深南电B：2020年半年度报告（英文版）

Stock Code: 000037 200037 Short Form of Stock: Shen Nan DianA Shen Nan Dian B No.: 2020-039

深圳南山热电股份有限公司

Shenzhen Nanshan Power Co. Ltd.Semi-annual Report 2020

August 2020

Section I. Important Notice Contents and Interpretation

Board of Directors Supervisory Committee all directors supervisors and senior

officers of Shenzhen Nanshan Power Co. Ltd. (hereinafter the Company)

guarantee that the Semi-Annual Report contains no misrepresentations

misleading statements or material omissions and take all responsibilities

individual and/or joint for the reality accuracy and completion of the whole

contents.Principal of the Company- Chairman Li Xinwei person in charger of

accounting works- Director and GM Chen Yuhui CFO Dai Xiji and person in

charge of accounting organ (chief accountants)- deputy GM Wang Yi(act for

financial works) guarantee that the Financial Report of the semi-annual report

disclosed is truthful accurate and complete.

All directors are attended the Board Meeting for semi-annual report

deliberation.

Concerning the forward-looking statements with future planning involved in the

Semi-Annual Report they do not constitute a substantial commitment for

investors. Investors are advised to exercise caution of investment risks.The Company has no plans of cash dividend distributed no bonus shares and

has no share converted from capital reserve either in the mid-term.The semi-annual report has been prepared in both Chinese and English for any

discrepancies the Chinese version shall prevail. Please read the full semi-annual

report seriously.Contents

Section I Important Notice Contents and Interpretation................................................................. 2

Section II Company Profile and Main Financial Indexes..................................................................6

Section III Summary of Company Business.........................................................................................9

Section IV Discussion andAnalysis of the Operation....................................................................... 11

Section V Important Events.................................................................................................................. 23

Section VI Changes in shares and particular about shareholders................................................. 35

Section VII Preferred Stock.................................................................................................................. 40

Section VIII Convertible Bonds............................................................................................................41

Section IX Particulars about Directors Supervisors and Senior Officers....................................42

Section X Corporate-bond.....................................................................................................................43

Section XI Financial Report..................................................................................................................44

Section XII Documents available for referenc................................................................................... 45

Interpretation

Items Refers to Contents

Company the Company Shen Nan Dian The

listed company

Refers to

Shenzhen Nanshan Power Co. Ltd.Shen Nan Dian Zhongshan Company Refers to Shen Nan Dian (Zhongshan) Electric Power Co. Ltd.Shen Nan Dian Dongguan Company Refers to Shen Nan Dian (Dongguan) Weimei Electric Power Co. Ltd

Shen Nan Dian Engineering Company Refers to Shenzhen Shennandian Turbine Engineering Technology Co. Ltd.Shen Nan Dian Environment Protection

Company

Refers to Shenzhen Shen Nan Dian Environment Protection Co. Ltd.Server Company Refers to Shenzhen Server Petrochemical Supplying Co. Ltd

New Power Company Refers to Shenzhen New Power Industrial Co. Ltd.Singapore Company Refers to Shen Nan Energy (Singapore) Co. Ltd.Nanshan Power Factory Refers to Nanshan Power Factory of Shenzhen Nanshan Power Co. Ltd.Zhongshan Nanlang Power Plant Refers to

Zhongshan Nanlang Power Plant of Shen Nan Dian (Zhongshan) Electric

Power Co. Ltd

Shenzhen Capital Holdings Refers to

Shenzhen Capital Holdings Co. Ltd. the name before changed on 3

March 2020 was Shenzhen Capital Co. Ltd.Shenzhen Gas Refers to Shenzhen Gas Group Co. Ltd.Shenzhen Qianhai Authority Refers to

Qianhai Shenzhen-Hongkong Modern Service Industry Cooperation Zone

of Shenzhen Authority

Audit institution LIXINZHONGLIAN

accounting organ

Refers to LIXINZHONGLIAN CPAS (SPECIAL GENERAL PARTNERSHIP)

Articles of Association Refers to Article of Association of Shenzhen Nanshan Power Co. Ltd.

Yuan ten thousand Yuan one hundred million Refers to

Except the special description of the monetary unit the rest of the

monetary unit is RMB Yuan ten thousand Yuanone hundred million Yuan

Reporting period Refers to 1 January 2020 to 30 June 2020

Section II. Company Profile and Main Financial Indexes

I. Company information

Short form of the stock Shen Nan Dian A Shen Nan Dian B Stock code 000037 200037

Stock exchange for listing Shenzhen Stock Exchange

Name of the Company (in

Chinese)深圳南山热电股份有限公司

Short form of the Company

(in Chinese) (if applicable)深南电

Foreign name of the Company

(if applicable)

Shenzhen Nanshan Power Co. Ltd.Legal representative Li Xinwei

II. Contact person/ways

Secretary of the Board Rep. of securities affairs

Name Zhang Jie

Contact adds.

16/F-17/F Hantang Building OCT

Nanshan District Shenzhen Guangdong

Province

Tel. 0755-26003611

Fax. 0755-26003684

E-mail investor@nspower.com.cn

III. Others

1. Way of contact

Whether registrations address offices address and codes as well as website and email of the Company changed in reporting period or

not

□ Applicable √ Not applicable

Registrations address offices address and codes as well as website and email of the Company has no change in reporting period

found more details in Annual Report 2019.

2. Information disclosure and preparation place

Whether information disclosure and preparation place changed in reporting period or not

□ Applicable √ Not applicable

The newspaper appointed for information disclosure website for semi-annual report publish appointed by CSRC and preparation

place for semi-annual report have no change in reporting period found more details in Annual Report 2019.IV. Main accounting data and financial indexes

Whether it has retroactive adjustment or re-statement on previous accounting data or not

□ Yes √ No

Current period Same period of last year

Increase/decrease in this

report y-o-y

Operating revenue(RMB) 518150606.21 408124616.38 26.96%

Net profit attributable to shareholders of

the listed Company(RMB)

52040498.42 -25283190.82 -305.83%

Net profit attributable to shareholders of

the listed Company after deducting

non-recurring gains and losses(RMB)

10149730.42 -28106510.82 -136.11%

Net cash flow arising from operating

activities(RMB)

69936561.46 56217376.89 24.40%

Basic earnings per share (RMB/Share) 0.09 -0.04 -325.00%

Diluted earnings per share (RMB/Share) 0.09 -0.04 -325.00%

Weighted average ROE 0.51% -1.43% 1.94%

End of current period End of last period

Increase/decrease in this

report-end over that of last

period-end

Total assets (RMB) 3051547885.42 3219261720.55 -5.21%

Net assets attributable to shareholder of

listed Company (RMB)

2042758054.74 2002772808.24 2.00%

V. Difference of the accounting data under accounting rules in and out of China

1. Difference of the net profit and net assets disclosed in financial report under both IAS (International

Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)

□ Applicable √ Not applicable

The Company had no difference of the net profit or net assets disclosed in financial report under either IAS (International

Accounting Standards) or Chinese GAAP (Generally Accepted Accounting Principles) in the period.

2. Difference of the net profit and net assets disclosed in financial report under both foreign accounting

rules and Chinese GAAP (Generally Accepted Accounting Principles)

□ Applicable √ Not applicable

The Company had no difference of the net profit or net assets disclosed in financial report under either foreign accounting rules or

Chinese GAAP (Generally Accepted Accounting Principles) in the period.

VI. Items and amounts of extraordinary profit (gains)/loss

√Applicable □ Not applicable

In RMB

Item Amount Note

Gains/losses from the disposal of non-current asset (including the

write-off that accrued for impairment of assets)

34363417.21

The investment income from sold

out the 70% equity of Shen Nan

Dian Dongguan Company

Governmental subsidy calculated into current gains and

losses(while closely related with the normal business of the

Company excluding the fixed-amount or fixed-proportion

governmental subsidy according to the unified national standard)

7621471.38

Receive unemployment insurance

premium refunds and

apportionment of government

subsidies related to assets

Other non-operating revenue and expenditure except for the

aforementioned items

-6356.16

Less: impact on income tax 67935.50

Impact on minority shareholders’ equity (post-tax) 19828.93

Total 41890768.00 --

Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies

Offering Their Securities to the Public --- Extraordinary Profit/loss and the items defined as recurring profit (gain)/loss according to

the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their

Securities to the Public --- Extraordinary Profit/loss explain reasons

□ Applicable √ Not applicable

Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies

Offering Their Securities to the Public --- Extraordinary Profit/loss and the items defined as recurring profit (gain)/loss according to

the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their

Securities to the Public --- Extraordinary Profit/loss the Company has no such items in the reporting period for the aforesaid

Section III. Summary of Company Business

I. Main businesses of the Company in the reporting period

The company is specialized in power and thermal supply as well as providing technical consulting and technical services for power

plant (stations). At beginning of the period the company has three wholly-owned or holding gas turbine plants which are all located

in the power load center of Pearl River Delta area. In reporting period the 70% equity of Shen Nan Dian Dongguan Company

directly or indirectly hold by the Company are transfer to Shenzhen Gas by agreement. Therefore up to the reporting period-end the

company has two wholly-owned or holding gas turbine plants which equipped with five sets of 9E gas steam combine cycle power

generating units with total installed capacity to 900000 KW (Nanshan Power Factory: 3×180000 KW Zhongshan Nanlang Power

Plant: 2×180000 KW). During the reporting period the Company mainly engaged in the combined cycle power generation business

with gas-steam the subordinate Nanshan Power Factory and Zhongshan Nanlang Power Plant are operates in a normal station. From

January to June 2020 the company withstood the pressure of the rapid shrinking of the electricity demand of the whole society

caused by the novel coronavirus pneumonia epidemic and completed the full power scale (on-grid power + electricity marketing

power) of 893 million KWH(data of Shen Nan Dian Dongguan Company is not included) completing the actual on-grid power of

333 million KWH and the electricity marketing power of 560 million KWH. Completion of the electricity for subordinate power

plants are as: Nanshan Power Factory (New Power Company included) completed 272 million KWH of on-grid electricity the full

electricity quantity totaled 466 billion KWH with a year-on-year down of 7.72%; Zhongshan Nanlang Power Plant completed 61

million KWH of on-grid electricity the full electricity quantity totaled 427 million KWH with a year-on-year growth of 18.61%.

During the reporting period the company not only strive to improve the operating efficiency of its main business of electric power

but also made great efforts to the operation and expansion of related businesses. In response to the impact of the epidemic the

subordinate Shen Nan Dian Engineering Company changed its thinking pattern in a timely manner adjusted its business strategy and

strived to turn crises into opportunities. While continuing to manage existing overseas projects it rapidly increased investment in the

domestic technical service markets and actively explored the technical consulting and technical service business for gas turbine

power station construction projects in domestic and foreign markets; Shen Nan Dian Environment Protection Company took the

initiative actively communicated made every effort to ensure the stable operation of the sludge treatment production line and

earnestly performed environmental protection responsibilities. In the first half of the year a total of 64300 tons of sludge were

processed and realized sludge reduction harmless treatment and comprehensive utilization of resources.II. Major changes in main assets

1. Major changes in main assets

Major assets Note of major changes

Equity assets No major changes

Fixed assets

During the reporting period 70% equity of Shen Nan Dian Dongguan Company are sold

out by the Company and at end of period Shen Nan Dian Dongguan Company excluded

in consolidate scope thus the fixed assets have 30.88% declined over that of

year-beginning

Intangible assets

During the reporting period 70% equity of Shen Nan Dian Dongguan Company are sold

out by the Company and at end of period Shen Nan Dian Dongguan Company excluded

in consolidate scope thus the intangible assets have 51.07% declined over that of

year-beginning

Construction in process

During the reporting period 70% equity of Shen Nan Dian Dongguan Company are sold

out by the Company and at end of period Shen Nan Dian Dongguan Company excluded

in consolidate scope thus the construction in process have 8.49% declined over that of

year-beginning

Monetary fund

During the reporting period 70% equity of Shen Nan Dian Dongguan Company are sold

out by the Company received equity transfer amount and borrowing refund thus the

monetary fund has 40.31% up over that of year-beginning

Inventory

During the reporting period 70% equity of Shen Nan Dian Dongguan Company are sold

out by the Company and at end of period Shen Nan Dian Dongguan Company excluded

in consolidate scope thus the inventories have 12.94% declined over that of

year-beginning

2. Main overseas assets

□ Applicable √ Not applicable

III. Core Competitiveness Analysis

In recent years due to the impact of the macroeconomic situation and the common problems of gas turbine industry the Company’s

main business has been facing increasing difficulties and challenges. However the basic core competitiveness formed by 30 years of

operation and development the strong support of the company’s major shareholders and the operating and management innovation

of the company’s new board of directors and leadership team have laid the essential foundation for the company’s sustainable

survival and for seeking transformation and development. (core competitiveness analysis found more in the Annual Report 2019)

Section IV. Discussion andAnalysis of the Operation

I. Introduction

In the first half of 2020 the sudden outbreak of novel coronavirus pneumonia brought an unprecedentedly huge impact on China and

the global economy. Affected by the novel coronavirus pneumonia epidemic the demand for power in the whole society has shrunk

sharply. According to statistics from relevant departments from January to June the province’s total electricity consumption was

296.484 billion kWh a year-on-year decrease of 2.07%.

Facing the dual test of the epidemic and the industry situation the company withstood the pressure forged ahead against the trend

strictly implemented the overall deployment and requirements of the Central Committee of the Communist Party of China the State

Council provincial municipal and district governments and higher-level units to respond to the epidemic and earnestly

implemented epidemic prevention and control work while overcoming difficulties to do a good job in production and operation

management and go all out to minimize the negative impact of the epidemic on the company. After the full resumption of work and

production the company intensified its efforts to take serious measures to safe production stock operation and transformation

development. On the premise of ensuring safety and epidemic prevention and control the company has achieved good results in

production operation and management.The first was industrial coordination and strategic cooperation for common development. The company negotiated and transferred

the 70% equity of Shen Nan Dian Dongguan Company it held directly and indirectly to Shenzhen Gas and signed the Resource

Strategic Cooperation Agreement to give full play to the advantages of the two parties in terms of resources technology market and

facilities to achieve resource complementarity enhance the overall competitiveness of both parties in their respective fields and

create conditions for the company to reduce burdens increase efficiency and generate income and seek transformation and

development. The second was one factory one policy and scientific marketing created good results. In the face of the difficult

production situation that the demand for electricity in the society continued to be insufficient from February to April this year on the

one hand the company paid close attention to improving the efficiency and reducing consumption of power generation equipment

and on the other hand it adopted marketing measures such as market-based competition calculation models and "one factory one

policy" marketing strategy strived to seize market opportunities and actively strived for more economic electricity share. At the

same time through strategic cooperation and healthy competition strived to minimize the cost of natural gas procurement. The third

was capital-driven rejected the dross and assimilated the essence to seek transformation. Guided by the annual working ideas of

actively exploring advanced manufacturing life and health new-generation information technology technology and finance and

other high-end manufacturing industry and innovative industry project resources and business fields on the one hand relying on the

platform advantages of major shareholders it’s planned to participate in the investment of Yuanzhi Ruixin New Generation

Information Technology Equity Investment Fund as a limited partner. On the other hand extensively sought opportunities for

high-quality projects and explored effective paths for transformation and development. The fourth was stability and long-term

development guaranteed long-term security to promote development. While doing a good job in fighting the novel coronavirus

pneumonia epidemic the company strived to lay a solid foundation for safe production established and completed a series of safety

index management and production guarantee systems and further strengthened risk classification control and hidden danger

investigation and treatment. As of the end of this reporting period the company has achieved a total of 5895 days of safe production

creating a new situation with the best safety record in the company's history the epidemic prevention and control work has also

achieved phased results.During the reporting period the Company has achieved a revenue in operation of 5181.5 million Yuan the net profit attributable to

shareholders of the listed company amounted as 52.04 million Yuan and basic EPS was 0.09 Yuan.II. Main business analysis

Found more in I. Introduction in Discussion and Analysis of the Operation

Y-o-y changes of main financial data

In RMB

Current period

Same period of last

year

Y-o-y

increase/decre

ase

Reasons for changes

Operating revenue 518150606.21 408124616.38 26.96%

Mainly due to the increase of revenue

from generating

Operating costs 453109436.14 382997137.69 18.31%

Mainly due to the increase of cost from

generating

Sales expenses 2527403.66 2566269.52 -1.51%

Administration expenses 43036872.15 44931864.50 -4.22%

Finance expenses 5064722.20 10639267.42 -52.40%

The interest rate of loans and loan size

have fallen.Income tax expenses 610366.52 1157865.76 -47.29% Taxable income amount decreased

Net cash flow arising

from operating activities

69936561.46 56217376.89 24.40%

The electricity bills are higher than the

gas payment

Net cash flow arising

from investment

activities

-70404614.02 -20841164.69 237.82%

Expenses for purchasing the financial

products increased

Net cash flow arising

from financing activities

313780839.64 79547879.58 294.46% Borrowings increased

Net increase of cash and

cash equivalent

313413965.85 114927228.73 172.71%

The net cash flow arising from financing

activities increased

Major changes on profit composition or profit resources in reporting period

□Applicable √Not applicable

No changes on profit composition or profit resources in reporting period

Constitution of operating revenue

In RMB

Current period Same period of last year

Y-o-y changes (+-)

Amount Ratio in operating Amount Ratio in operating

revenue revenue

Total operating

revenue

518150606.21 100% 408124616.38 100% 26.96%

According to industries

Energy industry 470093812.79 90.73% 347598428.46 85.17% 35.24%

Engineering labor 16697226.83 3.22% 25197504.31 6.17% -33.73%

Sludge drying 29975302.78 5.79% 34487375.32 8.45% -13.08%

Other 1384263.81 0.27% 841308.29 0.21% 64.54%

According to products

Power marketing 470093812.79 90.73% 347598428.46 85.17% 35.24%

Engineering labor 16697226.83 3.22% 25197504.31 6.17% -33.73%

Sludge drying 29975302.78 5.79% 34487375.32 8.45% -13.08%

Other 1384263.81 0.27% 841308.29 0.21% 64.54%

According to region

Shenzhen 227995512.76 44.00% 231432149.90 56.71% -1.48%

Zhongshan 85765596.92 16.55% 66364051.74 16.26% 29.24%

Dongguan 204389496.53 39.45% 110328414.74 27.03% 85.26%

The industries products or regions accounting for over 10% of the Company’s operating revenue or operating profit

√Applicable □ Not applicable

In RMB

Operating

revenue

Operating costs Gross profit ratio

Increase/decrease

of operating

revenue y-o-y

Increase/decrease

of operating cost

y-o-y

Increase/decrease

of gross profit

ratio y-o-y

According to industries

Energy industry 470093812.79 416716914.41 11.35% 35.24% 21.60% 9.94%

Engineering labor 16697226.83 13814797.57 17.26% -33.73% -15.41% -17.93%

Sludge drying 29975302.78 22479655.36 25.01% -13.08% -5.85% -5.75%

According to products

Power marketing 470093812.79 416716914.41 11.35% 35.24% 21.60% 9.94%

Engineering labor 16697226.83 13814797.57 17.26% -33.73% -15.41% -17.93%

Sludge drying 29975302.78 22479655.36 25.01% -13.08% -5.85% -5.75%

According to region

Shenzhen 226611248.95 200431777.94 11.55% -1.73% -6.27% 4.28%

Zhongshan 85765596.92 53279999.22 37.88% 29.24% -9.34% 26.43%

Dongguan 204389496.53 199299590.18 2.49% 85.26% 80.68% 2.47%

Under circumstances of adjustment in reporting period for statistic scope of main business data adjusted main business based on

latest one year’s scope of period-end

√ Applicable □ Not applicable

In RMB

Operating

revenue

Operating costs Gross profit ratio

Increase/decrease

of operating

revenue y-o-y

Increase/decrease

of operating cost

y-o-y

Increase/decrease

of gross profit

ratio y-o-y

According to industries

Energy industry 265704316.26 217417324.23 18.17% 11.92% -6.44% 16.06%

Engineering labor 16697226.83 13814797.57 17.26% -33.73% -15.41% -17.92%

Sludge drying 29975302.78 22479655.36 25.01% -13.08% -5.85% -5.76%

According to products

Power marketing 265704316.26 217417324.23 18.17% 11.92% -6.44% 16.06%

Engineering labor 16697226.83 13814797.57 17.26% -33.73% -15.41% -17.92%

Sludge drying 29975302.78 22479655.36 25.01% -13.08% -5.85% -5.76%

According to region

Shenzhen 226611248.95 200431777.94 11.55% -1.73% -6.27% 4.28%

Zhongshan 85765596.92 53279999.22 37.88% 29.24% -9.34% 26.43%

Causes for the statistic scope changed

The 70% equity of Shen Nan Dian Dongguan Company are sold out in the reporting period and change for the industrial and

commercial has completed in April 2020 the Shen Nan Dian Dongguan Company no longer included in the consolidate scope at end

of the period.Reasons for y-o-y relevant data with over 30% changes

√Applicable □ Not applicable

Energy industry/Power marketing has 35.24% up in revenue from a year earlier mainly because the revenue fro generating

increased.Revenue from engineering labor has 33.73% declined on a y-o-y basis mainly because the overseas project was suspended due to the

COVID-19 pneumonia outbreak.

Other revenue as 65.54% up on a y-o-y basis mainly due to the increase of technical service.III. Analysis of the non-main business

√Applicable □ Not applicable

In RMB

Amount Ratio in total profit Note Whether be sustainable (Y/N)

Investment income 33291259.12 62.98%

Investment income from

sold out the 70% equity of

Shen Nan Dian Dongguan

Company

Non-operating

income

4753.84 0.01% N

Non-operating

expenditure

11110.00 0.02% Donation N

IV. Assets and liability

1. Major changes of assets composition

In RMB

End of the Period

End of same period of last

year Ratio

changes

(+-)

Notes of major changes

Amount

Ratio in

total

assets

Amount

Ratio in

total assets

Monetary fund 1084903966.81 35.55% 1033453294.31 30.27% 5.28%

Increase of the bank loans and receive

part of the amount from equity transfer

Account

receivable

132037467.25 4.33% 161302717.77 4.72% -0.39%

Inventory 108553898.22 3.56% 124479548.95 3.65% -0.09%

Investment real

estate

2303258.20 0.08% 2499395.80 0.07% 0.01%

Long-term equity

investment

14375580.60 0.47% 15371492.58 0.45% 0.02%

Fixed assets 954992268.00 31.30% 1410660332.99 41.32% -10.02%

During the reporting period 70%

equity of Shen Nan Dian Dongguan

Company are sold out by the Company

and at end of period Shen Nan Dian

Dongguan Company excluded in

consolidate scope

Construction in

process

60831928.29 1.99% 67646496.22 1.98% 0.01%

Short-term loans 755480134.11 24.76% 1100000000.00 32.22% -7.46% Repayment of short-term bank loans

Long-term loans 0.00% 21940000.00 0.64% -0.64% Repayment of long-term bank loans

2. Assets and liability measured by fair value

□ Applicable √ Not applicable

3. Assets rights restricted till end of the period

V. Investment

1. Overall situation

□ Applicable √ Not applicable

2. The major equity investment obtained in the reporting period

□ Applicable √ Not applicable

3. The major non-equity investment caring in the reporting period

□ Applicable √ Not applicable

4.Financial assets measured by fair value

□ Applicable √ Not applicable

5. Financial assets investment

(1) Securities investment

□ Applicable √ Not applicable

The Company had no securities investment in Period.

(2) Derivative investment

□ Applicable √ Not applicable

The Company has no derivatives investment in Period.VI. Sales of major assets and equity

1. Sales of major assets

□ Applicable √ Not applicable

2. Sales of major equity

√Applicable □Not applicable

Cou Asse Sales Trading Net Impact Ratio Pricing Whe Relatio Owne Debt Impleme Disclosu Disclosure index

nterp

art

sold

day price

(10

thousan

d Yuan)

profit

contrib

uted by

the sold

assets

from

period-

begin

to date

for

sales

(in 10

thousan

d Yuan)

on the

Compa

of the

net

profit

from

assets

sales

in total

net

profit

of the

Compa

principal ther

was

relat

trans

actio

(Y/N

)

nship

with

the

counter

party

rship

transf

erred

comp

letely

or not

(Y/N)

/liab

ility

trans

fer

com

plete

ly or

not

(Y/

nted on

schedule

(Y/N)

explained

the

reasons

and

counterm

easure for

not

complete

d on

schedule

re day

Shen

zhen

Gas

Grou

Co.

Ltd.

70%

equit

y of

Shen

Nan

Dian

Don

ggua

Com

pany

(40

equit

held

direc

tly

the

Com

pany

and

30%

equit

held

thro

ugh

whol

9 April

2020

(change

industri

al and

comme

rcial

registra

tion for

the

equity

transfer

complet

ed by

Shen

Nan

Dian

Donggu

Compa

ny )

10498

(price

equity

transfer

amount

ed as

87.5

million

Yuan

17.48

million

Yuan

gains/lo

sses

during

the

transiti

onal

period

from

the

base

date of

assets

apprais

al to

Decem

ber 31

2019)）

-445.29

The

transact

ion is

conduct

ive to

revitali

zing the

Compa

ny’s

stock

assets

reducin

g the

operati

pressur

increasi

current

earning

s of the

Compa

ny and

promoti

ng the

realizati

on of

the

strategi

64.44%

Pricing

principle in

the

agreement

is that the

negotiated

transfer

price of

underlying

assets (70%

equity of

Shen Nan

Dian

Dongguan

Company )i

s higher

than the

appraisal

value of the

underlying

assets

issued by

Watson

(Beijing)

Internation

al Assets

Appraisal

Co. Ltd.

Not

applica

ble

Y Y Y

7 March

2020 24

March

2020 11

April

2020

and 4

July

2020

Notice including:

70% Equity of

Shen Nan Dian

(Dongguan)

Weimei Electric

Power Co. Ltd

Transfer

Resolution of the

First Extraordinary

Shareholders

General Meeting of

2020 Progress of

Transfer of 70%

Equity of Shen Nan

Dian (Dongguan)

Weimei Electric

Power Co. Ltd and

Completion of the

70% Equity of

Shen Nan Dian

(Dongguan)

Weimei Electric

Power Co. Ltd

Transferred; Notice

No.: (2020-006

2020-023 and

2020-032);

Released on :

China Securities

ly-o

wne

subs

idiar

Syn

diso

Com

pany

indir

ectly

)

transfor

mation

goals.Journal Securities

Times Hong Kong

Commercial Daily

and Juchao

Website.VII. Analysis of main Holding Company and stock-jointly companies

√Applicable □Not applicable

Particular about main subsidiaries and stock-jointly companies net profit over 10%

In RMB

Name Type Main business

capital

Total assets Net Assets

Operating

revenue

Operating

profit

Net profit

Shenzhen

New Power

Industrial Co.Ltd.Subsidiary

Technology

development regarding

to application of

remaining heat

(excluding restricted

items) and power

generation with

remaining heat. Add:

power generation

through burning

machines.

RMB 113.85

million

189619543.

150307261.

56347610.0

-5225752.

-5225752.7

Shenzhen

Shen Nan

Dian

Environment

Protection

Co. Ltd.

Subsidiary

Sludge drying; the

design and operations

management of sludge

treatment and disposal

facilities and

engineering; the

technology

development

technology transfer

RMB 79

million

155293267.

128501691.

29999302.7

4082731.

3505763.71

technical advice

technical services of

environmental pollution

control and

comprehensive

utilization domain;

(Except for the projects

required to be approved

before registration by

laws administrative

regulations or decisions

and stipulation of the

State Council the

restricted items must be

approved before

operating)

Shenzhen

Shennandian

Turbine

Engineering

Technology

Co. Ltd.

Subsidiary

Engage in the technical

advisory service for the

construction projects of

gas-steam combined

cycle power plant

(station) and undertake

the maintenance and

overhaul of the

operation equipment of

gas-steam combined

cycle power plant

(station). Import and

export of goods and

technologies (excluding

distribution and state

monopoly commodities)

RMB 10

million

51466814.3

36144584.8

16697226.8

125986.28 94489.69

Shenzhen

Server

Petrochemical

Supplying

Co. Ltd

Subsidiary

Self-supporting or

import agent business of

fuel oil; trade (excluding

production and storage

and transportation) in

diesel lubricating oil

liquefied petroleum gas

natural gas compressed

gas and liquefied gas

chemical products

(excluding dangerous

chemicals); investment

RMB 53.3

million

121784714.

92397733.0

535619.08

-1340725.

-1337873.2

construction and

technical supports in

liquefied petroleum gas

natural gas and related

facilities; import and

export businesses and

domestic trade of goods

and technologies

(excluding franchise

exclusive control and

monopoly products);

leasing business.Licensed projects: fuel

oil warehousing

business (except for

refined oil); general

freight transport special

transportation of goods

(containers) special

transportation of goods

(tank)

Shen Nan

Dian

(Zhongshan)

Electric Power

Co. Ltd.

Subsidiary

Gas turbine power

generation waste heat

power generation

power supply and

heating (excluding

heating pipe network)

leasing of wharf and oil

depots (excluding

refined oil dangerous

chemicals or flammable

and explosive goods).

RMB 746.8

million

596024563.

-80396382.

85765596.9

13952405

.29

13942405.2

Shen Nan

Energy

(Singapore)

Co. Ltd.

Subsidiary

Agent for oils trade and

spare parts of gas

turbine

US $ 0.9

million

139835443.

137146953.

-1047657

3.86

-10476573.

Subsidiary disposes and acquired in the period

√ Applicable □ Not applicable

Company name

Way acquired and disposed in reporting

period

Impact on overall production operation

and performance

Shen Nan Dian (Dongguan) Weimei

Electric Power Co. Ltd

The 70% equity of Shen Nan Dian

Dongguan Company directly or indirectly

hold by the Company are transfer by

agreement.The transaction is conductive to

revitalizing the Company’s stock assets

reducing the operating pressure and

achieving the income from equity transfer

Statement of main holding company and stock-jointly companies

VIII. Structured vehicle controlled by the Company

□ Applicable √ Not applicable

IX. Prediction of business performance from January – September 2020

Estimation on accumulative net profit from the beginning of the year to the end of next report period to be loss probably or the

warning of its material change compared with the corresponding period of the last year and explanation on reason

□ Applicable √ Not applicable

X. Risks and countermeasures

1. In terms of main business although the company has accumulated certain experience through vigorously focusing on power

market marketing due to the high cost of power generation by 9E gas turbines the on-grid power price is at a high level among all

types of power generation units. With the increasingly fierce competition in power trading market coupled with the upcoming

implementation of the power spot trading policy the company’s main business of gas turbine power generation will face greater

challenges. The company will actively communicate with relevant provincial and municipal departments to reflect the difficulties of

the enterprise and seek government support and will try its utmost to improve the profitability of the main business and the overall

operating efficiency by strengthening the management of existing assets. At the same time the company will actively explore

diversified business models and transformation and development opportunities to create better conditions for the company's

sustainable operation and healthy development.

2. In terms of safety production the power generation equipment of the company's power plants all have different degrees of aging

and the hidden troubles and safety risks are increasing year by year which put forward higher requirements for equipment

management and maintenance investment. In addition the age structure of the company’s technical personnel is aging and the

problem of temporary shortages is also becoming increasingly apparent making the company's safety management face greater

challenges. The company will strengthen the regular inspection and maintenance of equipment strengthen the safety education and

training of employees intensify the responsibility system for safety production and strictly implement the safety management system

and enhance the safety awareness and responsibility awareness of personnel at all levels by combining assessment and rewards and

punishments to ensure production safety.

3. In terms of fuel procurement on the one hand the uncertainty of the actual power generation will further increase the possible

difference between the planned purchase of natural gas and the actual purchase resulting in difficulty in the execution of the contract

volume or a shortage of natural gas supply due to an expected shortage; on the other hand in the first half of the year natural gas

prices were at a low level due to factors such as the epidemic and disputes among oil-producing countries however with the

recovery of international crude oil prices natural gas prices have shown an upward trend in the second half of 2020 and the company

will face pressure from a sharp increase in fuel costs. The company will continue to leverage its advantages in large-scale

procurement and the adjustment function of multiple gas sources while ensuring to meet the demand for electricity production it

will try its best to reduce the cost of natural gas procurement.The Company reminds investors to pay attention to the above major risks and other risks that the Company may face and prudently

make rational investment decisions.Section V. Important Events

I. In the report period the Company held annual shareholders’ general meeting and

extraordinary shareholders’ general meeting

1. Shareholders’ General Meeting in the report period

Session of meeting Type

Ratio of investor

participation

Opening date Date of disclosure Index of disclosure

First extraordinary

shareholders’ general

meeting in 2020

Extraordinary

shareholders’ general

meeting

42.09% 2020-03-23 2020-03-24“Resolution Notice

of First

extraordinary

shareholders’ generalmeeting in 2020”

No.:2020-019released on “ChinaSecurities Journal”

“Securities Times”“Hong Kong

Commercial Daily”

and Juchao Website

Annual General

Meeting (AGM) of

2019

AGM 38.72% 2020-04-10 2020-04-11“Resolution Notice

of Annual GeneralMeeting 2019”

No.:2020-021released on “ChinaSecurities Journal”

“Securities Times”“Hong Kong

Commercial Daily”

and Juchao Website

2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore

□ Applicable √ Not applicable

II. Profit distribution plan and capitalizing of common reserves plan for the Period

□ Applicable √ Not applicable

The Company has no plans of cash dividend distributed no bonus shares and has no share converted from capital reserve either for

the semi-annual year.III. Commitments that the committed party as the actual controller shareholders related

party buyer and the Company have fulfilled during the reporting period and have not yet

fulfilled by the end of reporting period

□ Applicable √ Not applicable

There are no commitments that the committed party as the actual controller shareholders related party buyer and the Company have

fulfilled during the reporting period and have not yet fulfilled by the end of reporting period

IV. Appointment and non-reappointment (dismissal) of CPA

Financial report has been audited or not

□ Yes √ No

Not been audited

V. Explanation from Board of Directors Supervisory Committee for “Qualified Opinion”

that issued by CPA

□ Applicable √ Not applicable

VI. Explanation from the Board for “Qualified Opinion” of last year’s

□ Applicable √ Not applicable

VII. Bankruptcy reorganization

□ Applicable √ Not applicable

No bankruptcy reorganization for the Company in Period.VIII. Lawsuits

Material lawsuits and arbitration

□Applicable √Not applicable

There are no material lawsuits or arbitration in the period

Other lawsuits

□Applicable √Not applicable

IX. Media questioning

□Applicable √Not applicable

During the reporting period the company had no media generally questioned matters.

X. Penalty and rectification

□ Applicable √ Not applicable

No penalty and rectification for the Company in Period.XI. Integrity of the Company and its controlling shareholders and actual controllers

□ Applicable √ Not applicable

XII. Implementation of the Company’s stock incentive plan employee stock ownership plan

or other employee incentives

□ Applicable √ Not applicable

The Company has no equity incentive plan employee stock ownership plans or other employee incentives in Period.XIII. Major related transaction

1. Related transaction with routine operation concerned

√Applicable □ Not applicable

party

Relation

ship

Type of

transacti

Content

transacti

Pricing

principl

transacti

on price

transacti

amount

(in 10

thousan

d Yuan)

Proporti

on in

similar

transacti

ons

Trading

limit

approve

d (in 10

thousan

d Yuan)

Whether

over the

approve

limited

or not

(Y/N)

Clearing

form for

transacti

Availabl

e similar

market

price

Date of

disclosu

Index of

disclosur

Shenzhe

Energy

Gas

Investm

ent

Holding

Co.

Ltd.

Fuel

Branch

Shenzhe

Energy

Group

Co.

Ltd.

Associat

ed legal

person

Purchas

e fuel

The

Compan

y New

Power

Compan

y and

Shen

Nan

Dian

(Dongg

uan)

Compan

y are

entered

into the

Natural

Gas

Sales

and

Purchas

principl

e the

price

shall not

higher

than the

market

price of

natural

gas with

referenc

e to the

market

standard

principl

e the

price

shall not

higher

than the

market

price of

natural

gas with

referenc

e to the

market

standard

1366.01

100.00

8867 No

agreeme

-25

The

Notice of

OEM for

Equity

Gas

Purchase

and

Transacti

(Notice

No.:

) released

on China

Securities

Journal

Securities

Times

Hong

Contract

with SZ

Energy

Gas

Holding

respecti

vely

and

entered

in the

Purchas

e and

Sale

Manage

ment

Service

Agreem

ent of

LNG

with

Fuel

Branch

Kong

Commerc

ial Daily

and

Juchao

Website

Total -- -- 1366.01 -- 8867 -- -- -- -- --

Detail of sales return with major

amount involved

N/A

Report the actual implementation of

the daily related transactions which

were projected about their total

amount by types during the reporting

period

Not applicable

Reasons for major differences

between trading price and market

reference price

Not applicable

2. Related transactions by assets acquisition and sold

□ Applicable √ Not applicable

No related transactions by assets acquisition and sold for the Company in Period.

3. Main related transactions of mutual investment outside

□ Applicable √ Not applicable

No main related transactions of mutual investment outside for the Company in Period.27

4. Contact of related credit and debt

√Applicable □ Not applicable

Whether has non-operational contact of related liability and debts or not

√ Yes □ No

Claim receivable from related party:

party

Relationship Causes

Whether has

non-busines

s capital

occupying

or not (Y/N)

Balance at

period-begin

(10

thousand

Yuan)

Current

newly added

(10

thousand

Yuan)

Current

recovery

(10

thousand

Yuan)

Interest rate

Current

interest

(10

thousand

Yuan)

Ending

balance (10

thousand

Yuan)

Shen Nan

Dian

Environmen

t Protection

Company

Subsidiary

Routine

current

account

N 388.98 770.12 777.90 381.2

Shen Nan

Dian

Dongguan

Company

Subsidiary

Routine

current

account

N 18234.42 271.98 18506.40 4.82% 255.92 0.00

Shen Nan

Dian

Zhongshan

Company

Subsidiary

Routine

current

account

N 66759 1556.45 3500.00 4.82% 1556.45 64815.45

Shen Nan

Dian

Engineering

Company

Subsidiary

Routine

current

account

N 1649.49 137.45 1366.50 4.82% 18.12 420.44

Singapore

Company

Subsidiary

Routine

current

account

N 152.19 152.19

Influence on business

performance and financial

status of the Company

from related liabilities

No major influence on business performance and financial status of the Company from related liabilities

Debts payable to related party:

Related party Relationship Causes

Balance at

period-begin

(10 thousand

Yuan)

Current

newly added

(10 thousand

Yuan)

Current

recovery

(10 thousand

Yuan)

Interest rate

Current

interest

(10 thousand

Yuan)

Ending

balance (10

thousand

Yuan)

New Power Subsidiary Disburseme 8861.83 30939.4 32088.96 7712.27

Company nt fee

Server

Company

Subsidiary

Money

lending

6600 120.12 60.06 3.60% 60.06 6660.06

Shen Nan

Dian

Environment

Protection

Company

Subsidiary

Money

lending

2522.78 550.85 3.60% 50.85 3073.63

Syndisome

Company

Subsidiary

Disburseme

nt fee

386.69 5.63 392.32

Influence on business

performance and financial

status of the Company from

related debts

No major influence on business performance and financial status of the Company from related debts

5. Other major related transactions

□Applicable √Not applicable

There are no other major related transactions in the period

XIV. Non-business capital occupying by controlling shareholders and its related parties

□ Applicable √ Not applicable

No non-business capital occupied by controlling shareholders and its related parties in Period.XV. Significant contract and implementations

1. Trusteeship contract and leasing

(1) Trusteeship

√Applicable □ Not applicable

Note of trusteeship

In line with the Genset Asset Trusteeship Contract of Shenzhen New Power Industrial Co. Ltd. signed with New Power Company

the Company was entrusted to operate and manage the power generation machine unit owned by its wholly-owned subsidiary New

Power Company. The custody business service charge RMB 5.8711 million was obtained by the Company in reporting period.Gains/losses to the Company from projects that reached over 10% in total profit of the Company in reporting period

□ Applicable √ Not applicable

No gains or losses to the Company from projects that reached over 10% in total profit of the Company in reporting period.(2) Contract

□ Applicable √ Not applicable

No contract for the Company in Period.

(3) Leasing

□ Applicable √ Not applicable

No leasing for the Company in Period.

2. Major guarantees

□ Applicable √ Not applicable

No major guarantees for the Company in Period.

3. Trust financing

√Applicable □Not applicable

In 10 thousand Yuan

Type Capital sources Amount occurred Outstanding balance Overdue amount

Bank financial products Own funds 5367.42 13967.42 0

Total 5367.42 13967.42 0

Details of the single major amount or high-risk trust investment with low security poor fluidity and non-guaranteed

□Applicable √Not applicable

Entrust financial expected to be unable to recover the principal or impairment might be occurred

□ Applicable √ Not applicable

4. Other material contracts

√Applicable □Not applicable

The

name

of the

contra

cting

Comp

any

The

name

of the

contr

acted

Com

pany

contr

act

objec

The

book

value

of the

assets

invol

ved

in the

contr

act

(in

The

asses

sed

value

of the

assets

invol

ved

in the

contr

act

(in

Nam

e of

the

evalu

ation

organ

izatio

n (if

appli

cable

)

The

base

date

evalu

ation

(if

appli

cable

)

Pricing

principles

Bargain

price (in

thousan

d yuan)

eth

con

nec

ted

tra

nsa

ctio

(Y/

rel

ati

The

date

discl

osur

Index

ntr

act

thous

and

yuan)

(if

appli

cable

)

thous

and

yuan)

(if

appli

cable

)

ter

The

Comp

any

New

Power

Co.

Shen

zhen

Gas

Grou

Co.

Ltd.Pipeli

gas

-0

N/A

It was a

framewor

agreement

the price

of NG

will make

by the two

parties

according

to the

suppleme

ntary

agreement

It was a

framew

ork

agreeme

nt the

price of

NG will

make by

the two

parties

accordin

g to the

supplem

entary

agreeme

N N

pli

Fail to release for

special

disclosure

condition

un-qualified

The

Comp

any

Syndis

ome

Comp

any

Shen

zhen

Gas

Grou

Co.

Ltd.

70%

equit

y of

Shen

Nan

Dian

Dong

guan

Com

pany

(40%

equit

held

direct

ly by

the

Com

pany

and

5841

.18

8329

.92

Wats

(Beiji

ng)

Inter

natio

nal

Asset

Appr

aisal

Co.

Ltd.

2019-

Pricing

principle

in the

agreement

is that the

negotiated

transfer

price of

underlyin

g assets

(70%

equity of

Shen Nan

Dian

Dongguan

Company

)is higher

than the

appraisal

value of

10498(

price of

equity

transfer

amounte

d as

87.5

million

Yuan

17.48

million

Yuan

gains/lo

sses

during

the

transitio

nal

period

from the

N N

pli

Mar

202

Mar

202

Apri

202

and

July

202

Notice including:

70% Equity of

Shen Nan Dian

(Dongguan)

Weimei Electric

Power Co. Ltd

Transfer

Resolution of the

First

Extraordinary

Shareholders

General Meeting

of 2020 Progress

of Transfer of

70% Equity of

Shen Nan Dian

(Dongguan)

Weimei Electric

Power Co. Ltd

and Completion

30%

equit

held

throu

wholl

y-ow

ned

subsi

diary

Syndi

some

Com

pany

indire

ctly)

the

underlyin

g assets

issued by

Watson

(Beijing)

Internatio

nal Assets

Appraisal

Co. Ltd.

base

date of

assets

appraisa

l to

Decemb

er 31

2019)

0 of the 70%

Equity of Shen

Nan Dian

(Dongguan)

Weimei Electric

Power Co. Ltd

Transferred;

Notice No.:

(2020-006

2020-023 and

2020-032);

Released on :

China Securities

Journal

Securities Times

Hong Kong

Commercial

Daily and Juchao

Website.XVI. Social responsibility

1. Major environmental protection

The listed Company and its subsidiary whether belong to the key sewage units released from environmental protection department

Yes

Enterprise

subsidiary

Main

pollutant

and features

Way of

discharge

Number of

discharge

outlet

Distribution

of the

discharge

outlet

Emission

concentratio

Pollutant

discharge

standard

implemente

Total

discharge

Total

approved

emissions

Excessive

emission

Shenzhen

Nanshan

Power Co.Ltd.Oxynitride

Concentrate

emission

from boiler

uptake

In plant area

of Nanshan

Thermal

Plant

<15 mg/ m3

Implementa

tion of“Shenzhen

Blue”

emission

standard<15

mg/m3

19.04 ton 457.5 ton 0

Shenzhen

New Power

Industrial

Co. Ltd.

Oxynitride

Concentrate

emission

from boiler

uptake

In plant area

of Nanshan

Thermal

Plant

<15 mg/ m3

Implementa

tion of“Shenzhen

Blue”

3.24 ton 228.75 ton 0

emission

standard<15

mg/m3

Shen Nan

Dian

(Zhongshan

) Electric

Power Co.Ltd.Oxynitride

Concentrate

emission

from boiler

uptake

In plant area

of Nanshan

Thermal

Plant

<25 mg/ m3

Emission

standards

for air

pollutants

from

thermal

power

plants

GB13223-2

011

4.97 ton 324.50 ton 0

Construction and operation of the pollution controlling instruments

All pollution prevention and control facilities are operating normally and all pollutant discharges are stable and up to standard.

Environmental impact assessment of construction projects and other environmental protection administrative licenses:

All the above three legal entities have passed the environmental impact assessment and have been filed in Guangdong Environmental

Protection Department.

Emergency plan for sudden environmental incidents:

The emergency plan for sudden environmental incidents has been filed in Guangdong Environmental Protection Department and the

corresponding Municipal Environmental Protection Bureau.

Environmental self-monitoring program:

The environmental self-monitoring program has been prepared and reviewed by the environmental protection department; the

information on the monitoring data is disclosed on the website of the environmental protection department on time.Other environmental information that should be disclosed:

Nil

Relevant other information

Nil

2. Fulfill the precise social responsibility for poverty alleviation

During the reporting period the company has not yet carried out targeted poverty alleviation.

XVII. Other major events

√Applicable □ Not applicable

1. Matters related to the agreement to transfer 70% of the shares of Shen Nan Dian Dongguan Company. On March 5 and March 23

2020 the Eleventh Extraordinary Meeting of the Company’s Eighth Board of Directors and the 2020 First Extraordinary General

Meeting of Shareholders respectively reviewed and approved the Proposal on the Agreement to Transfer 70% Equity of Shen Nan

Dian (Dongguan) Weimei Electric Power Co. Ltd." agreeing to transfer 70% equity of Shen Nan Dian Dongguan Company directly

and indirectly held by the company to Shenzhen Gas at a total price of 104.98 million yuan (including the equity agreement price of

87.5 million yuan and the transition period gains and losses of 17.48 million yuan). According to the equity transfer agreement

signed between the company and Shenzhen Gas after the company received 40% of equity transfer fund i.e. 59.99 million yuan of

Shen Nan Dian Dongguan Company from Shenzhen Gas Shen Nan Dian Dongguan Company has completed the industrial and

commercial change registration on April 9 2020. Since then the total loan of 300 million yuan applied by Shen Nan Dian Dongguan

Company from Ningbo Bank Shenzhen Branch and Industrial Bank Shenzhen Branch has been repaid and the joint guarantee and

liability guarantee provided by the company for the above loan of Shen Nan Dian Dongguan Company has been lifted; Shen Nan

Dian Dongguan Company has fully repaid the principal and interest of the company's 180 million yuan of financial assistance. On

July 2 2020 the company's wholly-owned subsidiary Hong Kong Syndisome Co. Ltd. received the remaining 30% equity transfer

payment of RMB 44.99 million from Shenzhen Gas. So far the company has received all the equity transfer payments paid by

Shenzhen Gas and the transfer of 70% equity of Shen Nan Dian Dongguan Company was completed. (Found more in the Notice

released on China Securities Journal Securities Times Hong Kong Commercial Daily and Juchao Website including 70% Equity of

Shen Nan Dian (Dongguan) Weimei Electric Power Co. Ltd Transfer Resolution of the First Extraordinary Shareholders General

Meeting of 2020 Progress of Transfer of 70% Equity of Shen Nan Dian (Dongguan) Weimei Electric Power Co. Ltd and

Completion of the 70% Equity of Shen Nan Dian (Dongguan) Weimei Electric Power Co. Ltd Transferred (Notice No.: 2020-006

2020-019 2020-023 and 2020-032))

2. Matters concerning the company’s investment in Yuanzhi Ruixin New Generation Information Technology Equity Investment

Fund. On March 5 2020 and March 23 2020 the Eleventh Extraordinary Meeting of the Company’s Eighth Board of Directors and

the 2020 First Extraordinary General Meeting of Shareholders respectively reviewed and approved the Proposal on Investing in

Yuanzhi Ruixin New Generation Information Technology Equity Investment Fund and Related Transactions agreed that the company

would invest 200 million yuan with its own funds in Yuanzhi Ruixin New Generation Information Technology Equity Investment

Fund. In view of the fact that Shenzhen Capital Holdings Co. Ltd one of the limited partners of the fund and Shenzhen Yuanzhi

Ruixin Equity Investment Management Co.Ltd. the general partner of the fund are all related legal persons of the company the

company fulfills relevant approval procedures and information disclosure obligations in accordance with relevant regulations of

related transactions. As of the end of the reporting period the related work is in progress. The company and related parties have

neither signed the Partnership Agreement for Yuanzhi Ruixin New Generation Information Technology Equity Investment Fund

nor invested funds. The company will follow the progress of the matter and fulfill information disclosure obligations in accordance

with the law and regulations. (Found more in the Notice released on China Securities Journal Securities Times Hong Kong

Commercial Daily and Juchao Website including Notice on Investing in Yuanzhi Ruixin New Generation Information Technology

Equity Investment Fund and Related Transactions and Resolution of the First Extraordinary Shareholders General Meeting of 202

(Notice No.: 2020-007 and 2020-019))

3. T102-0011 T102-0155 Land related matters

(1) On April 2 2020 the company received the Notice of Shenzhen Qianhai Authority Regarding Resumption of Land Use Rights of

T102-0011 Parcel from Shenzhen Qianhai Authority. The company fulfilled its information disclosure obligations in a timely manner

and immediately worked with special legal advisors to study the Shenzhen Qianhai Authority’s plan to take back the land use rights

of the T102-0011 parcel and its countermeasures. At the same time it organized Shen Nan Dian Environment Protection Company

the company’s wholly-owned subsidiary and Nanshan Power Factory a subsidiary of the company carefully assessed the impact of

this matter on their normal production and operation. On April 24 the company delivered the "Reply to the Notice of Shenzhen

Qianhai Authority Regarding the Resumption of Land Use Rights of T102-0011 Parcel" (SNDHZ [2020 ] No. 4) which analyzed

and calculated the impact of Shenzhen Qianhai Authority's plan to recover the land use rights of 2531 square meters within

T102-0011 parcel on Shen Nan Dian Environment Protection Company and Nanshan Power Factory and made a compensation

request for the resumption of land use rights. (For details please refer to the company’s Announcement About Receipt of the Notice

of Shenzhen Qianhai Authority Regarding Resumption of Land Use Rights of T102-0011 Parcel the Announcement About Reply to

the Notice of Shenzhen Qianhai Authority Regarding the Resumption of Land Use Rights of T102-0011 Parcel disclosed on China

Securities Journal Securities Times Hong Kong Commercial Daily and cninfo Announcement No.: 2020-020 2020-029).

(2)On April 10 2020 the company received the Letter of Notice Regarding the Selection of the Surveying Mapping and Evaluation

Agency for the Land Preparation Project (Legal Buildings and Structures) of the Rapid Reconstruction Project of Yueliangwan

Avenue from Shenzhen Qianhai Development Investment Holding Co. Ltd. The company fulfilled its obligation of information

disclosure in a timely manner (for details please refer to the company’s Announcement About Receipt of Letter of Notice Regarding

the Selection of the Surveying Mapping and Evaluation Agency for the Land Preparation Project (Legal Buildings and Structures) of

the Rapid Reconstruction Project of Yueliangwan Avenue from Shenzhen Qianhai Development Investment Holding Co. Ltd.disclosed on China Securities Journal Securities Times Hong Kong Commercial Daily and cninfo Announcement No.: 2020-024).

(3)On June 19 2020 Shenzhen Qianhai Authority issued the Announcement of Shenzhen Qianhai Authority on the Public

Presentation of the Development Unit Planning Revision (Draft) of Qianhai Area on its official website (hereinafter referred to as

"the Announcement") and publicly presented the development unit planning revision (draft) for the three areas of Qianhai (Guiwan

Qianwan and Mawan). The company fulfilled its obligation of information disclosure in a timely manner and submitted the Opinions

of Shenzhen Nanshan Power Co. Ltd. on the Development Unit Planning Revision (Draft) of Qianhai Area to the Shenzhen Qianhai

Authority put forward relevant issues concerning planning content of the company's Nanshan Power Factory (Development Unit 13)

in the Announcement and raised an objection to the planning for Development Unit 13 hoping that Shenzhen Qianhai Authority will

fully consider the contributions the company made to Shenzhen and Qianhai area for more than 30 years based on the principle of

“respect for history cooperation and win-win” taking the successful land preparation model and mature experience of Qianhai for

example and properly solve the related issues of the company’s Nanshan Power Factory (Development Unit 13) so that the

legitimate rights and interests of listed companies and their shareholders shall be effectively protected (Found more in the Notice

released on China Securities Journal Securities Times Hong Kong Commercial Daily and Juchao Website including the Notice on

Shenzhen Qianhai Authority issued the Announcement of Shenzhen Qianhai Authority on the Public Presentation of the Development

Unit Planning Revision (Draft) and Development Unit Planning Revision (Draft) of Qianhai Area to the Shenzhen Qianhai Authority

(Notice No.: 2020-031 and 2020-034))

The company will continue to follow up the progress of matters related to the land where Nanshan Power Factory is located maintain

close communication with relevant functional departments in Shenzhen and Shenzhen Qianhai Authority and do its best to protect

the legitimate rights and interests of the listed company and all shareholders.

Except for the above matters the collection of refundable money of the "Guangdong Xinjiang Aid Project" and the "Project

Technical Reform Benefit Fund" that the company participated in in 2013 had no progress or change during the reporting period.XVIII. Major event of the subsidiaries

□Applicable √Not applicable

Section VI. Changes in Shares and Particulars about Shareholders

I. Changes in Share Capital

1. Changes in Share Capital

In Share

Before the Change Increase/Decrease in the Change (+ -) After the Change

Amount

Proportio

New

issued

Bonus

Capitaliz

ation of

public

reserve

Others Subtotal Amount

Proportio

I. Restricted shares 14139 0.0023% 14139 0.0023%

1. State-owned shares

2. State-owned legal person’s

3. Other domestic shares 14139 0.0023% 14139 0.0023%

Including: Domestic legal

person’s shares

Domestic natural person’s

14139 0.0023% 14139 0.0023%

4. Foreign shares

Including: Foreign legal

person’s shares

Foreign natural person’s

II. Unrestricted shares 602748457 99.9977% 602748457 99.9977%

1. RMB ordinary shares 338894011 56.2235% 338894011 56.2235%

2. Domestically listed foreign

263854446 43.7742% 263854446 43.7742%

3. Overseas listed foreign

4. Others

III. Total shares 602762596 100.00% 602762596 100.00%

Reasons for share changed

□ Applicable √ Not applicable

Approval of share changed

□ Applicable √ Not applicable

Ownership transfer of share changes

□ Applicable √ Not applicable

Implementation progress of shares buy-back

□ Applicable √ Not applicable

Implementation progress of the reduction of repurchases shares by centralized bidding

□ Applicable √ Not applicable

Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common

shareholders of Company in latest year and period

□ Applicable √ Not applicable

Other information necessary to disclose or need to disclosed under requirement from security regulators

□ Applicable √ Not applicable

2. Changes of restricted shares

□ Applicable √ Not applicable

II. Securities issuance and listing

□ Applicable √ Not applicable

III. Number of shares and shares held

In Share

Total common shareholders at

period-end

23874

Total preference shareholders

with voting rights recovered at

end of reporting period (if

applicable) (see note 8)

Particulars about common shares held above 5% by shareholders or top ten common shareholders

Shareholders

Nature of

shareholder

Proportion

of shares

held

Number of

common

shares held

period-end

Changes

reporting

period

Amount of

restricted

common

shares held

Amount of

un-restricted

common

shares held

Number of share

pledged/frozen

State of share Amount

HONG KONG

NAM HOI

Overseas

corporate

15.28% 92123248 92123248

(INTERNATION

AL) LTD

Shenzhen

Guangju Industrial

Co. Ltd.

State-owned

corporate

12.22% 73666824 73666824

Shenzhen Energy

Group Co. Ltd.State-owned

corporate

10.80% 65106130 65106130

Gaohua－HSBC

－GOLDMAN

SACHS &

CO.LLC

Overseas

corporate

2.13% 12839723 12839723

BOCI

SECURITIES

LIMITED

Overseas

corporate

1.72% 10389282 10389282

Liu Fang

Domestic nature

person

1.70% 10237134 10237134

China Merchants

Securities (HK)

Co. Limited

State-owned

corporate

1.32% 7955128 7955128

Zeng Ying

Domestic nature

person

1.25% 7559600 7559600

Meiyi Investment

Property Co. Ltd.

Domestic

non-state-owned

corporate

0.87% 5216700 5216700

LI SHERYN

ZHAN MING

Overseas nature

person

0.84% 5067200 5067200

Explanation on associated

relationship among the aforesaid

shareholders

1. Shenzhen Energy Group Co. Ltd. holds indirectly 100% equities of Hong Kong Nam Hoi

(International) Limited; 2. Among other social public shareholders the Company did not

know whether there were associated relationships or belonging to consistent actors.Particular about top ten common shareholders with un-restrict shares held

Shareholders

Amount of un-restrict common shares held at

period-end

Type of shares

Type Amount

HONG KONG NAM HOI

(INTERNATIONAL) LTD

92123248

Domestically

listed foreign

92123248

Shenzhen Guangju Industrial Co.Ltd.

73666824

RMB ordinary

73666824

Shenzhen Energy Group Co. Ltd. 65106130

RMB ordinary

65106130

Gaohua－HSBC－GOLDMAN

SACHS & CO.LLC

12839723

RMB ordinary

12839723

BOCI SECURITIES LIMITED 10389282

Domestically

listed foreign

10389282

Liu Fang 10237134

RMB ordinary

7176334

Domestically

listed foreign

3060800

China Merchants Securities (HK)

Co. Limited

7955128

Domestically

listed foreign

7955128

Zeng Ying 7559600

Domestically

listed foreign

7599600

Meiyi Investment Property Co. Ltd. 5216700

RMB ordinary

5216700

LI SHERYN ZHAN MING 5067200

Domestically

listed foreign

5067200

Expiation on associated relationship

or consistent actors within the top

10 un-restrict shareholders and

between top 10 un-restrict

shareholders and top 10

shareholders

1. 100% equity of HONG KONG NAM HOI (INTERNATIONAL) LIMITED was held by

Shenzhen Energy Group Co. Ltd.

2. Among other social public shareholders the Company did not know whether there were

associated relationships or belonging to consistent actors.

Explanation on top 10 shareholders

involving margin business (if

applicable) (see note 4)

Among the top ten shareholders Ms. Liu Fang holds 4 031688 shares through credit

transaction guarantee securities account

Whether top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held have a buy-back

agreement dealing in reporting period

□ Yes √ No

The top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held of the Company have no

buy-back agreement dealing in reporting period.IV. Changes of controlling shareholders or actual controller

Change of controlling shareholders in reporting period

□ Applicable √ Not applicable

No changes of controlling shareholder for the Company in reporting period

Change of actual controller in the period

□Applicable √Not applicable

Actual controller of the Company has no changes in the reporting period.

Section VII. Preferred Stock

□ Applicable √ Not applicable

The Company had no preferred stock in the reporting period.Section VIII. Convertible Bonds

□ Applicable √ Not applicable

The Company had no convertible bonds in the Period.Section IX. Particulars about Directors Supervisors and Senior

Officers

I. Changes of shares held by directors supervisors and senior officers

□ Applicable √ Not applicable

Shares held by directors supervisors and senior officers have no changes in reporting period found more details in Annual Report

2019.

II. Resignation and dismissal of directors supervisors and senior officers

□ Applicable √ Not applicable

The directors supervisors and senior officers of the company did not change during the reporting period found more details in

Annual Report 2019.

Section X. Corporate-bond

Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without due on the date when

annual report approved for released or fail to cash in full on due

Section XI. Financial Report

Financial statements and notes are attached.

Section XII. Documents Available for Reference

I. Original semi-annual Report of 2020 carried with the personnel signature of Legal

Representative;

II. Accounting Statements carried with the signature and seals of the person in charge of the

Company (Legal Representative) person in charge of accounting (General Manager and CFO) and

person in charge of accounting department (chief accountants).III.All the originalCompany’s documents and publicnotices disclosed in SecuritiesTimesChina Securities

Journal andHongKongCommercialDaily in the report period.IV.Place for inspection: ShenzhenStockExchange Secretariat of theBoardofDirector of theCompany.Financial Report

I. Auditing report

Whether the semi-annual report have been audited or not

□ Yes √ No

The financial report of the semi-annual report has not been audited.II. Financial Statement

Statement in Financial Notes are carried in RMB/CNY

1. Consolidated balance sheet

Shenzhen Nanshan Power Co. Ltd.

2020-06-30

In RMB

Item 2020-6-30 2019-12-31

Current assets:

Monetary funds 1084903966.81 773209854.84

Settlement provisions

Capital lent

Tradable financial assets

Derivative financial assets

Note receivable 2900000.00

Account receivable 132037467.25 178150580.32

Receivable financing

Accounts paid in advance 32848698.89 70005681.50

Insurance receivable

Reinsurance receivables

Contract reserve of reinsurance

receivable

Other account receivable 80837116.58 32321826.94

Including: Interest receivable

Dividend receivable

Buying back the sale of financial

assets

Inventories 108553898.22 124686443.61

Contractual assets

Assets held for sale

Non-current asset due within one

year

Other current assets 491760334.29 445236731.33

Total current assets 1933841482.04 1623611118.54

Non-current assets:

Loans and payments on behalf

Debt investment

Other debt investment

Long-term account receivable

Long-term equity investment 14375580.60 14619203.03

Investment in other equity

instrument 60615000.00 60615000.00

Other non-current financial assets

Investment real estate 2303258.20 2401327.00

Fixed assets 954992268.00 1381675872.68

Construction in progress 60831928.29 66474630.23

Productive biological asset

Oil and gas asset

Right-of-use assets

Intangible assets 21334118.82 43602166.44

Expense on Research and

Development

Goodwill

Long-term expenses to be

apportioned 1048199.78 1174171.16

Deferred income tax asset 2206049.69 2206049.69

Other non-current asset 22882181.78

Total non-current asset 1117706403.38 1595650602.01

Total assets 3051547885.42 3219261720.55

Current liabilities:

Short-term loans 755480134.11 881075378.48

Loan from central bank

Capital borrowed

Trading financial liability

Derivative financial liability

Note payable

Account payable 13361192.95 19871102.41

Accounts received in advance

Contractual liability

Selling financial asset of

repurchase

Absorbing deposit and interbank

deposit

Security trading of agency

Security sales of agency

Wage payable 41045198.56 55208432.53

Taxes payable 11824882.40 21769273.77

Other account payable 34163258.96 43691472.06

Including: Interest payable

Dividend payable

Commission charge and

commission payable

Reinsurance payable

Liability held for sale

Non-current liabilities due within

one year

Other current liabilities

Total current liabilities 855874666.98 1021615659.25

Non-current liabilities:

Insurance contract reserve

Long-term loans

Bonds payable

Including: Preferred stock

Perpetual capital

securities

Lease liability

Long-term account payable

Long-term wages payable

Accrual liability 26646056.28 26646056.28

Deferred income 96957757.04 108507683.52

Deferred income tax liabilities

Other non-current liabilities

Total non-current liabilities 123603813.32 135153739.80

Total liabilities 979478480.30 1156769399.05

Owner’s equity:

Share capital 602762596.00 602762596.00

Other equity instrument

Including: Preferred stock

Perpetual capital

securities

Capital public reserve 362770922.10 362770922.10

Less: Inventory shares

Other comprehensive income -2500000.00 -2500000.00

Reasonable reserve

Surplus public reserve 332908397.60 332908397.60

Provision of general risk

Retained profit 746816139.04 706830892.54

Total owner’ s equity attributable to

parent company 2042758054.74 2002772808.24

Minority interests 29311350.38 59719513.26

Total owner’ s equity 2072069405.12 2062492321.50

Total liabilities and owner’ s equity 3051547885.42 3219261720.55

Legal Representative: Li Xinwei

General Manager: Chen Yuhui

CFO: Dai Xiji

Person in charge of financial dept.: Wang Yi

Tabulator: Liu Yan

2. Balance Sheet of Parent Company

In RMB

Item 2020-6-30 2019-12-31

Current assets:

Monetary funds 1012488905.86 632948706.11

Trading financial assets

Derivative financial assets

Note receivable

Account receivable 61629518.43 31824693.69

Receivable financing

Accounts paid in advance 27966084.58 46152700.57

Other account receivable 660835522.34 873861071.55

Including: Interest receivable

Dividend receivable

Inventories 97843620.07 101728367.43

Contractual assets

Assets held for sale

Non-current assets maturing within

one year

Other current assets 485147244.31 438613774.49

Total current assets 2345910895.59 2125129313.84

Non-current assets:

Debt investment

Other debt investment

Long-term receivables

Long-term equity investments 228918765.00 303341165.00

Investment in other equity

instrument 60615000.00 60615000.00

Other non-current financial assets

Investment real estate

Fixed assets 315117782.13 321395526.04

Construction in progress 2355233.61 1949450.23

Productive biological assets

Oil and natural gas assets

Right-of-use assets

Intangible assets 229435.21 404104.06

Research and development costs

Goodwill

Long-term deferred expenses 709967.63 790841.39

Deferred income tax assets

Other non-current assets

Total non-current assets 607946183.58 688496086.72

Total assets 2953857079.17 2813625400.56

Current liabilities

Short-term borrowings 755480134.11 580640114.59

Trading financial liability

Derivative financial liability

Notes payable

Account payable 1756794.04 864016.74

Accounts received in advance

Contractual liability

Wage payable 26769914.84 33840544.53

Taxes payable 1279402.89 718630.17

Other accounts payable 193871721.75 203332331.14

Including: Interest payable

Dividend payable

Liability held for sale

Non-current liabilities due within

one year

Other current liabilities

Total current liabilities 979157967.63 819395637.17

Non-current liabilities:

Long-term loans

Bonds payable

Including: preferred stock

Perpetual capital

securities

Lease liability

Long-term account payable

Long term employee compensation

payable

Accrued liabilities

Deferred income 56533398.56 58261356.20

Deferred income tax liabilities

Other non-current liabilities

Total non-current liabilities 56533398.56 58261356.20

Total liabilities 1035691366.19 877656993.37

Owners’ equity:

Share capital 602762596.00 602762596.00

Other equity instrument

Including: preferred stock

Perpetual capital

securities

Capital public reserve 289963039.70 289963039.70

Less: Inventory shares

Other comprehensive income

Special reserve

Surplus reserve 332908397.60 332908397.60

Retained profit 692531679.68 710334373.89

Total owner’s equity 1918165712.98 1935968407.19

Total liabilities and owner’s equity 2953857079.17 2813625400.56

Legal Representative: Li Xinwei

General Manager: Chen Yuhui

CFO: Dai Xiji

Person in charge of financial dept.: Wang Yi

Tabulator: Liu Yan

3. Consolidated Profit Statement

In RMB

Item 2020 semi-annual 2019 semi-annual

I. Total operating income 518150606.21 408124616.38

Including: Operating income 518150606.21 408124616.38

Interest income

Insurance gained

Commission charge and

commission income

II. Total operating cost 508157542.84 443959972.56

Including: Operating cost 453109436.14 382997137.69

Interest expense

Commission charge and

commission expense

Cash surrender value

Net amount of expense of

compensation

Net amount of withdrawal of

insurance contract reserve

Bonus expense of guarantee slip

Reinsurance expense

Tax and extras 4419108.69 2825433.43

Sales expense 2527403.66 2566269.52

Administrative expense 43036872.15 44931864.50

R&D expense

Financial expense 5064722.20 10639267.42

Including: Interest

expenses 18187759.13 23542971.21

Interest income -13142285.32 -13189605.67

Add: other income 8755536.55 4962155.46

Investment income (Loss is

listed with “-”) 33291259.12 -677552.37

Including: Investment income

on affiliated company and joint venture -243622.43 -677552.37

The termination of income

recognition for financial assets measured

by amortized cost(Loss is listed with “-”)

Exchange income (Loss is

listed with “-”)

Net exposure hedging income

(Loss is listed with “-”)

Income from change of fair

value (Loss is listed with “-”)

Loss of credit impairment

(Loss is listed with “-”)

Losses of devaluation of asset

(Loss is listed with “-”)

Income from assets disposal

(Loss is listed with “-”) 828535.66 -417926.32

III. Operating profit (Loss is listed with

“-”) 52868394.70 -31968679.41

Add: Non-operating income 4753.84 103166.50

Less: Non-operating expense 11110.00 46124.97

IV. Total profit (Loss is listed with “-”) 52862038.54 -31911637.88

Less: Income tax expense 610366.52 1157865.76

V. Net profit (Net loss is listed with “-”) 52251672.02 -33069503.64

(i) Classify by business continuity

1.continuous operating net profit(net loss listed with ‘-”) 52251672.02 -33069503.64

2.termination of net profit (net losslisted with ‘-”)

(ii) Classify by ownership

1.Net profit attributable to owner’s

of parent company 52040498.42 -25283190.82

2.Minority shareholders’ gains and

losses 211173.60 -7786312.82

VI. Net after-tax of other comprehensive

income

Net after-tax of other comprehensive

income attributable to owners of parent

company

(I) Other comprehensive income

items which will not be reclassified

subsequently to profit of loss

1.Changes of the defined

benefit plans that re-measured

2.Other comprehensive

income under equity method that cannot

be transfer to gain/loss

3.Change of fair value of

investment in other equity instrument

4.Fair value change of

enterprise's credit risk

5. Other

(ii) Other comprehensive income

items which will be reclassified

subsequently to profit or loss

1.Other comprehensive

income under equity method that can

transfer to gain/loss

2.Change of fair value of

other debt investment

3.Amount of financial assets

re-classify to other comprehensive

income

4.Credit impairment

provision for other debt investment

5.Cash flow hedging reserve

6.Translation differences

arising on translation of foreign currency

financial statements

7.Other

Net after-tax of other comprehensive

income attributable to minority

shareholders

VII. Total comprehensive income 52251672.02 -33069503.64

Total comprehensive income

attributable to owners of parent Company 52040498.42 -25283190.82

Total comprehensive income

attributable to minority shareholders 211173.60 -7786312.82

VIII. Earnings per share:

(i) Basic earnings per share 0.09 -0.04

(ii) Diluted earnings per share 0.09 -0.04

Legal Representative: Li Xinwei

General Manager: Chen Yuhui

CFO: Dai Xiji

Person in charge of financial dept.: Wang Yi

Tabulator: Liu Yan

4. Profit Statement of Parent Company

In RMB

Item 2020 semi-annual 2019 semi-annual

I. Operating income 145767015.34 165514051.23

Less: Operating cost 137936919.09 172328135.53

Taxes and surcharge 1043521.78 1087030.23

Sales expenses

Administration expenses 20573683.41 24673677.93

R&D expenses

Financial expenses -15583586.02 -14339507.18

Including: interest

expenses 14003693.17 22030984.10

Interest income -29739688.14 -36594234.59

Add: other income 6061054.97 1973036.55

Investment income (Loss is

listed with “-”) -14432400.00

Including: Investment income

on affiliated Company and joint venture

The termination of

income recognition for financial assets

measured by amortized cost (Loss is

listed with “-”)

Net exposure hedging income

(Loss is listed with “-”)

Changing income of fair

value (Loss is listed with “-”)

Loss of credit impairment

(Loss is listed with “-”)

Losses of devaluation of asset

(Loss is listed with “-”)

Income on disposal of assets

(Loss is listed with “-”) 828535.66 -231373.37

II. Operating profit (Loss is listed with

“-”) -5746332.29 -16493622.10

Add: Non-operating income

Less: Non-operating expense 1110.00

III. Total Profit (Loss is listed with “-”) -5747442.29 -16493622.10

Less: Income tax -2246824.86

IV. Net profit (Net loss is listed with

“-”) -5747442.29 -14246797.24

(i)continuous operating net profit(net loss listed with ‘-”) -5747442.29 -14246797.24

(ii) termination of net profit (netloss listed with ‘-”)

V. Net after-tax of other comprehensive

income

(I) Other comprehensive income

items which will not be reclassified

subsequently to profit of loss

1.Changes of the defined

benefit plans that re-measured

2.Other comprehensive

income under equity method that cannot

be transfer to gain/loss

3.Change of fair value of

investment in other equity instrument

4.Fair value change of

enterprise's credit risk

5. Other

(II) Other comprehensive income

items which will be reclassified

subsequently to profit or loss

1.Other comprehensive

income under equity method that can

transfer to gain/loss

2.Change of fair value of

other debt investment

3.Amount of financial

assets re-classify to other

comprehensive income

4.Credit impairment

provision for other debt investment

5.Cash flow hedging

reserve

6.Translation differences

arising on translation of foreign

currency financial statements

7.Other

VI. Total comprehensive income -5747442.29 -14246797.24

VII. Earnings per share:

(i) Basic earnings per share

(ii) Diluted earnings per share

Legal Representative: Li Xinwei

General Manager: Chen Yuhui

CFO: Dai Xiji

Person in charge of financial dept.: Wang Yi

Tabulator: Liu Yan

5. Consolidated Cash Flow Statement

In RMB

Item 2020 semi-annual 2019 semi-annual

I. Cash flows arising from operating

activities:

Cash received from selling

commodities and providing labor

services

546650431.87 428898326.58

Net increase of customer deposit

and interbank deposit

Net increase of loan from central

bank

Cash received from original

insurance contract fee

Net cash received from reinsurance

business

Net increase of insured savings

and investment

Cash received from interest

commission charge and commission

Net increase of capital borrowed

Net increase of returned business

capital

Net cash received by agents in sale

and purchase of securities

Write-back of tax received 825437.15 1346224.12

Other cash received concerning

operating activities 22506294.89 70033512.82

Subtotal of cash inflow arising from

operating activities 569982163.91 500278063.52

Cash paid for purchasing

commodities and receiving labor

service

375599637.22 333819040.13

Net increase of customer loans and

advances

Net increase of deposits in central

bank and interbank

Cash paid for original insurance

contract compensation

Net increase of capital lent

Cash paid for interest commission

charge and commission

Cash paid for bonus of guarantee

slip

Cash paid to/for staff and workers 75085663.24 66444597.80

Taxes paid 28204829.24 17292868.12

Other cash paid concerning

operating activities 21155472.75 26504180.58

Subtotal of cash outflow arising from

operating activities 500045602.45 444060686.63

Net cash flows arising from operating

activities 69936561.46 56217376.89

II. Cash flows arising from investing

activities:

Cash received from recovering

investment

Cash received from investment

income 254147.93

Net cash received from disposal of

fixed intangible and other long-term

assets

1989560.00

Net cash received from disposal of

subsidiaries and other units

Other cash received concerning

investing activities 800000.00

Subtotal of cash inflow from investing

activities 1054147.93 1989560.00

Cash paid for purchasing fixed

intangible and other long-term assets 5447277.81 22830724.69

Cash paid for investment 53434321.12

Net increase of mortgaged loans

Net cash received from

subsidiaries and other units obtained

Other cash paid concerning

investing activities 12577163.02

Subtotal of cash outflow from investing

activities 71458761.95 22830724.69

Net cash flows arising from investing

activities -70404614.02 -20841164.69

III. Cash flows arising from financing

activities

Cash received from absorbing

investment

Including: Cash received from

absorbing minority shareholders’

investment by subsidiaries

Cash received from loans 844233285.00 730000000.00

Other cash received concerning

financing activities 170000000.00 7303338.86

Subtotal of cash inflow from financing

activities 1014233285.00 737303338.86

Cash paid for settling debts 670000000.00 634000000.00

Cash paid for dividend and profit

distributing or interest paying 30452445.36 23755459.28

Including: Dividend and profit of

minority shareholder paid by

subsidiaries

Other cash paid concerning

financing activities

Subtotal of cash outflow from financing

activities 700452445.36 657755459.28

Net cash flows arising from financing

activities 313780839.64 79547879.58

IV. Influence on cash and cash

equivalents due to fluctuation in

exchange rate

101178.77 3136.95

V. Net increase of cash and cash

equivalents 313413965.85 114927228.73

Add: Balance of cash and cash

equivalents at the period -begin 771490000.96 914956611.70

VI. Balance of cash and cash

equivalents at the period -end 1084903966.81 1029883840.43

Legal Representative: Li Xinwei

General Manager: Chen Yuhui

CFO: Dai Xiji

Person in charge of financial dept.: Wang Yi

Tabulator: Liu Yan

6. Cash Flow Statement of Parent Company

In RMB

Item 2020 semi-annual 2019 semi-annual

I. Cash flows arising from operating

activities:

Cash received from selling

commodities and providing labor

services

175122223.90 179341203.60

Write-back of tax received 171207.01

Other cash received concerning

operating activities 255646269.06 472584897.62

Subtotal of cash inflow arising from

operating activities 430939699.97 651926101.22

Cash paid for purchasing

commodities and receiving labor

service

117118694.51 166269024.94

Cash paid to/for staff and workers 47301346.15 37380527.03

Taxes paid 222887.49 9889753.49

Other cash paid concerning

operating activities 275229334.87 180626305.78

Subtotal of cash outflow arising from

operating activities 439872263.02 394165611.24

Net cash flows arising from operating -8932563.05 257760489.98

activities

II. Cash flows arising from investing

activities:

Cash received from recovering

investment 59990000.00

Cash received from investment

income 254147.93

Net cash received from disposal of

fixed intangible and other long-term

assets

1794800.00

Net cash received from disposal of

subsidiaries and other units

Other cash received concerning

investing activities 230318617.98

Subtotal of cash inflow from investing

activities 290562765.91 1794800.00

Cash paid for purchasing fixed

intangible and other long-term assets 1915256.43 15789275.99

Cash paid for investment 53434321.12

Net cash received from

subsidiaries and other units obtained

Other cash paid concerning

investing activities

Subtotal of cash outflow from investing

activities 55349577.55 15789275.99

Net cash flows arising from investing

activities 235213188.36 -13994475.99

III. Cash flows arising from financing

activities

Cash received from absorbing

investment

Cash received from loans 544233285.00 430000000.00

Other cash received concerning

financing activities 5000000.00

Subtotal of cash inflow from financing

activities 549233285.00 430000000.00

Cash paid for settling debts 370000000.00 530000000.00

Cash paid for dividend and profit

distributing or interest paying 25373959.23 20895394.22

Other cash paid concerning

financing activities 600600.00

Subtotal of cash outflow from financing

activities 395974559.23 550895394.22

Net cash flows arising from financing

activities 153258725.77 -120895394.22

IV. Influence on cash and cash

equivalents due to fluctuation in

exchange rate

848.67 391.81

V. Net increase of cash and cash

equivalents 379540199.75 122871011.58

Add: Balance of cash and cash

equivalents at the period -begin 632948706.11 766041463.01

VI. Balance of cash and cash

equivalents at the period -end 1012488905.86 888912474.59

Legal Representative: Li Xinwei

General Manager: Chen Yuhui

CFO: Dai Xiji

Person in charge of financial dept.: Wang Yi

Tabulator: Liu Yan

7. Statement of Changes in Owners’ Equity (Consolidated)

This Period

In RMB

Item

2020 semi-annual

Owners’ equity attributable to the parent Company

Minori

interes

Total

owners

’

equity

capita

Other

equity instrument

Capital

reserve

Less:

Invent

ory

Other

compr

ehensi

incom

Reaso

nable

reserve

Surplu

reserve

Provisi

on of

genera

l risk

Retain

profit

Other

Subtot

alPrefe

rred

stock

Perpe

tual

capit

secur

ities

Other

I. Balance at the

end of the last

year

6027

6259

6.00

36277

0922.

-2500

000.00

33290

8397.

70683

0892.

2002

77280

8.24

59719

513.2

2062

49232

1.50

Add:

Changes of

accounting

policy

Error

correction of the

last period

Enterprise

combine under

the same

control

Other

II. Balance at

the beginning of

this year

6027

6259

6.00

36277

0922.

-2500

000.00

33290

8397.

70683

0892.

2002

77280

8.24

59719

513.2

2062

49232

1.50

III. Increase/

Decrease in this

year (Decrease

is listed with

“-”)

39985

246.5

39985

246.5

-3040

8162.

9577

083.62

(i) Total

comprehensive

income

52040

498.4

52040

498.4

21117

3.60

52251

672.0

(ii) Owners’

devoted and

decreased

capital

-3061

9336.

-3061

9336.

1.Common

shares invested

by shareholders

2. Capital

invested by

holders of other

equity

instruments

3. Amount

reckoned into

owners equity

with

share-based

payment

4. Other

-3061

9336.

-3061

9336.

(III) Profit

distribution

-1205

5251.

-1205

5251.

-1205

5251.

1. Withdrawal

of surplus

reserves

2. Withdrawal

of general risk

provisions

3. Distribution

for owners (or

shareholders)

-1205

5251.

-1205

5251.

-1205

5251.

4. Other

(IV) Carrying

forward internal

owners’ equity

1. Capital

reserves

conversed to

capital (share

capital)

2. Surplus

reserves

conversed to

capital (share

capital)

3. Remedying

loss with

surplus reserve

4．Carry-over

retained

earnings from

the defined

benefit plans

5．Carry-over

retained

earnings from

other

comprehensive

income

6. Other

(V) Reasonable

reserve

1. Withdrawal

in the report

period

2. Usage in the

report period

(VI)Others

IV. Balance at

the end of the

report period

6027

6259

6.00

36277

0922.

-2500

000.00

33290

8397.

74681

6139.

2042

75805

4.74

29311

350.3

2072

06940

5.12

Last Period

In RMB

Item

2019 semi-annual

Owners’ equity attributable to the parent Company

Minorit

interest

Total

owners’

equity

capita

Other

equity instrument

Capital

reserve

Less:

Invent

ory

Other

compr

ehensi

incom

Reaso

nable

reserve

Surplu

reserve

Provisi

on of

genera

l risk

Retain

profit

Other

Subtot

Prefe

rred

stock

Perp

etual

capit

secur

ities

Other

I. Balance at

the end of the

last year

6027

6259

6.00

36277

0922.

33290

8397.

67942

9935.

1977

87185

1.51

58927

527.37

20367

99378.

Add:

Changes of

accounting

policy

Error

correction of

the last period

Enterprise

combine

under the

same control

Other

II. Balance at

the beginning

of this year

6027

6259

6.00

36277

0922.

33290

8397.

67942

9935.

1977

87185

1.51

58927

527.37

20367

99378.

III. Increase/

Decrease in this

-2528

3190.

-2528

3190.

-7786

312.82

-33069

503.64

year (Decrease

is listed with

“-”)

82 82

(i) Total

comprehensive

income

-2528

3190.

-2528

3190.

-7786

312.82

-33069

503.64

(ii) Owners’

devoted and

decreased

capital

1.Common

shares invested

by shareholders

2. Capital

invested by

holders of other

equity

instruments

3. Amount

reckoned into

owners equity

with

share-based

payment

4. Other

(III) Profit

distribution

1. Withdrawal

of surplus

reserves

2. Withdrawal

of general risk

provisions

3. Distribution

for owners (or

shareholders)

4. Other

(IV) Carrying

forward

internal

owners’ equity

1. Capital

reserves

conversed to

capital (share

capital)

2. Surplus

reserves

conversed to

capital (share

capital)

3. Remedying

loss with

surplus reserve

4．Carry-over

retained

earnings

from the

defined

benefit plans

5．Carry-over

retained

earnings from

other

comprehensive

income

6. Other

(V) Reasonable

reserve

1. Withdrawal

in the report

period

2. Usage in the

report period

(VI)Others

IV. Balance at

the end of the

report period

6027

6259

6.00

36277

0922.

33290

8397.

65414

6744.

1952

58866

0.69

51141

214.55

20037

29875.

Legal Representative: Li Xinwei

General Manager: Chen Yuhui

CFO: Dai Xiji

Person in charge of financial dept.: Wang Yi

Tabulator: Liu Yan

8. Statement of Changes in Owners’ Equity (Parent Company)

This Period

In RMB

Item

2020 semi-annual

capital

Other equity instrument

Capital

public

reserve

Less:

Inventor

y shares

Other

compreh

ensive

income

Reasona

ble

reserve

Surplus

reserve

Retaine

d profit

Other

Total

owners’

equity

Preferr

stock

Perpet

ual

capital

securiti

Other

I. Balance at the

end of the last

year

60276

2596.0

289963

039.70

332908

397.60

71033

4373.8

1935968

407.19

Add:

Changes of

accounting

policy

Error

correction of the

last period

Other

II. Balance at the

beginning of this

year

60276

2596.0

289963

039.70

332908

397.60

71033

4373.8

1935968

407.19

III. Increase/

Decrease in this

year (Decrease is

listed with “-”)

-17802

694.21

-1780269

4.21

(i) Total

comprehensive

income

-5747

442.29

-5747442

.29

(ii) Owners’

devoted and

decreased capital

1.Common

shares invested

by shareholders

2. Capital

invested by

holders of other

equity

instruments

3. Amount

reckoned into

owners equity

with share-based

payment

4. Other

(III) Profit

distribution

-12055

251.92

-1205525

1.92

1. Withdrawal of

surplus reserves

2. Distribution

for owners (or

shareholders)

-12055

251.92

-1205525

1.92

3. Other

(IV) Carrying

forward internal

owners’ equity

1. Capital

reserves

conversed to

capital (share

capital)

2. Surplus

reserves

conversed to

capital (share

capital)

3. Remedying

loss with surplus

reserve

4．Carry-over

retained earnings

from the defined

benefit plans

5．Carry-over

retained earnings

from other

comprehensive

income

6. Other

(V) Reasonable

reserve

1. Withdrawal in

the report period

2. Usage in the

report period

(VI)Others

IV. Balance at

the end of the

report period

60276

2596.0

289963

039.70

332908

397.60

69253

1679.6

1918165

712.98

Last period

In RMB

Item

2019 semi-annual

capital

Other equity

instrument

Capital

public

reserve

Less:

Inventor

y shares

Other

compre

hensive

income

Reasonab

le reserve

Surplus

reserve

Retained

profit

Other

Total

owners’

equity

Preferr

stock

Perpet

ual

capital

securit

ies

Other

I. Balance at the

end of the last

year

60276

2596.

289963

039.70

332908

397.60

7095813

50.64

19352153

83.94

Add:

Changes of

accounting

policy

Error

correction of

the last period

Other

II. Balance at

the beginning

of this year

60276

2596.

289963

039.70

332908

397.60

7095813

50.64

19352153

83.94

III. Increase/

Decrease in this

year (Decrease

-142467

97.24

-14246797

.24

is listed with

“-”)

(i) Total

comprehensive

income

-142467

97.24

-14246797

.24

(ii) Owners’

devoted and

decreased

capital

1.Common

shares invested

by shareholders

2. Capital

invested by

holders of other

equity

instruments

3. Amount

reckoned into

owners equity

with

share-based

payment

4. Other

(III) Profit

distribution

1. Withdrawal

of surplus

reserves

2. Distribution

for owners (or

shareholders)

3. Other

(IV) Carrying

forward internal

owners’ equity

1. Capital

reserves

conversed to

capital (share

capital)

2. Surplus

reserves

conversed to

capital (share

capital)

3. Remedying

loss with

surplus reserve

4．Carry-over

retained

earnings from

the defined

benefit plans

5．Carry-over

retained

earnings from

other

comprehensive

income

6. Other

(V) Reasonable

reserve

1. Withdrawal

in the report

period

2. Usage in the

report period

(VI)Others

IV. Balance at

the end of the

report period

60276

2596.

289963

039.70

332908

397.60

6953345

53.40

19209685

86.70

Legal Representative: Li Xinwei

General Manager: Chen Yuhui

CFO: Dai Xiji

Person in charge of financial dept.: Wang Yi

Tabulator: Liu Yan

Shenzhen Nanshan Power Co. Ltd.Notes to financial statement of Semi-Annual 2020

I. Company Profile

(1) Profile

Shenzhen Nanshan Power Co. Ltd (hereinafter the “Company”) was reorganized to be a joint-stock enterprise

from a foreign investment enterprise on 25 November 1993 upon the approval of General Office of Shenzhen

Municipal Government with Document Shen Fu Ban Fu [1993] No.897.

After approved by Document Shen Zhu Ban Fu [1993] No.179 issued by Shenzhen Securities Regulatory Office

on 3 January 1994 the Company offered 40000000 RMB common shares and 37000000 domestically listed

foreign shares in and out of China. And the RMB common shares (A-stock) and domestically listed foreign listed

shares (B-stock) were listed in Shenzhen Stock Exchange successively on July 1 1994 and Nov. 28 1994.Headquarter of the Company located on 16/F 17/F Han Tang Building OCT Nanshan District Shenzhen City

Guangdong Province P.R.C.The financial statement has approved for report by the Board on 12 August 2020.(2) Scope of consolidate financial statement

Subsidiary included in the consolidate financial statement of the Company up to 30 June 2020 are as:

Subsidiary

Shen Nan Dian (Zhongshan) Electric Power Co. Ltd.（“Zhongshan Electric Power”）

Shenzhen Shennandian Turbine Engineering Technology Co. Ltd.（“Engineering Company”）

Shenzhen Shen Nan Dian Environment Protection Co. Ltd.（“Environment Protection Company”）

Shenzhen Server Petrochemical Supplying Co. Ltd（“Shenzhen Server”）

Shenzhen New Power Industrial Co. Ltd.（“New Power”）

Shen Nan Energy (Singapore) Co. Ltd.（“Singapore Company”）

Hong Kong Syndisome Co. Ltd.（“Syndisome ”）

Zhongshan Shen Nan Dian Storage Co. Ltd.（“Shen Storage”）

Scope of the consolidate financial statement and its changes found more in the VI. Change of Consolidate Scope

and VII. Equity in other entity carry in the Note

II. Preparation basis of Financial statement

(1) Preparation basis

The Company’s financial statements have been prepared based on the going concern and the actual transactions

and events. In accordance with the Accounting Standards for Business Enterprises- Basic Norms and every

specific accounting rules the application guidelines of the Accounting Standards for Business Enterprises

interpretations and other related rules of the Accounting Standards for Business Enterprises (hereinafter referred to

as “ASBEs”) and the disclosure requirements of the “Regulation on the Preparation of Information Disclosures of

Companies Issuing Public Shares No. 15- General Requirements for Financial Reports” of China Securities

Regulatory Commission.

(2)Going concern

The Company is capable of going concern for 12 months from the end of the reporting period and there are no

major issues affecting the ability to go concern.III.MajorAccounting Policies and Estimation

The Company together with its subsidiaries is mainly engaged in businesses as production of power and heat

power plant construction fuel trading engineering consulting and and sludge drying.According to the actual

production and operation characteristics the Company and its subsidiaries establish certain specific accounting

policies and accounting estimates in respect of their transactions and matters such as sales revenue recognition

pursuant to relevant business accounting principles. Details are set out in (16) Fixed assets and the (25) Revenue

under Note III. For explanation on material accounting judgment and estimate issued by the management please

refer to (32) Major accounting judgment and estimation under Note III.

(1) Statement on observation of Accounting Standard for Business Enterprises

The Financial Statements are up to requirements of Accounting Standards for Business Enterprises and reflect the

financial status operation outcomes and cash flows of the Company in reporting period in truthfulness and

completeness.

(2) Accounting period

Accounting period of the Company divide into annual and medium-term and the medium-term is the reporting

period that shorter than one completed accounting year. The Company’s accounting year is Gregorian calendar

year namely from 1st January to 31stDecember.

(3) Operating cycle

The operating cycle of the Company is 12 months.

(4) Book-keeping standard currency

Book-keeping standard of the Company is RMB(CNY)

(5) Accounting treatment on enterprise combine under the same control and under the

different control

Enterprise combination under the same control: The assets and liabilities obtained by the Company in enterprise

combination are measured at the book value of the consolidated financial statements of the ultimate controlling

party in accordance with the assets and liabilities of the combined party on the date of combination. The difference

between the carrying amount of the net assets obtained and the carrying amount of the consideration paid for the

combination (or the aggregate nominal value of shares issued as consideration) is charged to the share capital

premium in capital reserve. If the share capital premium in capital reserve is not sufficient to absorb the difference

any excess shall be adjusted against retained earnings.

Enterprise combinations not under the same control: The Company's assets paid and liabilities incurred or assumed

on the date of purchase as a consideration of enterprise combination are measured at fair value and the difference

between the fair value and its book value is included in the current profit and loss. Where the cost of a business

combination exceeds the acquirer’s interest in the fair value of the acquiree’s identifiable net assets the difference

is recognized as goodwill; where the cost of a business combination less than the acquirer’s interest in the fair

value of the acquiree’s identifiable net assets reckoned into current gains/losses after double-check.The intermediary fees such as auditing legal services consultation and other directly relevant incurred in the

merger of enterprises shall be reckon into the current gains/losses when incurred; the transaction costs of issuing

equity securities for the purpose of enterprise combination should be charge-off.

(6) Preparation methods for consolidated statement

1.Consolidate scope

Scope of the consolidate financial statement is determined on a control basis all subsidiaries (including the part of

the enterprise under control of the investee that can be divided) are included in the consolidated financial

statement.

2. Consolidate procedures

Based on the financial statements of itself and its subsidiaries the Company compiles the consolidated financial

statements in line with other relevant information. The Company compiles consolidated financial statements

considers the entire enterprise group as an accounting entity and reflects the overall financial position operating

results and cash flow of the enterprise group in accordance with the relevant accounting standards' recognition

measurement and presentation requirements and in accordance with unified accounting policies.The accounting policies and accounting periods adopted by all subsidiaries included in the consolidation scope of

the consolidated financial statements are consistent with the Company. If the accounting policies and accounting

periods adopted by the subsidiaries are inconsistent with the Company when preparing the consolidated financial

statements make necessary adjustments according to the accounting policies and accounting periods of the

Company. For a subsidiary acquired through a business combination not under the same control its financial

statements are adjusted based on the fair value of the identifiable net assets at the acquisition date. For a subsidiary

acquired through a business combination under the same control its financial statements are adjusted based on the

book value of its assets and liabilities (including the goodwill formed by the ultimate controlling party's acquisition

of the subsidiary) in the ultimate controlling party's financial statements.The subsidiary's owner's equity current net profit or loss and the share of current comprehensive income belonging

to minority shareholders are separately listed under the owner's equity item in the consolidated balance sheet

under the net profit item in the consolidated income statement and under the total comprehensive income item. If

the current loss shared by the minority shareholders of a subsidiary exceeds the minority shareholder' share in the

owner's equity of the subsidiary at the beginning of the period the balance shall offset against the minority

shareholders' equity.

(1) Increase subsidiaries or businesses

During the reporting period if a subsidiary or business is added due to a business combination under the same

control adjust the opening balance of the consolidated balance sheet; incorporate the income expenses and profits

of the subsidiary or business combination from the beginning of the current period to the end of the reporting

period into the consolidated income statement; incorporate the cash flows of the subsidiary or business

combination from the beginning of the current period to the end of the reporting period into the consolidated cash

flow statement and adjust the relevant items of the comparative statement as if the consolidated reporting entity

had been existing since the time when the ultimate controlling party began controlling.Where it is possible to exercise control over an investee under the same control due to additional investment all

parties participating in the combination are deemed to have adjusted in their current state when the ultimate

controlling party commenced control. The equity investment held before the control of the combined party is

obtained the relevant profit or loss and other comprehensive income that have been confirmed between the date of

acquisition of the original equity and the date on which the combining party and the combined party are under the

same control until the combining date as well as other changes in net assets respectively write down the retained

earnings at the beginning of period or the current profits and losses in the comparative statements.

During the reporting period if a subsidiary or business is added due to a business combination not under the same

control the opening balance of the consolidated balance sheet period will not be adjusted; the income expenses

and profits of the subsidiary or business from the acquisition date to the end of the reporting period will be

included in the consolidated income statement; the cash flows of the subsidiary or business from the acquisition

date to the end of the reporting period are included in the consolidated statement of cash flow.

For reasons such as additional investments that can control an investee not under the same control the Company

remeasures the equity of the acquiree held before the purchase date according to the fair value of the equity on the

purchase date and the balance between the fair value and its book value is included in the current investment

income. If the equity of the acquiree held before the purchase date involves other comprehensive income under the

equity method and other changes in owner's equity other than net profit or loss other comprehensive income and

profit distribution other comprehensive income and other changes in owner's equity related to it shall be converted

into the investment income of the current period on the date of purchase except for other comprehensive income

arising from the re-measurement of the net liabilities or changes in net assets of the defined benefit plan of the

investee.

(2) Disposal of subsidiaries or businesses

①General treatment method

During the reporting period when the Company disposes of a subsidiary or business the income expenses and

profits of the subsidiary or business from the beginning of the period to the disposal date are included in the

consolidated income statement while the cash flow of the subsidiary or the business from the beginning of the

period to the disposal date is included in the consolidated statement of cash flow.

For control rights loss in original subsidiary for partial equity investment disposal or other reasons the remained

equity should re-measured based on the fair value at date of control losses. The difference between the net assets of

original subsidiary share by proportion held that sustainable calculated since purchased date (or combination date)

and sum of consideration obtained by equity disposal and fair value of remain equity reckoned into the current

investment income of control rights loss. Other comprehensive income related to the original subsidiary's equity

investment or other changes in owner's equity other than net profit and loss other comprehensive income and

profit distribution will be converted to current investment income when the control is lost except for other

comprehensive income arising from the remeasurement of the net liabilities or changes in net assets of the defined

benefit plan of the investee.If other investors’ capital increases in the subsidiary results in a decline in the Company's shareholding ratio and

thus loss of control power accounting shall be conducted in accordance with the above principles.

② Dispose subsidiary step-by-step

When the Company disposes of equity investment in a subsidiary by a stage-up approach with several transactions

until the control over the subsidiary is lost these several transactions related to the disposal of equity investment in

a subsidiary are accounted for as transactions in a basket when the terms conditions and economic impacts of

these several transactions meet the following one or more conditions:

i. these transactions are entered into at the same time or after considering their impacts on each other;

ii. these transactions as a whole can reach complete business results;

iii the occurrence of a transaction depends on at least the occurrence of an other transaction;

iv.an individual transaction is not deemed as economic but is deemed as economic when considered with other

transactions.When several transactions related to the disposal of equity investment in a subsidiary until the control over the

subsidiary is lost fall within transactions in a basket each of which is accounted for as disposal of a subsidiary

with a transaction until the control over a subsidiary is lost; however the different between the amount of disposal

prior to the loss of control and the net assets of a subsidiary attributable to the disposal investment shall be

recognized as other comprehensive income in consolidated financial statements and transferred to profit or loss for

the period at the time when the control is lost.If the transactions that dispose of the equity investment in the subsidiary until the loss of control do not belong to

the package transaction before the loss of control the relevant policies for partial disposal of the equity investment

in the subsidiary shall be accounted for without losing control. When the control right is lost the accounting

treatment shall be carried out according to the general treatment method for disposing of the subsidiary.

(3) Purchase of minority shares in subsidiaries

The difference between the Company's newly acquired long-term equity investment due to the purchase of

minority shares and the net assets share calculated continuously by the subsidiary from the date of purchase (or

merger date) in accordance with the calculation of the newly increased shareholding ratio adjust the equity

premium in the capital reserve in the consolidated balance sheet if the equity premium in the capital reserve is

insufficient to offset adjust the retained earnings.

(4) Partial disposal of equity investment in subsidiaries without losing control

The difference between the disposal cost obtained as a result of partial disposal of long-term equity investment in a

subsidiary without losing control and the net assets share calculated continuously by the subsidiary from the date

of purchase or merger corresponding to the disposal of the long-term equity investment adjust the equity premium

in the capital reserve in the consolidated balance sheet if the equity premium in the capital reserve is insufficient

to offset adjust the retained earnings.

(7) Classification of joint arrangement and accounting treatment

Joint arrangement is divided into joint operation and joint venture.

As a joint party of the joint arrangement it is a joint operation when the Company enjoys assets related to the

arrangement and bears the liabilities related to the arrangement.The company confirms the following items related to the share of interests in its joint operations and in

accordance with the provisions of the relevant accounting standards for accounting treatment:

(1) Recognize the assets held solely by the Company and recognize assets held jointly by the Company in

appropriation to the share of the Company;

(2) Recognize the obligations assumed solely by the Company and recognize obligations assumed jointly by the

Company in appropriation to the share of the Company;

(3) Recognize revenue from disposal of the share of joint operations of the Company;

(4) Recognize fees solely occurred by Company;

(5) Recognize fees from joint operations in appropriation to the share of the Company.

Accounting policy for the joint venture investment found more in (14) Long-term equity investment under Note

III.

(8) Determination criteria of cash and cash equivalent

While preparing the cash flow statement the stock cash and savings available for payment at any time are

recognized as cash. The investments meets the follow four conditions at the same time are recognized as cash

equivalent that is short-term (normally fall due within three months from the date of acquisition) and highly liquid

investments held the Group which are readily convertible into known amounts of cash and which are subject to

insignificant risk of value change.

(9) Foreign currency business and foreign currency statement translation

1.Foreign currency business

Foreign currency business uses the spot exchange rate on the transaction date as the conversion rate to convert

foreign currency amounts into RMB for accounting.The balance of foreign currency monetary items at the balance sheet date is converted at the spot exchange rate on

the balance sheet date the resulting exchange difference is included in current profit and loss except that the

exchange difference arising from foreign currency special borrowings related to the acquisition or construction of

assets eligible for capitalization is disposed with the principle of borrowing costs capitalization.

2. Foreign currency statement translation

Assets and liabilities in the balance sheet are converted at the spot exchange rate on the balance sheet date; the

owners' equity items are converted at the spot exchange rate at the time of occurrence except for the "undistributed

profit" item. The income and expense items in the income statement are converted at the spot exchange rate on the

transaction date.When disposing of an overseas operation the translation difference in the foreign currency financial statements

related to the overseas operation is transferred from the owner's equity item to the disposal of current profit or loss.

(10) Financial instrument

Financial instrument consist of financial assets financial liability and equity instrument.

1.Classification of financial instrument

Based on the Company's business model for managing financial assets and the contractual cash flow characteristics

of financial assets financial assets are classified as the financial assets measured at amortized cost the financial

assets (debt instruments) measured at fair value and whose changes are included in other comprehensive income

and the financial assets measured at fair value and whose changes are included in current profit and loss at initial

recognition.

Business model to collect the contractual cash flow and the contractual cash flow is only the payment of the

principal and the interest based on the outstanding principal amount is classified as a financial asset measured at

amortized cost; business model to collect the contractual cash flow and sell the financial asset and the contractual

cash flow is only the payment of principal and the interest based on the outstanding principal amount is classified

as a financial asset measured at fair value and whose changes are included in other comprehensive income (debt

instruments); other financial assets other than these are classified as financial assets measured at fair value and

whose changes are included in the current profit and loss.

For a non-tradable equity instrument investment the Company determines at the time of initial recognition

whether to designate it as a financial asset (equity instrument) measured at fair value and whose changes are

included in other comprehensive income. At the time of initial recognition in order to eliminate or significantly

reduce accounting mismatches financial assets can be designated as financial assets that are measured at fair value

and whose changes are included in the current profit and loss.

At the time of initial recognition financial liabilities are classified into financial liabilities that are measured at fair

value and whose changes are included in the current profit and loss and financial liabilities that are measured at

amortized cost.

A financial liability that meets one of the following conditions can be designated as a financial liability measured

at fair value and whose changes are included in current profit and loss at initial measurement:

1) This designation can eliminate or significantly reduce accounting mismatches.

2) In accordance with the corporate risk management or investment strategy stated in formal written documents

make management and performance evaluation to financial liability portfolios or financial assets and financial

liability portfolios based on fair value and report to the key management personnel within the enterprise based on

this.

3) The financial liability includes embedded derivatives that need to be split separately.

2. Recognition basis and measurement method of financial instruments

(1) Financial assets measured at amortized cost

Financial assets measured at amortized cost include bills receivable accounts receivable other receivables

long-term receivables debt investment etc. which are initially measured at fair value and related transaction costs

are included in the initially recognized amount; accounts receivable excluding significant financing components

and accounts receivable with financing components not exceeding one year that the Company decides not to

consider are initially measured at the contract transaction price.The interest calculated by using the effective interest method during the holding period is included in the current

profit and loss.When taking back or disposing the difference between the cost obtained and the book value of the financial asset

is included in the current profit and loss.

(2) Financial assets (debt instrument) measured at fair value and whose changes are reckoned into other

comprehensive income

The financial assets (debt instrument) measured at fair value and whose changes are reckoned into other

comprehensive income consist of receivable financing and other debt investment and initially measured at fair

value relevant transaction fees are included in initial recognized amount. The financial assets are subsequently

measured at fair value and the fair value changes are reckoned into other comprehensive income except for the

interest impairment loss or gain and exchange gain or loss calculated by actual interest rate method.Upon termination of the recognition the accumulated gains or losses previously included in other comprehensive

income shall be transferred out and reckoned into current profit and loss.

(3) Financial assets (equity instrument) measured at fair value and whose changes are reckoned into other

comprehensive income

The financial assets (equity instrument) measured at fair value and whose changes are reckoned into other

comprehensive income consist of the equity instrument investment etc. and initially measured at fair value

relevant transaction fees are included in initial recognized amount. The financial assets are subsequently measured

at fair value and the fair value changes are reckoned into other comprehensive income. The dividend obtained

should reckoned into current gains/losses.Upon termination of the recognition the accumulated gains or losses previously included in other comprehensive

income shall be transferred out and reckoned into retained earnings.

(4) Financial assets measured at fair value and whose changes are reckoned into current gains/losses

The financial assets measured at fair value and whose changes are reckoned into current gains/losses consist of

trading financial assets derivative financial assets and other non-current financial assets etc. and initially measured

at fair value relevant transaction fees are included in current gains/losses. The financial assets are subsequently

measured at fair value and the fair value changes are reckoned into current gains/losses.Upon termination of the recognition the difference between its fair value and initial entry amount is recognized as

investment income and adjust the gains/losses from fair value changes at the same time.

(5) Financial liability measured at fair value and whose changes are reckoned into current gains/losses

The financial liability measured at fair value and whose changes are reckoned into current gains/losses consist of

trading financial liability and derivative financial liability etc. and initially measured at fair value relevant

transaction fees are included in current gains/losses. The financial liabilities are subsequently measured at fair

value and the fair value changes are reckoned into current gains/losses.Upon termination of the recognition the difference between its fair value and initial entry amount is recognized as

investment income and adjust the gains/losses from fair value changes at the same time.

(6) Financial liability measured at amortized cost

The financial liabilities measured at amortized cost consist of short-term loans note payable account payable

other account payable long-term loans bond payable and long-term account payable and initially measured at fair

value relevant transaction fees are included in initial recognized amount.The interests calculated by effective interest rate method during the holding period is reckoned into current

gains/losses.Upon termination of the recognition the difference between consideration paid and the book value of financial

liability is reckoned into current gains/losses.

3. Recognition basis and measurement method for transfer of financial assets

When the Company transfers financial assets if almost all risks and rewards of ownership of financial assets have

been transferred to the transferee derecognize the financial assets; if almost all risks and rewards of ownership of

financial assets have been retained don’t derecognize the financial assets.When determining whether the transfer of financial assets meets the above conditions for the termination of

recognition of financial assets adopt the principle of substance over form. The Company distinguishes the transfer

of financial assets into overall transfers and partial transfers of financial assets. If the overall transfer of financial

assets meets the conditions for derecognition the difference between the following two amounts is included in the

current profit and loss:

(1) The book value of the transferred financial assets;

(2) The sum of the consideration received as a result of the transfer and the cumulative amount of changes in the

fair value that were directly credited to the owner's equity (the transferred financial asset is an available-for-sale

financial asset).If partial transfer of financial assets meets the conditions for derecognition the entire book value of the transferred

financial assets is apportioned between the derecognized parts and non-derecognized parts according to their

relative fair values and the difference between the following two amounts is included in the current profit and loss:

(1) The book value of the derecognition part;

(2) The sum of the consideration of the derecognition part and the amount corresponding to the derecognition part

of the cumulative total of changes in fair value that were directly credited to the owner's equity (the transferred

financial asset is an available-for-sale financial asset).If the transfer of financial assets does not meet the conditions for derecognition the financial assets are

continuously recognized and the consideration received is recognized as a financial liability.

4. Termination recognition of financial liability

Where the current obligation of a financial liability have been discharged in whole or in part the recognition of the

financial liability or part thereof shall be terminated; If the Company entered into an agreement with its creditors to

replace its existing financial liabilities with the new financial liability and the contract terms of the new financial

liabilities and the existing financial liabilities are substantially different the existing financial liabilities shall be

terminated for recognition and the new ones shall be recognized at the same time. As for substantive changes made

to the contract terms (in whole or in part) of the existing financial liabilities the existing financial liabilities (or

part of it) will be terminated for recognition and the financial liabilities after term revision will be recognized as a

new financial liability.When a financial liability is derecognized in whole or in part the difference between the book value of the

financial liability derecognized and the consideration paid (including the non-cash assets transferred out or the new

financial liabilities assumed) is included in the current profit and loss.If the Company repurchases part of the financial liabilities the entire book value of the financial liabilities will be

allocated on the repurchase date according to the relative fair value of the continuing recognition part and the

derecognition part. The difference between the book value allocated to the derecognition part and the consideration

paid (including the transferred non-cash assets or assumed new financial liabilities) is included in the current profit

and loss.5. Methods for determining the fair value of financial assets and financial liabilities

For financial instruments that have an active market their fair values are determined by using quotes in the active

market. For financial instruments that do not have an active market valuation techniques are used to determine

their fair values. In the valuation the Company adopts valuation techniques that are applicable under the current

circumstances and have sufficient available data and other information support chooses the input values consistent

with the characteristics of assets or liabilities considered by market participants in the transactions of related assets

or liabilities and prioritizes the relevant observable input values. The Company uses unobservable input values

only if the relevant observable input values cannot be obtained or are not practicable.

6. Test methods and accounting treatment methods for impairment of financial assets (excluding receivables)

The Company considers all reasonable and evidence-based information including forward-looking information

and estimates the expected credit losses of financial assets measured at amortized cost by the single or combined

way and financial assets (debt instruments) measured at fair value and whose changes are included in other

comprehensive income. The measurement of expected credit losses depends on whether a significant increase in

credit risk has occurred since the initial recognition of a financial asset.If the credit risk of the financial instrument has increased significantly since initial recognition the Company shall

measure its loss provision at an amount equivalent to the expected credit loss throughout the life of the financial

instrument. If the credit risk of the financial instrument has not increased significantly since initial recognition the

Company shall measure its loss provision at an amount equivalent to the expected credit loss of the financial

instrument in the next 12 months. The increased or reversed amount of the loss provision thus formed shall be

included in the current profit and loss as impairment losses or gains.Usually the Company considers that the credit risk of the financial instrument has increased significantly when it

is overdue for more than 30 days unless there is conclusive evidence that the credit risk of the financial instrument

has not increased significantly after initial recognition.If the credit risk of a financial instrument at the balance sheet date is low the Company will consider that the credit

risk of the financial instrument has not increased significantly since initial recognition.

(11) Bad deb provision of account receivable

Regarding account receivables whether or not it contains a significant financing component the Company always

measures its loss provisions at an amount equivalent to the expected credit loss throughout the duration and the

resulting increase and reversed amount of loss provisions is included in the current profit and loss as impairment

losses or gains.In addition to receivables that individually assess credit risk based on their credit risk characteristics they are

divided into different portfolios:

Item Accrual ratio for account receivable (%)

Group 1: low-risk

The portfolio is determined based on the similarity

of credit risk characteristics the Company believes

Item Accrual ratio for account receivable (%)

that the credit risk of a receivable that has not been

impaired in a single assessment of credit risk is low

and no provision for bad debts is made unless there

is evidence that the credit risk of a certain

receivable is high.If there is objective evidence that a certain account receivable has suffered credit impairment the Company shall

make provision for bad debts on that account receivable and confirm the expected credit loss.

(12) Inventory

1. Categories of inventory

Inventory consists of fuels and raw materials etc.

2. Valuation method of delivered inventory

The inventories are initially measured at cost. When the inventory is delivered the actual cost of delivered

inventory shall be determined by weighted average method.

3.Basis for determining the net realizable value of different types of inventories

On the balance sheet day the inventory is measured by the lower one between the cost and the net realizable

value. As the net realizable value is lower than the cost the inventory depreciation provision is accrued. The

net realizable value is balance of the estimated sale price less the estimated forthcoming cost upon the

completion the estimated sale expense and the relevant tax in the daily activities. Upon the recognition of

net realizable value of the inventory the concrete evidence is based on and the purpose of holding the

inventory and the influence of events after the balance sheet day are considered.

As for the inventory of large sum and lower price the inventory depreciation provision is accrued by the inventory

categories. As for the inventory related to the product series produced and sold in the same district of the same or

similar final use or purpose and impossible to be separated from the other items the provision is consolidated and

accrued. The provision for other inventory is accrued by the difference between the cost and net realizable value.Upon the accrual of the inventory depreciation provision if the previous influence factors on the inventory

deduction disappeared which resulted in the net realizable value being higher than its book value; the accrual is

transferred back within the previous accrual of the provision and reckoned into the current gain/loss.

4. Inventory system

Perpetual inventory system required

5. Amortization method of low-value consumables and packaging

(1) Low-value consumables-one pass method

(2) Packaging- one pass method

(13) Contract assets

1. Confirmation methods and standards of contract assets

If the Company has transferred goods to customers and has the right to receive consideration and the right depends

on factors other than the time lapses it is recognized as contract assets. The Company's unconditional (that is only

depending on the time lapses) right to collect consideration from customers are separately listed as receivables.

2. Determination method and accounting treatment method of expected credit loss of contract assets

The Company's determination method and accounting treatment method for the expected credit loss of contract

assets are detailed in Note III/(11) Provision for bad debts of receivables

(14) Long-term equity investment

1. Criteria judgement for joint control and significant influence

Joint control is the Company’s contractually agreed sharing of control over an arrangement which relevant

activities of such arrangement must be decided by unanimously agreement from parties who share control. Where

the Company and other joint ventures exercise joint control over the investee and enjoy the rights to the net assets

of the investee the investee is a joint venture of the Company.Significant influence is the right of the Company to participate in the financial and operation decision-making of

an enterprise but not to control or jointly control the formulation of such policies with other parties. Where the

Company is able to exert significant influence on the investee the investee shall be a joint venture of the Company.

2. Determination of initial investment cost

(1) Long-term equity investment resulting from enterprise combination

Enterprise combination under the same control: If the Company pays cash transfers non-cash assets or assumes

debt and issues equity securities as the consideration for the merger the share of the book value of the owner's

equity of the combined party in the consolidated financial statements of the ultimate controlling party on the

combining date shall be used as the initial investment cost of long-term equity investment. If it is possible to

control the investee under the same control due to additional investments etc. the initial investment cost of

long-term equity investment shall be determined based on the share of the book value of the net assets of the

combined party in the consolidated financial statements of the ultimate controlling party on the merger date. The

difference between the initial investment cost of the long-term equity investment on the merger date and the sum of

the book value of the long-term equity investment before the merger plus the book value of the new share payment

consideration obtained on the merger date adjusts the equity premium. If the equity premium is insufficient to be

offset the retained earnings shall be offset.

Business combination not under the same control: The Company uses the combination cost determined on the

purchase date as the initial investment cost of the long-term equity investment. If it is possible to exercise control

over an investee that is not under the same control due to additional investments etc. the sum of the book value of

the original equity investment plus the newly increased investment cost is used as the initial investment cost

calculated by the cost method.

(2) Long-term equity investment obtained through other methods

For a long-term equity investment obtained by paying cash the actually paid purchase price is taken as the initial

investment cost.

For a long-term equity investment obtained by issuing equity securities the fair value of the issued equity

securities is taken as the initial investment cost.On the premise that the non-monetary asset exchange has commercial substance and that the fair value of the

assets swapped in or out can be reliably measured the initial investment cost of the long-term equity investment

swapped in by non-monetary assets exchange is determined by the fair value of assets swapped out and the

relevant payable taxes and fees unless there is conclusive evidence that the fair value of the assets swapped in is

more reliable; for non-monetary assets exchange that do not meet the above preconditions the book value of the

assets swapped out and the relevant taxes and fees payable are used as the initial investment cost of the long-term

equity investment swapped in.

For a long-term equity investment obtained through debt restructuring its entry value is determined based on the

fair value of the abandoned creditor's rights and other costs such as taxes directly attributable to the asset and the

difference between the fair value of the abandoned creditor's rights and the book value is included in the current

profit and loss.

3. Follow-up measurement and gain/loss recognition

(1) Long-term equity investment measured at cost

The long-term equity investment in subsidiaries shall be measured at cost. In addition to the actual prices or the

announced but yet undistributed cash dividend or profit in consideration valuation the current investment return is

recognized by the announced cash dividend or profit by the invested units.

(2) Long-term equity investment measured at equity

The long-term equity investment in associated enterprise and joint ventures shall be measured at cost. If the initial

investment cost is greater than than the share of fair value of the invested entity’s identifiable net assets the initial

investment cost of the long-term equity investment will not be adjusted; if the initial investment cost is less than

than the share of fair value of the invested entity’s identifiable net assets the difference shall reckoned in current

gains/losses.The investment gain and other comprehensive income shall be recognized based on the Company’s share of the net

profits or losses and other comprehensive income made by the investee respectively. Meanwhile the carrying

amount of long-term equity investment shall be adjusted. The carrying amount of long-term equity investment

shall be reduced based on the Group’s share of profit or cash dividend distributed by the investee. In respect of the

other movement of net profit or loss other comprehensive income and profit distribution of investee the carrying

value of long-term equity investment shall be adjusted and included in the owners’ equity.The Company shall recognize its share of the investee’s net profits or losses based on the fair values of the

investee’s individual separately identifiable assets at the time of acquisition after making appropriate adjustments

thereto during the accounting period and according to the accounting policy of the Company. During the period of

holding the investment the investee prepares the consolidated financial statements based on the net profit other

comprehensive income and the amount attributable to the investee in changes in other owners' equity in the

consolidated financial statements for business accounting.When the Company confirms that it should share the losses incurred by the investee it shall proceed in the

following order. Firstly write off the book value of the long-term equity investment. Secondly if the book value of

the long-term equity investment is not sufficient to offset the investment loss shall continue to be recognized

within the limit of the book value of long-term equity that substantially constitutes a net investment in the investee

and offset the book value of long-term receivables. Finally after the above-mentioned treatment if the enterprise

still bears additional obligations as stipulated in the investment contract or agreement the estimated liabilities are

recognized according to the estimated obligations and included in the current investment loss.

(3) Disposal of long-term equity investment

When disposing of a long-term equity investment the difference between its book value and the actual purchase

price is included in the current profit and loss.When disposing of a long-term equity investment accounted for by using the equity method use the same basis as

the investee directly disposes of related assets or liabilities and make accounting treatment to the portion that was

originally included in other comprehensive income according to the corresponding proportion. The owner's equity

recognized as a result of changes in other owner's equity of the investee other than net profit or loss other

comprehensive income and profit distribution is carried forward to the current profit and loss on a pro rata basis

except for other comprehensive income arising from the remeasurement of the net liabilities or net assets changes

of the defined benefit plan by the investee.If the joint control or significant influence on the investee is lost due to the disposal of part of the equity

investment etc. the remaining equity after disposal shall be calculated in accordance with the financial instrument

recognition and measurement standards and the difference between the fair value and the book value on the day of

losing the joint control or significant influence is included in the current profit and loss. Other comprehensive

income of the original equity investment recognized due to using the equity method for accounting shall adopt the

accounting treatment on the same basis as the investee directly disposes of related assets or liabilities when

terminating the adoption of equity method for accounting. The owner's equity recognized as a result of changes in

the owner's equity other than net profit or loss other comprehensive income and profit distribution of the investee

is transferred to current profit and loss when terminating the adoption of equity method for accounting.The control over the investee is lost due to the disposal of part of the equity investment and the capital increase in

the subsidiary by other investors resulting in a decline in the shareholding ratio of the Company in preparing

separate financial statements the remaining equity interest which can apply common control or impose significant

influence over the investee shall be accounted for using equity method. Such remaining equity interest shall be

treated as accounting for using equity method since it is obtained and adjustment was made accordingly. For

remaining equity interest which cannot apply common control or impose significant influence over the investeel it

shall be accounted for using the recognition and measurement standard of financial instruments. The difference

between its fair value and carrying amount as at the date of losing control shall be included in profit or loss for the

current period.The disposed equity is obtained through business combination due to additional investment and other reasons

when preparing individual financial statements if the remaining equity after disposal uses cost method or equity

method for accounting the equity investments held before the acquisition date shall be carried forward in

proportion to other comprehensive income and other owner's equity recognized through equity method accounting;

For the remaining equity interest after disposal accounted for using the recognition and measurement standard of

financial instruments other comprehensive income and other owners’ equity shall be fully transferred.

(15) Investment real estate

Investment real estate is defined as the real estate with the purpose to earn rent or capital appreciation or both

including the rented land use rights and the land use rights which are held and prepared for transfer after

appreciation the rented buildings. (Including buildings for lease after self-construction or development activities

completed and buildings under construction or development for lease in the future)

Investment real estate of the Company are measured at cost model. The Investment real estate- rental buildings

measured at cost model has the same depreciation policy as fixed assets the land use right for lease is exercise the

amortization policy as intangible assets.

(16) Fixed assets

1. Recognition conditions for the fixed assets

Fixed assets is defined as the tangible assets which are held for the purpose of producing goods providing services

lease or for operation & management and have more than one fiscal year of service life. Fixed assets are

recognized when the following conditions are simultaneously met:

(1) The economic benefits with the fixed assets concerned are likely to flow into the enterprise; and

(2) cost of the fixed assets can be measured reliably.

2. Depreciation method

From the next month since reaching the intended use state depreciation on fixed assets shall be accounted by using

the method of average life length except the steam turbine generating unit that accounted by withdrawal the

working volume method.Life expectancy expected net impairment value and annual depreciation rate of all assets are as follows:

Category

Depreciation

method

Depreciation life (Year) Residuals rate(%) Annual depreciation rate (%)

Houses and

buildings

Straight-line 20-year 10 4.5

Equipment (fuel

machinery sets

Straight-line 15-20-year 10 4.5-6

Category

Depreciation

method

Depreciation life (Year) Residuals rate(%) Annual depreciation rate (%)

excluded)

Equipment-fuel

machinery

sets(Note)

The work

quantity

method

10 The work quantity method

Transportation

tools

Straight-line

5-year 10 18

Other equipment Straight-line 5-year 10 18

Estimated salvage value refers to the amount of value retrieved after deducting of predicted disposal expense when

the expected using life of a fixed asset has expired and in the expected state of termination.Note: gas turbine generator set is provided with depreciation under workload method namely to determine the

depreciation amount per hour of gas turbine generator set based on equipment value predicted net remaining value

and predicted generation hours. Details are set out as follows:

Name of the Company Fixed assets Depreciation amount (RMB/Hour)

The Company

Generating unit 1#

538.33

Generating unit 3#

601.20

New Power Generating unit 10#

520.61

Zhongshan Electric Power

Generating unit 1#

4246.00

Generating unit 3#

4160.83

3. Recognition basis and measurement method of fixed assets under finance lease

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and

rewards of ownership to the lessee. Title may or may not eventually be transferred. The depreciation policy for

fixed asset held under finance lease is consistent with that for its owned fixed asset. When a leased asset can be

reasonably determined that its ownership will be transferred at the end of the lease term it is depreciated over the

period of expected use; otherwise the leased asset is depreciated over the shorter period of the lease term and the

period of expected use.

4. Other explanation

Concerning the follow-up expenses related to fixed assets if the relevant economy benefit of fixed assets probably

in-flow into the Company and can be measured reliably reckoned into cost of fixed assets and terminated the

recognition of the book value of the parts that been replaced. Others follow-up expenses should reckoned into

current gains/losses while occurred.Terminated the recognition of fixed assets that in the status of disposal or pass through the predicted usage or

without any economy benefits arising from disposal. Income from treatment of fixed asset disposing transferring

discarding or damage the balance after deducting of book value and relative taxes is recorded into current income

account.The Company re-reviews useful life expected net residual value and depreciation method of fixed assets at least at

each year end. Any change thereof would be recorded as change of accounting estimates.

(17) Construction in process

Cost of construction in process is determined at practical construction expenditures including all expenses during

the construction capitalized loan expenses before the construction reaches useful status and other relative

expenses. It is transferred to fixed asset as soon as the construction reaches the useful status.

(18) Borrowing expenses

Borrowing expenses include interest amortization of discounts or premiums related to borrowings ancillary costs

incurred in connection with the arrangement of borrowings and exchange differences arising from foreign

currency borrowings. Borrowing expenses that can be directly attributed for purchasing or construction of assets

that are complying with capitalizing conditions start to be capitalized when the payment of asset and borrowing

expenses have already occurred and the purchasing or production activities in purpose of make the asset usable

have started; Capitalizing will be terminated as soon as the asset that complying with capitalizing conditions has

reached its usable or saleable status. The other borrowing expenses are recognized as expenses when occurred.Interest expenses practically occurred at the current term of a special borrowing are capitalized after deducting of

the bank saving interest of unused borrowed fund or provisional investment gains; Capitalization amounts of

common borrowings are decided by the weighted average of exceeding part of accumulated asset expenses over

the special borrowing assets multiply the capitalizing rate of common borrowings adopted. Capitalization rates are

decided by the weighted average of common borrowings.

During the capitalization period exchange differences on a specific purpose borrowing denominated in foreign

currency shall be capitalized. Exchange differences related to general-purpose borrowings denominated in foreign

currency shall be included in profit or loss for the current period.Qualifying assets are assets (fixed assets investment property inventories etc.) that necessarily take a substantial

period of time for acquisition construction or production to get ready for their intended use or sale.

Capitalization of borrowing costs shall be suspended during periods in which the acquisition construction or

production of a qualifying asset is interrupted abnormally when the interruption is for a continuous period of more

than 3 months until the acquisition construction or production of the qualifying asset is resumed.(19) Intangible assets

An intangible asset is an identifiable non-monetary asset without physical substance owned or controlled by the

Company.

An intangible asset shall be initially measured at cost. The expenditures incurred on an intangible asset shall be

recognized as cost of the intangible asset only if it is probable that economic benefits associated with the asset will

flow to the Company and the cost of the asset can be measured reliably. Other expenditures on an item asset shall

be charged to profit or loss when incurred.Land use right acquired shall normally be recognized as an intangible asset. Self-constructed buildings (e.g. plants)

related land use right and the buildings shall be separately accounted for as an intangible asset and fixed asset. For

buildings and structures purchased the purchase consideration shall be allocated among the land use right and the

buildings on a reasonable basis. In case there is difficulty in making a reasonable allocation the consideration shall

be recognized in full as fixed assets.

An intangible asset with a finite useful life shall be stated at cost less estimated net residual value and any

accumulated impairment loss provision and amortized using the straight-line method over its useful life when the

asset is available for use. Intangible assets with indefinite life are not amortized.The Group shall review the useful life of intangible asset with a finite useful life and the amortization method

applied at least at each financial year-end. A change in the useful life or amortization method used shall be

accounted for as a change in accounting estimate. For an intangible asset with an indefinite useful life the Group

shall review the useful life of the asset in each accounting period. If there is evidence indicating that the useful life

of that intangible asset is finite the Company shall estimate the useful life of that asset and apply the accounting

policies accordingly.

(20) Impairment of long-term assets

The Group will judge if there is any indication of impairment as at the balance sheet date in respect of non-current

non-financial assets such as fixed assets construction in process intangible assets with an infinite useful life

investment properties measured at cost and long-term equity investments in subsidiaries joint ventures and

associates. If there is any evidence indicating that an asset may be impaired recoverable amount shall be estimated

for impairment test. Goodwill intangible assets with an indefinite useful life and intangible assets beyond working

conditions will be tested for impairment annually regardless of whether there is any indication of impairment.If the impairment test result shows that the recoverable amount of an asset is less than its carrying amount the

impairment provision will be made according to the difference and recognized as an impairment loss. The

recoverable amount of an asset is the higher of its fair value less costs of disposal and the present value of the

future cash flows expected to be derived from the asset. An asset’s fair value is the price in a sale agreement in an

arm’s length transaction. If there is no sale agreement but the asset is traded in an active market fair value shall be

determined based on the bid price. If there is neither sale agreement nor active market for an asset fair value shall

be based on the best available information. Costs of disposal are expenses attributable to disposal of the asset

including legal fee relevant tax and surcharges transportation fee and direct expenses incurred to prepare the asset

for its intended sale. The present value of the future cash flows expected to be derived from the asset over the

course of continued use and final disposal is determined as the amount discounted using an appropriately selected

discount rate. Provisions for assets impairment shall be made and recognized for the individual asset. If it is not

possible to estimate the recoverable amount of the individual asset the Group shall determine the recoverable

amount of the asset group to which the asset belongs. The asset group is the smallest group of assets capable of

generating cash flows independently.

For the purpose of impairment testing the carrying amount of goodwill presented separately in the financial

statements shall be allocated to the asset groups or group of assets benefiting from synergy of business

combination. If the recoverable amount is less than the carrying amount the Group shall recognize an impairment

loss. The amount of impairment loss shall first reduce the carrying amount of any goodwill allocated to the asset

group or set of asset groups and then reduce the carrying amount of other assets (other than goodwill) within the

asset group or set of asset groups pro rata on the basis of the carrying amount of each asset.Once an impairment loss of these assets is recognized it is not allowed to be reversed even if the value can be

recovered in subsequent period.

(21) Long-term unamortized expenses

Long-term unamortized expenses are those already occurred and amortizable to the current term and successive

terms for over one year. Long-term amortizable expenses are amortized by straight-line method to the benefit

period.

(22)Contract liabilities

1. Confirmation method of contract liabilities

The Company's obligation to transfer goods or provide services to customers for consideration received or

receivable from customers is listed as contract liabilities.

(23) Staff remuneration

Staff remuneration includes short term staff remuneration post office benefit dismissal benefit and other long term

staff benefits among which:

Short term staff remuneration mainly consists of salary bonus allowance and subsidy staff benefits medical

insurance maternity insurance work related injury insurance housing funds labor unit fee and education fee

non-monetary benefits etc. short term staff remuneration actually happened during the accounting period in which

staff provides services to the Company is recognized as liability and shall be included in current gains and losses

or relevant asset cost. Non-monetary benefits are measured at fair value.Post office benefits mainly consist of defined withdraw plan and defined benefit plan. Defined withdraw plan

mainly includes basic pension insurance unemployment insurance and annuity and the contribution payable is

included in relevant asset cost or current gains and losses when occurs.When the Company terminates the employment relationship with employees before the end of the employment

contracts or provides compensation as an offer to encourage employees to accept voluntary redundancy the

Company shall recognize employee compensation liabilities arising from compensation for staff dismissal and

included in profit or loss for the current period when the Company cannot revoke unilaterally compensation for

dismissal due to the cancellation of labor relationship plans and employee redundant proposals; and the Company

recognize cost and expenses related to payment of compensation for dismissal and restructuring whichever is

earlier. However if the compensation for termination of employment is not expected to be fully paid within 12

months from the reporting period it shall be accounted for other long-term staff remuneration.The early retirement plan shall be accounted for in accordance with the accounting principles for compensation for

termination of employment. The salaries or wages and the social contributions to be paid for the employees who

retire before schedule from the date on which the employees stop rendering services to the scheduled retirement

date shall be recognized (as compensation for termination of employment) in the current profit or loss by the

Group if the recognition principles for provisions are satisfied.

For other long-term employee benefits provided by the Company to its employees if satisfy with the established

withdraw plan then the benefits are accounted for under the established withdraw plan otherwise accounted for

under defined benefit scheme.

(24) Accrual liability

1. Recognition criteria

The obligations with contingencies concerned as litigation debt guarantee and contract in loss are recognized as

accrual liability when the following conditions are met simultaneously:

(1) the liability is the current liability that undertaken by the Company;

(2) the liability has the probability of result in financial benefit outflow; and

(3) the responsibility can be measured reliably for its value.

Measurement on vary accrual liability

At balance sheet day with reference to the risks uncertainty and periodic value of currency that connected to the

contingent issues the predicted liabilities are measured according to the best estimation on the payment to fulfill

the current responsibility.If the expenses for clearing of predictive liability is fully or partially compensated by a third party and the

compensated amount can be definitely received it is recognized separated as asset. The compensated amount shall

not be greater than the book value of the predictive liability.

(1) Contact in loss

Contact in loss is identified when the inevitable cost for performance of the contractual obligation exceeds the

inflow of expected economic benefits. When a contract in loss is identified and the obligations there under are

qualified by the aforesaid recognition criterion for contingent liability the difference of estimated loss under

contract over the recognized impairment loss (if any) of the subject matter of the contract is recognized as

contingent liability.

(2) Restructuring obligations

For detailed official and publicly announced restructuring plan the direct expenses attributable to the restructuring

are recognized as contingent liabilities provided that the aforesaid recognition criterion for contingent liability is

met. For restructuring obligations arising from disposal of part business the Company will recognize the

obligations relating to restructuring only when it undertakes to dispose part business (namely entering into

finalized disposal agreement).

(25) Revenue

The Company’s revenue is recognized after it has fulfilled the performance obligations in the contract that is

when the customer obtains control of the relevant assets (goods or services). Whether the performance obligation is

fulfilled within a certain period of time or at a certain time point depends on the terms of the contract and relevant

legal provisions. If the Company meets one of the following conditions it belongs to the performance obligation

within a certain period of time:

1. The customer obtains and consumes the economic benefits brought by the Company's performance when the

Company fulfills its performance.

2. The client can control the assets under construction during the performance of the Company.

3. The assets produced by the Company during the performance have irreplaceable uses and the Company has the

right to collect payment for the cumulative performance that has been completed so far during the entire contract

period.If the performance obligation is performed within a certain period of time the Company recognizes revenue

according to the performance progress. Otherwise the Company recognizes revenue at a certain point when the

customer obtains control of the relevant assets. The performance progress is measured by the Company's

expenditure or investment in fulfilling the performance obligations and the progress is determined based on the

proportion of the cumulative cost incurred as of the balance sheet date of each contract to the estimated total cost.When determining the contract transaction price if there is a variable consideration the Company shall determine

the best estimate of the variable consideration based on the expected value or the most likely amount and the

amount that does not exceed the cumulatively recognized revenue when the relevant uncertainty is eliminated and

that is very likely not to have significant reversal is included in the transaction price. If there is a major financing

component in the contract the Company will adjust the transaction price according to the financing component in

the contract; if the interval between the transfer of control and the payment by the customer is less than one year

the Company will not consider the financing component.

Detail recognition according to specific revenue:

1. Power marketing revenue

The Group generates electricity by thermal power and realizes sales through incorporation into Guangdong power

grid. As for power sales the Group realizes revenue when it produces electricity and obtains the grid power

statistics table confirmed by the power bureau.2. Specific criteria for revenue recognition of the Environment Protection Company

At the end of each month the company confirms the monthly income based on the initially confirmed sludge

transportation volume and sludge treatment price and revises the revenue confirmed last month after checking

with the relevant units in the next month and the correction proportion is relatively small.

3. Specific criteria for revenue recognition of the Engineering Company

(1)Debugging projects: When the debugging is successful obtain the confirmation of successful debugging and

confirm the income according to the contract;

(2) Operation and maintenance and management projects: Temporarily estimate and confirm the income every

month according to the attendance time and labor service price of attendance staff and adjust the temporarily

estimated income after obtaining the monthly settlement statement sealed and signed by suppliers the confirmation

of progress and the attendance form.

(26)Contract costs

Contract costs are divided into contract performance costs and contract acquisition costs.

The cost incurred by the Company to perform the contract is recognized as an asset as the contract performance

cost when meeting the following conditions:

1. The cost is directly related to a current or expected contract.

2. The cost increases the Company's future resources for fulfilling contract performance obligations.

3. The cost is expected to be recovered.

The incremental cost incurred by the Company for obtaining the contract is expected to be recovered and it is

recognized as an asset as the cost of obtaining the contract.

Assets related to contract costs are amortized on the same basis as the revenue of goods or services related to the

asset; however if the amortization period of contract acquisition costs does not exceed one year the Company will

include them in the current profits and losses when they occur.If the book value of assets related to contract costs is higher than the difference between the following two items

the Company will make provisions for impairment for the excess part and recognize it as an asset impairment loss:

1. The remaining consideration expected to be obtained due to the transfer of goods or services related to the asset;

2. Costs estimated to incur for the transfer of the related goods or services.

If the aforementioned asset impairment provision is subsequently reversed the book value of the asset after

reversal shall not exceed the book value of the asset on the date of reversal under the assumption that no

impairment provision is made.

(27) Government subsidy

Government subsidy refers to the monetary asset and non-monetary asset that the Company obtains from the

government free of charge excluding the capital that the government invests as an investor and enjoys the

corresponding owner's equity. Government subsidies are divided into the asset-related government subsidy and the

income-related government subsidy.If the government subsidy is a monetary asset it shall be measured according to the received or receivable amount.If the government subsidy is a non-monetary asset it shall be measured at fair value. If the fair value cannot be

obtained reliably it shall be measured according to the nominal amount. Government subsidy measured by

nominal amount is directly included in the current profits and losses.The government subsidy related to the assets is recognized as deferred income and is recorded into the current

profits and losses or the book value of the relevant assets in a reasonable and systematic manner within the useful

life of the relevant assets. Revenue-related government grants are used to compensate for the related costs or losses

incurred during the subsequent period and are recognized as deferred income and are recognized in the current

profit or loss or related expenses during the period of recognition of the relevant cost expense or loss; Incurred

costs or losses incurred directly included in the current profits and losses or offset the relevant costs.

For the government subsidy containing both asset-related parts and income-related parts at the same time

distinguish the different parts and make the accounting treatment classify the parts which are difficult to be

distinguished as the income-related government subsidy.The government subsidy related to the Company’s daily activities is included in other incomes or offsets related

costs in accordance with the essence of economic business; while the government subsidy unrelated to the

Company’s daily activities is included in non-operating income and expenditure.

When the recognized government subsidy needs to be refunded or has balance of related deferred income offset

the book balance of related deferred income and include the excess parts in the current profits and losses or (the

asset-related government subsidy for offsetting the book value of underlying assets in initial recognition) adjust the

book value of assets; directly include these belong to other situations in the current profits and losses.

(28) Deferred income tax asset/ deferred income tax liability

1. Current income tax

On balance sheet date current income tax liability (or asset) formed during and before current period will be

measured as amount of income tax payable (or repayable) as specified by tax law. The taxable income for

calculating the current income tax expenses is based on the pre-tax accounting profit of the current year after

adjustment according to relevant regulations of taxation.

2. Deferred income tax asset & deferred income tax liability

For balance of book value of some asset/liability item and its tax base or temporary difference derived from

balance of book value and tax base of the item which is not confirmed as asset or liability but tax base can be

fixed as specified by tax law deferred income tax asset & deferred income tax liability will be confirmed in

balance sheet liability approach.

Deferred income tax liabilities are not recognized for taxable temporary differences related to: the initial

recognition of goodwill; and the initial recognition of an asset or liability in a transaction which is neither a

business combination nor affects accounting profit or taxable profit (or deductible loss) at the time of the

transaction. In addition the Group recognizes the corresponding deferred income tax liability for taxable

temporary differences associated with investments in subsidiaries associates and joint ventures except when both

of the following conditions are satisfied: the Company able to control the timing of the reversal of the temporary

difference; and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred income tax assets are not recognized for deductible temporary differences related to the initial recognition

of an asset or liability in a transaction which is neither a business combination nor affects accounting profit or

taxable profit (or deductible loss) at the time of the transaction. In addition the Group recognizes the

corresponding deferred income tax asset for deductible temporary differences associated with investments in

subsidiaries associates and joint ventures to the extent that it is probable that taxable profits will be available

against which the deductible temporary differences can be utilized except when both of the following conditions

are satisfied: it is not probable that the temporary difference will reverse in the foreseeable future; and it is not

probable that taxable profits will be available in the future against which the temporary difference can be utilized.

For deductible loss and taxation decrease which can be carried over to following fiscal year relevant deferred

income tax asset may be confirmed subject to amount of taxable income which is likely to be acquired to deduct

deductible loss and taxation decrease in the future.On balance sheet day those deferred income tax assets and income tax liabilities according to the tax law

calculation will be on tax rate applicable to retrieving period of assets or clearing of liabilities.On balance sheet day verification will be performed on the book value of differed income tax assets. If it is not

possible to obtain enough taxable income to neutralize the benefit of differed income tax assets then the book

value of the differed income tax assets shall be reduced. Whenever obtaining of taxable income became possible

the reduced amount shall be restored.

3. Income tax expenses

Income tax expense includes current income tax and deferred income tax.

Current deferred income tax and deferred income tax expenses or income shall reckoned into current gains/losses

other that those current income tax and deferred income tax with transactions and events concerned that reckoned

into shareholder’s equity directly while recognized as other comprehensive income; and the book value of the

goodwill adjusted for deferred income tax arising from enterprise combination.

4. Offset of income tax

When the Group has a legal right to settle on a net basis and intends either to settle on a net basis or to realize the

assets and settle the liabilities simultaneously current tax assets and current tax liabilities are offset and presented

on a net basis.When the Group has a legal right to settle current tax assets and liabilities on a net basis and deferred tax assets

and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable

entity or different taxable entities which intend either to settle current tax assets and liabilities on a net basis or to

realize the assets and liabilities simultaneously in each future period in which significant amounts of deferred tax

assets or liabilities are expected to be reversed deferred tax assets and deferred tax liabilities are offset and

presented on a net basis.(29) Leasing

Finance lease is to virtually transfer all risks and rewards related to ownership of asset the ownership is may

transfer ultimately or not. Leases other than finance lease are operating leases.

1.Lease business with the Company as the rentee

The rental is reckoned into the relevant assets cost or the current loss/gain in the straight-line method. The initial

direct expenses are reckoned into the current gain/loss or the actual rental into the current loss/gain.

2.Lease business with the Company as the renter

The rental is reckoned into the relevant assets cost or the current loss/gain in the linear way. The initial direct

substantive expenses are capitalized and reckoned into the current gain/loss or the actual rental into the current

loss/gain. The initial direct small expenses are reckoned into the current actual gain/loss or the actual rental into

the current loss/gain.

3. Financing lease business with the Group recorded as lessee

On the beginning date of the lease the entry value of leased asset shall be at the lower of the fair value of the

leased asset and the present value of minimum lease payment at the beginning date of the lease. Minimum lease

payment shall be the entry value of long-term accounts payable with difference recognized as unrecognized

financing expenses. In addition initial direct costs attributable to leased items incurred during the process of lease

negotiation and signing of lease agreement shall be included in the value of leased assets. The balance of minimum

lease payment after deducting unrecognized financing expenses shall be accounted for long-term liability and

long-term liability due within one year.Unrecognized financing expenses shall be recognized as financing expenses for the current period using effective

interest method during the leasing period. Contingent rent shall be included in profit or loss for the current period

at the time it incurred.

4.Financing lease business with the Group recorded as lessor

On the beginning date of the lease the entry value of lease receivable shall be the aggregate of minimum lease

receivable and initial direct costs at the beginning date of the lease. The unsecured balance shall be recorded. The

aggregate of minimum lease receivable initial direct costs and unsecured balance and the different between their

present value shall be recognized as unrealized financing income. The balance of lease receivable after deducting

unrecognized financing income shall be accounted for long-term debt and long-term debt due within one year.Unrecognized financing income shall be recognized as financing income for the current period using effective

interest method during the leasing period. Contingent rent shall be included in profit or loss for the current period

(30) Other major accounting policies and estimations

The discontinued operation refers to the component that meets one of following conditions and has been disposed

by the Company or classified as held-for-sale and can be individually distinguished when operating and preparing

the financial statements: 1- the component represents an independent main Business or a major operating area; 2-

the component is a parts that intends to dispose or arrange an independent main business or a major operating area;

3- the component is a subsidiary obtained only for re-sale.

(31) Changes of major accounting policy and accounting estimation

1. Change of major accounting policies

The Accounting Standards for Business Enterprises No. 14 - Revenue was revised by Ministry of Finance in 2017.In accordance with the Revised Standard the cumulative impact of the first implementation of the standard is

adjusted for the amount of retained earnings and other related items in the financial statements at the beginning of

the first implementation period (January 1 2020) and no adjustment is made to the comparable period information.Main influence while exercising the above provision are as:

Content / causes for the changes of

accounting policies

Approval procedures

Note

The Company implemented the Accounting

Standards for Business Enterprises No. 14 -

Revenue revised by Ministry of Finance in

2017 since 1 Jan. 2020

Deliberated and approved by 6th session of 8th BOD

significant

influence

2. Change of accounting estimation

No change of accounting estimation occurred in the reporting period

(32)Major accounting judgment and estimation

When using the accounting policies the Company needs to made judgment estimation and assumption for

carrying value of certain items which cannot be measured adequately due to inherent uncertainty of economic

activities. Such judgment estimation and assumption are based on historical experiences of the Group’s

management together with consideration of other relevant factors. These judgments estimations and assumption

would affect the reported amount of income expense asset and liability and disclosure of contingent liabilities on

balance sheet date. However actual results resulting from the uncertainty of these estimates may differ from the

current estimation made by management of the Company which would in turn lead to material adjustments to the

carrying value of assets or liabilities which will be affected in future.The Group conducts regular re-review on the aforesaid judgment estimation and assumption on a continued

operation basis. If the change of accounting estimation only affect current period the affected amount is

recognized in the period when change occurs. If the change affects current and future periods both the affected

amount is recognized in the period when change occurs and future periods.On balance sheet date major aspects in the statement need to judge estimate and consumption by the Company

are as:

1.Fixed assets are provided for depreciation by output method

The Group recognizes depreciation for unit electricity based on values of power generation machine sets projected

power sales volume and projected net remaining value and provides for depreciation according to depreciation of

unit electricity and actual power sales volume. Taking into account the prevailing industry policies technologies

consumption allocation method of power management authorities and past experiences and the Group

management believes that it is adequate for utilization life of such power generation machine sets projected power

sales volume projected net remaining value and provision method for depreciation. If the future actual power sales

volume differs substantially from the projected one the Group would make adjustment to unit electricity

depreciation which would bring affects to the depreciation expenses included in profit and loss for the current and

future periods.

2.Provision for bad debts

The Group use allowance method to state bad debt losses according to the accounting policies of accounts

receivable. Impairment of receivables is based on the assessment of the collectibility of accounts receivable.Identification of impairment of receivables requires management judgments and estimates. The differences

between actual results and the original estimate will affect the book value of accounts receivable as well as the

recognition or reversal of provision for bad debts in the period in which the estimate is changed.

3.Allowance for inventories

Under the accounting policies of inventories and by measuring at the lower of cost and net realizable value the

Group makes allowance for inventories that have costs higher than net realizable value or become obsolete and

slow moving. Write-down of inventories to their net realizable values is based on the salability of the evaluated

inventory and their net realizable values. Identification of inventories requires management to make judgments and

estimates on the basis of obtaining conclusive evidence and considering the purpose of holding inventory and the

events after balance sheet date. The differences between actual results and the original estimate will affect the book

value of inventories as well as the recognition or reversal of provision for inventories in the period in which the

estimate is changed.

4. Impairment provision for long-term assets

The Company makes judgment on each balance sheet date on whether there is indication of impairment in respect

of non-current assets other than financial assets. Intangible assets with indefinite useful life shall also be further

tested for impairment when there is indication of impairment in addition to the annual impairment test. Other

non-current assets other than financial assets would be test for impairment when there is indication showing its

carrying value in not likely to be recovered.Impairment exists when carrying value of asset or assets group is higher than recoverable amount namely the

higher of fair value less disposal cost and present value of expected future cash flow.The calculation of the fair value less costs of disposal is based on available data from binding sales transactions in

an arm’s length transaction of similar assets or observable market prices less incremental costs for disposing of the

asset.In assessing value in use significant judgments are exercised over the asset’s production selling price related

operating expenses and discount rate to calculate the present value. All relevant materials which can be obtained

are used for estimation of the recoverable amount including the estimation of the production selling price and

related operating expenses based on reasonable and supportable assumptions.The Group determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the

value in use of the cash-generating units to which the goodwill is allocated. Estimating the value in use requires the

Group to make an estimate of the expected future cash flows from the cash-generating units and also to choose a

suitable discount rate in order to calculate the present value of those cash flows.

5. Depreciation and amortization

Assets such as investment real estate and intangible assets are depreciated and amortized over their useful lives

under straight line method after taking into account residual value. The estimated useful lives of the assets are

regularly reviewed to determine the depreciation and amortization costs charged in each reporting period. The

useful lives of the assets are determined based on historical experience of similar assets and the estimated technical

changes. If there have been significant changes in the factors used to determine the depreciation or amortization

the rate of depreciation or amortization is revised prospectively.

6. Deferred income tax assets

Deferred tax assets are recognized for all unused tax losses to the extent that it is probable that taxable profit will

be available against which the losses can be utilized. Significant management judgment is required to determine

the amount of deferred income tax assets that can be recognized based upon the likely timing and level of future

taxable profits together with future tax planning strategies.

7. Accrual liability

Provision for product quality guarantee estimated onerous contracts and delay delivery penalties shall be

recognized in terms of contract current knowledge and historical experience. If the contingent event has formed a

practical obligation which probably results in outflow of economic benefits from the Group a projected liability

shall be recognized on the basis of the best estimate of the expenditures to settle relevant practical obligation.Recognition and measurement of the accrual liability significantly rely on the management’s judgments

inconsideration of the assessment of relevant risks uncertainties time value of money and other factors related to

the contingent events.In addition the Company would accrual liability for after-sale quality maintenance commitment provided to

customers in respect of goods sold maintained and reconstructed by the Company. Recent maintenance experience

of the Company has been considered when projecting liabilities while the recent maintenance experience may not

reflect the future maintenance. Any increase or decrease of this provision may affect profit or loss for future years.IV. Taxes

(1) Main taxation and rates

Taxation items Taxation basis Tax rate

VAT

Calculate the output tax based on the sales of goods and

taxable service income calculated according to the tax

law after deducting the input tax allowable for deduction

in the current period the difference is the VAT payable.

6% 9% 10%

11% 13%

16%

Taxation items Taxation basis Tax rate

City maintenance tax

According to the actual payment of VAT and

consumption tax

5% 7%

Education surtax

According to the actual payment of VAT and

consumption tax

Local education surtax

According to the actual payment of VAT and

consumption tax

Enterprise income tax According to the taxable income amount

16.5% 17%

25% 15%

Land-use tax of town

2 Yuan ~ 8Yuan per square meter of the actual occupied are for the industrial

land located in Nanshan District Shenzhen City; 1Yuan per square meter of

the actual occupied are for the industrial land located in Zhongshan City

Land VAT

Tax by the Value-added amount from transferring state-owned land use right

landing construction and its affiliates with four super-rate progressive tax

rate

As for the taxpaying bodies have different enterprise income tax rate explanation as:

Taxpaying body Rate of income tax

The Company 25%

New Power Company 25%

Engineering Company 25%

Shenzhen Server 25%

Environment Protection Company 15%

Zhongshan Electric Power 25%

Singapore Company 17%

Shen Storage 25%

Syndisome 16.5%

(2) Taxes preferential

1. VAT

Name of the

company

Relevant regulation and

policies basis

Approval

institution

Approval

documents

Exemption

range

Period of

validity

Environment

Protection

Company

Notice on "contents of

products with

comprehensive utilization

of resources and

value-added tax privilege

of labor service" (CS No.

[2015] 78)

Shenzhen

Provincial

Office SAT

(Qianhai

SAT)

SQSST[2018]

No.: 18302

Resource

comprehen

sive

utilization

of VAT

refund

31 Aug.

2018 to 31

July 2022

2. Income tax

According to the announcement (No. 60 of 2019) of the Ministry of Finance the State Administration of Taxation

the National Development and Reform Commission and the Ministry of Ecological Environment and the

Announcement on Issues Concerning Income Tax Policies for Third-Party Enterprises Engaged in Pollution

Prevention and Control of the Ministry of Finance and the State Administration of Taxation from January 1 2019

to December 31 2021 the corporate income tax will be levied at a reduced rate of 15% on eligible third-party

enterprises engaged in pollution prevention and control. The Company’s subordinate Environment Protection

Company enjoys the above preferential policy and levies corporate income tax at a rate of 15%

V.Annotation of the items in consolidate financial statement

(1) Monetary fund

Item Ending Balance Year-end balance of last year

Cash on hand 65138.88 84307.60

Bank savings 467274657.16 731339856.01

Other monetary fund 617564170.77 41785691.23

Total 1084903966.81 773209854.84

Including: total amount saving aboard 6292429.36 6242072.77

Note: among the above mentioned “other monetary fund” the restricted monetary fund including cash deposit of 0

Yuan in total (on 31 Dec. 2019 the restricted monetary fund include cash deposit of 1719853.88 Yuan)

(2) Bill receivable

Item Ending Balance

Year-end balance of last

year

Bank acceptance note 2900000.00 0.00

Commercial Acceptance Notes 0.00 0.00

Total 2900000.00 0.00

(3) Account receivable

1. Age analysis

Account age Ending Balance Year-end balance of last year

Within one year

132034578.25 178147691.32

1 to 2 years

2 to 3 years

Over 3 years

5769529.84 5769529.84

Subtotal

137804108.09 183917221.16

Less: Bad debt provision

5766640.84 5766640.84

Total

132037467.25 178150580.32

2. According to accrual method for bad debts

Category Ending Balance

Book balance Bad debt provision Book value

Amount

Proportion

(%)

Amount

Accrual

proportion (%)

With single provision for

bad debts

5766640.84 4.18 5766640.84 100.00

With bad debt provision

accrual based on similar

credit risk characteristics

of a portfolio

132037467.25 95.82 132037467.25

Total 137804108.09 100.00 5766640.84 4.18 132037467.25

Category

Year-end balance of last year

Book balance Bad debt provision Book value

Amount Ratio (%) Amount

Accrual

ratio (%)

With single provision for

bad debts

5766640.84 3.14 5766640.84 100.00

With bad debt provision

accrual based on similar

credit risk characteristics of

a portfolio

178150580.32 96.86 178150580.32

Total 183917221.16 100.00 5766640.84 3.14 178150580.32

With single provision for bad debts:

Name

Ending Balance

Book amount Bad debt provision Accrual proportion (%) Causes

Shenzhen

Petrochemical

Products Bonded

Trading Co. Ltd.

3474613.06 3474613.06 100.00 Uncollectible in excepted

Zhongji

Construction

Development Co.

1137145.51 1137145.51 100.00 Uncollectible in excepted

Name

Ending Balance

Book amount Bad debt provision Accrual proportion (%) Causes

Ltd.Shenzhen Fuhuade

Power Co. Ltd

800000.00 800000.00 100.00 Uncollectible in excepted

Other 354882.27 354882.27 100.00 Uncollectible in excepted

Total 5766640.84 5766640.84 100.00

Provision for bad debts by portfolio：

Provision by portfolio：

Name

Ending balance

Account receivable

Bad debt provision Accrual proportion (%)

With minor

credit risk

132037467.25 0.00

Recognition standards and specifications on provisions by portfolio:

The account receivable with provision for bad debts by portfolio mainly refers to the amount from

Guangdong Power Grid Co. Ltd. Shenzhen Power Supply Bureau Co. Ltd. and Shenzhen Water

Bureau etc. which have minor credit risk and no provision for bad debts.

3. Bad debt provision accrual collected or switch back

Category

Year-end balance of

last year

Current amount changed

Ending BalanceAccrual

Collected or

switch back

Rewrite or

write-off

With single

provision for bad

debts

5766640.84 5766640.84

There is no receivable with significant recovery or reversal amount of bad debt provision in the

current period.

4. Account receivable without actual charge off in the period

5. Top 5 receivables at ending balance by arrears party

Total period-end balance of top five receivables by arrears party amounting to

129063847.54 Yuan takes 93.66 percent of the total account receivable at period-end bad

debt provision accrual correspondingly at period-end amounting as 0 Yuan

6. No accounts receivable terminated recognition due to transfer of financial assets at the end

of the period

(4) Account paid in advance

1. Account paid in advance classified according to age

Age

Ending Balance Year-end balance of last year

Book balance Proportion (%) Book balance Proportion (%)

Within 1year 28934955.72 88.09 69896494.56 99.84

1 to 2years 3820156.23 11.63 15600.00 0.02

2 to 3years 32000.00 0.05

Over 3 years 93586.94 0.28 61586.94 0.09

Total 32848698.89 100.00 70005681.50 100.00

2. Top five accounts paid in advance at period-end balance listed by object

Paid in advance to Book balance

Proportion in total book

balance of accounts paid in

advance (%)

Guangdong sales branch of CNOOC Gas

Power Group Co. Ltd.

22631736.13 68.90

Shenzhen Gas Group Co. Ltd. 3820156.23 11.63

Guangzhou Zike Environmental Protection

Technology Co. Ltd.

802500.00 2.44

Xinao Energy Trading Co. Ltd. 351988.63 1.07

Yongcheng Property Insurance Co. Ltd.Shenzhen Branch

161674.43 0.49

Total 27768055.42 84.53

(5) Other account receivable

Item Book balance Year-end balance of last year

Interest receivable

Dividend receivable

Other account receivable 80837116.58 32321826.94

Total 80837116.58 32321826.94

1. Other account receivable

(1) Age analysis

Account age

Book balance Year-end balance of last year

Within one year

50107926.26 4589653.32

1 to 2 years

1215311.98 1223336.54

2 to 3 years

2758753.80 3414019.37

Over 3 years

58587544.98 54927238.15

Subtotal

112669537.02 64154247.38

Less: Bad debt provision

31832420.44 31832420.44

Total

80837116.58 32321826.94

(2) By category

Category

Book balance

Book balance Bad debt provision

Book value

Amount

Proportion

(%)

Amount

Accrual

proportion

(%)

With single provision

for bad debts

32525936.22 28.87 31832420.44 97.87 693515.78

With bad debt

provision accrual based

on similar credit risk

characteristics of a

portfolio

80143600.80 71.13 80143600.80

Total 112669537.02 100.00 31832420.44 28.25 80837116.58

Category

Year-end balance of last year

Book balance Bad debt provision

Book value

Amount

Proportion

(%)

Amount

Accrual

proportion (%)

With single provision

for bad debts

32525936.22 50.70 31832420.44 97.87 693515.78

With bad debt provision 31628311.16 49.30 31628311.16

Category

Year-end balance of last year

Book balance Bad debt provision

Book value

Amount

Proportion

(%)

Amount

Accrual

proportion (%)

accrual based on similar

credit risk

characteristics of a

portfolio

Total 64154247.38 100.00

31832420.

44 49.62 32321826.94

With single provision for bad debts:

Name

Book balance

Book balance Bad debt provision Accrual ratio （%） Accrual reasons

Huiyang Kangtai

Industrial Company 14311626.70 14311626.70 100.00 Un-collectable in excepted

Shandong Jinan

Generation Equipment

Plant

3560000.00 3560000.00 100.00 Un-collectable in excepted

Individual income tax 2470039.76 2470039.76 100.00 Un-collectable in excepted

Dormitory amount

receivable

2083698.16 1736004.16 83.31 Some un-collectable in excepted

Personal receivables 7498997.87 7498997.87 100.00 Un-collectable in excepted

Deposit receivable 1658796.73 1312974.95 79.15 Some un-collectable in excepted

Other 942777.00 942777.00 100.00 Un-collectable in excepted

Total 32525936.22 31832420.44 97.87

Provision for bad debts by portfolio：

Provision by portfolio：

Name

Ending balance

Other account receivable Bad debt provision Accrual proportion (%)

With minor credit risk 80143600.80

Recognition standards and specifications on provisions by portfolio:

The Company believes that the credit risk of other account receivable with no impairment in the

single assessment is relatively low no provision for bad debts unless there is an evidence that a

certain other account receivable is at greater credit risk.

(3) Accrual of bad debt provision

Bad debt provision

Phases I Phases II Phases III

TotalExpected credit

losses over next 12

months

Expected credit

losses for the entire

duration (without

credit impairment

occurred)

Expected credit

losses for the

entire duration

(with credit

impairment

occurred)

Balance at last year-end 31832420.44 31832420.44

Book balance of other account

receivable at year-begin

——Turn to phase II

——Turn to phase III

——Return to Phase II

——Return to Phase I

Current accrual

Current switch back

Rewrite in the period

Write-off in the period

Other changes

Book balance 31832420.44 31832420.44

(4) Bad debt provision accrual collected or switch-back in the period

Category Year-end balance

of last year

Current amount changed

Book balanceAccrual

Collected or

switch back

Rewrite or

write-off

Bad debt

provision for

other receivables

31832420.44 31832420.44

(5) No other accounts receivable that had actually written off in the period

(6) By nature

Nature Ending book balance Book balance at last year-end

Dormitory receivables 2083698.16 2083698.16

Deposit receivable 8114769.72 8114769.72

Personal receivables 10625884.03 10625884.03

Co management account 13243635.56 13114012.69

Accounts receivable of

Huidong Server

8432761.42 9060361.44

Receivables from equity transfer 44990000.00 -

Other 25178788.13 21155521.34

Total 112669537.02 64154247.38

(7) Top five other account receivables at period-end balance listed by arrears party

Name of the company Nature Ending balance Age

Proportion in

total period-end

balance of

other account

receivable (%)

Period-end

balance of bad

debt provision

Shenzhen Gas Group Co.Ltd.

Equity

transfer

44990000.00 Within 1

years

39.93

Huidong Server Harbor

Comprehensive

Development Co. Ltd.

Intercourse

fund

21676396.98 Over 3

years

19.24

Huiyang County Kangtai

Industrial Company

Other 14311626.70 Over 3

years

12.70 14311626.70

China Machinery

Engineering Corporation

Guarantee

money

4906822.44 Within 3

years

4.36

Shandong Jinan Power

Equipment Factory

Other 3560000.00 Over 3

years

3.16 3560000.00

89444846.12 79.39 17871626.70

(8) No receivables involving government subsidies at the end of the period

(9) No other receivables terminated recognition due to transfer of financial assets

(6) Inventory

1. Classification

Item

Ending Balance Year-end balance of last year

Book balance

Inventory

falling price

reserves

Book value Book balance

Inventory

falling price

reserves

Book value

Raw

material

150562248.7

42008350.5

108553898.2

171828426.1

47141982.5

124686443.6

Note: After the sale of the equity of Shen Nan Dian (Dongguan) Weimei Electric Power Co. Ltd. this year Shen

Nan Dian (Dongguan) Weimei Electric Power Co. Ltd. will no longer be included in the scope of consolidation

from April 30 2020 and the original assets and liabilities have been transferred out.

2. Inventory falling price reserves

Item

Year-end balance

of last year

Current increased Current decreased Ending Balance

Accrual Other

Switch-back

or write-off

Changes in

scope of

consolidation

Raw

materials

47141982.58 5133632.04 42008350.54

3. Accrual basis for the depreciation provision of inventory and reasons of switch-back or

write-off in the year

Item Accrual basis

Reasons of

switch-back

Reasons of write-off

Raw materials Cost higher the net realizable value Not applicable Spare parts on sale

(7) Other current assets

Item Ending Balance Opening Balance

VAT input tax deductible 341415281.38 349953491.34

Enterprise income tax paid in advance 6583089.98 6583089.98

Financial products 139674162.93 86000000.00

Item Ending Balance Opening Balance

Accrual interest of time deposit 4057800.00 2670150.01

Other 30000.00 30000.00

Total 491760334.29 445236731.33

(8) Long-term equity investment

The invested entity

Year-end

balance of last

year

Changes +-

Ending

Balance

Period-end

balance of

depreciation

reserves

Additional

investment

Disinvestment

Investment

gains/losses

recognized by

equity method

Other

comprehensive

income

adjustment

Other

changes

equity

Declaration

of cash

dividends

or profits

Provision

for

impairment

Other

1. Joint venture

Huidong Server

Harbor

Comprehensive

Development

Company (“HuidongServer” for short)

14619203.03 -243622.43 14375580.60

Total 14619203.03 -243622.43 14375580.60

(9) Other equity instrument investment

1. Other equity instrument investment

Item Book balance

CPI Jiangxi Nuclear Power Company

60615000.00

Shenzhen Petrochemical Oil Bonded Trade Co. Ltd. -

investment cost

2500000.00

Shenzhen Petrochemical Oil Bonded Trade Co. Ltd. -

change in fair value

-2500000.00

Total 60615000.00

2. Non trading equity instrument investment

Item

Dividend

income

recogniz

ed in the

current

period

Accumulat

ed gain

Accumulat

ed loss

Retained

earnings

transferred

from other

comprehensi

ve income

Designated as the

investment measured at fair

value and whose changes

reckoned into other

comprehensive income

(explain reasons)

Reasons of

retained

earnings

transferred

from other

comprehensi

ve income

Jiangxi

Nuclear

Power Co.Ltd.intents to holding for a

long-term

Shenzhen

Petrochemi

cal Oil

Bonded

Trade Co.Ltd.

-2500000.

intents to holding for a

long-term

Total

-2500000.

(10) Investment real estate

1. Investment real estate measured at cost

Item House and building

Land use

right

Construction in

progress

Total

1. Original book value

(1) Year-end balance of last year 9708014.96 9708014.96

(2) Current increased

(3) Current decreased

(4) Ending Balance 9708014.96 9708014.96

2. Accumulated depreciation and

accumulated amortization

(1) Year-end balance of last year 7306687.96 7306687.96

(2) Current increased 98068.80 98068.80

—Accrual or amortization 98068.80 98068.80

(3) Current decreased - -

(4) Book balance 7404756.76 7404756.76

3. Depreciation provision

(1) Year-end balance of last year

(2) Current increased

(3) Current decreased

(4) Book balance

4. Book value

(1) Period-end book value 2303258.20 2303258.20

(2) Year-begin book value 2401327.00 2401327.00

(11) Fixed assets

1. Fixed assets and disposal of fixed assets

Item Ending Balance Year-end balance of last year

Fixed assets

954992268.00 1381675872.68

Disposal of fixed assets

Total 954992268.00 1381675872.68

2. Fixed assets

Item

House and

buildings

Machinery

equipment

Transportation

tools

Other

equipment

Total

I. Original book value

1. Opening balance 501321101.48 4079001987.60 16336684.19 55807562.91 4652467336.18

2. Increased in the

year

3270619.85 71238.94 873334.63 4215193.42

(1) Purchase 823506.59 167066.26 990572.85

(2) Construction in

progress transfer-in

2447113.26 71238.94 706268.37 3224620.57

(3) Increase in

business combination

3. Decreased in the

year

75311278.51 912852652.58 1677249.73 1101001.76 990942182.58

(1) Disposal or

scrapping

0.00 11100.00 11100.00

(2) Reduction of

consolidation scope

changes

75311278.51 912852652.58 1677249.73 1089901.76 990931082.58

Item

House and

buildings

Machinery

equipment

Transportation

tools

Other

equipment

Total

4. Ending Balance 426009822.97 3169419954.87 14730673.40 55579895.78 3665740347.02

II. Accumulated

depreciation

1. Opening balance 308704855.95 2768225963.03 9246358.34 43480376.06 3129657553.38

2. Increased in the

year

5651134.50 18473218.63 726108.03 954942.33 25805403.49

(1) Accrual 5651134.50 18473218.63 726108.03 954942.33 25805403.49

3. Decreased in the

year

44544371.88 505772982.44 1268277.91 780774.36 552366406.59

(1) Disposal or

scrapping

9990.00 9990.00

(2) Reduction of

consolidation scope

changes

44544371.88 505772982.44 1268277.91 770784.36 552356416.59

4. Book balance 269811618.57 2280926199.22 8704188.46 43654544.03 2603096550.28

III. Impairment

provision

1. Opening balance 14860025.13 126273884.99 141133910.12

Item

House and

buildings

Machinery

equipment

Transportation

tools

Other

equipment

Total

2. Increased in the

year

(1) Accrual

3. Decreased in the

year

5059785.83 28422595.55 33482381.38

(1) Disposal or

scrapping

(2) Reduction of

consolidation scope

changes

5059785.83 28422595.55 33482381.38

4. Book balance 9800239.30 97851289.44 107651528.74

IV. Book value

(1) Closing book

value

146397965.10 790642466.21 6026484.94 11925351.75 954992268.00

(2) Opening book

value

177756220.40 1184502139.58 7090325.85 12327186.85 1381675872.68

3. Idle fixed assets temporary

Item

Original book

value

Accumulated

depreciation

Impairment

provision

Book value Note

Housing &

buildings 127893412.10 98010753.95 13948439.04 15934219.11

Machinery

equipment 523528339.27 452630912.68 32087951.59 38809475.00

Transportation

equipment

256300.00 230670.00 25630.00

Total 651678051.37 550872336.63 46036390.63 54769324.11

4. No fixed assets acquired by financing lease

5. No fixed assets acquired by operating lease

6. Fixed assets without property rights certificate

Item Book value

Reasons for failing to complete the

property rights certificate

Booster station 3962705.44 Procedures uncompleted

Steam turbine workshop 1437359.56 Procedures uncompleted

Chemical water tower 2363171.86 Procedures uncompleted

Treatment shop for heavy oil 464359.97 Procedures uncompleted

Start-up boiler house 104559.07 Procedures uncompleted

Fire pump room 242318.01 Procedures uncompleted

Circulating water pump house 1520701.82 Procedures uncompleted

Comprehensive building 2589240.59 Procedures uncompleted

Production and inspection

building 4396371.57 Procedures uncompleted

Administrative building 4520121.49 Procedures uncompleted

Mail room of the main entrance 183112.49 Procedures uncompleted

Chemical water treatment

workshop

232960.00 Procedures uncompleted

Cooling tower 673259.25 Procedures uncompleted

Comprehensive building canteen 276091.29 Procedures uncompleted

Comprehensive building 443246.19 Procedures uncompleted

Total 23409578.60

(12) Construction in progress

1. Construction in progress and Engineering materials

Item Ending Balance Year-end balance of last year

Construction in progress 60831928.29 66474630.23

Engineering materials

Total 60831928.29 66474630.23

2. Construction in progress

Item

Ending Balance Year-end balance of last year

Book balance

Impairment

provision

Book value Book balance

Impairment

provision

Book value

Cogeneratio

57946875.6

63151182.6

Oil to Gas

Works

13230574.5

32871600.2

Technical

innovation

2217378.76 2217378.76 3061557.07 3061557.07

Other

667673.90 667673.90 261890.52 261890.52

Total

74062502.8

13230574.5

60831928.2

99346230.4

32871600.2

66474630.2

3. Changes of significant projects in construction in the year

Item Budget

Opening

balance

Increase

of this

period

Transferred

fixed assets

in this

period

Reduction

consolidati

on scope

changes

Other

decrease in

the period

Closing

balance

Proportion

accumulat

ive project

investmen

t in budget

(%)

Project

progress

(%)

Accumulati

ve amount

capitalizatio

n of interest

Including:

capitalizati

on of

interest

Rate of

interest

capitalizat

ion (%)

Capital

sources

Cogenerat

ion

60000000.

63151182.

64 45871.71

5250178

.72

57946875

.63 96.58

6476185

.46

Self-rais

ed and

borrowi

Oil to Gas

Works

74400000.

32871600.

19641025

.73

13230574

.53 63.76 63.76

Self-rais

Technical

innovatio

3061557.0

1066319

.79

1910498

.10

2217378.

Not

applicable

Not

applica

ble

Self-rais

Other 261890.52 1719905.85

1314122

.47 667673.90

Self-rais

Total

13440000

0.00

99346230.

2832097

.35

3224620

.57

5250178

.72

19641025

.73

74062502

.82

6476185

.46

4. No accrual of impairment provision for Construction in progress in the period

(13) Intangible assets

1. Intangible assets

Item Land use right Software Total

I. Original book value

1. Opening balance 91355995.46 3577588.80 94933584.26

2. Increased in the year -

(1) Purchase - -

3. Decreased in the year 30542000.70 - 30542000.70

(1) Reduction of

consolidation scope

changes

30542000.70 - 30542000.70

4. Ending Balance 60813994.76 3577588.80 64391583.56

II. Accumulated

depreciation

1. Opening balance 48080331.33 3251086.49 51331417.82

2. Increased in the year 388916.55 97067.10 485983.65

(1) Accrual 388916.55 97067.10 485983.65

3. Decreased in the year 8759936.73 - 8759936.73

(1) Reduction of

consolidation scope

changes

8759936.73 - 8759936.73

4. Book balance 39709311.15 3348153.59 43057464.74

III. Impairment

provision

1. Opening balance - - -

2. Increased in the year

(1) Accrual - - -

3. Decreased in the year

(1) Disposal - - -

4. Book balance - - -

IV. Book value

(1) Closing book value 21104683.61 229435.21 21334118.82

(2) Opening book value 43275664.13 326502.31 43602166.44

2. Land use rights without property rights certificate

Item Book value

Reasons for failing to

complete the property rights

certificate

Land use right of the wharf and pipe

gallery

530733.25 Property rights certificate is

undergoing

(14) Long-term deferred expenses

Item Year-end balance

of last year

Current increased

amount

Amortized in the

Period

Other decrease

Book balance

Exhibition hall

decoration

amount

1174171.16 125971.38 1048199.78

(15) Deferred income tax assets and deferred income tax liabilities

1. Deferred income tax assets without offsetting

Item

Ending Balance Year-end balance of last year

Deductible

temporary difference

Deferred income

tax assets

Deductible

temporary

difference

Deferred income

tax assets

Bad debt provision for

account receivable 5628573.77 1400153.44

5628573.77 1400153.44

Bad debt provision for

other receivable 723585.00 180896.25

723585.00 180896.25

Changes in fair value of

other equity instrument

investments 2500000.00 625000.00

2500000.00 625000.00

Other

Total 8852158.77 2206049.69 8852158.77 2206049.69

(16) Other non-current assets

Item

Ending Balance Year-end balance of last year

Book balance

Depreciation

reserve

Book value Book balance

Depreciation

reserve

Book value

Project of

LNG 22882181.78 22882181.78

Total 22882181.78 22882181.78

(17) Short-term loans

1. Classification

Item Ending Balance

Year-end balance

of last year

Guarantee loans 300000000.00

Credit loans 754233285.00 580000000.00

Accrued interest 1246849.11 1075378.48

Total 755480134.11 881075378.48

(18) Account payable

1. Account payable

Item Ending Balance

Year-end balance of

last year

Materials 2854019.71 12180417.48

Electricity 1884315.07 1760985.99

Labor 6101200.00 3102530.32

Others 2521658.17 2827168.62

Total 13361192.95 19871102.41

2. There is no major amount payable with over one year age at end of the period

(19)Payroll payable

1. Payroll payable

Item

Year-end balance

of last year

Current increased

Current

Decreased

Ending Balance

Short-term remuneration 54801004.42 57502762.80 73035130.07 39268637.15

Post-employment 407428.11 6482783.84 5113650.54 1776561.41

Item

Year-end balance

of last year

Current increased

Current

Decreased

Ending Balance

welfare-defined contribution

plans

Severance Pay

Other welfare due within one

year

Total 55208432.53 63985546.64 78148780.61 41045198.56

2. Short-term remuneration

Item

Year-end balance

of last year

Current increased

Current

Decreased

Book balance

(1) Wagesbonusesallowancesand

subsidies

53579116.98 44870304.70 59821822.13 38627599.55

(2) Welfare for workers and

staff

63050.00 413654.74 378393.74 98311.00

(3) Social insurance

199344.99 2418356.33 2569608.69 48092.63

Including: Medical

insurance

167818.74 2351191.23 2476620.10 42389.87

Work injury

insurance

13139.34 7859.44 20962.00 36.78

Maternity

insurance

18386.91 59305.66 72026.59 5665.98

(4) Housing accumulation fund 614780.58 9085609.07 9549296.93 151092.72

(5) Labor union expenditure

and personnel education

expense

344711.87 714837.96 716008.58 343541.25

Total 54801004.42 57502762.80 73035130.07 39268637.15

3. Defined contribution plans

Item

Year-end balance

of last year

Current increased

Current

Decreased

Book balance

Item

Year-end balance

of last year

Current increased

Current

Decreased

Book balance

Basic endowment insurance 394280.13 3829721.67 4201766.55 22235.25

Unemployment insurance 12849.98 22162.21 34888.99 123.20

Enterprise annuity 298.00 2630899.96 876995.00 1754202.96

Total 407428.11 6482783.84 5113650.54 1776561.41

(20) Taxes payable

Item Ending Balance

Year-end balance of

last year

Enterprise income tax 475248.33 3407074.02

Real estate tax 1957956.15 996166.86

Individual income tax 1043897.37 1550858.52

Land-use tax of town 452439.30

VAT 7538071.86 15053172.64

Other 357269.39 762001.73

Total 11824882.40 21769273.77

(21) Other account payable

Item Ending Balance Year-end balance of last year

Interest payable

Dividends payable

Other account payable

34163258.96 43691472.06

Total 34163258.96 43691472.06

1. Other account payable

(1) Other payable by nature

Item Book balance

Year-end balance of

last year

Engineering funds 11861176.64 13045165.88

Quality assurance 6633006.27 6825475.53

Item Book balance

Year-end balance of

last year

Accrued expenses 10143950.69 10301185.40

Equipment fund 3718050.65

Other 5525125.36 9801594.60

Total 34163258.96 43691472.06

(2) Other account payable of more than one year is of 18271785.62 Yuan (December 31 2019:

18303816.84 Yuan) which is mainly the engineering equipment fund payable and guarantee

money.

(22)Accrual liability

Item Book balance

Year-end balance of last

year

Reason

Guarantee offering outside 26646056.28 26646056.28

Total 26646056.28 26646056.28

Note: On 29 November 2013 Shenzhen Server and Jiahua Building Products (Shenzhen) Co. Ltd. (Jiahua

Building) signed a supplementary term aiming at equity transfer over equity attribution and division of Yapojiao

Dock which belongs to Shenzhen Server Huidong Server and Huidong Nianshan Town Government as well as its

subordinate Nianshan Group. In order to solve this remaining historic problem Shenzhen Server saved RMB

12500000.00 in condominium deposit account as guarantee. In addition Server pledged its 20% of equity holding

from Huidong Server to Jiahua Architecture with pledge duration of 2 years. The amount of collateral on loans

could not exceed RMB 15000000.00. Relevant losses with the event concerned predicted amounting to RMB 27

500000.00 by the Group. The costs for lawyers from 2014 to June 2020 and the costs for problem left over by

history amounting to 853943.72 Yuan ending balance amounted as 26646056.28 Yuan.

(23) Deferred income

Item

Year-end balance of

last year

Current increased

Current

decreased

Ending Balance Reasons

Government

subsidy

108507683.52 11549926.48 96957757.04

Items with government subsidy involved:

Liability

Opening

balance

Subsidy amount

newly increased in

the current period

Amount included

in current profit

and loss

Reducti

on of

consoli

dation

scope

changes

Book balance

Assets

related/income

Subsidy for

low-nitrogen

transformation

25165130.64 261374.29 3736754.75 21167001.60 Assets related

Information

construction

86666.60 30588.24 56078.36 Assets related

Support fund of

recycling

economy for

sludge drying

7451273.95 323501.46 7127772.49 Assets related

Treasury subsidies

for sludge drying 2826250.00 127500.00 2698750.00 Assets related

Special funds for

energy

conservation and

emission

reduction

684223.30 57018.66 627204.64 Assets related

Funded of energy

efficiency

improvement for

electric machine

401760.00 17280.00 384480.00 Assets related

Subsidy for

quality promotion

of the air

environment in

Shenzhen

67262379.03 2365909.08 64896469.95 Assets related

Cogeneration 4630000.00 4630000.00 Assets related

Total 108507683.52 3183171.73

8366

754.75 96957757.04

(24) Share capital

Item

Year-end balance

of last year

Changes in this period(+ -) Ending Balance

New shares

issued

Bonus

Capitalizing

from reserves

Other Subtotal

Item

Year-end balance

of last year

Changes in this period(+ -) Ending Balance

New shares

issued

Bonus

Capitalizing

from reserves

Other Subtotal

Total shares 602762596.00 602762596.00

(25) Capital reserve

Item

Year-end balance of last

year

Current

increased

Current

decreased

Book balance

Capital premium

（Sharepremium）

233035439.62 233035439.62

Other capital

reserve

129735482.48 129735482.48

Total 362770922.10 362770922.10

(26) Other comprehensive income

Item

Year-end

balance of last

year

Current period

Book balance

Accountbefore

income tax in the

year

Less: written in

other

comprehensive

income in

previous period

and carried

forward to gains

and losses in

current period

Less : income tax

expense

Belong to parent

companyafter tax

Belong to

minority

shareholders after

tax

1. Other comprehensive income items which will not

be reclassified subsequently to profit of loss

-2500000.00 -2500000.00

Including: changes of the defined benefit plans that

re-measured

Other comprehensive income under equity

method that cannot be transfer to gain/loss

Change of fair value of investment in other

equity instrument

-2500000.00 -2500000.00

Fair value change of enterprise's credit risk

Item

Year-end

balance of last

year

Current period

Book balance

Accountbefore

income tax in the

year

Less: written in

other

comprehensive

income in

previous period

and carried

forward to gains

and losses in

current period

Less : income tax

expense

Belong to parent

companyafter tax

Belong to

minority

shareholders after

tax

2. Other comprehensive income items which will be

reclassified subsequently to profit or loss

including: other comprehensive income under equity

method that can transfer to gain/loss

Change of fair value of other debt investment

Amount of financial assets re-classify to other

comprehensive income

Credit impairment provision for other debt

investment

Cash flow hedging reserve

Item

Year-end

balance of last

year

Current period

Book balance

Accountbefore

income tax in the

year

Less: written in

other

comprehensive

income in

previous period

and carried

forward to gains

and losses in

current period

Less : income tax

expense

Belong to parent

companyafter tax

Belong to

minority

shareholders after

tax

Translation differences arising on translation of

foreign currency financial statements

Total other comprehensive income -2500000.00 -2500000.00

(27) Surplus reserve

Item

Year-end balance of

last year

Current increased Current decreased Book balance

Legal surplus reserve 310158957.87 310158957.87

Discretionary surplus

reserve

22749439.73 22749439.73

Total 332908397.60 332908397.60

Note: according to the Company Law and the Articles of Association the Company takes 10% of the net profit

aside as legal surplus reserve. No more provision is made when the accumulated legal surplus reserve exceeds

50% of the registered capital.

After provision for legal surplus reserve the Company can make provision for other surplus reserve. As approved

other surplus reserve can be used to make up for previous loss or increase share capital.

(28) Retained profit

Item Current amount

Year-end balance of last

year

Retained profit of last year before adjusted 706830892.54 679429935.81

Total retained profit adjusted (increased with +

decreased with -)

2500000.00

Retained profit at beginning of the year after adjusted 706830892.54 681929935.81

Add: net profit attributable to shareholders of parent

company

52040498.42 24900956.73

Less: withdrawal of statutory surplus reserve

Surplus reserves withdrawal

General risk reserve withdrawal

Common Stock dividend payable 12055251.92

Dividend of common shares transfer as share capital

Retained profit at period-end 746816139.04 706830892.54

(29) Operating income and operating cost

Item Current amount Last-period amount

Income Cost Income Cost

Main business 516766342.40 453011367.34 407283308.09 382899068.89

Other business 1384263.81 98068.80 841308.29 98068.80

Total 518150606.21 453109436.14 408124616.38 382997137.69

(30) Tax and surcharge

Item Current amount Last-period amount

City maintenance tax 1383140.70 347935.14

Education surtax 994801.55 239773.87

Real estate tax 1208396.49 1299068.45

Stamp tax 249088.14 223246.10

Environmental protection tax 52684.43 71377.28

Land holding tax 528926.56 622976.03

Other 2070.82 21056.56

Total 4419108.69 2825433.43

(31) Sales expense

Item Current amount Last-period amount

Sludge treatment costs

1759061.64 2091758.08

Salary welfare and social insurance

483096.28 211222.62

Communication expenses 3600.00 3600.00

Social expenses

102828.00 115344.00

Fleet cost

14862.00 15559.00

Inspection charges

8254.72 5707.55

Labor insurance fee

12146.33 10530.68

Rental fee

14400.00 14400.00

Property insurance

55981.53 49130.74

Agency engagement fee

49056.60 37735.85

Other 24116.56 11281.00

Total 2527403.66 2566269.52

(32)Administration expense

Item Current amount Last-period amount

Wages

22642057.64 23892967.48

Rental fee

3190390.04 3288377.42

Social expenses

1215245.44 1532058.32

Intermediary agency fee 769240.68 1231759.70

Fleet cost

1544894.98 1007200.26

Board charges

643383.04 588713.32

Depreciation 3219527.40 2735952.70

Amortization of intangible assets

438195.11 924080.54

Environmental protection fee 112454.45 985970.24

Food fee 1683299.91 1636173.21

Corporate culture fee

466986.30 416397.26

Property management fee

476391.32 473682.63

Office fee

451606.20 351693.34

Communication expenses

584900.66 555998.52

Business travel expenses

150697.01 309115.10

Fee for stock certificate

268361.53 86822.94

Union funds 296122.92 303547.56

Employee education expenses 25496.98 55175.25

Other 4857620.54 4556178.71

Total 43036872.15 44931864.50

(33) Financial expense

Item Current amount Last-period amount

Interest expenses

18800827.68 23542971.21

Less: capitalized interest

613068.55

Expenses interest

18187759.13 23542971.21

Less: interest income

13142285.32 13189605.67

Item Current amount Last-period amount

Exchange loss (gains is listed with ”-”)

-56923.92 -6301.58

Other

76172.31 292203.46

Total 5064722.20 10639267.42

(34) Other Income

Item Current amount Last-period amount

Government grants 8588818.18 4962155.46

Additional deduction on input tax

Commission for withholding the individual income tax 166718.37

Income from debt restructuring

Total 8755536.55 4962155.46

Government subsidies included in other income

Item

Current

amount

Last-period

amount

Asset related /

income related

Special Fund Subsidy for Shenzhen Atmospheric

Environmental Quality Improvement

2365909

.08

1201651.5

Asset related

Subsidy for low-nitrogen transformation 261374.2

251403.55 Asset related

Enterprise information construction project funding 30588.24 30588.24 Asset related

Subsidies for energy-saving technological transformation

projects

57018.66 57018.66 Asset related

Treasury subsidies for sludge drying 127500.0

127500.00 Asset related

Support fund of recycling economy for sludge drying 323501.4

323501.46 Asset related

Funded of energy efficiency improvement for electric machine

17280.00 17280.00 Asset related

VAT rebates

1134065

.17

1753212.0

Income related

Unemployment insurance refund of affected enterprises - Income related

Item

Current

amount

Last-period

amount

Asset related /

income related

4171581

.28

Subsidies for further steady growth of funding projects

100000.0

Income related

Supporting funds of office occupancy for listed companies

1000000.0

Income related

Reward to encouraging small and medium-sized enterprise to

growth as a scale-sized company

200000.00

Income related

Total 8588818

.18

4962155.4

(35) Investment income

Item

Current

amount

Last-period

amount

Long-term equity investment income by equity -243622.43 -677552.37

Investment income from disposal of long-term investments 33534881.55

Total 33291259.12 -677552.37

(36)Income from disposal of assets

Item

Current

amount

Last-period

amount

Amount reckoned into non-recurring

gains/losses of the Period

Profit and loss on disposal of fixed

assets

-417926.32

Profit and loss on disposal of

construction in process

828535.6

6 828535.66

Total 828535.6

6 -417926.32 828535.66

(37) Non-operating revenue

Item Current amount Last-period amount

Amount reckoned into

non-recurring

gains/losses of the

Period

Sales of waste materials 98666.50

Other

4753.84 4500.00 4753.84

Total 4753.84 103166.50 4753.84

(38) Non-operating expenditure

Item Current amount Last-period amount

Amount reckoned into

non-recurring

gains/losses of the

Period

External donation 10000.00 10000.00

Loss of scrap from non-current

assets

1110.00 1110.00

Other

46124.97

Total 11110.00 46124.97 11110.00

(39) Income tax expense

Item Current amount Last-period amount

Current income tax calculated in

accordance with tax laws and related

regulations

610366.52 1157865.76

(40) Cash flow statement

1. Cash received with other operating activities concerned

Item Current amount Last-period amount

Government subsidy collected 4688786.13 39297273.00

Intercourse funds collected 13431789.29

Interest income 10929678.85 12982668.91

2. Other cash paid in relation to operation activities

Item Current amount Last-period amount

Hiring intermediary agency fee 769240.68 1231759.70

Board fee 643383.04 588713.32

Rental fees 3850120.43 3762060.05

Communication fee 1215245.44 1532058.32

Fleet cost 1544894.98 1007200.26

Corporate culture fee 466986.30 416397.26

Communication fee 584900.66 555998.52

Environmental protection fee 112454.45 985970.24

Other 11968246.77 16424022.91

Total 21155472.75 26504180.58

3. Cash received from other investment activities

Item Current amount Last-period amount

Repayment of loan from Huidong Serve 800000.00

4. Other cash paid related to investment activities

Item Current amount Last-period amount

The cash difference bewteen the cash balance of

Shen Nan Dian (Dongguan) Weimei Electric Power

Co. Ltd and the cash received from the disposal of

the equity on the date when disposing

12577163.02

5. Other cash received in relation to financing activities

Item Current amount Last-period amount

Margin received 7303338.86

Received a loan from Shenzhen Gas Group Co. Ltd. 170000000.00

Total 170000000.00 7303338.86

Other

6887829.91 4321781.62

Total

22506294.89 70033512.82

(41) Supplementary information to statement of cash flow

1. Supplementary information to statement of cash flow

Supplementary information Current amount Last-period amount

1. Net profit adjusted to cash flow of operation activities

Net profit 52251672.02 -33069503.64

Add: Assets impairment provision

Depreciation of fixed assets 25805403.49 44801828.95

Amortization of intangible assets 485983.65 1232100.02

Amortization of long-term deferred expenses 125971.38 22548.81

Loss from disposing fixed assets intangible assets and

other long-term assets (income)

-828535.66 417926.32

Loss on retirement of fixed assets

Financial expense (income) 18800827.68 23542971.21

Investment loss (income) 33291259.12 677552.37

Decrease of deferred income tax asset( (increase)

Decrease of inventory (increase) 16132545.39 278786.02

Decrease of operating receivable accounts (increase) -18919356.88 4043360.79

Increase of operating payable accounts (decrease) -57209208.73 14269806.04

Net cash flow arising from operating activities 69936561.46 56217376.89

2. Material investment and financing not involved in cash

flow

Debt capitalization

Convertible company bond due within one year

Fixed assets acquired under finance leases

3. Net change of cash and cash equivalents:

Closing balance of cash and cash equivalent 1084903966.81 1029883840.43

Less: Opening balance of cash and cash equivalent 771490000.96 914956611.70

Net increasing of cash and cash equivalents 313413965.85 114927228.73

2. Composition of cash and cash equivalent

Item Book balance

Year-end balance of last

year

I. Cash 324903966.81 381490000.96

Including: Cash on hand 65138.88 84307.60

Bank savings available for payment needed 317274657.16 381339856.01

Other monetary capital available for payment needed 7564170.77 65837.35

Account due from central bank available for payment

Amount due from banks

Amount call loans to banks

II. Cash equivalent 760000000.00 390000000.00

including: bond investment due within three months

III. Balance of cash and cash equivalent at period-end 1084903966.81 771490000.96

Including: Cash and cash equivalent of the parent company

or subsidiaries with use restricted

(42) Foreign currency

1. Foreign currency

Item

Balance of foreign

currency at period-end

Conversion rate

Balance of RMB converted

at period-end

Monetary fund

Including: USD 840153.18 7.08 5947607.19

HKD 976.71 7.96 7775.59

Euro 466204.75 0.91 425833.72

SGD 5558.03 5.08 28242.02

VI. Change of consolidate scope

1. Disposal of subsidiary

Name of

subsidiary

Equity disposal

price

Equity

disposal

ratio

(%)

Equity

disposal

method

Time point

of loss of

control

Basis for

determining the

time point of loss

of control

Consolidated

statement level

corresponding to

disposal price and

disposal

investment enjoys

the difference of

the subsidiary’s net

asset share

Shen Nan

Dian

(Dongguan)

Weimei

Electric

Power Co.Ltd

104980000.00 70%

Assignment

agreement

2020/4/30

The sale has been

approved by the

general meeting of

shareholders more

than 50% of the

disposal payment

has been received

the equity transfer

procedures have

been completed

and the board of

directors has been

completely

replaced

33534881.55

Cont.

Name of

subsidiary

Proportion of

remaining

equity on the

day of loss of

control (%)

Book

value of

remaining

equity on

the date of

loss of

control

Fair value

of the

remaining

equity on

the date of

loss of

control

Gains or

losses

arising from

recalculating

the

remaining

equity at fair

value

Determination

method and main

assumptions of the

fair value of the

remaining equity

on the date of loss

of control

Amount of other

comprehensive

income related

to the equity

investment of

the original

subsidiary that

transferred to

the investment

profit and loss

Shen Nan

Dian

(Dongguan)

Weimei

Electric

Power Co.Ltd

N/A N/A N/A N/A N/A N/A

VII. Equity in other entity

(1) Equity in subsidiaries

1. Composition of the Group

Subsidiary

Main

operation

place

Registration

place

Business

nature

Shareholding ratio

(%)

Acquired way

Directly Indirectly

Shenzhen

Server (note)

Shenzhen Shenzhen Trading 50 Establishment

New Power Shenzhen Shenzhen

Power

generation 75 25 Establishment

Zhongshan

Electric

Power

Zhongshan Zhongshan

Power

generation 55 25 Establishment

Engineering

Company

Shenzhen Shenzhen

Engineering

consulting 60 40 Establishment

Environment

Protection

Company

Shenzhen Shenzhen Engineering 70 30 Establishment

Singapore

Company

Singapore Singapore Trading 100 Establishment

Shenzhen

Storage

Zhongshan Zhongshan Storage 80 Establishment

Syndisome Hong Kong Hong Kong

Exp. & imp.

Trading 100

Under

different

control

Note : The Company holds 50% equity of Shenzhen Server and holds a majority of voting rights in the company's

board of directors at the same time. Therefore the Company has substantive control over it and it is included in

the consolidation scope of the consolidated financial statements.

2. Important non-wholly-owned subsidiary

Subsidiary

Share-holding ratio

of minority (%)

Gains/losses

attributable to

minority in the

Period

Dividend

announced to

distribute for

minority in the

Period

Ending equity of

minority

Zhongshan Electric

Power

20.00 2788481.06 -16079276.55

3. Main finance of the important non-wholly-owned subsidiary

Subsidiar

Ending Balance Year-end balance of last year

Current

assets

Non-curr

ent assets

Total

assets

Current

liability

Non-cu

rrent

liability

Total

liability

Current

assets

Non-curren

t assets

Total assets

Current

liability

Non-curren

t liability

Total

liability

Zhongsha

n Electric

Power

7838334

8.34

51764121

4.85

59602456

3.19

67087228

1.50

554866

4.49

67642094

5.99

67810211.56 529800968.

597611180.0

686312294.

5637673.36 691949968.

Subsidiary

Current amount Last-year amount

Operation Income Net profit

Total

comprehensive

income

Cash flow from

operation

activity

Operation

Income

Net profit

Total

comprehensive

income

Cash flow from

operation

activity

Zhongshan Electric

Power

85765596.92 13942405.29 13942405.29 31248237.34 66364051.74 -11987240.04 -11987240.04 30421274.57

(2) Equity in joint venture and cooperative enterprise

1. Major joint venture and cooperative enterprise

Name

Main

operation

place

Registered

place

Business

nature

Share-holding ratio（%） Accounting

treatment on

investment for

joint venture and

cooperative

enterprise

Directly Indirectly

Huidong Server Huizhou Huizhou

Wharf

operation

40.00

Equity method

2. Financial summary for un-important joint venture or cooperative enterprise

Ending Balance

/Current amount

Year-end balance of

last year /Last-year

amount

Joint venture:

Total book value of the investment 14375580.60 14619203.03

Total numbers measured by

share-holding ratio

—Net profit -243622.43 -677552.37

—Other comprehensive income

—Total comprehensive income -243622.43 -677552.37

VIII. Risks relating to financial instruments

The Company's main financial instruments include equity investment borrowings accounts receivable accounts

payable etc. see details of each financial instrument in related items of this annotation V. The risks associated with

these financial instruments and the risk management policies adopted by the Company to reduce these risks are

described as below. The management of the Company manages and monitors these risk exposures to ensure that

the above risks are controlled within the limit range.The Company uses the sensitivity analysis technique to analyze the possible impact of the risk variable on the

current profit and loss or the shareholders' equity. Since any risk variable rarely changes in isolation and the

correlation existing among the variables shall have a significant effect on the final amount of changes about a

certain risk variable therefore the following proceeds by assuming that the change in each variable is independent.The objective of the Company's risk management is to gain a proper balance between risks and profits minimize

the negative impact of risks on the Company's operating results and maximize the benefits of shareholders and

other equity investors. Based on the risk management objective the basic strategy of the Company's risk

management is to identify and analyze the risks faced by the Company establish appropriate bottom line to bear

the risks and carry out risk management and timely and reliably supervise the risks so as to control the risks within

the limit range.(I) Credit risk

On 30 June 2020 the maximum credit risk exposure that could cause financial loss to the Company is mainly due

to the failure of the other party to fulfill the obligations resulting in losses to the Company's financial assets

including:

Carrying value of financial assets recognized in consolidated balance sheet. As for financial instrument at fair

value carrying value reflects its risk exposure while not the largest risk exposure. The largest risk exposure will

vary as fair value changes in future.In order to bring down credit risk the Company establishes a special working team to take charge of determining

credit limit making credit approval and implementing other monitor procedures to ensure necessary measures are

adopted to collect overdue debts. In addition recovery of each single account receivable is reviewed on each

balance sheet date to ensure adequate bad debt provision is made for unrecoverable amount. Therefore

management believes that the Company has substantially reduced the credit risks it assumes.Our current capital is deposited with highly-rated banks thus credit risk arising from current capital is relatively

low.(II) Market risk

Market risks of financial instruments refers to the risks that the fair value or future cash flow of

such financial instruments will fluctuate due to the changes in market prices including FX risks

interest rate risks and other price risks.

1. Interest rate risk

The Company's cash flow change risk of financial instruments arising from interest rate change is mainly related to

the floating interest rate bank loans (see details in Note V (16);

Interest rate risk sensitivity analysis:

The interest rate risk sensitivity analysis is based on the following assumptions:

Changes in market interest rates affect the interest income or expense of financial instruments with

variable interest rate; For financial instruments with fixed rate by fair value measurement the

changes in market interest rates only affect their interest income or expense; For derivative

financial instruments designated as hedging instruments the changes in market interest rates affect

their fair value and all interest rate hedging prediction is highly effective; Calculate the changes in

fair value of derivative financial instruments and other financial assets and liabilities by using the

cash flow discount method at the market interest rate at the balance sheet date.On the basis of above assumptions in case that other variables keep unchanged the pre-tax effect of possible

reasonable changes in interest rates on current profits and losses and shareholders' equity is as follows:

Rate

changes

Current year Last year

Impact on profit Impact on shareholders’ equity Impact on profit

Impact on

shareholders’ equity

increased

878221.61 800563.02 1177083.56 1139067.58

Rate

changes

Current year Last year

Impact on profit Impact on shareholders’ equity Impact on profit

Impact on

shareholders’ equity

decreased

-878221.61 -800563.02 -1177083.56 -1139067.58

2. FX risks

Foreign exchange risk refers to the risk of losses due to exchange rate changes. The Company’s foreign exchange

risk is mainly related to the US dollar. On 30 June 2020 except for the balance of foreign currency monetary items

of 42. Foreign currency monetary in Note V the assets and liabilities of the Company are RMB balance. The

foreign exchange risk arising from the assets and liabilities of such foreign currency balances may have an impact

on the Company's operating results.(III) Liquidity risk

In managing the liquidity risk the Company keeps the cash and cash equivalents that the management considers to

be sufficient and supervise them so as to meet the Company's operating needs and reduce the impact of

fluctuations in cash flows. The Company’s management monitors the use of bank loans and ensures to comply

with the loan agreement.The Company uses bank loans as the main source of funds.IX. Related party and related party transactions

(1) Parent company of the Group

Share holding proportion of any shareholder of the Company didn't reach 50% and couldn't form a holding

relationship of the Company through any methods. The Company has no parent company.

(2) Subsidiaries of the Company

See details in Note VII. Equity in other entity

(3) Joint venture and affiliated enterprise of the Group

See details in Note VII. Equity in other entity

(4) Other related party

Other related party Relationship with the CompanyShenzhen Energy Group Co. Ltd. (“Shenzhen EnergyGroup” for short)

Legal person holding more than 5% of the company's

Shenzhen Guangju Industrial Co. Ltd. Legal person holding more than 5% of the company's

HONG KONG NAM HOI (INTERNATIONAL)

LTD.

Legal person holding more than 5% of the company's

Shenzhen Capital Co. Ltd. Legal person indirectly holding more than 5% of the

company's shares through Shenzhen Energy Group

Other related party Relationship with the Company

Wanhe Securities Co. Ltd. Other related parties

Shenzhen Energy Group Co. Ltd. Other related parties

Fuel branch of Shenzhen Energy Group Co. Ltd. Other related parties

Shenzhen Energy and Gas Investment Holding Co.Ltd.Other related parties

Directors supervisors and senior management of the

company

Key managers

(5) Receivable/payable items of related parties

1. Receivable

Item Related party

Ending Balance Year-end balance of last year

Book balance Bad debt

provision

Book balance Bad debt

provision

Other account

receivable

Huidong Server 8432761.42 9060361.44

Huidong Server

managed account

13243635.56 13114012.69

Total 21676396.98 22174374.13

X. Government subsidies

(1) Government subsidies related to assets

Type Amount Balance sheet

The amount included in current

gain/loss or loss resulting from

related costs off-setting

Item of the

amount

included in

current

gain/loss or

loss resulting

from related

costs

off-setting

Current

amount

Last amount

Type Amount Balance sheet

The amount included in current

gain/loss or loss resulting from

related costs off-setting

Item of the

amount

included in

current

gain/loss or

loss resulting

from related

costs

off-setting

Current

amount

Last amount

Subsidy for low-nitrogen

transformation

43032780.

Deferred

income

261374.29 251403.55 Other

income

Information

construction

520000.00 Deferred

income

30588.24 30588.24 Other

income

Support fund of recycling economy

for sludge drying

10000000.

Deferred

income

127500.00 127500.00 Other

income

Treasury subsidies for sludge drying 5100000.0

Deferred

income

323501.46 323501.46 Other

income

Special funds for energy

conservation and emission reduction

1530000.0

Deferred

income

57018.66 57018.66 Other

income

Funded of energy efficiency

improvement for electric machine

518400.00 Deferred

income

17280.00 17280.00 Other

income

Subsidy for quality promotion of the

air environment in Shenzhen

70977273.

Deferred

income

2365909.08 1201651.54 Other

income

Total

131678453

.00

3183171.73 2008943.45

(2) Government subsidies related to income

Type Amount

The amount included in

current gain/loss or loss

resulting from related costs

off-setting

Item of the amount

included in current

gain/loss or loss

resulting from

related costs

off-setting

Current

amount

Last

amount

Type Amount

The amount included in

current gain/loss or loss

resulting from related costs

off-setting

Item of the amount

included in current

gain/loss or loss

resulting from

related costs

off-setting

Current

amount

Last

amount

VAT refund 1134065.

1134065.1

1753212.

Other

income

Unemployment insurance refund of affected

enterprises 4171581.28

4171581.2

Other

income

Subsidies for further steady growth of funding

projects 100000.00 100000.00

Other

income

Office housing support funds for listed

companies

1000000.

Other

income

Encourage SMEs to scale up rewards 200000.00

Other

income

Total 5405646.

5405646.4

2953212.

XI. Commitment and Contingency

(1) Major Commitment

Nil

(2) Contingency

Nil

XII. Events Occurring after the Balance Sheet Date

On March 5 and March 23 2020 the Eleventh Extraordinary Meeting of the Company’s Eighth

Board of Directors and the 2020 First Extraordinary General Meeting of Shareholders under the

name of Shenzhen Nanshan Power Co. Ltd (hereinafter referred to as the Company) respectively

reviewed and approved the Proposal on the Agreement to Transfer 70% Equity of Shen Nan Dian

(Dongguan) Weimei Electric Power Co. Ltd." agreeing to transfer 70% equity of Shen Nan Dian

Dongguan Company directly and indirectly held by the company to Shenzhen Gas Group Co. Ltd.

(hereinafter referred to as Shenzhen Gas) at a total price of 104.98 million yuan. According to the

equity transfer agreement signed between the company and Shenzhen Gas after the company

received 40% of equity transfer fund i.e. 59.99 million yuan of Shen Nan Dian Dongguan

Company from Shenzhen Gas Shen Nan Dian Dongguan Company has completed the industrial

and commercial change registration on April 9 2020. Since then the total loan of 300 million

yuan applied by Shen Nan Dian Dongguan Company from Bank of Ningbo Shenzhen Branch and

Industrial Bank Shenzhen Branch has been repaid and the joint guarantee and liability guarantee

provided by the company for the above loan of Shen Nan Dian Dongguan Company has been

lifted; Shen Nan Dian Dongguan Company has fully repaid the principal and interest of the

company's 180 million yuan of financial assistance.On July 2 2020 the company's wholly-owned subsidiary Hong Kong Syndisome Co. Ltd.received the remaining 30% equity transfer payment of 44.99 million yuan from Shenzhen Gas.So far the company has received all the equity transfer payments paid by Shenzhen Gas and the

transfer of 70% equity of Shen Nan Dian Dongguan Company was completed.XIII. Other important events

(1) Segment information

1. Determining basis and accounting policies of reportable segments

According to the Group's internal organization structure management requirements and internal reporting system the

Group's business is divided into three operating segments including power and heat supply fuel oil trade and other

business the Group's management periodically evaluates the operating results of these segments so as to determine

the allocation of resources and assess their performances.Segmental reporting information is disclosed in accordance with the accounting policies and measurement standards

adopted by each segment for reporting to the management the measurement basis keep pace with the accounting and

measurement basis used for preparing financial statements.

2. Financial information of the reportable segment

Item Power supply & heating Fuel trading Other Fuel trading Total

Operation income 492269718.83 535619.08 46696529.61 21351261.31 518150606.21

Operation cost 443625551.12 98068.80 36294452.93 26908636.71 453109436.14

Total assets 3739501185.55 121784714.52 346595525.59 1156333540.24 3051547885.42

Total liabilities 1751424593.52 29386981.49 44802294.92 846135389.63 979478480.30

XIV. Note to main items of financial statements of the Company

(1) Account receivable

1. Age analysis

Account age Book balance Year-end balance of last year

Within one year

61626629.43 31821804.69

1 to 2 years

2 to 3 years

Over 3 years

2889.00 2889.00

Subtotal

61629518.43 31824693.69

Less: Bad debt provision

Total

61629518.43 31824693.69

2. According to accrual method for bad debts

Category

Book balance

Book balance Bad debt provision

Book value

Amount

Proportion

(%)

Amount

Accrual

proportion

(%)

With single

provision for bad

debts

With bad debt

provision accrual

based on similar

credit risk

characteristics of a

portfolio 61629518.43 100.00 61629518.43

Total 61629518.43 100.00 61629518.43

Category

Year-end balance of last year

Book balance Bad debt provision

Book

valueAmou

roportion

(%)

Amount

ccrual

proportion

(%)

With single provision for

Category

Year-end balance of last year

Book balance Bad debt provision

Book

valueAmou

roportion

(%)

Amount

ccrual

proportion

(%)

bad debts

With bad debt provision

accrual based on similar

credit risk characteristics

of a portfolio

31824693.69 100 31824693.69

Total 31824693.69 100 31824693.69

3. No account receivable with single provision for bad debts

Provision for bad debts by portfolio：

Provision by portfolio：

Name

Book balance

Account receivable

Bad debt provision Accrual proportion (%)

With minor

credit risk

61629518.43

Recognition standards and specifications on provisions by portfolio:

The account receivable with provision for bad debts by portfolio mainly refers to the amount from

Shenzhen Power Supply Bureau Co. Ltd etc. which has minor credit risk and no provision for

bad debts.

4. No provision for bad debts in the current period

5. Top 5 receivables at ending balance by arrears party

Total period-end balance of top five receivables by arrears party amounting to 61629518.43 Yuan takes 100

percent of the total account receivable at period-end bad debt provision accrual correspondingly at period-end

amounting as 0 Yuan

6. No accounts receivable terminated recognition due to transfer of financial assets at the

period

(2) Other account receivable

Item Ending Balance Last year-end balance

Interest receivable

Dividend receivable

Item Ending Balance Last year-end balance

Other account receivable 660835522.34 873861071.55

Total 660835522.34 873861071.55

1. Other account receivable

(1) Disclosure by age

Account age Ending Balance Last year-end balance

Within one year

181599583.37 239265595.88

1 to 2 years

262147773.68 89264291.59

2 to 3 years

136709590.00 100729690.00

Over 3 years

107708218.73 471931137.52

Subtotal

688165165.78 901190714.99

Less: Bad debt provision

27329643.44 27329643.44

Total

660835522.34 873861071.55

(2) Disclosure by category

Category

Book balance

Book balance Bad debt provision

Book value

Amount

Proportion

(%)

Amount

Accrual

proportion

(%)

With single

provision for bad

debts

28023159.22 4.07 27329643.44 97.53 693515.78

With bad debt

provision accrual

based on similar

credit risk

characteristics of a

portfolio

660142006.56 95.93 660142006.56

Total 688165165.78 100.00 27329643.44 3.97 660835522.34

Category

Year-end balance of last year

Book balance Bad debt provision

Book value

Amount

Proportion

(%)

Amount

Accrual

proportion

(%)

With single provision

for bad debts

28023159.22 3.11 27329643.44 97.53 693515.78

With bad debt

provision accrual

based on similar

credit risk

characteristics of a

portfolio 873167555.77 96.89 873167555.77

Total 901190714.99 100.00 27329643.44 3.03 873861071.55

With single provision for bad debts:

Name

Book balance

Book amount Bad debt provision Accrual proportion (%) Causes

Huiyang

Kangtai

Industrial

Company

14311626.70 14311626.70 100.00 Un-collectable in excepted

Individual

income tax

2470039.76 2470039.76 100.00 Un-collectable in excepted

Dormitory

amount

receivable

2083698.16 1736004.16 83.31 Some un-collectable in excepted

Personal

receivables

7498997.87 7498997.87 100.00 Un-collectable in excepted

Deposit

receivable

1658796.73 1312974.95 79.15 Some un-collectable in excepted

Total 28023159.22 27329643.44 97.53

Provision for bad debts by portfolio:

Provision by portfolio:

Name Book balance

Other account receivable Bad debt provision Accrual proportion (%)

With minor credit

risk

660142006.56

Recognition standards and specifications on provisions by portfolio:

The Company believes that the credit risk of other account receivable with no impairment in the single assessment

is relatively low no provision for bad debts unless there is evidence that a certain other account receivable is at

greater credit risk.

(3) Accrual of bad debt provision

Bad debt provision

Phases I Phases II Phases III

TotalExpected credit

losses over next

12 months

Expected credit

losses for the

entire duration

(without credit

impairment

occurred)

Expected credit

losses for the

entire duration

(with credit

impairment

occurred)

Balance at year-begin 27329643.44 27329643.44

Book balance of other

account receivable at

year-begin

——Turn to phase II

——Turn to phase III

——Return to Phase II

——Return to Phase I

Current accrual

Current switch back

Rewrite in the period

Write-off in the period

Other changes

Book balance 27329643.44 27329643.44

(4) No provision for bad debts in the current period

(5) No other accounts receivable that had actually written off in the period

(6) By nature

Nature Ending book balance Book balance at last year-end

Dormitory receivables 2083698.16 2083698.16

Deposit receivable 1738810.86 1658796.73

Related party transactions 656170887.94 866978723.13

Personal account 10008932.63 10008932.63

Other 18162836.19 20460564.34

Total 688165165.78 901190714.99

(7) Top 5 other account receivables at period-end listed by arrears party

Name of the company

Relationship

with the

Company

Ending Balance Age

Proportion in

total other

account

receivable(%)

Ending

balance of bad

debt provision

Shen Nan Dian

(Zhongshan) Electric

Power Co. Ltd.Intercourse

funds

648154459.86 0-3 year

Over 3

years

94.19

Huiyang County Kangtai

Industrial Company

Other

14311626.70 Over 3

years

2.08 14311626.70

Shenzhen Shennandian

Turbine Engineering

Technology Co. Ltd.Intercourse

funds

4204379.85

Within 1

year

0.61

Shenzhen Shen Nan

Dian Environment

Protection Co. Ltd.Intercourse

funds

3812048.23

Within 1

year

0.55

Dormitory receivables

Intercourse

funds

2083698.16 Over 3

years

0.30 1736004.16

Total 672566212.80 97.73 16047630.86

(8) No receivables involving government subsidies

(9) No other receivables terminated recognition due to transfer of financial assets

(3) Long-term equity investment

Item Ending Balance Last year-end balance

Book

balance

Impairment

provision

Book value Book balance

Impairment

provision

Book value

Investment

subsidiary

576663800.00 347745035.00 228918765.00 691982849.76 388641684.76 303341165.00

Investment

to joint

venture

and

affiliate

enterprise

Total 576663800.00 347745035.00 228918765.00 691982849.76 388641684.76 303341165.00

1. Investment to subsidiary

The invested

entity

Last year-end

balance

Increase

in the

period

Decrease in the

period

Ending

Balance

Impairment

provision

accrual in

the Period

Period-end

balance of

depreciation

reserves

Shenzhen

Server

26650000.00 26650000.00

New Power

Company

71270000.00 71270000.00

Zhongshan

Electric

Power

410740000.00 410740000.00 347745035.00

Engineering

Company

6000000.00 6000000.00

Weimei

Electric

Power

115319049.76 115319049.76

Singapore

Company

6703800.00 6703800.00

The invested

entity

Last year-end

balance

Increase

in the

period

Decrease in the

period

Ending

Balance

Impairment

provision

accrual in

the Period

Period-end

balance of

depreciation

reserves

Environment

Protection

Company

55300000.00 55300000.00

Total 691982849.76 115319049.76 576663800.00 347745035.00

(4) Operation revenue/operation cost

Item

Current amount Last-period amount

Revenue Cost Revenue Cost

Main business 118119714.73 133626167.32 127282753.58 166390507.99

Other business 27647300.61 4310751.77 38231297.65 5937627.54

Total 145767015.34 137936919.09 165514051.23 172328135.53

XV. Supplementary information

(1) Statement of non-recurring gains/losses

Item Amount Note

Gains and losses from disposal of non-current assets 34363417.21

Tax refund or mitigate due to examination-and-approval

beyond power or without official approval document

Governmental subsidy reckoned into current

gains/losses(not including the subsidy enjoyed in quota or

ration which are closely relevant to enterprise’s normal

business

7621471.38

Capital occupancy expense collected from non-financial

enterprises and recorded in current gains and losses

Income from the exceeding part between investment cost

of the Company paid for obtaining subsidiaries associates

and joint-ventures and recognizable net assets fair value

attributable to the Company when acquiring the investment

Gains and losses from exchange of non-monetary assets

Gains and losses from assets under trusted investment or

Item Amount Note

management

Various provision for impairment of assets withdrew due to

act of God such as natural disaster

Gains and losses from debt restructuring

Enterprise restructuring costs such as expenses for staff

placement integration costs etc

Gains and losses of the part arising from transaction in

which price is not fair and exceeding fair value

Current net gains and losses occurred from period-begin to

combination day by subsidiaries resulting from business

combination under common control

Gains and losses arising from contingent proceedings

irrelevant to normal operation of the Company

Except for effective hedge business relevant to normal

operation of the Company gains and losses arising from fair

value change of tradable financial assets and tradable

financial liabilities and investment income from disposal of

tradable financial assets tradable financial liabilities and

financial assets available for sale

Switch-back of provision of impairment of account

receivable which are treated with separate depreciation test

Gains and losses obtained from external trusted loans

Gains and losses arising from change of fair value of

investment real estate whose follow-up measurement are

conducted according to fair value pattern

Affect on current gains and losses after an one-time

adjustment according to requirements of laws and

regulations regarding to taxation and accounting

Trust fee obtained from trust operation

Other non-operating income and expenditure except for the

aforementioned items -6356.16

Other gains and losses items complying with definition for

non-recurring gains and losses

Impact on income tax -67935.50

Impact on minority shareholders’ equity -19828.93

Item Amount Note

Total 41890768.00

(2) ROE and EPS

Profit in the Period

Weighted average ROE(%)）

EPS

Basic EPS Diluted EPS

Net profit attributable to shareholders of the

listed company

2.57 0.09 0.09

Net profit attributable to shareholders of the

listed company after deducting non-recurring

gains and losses

0.51 0.02 0.02

行情