial statements are a true reflection of the Company’ s financial status and operating results 15 iii For last 3 years, the Company did not have any other capital proceeding events. iv The Company had no significant acquisition or sale of assets in the reporting period. v The Supervisory Committee is of the opinion that related party transactions were conducted fairly and reasonably in the reporting period, the decision- making and information disclosure procedures was standardized, therefore, no activities that impair the interest of the listed company were incurred. (3) Assessment on the Company’ s operation and financial position In 2004, the Group’ s total electricity generation volume amounted to 21,887 million KWH, achieving 101.72% of the planned annual power generation of 21,517 million KWH, and an increase of 14.85% as compared to 19,057 million KWH in 2003. According to the audit report issued by Pan-China Certified Public Accountants Co Ltd., the Group’ s total assets amounted to RMB13.304 billion in 2004, the total sales amounted to RMB 7.151 billion. The net profit was RMB 0.948 billion. Earnings per share was RMB 0.357. The Company has got a satisfactory operating result in current year. Chapter9:Financial Statement 9.1 Audit opinion: The financial statements of 2004 has been audited by PricewaterhouseCoppers Zhong Tian CPAs Co., Ltd, and unqualified opinion was expressed in the international auditor’ s report 9.2 Consolidated income statement ,consolidated balance sheet, and consolidated cash flow statement 16 9.2.1 Balance Sheet 2004 2003 (As restated) ASSETS Non-current assets Property, plant and equipment 8,407,240 7,576,065 Land use rights 310,793 316,564 Intangible assets 303,053 347,594 Investments in associates 1,240,671 257,101 Loan receivables 38,800 76,115 Available-for-sale investments 75,502 76,982 Prepayments for investment in subsidiary 108,120 - Deferred tax assets 32,171 35,972 Deferred staff costs 51,091 61,310 Long-term prepayments for coal purchases 345,000 180,000 10,912,441 8,927,703 Current assets Materials and supplies 417,792 219,151 Trade receivables 1,064,398 835,331 Prepayments and other receivables 38,570 33,719 Due from related companies 32,662 22,540 Short-term bank deposits 270,000 314,845 Cash and cash equivalents 807,645 2,194,654 2,631,067 3,620,240 Total assets 13,543,508 12,547,943 EQUITY AND LIABILITIES Capital and reserves Share capital 2,659,404 2,659,404 Reserves 5,506,571 5,234,692 8,165,975 7,894,096 Minority interests 1,996,548 1,805,044 Non-current liabilities Borrowings 1,504,740 1,473,780 Early retirement obligation 65,120 77,031 1,569,860 1,550,811 Current liabilities Trade payables 55,079 45,698 Borrowings 539,040 283,360 Taxes payable 306,101 301,945 Other payables and accruals 241,171 275,218 Due to related companies 669,734 391,771 1,811,125 1,297,992 Total equity and liabilities 13,543,508 12,547,943 9.2.2 Income statement 17 2004 2003 (As restated) Operating revenue, net 7,115,657 5,996,285 Operating costs: Fuel (3,712,016) (2,269,656) Repair and maintenance (329,764) (332,659) Depreciation (717,610) (686,638) Staff costs (369,316) (459,378) Administrative expenses (216,468) (194,402) Others (108,491) (40,382) Total operating costs (5,453,665) (3,983,115) Profit from operations 1,661,992 2,013,170 Other income, net 56,633 24,131 Finance costs, net (102,486) (103,966) Share of results of associates before tax 338 1,492 Profit before tax 1,616,477 1,934,827 Income tax expense (466,008) (594,028) Profit after tax 1,150,469 1,340,799 Minority interests (213,739) (213,437) Net profit 936,730 1,127,362 Earnings per share - Basic Rmb0.35 Rmb0.42 - Diluted N/A N/A 9.2.3 Cash flow statement 2004 2003 Cash flows from operating activities: Cash generat ed from operations 2,195,007 2,749,255 Interest paid (102,486) (103,966) 18 Income tax paid (481,713) (636,198) Net cash from operating activities 1,610,808 2,009,091 Cash flows from investing activities: Proceeds from disposal of property, plant and equipment 574 - Purchases of property, plant and equipment (1,510,084) (847,870) Purchases of intangible assets (5,488) - Purchases of land use rights (3,189) (14,990) Interest received 32,360 29,257 Investment in associates (985,650) (243,460) Prepayments for investment in subsidiary (108,120) - Dividends received from associates 2,215 2,095 Dividends received from available-for-sale investments 4,966 3,983 Loans to associates made (37,447) (68,479) Loan repayments received 74,762 1,686 Net cash used in investing activities (2,535,101) (1,137,778) Cash flows from financing activities: Proceeds from /(repayments of) borrowings 286,640 (346,360) Dividends paid to group shareholders (664,851) (611,663) Dividends paid to minority shareholders (200,505) (189,169) Contribution from minority shareholders 116,000 213,987 Net cash used in financing activities (462,716) (933,205) Net decrease in cash and cash equivalents (1,387,009) (61,892) Cash and cash equivalents at beginning of year 2,194,654 2,256,546 Cash and cash equivalents at end of year 807,645 2,194,654 9.3 Accounting policies, accounting estimated changes and related impacts Applicable √ Not applicable 9.4 The details of the important retrospective accounting adjustment. √ Applicable Not applicable 1 The reasons and explanation for the adjustments. Being approved by the Fourth Board of Directors on its Eighteenth meeting , the Company and its subsidiaries performed assets tabulation and verification , 19 .(1) VAT and other tax receivables (education tax)amounting to RMB 19,073,417.88 made by Shajiao Power Plant A of the Company in 1994 was identified as uncollectible and should be written off. This is due to the changes made to the VAT policy which hasn’ t resolved by Finance and Tax department. (2) the material loss and fixed assets loss of the Shajiao Power Plant A was RMB 17,159,261.07; The materials loss and fixed assets loss of Zhanjiang Electric Ltd (the company holds its 76% shares) was RMB 25,191,303.27 and the actual loss of the company is RMB 19,145,390.49 which is based on the percentage of holding. In view of all the above loss incurred in the past periods ,according to the related accounting standard the Company should make the necessary adjustment . 2 Impact on the financial statement due to the adjustment made to accounting errors. The Company has already made the necessary adjustment for the above accounting errors (1) The opening balance of Un-distributed profit for year 2003 reduced RMB1,9073,417.88, Tax payable increased RMB 18,934,752.85, other payables increased RMB 138,655.03. (2) For year 2003 the following accounts have been made adjustment , Impairment for inventory increased RMB 15,459,569.13 ,Administrative expenses increased RMB 15,459,569.13, impairment for fixed assets increased RMB 26,890,995.2, non- operating expenses increased 26,890,995.21. (3) The closing balance of the un-distributed profit decreased RMB 55,378,069.44, The minority interest decreased RMB 6,045,912.78. 9.5 The detailed explanation regarding to changes for the scope of consolidation of the financial statement compared to the latest annual report 20