13th Sep 2007 08:58
Datang Intl Power Generation Co Ld13 September 2007 Datang International Power Generation Co., Ltd. Interim Report 2007 Diversifying with Flying Colours In recent years, Datang Power has been actively pursuing expansion of itsbusiness scope, mapping out a strategic deployment of its power generationsources. The Company's power source structure has transformed from the previoussingle power generation mode to the currently diversified and balancedportfolio comprising hydropower, thermal power, wind power and nuclear power.The business assets structure has also transformed from a pure power generationbusiness in the past to a conglomerate today with power generation as theprincipal business but integrated with related upstream and downstream businessassets. Datang Power will continue to actively develop power source projects and enhancethe Company's operating efficiency through assets integration, with a view tolaying down an even stronger foundation for the Company's resource reserve.Datang Power firmly believes that its business strategy of diversifieddevelopment will develop the Company into a multifaceted company among PRC'spower generation enterprises, marching into success with flying colours. Contents Company Results Management Discussion and Analysis Share Capital and Dividends Significant Events Purchase, Sale and Redemption of the Company's Listed Securities Compliance with the Code on Corporate Governance Practices Compliance with the Model Code Audit Committee Condensed Consolidated Interim Balance Sheet (Unaudited) Condensed Consolidated Interim Income Statement (Unaudited) Condensed Consolidated Interim Statement of Changes in Equity (Unaudited) Condensed Consolidated Interim Cash Flow Statement (Unaudited) Notes to the Condensed Consolidated Interim Financial Information (Unaudited) Company Results - Consolidated operating revenue amounted to approximately RMB15,465million, representing an increase of 42.26% over the first half of 2006. - Consolidated net profit attributable to the equity holders of theCompany amounted to approximately RMB1,807 million, representing an increase of41.86% over the first half of 2006. - Basic earnings per share attributable to the equity holders of theCompany amounted to approximately RMB0.16, representing an increase ofapproximately RMB0.04 per share over the first half of 2006. The board of directors (the "Board") of Datang International Power GenerationCo., Ltd. (the "Company") hereby announces the unaudited consolidated operatingresults of the Company and its subsidiaries and jointly controlled entities (the"Company and its Subsidiaries") prepared in conformity with the InternationalFinancial Reporting Standards ("IFRS") for the six months ended 30 June 2007(the "Period"), together with the unaudited consolidated operating results ofthe first half of 2006 (the "Same Period Last Year") for comparison. Suchoperating results have been reviewed and confirmed by the Company's auditcommittee (the "Audit Committee"). Consolidated operating revenue of the Company and its Subsidiaries for thePeriod was approximately RMB15,465 million, representing an increase of 42.26%as compared to the Same Period Last Year. The realised consolidated net profitattributable to the equity holders of the Company was approximately RMB1,807million, representing an increase of approximately 41.86% as compared to theSame Period Last Year. Basic earnings per share attributable to the equityholders of the Company for the Period amounted to approximately RMB0.16(including the impact of the bonus issue of 10 bonus shares issued for every 10shares held by way of capitalisation of the capital reserve fund), representingan increase of approximately RMB0.04 per share as compared to the Same PeriodLast Year. The Board does not recommend any payment of interim dividend for 2007. Please refer to the unaudited condensed consolidated interim financialinformation for details of the consolidated operating results. Management Discussion and Analysis The Company is one of the largest independent power companies in the People'sRepublic of China (the "PRC"), primarily engaged in power generation businessesmainly focusing on coal-fired power generation. As at 30 June 2007, the Companymanaged a total installed capacity of 19,430 MW. The power generation businessesof the Company are primarily distributed in the North China Power Grid(including the Beijing-Tianjin-Tangshan ("BTT") Power Grid and the Shanxi PowerGrid), the Gansu Power Grid, the Zhejiang Power Grid, the Yunnan Power Grid, theFujian Power Grid and the Guangdong Power Grid. During the Period, the PRC's economy maintained a relatively fast growth under afavourable domestic macro-economic environment, with a gross domestic product("GDP") growth rate of 11.5% over the Same Period Last Year. During the Period,the social power consumption increased by about 15.56% over the Same Period LastYear while nationwide power generation increased by approximately 16% over theSame Period Last Year. The power generation of the power grids where the powergeneration businesses of the Company and its Subsidiaries were distributed alsomaintained rapid growth. Business Review During the Period, the Company and its Subsidiaries faced production operationpressures brought by a decline in utilisation rates in the power market andpersistent high fuel prices. Nevertheless, the Company and its Subsidiariesactively capitalised on market opportunities, diligently carried out effectiveproduction operations and implemented measures to boost revenue and reducecosts. The Company and its Subsidiaries overcame difficulties and strove tocomplete the production objectives of the Period, with a sustained and steadygrowth in profit. Total power generation increased by about 35.54% over the SamePeriod Last Year while consolidated net profit attributable to the equityholders of the Company rose by approximately 41.86% over the Same Period LastYear. 1. Production and Environmental Protection During the Period, total power generation of the Company and its Subsidiariesamounted to 56.042 billion kWh, an increase of 35.54% when compared to the SamePeriod Last Year. Total on-grid power generation of the Company and itsSubsidiaries amounted to 52.812 billion kWh, an increase of 35.79% over the SamePeriod Last Year. The increases in total power generation and on-grid powergeneration were mainly attributable to the following reasons: (1) Increased capacity of operating generation units: Compared to the SamePeriod Last Year, the Company and its Subsidiaries have increased its installedcapacity by 4,020 MW as new generation units commenced commercial operation inthe second half of 2006, thereby substantially increasing the overall powergeneration capacity of the Company and its Subsidiaries. (2) Increased demand in service areas: During the Period, the power demandwithin the service areas of the Company and its Subsidiaries maintained steadyrapid growth. (3) Improvement in operating reliability of generation units: During thePeriod, the operating generation units of the Company and its Subsidiariesachieved an equivalent availability factor of 93.88%, representing an increaseof 1.13 percentage points when compared to the Same Period Last Year. Power generation details of the Company and its Subsidiaries during the Period (Unit: billion kWh): Power Plant / Company Name Power Generation Growth for the First Half (%) of 2007 (billion kWh) 1 Gao Jing Thermal Power Plant 1.835 7.182 Dou He Power Plant 5.391 2.723 Xia Hua Yuan Power Plant 1.312 -0.914 Zhang Jia Kou Power Plant 7.655 0.425 Zhejiang Datang Wushashan Power Generation Company Limited ("Wushashan Power Company") 6.399 695.896 Tianjin Datang International Panshan Power Generation Company Limited ("Panshan Power Company") 3.371 -4.917 Inner Mongolia Datang International Tuoketuo Power Generation Company Limited ("Tuoketuo Power Company") 9.852 -7.028 Shanxi Datang International Yungang Thermal Power Company Limited ("Yungang Thermal Power Company") 1.439 2.359 Hebei Datang International Tangshan Thermal Power Company Limited ("Tangshan Thermal Power Company") 2.013 -13.3010 Shanxi Datang International Shentou Power Generation Company Limited ("Shentou Power Company") 2.597 -0.9211 Gansu Datang International Liancheng Power Generation Company Limited ("Liancheng Power Company") 2.043 15.5512 Hebei Datang International Wangtan Power Generation Company Limited ("Wangtan Power Company") 3.541 87.6513 Guangdong Datang International Chaozhou Power Generation Company Limited ("Chaozhou Power Company") 2.857 1,070.914 Fujian Datang International Ningde Power Generation Company Limited ("Ningde Power Company") 3.206 -15 Yunnan Datang International Honghe Power Generation Company Limited ("Honghe Power Company") 2.219 2,140.4116 Yunan Datang International Nalan Hydropower Development Company Limited ("Nalan Hydropower Company") 0.190 38.6917 Yunnan Datang International Lixianjiang Hydropower Development Company Limited ("Lixianjiang Hydropower Company") 0.111 -18 Hebei Datang International Huaze Hydropower Development Company Limited ("Huaze Hydropower Company") 0.0105 2.94 Total 56.042 35.54 While endeavouring to increase power generation, the Company and itsSubsidiaries also put a strong emphasis on the implementation of environmentalprotection projects in accordance with the State's environmental protectionrequirements. As at 30 June 2007, the installed capacity of the Company and itsSubsidiaries with desulphurisation facilities in use accounted for about 70% ofthe coal-fired units of the Company and its Subsidiaries. Meanwhile, otherenvironmental protection projects such as denitration and denitrificationupgrades are currently in progress as scheduled. 2. Operational Management During the Period, the Company and its Subsidiaries achieved a consolidatedoperating revenue of approximately RMB15,465 million, representing an increaseof approximately 42.26% over the Same Period Last Year. Consolidated net profitattributable to the equity holders of the Company amounted to approximatelyRMB1,807 million, representing an increase of approximately 41.86% over the SamePeriod Last Year. The sustained, steady growth in profit of the Company and itsSubsidiaries was mainly attributable to the following factors: (1) Increase in on-grid power generation. On-grid power generation increased byapproximately 13.919 billion kWh over the Same Period Last Year, therebyincreasing the revenue by approximately RMB3,836 million accordingly. (2) Increase in average on-grid power tariff. As a result of the implementationof the Fuel-Tariff Pass-through Mechanism which led to power tariff adjustmentsin the second half of 2006, and the increased number of the Company and itsSubsidiaries' units adopting the tariff rates for desulphurised units in thefirst half of 2007, as well as the rational adjustment in the power generationstructure, the Company's on-grid tariff (tax included) increased byapproximately RMB16.86 per MWh over the Same Period Last Year, leading to acorresponding increase of about RMB758 million in revenue over the Same PeriodLast Year. (3) Stringent cost control to strive for energy savings and consumptionreduction. During the Period, as a result of rising fuel prices and changes inthe power structure of regions with high fuel costs, the unit fuel cost for theCompany and its Subsidiaries increased by approximately RMB20.35/MWh over theSame Period Last Year. In light of this, the Company and its Subsidiariesexercised all sorts of stringent cost control measures to strive for energysavings and consumption reduction while securing fuel supply. During the Period,unit coal consumption for power supplied amounted to 336.99g/kWh, representing adecrease by approximately 8g/kWh over the Same Period Last Year, while theconsolidated self electricity consumption rate was 5.78%, down approximately 0.2percentage point over the Same Period Last Year. (4) Financing channels were expanded to reduce financing costs. During thePeriod, the Company issued RMB3,000 million of "short-term commercial papers" inthe inter-bank bond market. The coupon rate was 3.48%, which was lower than theissuing rate of a same term for comparable issuers. 3. Business Expansion During the Period, the Company continued to implement its developmentstrategies, which include the transformation from a single mode of coal-firedpower generation to the development of renewable energy including hydropower,nuclear power, wind power and so forth; the transformation of the businessstructure from simply an electricity producer into a chain of relevantbusinesses. As the Company worked diligently on projects under constructionduring the Period, it also actively initiated preliminary studies anddevelopment works on certain development projects. Among these: (1) Thermal projects: The Phase 1 project (installed capacity: two 600 MWunits) of Ningxia Datang International Daba Power Generation Company Limited, anassociate of the Company in which the Company holds 45% interests, was approvedby the relevant State authorities and construction would commence within thecurrent year. (2) Hydropower projects: The Hengjiang region Luoze River Two-Level hydropowerprojects (total installed capacity: 48 MW), both controlled and constructed bythe Company, were respectively approved by the relevant State authorities andconstruction is expected to commence within the current year. (3) Nuclear power project: Fujian Ningde Nuclear Power Company Limited (two1,000 MW units), in which the Company holds 49% interests, reported smoothprogress in its preliminary works. At present, the project has finished thecompilation of the "Project Application Report". (4) Wind power project: The Bayin Wind Power Plant Phase II (installedcapacity: 48 MW), developed and constructed by the Company's wholly-ownedsubsidiary Inner Mongolia Datang International Zhouzi Wind Power Co., Ltd., andthe Shanxi Datong Zuoyun Wing Power Plant Phase I (installed capacity: 49.5 MW),planned to be solely developed by the Company, were respectively approved by therelevant State authorities. Construction of these projects is expected toofficially commence within the current year. (5) Coal chemical projects: Based on substantial preliminary studies andexperiments, the Board of the Company has considered and approved thedevelopment and construction of the "Coal-based Olefin Project in Duolun County,Xilinguole League, Inner Mongolia" with a controlling interest in the project.The plant of the project is located in Duolun County, Xilinguole League of theInner Mongolia Autonomous Region. The project uses the coal from Shengli CoalMine in Inner Mongolia, of which the Company participated in the development, asraw materials. It produces chemical products with the world's advancedtechnologies, including the pulverised coal gasification technology, thesynthetic gas purification technology, the methanol-to-propylene technology andthe propylene polymerisation technology. It is the most advanced coal chemicalproject utilising clean, efficient and high added-value coal. The project isexpected to produce annually 460,000 tonnes of polypropylene and otherby-products. The Inner Mongolia Development and Reform Commission has approvedthe preliminary application for the project. The National Development and ReformCommission has also approved the project's tax exemption application forintroduction of equipment and technological research. The Company expects theproject, upon successful development and construction, to become the Company'snew source of profit growth. (6) Other energy projects: In March 2007, the Company entered into an equitytransfer agreement with Inner Mongolia Huineng Group to participate in thedevelopment of Changtan Coal Mine in Ordos City of Inner Mongolia. It isexpected that the relevant acquisition procedures will be completed before theend of the current year. Major Financial Indicators and Analysis During the Period, the Company and its Subsidiaries realised RMB15,465 millionin revenue from principal operations, representing a 42.26% increase over theSame Period Last Year. Net profit attributable to the equity holders of theCompany was RMB1,807 million, representing a 41.86% increase over the SamePeriod Last Year. Basic earnings per share attributable to the equity holders ofthe Company was RMB0.16, representing an increase of RMB0.04 per share over theSame Period Last Year (the outstanding ordinary shares increased as a result ofthe bonus issue of 10 shares issued for every 10 shares held by way ofcapitalisation of the capital reserve fund, without affecting the balance heldof total equity, hence the basic earnings per share for the reported periodswere adjusted retrospectively to reflect the bonus issue). 1. Operating Revenue The Company is principally engaged in power generation businesses which involvemainly coal-fired power generation. Heat supply also forms a minor part of theoperation. The Company's revenue from principal operations mainly comprisesrevenue from electricity sales and heat sales. During the Period, the Company and its Subsidiaries realised an operatingrevenue of RMB15,465 million, representing an increase of approximately RMB4,594million or 42.26% over the Same Period Last Year, owing to the following mainreasons: - Increase in installed capacity and on-grid power generation. Duringthe Period, the Company's installed capacity under management increased by 4,020MW as compared to the Same Period Last Year as new generation units commencedcommercial operation in the second half of 2006. On-grid power generationincreased by approximately 13.919 billion kWh, thereby increasing the revenue byapproximately RMB3,836 million. - Increase in average on-grid power tariff. As a result of theimplementation of the Fuel-Tariff Pass-through Mechanism from 30 June 2006, theincrease in the number of the Company and its Subsidiaries' units adopting thetariff rates for desulphurised units as well as the Company's rationaladjustment in the power generation structure, the average on-grid tariff(consolidated, tax included) of the Company and its Subsidiaries increased byapproximately RMB16.86 per MWh over the Same Period Last Year, leading to acorresponding increase of about RMB758 million in revenue. 2. Operating Costs During the Period, the total consolidated operating costs of the Company and itsSubsidiaries amounted to RMB11,545 million, representing an increase of 42.51%over the Same Period Last Year. The major reasons were increases in fuel costsand fixed costs. During the Period, fuel costs accounted for 62.18% of operating costs. Followingthe increases of the Company's newly commenced operating generation units andthe increase in power generation, as well as the continued rise in nationwidefuel prices, fuel costs increased by about RMB2,620 million or approximately57.49% over the Same Period Last Year. Of such increased amount, the increase infuel costs as a result of a rise in on-grid electricity volume amounted toapproximately RMB1,552 million. The rise in the unit fuel cost has led to anincrease in fuel costs of approximately RMB1,068 million. During the Period, fixed costs increased by approximately RMB823 million or23.24% over the Same Period Last Year, which was mainly attributable to theincreases in depreciation charges for generation units, maintenance costs, waterexpenses and pollution discharge fees incurred by newly commenced operatinggeneration units of the Company over the Same Period Last Year. Among these, thedepreciation charges increased by approximately 33.88% over the Same Period LastYear. 3. Net Financing Costs During the Period, the financing costs of the Company amounted to approximatelyRMB973 million, representing an increase of 73.46% over the Same Period LastYear. The relatively rapid increase was attributable to the increase in interestexpenses on short-term and long-term loans during the Period. 4. Profit During the Period, the Company and its Subsidiaries reported a consolidatedprofit before tax amounting to RMB2,985 million, representing an increase of34.47% over the Same Period Last Year. Consolidated profit attributable to theequity holders of the Company amounted to approximately RMB1,807 million,representing an increase of 41.86% over the Same Period Last Year. The increasein the Company's profit was mainly attributable to the increase in operatingrevenue as well as stringent and effective cost controls adopted by the Company. 5. Financial Position As at 30 June 2007, total consolidated assets of the Company and itsSubsidiaries amounted to approximately RMB101,329 million, representing anincrease of approximately RMB10,618 million as compared to the end of 2006.Total consolidated liabilities amounted to approximately RMB70,631 million,representing an increase of approximately RMB7,121 million over the end of 2006.Minority interests amounted to approximately RMB4,579 million, representing anincrease of approximately RMB1,275 million over the end of 2006. Total equityamounted to approximately RMB30,698 million, representing an increase ofapproximately RMB3,497 million over the end of 2006. The increase in totalassets was primarily caused by the implementation of the expansion strategy bythe Company and its Subsidiaries which led to a corresponding increase ininvestments in construction-in-progress. 6. Liquidity As at 30 June 2007, the asset-to-liability ratio for the Company and itsSubsidiaries was approximately 69.70%. The net debt-to-equity ratio (i.e. (loans+ convertible bonds + short-term commercial papers - cash and cash equivalents - short-term bank deposits with a maturity of over 3 months)/total equity) wasapproximately 172.85%. As at 30 June 2007, total cash and cash equivalents and bank deposits with amaturity of over 3 months of the Company and its Subsidiaries amounted toapproximately RMB5,658 million, of which the deposits with a total amountequivalent to approximately RMB83 million were in foreign currencies. TheCompany and its Subsidiaries had no entrusted deposits or overdue fixed depositsduring the Period. As at 30 June 2007, short-term loans of the Company and its Subsidiariesamounted to approximately RMB10,516 million, carrying annual interest ratesranging from 4.96% to 6.60%. Long-term loans (excluding those due within 1 year)amounted to approximately RMB43,675 million and long-term loans due within 1year amounted to approximately RMB1,253 million, at annual interest ratesranging from 3.60% to 6.57%, of which an amount equivalent to approximatelyRMB2,557 million was denominated in US dollar. The Company and its Subsidiariespay regular and active attention to foreign exchange market fluctuations andconstantly assess foreign currency risks. As at 30 June 2007, North China Grid Company Limited ("NCG", originally NorthChina Power (Group) Corp. and its subsidiaries) and some minority shareholdersof the Company's subsidiaries provided guarantees for the loans of the Companyand its Subsidiaries amounting to approximately RMB2,808 million. The Companyhad not provided any guarantee in whatever forms for any other company apartfrom its subsidiaries, jointly controlled entities and associates. Outlook for the Second Half of 2007 In 2007, competition in the power market has been intensifying. The utilisationrates of generation units continue to decrease. The rise in coal prices and theuncertainties regarding coal quality increase the difficulty for cost controland operation management. Facing a difficult environment, the Company willfurther improve and enhance the management quality and work harder to strive forencouraging results. In the second half of 2007, the Company will focus on thefollowing tasks: 1. Continuing the implementation of the Company's diversified developmentstrategy, dedicating further effort to the preliminary works of developmentprojects and striving to expand the reserve of preliminary projects, therebylaying the foundation for the Company's sustainable development. 2. Further reinforcing on production safety efforts by enforcing safetyproduction accountabilities and strengthening the management of significant risksources; elevating the effort on specific management of equipment to enhance thesafety level of equipment, thereby ensuring the safe and stable operation ofgeneration units for increased power generation. 3. Strengthening fuel management to strive for a reduction in fuel costs onthe premise of ensuring fuel supply. 4. Strengthening the management of projects under construction, so as toensure the generation units planned to commence operation will be in operationwith safe and good quality operation as scheduled within 2007. 5. Striving to secure funding for the Company's development by activelystudying and exploring more varied and low-cost financing channels. Share Capital and Dividends Share Capital As at 30 June 2007, the total share capital of the Company amounted to5,833,079,077 shares, divided into 5,833,079,077 shares carrying a nominal valueof RMB1.00 each. Shareholding of Substantial Shareholders So far as the directors of the Company are aware, as at 30 June 2007, thepersons below with interests or short positions in the shares or underlyingshares of the Company which are required to be disclosed to the Company undersection 336 of the Securities and Futures Ordinance (the "SFO") (Chapter 571 ofthe Law of Hong Kong) were as follows: Approximate percentage Approximate Approximate to total percentage to percentage to issued share total issued A total issued H Class of Number of capital of the Shares of the Shares of theName of Shareholder Shares shares held Company (%) Company (%) Company (%) China Datang Corporation A Shares 1,979,620,580 33.94 46.78 - Beijing Energy Investment (Group) Company A Shares 671,792,400 11.52 15.87 - Hebei Construction Investment Company A Shares 671,792,400 11.52 15.87 -Tianjin Jinneng Investment Company A Shares 606,006,300 10.39 14.32 -Allianz SE H Shares 109,663,000 (L) 1.88 (L) - 7.21 (L)UBS AG H Shares 105,980,298 (L) 1.82 (L) - 6.66 (L) 19,820,000 (S) 0.34 (S) - 1.25 (S)JPMorgan Chase & Co. H Shares 91,061,286 (L) 1.56 (L) - 5.72 (L) 69,118,059 (P) 1.18 (P) - 4.34 (P) (L) means long position (S) means short position (P) means lending pool Dividends The Company had considered and approved the distribution proposals on paying the2006 cash dividends and share capital expansion by utilising the capital reservefund at its 2006 annual general meeting held on 29 June 2007. The abovedistribution proposals were completed before the publication date of thisreport. The Board does not recommend any payment of interim dividend for 2007. Shareholding by the Directors and Supervisors As at 30 June 2007, Mr. Fang Qinghai, director of the Company, was interested in1,000 A Shares of the Company. As at 27 August 2007, Mr. Fang Qinghai'sinterests in the Company's A Shares increased to 2,000 shares due to theCompany's implementation of the proposal on share capital expansion by way ofcapitalisation of the capital reserve fund for the year 2006. Save as disclosedabove, none of the directors, supervisors and chief executive of the Company northeir associates had any interest and short positions in the shares, underlyingshares and debentures of the Company or any of its associated corporation(within the meaning of SFO) that were required to be notified to the Company andThe Stock Exchange of Hong Kong Limited (the "Hong Kong Stock Exchange") underthe provisions of Divisions 7 and 8 of Part XV of the SFO, or required to berecorded in the register mentioned in the SFO pursuant to section 352 orotherwise required to be notified to the Company and the Hong Kong StockExchange pursuant to the Model Code for Securities Transactions by Directors ofListed Issuers (the "Model Code") in Appendix 10 of the Rules Governing theListing of Securities on the Hong Kong Stock Exchange (the "Listing Rules"). Significant Events 1. The term of the members of the fifth session of the Company's Board andSupervisory Committee had expired on 30 June 2007. Pursuant to the resolutionspassed at the 2006 annual general meeting held on 29 June 2007, it was resolvedthat (1) Mr. Zhai Ruoyu, Mr. Zhang Yi, Mr. Hu Shengmu, Mr. Fang Qinghai, Mr.Zhou Gang, Mr. Liu Haixia, Ms. Guan Tiangang, Mr. Su Tiegang, Mr. Ye Yonghui, Mr. LiGengsheng, Mr. Xie Songlin, Mr. Yu Changchun, Mr. Liu Chaoan and Mr. Xia Qing beappointed members of the sixth session of the Board for a term from 1 July 2007to 30 June 2010; (2) Mr. Zhang Jie, Mr. Zhang Wantuo, Mr. Fu Guogiang and Mr.Shi Xiaofan be appointed members of the sixth session of the SupervisoryCommittee (among which Mr. Zhang Jie and Mr Shi Xiaofan are Supervisorsrepresenting the staff) for a term from 1 July 2007 to 30 June 2010. 2. Pursuant to the written resolutions formed at the twenty-thirdmeeting of the fifth session of the Board held on 12 June 2007, Mr. Zhou Gangand Mr. Qin Jianming were appointed Deputy General Managers of the Companywhilst Mr. Yang Hongming ceased to be a Deputy General Manager of the Company. 3. Pursuant to the resolutions passed at the twenty-eighth meeting ofthe fifth session of the Board held on 29 June 2007, Mr. Zhou Gang was appointedas Secretary to the Board (and Company Secretary) of the Company and Mr. MokChung Kwan, Stephen was appointed as Joint Company Secretary of the Company,whilst Mr. Yang Hongming ceased to be the Secretary to the Board (and CompanySecretary) of the Company. Purchase, Sale and Redemption of the Company's Listed Securities During the Period, the Company and its Subsidiaries have not purchased, sold orredeemed any of its listed securities. Compliance with the Code on Corporate Governance Practices To the knowledge of the Board, the Company has complied with the code provisionsin the Code on Corporate Governance Practices as set out in Appendix 14 of theListing Rules during the Period. Compliance with the Model Code Upon specific enquiries made to all the directors of the Company and inaccordance with information provided, the Board confirmed that all directors ofthe Company have complied with the provisions under the Model Code as set out inAppendix 10 of the Listing Rules during the Period. Audit Committee The Audit Committee has reviewed the accounting principles and methods adoptedby the Company and its Subsidiaries with the management of the Company. It hasalso discussed matters regarding internal controls and the annual financialstatements, including the review of the unaudited condensed consolidated interimfinancial information for the six months ended 30 June 2007. The Audit Committee considers that the financial information of the Company andits Subsidiaries for the first half of 2007 have complied with the applicableaccounting standards, and that the Company has made appropriate disclosurethereof. By order of the Board Zhai Ruoyu Chairman Beijing, the PRC, 27 August 2007 Condensed Consolidated Interim Balance Sheet (Unaudited) As at 30 June 2007 (Amounts expressed in thousands of Renminbi ("Rmb")) 30 June 31 December Note 2007 2006 (Note 17)ASSETSNon-current assets Property, plant and equipment, net 3 84,943,932 77,574,619 Investments in associates 960,677 857,421 Available-for-sale investments 2,952,883 1,774,184 Land use rights 637,008 572,599 Intangible assets 85,791 83,576 Deferred housing benefits 263,686 300,232 Other long-term assets 87,850 87,850 Deferred income tax assets 156,553 142,969 90,088,380 81,393,450 Current assets Inventories 1,011,125 806,965 Other receivables and current assets 905,294 710,472 Accounts receivable 4 3,622,233 3,337,529 Notes receivable 43,076 11,132 Short-term bank deposits over three months 45,000 - Cash and cash equivalents 5 5,613,437 4,451,284 11,240,165 9,317,382 Total assets 101,328,545 90,710,832 30 June 31 December Note 2007 2006 (Note 17)EQUITY AND LIABILITIESCapital and reserves attributable to the Company's equity holders Share capital 5,833,079 5,662,849 Reserves 20,285,394 18,233,202 26,118,473 23,896,051Minority interests 4,579,319 3,304,667 Total equity 30,697,792 27,200,718 Non-current liabilities Long-term loans 6 43,674,608 40,273,581 Convertible bonds 7 275,976 1,111,810 Deferred income 299,975 273,257 Deferred income tax liabilities 742,658 421,682 44,993,217 42,080,330 Current liabilities Accounts payable and accrued liabilities 8 8,988,842 7,648,155 Short-term loans 6 10,516,067 9,300,496 Current portion of long-term loans 6 1,253,076 2,942,804 Taxes payable 529,397 538,329 Dividends payable 1,350,154 - Other current liabilities 3,000,000 1,000,000 25,637,536 21,429,784 Total liabilities 70,630,753 63,510,114 Total equity and liabilities 101,328,545 90,710,832 The accompanying notes are an integral part of this unaudited condensedconsolidated interim financial information. Condensed Consolidated Interim Income Statement (Unaudited) For the six months ended 30 June 2007 (Amounts expressed in thousands of Rmb, except per share data) Six months ended 30 June Note 2007 2006 (Note 17) Operating revenue 9 15,465,022 10,870,962Operating costs 14(b) (11,544,567) (8,100,949) Operating profit 3,920,455 2,770,013Share of profit/(loss) of associates 6,905 (3,426)Interest income 31,121 14,463Finance costs 14(b) (973,005) (560,936) Profit before taxation 2,985,476 2,220,114Taxation 10 (732,806) (598,386) Profit for the period 2,252,670 1,621,728 Attributable to: - Equity holders of the Company 1,807,257 1,273,947 - Minority interests 445,413 347,781 2,252,670 1,621,728 Earnings per share for profit attributable to the equity holders of the Company during the period - basic (Rmb) 11 0.16 0.12 - diluted (Rmb) 11 0.16 0.12 The accompanying notes are an integral part of this unaudited condensedconsolidated interim financial information. Condensed Consolidated Interim Statement of Changes in Equity (Unaudited) For the six months ended 30 June 2007 (Amounts expressed in thousands of Rmb) Attributable to equity holders of the Company Reserves Statutory Statutory Discretionary Share Capital surplus public surplus Note capital reserve reserve welfare fund reserveBalance as at1 January2006,as previously reported 5,162,849 3,653,421 1,977,048 559,456 4,981,377 Adjustment tostatutorysurplus reserve 2 - - (333,446) - - Balance as at1 January2006, as restated 5,162,849 3,653,421 1,643,602 559,456 4,981,377 Minorityinterestsarising frombusiness combination - - - - - Capitalinjectionfromminority shareholders ofsubsidiaries - - - - - Dividends declared - - - - - Currency translationdifferences - - - - - Profit forthe period - - - - - Transferbetween reserves - - 559,456 (559,456) - Release of restrictedreserve - - - - - Transfer todiscretionarysurplus reserve - - - - 759,910 Balance as at30 June 2006 5,162,849 3,653,421 2,203,058 - 5,741,287 Attributable to equity holders of the Company Reserves Currency Restricted translation Other Retained Total Minority Total Note reserve differences reserve earnings reserves interests equity Balance as at1 January2006, aspreviouslyreported 173,510 (184) 149,796 1,668,189 13,162,613 2,403,475 20,728,937 Adjustment to statutorysurplusreserve 2 - - - 333,446 - - - Balance as at 1 January2006, asrestated 173,510 (184) 149,796 2,001,635 13,162,613 2,403,475 20,728,937 Minorityinterestsarising frombusinesscombination - - - - - 64,263 64,263 Capitalinjection fromminorityshareholdersofsubsidiaries - - - - - 251,000 251,000 Dividendsdeclared - - - (1,177,130) (1,177,130) (551,018) (1,728,148) Currencytranslationdifferences - (165) - - (165) - (165) Profit forthe period - - - 1,273,947 1,273,947 347,781 1,621,728 Transferbetweenreserves - - - - - - - Release of restrictedreserve (28,005) - - 28,005 - - - Transfer todiscretionary surplus reserve - - - (759,910) - - - Balance as at30 June 2006 145,505 (349) 149,796 1,366,547 13,259,265 2,515,501 20,937,615 Attributable to equity holders of the Company Reserves Statutory Discretionary Share Capital surplus surplus Note capital reserve reserve reserveBalance as at1 January 2007,as previously 5,662,849 6,432,245 2,914,599 5,741,287reported Adjustment toStatutory 2 - - (465,538) -reserves Balance as at1 January 2007, asrestated. 5,662,849 6,432,245 2,449,061 5,741,287 Conversion ofconvertible 7 170,230 796,394 - -bonds Capital injectionfrom minorityshareholders of - - - -subsidiaries Dividends declared 12 - - - - Currency - - - -translationdifferences Profit for the - - - -period Release ofrestricted reserve 12 - - - - Transfer todiscretionarysurplus reserve 12 - - - 1,020,774 Fair value gains,net of tax:available-for-sale - - - -financial assets Balance as at30 June 2007 5,833,079 7,228,639 2,449,061 6,762,061 Attributable to equity holders of the Company Reserves Currency Restricted translation Other Retained Total Total Note reserve differences reserve earnings reserves equityBalance as at1 January2007,as previouslyreported 237,354 422 840,304 2,066,991 18,233,202 27,200,718 Adjustment toStatutoryreserves 2 - - - 465,538 - - Balance as at1 January2007, asrestated. 237,354 422 840,304 2,532,529 18,233,202 27,200,718 Conversion ofconvertiblebonds 7 - - (112,673) - 683,721 853,951 Capitalinjection fromminorityshareholdersofsubsidiaries - - - - - 1,006,010 Dividendsdeclared 12 - - - (1,348,714) (1,348,714) (1,525,485) Currencytranslationdifferences - (2,426) - - (2,426) (2,426) Profit for theperiod - - - 1,807,257 1,807,257 2,252,670 Release ofrestrictedreserve 12 (34,162) - - 34,162 - - Transfer todiscretionarysurplusreserve 12 - - - (1,020,774) - - Fair valuegains, net oftax:available-for-salefinancialassets - - 912,354 - 912,354 912,354 Balance as at30 June 2007 203,192 (2,004) 1,639,985 2,004,460 20,285,394 30,697,792 The accompanying notes are an integral part of this unaudited condensedconsolidated interim financial information. Condensed Consolidated Interim Cash Flow Statement (Unaudited) For the six months ended 30 June 2007 (Amounts expressed in thousands of Rmb) Six months ended 30 June Note 2007 2006 Net cash provided by operating activities 6,817,751 4,020,004Net cash used in investing activities 14 (9,380,255) (7,636,519)Net cash provided by financing activities 14 3,727,161 3,831,013 Net increase in cash and cash equivalents 1,164,657 214,498Cash and cash equivalents, beginning of period 4,451,284 1,029,339Exchange losses on cash and cash equivalents (2,504) (4,200) Cash and cash equivalents, end of period 5,613,437 1,239,637 The accompanying notes are an integral part of this unaudited condensedconsolidated interim financial information. Notes to the Condensed Consolidated Interim Financial Information (Unaudited) For the six months ended 30 June 2007 (Amounts expressed in thousands of Rmb unless otherwise stated) 1. Company organisation and principal activities Datang International Power Generation Co., Ltd. (the "Company") was incorporatedin Beijing, the People's Republic of China (the "PRC"), on 13 December 1994 as ajoint stock limited company. The Company listed its H Shares on the StockExchange of Hong Kong Limited and the London Stock Exchange Limited on 21 March1997 and was registered as a sino-foreign joint stock limited company on 13 May1998. On 20 December 2006, the Company listed its A Shares on the Shanghai StockExchange. The principal activity of the Company and its subsidiaries and jointlycontrolled entities (the "Company and its Subsidiaries") is power generation andpower plant development in the PRC. Substantially all of the businesses of theCompany and its Subsidiaries are conducted within one industry segment. The directors consider that the significant shareholder of the Company is ChinaDatang Corporation ("China Datang"), which is incorporated in the PRC and doesnot produce financial statements available for public use. 2. Principal accounting policies The unaudited condensed consolidated interim financial information for the sixmonths ended 30 June 2007 has been prepared in accordance with InternationalAccounting Standard ("IAS") 34 "Interim Financial Reporting" promulgated by theInternational Accounting Standards Board and Appendix 16 of the Rules Governingthe Listing of Securities on The Stock Exchange of Hong Kong Limited. Theunaudited condensed consolidated interim financial information should be read inconjunction with the annual financial statements for the year ended 31 December2006. The principal accounting policies applied in the preparation of this unauditedcondensed consolidated interim financial information are consistent with thoseapplied in the preparation of the annual financial statements for the year ended31 December 2006 except that the Company and its Subsidiaries have adopted therevised/new International Financial Reporting Standards ("IFRS") which areeffective for accounting period commencing on or after 1 January 2007, which aredetailed as follows: - IFRS 7, Financial Instruments: Disclosures and a complementaryamendment to IAS 1, Presentation of Financial Statements !X Capital Disclosures(effective for annual periods beginning on or after 1 January 2007). IFRS 7introduces new disclosures relating to financial instruments. This standardintroduces certain revised disclosure requirements, including the mandatorydisclosures on sensitivity analysis for each type of market risk. It replacesIAS 30, Disclosures in the Financial Statements of Banks and Similar FinancialInstitutions, and disclosure requirements in IAS 32, Financial Instruments:Disclosure and Presentation and is applicable to all entities reporting underIFRS. The amendment to IAS 1 introduces disclosures on the objectives, policiesand processes for managing capital. Except for an extension of disclosures,management considered there was no significant impact from adopting IFRS 7 andthe amendment to IAS 1 on the financial statements of the Company and itsSubsidiaries. - International Financial Reporting Interpretation CommitteeInterpretation ("IFRIC Interpretation") 10, Interim Financial Reporting andImpairment (effective for annual periods beginning on or after 1 November 2006).This interpretation prohibits the impairment losses recognised in a previousinterim period on goodwill, investments in equity instruments and investments infinancial assets carried at cost to be reversed at subsequent balance sheetdates. Management considered there was no significant impact from adopting IFRICInterpretation 10 on the financial statements of the Company and itsSubsidiaries. The Company and its Subsidiaries adopted the Accounting Standards for BusinessEnterprises promulgated by the Ministry of Finance of the PRC on 15 February2006 (the "new PRC GAAP") since 1 January 2007. According to relevantrequirements under the new PRC GAAP, retrospective adjustment to the provisionof statutory reserves is required as a result of the retrospective adjustmentsin retained earnings upon first-time adoption. In addition, the new PRC GAAP nolonger permits share of statutory reserves of subsidiaries at consolidationlevel. Hence aforementioned adjustments have been made retrospectively in thisunaudited condensed consolidated interim financial information as change ofaccounting policy. 3. Property, plant and equipment, net 30 June 31 December 2007 2006 Beginning of the period/year 77,574,619 58,948,110Changes in consolidation scope - 3,809,097Acquisition 613,370 529,137Additions 9,155,845 18,428,568Disposals (1,066) (13,451)Depreciation (2,398,836) (4,126,842) End of the period/year 84,943,932 77,574,619 4. Accounts receivable Accounts receivable of the Company and its Subsidiaries mainly represents thereceivables from the respective regional or provincial grid companies for tariffrevenue. These receivables are unsecured and non-interest bearing. The tariffrevenue is settled on a monthly basis according to the payment provisions in thepower purchase agreements. As at 30 June 2007 and 31 December 2006, all tariffrevenue receivables from the respective grid companies were aged within threemonths, and no doubtful debt provisions were considered necessary. 5. Cash and cash equivalents 30 June 31 December 2007 2006 Bank deposits 5,612,578 4,450,799Deposits with China Datang Group Finance Company Limited ("Datang Finance") 103 10Cash on hand 756 475 5,613,437 4,451,284 6. Loans As at 30 June 2007, the Company and its Subsidiaries had short-term andlong-term loans payable to Datang Finance totalling Rmb1,938,300,000 andRmb203,500,000 respectively (31 December 2006 - Rmb761,200,000 andRmb189,500,000). 7. Convertible bonds The movement in liability component of convertible bonds during the six monthsended 30 June 2007 was as follows: Balance at 1 January 2007 1,111,810Conversion to share capital (833,570)Interest expense 14,924Interest payments (2,674)Exchange rate adjustment (14,514) Balance at 30 June 2007 275,976 The carrying amount of the liability component at 30 June 2007 of theconvertible bonds approximated its fair value. During the six months ended 30 June 2007, holders of the convertible bonds withface value of USD115,684,000 have exercised their conversion rights andincreased the number of H Shares of the Company by 170,230,077 shares with parvalue of Rmb1 each. 8. Accounts payable and accrued liabilities 30 June 31 December 2007 2006 (Note 17)Construction costs and deposits payable to contractors 4,304,564 5,393,189Fuel and material costs payable 3,924,007 1,500,801Salary and welfare payable 125,375 147,078Interest rate swap liability - 12,766Interest payable 135,282 137,480Assets acquisition payable 11,296 50,546Others 488,318 406,295 8,988,842 7,648,155 As at 30 June 2007 and 31 December 2006, other than certain deposits forconstruction which were aged between one and three years, substantially allaccounts payable were aged within one year. As at 30 June 2007, the notional principal amount of the outstanding interestrate swap contract of Inner Mongolia Datang International Tuoketuo PowerGeneration Company Limited was USD186,955,486 (31 December 2006-USD200,615,486),and the fixed rate and floating rate were 5.15% (31 December 2006 - 5.15%) and5.38% (31 December 2006 - 5.61%) (LIBOR offered by British Bankers' Associationon 11 January 2007), respectively. 9. Operating revenue Six months ended 30 June 2007 2006 (Note 17) Electricity 15,347,761 10,742,226Heat 78,182 73,639Others 39,079 55,097 15,465,022 10,870,962 Pursuant to the Power Purchase Agreements entered into between the Company andits Subsidiaries and the regional or provincial grid companies, the Company andits Subsidiaries sell their entire net generation of electricity to these gridcompanies at approved tariff rates. 10. Taxation Six months ended 30 June 2007 2006 Current tax 794,005 613,951Deferred tax (61,199) (15,565) 732,806 598,386 Income tax is provided on the basis of the statutory profit for financialreporting purposes, adjusted for income and expense items, which are notassessable or deductible for income tax purposes. Income tax has been provided on the estimated assessable profit for the periodat their prevailing rates of taxation. Certain of the subsidiaries, beinglocated in specially designated regions, are subject to preferential income taxrates. In addition, certain subsidiaries are exempted from the PRC income taxfor two years starting from the first year of operation followed by a 50%exemption of the applicable tax rate for the next three years. In March 2007, the PRC government promulgated the Corporate Income Tax Law whichwill be effective from 1 January 2008. According to the Corporate Income TaxLaw, both domestic and foreign invested enterprise will be subject to a singleincome tax rate of 25%.The existing Tax Law of the People's Republic of Chinafor Enterprises with Foreign Investment and Foreign Enterprises (the FIE and FEtax laws") and Provisional Regulations of the People's Republic of China onEnterprise Income Tax will be abolished simultaneously. The Corporate Income TaxLaw has an impact on the deferred income tax assets and liabilities of theCompany and its Subsidiaries. As the detailed implementations rulings have notyet been released, the Company and its Subsidiaries adjusted deferred income taxbalances as at 30 June 2007 based on their best estimates and will continue toaccess the impact of such new law in the future. 11. Earnings per share On 23 July 2007, the Company announced the payment of final dividends in respectof the year ended 31 December 2006 and a bonus issue of 10 shares for every 10shares outstanding. The basic and diluted earnings per share included in thisunaudited condensed consolidated interim financial information have beenadjusted retrospectively to reflect the bonus issue (see Note 12). (i) Basic earnings per share The calculation of basic earnings per share for profit attributable to theequity holders of the Company was based on profit attributable to equity holdersof the Company and on the weighted average amount of shares outstanding duringthe period. Six months ended 30 June 2007 2006 Profit attributable to equity holders of Company (Rmb'000) 1,807,257 1,273,947 Weighted average number of ordinary shares in issue (shares in thousand) 5,763,261 5,162,849 Impact of bonus issue (shares in thousand) (Note 12) 5,763,261 5,162,849 Weighted average number of ordinary shares for basic earnings per share (shares in thousand) 11,526,522 10,325,698 Basic earnings per share for profit attributable to the equity holders of the Company (Rmb) 0.16 0.12 (ii) Diluted earnings per share The diluted earnings per share is calculated by adjusting the weighted averagenumber of ordinary shares outstanding to assume conversion of all dilutivepotential ordinary shares. The convertible bond is assumed to have beenconverted into ordinary shares and the net profit is adjusted to eliminate theinterest expenses less the tax effect. Six months ended 30 June 2007 2006 Profit attributable to equity holders of Company (Rmb'000) 1,807,257 1,273,947Interest expense on convertible debt (net of tax) (Rmb'000) 3,328 19,551 Profit used to determine diluted earnings per share (Rmb'000) 1,810,585 1,293,498 Weighted average number of ordinary shares for basic earnings per share (shares in thousand) 11,526,522 10,325,698Adjustments for assumed conversion of convertible bonds (including the impact of share capital expansion*) (shares in thousand) 112,176 444,254 Weighted average number of ordinary shares for diluted earnings per share (shares in thousand) 11,638,698 10,769,952 Diluted earnings per share for profit attributable to the equity holders of the Company (Rmb) 0.16 0.12 * According to the terms and conditions of the convertible bonds, if theCompany makes a bonus issue (in either case credited as fully paid by way ofcapitalisation of profits or reserves), the conversion price will be adjusted tomirror the change of outstanding ordinary shares due to the bonus issue, hencethe assumed conversion of convertible bonds have been adjusted retrospectivelydue to the bonus issue approved in the general meeting held on 29 June 2007 (seeNote 12). 12. Profit appropriations Dividends In the general meeting held on 29 June 2007, the shareholders approved a cashdividend amounting to Rmb1,348,714,000 in respect of the year ended 31 December2006. The amounts have been reflected as an appropriation of retained earningsfor the six months ended 30 June 2007. In addition, the shareholders alsoapproved a bonus issue of 10 shares for every 10 shares outstanding by way ofcapitalisation of capital reserve fund. On 23 July 2007, the Company announced the payment of final cash dividends ofRmb1,348,714,000 and a bonus issue of 10 shares for every 10 shares outstanding,with reference to the total 5,844,880,580 outstanding ordinary shares as at 18July 2007. The cash dividend per share is Rmb0.23075 and the ordinary shares inissue is to be increased by 5,844,880,580 shares. The increase in the number ofordinary shares will result in an increase in share capital of the Company byRmb5,844,880,580 with a corresponding amount of reduction in capital reserve. Asof the date of this unaudited condensed consolidated interim financialinformation approved for issue, the legal process of the share capital expansionhas not been completed. Therefore, no adjustment was made to the share capitalas at 30 June 2007. Reserves During the period, approximately Rmb34,162,000 have been transferred from therestricted reserve to retained earnings. This amount represented amortisation ofdeferred housing benefits for the six months ended 30 June 2007, net of theadditional deferred housing benefits incurred during the same period. An appropriation of approximately Rmb1,020,774,000 to the discretionary surplusreserve for the year ended 31 December 2006 was approved by the shareholders onthe general meeting held on 29 June 2007. As described in Note 2 above, the opening balances of statutory surplus reverseof all the presented periods have been restated as a result of the adoption ofnew PRC GAAP. 13. Related parties and transactions (i) The related parties of the Company and its Subsidiaries are as follows: Name of related parties Nature of relationship Related parties in which the Company has no equity interest China Datang Significant shareholder of the CompanyTianjin Jinneng Investment Company ("Tianjin Jinneng") Shareholder of the CompanyBeijing Energy Investment (Group) Company Shareholder of the CompanyHebei Construction Investment Company Shareholder of the CompanyOther state-controlled entities Related parties of the CompanyRelated parties in which the Company has equity interestNorth China Electric Power Research Institute Associate Company Limited ("NCEPR")Beijing Texin Datang Heat Company Limited ("Datang Texin") AssociateNingxia Datang International Daba Power Associate Generation Company Limited ("Daba Power Company")Tongmei Datang Tashan Coalmine Company Limited Associate ("Tashan Coalmine")Datang Finance Associate (ii) The following is a summary of the major related party transactionsundertaken by the Company and its Subsidiaries during the period: Six months ended 30 June 2007 2006 Ash disposal fee to China Datang 28,946 28,946Rental fee to China Datang 3,614 3,614Technical supervision, assistance and testing service fee to NCEPR 21,096 16,916Heat revenue from Datang Texin 28,045 25,488Fuel management fee to China Datang - 3,134Interest expense to Datang Finance 49,681 15,740Interest expense to Tianjin Jinneng 1,425 - Transactions with other state-controlled entities The PRC government controls a significant portion of the assets and asubstantial number of entities in the PRC. The PRC government is considered tobe the Company's ultimate controlling party. Apart from the transactionsdisclosed above, the Company and its Subsidiaries also conduct a majority of itsbusiness with state-controlled entities. Many state-controlled entities have a multi-layered and complicated corporatestructure and the ownership structures change over time as a result of transfersand privatisation programs. Nevertheless, management believes that the Companyand its Subsidiaries have provided meaningful disclosures of related partytransactions, with inclusion of the following disclosures of materialtransactions and balances with other state-controlled entities. Six months ended 30 June 2007 2006 Sales of electricity 15,347,761 10,742,226Sales of heat 78,182 73,639Interest income from state-owned banks/non-bank financial institution 31,121 14,463Interest expense on loans borrowed from state-owned banks/non-bank financial institution 1,551,987 1,151,356Purchases of property, plant and equipment (including construction-in-progress) 4,920,848 9,899,414Purchases of fuel 8,916,362 3,584,270Purchases of spare parts and consumable supplies 538,763 93,632Drawdown of short-term loans from state-owned banks/non-bank financial institution 10,343,967 9,115,920Repayments of short-term loans from state-owned banks/non-bank financial institution 9,128,396 6,829,434Drawdown of long-term loans borrowed from state-owned banks/non-bank financial institution 8,543,231 7,873,168Repayments of long-term loans borrowed from state-owned banks/non-bank financial institution 6,363,745 3,771,589Acquisition of Hebei Shayu Railway Company Limited - 288,719Other charges - Repairs and maintenance services 51,656 93,578 - Transportation expenses 9,284 139,442 30 June 31 December 2007 2006 Guaranteed loansLoans guaranteed by - North China Grid Company Limited ("NCG") 869,298 921,648 - Minority shareholders of subsidiaries 1,939,316 3,008,081 (iii) Key Management Compensation Six months ended 30 June 2007 2006 Basic salaries and allowances 634 403Bonus 1,820 1,319Retirement benefits 149 98Other benefits 476 677 14. Supplemental financial information (a) Condensed consolidated balance sheet 30 June 31 December 2007 2006 Net current liabilities 14,397,371 12,112,402 Total assets less current liabilities 75,691,009 69,281,048 (b) Condensed consolidated income statement Six months ended 30 June 2007 2006 Interest expense 1,663,791 1,194,282Less: amount capitalised in property, plant and equipment (590,529) (559,979) 1,073,262 634,303Exchange gain, net (83,206) (25,656)Fair value gain on an interest rate swap (17,051) (47,711) Finance costs 973,005 560,936Cost of inventories sold - Fuel 7,178,182 4,557,820 - Spare parts and consumable supplies 114,427 55,967Depreciation 2,389,709 1,785,011Amortisation - Land use rights 8,262 4,157 - Intangible assets 4,145 3,352Dividend income (51,699) (28,052)Donation to State Environmental Bureau - 34,000Amortisation of deferred housing benefits 49,198 40,755 (c) Condensed consolidated cashflow statement Six months ended 30 June 2007 2006Investing activities, included: Additions to property, plant and equipment (9,262,247) (6,929,412)Financing activities, included: Drawdown of short-term loans 10,655,760 9,115,920 Repayments of short-term loans (9,456,686) (6,829,434) Drawdown of long-term loans 6,793,549 7,923,500 Repayments of long-term loans (6,450,995) (3,869,493) (d) Acquisition of a jointly controlled entity On 15 January 2007, the Company entered into agreements with Tuoketuo YunlongEnergy Investment Company Limited, pursuant to which the Company acquired 51%interest in Huhehaote Guoneng Power Company Limited at a cash consideration ofRmb6,002,000. 15. Commitments (a) Capital commitments As at 30 June 2007, the Company and its Subsidiaries had capital commitments ofinvestments amounted to Rmb13,533 million (31 December - 2006 Rmb12,906million). In addition, capital commitments of the Company and its Subsidiariesin relation to the construction and renovation of the electric utility plantsnot provided for in the balance sheet were as follows: 30 June 31 December 2007 2006Authorised and contracted for 14,450,020 21,972,218Authorised but not contracted for 11,705,157 19,484,254 26,155,177 41,456,472 A substantial portion of the above capital commitment is in relation to a coalmining project for which the Company and its Subsidiaries has not yet obtainedthe relevant mining license. If the mining license is not obtained at the end ofthe exploration work, there will be no capital commitment for this coal miningproject. (b) Operating lease commitments Operating lease commitments extending to November 2016 in relation to buildingswere as follows: 30 June 31 December 2007 2006Amounts repayable Within one year 7,228 10,372 Between one to five years 28,912 28,912 Over five years 25,298 36,140 61,438 75,424 16. Financial Guarantees 30 June 31 December 2007 2006Guarantee for loan facilities granted to associates 497,000 1,084,850 Based on historical experience, no claims have been made against the Company andits Subsidiaries since the dates of granting the financial guarantees describedabove. 17. Reclassification Certain comparative figures have been reclassified to conform to the currentyear presentation. 18. Net assets and net profit reconciliation between PRC GAAP and IFRS The consolidated financial statements, which are prepared by the Company and itssubsidiaries in conformity with PRC GAAP, differ in certain respects from IFRS.Major differences between PRC GAAP and IFRS, which affect the net assets and netprofit of the Company and its subsidiaries, are summarized as follow: Net assets 30 June 31 December 2007 2006 (Note) Net assets under PRC GAAP 30,528,023 26,992,067Impact of IFRS adjustments:Difference in the recognition policy on housing benefits to the employees (a) 56,020 74,693Difference in the commencement of depreciation of property, plant and equipment (b) (106,466) (106,466)Difference in accounting treatment on monetary housing benefits (c) 207,666 225,539Others (17,151) (16,750)Applicable deferred tax impact of the above GAAP differences (e) 29,700 31,635 Net assets under IFRS 30,697,792 27,200,718 Net assets For six months ended 30 June 2007 2006 (Note) Net profit under PRC GAAP 2,303,804 1,692,047Impact of IFRS adjustments:Difference in the recognition policy on housing benefits to the employees (a) (18,673) (18,673)Difference in accounting treatment on monetary housing benefits (c) (30,525) (22,102)Difference in accounting treatment of performance payroll accrual (d) - (30,229)Applicable deferred tax impact of the above GAAP differences (e) (1,936) 685 Net profit under IFRS 2,252,670 1,621,728 Note: Since the Company and its Subsidiaries adopted the new PRC GAAP, thecomparative figures have been restated accordingly (Note 2). (a) Difference in the recognition policy on housing benefits to theemployees The Company provided housing to its employees at a discount price. The pricedifference between the selling price and the cost of housing is considered to bea housing benefit and is borne by the Company. For PRC statutory reporting purposes, in accordance with the relevantregulations issued by the Ministry of Finance of the PRC, the total housingbenefits provided by the Company before 6 September 2000 should be directlydeducted from the statutory public welfare fund and those provided after 6September 2000 are charged to non-operating expenses as incurred. Under IFRS,the housing benefits provided by the Company are recognised on a straight-linebasis over the estimated remaining average service lives of the employees. (b) Difference in the commencement of depreciation of property, plantand equipment Under PRC GAAP, depreciation of property, plant and equipment commences from onemonth after the relevant assets are completed and ready for their intended use.Under IFRS, depreciation commences immediately when the relevant assets areready for its intended use. (c) Difference in accounting treatment on monetary housing benefits Under PRC GAAP, the monetary housing benefits provided to employees who startedwork before 31 December 1998 were directly deducted from the retained earningsand statutory public welfare fund after approval by the general meeting of theCompany. Under IFRS, these benefits are recorded as deferred assets and amortised on astraight-line basis over the estimated service lives of relevant employees. (d) Difference in accounting treatment of performance payroll accrual Performance payroll accrued under PRC GAAP, in accordance with relevantgovernment policies, but not paid out at the end of the year does not meet allthe criteria of recognising liabilities under IFRS. Therefore these unpaidbalances were reversed under IFRS. (e) Applicable deferred tax impact on the above GAAP differences This represents the deferred tax effect on the above GAAP differences whereapplicable. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Datang Intl H