RNS Number:6217O
Zhejiang Southeast Elec Power Co Ld
13 August 2003
Zhejiang Southeast Electric Power Company Limited
Interim Report 2003
IMPORTANT NOTICE
The Directors of the Zhejiang Southeast Electric Power Company Limited (the
Company) confirm that there are no false representations, misleading statements
or material omissions in this Report. And they jointly and severally accept full
responsibility for the authenticity, accuracy and integrity of the information
contained herein.
The Board Chairman of the Company, Hu Jiangchao and the management personnel in
charge of accounting affairs including General Manager Shou Desheng, Chief
Accountant Hu Senjian and Deputy Manager of Finance Department Yang Xiaodong
affirm that the financial statements contained herein are true and complete.
The interim financial statements attached to this Interim Report is unaudited.
The text of this report has been prepared in both Chinese and English. Should
there be any discrepancies between the Chinese version and the English version,
the Chinese version shall prevail.
Contents
I. About the Company- PAGEREF
II. Change in Share Capital and Shareholding of Major Shareholders
III. Particulars of Directors, Supervisors and Senior Management Personnel
IV. The Management's Discussion and Analysis
V. Important Events
VI. Financial Statements
I. About the Company
1. Registered Name in Chinese:
Registered Name in English:
Zhejiang Southeast Electric Power Company Limited
Abbreviation of the Company Name: ZSEPC
2. Information on the listing of the shares of the Company
Listing place of B shares: Shanghai Stock Exchange
Abbreviation of B shares: ZSEPC B Shares
Code of B shares: 900949
Listing place of GDRs: London Stock Exchange
Name of GDRs: ZHEJIANG GDRs
Code of GDRs: 0949QLT
3. Registered Address and Office Location:
22-23 Floor, Biao Li Tower, 528 Yan'an Road,
Hangzhou, Zhejiang Province, P.R. China
Postal Code: 310006
Website: http://www.zsepc.com/
4. Legal Representative: Sun Yongsen
5. Secretary to the Board of Directors: Xia Jinghan
Address: 22-23 Floor, Biao Li Tower, 528 Yan'an Road,
Hangzhou, Zhejiang Province, the People's Republic of China
Tel: 0571-85774566
Fax: 0571-85774321
E-mail Address: xjh@zsepc.com
6. Designated Press for Information Disclosure:
Shanghai Securities News, China Securities Journal, South China Morning Post
(Hong Kong), Wen Hui Bao (Hong Kong)
Website for Publication of Annual Reports as designated by the China
Securities Regulatory Commission (CSRC):
http://www.sse.com.cn/
Venues for inspection of the Annual Report:
Head office of the Company, Herbert Smith Hong Kong Office and London Office
7. Other Information
Initial Registration Date: 15 May 1997
Initial Registered Address:
451 Fengqi Road, Hangzhou, Zhejiang Province
Re-registration Date: 8 July 2002
Re-registered Address:
22-23 Floor, Biao Li Tower, 528 Yan'an Road,
Hangzhou, Zhejiang Province
Registration No. of Business License: Qi Gu Zhe Zong Zi No.002189
Taxation Registration No.: State Tax Registration No.330000142943450
Local Tax Registration No.330000142943450
Names and Addresses of Domestic and International Accountants Appointed by the
Company:
Domestic: Zhejiang Pan-China Certified Public Accountants
Address: Qianjiang Sci-tech Building, 388 Wensan Road, Hangzhou, China
International: PricewaterhouseCoopers Zhong Tian CPAs Co., Ltd.
Address: Rui'an Plaza, 333 Mid-Huaihai Road, Shanghai, China
8. Main Financial Data and Indicators
Unit: RMB yuan
30 June 2003 31 Dec. 2002 Increase/decrease compared
with beginning amount (%)
Current Assets 1,879,735,389.29 1,708,215,077.32 10.04
Current Liabilities 2,082,769,539.04 2,245,491,932.48 -7.25
Total Assets 8,845,688,847.99 8,602,419,267.42 2.83
Shareholders' Equity (excluding 5,740,924,745.75 5,386,781,727.00 6.57
minority shareholders)
Net Assets per Share 2.86 2.68 6.72
Adjusted Net Assets per Share 2.84 2.67 6.37
Jan.-June 2003 Jan.-June 2002 Increase/decrease compared
with beginning amount (%)
Net Profit 354,143,018.75 296,993,882.25 19.24
Net Profit after Deducting 358,283,128.20 304,837,129.24 17.53
Non-recurring Gains & Losses
Earnings per Share 0.176 0.148 18.92
Yield on Net Assets 6.17 5.24 17.75
Net Cash Flow Generated from 659,333,383.25 535,044,162.79 23.23
Operating Activities
Note: Non-recurring Gains & Losses
Unit: RMB yuan
Non-recurring Gains & Losses Amount (Loss and expenditure denominated by "-")
Net Losses on Disposal of Fixed Assets -6,401,998.20
Donations -101,000.00
Penalties 39,660.00
Others 284,070.37
Total -6,179,267.83
II. Change in Share Capital and Shareholding of Major Shareholders
1. There was no change in the share capital in this reporting period.
2. Total Number of Shareholders as at the Period End
As at the end of the reporting period, the Company's shareholders numbered
86,592 in total.
3. Shareholding of Major Shareholders
Full Names of Shareholders Increase/ Number of Percentage Type of Shares Number of Nature of
Shares Held of Shares in Shareholders
decrease at Year End Shareholding Pledge or
in Current Freeze
Year (+,-)
(share)
Zhejiang Provincial Electric 0 799,963,200 39.80 Non-negotiable - State-owned
Power Development Co. shareholder
China Huaneng Group Corp. 0 514,036,800 25.57 Non-negotiable - State-owned
shareholder
NAITO SECURITIES CO.,LTD 598,832 14,846,636 0.74 Outstanding Unknown Foreign capital
shareholder
SCBHK A/C BROWN BROTHERS 2,380,000 11,492,918 0.57 Outstanding Unknown Foreign capital
HARRIMAN AND COBOSTON S/A CMO shareholder
EMERGING MARKETS FUND
TOYO SECURITIES ASIA LTD. A/C 78,900 7,384,400 0.37 Outstanding Unknown Foreign capital
CLIENT shareholder
Huacong Investment Co. Ltd 0 6,807,825 0.34 Outstanding Unknown Foreign capital
shareholder
Zhejiang Bada Co. Ltd 0 4,000,000 0.20 Non-negotiable - Legal person
shareholder
SCBHK A/C NOMURA TB/NOMURA ITM 0 2,400,000 0.12 Outstanding Unknown Foreign capital
shareholder
BSDT S/A PENSION RESERVES 245,000 2,214,987 0.11 Outstanding Unknown Foreign capital
INVESTMENT MANAGEMENT BOARD shareholder
Hu Jiaying 0 2,158,585 0.11 Outstanding Unknown Foreign capital
shareholder
In the light of Document Ji Ji Chu (2002)2704 "The State Planning Commission's
Approval of the Plan for Restructuring of the Generation Assets of the State
Power Corp." issued by the State Planning Commission, the 514,036,800
state-owned legal person shares of the Company originally held by Zhejiang
Provincial Electric Power Co. (ZPEPC) were decreed to be transferred to China
Huaneng Group Corp. for free. Based on the Share Transfer Agreement between the
two parties, the effective date of the transfer was 1 January 2003. After the
share transfer, China Huaneng Group came into possession of 514,036,800 shares
of the Company, accounting for 25.57% of the total shares as the second largest
shareholder of ZSEPC. ZPEPC no longer hold any shares of ZSEPC. Announcement of
the above transfer was made on 23 April 2003.
4. The holding shareholders and the de facto controller of the Company remained
unchanged in this reporting period.
III. Particulars of Directors, Supervisors and Senior Management Personnel
1.Change in Shareholding of Directors, Supervisors and Senior Management
Personnel
Since the directors, supervisors and senior management personnel hold no shares
of the Company, there was no change in their shareholding in this reporting
period.
2. Changes of Directors, Supervisors and Senior Management
Personnel
(1) Since the tenure of the 2nd Board of Directors and the Supervisory
Committee expired, re-election was held and approved in the Shareholders'
General Meeting 2002 of the Company. Sun Yongsen, Wang Xiaosong, Shou Desheng,
Xie Guoxing, Hu Genfa, Cao Lu, Xing Junjie, Liu Ranxing, Li Hua, Li Jianguo, Wu
Xianquan, Qian Zhongwei, Huang Dongliang, Huan Guocang and Mao Fugen were
elected Directors of the 3rd Board of Directors, among whom Wu Xianquan, Qian
Zhongwei, Huang Dongliang, Huan Guochang and Mao Fugen were Independent
Directors; Huang Lixin, Fu Muqing, Yang Jianxiong, Sun Chaoyang, Chen Xi, Wang
Jiafu and Huang Guanlin were elected Supervisors of the 3rd Supervisory
Committee, among whom Wang Jiafu and Huang Guanlin were supervisors representing
the Company employees.
(2) It was unanimously approved in the first meeting of the 3rd Board of
Directors that Sun Yongsen were elected Chairman of the Board, and Wang Xiaosong
Vice Chairman of the Board; Shou Desheng were appointed as General Manager of
the Company, and Wu Yaozhong, Chen Juemin and Xia Jinghan as Deputy Managers of
the Company; Xia Jinghan was made Secretary to the Board of Directors; Hu
Senjian was made Chief Accountant of the Company.
(3) It was unanimously approved in the first meeting of the 3rd Board of
Directors that Huang Lixin was elected the convener of the supervisory committee
meeting of the Company.
IV. The Management's Discussion and Analysis
1. Operating Results and Financial Status
Unit: RMB yuan
Item January-June 2003 January-June 2002 Increase/decrease
%
Principal Operating 2,006,210,874.42 1,593,850,915.17 25.87
Income
Gross Profit 533,649,220.31 445,486,022.22 19.79
Net Profit 354,143,018.75 296,993,882.25 19.24
Item 30 June 2003 31 December 2002 Increase/decrease
%
Total Assets 8,845,688,847.99 8,602,419,267.42 2.83
Net Assets 5,740,924,745.75 5,386,781,727.00 6.57
2. Scope and Analysis of Principal Operations
The principal operations of the Company cover investment in, development and
operations of the electric power business. As of the end of this reporting
period, the commissioned generating capacity of the Company as indicated in its
consolidated financial statements reached 2,300 MW, of which the Company-owned
capacity reached 2,090 MW.
Power Plant Name Installed Percentage owned by the Capacity owned by the
Capacity Company Company
Taizhou Power Plant 1,440MW 100% 1,440MW
Xiaoshan Power Plant 260MW 100% 260MW
Zhejiang Changxing Power 600MW 65% 390MW
Generation Co. Ltd
Total 2,300MW - 2,090MW
In this reporting period, the generating units wholly owned or controlled by the
Company had been kept in safe and stable operation. The provincial power
consumption grew drastically due to the rapid economic development in Zhejiang.
And the Company's generating capacity increased when new units, i.e. Units 1 and
2 of Zhejiang Changxing Power Generation Co. Ltd were commissioned. All this
contributed to a significant increase in the electricity sales of the Company in
this reporting period as opposed to the same period in the previous year. Based
on the consolidated financial statements, the electricity sales completed by the
Company in this reporting period increased by 1.439 billion kwh or 31.51% to
6.006 billion kwh compared with that in the same period of the previous year. If
excluding the newly-added generating units, the electricity sales increased by
0.395 billion kwh compared with that in the same period of the previous year.
The increase in the electricity sales enabled the Company to overcome the
adverse effect of the contractual price adjustment with regard to Taizhou Power
Plant and the coal price hike (Refer to "Operational Difficulties" herein). Both
its principal operating income and its principal operating profit increased
remarkably. Based on the consolidated financial statements, the principal
operating income and the principal operating profit of the Company increased by
RMB 412 million yuan and 128 million yuan, or 25.87% and 24.06% to RMB 2,006
million yuan and 660 million yuan respectively in this reporting period compared
with those in the same period of the previous year. If excluding the newly-added
generating units, they increased by RMB 85 million and 41 million yuan
respectively.
Power Plant Name Electricity Sales (in 108 kwh) Principal Operating Income
(in RMB 108 yuan)
Jan.-Jun. 2003 Jan.-Jun. 2002 Jan.-Jun. 2003 Jan.-Jun. 2002
Taizhou Power Plant 42.83 38.07 14.59 13.50
Xiaoshan Power Plant 6.79 7.60 2.20 2.43
Zhejiang Changxing Power 10.44 - 3.28 -
Generation Co. Ltd
Total 60.06 45.67 20.06 15.94
In this reporting period, the net profit realized by the Company increased by
RMB 57 million yuan or 19.24% to RMB 354 million yuan compared with that of the
same period in the previous year. The earnings per share of the Company reached
RMB 0.176 yuan.
3. Businesses or Product Accounting for Above 10% of the Principal
Operating Income
All the principal operating income of the Company came from its electricity
sales.
Business or Principal Principal Gross Increase/ Increase/ Increase/
Product Operating Income Operating Cost Profit decrease in decrease in decrease in
% principal principal gross profit
operating income operating cost compared with
compared with compared with same period in
same period in same period in previous year
previous year previous year (%)
(%) (%)
Electricity 2,006,210,874.42 1,323,179,148.26 34.05 25.87 27.28 -2.10
Generation
Region Principal Increase/decrease in principal operating income compared with previous year (%)
Operating Income
East China 2,006,210,874.42 25.87
4. No investment returns from a singe company in which the Company has
minority shares accounted for more than 10% of the net profit of the Company.
5. Operational Difficulties
(1) The Effect of Price Adjustment on the Company
Pursuant to Notice on Power Tariff Management and Notice to Accelerate
Implementation of Same Tariff for Same Power in Urban and Suburban Areas issued
by the State Planning Commission, as approved by Zhejiang Commodity Pricing
Bureau with Document Zhe Jia Shang (2003)36, the contractual electricity price
applicable to Taizhou Power Plant under the Company was reduced by RMB 5 yuan/MW
to RMB 352.42 yuan/MW, effective from 1 January 2003. In this reporting period,
the principal operating income of the Company decreased by RMB 16.90 million
yuan due to electricity price adjustment.
(2) The Effect of Coal Price Hike on the Company
Due to a price hike in the coal market, the prices of some types of coals went
up to varying degrees in the Coal Supply Contract signed between the Company and
the coal suppliers in this reporting period. For this reason, the standard coal
price of the Company rose by RMB 10.17 yuan/ton compared with that of the
previous year.
The Company will try to reduce coal consumption by stepping up equipment
renovation, strengthening coal yard management and tightening coal quality
control and measurement check in an attempt to minimize the adverse effect of
the coal price hike.
(3) The Effect of Emission Charges on the Company
The Regulations for Management of Collection and Use of Emission Charges issued
by the State Environmental Protection Agency came into force on 7 July 2003.
What concerns the power sector is that the charges on sulfur dioxide emission
will be based on the total emission instead of the excess emission. Preliminary
estimation indicates that the charges on sulfur dioxide emission to be paid by
the Company in the latter half of 2003 will increase by RMB 8.45 million yuan.
6. Investment
(1) Use of Proceeds Raised
The proceeds raised from the issuance of B shares of the Company in 1997 totaled
230 million US dollars, equivalent to approximately RMB 1,900 million yuan. An
amount of RMB 1,169 million yuan out of the proceeds raised was used to erect
Unit 8 of Taizhou Power Plant and to acquire Xiaoshan Power Plant as stated in
the Prospectus.
As approved in the extraordinary shareholders' general meeting of the Company in
2001, the remaining amount of RMB 742 million yuan was used to (a) make equity
investment in Zhejiang Jiahua Power Generation Co. Ltd (ZJPGC), and (b)
supplement working capital of the Company.
ZJPGC is the project company responsible for construction and operation of
Jiaxing Power Plant Phase II (4 x 600 MW). In accordance with Document Ji Ji Chu
The State Planning Commission's Approval of Adjustment to Construction Plan for
Zhejiang Jiaxing Power Plant Phase II, the total investment of the project
amounts to RMB 10,280 million yuan, of which the registered capital amounts to
RMB 2,570 million yuan, and debt financing from the domestic commercial banks
amounts to RMB 7,710 million yuan. The Company's investment in ZJPGC accounts
for 24% of its equity, equivalent to a total capital injection by the Company of
RMB 616.8 million yuan.
The equity investment in ZJPGC is to be injected in installments. As at the end
of the 2002, the registered capital of ZJPGC amounted to RMB 555.19 million
yuan. The Company injected an equity investment of RMB 133.25 million yuan per
the investment ratio in 2001. Based on the Resolution on Increasing Registered
Capital adopted in shareholders' general meeting of ZJPGC held on 28 November
2002, all the shareholders unanimously agreed to increase the registered capital
of ZJPGC to RMB 1,555.19 million yuan. Each shareholder will inject the
additional amount in proportion to his equity investment ratio and in conformity
with Equity Capital Injection Plan in 4 installments in 2003. Based on the above
resolution and the investment ratio of the Company, the Company shall inject
additional equity capital totaling RMB 240 million yuan to ZJPGC in 2003, and
paid in RMB 120 million yuan in this reporting period.
Jiaxing Power Plant Phase II is now under construction without producing any
profit yet. It is scheduled that Unit 1 will be commissioned at the end of 2004,
and the whole project will be completed and put into production by the end of
June 2006.
(2) Investment Not Using Raised Proceeds
a. Zhejiang Changxing Power Generation Co. Ltd (ZCPGC)
ZCPGC owns 2 x 300 MW generating units. Its registered capital stands at RMB 610
million yuan. The Company holds 65% of its equity and has thus made equity
investment of RMB 395.50 million yuan, all of which has been in place in 2001.
Unit 1 of ZCPGC was put into commercial operation on 15 December 2002, and Unit
2 on 22 May 2003. In this reporting period, ZCPGC completed electricity sales
amounting to 1,044 million kwh and principal operating income amounting to RMB
328 million yuan.
b. Tankeng Hydropower Station
As reviewed and approved in the first meeting of the 3rd Board of Directors and
the first extraordinary shareholders' general meeting, the Company decided to
use its own fund to make equity investment in Tankeng Hydropower Station holding
(Tankeng) 25% of Tankeng's equity.
The planned installed capacity of Tankeng project totals 3 x 200 MW. Based on
the Feasibility Study Report for Tankeng Hydropower Station Project, the total
investment of the project will be RMB 4.642 billion yuan, of which 30% will be
contributed by the investors in the form of equity investment, the remaining 70%
will be financed through the bank loans. It is estimated that the construction
period will be 5 years.
The Project Proposal of Tankeng Hydropower Station was submitted to the State
Council through the State Development and Reform Commission and was approved in
the 8th routine meeting of the State Council on 13 May 2003. Right now the
preparatory work on various fronts for the project is well under way.
V. Important Events
1. Corporate Governance Structure
In strict accordance with the Company Law, the Securities Law and Rules for
Governance of Listed Companies, the Company constantly perfected its corporate
legal person governance structure. As approved in the Shareholders' General
Meeting 2002 of the Company, the Board of Directors of the Company is composed
of 15 directors. Among them, 5 are independent directors accounting for one
third of the total, which conforms to the Instruction on Establishment
Independent Director System in Listed Companies issued by China Securities
Regulatory Commission.
Three ad hoc committees under the board of directors i.e. the Strategic
Committee, the Auditing Committee and the Salaries & Appraisal Committee were
set up. The independent directors in the Auditing Committee and the Salaries &
Appraisal Committee account for half or more than half of the directors and are
appointed as Head of Committee. Two independent directors in the Auditing
Committee are accountants with professorship.
2. Implementation of Profit Distribution Plan
The shareholders' general meeting 2002 of the Company reviewed and approved the
profit distribution plan for 2002 as follows:
Taking 2,010,000,000 shares at the end of 2002 as the base number, a cash
dividend of RMB 0.248 yuan per share (including tax) would be distributed to all
the shareholders, totaling RMB 498,480,000.00 yuan. The dividend of the B share
would be converted to the US dollars for distribution. The actual distribution
of cash dividend would be 0.029961 US dollars per share based on the median
exchange rate of USD: RMB=1:8.2774 published by the Bank of China on 7 July
2003.
The Announcement of Dividend Distribution was published on 10 July 2003. The
final transaction date of B share: 15 July 2003; the ex dividend date: 16 July
2003; the shareholding registration date: 18 July 2003; the B share dividend
distribution date: 25 July 2003. The distribution of dividends was performed on
schedule.
3. The Company made no interim profit distribution or conversion of capital
reserves into share capital.
4. The Company was not subjected to any major cases of litigation or
arbitration occurring in this reporting period or occurring before the reporting
period but continuing into this reporting period.
5. The Company made no major purchase, sale or disposal of assets or
acquisition or merger of enterprises in this reporting period or before this
reporting period but continuing into this reporting period.
6. Important Related Transaction
(1) Purchase/Sale of Commodities and Supply of Labor Service
The Company made no major related transactions of purchase/sale of
commodities or supply of labor service in this reporting period.
(2) Purchase/Sale of Assets
The Company made no related transactions of purchase/sale of assets in
this reporting period.
(3) Guarantees
a. Providing ZCPGC with Shareholder's Guarantee Proportional to Equity
Investment
To meet the needs for construction of 2 x 300 MW generating units of ZCPGC, the
shareholders of ZCPGC severally provided ZCPGC with shareholders' guarantees
proportional to their respective equity investment for the project loan without
joint accountability. The provision of the guarantee was approved in the 15th
meeting of the 2nd Board of Directors of the Company.
In December 2001, ZCPGC applied to China Construction Bank Changxing County
Branch for a loan in amount of RMB 1.5 billion yuan. In proportion to its equity
investment, the Company provided a guarantee for part of the loan amounting to
RMB 1.07 billion yuan with its duration from 18 December 2001 to 17 June 2019.
Up to the end of this reporting period, the balance of ZCPGC's loan stood at RMB
490 million, of which RMB 343 million was on a guarantee provided by the
Company. In this reporting period, ZCPGC's balance of loan increased by RMB 40
million yuan, and thus the guarantee provided by the Company increased by RMB 14
million yuan.
Units 1 and 2 of ZCPGC were put into commercial operation on 15 December 2002
and 22 May 2003 respectively, making principal operating income of RMB 328
million yuan in this reporting period. As at the end of this reporting period,
there existed no signs of joint liabilities on the part of the Company.
b. Providing ZJPGC with Shareholder's Guarantee Proportional to Equity
Investment
To meet the needs for construction of 4 x 600 MW generating units of ZJPGC, the
shareholders of ZJPGC severally provided ZJPGC with shareholders' guarantees
proportional to their respective investment for the project loan without joint
accountability. This guarantee was approved in the extraordinary shareholders'
meeting of the Company in 2001.
In December 2001, ZJPGC applied to Industrial and Commercial Bank of China
Zhejiang Branch and China Construction Bank Zhejiang Branch for long-term loans
in amount of RMB 4,500 million yuan and RMB 3,200 million yuan respectively,
with guarantees spanning a duration from 17 Dec. 2001 to 16 Dec. 2026.
Up to the end of this reporting period, the balance of ZJPGC's loan stood at RMB
100 million. In proportion to its equity investment ratio of 24%, the Company
provided a guarantee for part of the loan amounting to RMB 24 million yuan. In
this reporting period, there was no increase in ZJPGC's loan balance.
The 4 x 600 MW units of ZJPGC are now under construction. As at the end of the
current reporting period, there existed no signs of joint liabilities on the
part of the Company.
(4) Creditor/Debtor Relationship between the Company and Related Parties
a. Creditor/Debtor Relationship with Controlled Subsidiaries
In order to raise the efficiency of capital use, the Company entrusted
Industrial & Commercial Bank of China, Hangzhou Qingchunlu Branch to provide
trust loans to Zhejiang Changxing Power Generation Co. Ltd. As at the end of
this reporting period, the balance of the trust loan of the Company amounted to
RMB 300 million yuan.
Entrustment Loan Amount Due Date Repayment Time Annual
Interest
Time (RMB million yuan) Rate
30/01/2002 50 29/01/2003 29/01/2003 5.85%
25/09/2002 50 24/09/2003 Not yet due 5.31%
25/10/2002 50 24/10/2003 Not yet due 5.31%
25/12/2002 50 24/12/2003 Not yet due 5.31%
27/01/2003 50 26/01/2004 Not yet due 5.31%
29/01/2003 50 28/01/2004 Not yet due 5.31%
04/03/2003 50 03/03/2004 Not yet due 5.31%
b. Creditor/Debtor Relationship between the Company and Other Related Parties
Unit: RMB yuan
Item Ending Balance Current Amount Formation Repayment Status Percentage out of
Reasons Credit/Debt of
Same Kind (%)
Long term Liabilities
Zhejiang Provincial 79,473,000.00 0.00 (Note) Not yet repaid 9.74
Electric Power
Development Co.
(ZPEPDC)
Long term Liabilities
Due Within 1 Year
ZPEPDC 39,736,500.00 39,736,500.00 (Note) Half repaid per 24.37
contract
Accounts Payable
Taizhou Power Plant 0.00 1,255,000.00 Project Cost Repaid -
Industrial Co.
Changxing Changfeng 0.00 2,760,000.00 Lease Fee Repaid -
Energy Co.Ltd
Other Payables
ZPEPDC 1,058,581.44 0.00 Fee for Lease Not yet repaid 1.63
of Divested
Assets
Changxing Changfeng 0.00 2,803,873.66 Material Fee Repaid -
Energy Co.Ltd
Dividends Payable
ZPEPDC 198,390,873.60 0.00 Dividends Distributed in 39.80
Distribution accordance with
Profit
Distribution Plan
(Note): The Company signed a Liabilities Contract with two creditors, namely,
ZPEPC and ZPEPDC in 1997, whereby the Company borrowed a loan for construction
of the Taizhou Power Plant Phase IV (Units 7 and 8) for 10 years. The Company
shall repay the principal and interest in installments to the above two
creditors. Up to the end of 2002, the total liabilities amounted to RMB 652.12
million yuan. Based on Agreement on Liabilities Repayment in 2001 and Thereafter
signed between the three parties on 28 February 2001, the Company shall repay
liabilities totaling RMB 326.06 million yuan in 2003 ( the long term liabilities
due within 1 year) to the two creditors. In this reporting period, the Company
repaid liabilities amounting to RMB 163.03 million yuan to the creditors.
Unit: RMB yuan
ZPEPDC ZPEPC Total
(trust loan through (trust loan through
Shanghai Pudong Development East China Electric
Bank Hangzhou Branch) Power Group Financial
Co. Ltd)
Total Liabilities at End of 2002 158,946,000.00 493,174,000.00 652,120,000.00
Of which long term 79,473,000.00 246,587,000.00 326,060,000.00
liabilities up to end of 2002
Transferred to long term 79,473,000.00 246,587,000.00 326,060,000.00
liabilities due within 1 year
Amount of Repayment in Upper 39,736,500.00 123,293,500.00 163,030,000.00
Half of 2003
Balance of long term liabilities 39,736,500.00 123,293,500.00 163,030,000.00
due within 1 year on 30 June
2003
(5) As approved in the first meeting of the 3rd Board of Directors and the
first extraordinary shareholders' general meeting, the Company, Zhejiang
Provincial Energy Group Corp. (ZPEGC) and Lishui Municipal State-owned Assets
Operations Co. will jointly invest in the construction of Tankeng Hydropower
Station. As ZPEGC is the de facto controller of the Company holding 39.80% of
the Company's stock indirectly, this investment will constitute a related
transaction in the light of Regulations for Listed Shares of Shanghai Stock
Exchange. Refer to Para. 6 of Section IV "Investment" herein for details.
(6) Other Related Transactions
a. In this reporting period, ZCPGC paid Changxing Changfeng Energy Co. Ltd for
purchase of fuel oil and material and waste ash disposal amounting to RMB
48.1334 million yuan. ZCPGC is involved in the daily management of the latter.
b. In this reporting period, based on Labor Borrowing Agreement and
Transportation Service Contract with Taizhou Power Plant Industrial Co., the
Company paid the latter for labor borrowing, commuting buses to/from work and
waste ash disposal totaling RMB 4 million yuan. Taizhou Power Plant is involved
in the daily management of Taizhou Power Plant Industrial Co.
c. In the this reporting period, based on Vehicle Transport Contract, Logistic
Service Contract and House Rent Contract with Hangzhou Xiaoshan Linjiang
Industrial & Trade Co. Ltd, the Company paid the latter for car rental, house
rental and logistic service charges totaling RMB 7.36 million yuan. Xiaoshan
Power Plant is involved in the daily management of Hangzhou Xiaoshan Linjiang
Industrial & Trade Co. Ltd.
7. Important Contracts and Implementation
(1) Electricity Sales
Owing to the characteristics of the power sector, all the electricity generated
by the Company was sold to the single buyer in Zhejiang power grid, ZPEPC. Of
the total electricity sales, the contractual amount was settled at the price
approved by Zhejiang Commodity Pricing Bureau; and the competitive bidding
amount was settled at the market-clearing price.
In this reporting period, based on the consolidated financial statements, a
total of 6.006 billion kwh of electricity was sold to ZPEPC, earning principal
operating income amounting to RMB 2,006 million yuan.
(2) Coal Purchase
The coal needed by the Company for power generation is supplied by Zhejiang
Fuxing Electric Power Fuel Company Limited and its subsidiary Ningbo Fuxing
Electric Fuel Co. Ltd. Based on the Fuel Supply Agreement valid for 20 years
signed in May 1997, both sides shall enter into an Annual Coal Supply Contract
every year to determine the quality, specifications, quantity and price of the
coal supply for the current year. Zhejiang Fuxing Electric Fuel Co. and Ningbo
Fuxing Electric Fuel Co. shall supply fuel to the Company at a price neither
higher than the price at which it charges other power plants for the same type
of fuel, nor higher than the price at which the Company can purchase the same
type of fuel in the open market at the time of the price negotiation between
both sides.
The Company signed the Coal Supply Contract for 2003 with Zhejiang Fuxing
Electric Power Fuel Company Limited and Ningbo Fuxing Electric Fuel Co. Ltd on
22 April 2003. In this reporting period, the Company made payment for coal
purchase amounting to RMB 899 million yuan.
(3) The Company made no important trust management, contracting or lease of
other companies' assets, nor took other companies' important trust management,
contracting or lease of the Company's assets in this reporting period or before
this reporting period but continuing till the end of this reporting period.
(4) Important Guarantees
Refer to "Important Related Transactions" herein.
5. Trust Fund Management
In line with the resolution by which the Board authorized the management team to
invest in state treasury bonds and other securities up to a ceiling of RMB 300
million yuan, the Company entered into Agreement on Trust Fund Management with
Zhejiang International Trust Investment Corp. (ZITIC) in this reporting period
to trust the latter with capitalistic operations.
Unit: RMB yuan
Trustee Trust Amount Term Contracted Actual Yield Ending Balance
Yield
ZITIC 100,000,000.00 22/01/2003-21/01/2004 Nil Not yet due 100,000,000.00
with no yield
50,000,000.00 28/01/2003-27/01/2004 50,000,000.00
100,000,000.00 10/04/2003-09/04/2004 100,000,000.00
(6) Repayment of Long-term Liabilities
Based on Agreement on Liabilities Repayment in 2001 and Thereafter signed
between the Company, ZPEPDC and ZPEPC on 28 February 2001, the Company repaid
liabilities amounting to RMB 163.03 million yuan in this reporting period.
8. Commitment
Based on the Resolution on Increasing Registered Capital adopted in
shareholders' general meeting 2002 of ZJPGC held on 28 November 2002, all the
shareholders unanimously agreed to increase the registered capital of ZJPGC to
RMB 1,555.19 million yuan. Each shareholder will inject the additional amount in
proportion to his equity investment ratio and in conformity with Equity Capital
Injection Plan in 4 installments in 2003. Based on the above resolution and the
investment ratio of the Company, the Company shall inject additional equity
capital totaling RMB 240 million yuan to ZJPGC in 2003, and have paid in RMB 120
million yuan up to now.
9. Other Important Events
Testing Work of East China Power Market
The State Power Regulatory Commission issued Notice on Testing Work of East
China Power Market on 2 June 2003 and decided to establish a power market in
East China area as a pilot project, which encompasses Shanghai, Jiangsu,
Zhejiang and Fujian. It is envisioned that the review of the testing plan for
the regional power market will be finished by the end of August 2003, that the
market code and the regulatory method will be formulated by the end of 2003, and
that East China Power Market will go into operation starting from 1 April 2004.
All the power plants owned or controlled by the Company are located within the
East China area. The concrete model, the operating code and the regulatory
method of East China Power Market are yet to be shaped. Their impact on the
Company will be closely followed.
10. Index of Interim Announcements
Prior to the publication of this Interim Report 2003, the following interim
announcements have been made:
(1) Announcement of Board Resolutions dated 38 March 2003
(Announcement No. Lin 2003-001)
It announces the approved The Work Report of Board of Directors for 2002, The
General Manager's Report for 2002, Annual Report 2002 and Summary, Final
Accounting Report 2002 and Explanation of Accounting Policies, Changes of
Accounting Assumptions and Correction of Major Accounting Errors, Profit
Distribution Plan for 2002, Financial Budget Report for 2003, Proposal for
Renewal of Appointment of Accounting Firms, Proposal on Change of Shareholders
of Zhejiang Provincial Natural Gas Development Co. Ltd and Proposal on Change of
Shareholders of Zhejiang Changxing Power Generation Co. Ltd
(2) Announcement of Resolutions of Supervisory Committee dated 28 March
(Announcement No. Lin 2003-002)
It announces the approved Work Report of the Supervisory Committee for 2002 and
Annual Report 2002 and Summary
(3) Announcement on Transfer of State-owned Legal Person Shares dated 23 April
2003
(Announcement No. Lin 2003-003)
It announces that the state-owned legal person shares of the Company
originally held by ZPEPC were decreed to be transferred to China Huaneng Group
Corp. for free in the light of Document Ji Ji Chu (2002)2704 "The State Planning
Commission's Approval of the Plan for Restructuring of the Generation Assets of
the State Power Corp.".
(4) Announcement of Board Resolutions dated 30 May 2003
(Announcement No. Lin 2003-004)
It announces the approved Proposal for Amendment of Articles of Association,
Proposal for Election of Directors upon Tenure Expiry and Proposal for
Shareholders' General Meeting for 2002.
(5) Announcement of Resolutions of Supervisory Committee dated 30 May 2003
(Announcement No. Lin 2003-005)
It announces the approved Proposal for Election of Supervisors upon Tenure
Expiry.
(6) Notice to Hold Shareholders' General Meeting 2002 dated 30 May 2003
(Announcement No. Lin 2003-006)
(7) Announcement of Resolutions Adopted in Shareholders' General Meeting
dated 2 July 2003
(Announcement No. Lin 2003-007)
It announces the approved The Work Report of Board of Directors for 2002, The
Work Report of Supervisory Committee for 2002, Final Accounting Report 2002,
Profit Distribution Plan for 2002, Financial Budget Report for 2003, Proposal
for Renewal of Appointment of Accounting Firms, Proposal for Amendment of
Articles of Association, Proposal for Election of Directors upon Tenure Expiry
and Proposal for Election of Supervisors upon Tenure Expiry.
(8) Announcement of Resolutions Adopted in 1st Meeting of 3rd Board of
Directors dated 2 July 2003
(Announcement No. Lin 2003-008)
It announces the approved Proposal for Election Board Chairman, Proposal for
Election Vice Board Chairman, Proposal for Composition of Ad Hoc Committees of
the Third Board of Directors, Proposal for Renewal of Appointment of General
Manager, Proposal for Appointment of Deputy General Manager and Chief
Accountant, Proposal for Appointment of Secretary to Board of Directors and
Proposal for Investment in Tankeng Hydropower Station.
(9) Announcement of Resolutions Adopted in 1st Meeting of 3rd Supervisory
Committee dated 2 July 2003
(Announcement No. Lin 2003-009)
It announces the approved Proposal for Election of Convener of Supervisory
Committee Meeting.
(10)Announcement on Investment and Related Transaction dated 2 July 2003
(Announcement No. Lin 2003-010)
It announces that the Company intends to make equity investment to hold 25% of
Tankeng Hydropower Station.
(11) Notice to Hold 1st Extraordinary Shareholders' General Meeting in 2003
dated 2 July 2003
(Announcement No. Lin 2003-011)
(12)Announcement on Dividend Distribution for 2002 dated 10 July 2003
(Announcement No. Lin 2003-012)
(13) Announcement of Resolutions of 1st Shareholders' General Meeting
in 2003 dated 2 August 2003
(Announcement No. Lin 2003-013)
It announces the approved proposal to make equity investment to hold 25% of
Tankeng Hydropower Station.
All the foregoing interim announcements were published in Shanghai Securities
Journal, China Securities News, South China Morning Post (Hong Kong) and Wen Hui
Bao (Hong Kong) on the same date. Investors can also visit web site
www.zsepc.com for details.
VI. Financial Statements
1. The financial statements of the Company herein were prepared based on
the Enterprise Accounting Standards Regarding Interim Statements issued by the
Ministry of Finance. They have not been audited.
2. Financial Statements and Notes Thereto
Balance Sheet
30 June 2003
Prepared by: Zhejiang Southeast Electric Power Co. Unit: RMB yuan
Assets Ending Amount Beginning Amount
Parent Company Consolidated Parent Company Consolidated
Current assets
Monetary assets 1,069,233,157.65 1,195,912,715.09 1,275,444,909.15 1,316,602,765.12
Short term investments 594,481,100.00 294,481,100.00 245,339,100.00 45,066,100.00
Bills receivable
Share dividends receivable
Interests receivable
Accounts receivable 104,532,787.73 221,042,316.67 101,911,910.02 189,310,963.44
Other receivables 22,830,456.69 28,163,560.20 34,336,919.77 34,892,310.31
Prepayments 31,266,457.60 31,091,957.60 12,461,180.00 12,461,180.00
Subsidy receivable
Inventories 89,480,657.32 106,682,133.94 89,186,432.87 109,881,758.45
Deferred expenses 2,361,605.79 2,361,605.79
Long term investments in bond
due within 1 year
Other current assets
1,914,186,222.78 1,879,735,389.29 1,758,680,451.81 1,708,215,077.32
Total current assets
Long term investments:
Long term equity investments 1,710,999,903.11 1,328,550,000.00 1,567,688,293.33 1,208,550,000.00
Long term debt investments
Total long term investments 1,710,999,903.11 1,328,550,000.00 1,567,688,293.33 1,208,550,000.00
Including: consolidated price
differences
Including: equity investments
differences
Fixed assets:
Costs of fixed assets 6,681,130,833.63 8,829,903,026.41 6,663,381,995.97 8,262,163,609.22
Less: Accumulated depreciation 3,467,596,153.42 3,536,654,011.69 3,313,017,453.44 3,315,214,904.61
Net value of fixed assets 3,213,534,680.21 5,293,249,014.72 3,350,364,542.53 4,946,948,704.61
Less: Reserve for fixed
assets devaluation
Net value of fixed assets 3,213,534,680.21 5,293,249,014.72 3,350,364,542.53 4,946,948,704.61
Project material 4,868,939.99 10,462,131.39 21,012,643.90 32,013,043.90
Construction in progress 73,842,340.08 94,523,857.11 80,280,204.67 458,328,216.40
Disposal of fixed assets
Total fixed assets 3,292,245,960.28 5,398,235,003.22 3,451,657,391.10 5,437,289,964.91
Intangible assets and other
assets:
Intangible assets 217,979,607.47 217,979,607.47 221,098,737.29 221,098,737.29
Long term deferred expenses 21,188,848.01 21,188,848.01 24,564,741.71 27,265,487.90
Other long term assets
Total intangible and other 239,168,455.48 239,168,455.48 245,663,479.00 248,364,225.19
assets
Deferred tax:
Deferred tax debit
Total assets 7,156,600,541.65 8,845,688,847.99 7,023,689,615.24 8,602,419,267.42
Continued
Liabilities and Shareholders' Ending Amount Beginning Amount
Equity Parent Company Consolidated Parent Company Consolidated
Current liabilities:
Short term borrowings 10,390,000.00 670,390,000.00 3,390,000.00 553,390,000.00
Bills payable 50,248,000.00 56,963,000.00
Accounts payable 115,923,228.36 357,765,204.45 144,452,442.30 456,384,684.26
Accounts received in advance
Salaries payable 59,605,950.99 61,548,344.72 86,879,011.39 86,668,618.65
Welfare expenses payable 23,532,753.71 25,385,834.22 26,056,228.71 26,425,375.38
Dividends payable 498,477,932.74 498,477,932.74 498,480,000.00 498,480,000.00
Tax payable 115,779,251.37 144,660,574.65 108,557,056.55 116,153,980.49
Other payments due 2,747,213.91 3,505,164.36 1,320,983.85 1,584,804.17
Other payables 57,161,901.79 64,790,920.87 115,652,165.44 122,446,669.53
Accruals 42,967,563.03 42,967,563.03 934,800.00
Anticipated liabilities
Long term liabilities due 163,030,000.00 163,030,000.00 326,060,000.00 326,060,000.00
within one year
Other current liabilities
Total current 1,089,615,795.90 2,082,769,539.04 1,310,847,888.24 2,245,491,932.48
liabilities
Long term liabilities:
Long term borrowings 326,060,000.00 816,060,000.00 326,060,000.00 776,763,450.00
Bonds payable
Long term payables
Special payables
Other long term liabilities
Total long term 326,060,000.00 816,060,000.00 326,060,000.00 776,763,450.00
liabilities
Deferred tax:
Deferred tax credit
Total liabilities 1,415,675,795.09 2,898,829,539.04 1,636,907,888.24 3,022,255,382.48
Minority shareholders' equity 205,934,563.20 193,382,157.94
Shareholders' equity
Share capital 2,010,000,000.00 2,010,000,000.00 2,010,000,000.00 2,010,000,000.00
Less: investments paid back
Net value of share capital 2,010,000,000.00 2,010,000,000.00 2,010,000,000.00 2,010,000,000.00
Capital reserve 1,863,272,079.51 1,863,272,079.51 1,863,272,079.51 1,863,272,079.51
Surplus reserve 763,152,307.26 763,152,307.26 763,152,307.26 763,152,307.26
Including: statutory common 381,576,153.63 381,576,153.63 381,576,153.63 381,576,153.63
welfare reserve
Undistributed profits 1,104,500,358.98 1,104,500,358.98 750,357,340.23 750,357,340.23
Foreign currency statement
conversion difference
Total shareholders' equity 5,740,924,745.75 5,740,924,745.75 5,386,781,727.00 5,386,781,727.00
Total liabilities and owners' 7,156,600,541.65 8,845,688,847.99 7,023,689,615.24 8,602,419,267.42
equity
Statement of Profit and Profit Distribution
January-June 2003
Prepared by: Zhejiang Southeast Electric Power Co. Unit: RMB yuan
Item January-June 2003 January-June 2002
Parent Company Consolidated Parent Company Consolidated
1. Income from principal operating 1,678,644,959.84 2,006,210,874.42 1,593,850,915.17 1,593,850,915.17
activities
Less: Principal operating costs 1,087,106,829.83 1,323,179,148.26 1,039,563,215.61 1,039,563,215.61
Principal operating tax and 18,784,658.51 23,137,302.91 21,860,003.34 21,860,003.34
surtax
2. Profit from principal operating 572,753,471.50 659,894,423.25 532,427,696.22 532,427,696.22
activities (loss indicated by "-")
Add: Profit from other activities 461,422.94 461,422.94 279,486.92 279,486.92
(loss indicated by "-")
Less: Operating expenses
Administrative expenses 80,614,309.17 92,181,123.95 47,433,615.08 47,433,615.08
Financial expenses 10,236,261.36 28,017,963.74 21,335,945.65 21,335,945.65
3.Operating profit (loss indicated by "-") 482,364,323.91 540,156,758.50 463,937,622.41 463,937,622.41
Add: Return on investment 29,878,678.78 3,430,224.97 1,049,261.16
(loss indicated by "-")
Subsidy income
Non-operating income 852,246.95 852,246.95 368,263.56 368,263.56
Less: Non-operating expenses 7,025,014.78 7,359,785.14 19,869,124.91 19,869,124.91
4.Gross profit (loss indicated by "-") 506,070,234.86 533,649,220.31 447,866,986.03 445,486,022.22
Less: Income tax 151,927,216.11 166,953,796.30 148,492,139.97 148,492,139.97
Less: Minority shareholders' gains and 12,552,405.26
losses
5.Net profit (loss indicated by "-") 354,143,018.75 354,143,018.75 299,374,846.06 296,993,882.25
Add: Undistributed profit at beginning of 750,357,340.23 750,357,340.23 833,347,449.87 833,306,824.87
year
Profit transferred from
others
6.Distributable profit 1,104,500,358.98 1,104,500,358.98 1,132,722,295.93 1,130,300,707.12
Less: Allocation of statutory surplus
reserve
Allocation of statutory common welfare
reserve
Allocation of employee bonus and
welfare fund
Allocation of reserve fund
Allocation of corporate development
fund
Profit payback to investments
7.Profit Distributable to shareholders 1,104,500,358.98 1,104,500,358.98 1,132,722,295.93 1,130,300,707.12
Less: Preference share dividends payable
Allocation of discretionary surplus
reserve
Ordinary share dividends
payable
Dividends of ordinary
shares transferred to share capital
8.Undistributed profit 1,104,500,358.98 1,104,500,358.98 1,132,722,295.93 1,130,300,707.12
Statement of Cash Flow
January-June 2003
Prepared by: Zhejiang Provincial Electric Power Co. Unit: RMB yuan
Item Amount
Parent Company Consolidated
1.Cash flow generated from operating activities
Cash received from sale of goods, supply of labor service 1,962,064,456.68 2,370,553,229.08
Cash received from refund of taxes
Other cash received relating to operating activities 17,700,664.66 20,689,118.60
Sub-total of cash inflow 1,979,765,121.34 2,391,242,347.68
Cash paid for purchase of goods and labor services 857,487,708.72 1,025,036,860.71
Cash paid to and for the employee 231,452,984.80 249,712,931.21
Taxes paid 356,292,784.96 403,000,146.28
Other cash paid relating to operating activities 52,324,659.12 54,159,026.23
Sub-total of cash outflow 1,497,558,137.60 1,731,908,964.43
Net cash flow generated from operating activities 482,206,983.74 659,333,383.25
2.Cash flow generated from investment activities
Cash received from investment recovery 50,000,000.00
Cash received from investment return 6,567,069.00
Net cash received from disposal of fixed assets, intangible assets and 539,409.78 539,409.78
other long-term assets
Other cash received relating to investment activities 585,000.00 593,920.60
Sub-total of cash inflow 57,691,478.78 1,133,330.38
Cash paid for purchase/building of fixed assets, intangible assets and 47,532,432.23 345,302,819.83
other long-term assets
Cash paid for investment 520,000,000.00 370,000,000.00
Other cash paid relating to investment activities 7,147,928.33
Sub-total of cash outflow 567,532,432.23 722,450,748.16
Net cash flow generated from investment activities -509,840,953.45 -721,317,417.78
3. Cash flow from financing activities
Cash received by absorbing investment
Cash received from borrowing 7,000,000.00 427,000,000.00
Other cash received in relation to financing activities 168,343.54
Sub-total of cash inflow 7,000,000.00 427,168,343.54
Cash paid for debt service 163,030,000.00 433,030,000.00
Cash paid for distribution of dividend or profit 22,559,378.35 52,855,955.60
Other cash paid in relation to financing activities
Sub-total of cash outflow 185,589,378.35 485,885,955.60
Net cash flow generated from financing activities -178,589,378.35 -58,717,612.06
4. Impact of foreign exchange fluctuation on cash 11,596,56 11,596.56
5. Net increase in cash and cash equivalents -206,211,751.50 -120,690,050.03
Continued
Supplementary Information
1. Net profit converted to operating cash flow
Net profit 354,143,018.75 354,143,018.75
Add: Minority shareholders' gains and losses 12,552,405.26
Allocated reserve for assets devaluation
Depreciation of fixed assets 214,434,746.06 281,295,153.16
Amortization of intangible assets 3,119,129.82 3,119,129.82
Amortization of long term deferred expenses 3,375,893.70 6,076,639.89
Decrease in deferred expenses (less: increase) -2,361,605.79 -2,361,605.79
Increase in pre-allocated expenses (less: decrease) 42,967,563.03 41,759,763.03
Loss on disposal of fixed assets, intangible assets and other 3,953,008.22 3,953,008.22
long-term assets (less: income)
Loss on retirement of fixed assets 2,516,728.65 2,516,728.65
Financial expenses 22,968,634.43 40,750,336.81
Loss on investment (less: income) -29,878,678.78
Deferred tax credit (less: debit)
Decrease in inventory (less: increase) -294,224.45 3,199,624.51
Decrease in operational receivables (less: increase) -63,926,734.59 -93,272,741.91
Increase in operational payables (less: decrease) -68,810,495.31 5,601,922.85
Others
Net cash flow generated from operating activities 482,206,983.74 659,333,383.25
2. Investment and financing activities not involving cash income and
expenditure
Debt converted to capital
Convertible corporate bonds due within 1 year
Fixed assets leased in by financing lease
3. Net increase in cash and cash equivalents:
Ending balance of cash 1,069,233,157.65 1,195,912,715.09
Less: Beginning balance of cash 1,275,444,909.15 1,316,602,765.12
Add: Ending balance of cash equivalents
Less: Beginning balance of cash equivalents
Net increase in cash and cash equivalents -206,211,751.50 -120,690,050.03
Notes to Financial Statements 2002
Unit: RMB yuan
(1) Company Profile
Zhejiang Southeast Electric Power Company Limited (the Company) is a joint
stock limited company established by way of promotion by ZPEPC, ZPEPDC, Zhejiang
Bada Company Limited, Zhejiang Electric Power Equipment and Materials Supply
Company and Zhejiang Electric Power Real Estate Development Company Limited as
the promoters in accordance with Document Zhe Zheng Wei (1997) 49 entitled
Approval for Establishment of Zhejiang Southeast Electric Power Company Limited
released by the Securities Regulatory Commission of Zhejiang Provincial
Government and Document (1997) 4 entitled Reply to the Proposal of Zhejiang
Southeast Electric Power Company Limited (Preparation Office) to Issue New
Shares Right After Its Incorporation released by Division of International
Affairs of China Securities Regulatory Commission. The aggregate promoters'
share capital amounts to RMB 1,320 million yuan, as was verified in Capital
Verification Report Zhe Kuai Yan (1997) 75 by Zhejiang Accounting Firm. The
registration of the Company with the local industrial and commercial
administration authority was made, and the Business License No. 14294345-0 (1/1)
of the Company was obtained on 15th May 1997. After being approved by the
Securities Committee of the State Council with Document. Zheng Wei Fa (1997)44,
the Company issued 690 million domestically-listed foreign investment shares (B
shares) including an over-allotment of 90 million shares at a par value of RMB 1
yuan/share. The Company's shares went public on Shanghai Stock Exchange on 23
Sept. 1997. After issuance of the shares, the aggregate share capital of the
Company amounts to RMB 2,010 million yuan. Thus the Company was re-registered
with the local industrial and commercial administration, with the same business
license number.
The Company was transformed to a stock limited company with foreign
investment on 23 May 2000 upon the approval by the Ministry of Foreign Trade &
Economic Cooperation with Document Wai Jing Mao Zi (2000)373. The procedure
relating to the re-registration with the industrial and commercial
administration was then completed, and the altered Business License Qi Gu Zhe
Zong No.002189 obtained, with the total registered capital and the scope of the
business of the Company remaining unchanged.
The Company belongs to the power sector, with its business scope encompassing
investment in, development and operation of the electric power projects.
Under the administration of the Company, in addition to its head office, there
are Taizhou Power Plant, Xiaoshan Power Plant, a subsidiary namely Zhejiang
Changxing Power Generation Co. Ltdand an affiliated company namely Zhejiang
Jiaxhua Power Generation Co. Ltd.
(2) Principal Accounting Policies, Assumptions and Method for Preparation of
Consolidated Financial Statements Adopted by the Company
a. Accounting Standards and System
Enterprise Accounting Standards and Enterprise Accounting System and the
supplementary regulations relating thereto are followed.
b. Accounting Year
The accounting year starts from 1 January and ends on 31 December of the
Gregorian calendar year.
c. Bookkeeping Base Currency
RMB is adopted as the bookkeeping base currency.
d. Bookkeeping Basis and Valuation Principle
The bookkeeping is made on accrual basis. And the valuation is based on
historical cost.
e. Accounting of Foreign Currency Transaction
The accounting of the foreign currency transaction is based on RMB converted as
per the market exchange rate (the median rate) published by the People's Bank of
China on the transaction date. The ending balances of the various foreign
currency accounts are adjusted per the exchange rate (the median rate)
prevailing at the end of the period. With regard to the differences arising
therefrom, those in relation to the formation of fixed assets but before
reaching readiness for use are stated as the cost of acquisition of fixed
assets; those irrelevant to the acquisition of fixed assets but occurring during
the formation period are stated as the long-term deferred expenses, and those
occurring during the operating period are stated as the current financial
expenses.
f. Identification of Cash Equivalents
Cash equivalents refer to the investment made by the Company with a short
maturity (generally mature within 3 months after the date of purchase), strong
liquidity, ready convertibility to cash of known amount and low volatility.
g. Accounting of Short-term Investment
1. The accounting of short-term investment is made based on the actual cost paid
deducting the cash dividends or interest declared to be distributed but not yet
collected. The dividends or interest gained during the term of the investment is
not recognized as investment income but as offset against investment cost. The
difference obtained from the short-term investment sale income deducting the
book value of the short-term investment and the accrued receivables of dividends
or interest will be recognized as investment income & loss and recorded as the
current gains & losses.
2. At the end of the period, the short-term investment is accounted for based on
the lower of cost or market price method; and the reserve for devaluation is
allocated for various investment projects.
h. Accounting of Bad Debt
1. Adopting allowance method for accounting of bad debt
The allowance for bad debt is allocated as per 6% of the ending balance of
accounts receivable (including account receivables and other receivables).
2. The bad debt is determined as such when
(1) The debtor is bankrupt or dead, and the proceeds from the bankrupt's estates
or the legacy of the deceased is unable to cover the debt;
(2) The debtor fails to repay the overdue debt with plain evidences indicating
his inability to do so.
The confirmed irrecoverable accounts receivable are treated as loss on bad
debt after approval, which will be written off from the allowance for bad debt.
i. Accounting of Inventories
1. The inventories include the fuel, auxiliary materials, spare parts for
repair, low-cost consumables, etc. stored for the purposes of sale or
consumption in the process of production and operation.
2. The inventories are accounted for at the actual cost. The fuel bought and
checked into the warehouse is stated at the actual cost; the cost of outgoing
fuel is stated based on weighted average cost method. The spare parts for repair
and auxiliary materials such as cement, steel and wood are stated at planned
cost, with the difference between the planned cost and the actual cost shared
and written off per a composite differential rate at the end of a month. The
low-cost consumables are stated based on lump-sum write-off method.
3. The inventories are taken using the perpetual inventory method.
4. For the irrecoverable portion of the inventory cost due to physical
damages, obsolescence in full or in part and the selling price of the inventory
item lower than the cost, the reserve for devaluation is allocated at the end of
the period based on the difference by which the cost of a single inventory item
is more than its net realizable value. However, for the inventories of the
production material, if the net realizable value of the finished product made
from the production material is higher than its cost, it is accounted for at its
actual cost; if the opposite is true, it is accounted for at its net realizable
value.
j. Accounting of Long-term Investment
1. The accounting of the long-term equity investment is stated based on
the cost paid or value determined at the time of investment. If the investment
in other companies constitutes less than 20% of the total capital with voting
right in the companies, or constitutes 20% or above but without significant
influence, it is accounted for by the cost method; if the investment in other
companies constitutes 20% or above of the total capital with voting right in the
companies, or less than 20% but with significant influence, it is accounted for
by the equity method; if the investment in other companies constitutes more than
50% (exclusive) of the total capital with voting right in the companies, it is
accounted for by the equity method and incorporated in the consolidated
financial statements.
2. The difference of equity investment is amortized over the investment period
specified in the contract. If no specific investment period is stated in the
contract, the difference of the initial investment cost over the deserved share
of the investee equity is amortized in not more than 10 years, whereas the
difference of the initial investment cost under the deserved share of the
investee equity is amortized over the period not less than 10 years.
3. The long-term debt investment is stated based on its initial investment
cost. The bond premium or discount will be amortized on straight-line basis
within the bond term. The bond interest receivable deducting the amortized value
of the bond investment premium or discount will be recognized as the current
investment returns; significant expenses contained in the initial bond
investment cost will be amortized in the period from bond purchase up to
maturity when recognizing bond interest income, and will be stated as gains and
losses; the other bond interest receivable will be stated as the current
investment returns.
4. At the end of the accounting period, the reserve for long-term investment
devaluation is allocated based on the difference of the recoverable amount less
than the book value of the long term investment due to its declining market
value or the worsening business operations of the investment recipient company.
k. Accounting of Trust loan
1. The loan trusted to the financial institution for lending is recorded as
per the actual amount of the trust loan.
2. The interest accruing on the trust loan is recorded over the period and
stated as gains and losses; those recorded but unable to be recovered upon
maturity will not be recorded any longer, but will be offset against the
interest recorded before.
3. At the period end, the principal of the trust loan or its recoverable value
is measured, which is lower. For the difference of the recoverable value lower
than the trust loan principal, the trust loan devaluation reserve will be
allocated.
l. Accounting of Fixed Assets and Depreciation
1. The fixed assets refer to the tangible assets that possess the following
features simultaneously: (1) held for purposes of goods production, labor
service provision, lease or management; (2) with their useful life exceeding
1 year; (3) with high unit values.
2. The fixed assets are accounted for at actual cost. The fixed assets acquired
by financial leasing are stated as per the original book value of the leased
assets on the lease commencement date or the present value of the minimum
payment for the lease cost, whichever is lower. (If the assets on financial
leasing account for 30% or less of the total assets, such assets are stated
as per the minimum payment for the lease cost on the lease commencement
date.)
3. The depreciation of the fixed assets is on straight-line basis. When allowing
for no reserve for devaluation, the rates and periods of depreciation are
determined based on the classification, estimated economic useful life and
estimated residual value (as per 0-3% of the original cost except for the
land use right; if the expected life of the land use right is longer than
the expected life of the housing and building, this factor is taken into
account in reserving net residual value of the housing and building) of
fixed assets as follows:
Classification of Fixed Assets Period of Depreciation Annual Depreciation Rate (%)
Housing and Buildings 8-35 12.50-2.86
General Equipment 4-18 25.00-5.56
Special Equipment 7-18 14.29-5.56
Vehicles 6 16.67
Other Equipment 5-9 20.00-11.11
4. At the end of the accounting period, the recoverable amount of the fixed
assets may be lower than its book value due to its declining market price,
technical obsolescence, damages, long-time disuse, etc. The reserve for fixed
assets devaluation is allocated based on the difference of the recoverable value
of a single asset less its the book value.
m. Accounting of Construction in Progress
1. The estimated value of the construction in progress is transferred into the
fixed assets per its actual cost when ready for use.
2. At the period end, if one or more of the following cases take place, the
reserve for construction-in-progress devaluation is allocated based on the
difference of the recoverable value of a single item of construction in progress
less its book value.
(1) the construction in progress is suspended for a long time and will not be
resumed presumably in 3 years;
(2) the project is outdated in terms of technicality and functions, and
uncertain in terms of profitability for the enterprise;
(3) other cases of devaluation of the construction in progress with
sufficient evidences.
n. Accounting of Borrowing Expenses
1. Borrowing Expenses Recognition Principle
The interest, discount/premium amortization and exchange difference arising from
the special borrowing for purchase of fixed assets are capitalized and stated as
the cost of the asset if meeting capitalization conditions during the
capitalization period. The other interest on borrowing, discount/premium
amortization and exchange difference are recognized as expenses in the period.
The auxiliary expenses for arrangement of special borrowings occurring before
the purchased fixed assets are ready for use are capitalized at the time of its
occurrence. The other auxiliary expenses are recognized as expenses in the
occurring period. The auxiliary expenses of small value are recognized as
expenses in the occurring period.
2. Capitalization of Borrowing Expenses
(1) Inception of capitalization
When the following 3 conditions are met at the same time, the capitalization of
the interest, discount/premium amortization and exchange difference arising from
the special borrowing begins: (a) the expenditure has occurred; (b) the
borrowing expenses have occurred; (c) the activities to bring the fixed assets
to readiness for use have started.
(2) Suspension of capitalization
In case the purchase/building of fixed assets is interrupted for more than 3
consecutive months, the capitalization of borrowing expenses will be suspended
with the borrowing expenses being recognized as current expenses until the asset
purchase/building activities are resumed.
(3) Termination of capitalization
When the purchased fixed assets reach readiness for use, the capitalization
terminates.
3. Amount of Capitalization of Borrowing Expenses
In each accounting period subject to capitalization, the amount of interest
capitalization is equal to the product of cumulative expenditures for the
purchase of fixed assets up to the end of the period end and the rate of
capitalization.
o. Accounting of Intangible Assets
1. The intangible assets are stated at the actual cost.
2. The intangible assets are amortized in equal installments over its expected
useful life and recorded in gains & losses.
If its expected useful life exceeds the service term specified in the contract
or the valid term provided by the law, the amortization period of this
intangible asset is determined on the following principles:
(1) If there is a service term specified by the contract but no valid term
provided by the law, the term specified by the contract will apply;
(2) If there is no term specified by the contract but there is a valid term
provided by the law, the legal term will apply;
(3) If there are both a term specified by the contract and a valid term
provided by the law, the shorter of two terms will apply.
In the event that there is neither a term specified by the contract nor a valid
term provided by the law, the amortization period will be not more than 10
years. In the event that a certain intangible asset cannot presumably bring
future benefit to the enterprise, all the book value of this intangible asset
will be transferred to the current administrative expenses.
3. At the period end, the anticipated economic benefit that the intangible
asset can bring to the company is measured. Based on the difference of the
recoverable value of a single intangible asset less than its book value, the
reserve for devaluation of the intangible asset is allocated.
p. Accounting of Long-term Deferred Expenses
1. The long-term deferred expenses are stated as actually expended and are
amortized in equal installment over the useful life of the project.
2. The expenses incurred during the construction period (except for the
purchase of fixed assets) are firstly put together in the long-term deferred
expenses, and then are transferred at once to gains & losses in the month of
operation commencement.
q. Income Recognition Principle
1. Sale of Commodities
Income from electricity sale: The sales income is calculated and recognized by
multiplying the actual quantity of electricity delivered in this year by the
approved contractual tariff (including the base quantity and excess quantity) or
the market price as applicable.
Sale of commodity: The business income is recognized when the significant risk
in connection with the ownership of the commodity and the remuneration have
transferred to the buyer so that the Company no longer has custody and control
of the commodity, the income from the sale or the voucher of the payment has
been received, and the cost in relation to the commodity sale can be measured
accurately.
2. Supply of Labor Service
(1) For the labor service started and completed in the same year, the income
from labor service is recognized when the service has been rendered, and the
payment or the voucher of payment has been received.
(2) For the labor service started and completed in different accounting years,
the income from labor service is recognized per the percentage of completion
when the total income from the labor service and the percentage of completion
can be reliably determined, the corresponding revenue can flow in and the cost
of the labor service incurred and to be incurred can be reliably measured.
r. Accounting of Income Tax
The accounting of the corporate income tax is based on tax payable method.
s. Method for Preparation of Consolidated Financial Statement
Consolidated financial statement is prepared based on the financial statements
and other related information of the parent company and its subsidiaries covered
in the scope of consolidation in accordance with the Interim Provisions for the
Consolidated Financial Statement. The principal accounting policies of the
subsidiaries shall conform to the accounting policies of their parent companies.
The major transactions and current accounts between parent companies and their
subsidiaries offset each other during the consolidation.
t. Changes in Accounting Policies and Assumptions
None
u. Correction of Significant Accounting Errors
None
(3) Taxation
a. Value-added tax: at a rate of 17%
b. Operating tax: at a rate of 5%
c. Urban maintenance & construction tax: at a rate equal to 7% or 5% of the
turn-over tax payable. The head office of the Company and Xiaoshan Power Plant
were exempted from this tax as agreed by International Division of Zhejiang
Local Taxation Bureau and Hangzhou Xiaoshan Local Taxation Bureau Linpu Branch;
Taizhou Power Plant was taxed at 7% and the subsidiary Zhejiang Changxing Power
Generation Co. Ltd at 5%.
d. Education surtax: at a rate equal to 4% of the turn-over tax payable. The
head office of the Company was exempted from this tax as agreed by International
Division of Zhejiang Local Taxation Bureau; Xiaoshan Power Plant was taxed per
the domestic investment ratio of the Company as agreed by Hangzhou Xiaoshan
Local Taxation Bureau Linpu Branch, and Taizhou Power Plant and the subsidiary
Zhejiang Changxing Power Generation Co. Ltd at 4%.
d. Income tax: at a rate of 33%
(4) Holding Subsidiaries and Joint Ventures
Name of Enterprise Type of Business Registered Scope of Actual Investment Shareholding
Capital Business Percentage
Zhejiang Changxing Coal-fired power RMB Production RMB 396,500,000.00 65%
Power Generation generation 610,000,000.00 and sale of yuan
Company Ltd yuan electricity
(5) Distribution of Profit
The Company made no interim profit distribution or conversion of capital
reserves into equity in this reporting period.
(6) Notes to the Consolidated Financial Statements
(1) Notes to the Consolidated Balance Sheet
(a) Monetary Assets Ending Amount: 1,124,868,538.73
i. Details
Item Ending Amount Beginning Amount
Cash 13,905.30 11,165.21
Bank deposits 1,188,484,659.61 1,309,891,245.39
Other monetary assets 7,414,150.18 6,700,354.52
Total 1,195,912,715.09 1,316,602,765.12
ii. Monetary assets-in foreign currency
Item Ending Amount Beginning Amount
Amount in Exchange Equivalent to Amount in original Exchange Equivalent to
original rate RMB yuan currency (USD) rate RMB yuan
currency (USD)
Bank deposits 91,565,203.45 8.2774 757,921,815.04 USD90,317,894.76 8.2773 747,588,310.30
Subtotal 757,921,815.04 747,588,310.30
(b) Short-term investment Ending Amount: 294,481,100.00
i. Details
Item Ending Amount Beginning Amount
Book balance Reserve for Book value Book balance Reserve for Book value
devaluation devaluation
Stock 373,000.00 99,900.00 273,100.00 373,000.00 99,900.00 273,100.00
Investment
Bond 44,415,000.00 207,000.00 44,208,000.00 45,000,000.00 207,000.00 44,793,000.00
Investment
Other 250,000,000.00 0 250,000,000.00
Investment
Total 294,788,000.00 306,900.00 294,481,100.00 45,373,000.00 306,900.00 45,066,100.00
The addition of other investment of RMB 250,000,000.00 yuan in this reporting
period was the amount trusted to ZITIC for capitalistic operation in accordance
with the Trust Fund Management Agreement signed between the Company and ZITIC in
January and April 2003.
(c) Accounts receivable Ending Amount: 221,042,316.67
i. Classified by account age
Account Ending Amount Beginning Amount
age Book Percentage Allowance for Book Book Percentage Allowance for Book
bad debt bad debt
balance (%) value balance (%) value
Within 1 233,125,995.18 100.00 12,083,678.51 221,042,316.67 201,394,641.95 100.00 12,083,678.51 189,310,963.44
year
Total 233,125,995.18 100.00 12,083,678.51 221,042,316.67 201,394,641.95 100.00 12,083,678.51 189,310,963.44
ii. The book balances were the amount receivable from ZPEPC for sale of
electricity, representing 100% of the accounts receivables.
iii. There were no accounts due from the shareholders holding 5% or more of the
Company's share capital with voting right.
(d) Other receivables Ending Amount: 28,163,560.20
i. Classified by account age
Account Ending Amount Beginning Amount
age Book balance Percentage Allowance Book value Book Percentage Allowance Book value
for bad debt for bad debt
(%) balance (%)
Within 1 23,733,689.66 77.04 2,036,402.70 21,697,286.96 33,940,044.97 2,036,402.70 31,903,642.27
year 91.43
12 years 3,431,437.28 12.18 360.00 3,431,077.28 6,000.00 0.02 360.00 5,640.00
23 years 228,600.00 0.73 21,634.41 206,965.59 360,573.50 21,634.41 338,939.09
0.97
More 2,997,002.00 10.05 168,771.63 2,828,230.37 2,812,860.58 7.58 168,771.63 2,644,088.95
than 3
years
Total 30,390,728.94 100.00 2,227,168.74 28,163,560.20 37,119,479.05 100.00 2,227,168.74 34,892,310.31
ii. Other large-amount receivables
Name of Organization Ending Amount What Receivables are
Subsidy for employee housing 14,176,156 .08 Subsidy prepaid for employees with their service
length less than 20 years
Changxing Land Development 4,000,000.00 Prepayment for land requisiton for Phase II
Firm
Interest on time deposit at 2,379,660.01 Accruals, not yet settled on maturity
bank
PICC Life Insurance Company 2,700,000.00 Insurance deposits, not yet settled
Taizhou Branch
Subtotal 23,255,816.09
iii. The amount of receivables due from the top 5 debtors totals RMB
25,255,816.09 yuan, accounting for 83.10% of the ending book balance of other
receivables.
iv. There were no accounts due from main shareholders holding 5% or more of the
Company's share capital with voting right.
(e) Prepayments
Ending Amount: 31,091,957.60
i. Classified by account age
Account age Ending Amount Beginning Amount
Amount Percentage (%) Amount Percentage (%)
Within 1 year 29,180,957.60 93.85 12,425,180.00 99.71
12 years 1,911,000.00 6.15 36,000.00 0.29
Total 31,091,957.60 100.00 12,461,180.00 100.00
ii. There were no accounts due from main shareholders holding 5% or more of the
Company's share capital with voting right.
iii. Explanation about the prepayment unsettled for more than 1 year
This is the petty prepayment made by Taizhou Power Plant, not yet settled.
(f) Inventories
Ending Amount: 106,682,133.94
i. Details
Ending Amount Beginning Amount
Item Book Devalua- Book Book Devalua- Book
Balance tion Value Balance tion Value
Reserve Reserve
Materials in 6,632.48 6,632.48 303,401.08 303,401.08
transit
Raw materials 61,219,422.30 61,219,422.30 48,077,406.33 48,077,406.33
Fuel 44,967,061.58 44,967,061.58 60,672,020.13 60,672,020.13
Low-cost 489,017.58 489,017.58 828,930.91 828,930.91
consumables
Total 106,682,133.94 106,682,133.94 109,881,758.45 109,881,758.45
iii. The ending fair value of the inventory is determined as per the net
realizable value of a single inventory item. The reserve for devaluation was
allocated based on the principle of the lower of the cost or the market. As the
analysis indicated that no ending inventories were higher than their realizable
values, no reserve for devaluation was allocated.
(g) Deferred expenses Ending Amount: 2,361,605.79
Item Amount at year Increase in this Amortization in this Ending amount
beginning period period
Property insurance - 3,713,934.63 1,352,328.84 2,361,605.79
premium
Total - 3,713,934.63 1,352,328.84 2,361,605.79
The ending amount of deferred expenses is the property insurance premium already
paid but not yet amortized.
(h) Long-term equity investment Ending Amount: 1,328,550,000.00
i. Details
Ending Amount Beginning Amount
Item Book Devalua- Book Book Devalua- Book
Balance tion Value Balance tion Value
Reserve Reserve
Investment in 253,250,000.00 253,250,000.00 133,250,000.00 133,250,000.00
affiliated
enterprises
Other equity 1,075,300,000.00 1,075,300,000.00 1,075,300,000.00 1,075,300,000.00
investment
Total 1,328,550,000.00 1,328,550,000.00 1,208,550,000.00 1,208,550,000.00
ii. The increase in investment in affiliated enterprises amounting to RMB
120,000,000.00 yuan was the additional investment in Zhejiang Jiahua Power
Generation Co. Ltd in accordance with the Agreement on Capital Injection.
iii. The was no long-term equity investment differences.
iv. As analysis indicated that the investee company operated in good
conditions, there was no need to allocate reserve for devaluation of long-term
investment.
(h) Original cost of fixed assets Ending Amount: 8,829,903,026.41
i. Details
Beginning Amount Increase during Decrease during Ending Amount
this period this period
Category
Housing and 2,412,445,122.05 3,378,833.34 5,546,186.49 2,410,277,768.90
buildings
General Equipment 721,291,945.27 52,921,066.78 3,804,345.05 770,408,667.00
Special Equipment 5,031,712,935.51 575,741,742.14 57,671,230.18 5,549,783,447.47
Vehicles 46,579,292.80 4,498,648.50 1,619,250.00 49,458,691.30
Other Equipment 50,134,313.59 743,578.96 903,440.81 49,974,451.74
Total 8,262,163,609.22 637,283,869.72 69,544,452.53 8,829,903,026.41
ii. The increase during this reporting period includes the amount of RMB
617,523,132.04 yuan transferred from completion of the construction in progress,
of which the estimated value of Unit 2 of Zhejiang Changxing Power Generation
Co. amounting to RMB 539,584,500.00 yuan was transferred to the fixed assets
after it passed 168-hour-long trial operation and went into commercial operation
on 22 May 2003
iii. There was no sale of fixed assets or swap of fixed assets with other
organizations in this reporting period.
iv. There was no fixed assets rented on financial lease.
v. There was no fixed assets rented out on operation.
vi. There was no temporarily idle fixed assets.
vii. There was no fixed assets placed under debt guarantee.
(i) Accumulated Depreciation Ending Amount: 3,536,654,011.69
Category Beginning Amount Increase during Decrease during Ending Amount
this period this period
Housing and 663,398,192.90 60,462,415.19 1,855,159.17 722,005,448.92
buildings
General Equipment 274,458,383.18 22,878,698.43 2,339,510.94 294,997,570.67
Special Equipment 2,340,308,510.52 192,254,081.94 53,211,089.59 2,479,351,502.87
Vehicles 22,897,338.70 3,108,284.18 1,619,250.00 24,386,372.88
Other Equipment 14,152,479.31 2,591,673.42 831,036.38 15,913,116.35
Total 3,315,214,904.61 281,295,153.16 59,856,046.08 3,536,654,011.69
(j) Net value of fixed assets
i. Details
Category Ending Amount Beginning Amount
Housing and buildings 1,688,272,319.98 1,749,046,929.15
General equipment 475,411,096.33 446,833,562.09
Special equipment 3,070,431,944.60 2,691,404,424.99
Vehicles 25,072,318.42 23,681,954.10
Other equipment 34,061,335.39 35,981,834.28
Total 5,293,249,014.72 4,946,948,704.61
ii. Analysis indicates that the above fixed assets bore no visible signs of
devaluation, hence no allocation of the reserve for devaluation of fixed assets.
(k) Project equipment & materials Ending Amount: 10,462,131.39
Category Ending Amount Beginning Amount
Special materials 0 48,361.50
Prepayment for large-size equipment 10,462,131.39 31,964,682.40
Total 10,462,131.39 32,013,043.90
(l) Construction in progress Ending Amount: 94,523,857.11
i. Details
Name of Ending Amount Beginning Amount
project Book Balance Devaluation Book value Book Balance Devaluation Book value
reserve reserve
Taizhou 24,349,648.44 24,349,648.44 66,132,030.27 66,132,030.27
Power Plant
Xiaoshan 49,492,691.64 49,492,691.64 14,148,174.40 14,148,174.40
Power Plant
Changxing 20,681,517.03 20,681,517.03 378,048,011.73 378,048,011.73
Power Plant
Phase IV
Total 94,523,857.11 94,523,857.11 458,328,216.40 458,328,216.40
(Note) Unit 2 of the Company's subsidiary, Zhejiang Changxing Power Generation
Co. was put into commercial operation on 22 May 2003. The estimated value of
Unit 2 amounting to RMB 539,584,500.00 yuan was transferred to fixed assets.
ii. Borrowing expenses capitalized
Name of Beginning Amount Increase in this Transferred to Other decrease Ending Capitalization
project period fixed assets in in this period Amount rate
this period
(per annum)
Changxing 26,926,488.14 10,334,865.03 37,261,353.17 0 0 8.29
Power Plant
Phase IV
Subtotal 26,926,488.14 10,334,865.03 37,261,353.17 0 0 8.29
ii. Analysis indicates that the above projects in construction
bore no visible signs of devaluation, hence no allocation of the devaluation
reserve.
(m) Intangible assets Ending Amount: 217,979,607.47
i. Details
Ending amount Beginning amount
Category
Book Balance Devaluation Book value Book Balance Devaluation Book value
reserve reserve
Land use right 214,919,053.25 214,919,053.25 217,368,234.41 217,368,234.41
Computer software 2,364,179.04 2,364,179.04 2,956,752.72 2,956,752.72
Others 696,375.18 696,375.18 773,750.16 773,750.16
Total 217,979,607.47 217,979,607.47 221,098,737.29 221,098,737.29
ii. Changes in intangible assets
Acquisition Original Beginning Increase Transferred Amortization Ending Accumulated Residual
method amount amount in this from in this amount amortiza- amortiza-
Category period current period tion tion
amount term
(years)
Land use Out- 245,290,510.57 217,368,234.41 2,449,181.16 214,919,053.25 30,371,394.32 43.5-64.5
right sourcing
Computer Out- 5,925,736.09 2,956,752.72 592,573.68 2,364,179.04 3,561,557.05 1.2-4.4
software sourcing
Others Out- 1,547,500.00 773,750.16 77,374.98 696,375.18 851,124.82 4.5
sourcing
Total 252,763,746.66 221,098,737.29 3,119,066.82 217,979,607.47 34,784,076.19
iii. There were no obvious signs of devaluation of the intangible assets, hence
no allocation of the devaluation reserve.
(n) Long-term deferred expenses
Ending Amount: 21,188,848.01
Original Beginning Increase Amortization Ending amount Accumulated Residual
amount amount in this in this amortization amortization
Item period period term
Lease 24,910,723.99 24,564,741.71 3,375,893.70 21,188,848.01 3,721,875.98 5.42
expenses for
No. 7 ash
silo
Production 2,700,746.19 2,700,746.19 2,700,746.19 0
preparatory
expenses for
Unit 2 of
Changxing
Project
Phase IV
Total 27,611,470.18 27,265,487.90 6,076,639.89 21,188,848.01 3,721,875.98
(Note): The organization cost of the subsidiary company namely Zhejiang
Changxing Power Generating Company Ltd amounting to RMB 2,700,746.19 yuan was
transferred to the current gains and losses since Unit 2 of this company was put
into operation after completing 168 hours of trial operation on 22 May 2003.
(o) Short-term borrowings Ending Amount: 670,390,000.00
Category Ending Amount Beginning Amount
Credit borrowing 660,000,000.00 550,000,000.00
Guarantee borrowing 10,390,000.00 3,390,000.00
Total 670,390,000.00 553,390,000.00
(Note): The increase in the short-term borrowings in this reporting period
amounting to RMB 110,000,000 yuan was the short-term borrowings incurred by
Zhejiang Changxing Power Generation Co. Ltd.
(p) Bills payable Ending Amount: 50,248,000.00
i. Details:
Category Ending Amount Beginning Amount
Bank accepted bills 50,248,000.00 56,963,000.00
Total 50,248,000.00 56,963,000.00
ii. There were no accounts payable to major shareholders holding 5% or more of
the Company's share capital.
(q) Accounts payable Ending Amount: 357,765,204.25
There were no accounts payable to major shareholders holding 5% or more of the
Company's share capital.
(s) Dividends payable Ending Amount: 498,477,932.74
i. Details
Name of Investors Ending Amount Beginning Amount
Domestic investment shareholders 327,360,000.00 327,360,000.00
Shareholders of B shares 171,117,932.74 171,120,000.00
Total 498,477,932.74 498,480,000.00
ii. The beginning amount is the cash dividends payable to shareholders based on
the profit distribution plan 2002 determined in the Board meeting. The
difference between the ending amount and the beginning amount is the exchange
gains and losses of the B share US dollars.
(t) Tax payable Ending Amount: 144,660,574.65
Category Ending Amount Beginning Amount Statutory Tax Rate
VAT 47,224,652.51 29,207,888.79 At a rate of 17%
Business tax 2,567.30 277,600.41 At a rate of 5%
Urban maintenance and 5,444,015.02 2,458,163.00 Refer to Item (3)-c of the
construction tax Notes herein
Corporate income tax 93,995,679.62 85,175,507.26 At a rate of 33%
Individual income tax -2,004,859.80 -967,542.87 At a stipulated applicable
withheld and paid in rate (Note)
advance
Real estate tax 0 2,363.90 At a rate equal to 12% of the
rent income
Vehicles and ships -1,480
usage tax
Total 144,660,574.65 116,153,980.49
(Note): This is the advance payment on behalf of employees, but not yet settled
and not yet getting reimbursement from the employees.
(u) Other payment due Ending Amount: 3,505,164.36
Category Ending Amount Beginning Amount Tax Rate
Education surtax 3,312,024.48 1,490,573.52 Refer to Item (3)-d of the
Notes herein
Housing reserve for 88,791.00 77,112.00 At a stipulated applicable rate
employees
Water conservancy 104,348.88 17,118.65 At a rate equal to 0.1% of the
construction fund principal operating income
Total 3,505,164.36 1,584,804.17
(v) Other accounts payable
Ending Amount: 64,790,920.87
i. Accounts due to major shareholders holding 5% or more of the Company's share capital.
Name of Shareholder Ending Amount Beginning Amount
ZPEPDC 1,058,581.44 1,058,581.44
Subtotal 1,058,581.44 1,058,581.44
ii. Description of other large-amount accounts payable
Item Description Amount
Medical insurance premium Account payable but not yet paid 29,770,330.24
Last payment for Phase IV project Account payable but not yet paid 9,082,558.01
Returned check Unpaid check 8,040,371.95
Warranty Account payable but not yet paid 2,355,399.90
Rent for divested assets Account payable but not yet paid 1,728,800.00
Subtotal 50,977,460.10
(w) Pre-allocated expenses Ending Amount: 42,967,563.03
Item Ending Amount Beginning Amount Causes of Ending Balance
Overhaul expenses for 42,967,563.03 0 Accruals unpaid at apita end
generating units
Interest 0 934,800.00 Accruals unpaid at apita end
Total 42,967,563.03 934,800.00
(x) Long-term liabilities due within 1 year Ending Amount:
163,030,000.00
i. Details
Category Ending Amount Beginning Amount
Long-term borrowings 163,030,000.00 326,060,000.00
Total 163,030,000.00 326,060,000.00
i. Long-term liabilities due within 1 year-long-term borrowings
Borrowing Conditions Ending Amount
Borrowing on Credit 163,030,000.00
Subtotal 163,030,000.00
(y) Long-term borrowings Ending Amount: 816,060,000.00
Borrowing Conditions Ending Amount Beginning Amount
Credit loan 326,060,000.00(Note 1) 326,060,000.00
Guarantee loan 490,000,000.00(Note 2) 450,703,450.00
Total 816,060,000.00 776,763,450.00
(Note 1): The ending balance of long-term borrowings is the original amount
of the long-term debt of Taizhou Power Plant Phase IV extension project under
the Company. Based on Debt Repayment Agreement in 2001 and Thereafter between
the Company, ZPEPC and ZPEPDC, the repayment period of long-term debt owing to
ZPEPC and ZPEPDC was reduced to 7 years, i.e. the remaining debt shall be repaid
in equal installment in 4 years from 2001 to 2004 after the continuous debt
service for 3 consecutive years from 1998 to 2000. Pursuant to Debt Repayment
Agreement in 2001 and Thereafter, the amount of RMB 326,060,000.00 yuan due in
2003 was transferred to "long term liabilities due within 1 year", hence the
balance of RMB 326,060,000.00 yuan.
(Note 2): The subsidiary of the Company Zhejiang Changxing Power Generation
Company Ltd planned to borrow RMB 1,500,000,000.00 yuan from the bank on
guarantee. As at end of this reporting period, the actual borrowing received
amounted to RMB 490,000,000.00 yuan.
(z) Share Capital Ending Amount: 2,010,000,000.00
Beginning Amount Increase/decrease during this period (+,) Ending Amount
Allotment Bonus Shares Others Sub-total
Item shares shares converted
from
reserve
(1) 1. State-owned
Promoters' shares
Non- 1,315,000,000.00 1,315,000,000.00
Shares
negotiable
shares Shares held
by domestic
legal
persons
5,000,000.00 5,000,000.00
Shares held
by foreign
legal
persons
Others
2. Legal person shares
by subscription
3.Employee shares
4.Preference shares or
others
Total number of 1,320,000,000.00 1,320,000,000.00
non-negotiable shares
(2) 1.Domestically listed
Outstanding ordinary shares in RMB
shares 2.Domestically listed 690,000,000.00 690,000,000.00
foreign investment
shares
3.Overseas listed
foreign investment
shares
4.Others
Total number of 690,000,000.00 690,000,000.00
outstanding shares
(3) Total number of shares 2,010,000,00.00 2,010,000,000.00
(za) Capital Reserve Ending Amount: 1,863,272,079.51
i. Details
Item Beginning Amount Increase in this Decrease in this Ending Amount
period period
Share premium 1,859,977,258.75 1,859,977,258.75
Provision for 294,820.76 294,820.76
non-cash donations
Differences of 3,000,000.00 3,000,000.00
foreign capital
conversion
Total 1,863,272,079.51 1,863,272,079.51
i. No change occurred to the capital reserve in the
reporting year.
(zb) Surplus Reserve Ending Amount: 763,152,307.26
i. Details
Item Beginning Amount Increase in this Decrease in this period Ending Amount
period
Statutory surplus 381,576,153.63 381,576,153.63
reserve
Statutory common 381,576,153.63 381,576,153.63
welfare reserve
Total 763,152,307.26 763,152,307.26
(zc) Undistributed Profit Ending Amount: 1,104,500,358.98
i. Details
Beginning Amount 750,357,340.23
Add: increase in this period 354,143,018.75
Less: decrease in this period 0
Ending Amount 1,104,500,358.98
The increase in this reporting period is due to incoming transfer of the net
profit realized in this reporting period.
(2) Notes to Consolidated Statement of Profit and Profit Distribution
(a) Income/cost resulting from principal operating activities
Amount occurring in this period:
2,006,210,874.42/1,323,179,148.26
i. Classified by operating activities
Item Amount in This Period Amount in Same Period in Previous
Year
Income from principal
operating activities
Sale of electricity 2,006,210,874.42 1,593,850,915.17
Total 2,006,210,874.42 1,593,850,915.17
Cost of principal operating
activities
Cost of electricity sale 1,323,179,148.26 1,039,563,215.61
Total 1,323,179,148.26 1,039,563,215.61
ii. Classified by operating regions
Item Amount in This Period Amount in Same Period in Previous
Year
Income from principal
operating activities
East China region (Note) 2,006,210,874.42 1,593,850,915.17
Total 2,006,210,874.42 1,593,850,915.17
Cost of principal operating activities
East China region (Note) 1,323,179,148.26 1,039,563,215.61
Total 1,323,179,148.26 1,039,563,215.61
(Note): The electricity generated by the Company was transmitted into the
electric power system of the East China region.
iii. There was only one customer this period, namely ZPEPC. The sale income
amounted to RMB 2,006,210,874.42 yuan, accounting for 100% of the Company income
gained from principal operating activities.
(b) Tax and surtax on principal operating activities
Amount incurred in this period: 23,137,302.91
Item Amount in This Period Amount in Same Period in Tax rate
Previous Year
Urban maintenance & 14,307,803.31 13,910,911.22 Refer to Notes to Financial
construction tax Statements (3)-c
Educational surtax 8,829,499.60 7,949,092.12 Refer to Notes to Financial
Statements (3)-d
Total 23,137,302.91 21,860,003.34
(c) Profit from Other Operating Activities
Amount gained in this period: 461,422.64
Amount in This Period Amount in Same Period
Activities
in Previous Year
Operating Operating Profit Operating Operating Profit
income expenses income expenses
Sale of 414,365.27 133,281.15 281,084.12 143,820.99 38,157.29 105663.70
materials
Income from 306,478.92 126,140.10 180,338.82 315,968.93 142145.71 173,823.22
labor service
Total 720,844.19 259,421.25 461,422.94 459,789.92 180303.00 279,486.92
(d) Financial Expenses Amount incurred in this period: 28,017,963.74
Item Amount in This Period Amount in Same Period
in Previous Year
Interest expenses 40,059,512.22 33,747,210.00
Less: interest income 12,078,947.25 13,755,875.06
Exchange losses 89,290.37 444,980.56
Less: exchange gains 100,886.93 170,624.70
Others 48,995.23 1,070,254.85
Total 28,017,963.74 21,335,945.65
(e) Administrative expenses Amount incurred in this period: 92,181,123.95
The amount incurred in the same period in the previous year was RMB
47,433,615.08 yuan. The increase in this year is mainly due to the consolidated
financial statements and the incoming transfer of the housing subsidy.
(f) Non-operating Income/expenditure
(with "+" denoting "net expenditure" and "-" denoting "net income")
Amount realized in this period: 6,507,538.19
Item Amount in This Period Amount in Same Period
in Previous Year
Net losses on disposal of fixed assets 6,401,998.20 19,507,540.04
Water conservancy construction fund 328,270.36
Donation expenditure 101,000.00 1,500.00
Tax demurrage and penalty -39,660.00 -25,322.00
Others -284,070.37 17,143.31
Total 6,507,538.19 19,500,861.35
(7) Notes to the Financial Statement of Parent Company
a. Notes to the Balance Sheet of Parent Company
(a) Short-term investment Ending Amount: 594,481,100.00
i. Details
Item Ending Amount Beginning Amount
Book balance Reserve for Book value Book balance Reserve for Book value
devaluation devaluation
Stock 373,000.00 99,900.00 273,100.00 373,000.00 99,900.00 273,100.00
Investment
Bond 44,415,000.00 207,000.00 44,208,000.00 45,000,000.00 207,000.00 44,793,000.00
Investment
Other 550,000,000.00 0 550,000,000.00 200,273,000.00 200,273,000.00
Investment
Total 594,788,000.00 306,900.00 594,481,100.00 245,646,000.00 306,900.00 245,339,100.00
In other investment out of the short-term investment, RMB 300,000,000.00 yuan
is the trust loan to Changxing Power Plant Phase IV for a duration of one year;
RMB 100,000,000.00 yuan is the additional trust loan to Changxing Power Plant in
this year; and RMB 250,000,000.00 yuan is the amount placed in trusted fund
management based on the Agreement on Trusted Fund Management signed between the
Company and ZITIC separately in January and April 2003.
(b)Accounts receivable Ending Amount: 104,532,787.73
i. Classified by account age
Ending Amount Beginning Amount
Account Book balance Percent Allowance for Book value Book balance Percent Allowance for Book value
age bad debt bad debt
% %
Within 1 111,037,803.26 100 6,505,015.53 104,532,787.73 108,416,925.55 100.00 6,505,015.53 101,911,910.02
year
Total 111,037,803.26 100 6,505,015.53 104,532,787.73 108,416,925.55 100.00 6,505,015.53 101,911,910.02
ii. The book balances were the amount receivable from ZPEPC for sale of
electricity in the last 10 days of June, representing 100% of the accounts
receivables.
iii. There was no accounts receivable due from major shareholders holding 5%
or more of the Company's share capital with voting right
(c) Other receivables Ending Amount: 22,830,456.69
i. Classified by account age
Ending Amount
Beginning Amount
Account Book balance Percent Allowance for Book value Book balance Percent Allowance for Book value
age bad debt bad debt
% %
Within 1 18,365,135.69 71.68 2,000,952.24 16,364,183.45 33,349,203.97 91.30 2,000,952.24 31,348,251.73
year
12 years 3,431,437.28 15.03 360.00 3,431,077.28 6,000.00 0.01 360.00 5,640.00
23 years 228,600.00 0.91 21,634.41 206,965.59 360,573.50 0.99 21,634.41 338,939.09
More than 2,997,002.00 12.38 168,771.63 2,828,230.37 2,812,860.58 7.70 168,771.63 2,644,088.95
3 years
Total 25,022,174.97 100 2,191,718.28 22,830,456.69 36,528,638.05 100.00 2,191,718.28 34,336,919.77
ii. Other large-amount receivables
Description Ending Amount Account Description
Subsidy for employees housing 14,176,156.08 Prepaid housing subsidy for employees
with service length less than 20 years
Interest on time deposit at bank 2,379,660.01 Accruals unsettled upon maturity
PICC Life Insurance Company 2,700,000.00 Insurance deposit unsettled
Taizhou Branch
Subtotal 19,255,816.09
iii. The amount of receivables due from the top 5 debtors totals RMB
22,103,588.22 yuan, accounting for 88.34% of the book balance of other
receivables.
iv. There were no accounts due from main shareholders holding 5% or more of the
Company's voting share capital.
(d) Long-term equity investment
Ending Amount: 1,710,999,903.11
i. Details
Ending Amount Beginning
Amount
Item Book Devalua- Book Book Devalua- Book
Balance tion Value Balance tion Value
Reserve Reserve
Investment in 382,449,903.11 382,449,903.11 359,138,293.33 359,138,293.33
subsidiary
Companies
Investment in 253,250,000.00 253,250,000.00 133,250,000.00 133,250,000.00
affiliated
enterprises
Other equity 1,075,300,000.00 1,075,300,000.00 1,075,300,000.00 1,075,300,000.00
investment
Total 1,710,999,903.11 1,710,999,903.11 1,567,688,293.33 1,567,688,293.33
(Note): The increase in investment in affiliated enterprises amounting to RMB
120,000,000.00 in this reporting period was the additional capital contribution
to Zhejiang Jiahua Power Generation Co. Ltd in accordance with the Capital
Injection Agreement.
b. Notes to Statement of Profit and Profit Distribution of Parent Company
(a) Income/cost resulting from principal operating activities
Amount occurring in this period: 1,678,644,959.84/
1,087,106,829.83
i. Classified by operating activities
Item Amount in This Period Amount in Same Period in Previous
Year
Income from principal
operating activities
Sale of electricity 1,678,644,959.84 1,593,850,915.17
Total 1,678,644,959.84 1,593,850,915.17
Cost of principal operating
activities
Cost of electricity sale 1,087,106,829.83 1,039,563,215.61
Total 1,087,106,829.83 1,039,563,215.61
i. Classified by operating regions
Item Amount in This Period Amount in Same Period in Previous
Year
Income from principal
operating activities
East China region (Note) 1,678,644,959.84 1,593,850,915.17
Total 1,678,644,959.84 1,593,850,915.17
Cost of principal operating
activities
East China region (Note) 1,087,106,829.83 1,039,563,215.61
Total 1,087,106,829.83 1,039,563,215.61
(Note): The electricity generated by Company was transmitted into the electric
power system of the East China region.
iii. There was only one customer this year, namely ZPEPC. The sales income
amounted to RMB 1,678,644,959.84 yuan, accounting for 100% of the Company income
gained from principal operating activities.
(b) Investment Income Amount gained during current year: 29,878,678.78
i. Details
Item Amount in Period Amount in Same Period in Previous Year
Income from stock investment 137,661.16
Profit distribution from affiliated 911,600.00
or joint venture companies
Income from trust loan 6,567,069.00 2,380,963.81
Adjustment of investee companies at
period end
Net increase/decrease in 23,311,609.78
shareholders' equity
Total 29,878,678.78 3,430,224.97
ii. There was no significant limitation to remittance of investment incomes back
to the Company.
(8) The Relationship and Transactions with Related Parties
a. Relationship with Related Parties
(a) Related Parties with Controlling Relationship
i. Related parties with controlling relationship
Name of Registered Address Principal Operating Relationship Ownership or Legal
Enterprise Activities with the Type of Representative
Company Business
ZPEPDC 2 Jinzhu Road Raising capital for Main State-owned Shen Zhiyun
(south), Hangzhou power construction and shareholder
development, generation
and sale of
electricity in excess of
plan
ZCPGC Fucheng Commercial Production and sale of Subsidiary Limited Wei Guozhong
Building at North electricity Company
Side of Central
Square, Huzhou
ii. Registered capital of related parties with controlling relationship and
their movements
Name of Enterprise Beginning Amount Increase/de-crease Ending Amount
in Current year
ZPEPDC 2,545,000,000.00 2,545,000,000.00
ZCPGC 610,000,000.00 610,000,000.00
iii. Shares held by related parties with controlling relationship and their
movements
Name of Beginning Amount Increase in Decrease in Ending Amount
Enterprise current year current year
Amount % Amount % Amount % Amount %
ZPEPDC 799,963,200.00 39.80 799,963,200.00 39.80
ZCPGC 396,500,000.00 65.00 396,500,000.00 65.00
(b) Nature of Relationship with Related parties Without Controlling Relationship
Name of Enterprise Relationship with the Company
Taizhou Power Plant Industrial Company Taizhou Power Plant is involved in its day-to-day
management.
Hangzhou Xiaoshan Linjiang Industrial & Trade Co. Xiaoshan Power Plant is involved in its day-to-day
Limited management.
Changxing Changfeng Energy Co. Ltd. The subsidiary of the Company, namely ZCPGc is
involved in its day-to-day management.
b. Transactions between Related parties
(a) Purchase of commodity
There was no major purchase of commodity.
(b) Sale of commodities
There was no major sale of commodity.
(c) Balance of receivables and payables of related parties
Item and Name of Enterprise Balance Percentage out of Total
Receivables (Payables) (%)
Ending Amount Beginning Amount Ending Amount Beginning
Amount
Account payable
Taizhou Electric Power Plant 0 1,255,000.00 0.27
Industrial Company
Changxing Changfeng Energy Company 0 2,760,000.00 0.6
Ltd.
Subtotal 0 4,015,000.00 0.87
Other payables
ZPEPDC 1,058,581.44 1,058,581.44 1.63 0.86
Changxing Changfeng Energy Company 0 2,803,873.66 2.29
Ltd.
Subtotal 1,058,581.14 3,862,455.10 1.63 3.15
Dividend payable
ZPEPDC 198,390,873.60 198,390,873.60 39.80 39.80
Subtotal 198,390,873.60 198,390,873.60 39.80 39.80
c. Other Related Matters
(a) In this reporting period, ZCPGC paid Changxing Changfeng Energy Co. Ltd at
an agreed price for purchase of fuel oil and material and waste ash disposal
amounting to RMB 48.1334 million yuan.
(b) In this reporting period, based on Labor Borrowing Agreement and
Transportation Service Contract with Taizhou Power Plant Industrial Co., the
Company paid the latter for labor borrowing, commuting buses to/from work and
waste ash disposal totaling RMB 4 million yuan.
(c) In the this reporting period, based on Vehicle Transport Contract,
Logistic Service Contract and House Rent Contract with Hangzhou Xiaoshan
Linjiang Industrial & Trade Co. Ltd, the Company paid the latter for car rental,
house rental and logistic service charges totaling RMB 7.36 million yuan.
(d) The Company provided its subsidiary ZCPGC with a guarantee for an amount of
RMB 1.07 billion yuan out of the loan amounting to RMB 1.5 billion yuan for
which ZCPGC applied to China Construction Bank Changxing County Branch. Up to
the 30 June 2003, the balance of ZCPGC's loan stood at RMB 490 million, of which
RMB 343 million was on a guarantee provided by the Company.
(e) The Company provided its affiliated company ZJPGC with a guarantee for the
long-term loans in amount of RMB 4,500 million yuan and RMB 3,200 million yuan
applied by ZJPGC to Industrial and Commercial Bank of China Zhejiang Branch and
China Construction Bank Zhejiang Branch respectively. Up to 30 June 2003, the
balance of ZJPGC's loan stood at RMB 100 million. Based on the Guarantee
Contract, the Company has joint liability for part of the loan amounting to RMB
24 million yuan in proportion to its equity investment ratio of 24%.
(f) The Company signed a Liabilities Contract with two creditors, namely, ZPEPC
and ZPEPDC in 1997, whereby the Company borrowed a loan for construction of the
Taizhou Power Plant Phase IV (Units 7 and 8) for 10 years. The Company shall
repay the principal and interest in installments to the above two creditors. Up
to the end of 2002, the total liabilities amounted to RMB 652.12 million yuan.
Based on Agreement on Liabilities Repayment in 2001 and Thereafter signed
between the three parties on 28 February 2001, the Company shall repay
liabilities totaling RMB 326.06 million yuan in 2003 ( the long term liabilities
due within 1 year) to the two creditors. In this reporting period, the Company
repaid liabilities amounting to RMB 163.03 million yuan to the creditors.
Unit: RMB yuan
ZPEPDC ZPEPC Total
(trust loan through (trust loan through
Shanghai Pudong Development East China Electric
Bank Hangzhou Branch) Power Group Financial
Co. Ltd)
Total Liabilities at End of 2002 158,946,000.00 493,174,000.00 652,120,000.00
Of which long term 79,473,000.00 246,587,000.00 326,060,000.00
liabilities up to end of 2002
Transferred to long term 79,473,000.00 246,587,000.00 326,060,000.00
liabilities due within 1 year
Amount of Repayment in Upper 39,736,500.00 123,293,500.00 163,030,000.00
Half of 2003
Balance of long term liabilities 39,736,500.00 123,293,500.00 163,030,000.00
due within 1 year on 30 June
2003
(9) Contingent Events
a. In December 2001, the subsidiary of the Company, ZCPGC, applied to China
Construction Bank Changxing County Branch for a loan in amount of RMB 1.5
billion yuan, of which RMB 1,070 million yuan was guaranteed by the Company, and
RMB 430 million yuan was guaranteed by ZPEPDC with the duration from 18 December
2001 to 17 June 2019. As at 30 June 2003, the balance of ZCPGC's loan stood at
RMB 490 million, of which RMB 343 million was on a guarantee provided by the
Company. Up to the end of this reporting period, there was no sign of
anticipated liabilities thereof.
b. In 2001, the affiliated company of the Company, ZJPGC, applied to Industrial
and Commercial Bank of China Zhejiang Branch and China Construction Bank
Zhejiang Branch for long-term loans in amount of RMB 4,500 million yuan and RMB
3,200 million yuan respectively. Accordingly, the Company entered into guarantee
contracts with the above two banks, with the amount of the guarantees based on
the actual amount of principal and interest up to a ceiling, spanning a duration
from 17 Dec. 2001 to 16 Dec. 2026. As at 31 December 2002, the balance of
ZJPGC's loan stood at RMB 100 million. In proportion to its equity investment
ratio of 24%, the Company has joint liability for part of the loan amounting to
RMB 24 million yuan. Up to the end of this reporting period, there was no sign
of anticipated liabilities thereof.
c. ZCPGC produced bank-accepted draft amounting to RMB 56,963,000.00 yuan in
2002, of which RMB 39,696,000.00 yuan was on a guarantee provided by the
Company, and RMB 17,267,000.00 yuan was on a guarantee provided by ZPEPDC, with
duration from 6 Aug. 2002 to 28 Apr. 2003. In this reporting period, ZCPGC paid
the above amount on time, thus releasing the guarantee obligation.
(10) Corporate Commitment
The Resolution on Increasing Registered Capital was adopted in shareholders'
general meeting of ZJPGC held on 28 November 2002. All the shareholders
unanimously agreed to increase the registered capital of ZJPGC to RMB
1,555,190,000 yuan (Up to 31 December 2002, the registered capital of ZJPGC
amounted to RMB 555,190,000 yuan, and the Company made capital injection
amounting to RMB 133,250,000 yuan, accounting for 24% of ZJPGC's total
registered capital). Each shareholder will inject the additional amount in
proportion to his equity investment ratio and in conformity with the Equity
Capital Injection Plan in 4 installments in 2003. Based on the above resolution
and the investment ratio of the Company, the Company shall inject additional
equity capital totaling RMB 240 million yuan to ZJPGC in 2003, and paid in RMB
120 million yuan in this reporting period.
(11) Events Subsequent to Balance Sheet Date Not Requiring Account Adjustment
None
(12) Other Important Events
a. The Company was not subjected to any significant events of liability
restructuring.
b. The Company had no non-currency transactions.
c. The Company made no asset swap, transfer or sale.
d. Other Important Events
(a) Unit 2 of the subsidiary of the Company, ZCPGC, was put into commercial
operation on 22 May 2003. In this reporting period, both units of ZCPGC went
into commercial operation and realized electricity sales income amounting to RMB
327.56 million yuan.
(b) In line with the resolution by which the Board authorized the management
team to invest in state treasury bonds and other securities up to a ceiling
of RMB 300 million yuan, the Company entered into Agreement on Trust Fund
Management with ZITIC in this reporting period to trust the latter with
capitalistic operations.
Unit: RMB yuan
Trustee Trust Amount Term Contracted Actual Yield Ending Balance
Yield
ZITIC 100,000,000.00 22/01/2003-21/01/2004 Nil Not yet due 100,000,000.00
with no yield
50,000,000.00 28/01/2003-27/01/2004 50,000,000.00
100,000,000.00 10/04/2003-09/04/2004 100,000,000.00
3. Supplementary Information
(1) Diluted and Weighted Average Yield on Net Asset Value and Earnings per Share
Profit in Reporting Period Yield on Net Asset (%) Earnings per Share (yuan/share)
Diluted Weighted Average Diluted Weighted Average
Principal operating profit 11.49 11.86 0.328 0.328
Operating profit 9.41 9.71 0.269 0.269
Net profit 6.17 6.37 0.176 0.176
Net profit after deducting 6.24 6.44 0.178 0.178
non-recurring gains and losses
(2) No reserve for asset devaluation was allocated in this reporting period.
Zhejiang Southeast Electric Power Company Ltd
12 August 2003
This information is provided by RNS
The company news service from the London Stock Exchange
END
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