Final Results
Beijing Datang Power Generation Com
18 March 2004
Beijing Datang Power Generator Co. Ltd.
(A Sino-foreign Joint Stock Limited Company incorporated in the People's Republic of China)
Announcement of 2003 Annual Results
Operating and Financial Highlights
* On-grid electricity amounted to 38.651 million MWh, representing an increase of 29.11% over 2002
* Consolidated operating revenue amounted to approximately Rmb9,951 million, representing an increase of 24.10%
over 2002
* Consolidated net profit amounted to approximately Rmb1,812 million, representing an increase of 28.99% over 2002
* Basic earnings per share amounted to approximately Rmb0.35, representing an increase of approximately Rmb0.08
per share over 2002
* The Board of Directors has recommended a dividend of Rmb0.175 per share for the year ended 31 December 2003
I. Company Results
The Board of Directors of Beijing Datang Power Generation Company Limited (the 'Company') hereby announces the
audited consolidated operating results of the Company and its subsidiaries prepared in conformity with the
International Financial Reporting Standards for the year ended 31 December 2003 (the 'Year'), together with the
audited consolidated operating results of the corresponding period in 2002 (the 'Previous Year') for comparison.
Such operating results have been reviewed and confirmed by the Company's Audit Committee.
Consolidated operating revenue of the Company and its subsidiaries for the Year was approximately Rmb9,951
million, representing an increase of approximately 24.10% as compared to the Previous Year. Consolidated net
profit of the Company and its subsidiaries increased by approximately 28.99% as compared to the Previous Year.
Basic earnings per share amounted to approximately Rmb0.35, representing an increase of approximately Rmb0.08 per
share as compared to the Previous Year.
In view of the operating results, the Board of Directors has recommended a dividend of Rmb0.175 per share for the
Year.
Please refer to the audited consolidated income statement set out below for details of the operating results.
CONSOLIDATED INCOME STATEMENT
Note 2003 2002
Rmb'000 Rmb'000
Operating revenue 2 9,950,564 8,017,912
Operating costs
Local government surcharges (125,390 ) (102,012 )
Fuel (3,165,103 ) (2,556,173 )
Depreciation (1,643,530 ) (1,382,613 )
Repair and maintenance (405,770 ) (278,085 )
Wages and staff welfare (631,015 ) (544,514 )
Others (824,075 ) (716,957 )
Total operating costs (6,794,883 ) (5,580,354 )
Operating profit 3,155,681 2,437,558
Share of profit of associates 16,979 5,499
Interest income 41,395 89,314
Finance costs 3 (356,541 ) (522,145 )
Profit before taxation 2,857,514 2,010,226
Taxation 4 (988,947 ) (672,156 )
Profit before minority interests 1,868,567 1,338,070
Minority interests (56,768 ) 66,542
Net profit 1,811,799 1,404,612
Proposed dividends 5 903,499 619,542
Earnings per share
- basic (Rmb) 6 0.35 0.27
- diluted (Rmb) 6 0.35 N/A
Proposed dividend per share (Rmb) 5 0.175 0.120
Notes
1. Basis of presentation
The accompanying consolidated income statement was extracted from the consolidated financial statements
prepared in accordance with International Financial Reporting Standards, including International
Accounting Standards and Interpretations issued by the International Accounting Standards Board.
The principal accounting policies adopted for the preparation of the consolidated financial statements for
the year ended 31 December 2003 are consistent with those adopted for the preparation of the financial
statements for the year ended 31 December 2002.
2. Operating revenue
Substantially all operating revenue represents amount of tariffs billed for electricity generated and
transmitted to the respective regional or provincial power companies. Operating revenue is billed and
recognised upon transmission of electricity and heat to the customers.
2003 2002
RMB'000 RMB'000
Electricity 9,947,733 8,017,912
Heat 2,831 -
9,950,564 8,017,912
3. Finance costs
2003 2002
RMB'000 RMB'000
Interest expenses 308,878 282,478
Fair value loss on interest rate swap (note a) 53,636 240,224
Exchange gain, net (5,973 ) (557 )
356,541 522,145
(a) To hedge against its interest rate risk on long-term loans, Inner Mongolia Datang Tuoketuo Power
Generation Company Limited ('Datang Tuoketuo Power'), a subsidiary of the Company, has entered into
an interest rate swap contract, which is carried at fair value. However, since the swap does not
meet the definitions of an effective hedge under IAS 39, the change in its fair value is included in
the income statement.
4. Taxation
2003 2002
RMB'000 RMB'000
PRC enterprise income tax
- Current tax 919,398 764,130
- Deferred tax 69,549 (91,974 )
988,947 672,156
The applicable PRC enterprise income tax rate for the Company and its subsidiaries is 33%, except for
Datang Tuoketuo Power and Hebei Huaze Hydropower Development Company Limited ('Datang Fengning
Hydropower'). Pursuant to document Guo Ban Fa (2001) 73 issued by State Council of PRC and approved by the
local tax authorities in late 2003, Datang Tuoketuo Power was granted a tax concession to pay PRC income
tax at a preferential rate of 15% until 2011. In addition, pursuant to document Feng Zheng (1996) 51 issued
by the local government, all the enterprise income tax paid by Datang Fengning Hydropower is refunded for
ten years starting from 2002.
5. Profit appropriation
Dividends
On 17 March 2004, the Board of Directors proposed a dividend of Rmb0.175 per share, totalling approximately
Rmb903,499,000 for the year ended 31 December 2003. The proposed dividends distribution is subject to the
shareholders' approval in their next general meeting.
On 3 March 2003, the Board of Directors proposed a dividend of Rmb0.12 per share, totalling approximately
Rmb619,542,000 for the year ended 31 December 2002. The proposed dividends distribution was approved by the
shareholders in the general meeting dated 10 July 2003.
Reserves
In accordance with the relevant laws and regulations of the PRC and the Company's articles of association,
the Company and its subsidiaries are required to appropriate 10% of its net profit determined based on the
financial statements prepared in accordance with the PRC accounting standards and regulations to each of
the statutory surplus reserve and statutory public welfare fund respectively. Approximately Rmb204,538,000
(2002 - Rmb156,541,000) and Rmb201,130,000 (2002 - Rmb156,541,000) have been appropriated to statutory
surplus reserve and statutory public welfare fund respectively for the year ended 31 December 2003.
The appropriation of profit to the discretionary surplus reserve and its utilisation are made in accordance
with the recommendation of the Board of Directors and is subject to shareholders' approval at their general
meeting. Appropriation of profit of approximately Rmb509,077,000 (2002 - Nil) to the discretionary surplus
reserve for the year ended 31 December 2003 is subject to shareholders' approval at their next general
meeting.
6. Earnings per share
The calculation of basic earnings per share for the year ended 31 December 2003 was based on the net profit
of approximately Rmb1,811,799,000 (2002 - Rmb1,404,612,000) and on the weighted average number of
5,162,849,000 shares (2002 - 5,162,849,000 shares) in issue during the year ended 31 December 2003.
The diluted earnings per share is calculated adjusting the weighted average number of ordinary shares
outstanding to assume conversion of all dilutive potential ordinary shares. The convertible debt is assumed
to have been converted into ordinary shares and the net profit is adjusted to eliminate the interest
expenses less the tax effect. No diluted earnings per share have been presented for the year ended 31
December 2002 as there were no dilutive potential ordinary shares outstanding by then.
2003
Net profit attributable to shareholders (Rmb'000) 1,811,799
Interest expense on convertible bond (net of tax) (Rmb'000) 11,587
Net profit used to determine diluted earnings per share (Rmb'000) 1,823,386
Weighted average number of ordinary share in issue (shares in thousands) 5,162,849
Adjustments for assumed conversion of convertible bond (shares in thousands) 66,813
Weighted average number of ordinary shares for diluted earnings per share
calculation (shares in thousands) 5,229,662
Diluted earnings per share (Rmb) 0.35
II. Management Discussion and Analysis
China achieved GDP growth of approximately 9.10% during the Year. Driven by domestic economic growth, power
demand in China increased substantially. The nationwide power generation increased by approximately 15.41% over
the Previous Year. Total power generation of the Company and its subsidiaries during the Year increased by
approximately 28.44% over the Previous Year. Consolidated operating revenue increased by approximately 24.10%
over the Previous Year.
1. Production
As at 31 December 2003, the installed capacity (managed capacity) of operating units owned by the Company and its
subsidiaries was 7,810 MW. Total power generation of the Company and its subsidiaries for the Year amounted to
approximately 41.196 million MWh, representing an increase of approximately 28.44% over the Previous Year. Total
on-grid electricity amounted to approximately 38.651 million MWh, representing an increase of approximately
29.11% over the Previous Year. The increase in power generation and on-grid electricity was mainly attributable
to: (1) the continuous increase in power demand - the nationwide power consumption increased by approximately
15.40% for the Year; (2) the increase in power generation capacity - with four units put into operation during
the Year, the installed capacity managed by the Company and its subsidiaries increased by 1,640 MW over the
Previous Year; (3) safe and stable operation of existing units at high operating levels - the equivalent
availability factor reached approximately 93.30% during the Year; and (4) secured fuel supply - the increase in
power demand during the Year driven by substantial economic growth had resulted in tension in coal supply. Under
these unfavourable conditions, the Company and its subsidiaries proactively coordinated to further enhance
effective resource allocation; actively identified new sources of coal supply and work closely with the mining
and railway authorities. With the adoption of these effective measures, the Company and its subsidiaries have
secured sufficient coal supply for their power plants and ensured their normal operation.
Operating conditions of the Company and its subsidiaries' major power plants during the Year were as follows:
* The power generation of the Company's power plants, namely Gao Jing Power Plant, Dou He Power Plant, Zhang
Jia Kou Power Plant and Xia Hua Yuan Power Plant, with a total installed capacity of 4,950 MW, was
approximately 30.104 million MWh during the Year.
* The power generation of units 1 and 2 of Tianjin Datang Panshan Power Generation Company Limited ('Datang
Panshan Power'), a subsidiary of the Company, with total installed capacity of 1,200 MW, was approximately
7.204 million MWh during the Year.
* The power generation of units 1 and 2 of Datang Fengning Hydropower, a subsidiary of the Company, with a
total installed capacity of 20MW, was approximately 26 million KWh during the Year.
* Units 1 and 2 (2x600 MW) of Datang Tuoketuo Power, a subsidiary of the Company, were put into operation in
June and July of the Year, respectively. The power generation of these units for the Year was
approximately 3.593 million MWh. The commissioning of Units 1 and 2 coincided with the peak summer season.
These units, being the only new units in the Beijing-Tianjin-Tangshan ('BTT') Power Grid when there is
heavy power demand in summer, played an important role in ensuring no power supply rationing in the BTT
Grid area and the city of Beijing during summer.
* Units 1 and 2 (2x220 MW) of Shanxi Datang Yungang Thermal Power Company Limited (formerly named as Shanxi
Datang Pingwang Thermal Power Company Limited) ('Datang Yungang Thermal Power'), a subsidiary of the
Company, were put into operation in November and December of the Year, respectively. The total power
generated by these units for the Year was approximately 269 million KWh.
While endeavouring to increase power generation, the Company also put a strong emphasis on the implementation of
environmental protection improvement projects in accordance with state environmental protection requirements. The
focus of the Company's environmental protection measures during the Year was desulphurisation. Currently, the
desulphurisation plan for Zhang Jia Kou Power Plant has been confirmed, while tendering of the 3,800 MW
desulphurisation projects for a total of 12 boilers at Dou He Power Plant, Gao Jing Power Plant and Hebei Datang
Tangshan Thermal Power Company Limited ('Datang Tangshan Thermal Power') have also been completed. Amongst these,
the desulphurisation projects at Dou He Power Plant and Tangshan Thermal Power have already commenced, while the
project design of the desulphurisation project plan for Gao Jing Power Plant has been approved and ready for
commencement. The Company invested a total of approximately Rmb100 million in environmental protection projects
during the Year.
2. Operational Management
The Company and its subsidiaries achieved consolidated operating revenue of approximately Rmb9,951 million during
the Year, representing an increase of approximately 24.10% over the Previous Year. The increase in operating
revenue was mainly attributable to the increase in on-grid electricity by the Company and its subsidiaries.
During the Year, the Company and its subsidiaries achieved consolidated net profit of approximately Rmb1,812
million, representing an increase of 28.99% as compared to the Previous Year.
The substantial increase in the consolidated net profit of the Company and its subsidiaries for the Year was
mainly attributable to the increase in the on-grid electricity of the Company and its subsidiaries, as well as
the continued stringent cost control measures, the implementation of rigorous economic-target accountability
system and diligent verification of financial budgets adopted by the Company and its subsidiaries. With the
increase in power demand, coal supply was tight and fuel prices were on the rise throughout the Year. Under such
unfavourable conditions, in addition to the measures taken to ensure stable coal supply, the Company and its
subsidiaries also made appropriate adjustments to the structure of power generation. With the two 600 MW
generation units of Datang Tuoketuo Power with lower fuel operating costs put into operations and other measures
taken, the Company was able to control the fuel prices increase within a relatively low level. Meanwhile, the
Company and its subsidiaries continued to implement effective energy conservation measures and improve the
operating efficiencies of its generating units which resulted in coal consumption rate being 3.75 gm/kWh lower
than that of the Previous Year, while weighted average self consumption rate of the plants dropped by
approximately 0.49% as compared to the Previous Year. Accordingly, the unit fuel cost of the Company and its
subsidiaries' generating units were reduced by approximately Rmb3.33 / MWh as compared to the Previous Year.
During the Year, the Company successfully issued 5-year convertible bond amounting to US$153.8 million at an
annual coupon interest rate of 0.75%, reflecting the Company's strong financing ability.
3. Business Expansion
The construction projects of the Company and its subsidiaries progressed smoothly during the Year. Two 600 MW
units (a total of 1,200 MW) of Datang Tuoketuo Power and two 220 MW units (a total of 440 MW) of Datang Yungang
Thermal Power were put into operation during the Year. Breakthroughs were achieved in both construction and
pre-construction projects to ensure continued growth in the production capacity of the Company and its
subsidiaries. Major business expansion of the Company and its subsidiaries is as follows:
(1) Units 1 and 2 (2x600 MW) of Datang Tuoketuo Power were put into operation in June and July, respectively,
during the Year. The interval of 50 days between the commissioning of the two units set a new record for
similar units in North China area.
(2) Units 1 and 2 (2x220 MW) of Datang Yungang Thermal Power were put into operation in November and December
of the Year, respectively. It took less than 20 months for the two units to start generating power since
the commencement of their foundational works, setting a new record of construction progress for
large-scale domestic direct air-cooling units in cold regions.
(3) The construction works of the Company's subsidiaries progressed smoothly during the year:
* Units 3 and 4 (2x600 MW) of Datang Tuoketuo Power are under construction and scheduled to put into
operation in 2004.
* Unit 1 of the technological upgrade project (2x300 MW thermal power units) of Datang Tangshan Thermal
Power was put into operation in the first quarter of 2004, and Unit 2 is expected to be put into
operation in the fourth quarter of 2004.
* The two 500 MW units of Shanxi Datang Shentou Power Generation Company Limited ('Datang Shentou
Power') are under construction, and the first unit is expected to start generating power in 2004.
* The two 300 MW units of Gansu Datang Liancheng Power Generation Company Limited ('Datang Liancheng
Power') are under construction, and the first unit is expected to start generating power in 2004.
* Yunnan Datang Honghe Power Generation Company Limited ('Datang Honghe Power') has obtained approval
from the National Development and Reform Commission ('NDRC') for its construction commencement report
of the two 300 MW coal-fired units. Official construction is scheduled to begin in 2004.
(4) Pre-construction works progressed effectively, of which:
* Preparations for the construction of Units 5 and 6 of Datang Tuoketuo Power were underway and the
project proposal had been submitted to NDRC for approval.
* The feasibility study report for the development, construction and operation of Yunnan Nalan
Hydropower Project (3x50 MW hydropower units) by Yunnan Datang Nalan Hydropower Development
Company Limited has been approved by Yunnan Provincial Planning and Development Commission and
preparations for construction are underway.
* The construction commencement report for Yayangshan Hydropower Project (2x50 MW), to be developed,
constructed and operated by Yunnan Datang Lixianjiang Hydropower Development Company Limited has
obtained approval from the Yunnan Provincial Planning and Development Commission. Preparations for
construction, in particular for power stations in Longma, Jufudu, Gelantan and Tukahe along
Lixianjiang are underway.
* The development right for Zhejiang Wushashan Power Generation Project located in Wushashan of
Zhejiang Province has been obtained in the Year. Preparations for the construction of four 600 MW
coal-fired units are underway.
* Chongqing Datang Pengshui Hydropower Development Company Limited, invested by the Company and
other shareholders, was established on 28 August 2003 to construct five 350 MW hydropower units in
the downstream area of Wujiang, Pengshui County, Chongqing City. Preparations for the construction
are underway.
The Company has also started preliminary development works in areas where it has market advantage, such
as Guangdong, Fujian, Zhejiang and Jiangsu provinces.
While actively expanding its business, the Company also put a lot of efforts in ensuring high quality
of its construction projects which is the cornerstone of smooth operation of the units and successful
amidst market competition in the future. At the beginning of 2004, units 7 and 8 of Zhang Jia Kou Power
Plant and Unit 1 of Datang Panshan Power won the silver award of The Nation's Best Quality Projects
2003 from The Nation's Quality Projects Awards Assessment Committee.
4. Financial Analysis
(1) Operating Results
The Company and its subsidiaries achieved consolidated net profit of approximately Rmb1,812 million representing an
increase of approximately 28.99% over the Previous Year. Basic earnings per share was approximately Rmb0.35,
representing an increase of approximately Rmb0.08 per share over the Previous Year.
* Operating revenue: consolidated operating revenue of the Company and its subsidiaries for the Year
amounted to approximately Rmb9,951 million, representing an increase of approximately 24.10% over the
Previous Year. The increase in consolidated operating revenue was mainly resulted from increase in
on-grid electricity.
* Operating costs: consolidated operating costs of the Company and its subsidiaries for the Year
amounted to Rmb6,795 million, representing an increase of approximately 21.76% over the Previous Year.
Among which, fuel costs were approximately Rmb3,165 million, 23.82% higher as compared to the Previous
Year. Increase in fuel costs was mainly resulted from the increase in on-grid electricity. However,
unit fuel cost for the Year was lowered by approximately Rmb3.33/MWh, which was caused by the
commissioning of large units with larger capacities, lower consumption rates and lower costs.
Depreciation of fixed assets for the Year increased by approximately 18.87% as compared to the
Previous Year mainly because of additional depreciation of Datang Panshan Power unit 2 for additional
half-year and the generation units of Datang Tuoketuo Power and Datang Yungang Thermal Power which
were put into operation during the Year.
* Finance costs: Finance costs for the Year decreased by approximately 31.72% as compared to the
Previous Year, which was mainly attributable to a reduction of fair value loss for interest rate swap
by approximately Rmb187 million as compared to the Previous Year.
(2) Financial Position
As at 31 December 2003, total consolidated assets of the Company and its subsidiaries amounted to approximately
Rmb35,544 million, representing an increase of approximately Rmb8,724 million over the Previous Year. Total
consolidated liabilities amounted to approximately Rmb18,582 million, representing an increase of approximately
Rmb7,049 million over the Previous Year. Minority interests amounted to approximately Rmb1,241 million, representing an
increase of approximately Rmb333 million over the Previous Year. Shareholders' equity amounted to approximately
Rmb15,721 million, representing an increase of approximately Rmb1,342 million over the Previous Year. The increase in
total assets mainly resulted from the implementation of the expansion strategy by the Company and its subsidiaries and
the corresponding increase in investments in construction-in-progress.
(3) Liquidity
As at 31 December 2003, the asset-to-liability ratio (i.e. the ratio between total liabilities and total assets,
excluding minority interests) for the Company and its subsidiaries was approximately 52.28%. The net debt-to-equity
ratio (i.e. (total loans + convertible bond - cash and cash equivalents - bank deposits - quoted securities) /
shareholders' equity) was approximately 61.07%.
As at 31 December 2003, total cash and cash equivalents and bank deposits with a maturity of over 3 months of the
Company and its subsidiaries amounted to approximately Rmb5,428 million, among which the equivalent of approximately
Rmb2,035 million was in foreign currency. The Company and its subsidiaries had no entrusted deposits or overdue fixed
deposit during the Year.
As at 31 December 2003, short-term loans of the Company and its subsidiaries was approximately Rmb2,861 million and
bore annual interest rates ranging from 2.88% to 4.78%. Long-term loans (excluding those due within 1 year) amounted to
approximately Rmb10,306 million and long-term loans due within 1 year amounted to approximately Rmb829 million at
annual interest rates ranging from 1.30% to 5.76%, of which equivalent to approximately Rmb2,776 million was
denominated in United States Dollars. The convertible bond was denominated in United States Dollars and equivalent to
Rmb 1,032 million. The Company and its subsidiaries pay regular and active attention to foreign exchange market
fluctuations and constantly assess foreign currency risks.
As at 31 December 2003, former North China Power Group Company ('NCPGC', currently known as North China Grid Company
Limited) and some minority shareholders of Company's subsidiaries provided guarantee for the loans of the Company and
its subsidiaries amounting to approximately Rmb6,096 million. The Company had not provided any guarantee in whatever
forms for any other company apart from its subsidiaries.
5. Outlook for 2004
It is forecasted that China will continue to achieve steady economic growth in 2004. Nationwide power consumption is
expected to grow by approximately 12%. Tension in power supply provides new business opportunities to the Company and
its subsidiaries. The Company and its subsidiaries will expand their business across the nation in addition to the
continued development in the Service Area. The Company will actively develop, construct, operate and manage large-scale
power plants in various regions to expand its market share nationwide and to improve its ability to counteract against
risks and pursue sustainable development. NDRC has announced a new tariff policy, according to which the on-grid
tariffs for electricity sold to provincial or higher level power grids by coal-fired units were increased by Rmb7/MWh
(tax inclusive) from 1 January 2004. The previous year's average tariff of the relevant provincial power grid will be
adopted as the tariff of the newly operating units. With the implementation of the new tariff policy, and more new
units being put into operation over the years, the profit of Company and its subsidiaries will increase steadily. On
the other hand, there are also unfavourable conditions in 2004: the increase in fuel prices and the increasingly
stringent environmental protection requirements may affect the Company's profitability. The Company will further
enhance its management standards to overcome the challenges of such adverse factors and achieve competitive advantages
in the future competitive bidding power market. The Company's work focus in 2004 includes:
1. Actively pursue business expansion, continue pre-construction works and identify as well as create
development opportunities;
2. Actively identify different financing channels that would help lower the Company's capital costs and
appropriately rationalise its capital structure to prepare for the future financing requirements
arising from the Company's rapid business expansion;
3. Continue to enhance its construction works to ensure Units 3 and 4 of Datang Tuoketuo Power (2x600 MW),
Units 1 and 2 of Datang Tangshan Thermal Power (2x300 MW), Unit 1 of Datang Shentou Power (500 MW) and
Unit 1 of Datang Liancheng Power (300 MW) will be put into operation in 2004, and also to strive to
control project costs and ensure project quality so as to provide solid foundations for enhancing the
Company's competitiveness in future.
4. Improve the overall safety standard of all the generating units by enhancing scientific and
standardised production management, strengthening repair and maintenance, and technical management with
special emphasis on appropriate arrangements of overhaul programmes to improve the quality of repair
and maintenance works, and enhancing maintenance of equipment to eliminate defects and hazards that
might affect the safe and stable operation;
5. Ensure fuel supply for the Company and its subsidiaries' operating plants by enhancing fuel management
and procurement, optimising allocation of coal resources and railway transport capacity, effectively
handling external coordination with mining and rail authorities; and organising deployment plans for
coal;
6. Enhance efforts in cost management and explore new sources for revenue and opportunities for cost
saving, secure growth in sales revenue by increasing power generation, raising tariffs and optimising
on-grid electricity structures.
III. Share Capital and Dividends
(1) Share Capital
No new shares were issued by the Company during the Year. As at 31 December 2003, the total share capital of the
Company was 5,162,849,000 shares, divided into 5,162,849,000 shares of Rmb1.00 each.
(2) Substantial Shareholders
During the Year, the following persons (other than a director, chief executive or supervisor of the Company) have
interests or short positions in the shares or underlying shares as recorded in the register required to be kept by the
Company pursuant to section 336 of the Securities and Futures Ordinance (Chapter 571):
Percentage of
share capital
Name of shareholder Class of shares Number of shares held (%)
China Datang Corporation
('China Datang') Domestic Shares* 1,828,768,200 35.43
Beijing International Power
Development and Investment
Company Domestic Shares* 671,792,400 13.01
Hebei Construction Investment
Company Domestic Shares* 671,792,400 13.01
Tianjin Jinneng Investment Company Domestic Shares* 559,827,000 10.84
* Shareholder's own interest in the long position
(3) Dividends
The Board of Directors has declared dividends of Rmb0.175 per share for the Year. Dividends to be distributed
to domestic shareholders will be declared and paid in Rmb, while those to be distributed to foreign
shareholders will be declared in Rmb but paid in Hong Kong Dollar. Hong Kong Dollar exchange rate for the
purpose of dividends payment shall be based on the average of the closing rates of the Hong Kong Dollar/Rmb
exchange rates quoted by the People's Bank of China on each business day within the week immediately prior to
payment. The dividends will be paid on 30 June 2004.
(4) Shareholdings of Directors and Supervisors
During the Year, none of the directors, supervisors, senior executives or their connected parties held or effectively
owned any interests or short position in the shares, underlying share or debenture of the Company or any of its
associated corporations (as defined in the Securities and Futures Ordinance), nor were they granted any rights to
subscribe for or acquire any share or debt equity of the Company or any of its associated corporations.
IV. Significant Events
(1) Authorised by shareholders' general meeting, the board of directors completed the issuance of 5-year US
Dollar convertible bond of US$153.8 million at a coupon interest rate of 0.75% per annum in September
2003. The initial conversion price is HK$5.558 per share, subject to adjustment in accordance with terms
and conditions governing the issue.
(2) China Datang, entered into the Power Generating Enterprises Allocation and Transfer Agreement (the
'Agreement') with NCPGC on 15 January 2004, pursuant to which 35.43% equity in the Company and the
corresponding assets, liabilities and guarantees formerly owned by NCPGC were transferred to China
Datang with retrospective effect from 1 January 2003.
(3) On 5 August 1996, the Company entered into the Ash Disposal Agreement and the Buildings Lease Agreement
with its former shareholder, NCPGC, in respect of the provision of ash disposal services and the leasing
of buildings by NCPGC to the Company. The Stock Exchange of Hong Kong Limited had granted a waiver to
the Company in respect of these transactions to comply with the disclosure requirements under the
Listing Rules. On 16 March 2004, the Company, China Datang and NCPGC entered into a variation agreement
in respect of the Ash Disposal Agreement and the Building Lease Agreement whereby China Datang has been
substituted in place of NCPGC as the contractual party of such agreements. The aforesaid parties agreed
that NCPGC shall have transferred all the rights and obligations under the Ash Disposal Agreement and
the Building Lease Agreement to China Datang retrospectively from 1 January 2003.
V. Purchase, Sale and Redemption of the Company's Listed Securities
During the Year, the Company has not purchased, sold or redeemed any of its listed securities.
VI. Code of Best Practice
During the Year, the Company has complied with the Code of Best Practice set out in Appendix 14 of the Listing
Rules of The Stock Exchange of Hong Kong Limited.
By Order of the Board
Zhai Ruoyu
Chairman
Beijing, the People's Republic of China, 17 March 2004
The 2003 annual report of the Company containing all the information required by paragraphs 45(1) to 45(3) of Appendix
16 of the Listing Rules will be published on the website of The Stock Exchange of Hong Kong Limited in due course.
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