Datang Intl H Regulatory News (DAT)

17 Nov 2006 07:00

Datang Intl Power Generation Co Ld17 November 2006 Datang International Power Generation Co., Ltd (a sino-foreign joint stock limited company incorporated in the People's Republic of China) (Stock Code: 991) PROPOSED A SHARES ISSUE SUMMARY The Board would like to announce that the Company has submitted to the CSRC adraft prospectus for the A Shares Issue in respect of the Company's proposedplan of issuing A Shares. The consolidated financial information of the Groupfor the Relevant Periods prepared under the PRC GAAP will be contained in theprospectus for the A Shares Issue, of which a draft has been announced on theCSRC website and made available for the public starting from the afternoon of 16November 2006. In accordance with the announcement on the CSRC website, thePublic Offering Review Committee of CSRC will convene a meeting on 21 November2006 to consider and review the Company's application of the A Shares Issue. To enable Shareholders and investors to better understand the materialdifferences between the consolidated financial information of the Group for theRelevant Periods prepared under IFRS and those prepared under PRC GAAP, thisannouncement presents the consolidated financial information of the Group forthe Relevant Periods prepared under PRC GAAP and a reconciliation of the NetProfit/Net Assets, each attributable to equity holders of the Company preparedunder PRC GAAP to those prepared under IFRS. 1. PROPOSED A SHARES ISSUE Reference is made to the announcements dated 6 May 2004, 4 May 2005 and 19 April2006 issued by the Company and the Company's circulars dated 27 May 2004, 25May 2005 and 3 May 2006 in respect of the Company's intention to apply to theCSRC for the proposed A Shares Issue. The aggregate amount of the proposed A Shares Issue will not exceed 500,000,000A Shares, of which not more than 150,852,380 A Shares and 46,179,300 A Shareswill be strategically placed to CDGC and TJIC, respectively. The remaining AShares following the strategic placements to CDGC and TJIC will be sold by wayof a combination of placing off- line to target placees with price consultationthrough book-building and on-line subscription. CDGC and TJIC have alreadycommitted in writing that they will subscribe to the shares in full and by cashaccording to the determined price of the public offering. The offer price range for the A Shares Issue will be determined through priceconsultation with the targets for price consultation. Price consultation will beconducted through a book-building process among placement targets within theoffer price range. The offer price will be determined by the results of theprice consultation through book-building and the market conditions. The A Shares Issue is subject to the approval of the relevant regulatoryauthorities including the CSRC. As such, as at the date of this announcement, noguarantee could be made that the A Shares Issue will be approved by the relevantregulatory authorities and will proceed. Shareholders and investors are advisedto act cautiously when trading in the H Shares. The Company will disclose the relevant information in respect of the approval,offer price, offer time and other details of the A Shares Issue simultaneouslyin the PRC and in the newspapers of Hong Kong in accordance with the ListingRules. The exact timing of the A Shares Issue is subject to the relevant approvalobtained by the Company and the market conditions, but will be carried out assoon as possible. The consolidated financial information of the Group prepared under PRC GAAP forthe Relevant Periods will be contained in the prospectus for the A Shares Issue,of which a draft has been announced on the CSRC website and made available forthe public starting from the afternoon of 16 November 2006. In accordance withthe announcement on the CSRC website, the Public Offering Review Committee ofCSRC will convene a meeting on 21 November 2006 to consider and review theCompany's application of the A Shares Issue. 2. CONSOLIDATED FINANCIAL INFORMATION OF THE GROUP FOR THE RELEVANT PERIODSPREPARED UNDER PRC GAAP AND A RECONCILIATION OF THE NET PROFIT/NET ASSETS, EACHATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY PREPARED UNDER PRC GAAP TO THOSEPREPARED UNDER IFRS To enable Shareholders and investors to better understand the materialdifferences between the consolidated financial information of the Group for theRelevant Periods prepared under IFRS and those prepared under PRC GAAP, thisannouncement presents the consolidated financial information of the Group forthe Relevant Periods prepared under PRC GAAP and a reconciliation of the NetProfit/Net Assets, each attributable to equity holders of the Company preparedunder PRC GAAP to those prepared under IFRS. (The consolidated accounts of theGroup for the years ended 31 December 2003, 2004 and 2005 prepared in accordancewith IFRS were audited by PricewaterhouseCoopers, and unqualified opinions wereissued thereof. The figures for the 6 months ended 30 June 2006 prepared inaccordance with IFRS were unaudited. The consolidated accounts for the yearsended 31 December 2003, 2004 and 2005, and for the six months ended 30 June 2006prepared in accordance with PRC GAAP have been audited by PricewaterhouseCoopersZhong Tian CPAs Limited Company, and standard unqualified opinions were issuedthereof.) Consolidated Balance Sheet(All amounts expressed in thousands of Rmb) 30 June 31 December 31 December 31 December 2006 2005 2004 2003ASSETSCURRENT ASSETS Cash and cash equivalents 1,259,637 1,029,339 3,672,428 5,427,558 Short-term investment - - - - Notes receivable 10,891 64,829 - - Dividends receivable 1,200 - - - Interest receivable 19 - - - Accounts receivable 2,169,896 1,409,528 1,289,931 1,035,870 Other receivables 337,075 289,605 121,687 101,227 Prepayments 287,023 202,695 102,956 34,350 Government grants - - - - Inventories 892,014 693,019 442,615 342,834 Deferred expenses 1,934 - - - Current portion of long-term debt investments - - - - Other current assets - - - - Total current assets 4,959,689 3,689,015 5,629,617 6,941,839 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -LONG-TERM INVESTMENTS Long-term equity investments 1,538,356 1,099,609 851,115 380,055 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Long-term debt investments - - - - Total long-term investments 1,538,356 1,099,609 851,115 380,055 Including: Consolidated difference in value 54,388 - - -FIXED ASSETS Fixed assets, cost 57,188,467 43,631,437 33,526,477 26,801,352 Less: accumulated depreciation (13,947,900 ) (12,128,849 ) (9,523,176 ) (7,555,682 ) Fixed assets, net 43,240,567 31,502,588 24,003,301 19,245,670 Less: Provision for impairment of fixed assets - - - - Fixed assets, net book value 43,240,567 31,502,588 24,003,301 19,245,670 Leasehold improvement - - - - Construction materials 5,505,985 8,910,939 7,386,327 3,435,979 Construction-in-progress 17,435,531 18,539,978 10,865,397 4,926,680 Disposal of fixed assets 215 - - - Total fixed assets 66,182,298 58,953,505 42,255,025 27,608,329 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -INTANGIBLE AND OTHER ASSETS Intangible assets 429,831 353,460 276,176 275,884 Long-term deferred expenses 100,351 177,720 107,644 23,848 Other long-term assets - - 100,000 100,000 Total intangible and other assets 530,182 531,180 483,820 399,732 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -DEFERRED TAX Deferred tax assets - - - - TOTAL ASSETS 73,210,525 64,273,309 49,219,577 35,329,955 LIABILITIES AND SHAREHOLDERS' EQUITYCURRENT LIABILITIES Short-term loans 8,003,766 5,717,280 5,979,560 2,860,834 Notes payable 186,002 - - - Accounts payable 5,959,080 4,079,501 2,971,467 2,001,873 Advance from customers - - - - Salary payable 121,350 100,000 3,605 3,350 Welfare payable 54,066 46,718 68,817 59,544 Interest payable 86,189 94,430 72,095 49,272 Dividends payable - - - 219,452 Taxes payable 406,305 366,608 509,551 534,038 Other levies payable 9,271 11,233 6,532 11,570 Other payables 520,636 264,245 218,546 218,598 Accrued expenses 83,927 - - - Provisions - - - - Deferred income - - - - Current portion of long-term loans 2,159,715 2,488,884 1,106,875 829,209 Other current liabilities - - - - Total current liabilities 17,590,307 13,168,899 10,937,048 6,787,740 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -LONG-TERM LIABILITIES Long-term loans 33,579,554 29,215,217 17,949,062 10,306,487 Bonds payable 1,232,553 1,244,099 1,275,912 1,275,912 Long-term payables - - - - Government grants 210,942 210,942 170,177 138,928 Other long-term liabilities - - - - Total long-term liabilities 35,023,049 30,670,258 19,395,151 11,721,327 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -DEFERRED TAX Deferred tax liabilities - - - - TOTAL LIABILITIES 52,613,356 43,839,157 30,332,199 18,509,067 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -MINORITY INTERESTS 2,560,063 2,470,093 2,058,394 1,344,612 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -SHAREHOLDERS' EQUITY Share capital 5,162,849 5,162,849 5,162,849 5,162,849 Capital surplus 3,659,467 3,659,467 3,653,421 3,653,421 Surplus reserves 8,277,791 7,517,881 5,677,528 4,601,911 Including: Statutory public welfare fund - 559,456 464,488 256,981 Proposed cash dividends - 1,177,130 1,135,827 903,499 Undistributed profits 937,348 446,916 1,199,359 1,154,596 Foreign currency translation (349 ) (184 ) - - Total shareholders' equity 18,037,106 17,964,059 16,828,984 15,476,276 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 73,210,525 64,273,309 49,219,577 35,329,955 Consolidated Profit and Loss Accounts and Statement of Income Appropriation(All amounts expressed in thousands of Rmb) 6 months ended 30 June 2006 Year 2005 Year 2004 Year 2003 Revenue from principal operations 10,828,881 17,994,389 13,583,739 9,950,564 Less: Cost of principal operations (7,439,263 ) (12,720,252 ) (8,835,476 ) (6,257,373 ) Tax and levies on principal operations (125,922 ) (205,439 ) (168,933 ) (125,390 ) Profit from principal operations 3,263,696 5,068,698 4,579,330 3,567,801 Add: Profit from other operations 2,163 3,239 1,267 5,713Less: Operation expenses - - - - General and administrative expenses (476,651 ) (510,921 ) (377,313 ) (347,982 ) Financial expenses, net (560,967 ) (669,641 ) (597,032 ) (367,252 ) Operation profit 2,228,241 3,891,375 3,606,252 2,858,280 Add: Investment income 21,764 80,309 15,518 25,329 Subsidy income 846 2,919 - - Non-operating income 1,571 42,160 35,802 16,768Less: Non-operating cost (41,208 ) (121,596 ) (49,517 ) (60,217 ) Profit before taxation and minority interests 2,211,214 3,895,167 3,608,055 2,840,160Less: Income tax (613,951 ) (859,880 ) (914,993 ) (919,271 ) Minority interests (338,698 ) (674,547 ) (436,855 ) (83,956 ) Net profit 1,258,565 2,360,740 2,256,207 1,836,933 Add: Unappropriated profit brought forward 446,916 1,199,359 1,154,596 626,830 Adjustment to opening unappropriated profit (8,223 ) - - - Other transfers - - - - Unappropriated profit 1,697,258 3,560,099 3,410,803 2,463,763 Less: Transfer to statutory surplus reserve fund - (357,493 ) (307,488 ) (204,538 ) Transfer to statutory public welfare fund - (296,783 ) (259,052 ) (201,130 ) Transfer to employee bonus and welfare fund - - - - Profit distributable to shareholders 1,697,258 2,905,823 2,844,263 2,058,095 Less: Dividend distributed to preferred stock - - - - Discretionary surplus reserve (759,910 ) (1,281,777 ) (509,077 ) - Proposed cash dividends - (1,177,130 ) (1,135,827 ) (903,499 ) Bonus shares - - - - Unappropriated profit carried forward 937,348 446,916 1,199,359 1,154,596 Consolidated Cash Flow Statement(All amounts expressed in thousands of Rmb) 6 months ended 30 June 2006 Year 2005 Year 2004 Year 2003Cash flows from operating activitiesCash received from sale of goods and services 11,962,604 20,937,990 15,634,897 11,386,210Other cash received relating to operating activities 13,584 95,342 62,217 21,274 Sub-total of cash inflows 11,976,188 21,033,332 15,697,114 11,407,484 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -Cash paid for goods and services (5,066,892 ) (9,816,223 ) (6,359,298 ) (3,975,325 )Cash paid to and on behalf of employees (564,813 ) (1,202,300 ) (775,284 ) (566,818 )Payment of all types of taxes (2,054,143 ) (3,287,291 ) (2,850,854 ) (2,458,000 )Other cash paid relating to operating activities (278,851 ) (749,418 ) (595,703 ) (625,824 ) Sub-total of cash outflows (7,964,699 ) (15,055,232 ) (10,581,139 ) (7,625,967 ) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Net cash flows generated from operating activities 4,011,489 5,978,100 5,115,975 3,781,517 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -Cash flows from investing activitiesCash received on disposal of investments other than subsidiaries - 119,215 23,016 18,736Cash received on disposals of subsidiaries - - - -Cash received on investment income 28,052 47,038 40,808 82,364Net cash received from disposals of fixed assets, intangible assets and other long-term assets - 213,513 5,153 671Other cash received relating to investing activities 14,776 210,409 1,061,665 604,536 Sub-total of cash inflows 42,828 590,175 1,130,642 706,307 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -Cash paid to acquire fixed assets, intangible assets and other long-term assets (6,929,412 ) (17,916,250 ) (15,635,454 ) (7,854,365 )Cash paid to acquire investments in other than equity interest in subsidiaries (388,984 ) (330,043 ) (497,340 ) (210,031 )Cash paid to acquire equity interest in subsidiaries (280,965 ) - - -Other cash paid relating to investing activities (60,000 ) (156,719 ) - (102,073 ) Sub-total of cash outflows (7,659,361 ) (18,403,012 ) (16,132,794 ) (8,166,469 ) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Net cash flows used in investing activities (7,616,533 ) (17,812,837 ) (15,002,152 ) (7,460,162 ) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -Cash flows from financing activitiesCash received from investments 248,945 115,100 343,423 291,488 Including: cash received from minority shareholders' equity investments in subsidiaries 248,945 115,100 343,423 291,488Cash received from borrowings 17,039,420 31,110,586 22,934,591 7,202,964Other cash received relating to financing activities - - - - Sub-total of cash inflows 17,288,365 31,225,686 23,278,014 7,494,452 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -Cash paid on repayment of borrowings (10,698,927 ) (18,626,991 ) (11,884,245 ) (1,000,253 )Cash payments of interest expenses, dividends and appropriation of profit (2,769,896 ) (3,166,931 ) (2,201,057 ) (972,539 ) Including: Dividends paid to minority shareholders of subsidiaries (551,018 ) (378,508 ) (66,496 ) -Other cash paid relating to financing activities - - - (47,466 ) Including: cash payments for reduction of registered capital in subsidiaries to minority shareholders - - - (47,466 ) Sub-total of cash outflows (13,468,823 ) (21,793,922 ) (14,085,302 ) (2,020,258 ) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Net cash flows generated from financing activities 3,819,542 9,431,764 9,192,712 5,474,194 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -Effect of foreign exchange rate changes on cash (4,200 ) (29,707 ) - -Net increase/(decrease) in cash and cash equivalents 210,298 (2,432,680 ) (693,465 ) 1,795,549 Supplementary Information 1. Reconciliation of net profit to cash flows from operating activities Net profit 1,258,565 2,360,740 2,256,207 1,836,933 Add: Minority interests 338,698 674,547 436,855 83,956 Provision of asset impairment - - - - Depreciation of fixed assets 1,788,328 2,713,142 2,057,430 1,622,463 Amortisation of intangible assets 10,305 13,265 11,708 11,484 Amortisation of long-term deferred expenses 122,001 47,248 25,742 63,364 Increase in deferred expenses (1,934 ) - - - Increase in accrued expenses 83,927 - - - Losses on disposal of fixed assets, intangible assets and other long-term assets - - - - Losses on scrapping of fixed assets - 39,177 33,912 36,360 Financial expenses 587,640 768,955 597,032 373,225 Exchange gain or loss (26,673 ) (99,314 ) - - Investment income (21,764 ) (80,309 ) (15,518 ) (25,329 ) Deferred tax liabilities - - - - Increase in inventories (196,562 ) (302,052 ) (99,780 ) (40,726 ) Increase in operating receivables items (722,843 ) (195,367 ) (317,834 ) (285,816 ) Increase in operating payables items 791,801 38,068 130,221 105,603 Net cash flows generated from operating activities 4,011,489 5,978,100 5,115,975 3,781,517 - - - - - - - - - - - - - - - - - - - - - - - - - - - -2. Investing and financing activities that do not involve cash receipts or payments Conversion of debt into capital - - - - Reclassification of current portion of Convertible Bonds to current liabilities - - - - Fixed assets capitalised under finance leases - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -3. Net increase/(decrease) in cash and cash equivalents Cash at end of period/year 1,239,637 1,029,339 3,462,019 4,155,484 Less: cash at beginning of period/year (1,029,339 ) (3,462,019 ) (4,155,484 ) (2,359,935 ) Cash equivalents at end of period/year - - - - Less: cash equivalents at beginning of period/year - - - - Net increase/(decrease) in cash and cash equivalents 210,298 (2,432,680 ) (693,465 ) 1,795,549 Reconciliation of the Consolidated Financial Statements prepared under PRC GAAPand IFRS (RMB'000) Net assets 30 June 31 December 31 December 31 December 2006 2005 2004 2003 Net assets under PRC GAAP 18,037,106 17,964,059 16,828,984 15,476,276Impact of IFRS adjustments: Difference in the recognition policy on housing benefits to the employees 93,366 112,039 149,387 186,733 Difference in accounting treatment on long-term deferred expenses (93,174 ) (136,657 ) (62,874 ) (14,929 ) Difference in accounting treatment on interest rate swap (34,613 ) (65,399 ) (100,622 ) (152,457 ) Difference in capitalisation of borrowing costs 307,485 304,338 256,694 113,280 Difference in the commencement of depreciation of fixed assets (67,844 ) (67,844 ) (37,186 ) (18,441 ) Difference in accounting treatment on Convertible Bonds 119,369 145,341 197,885 244,190 Difference in accounting treatment on monetary housing benefits 64,603 76,428 - - Difference in accounting treatment of performance payroll accrual 59,138 79,000 - - Effect of amortisation of goodwill 8,604 5,736 - - Others (23,143 ) (19,633 ) (12,004 ) (13,601 ) Applicable deferred tax impact of the above GAAP differences (48,783 ) (71,946 ) (109,847 ) (99,719 )Net assets under IFRS (excluding minority interests) 18,422,114 18,325,462 17,110, 417 15,721,332 (RMB'000) Net profit 6 months ended 30 June 2006 Year 2005 Year 2004 Year 2003Net profit under PRC GAAP 1,258,565 2,360,740 2,256,207 1,836,933Impact of IFRS adjustments: Difference in the recognition policy on housing benefits to the employees (18,673 ) (37,346 ) (37,346 ) (37,346 ) Difference in accounting treatment on long-term deferred expenses 43,483 (73,783 ) (47,945 ) 15,487 Difference in accounting treatment on interest rate swap 30,786 35,224 51,835 (8,323 ) Difference in capitalisation of borrowing costs 3,147 47,644 143,414 43,840 Difference in the commencement of depreciation of fixed assets - (30,659 ) (18,745 ) (12,581 ) Difference in accounting treatment on convertible bonds (25,972 ) (52,544 ) (46,305 ) 20,614 Difference in accounting treatment on monetary housing benefits (20,046 ) (19,272 ) - - Difference in accounting treatment of performance payroll accrual (19,862 ) 79,000 - - Effect of amortisation of goodwill 2,868 5,736 - - Others (1,140 ) (1,583 ) 1,597 9,681 Applicable deferred tax impact of the above GAAP differences 20,791 37,899 (10,128 ) (56,506 )Net profit under IFRS (excluding minority interests) 1,273,947 2,351,056 2,292,584 1,811,799 (1) Difference in the recognition policy on housing benefits to the employees The Company provided housing to its employees at a discount price. The pricedifference between the selling price and the cost of housing is considered ashousing benefits and is borne by the Company. For PRC statutory reporting purposes, in accordance with the relevantregulations issued by the Ministry of Finance of the PRC, the total housingbenefits provided by the Company before 6 September 2000 should be directlydeducted from the statutory public welfare fund and those provided after 6September 2000 are charged to non-operating expenses as incurred. Under IFRS,the housing benefits provided by the Company are recognised on a straight-linebasis over the estimated remaining average service lives of the employees. (2) Difference in accounting treatment on long-term deferred expenses Under PRC GAAP, expenses incurred during construction stage but cannot becapitalised are accumulated in long-term deferred expenses and charged into theprofit and loss account upon the commencement of commercial operation of acompany. Under IFRS, such expenses are charged to profit and loss accounts whenincurred. (3) Difference in accounting treatment on interest rate swap To hedge the interest risk derived from the long-term borrowings denominated USdollar, an interest rate swap contract was entered between Tuoketuo PowerCompany, a subsidiary of the Company, and a financial institution. Pursuant tothis interest rate swap contract, Tuokekuo Power Company swap a floating-rateborrowing for a fixed-rate borrowing with the same notional principal amount.Under PRC GAAP, interest rate swap contract is disclosed as an off balance sheetitem. Under IFRS, derivatives are recognised in balance sheet at fair value asassets or liabilities, based on the market condition at each balance sheet date.Depending on whether the derivative is designated as a hedging instrument, theresulting gain or loss is recorded in profit and loss accounts or shareholders'equity. Due to the above interest rate swap contract does not qualify for hedgeaccounting in according with IAS 39, the changes in its value are included inthe profit and loss accounts. (4) Difference in capitalisation of borrowing costs Under PRC GAAP, capitalisation of interests is limited to specific borrowings.No interest can be capitalised on general borrowings. In accordance with IAS 23, a company capitalises interest on general borrowingsused for the purpose of obtaining a qualified fixed assets in addition to thecapitalisation of interest on specific borrowings. The GAAP difference of capitalised interests on general borrowings also causesthe difference of depreciation expense of relevant fixed assets. (5) Difference in the commencement of depreciation of fixed assets Under PRC GAAP, depreciation of fixed assets commences from one month after therelevant assets are completed and ready for its intended use. Under IFRS,depreciation commences immediately when the relevant assets are ready for itsintended use. (6) Difference in accounting treatment on convertible bonds Under PRC GAAP, convertible bonds are presented at principal together withinterest payable. Accrued interest expenses are treated in accordance with theprinciple of borrowing costs. Under IFRS, the proceeds received on the issue of convertible bonds areallocated into liability and equity components. Upon initial recognition, theliability component represented the present value, at the issuance date, of thecontractually determined stream of cash flows discounted at the market interestrate for instruments of comparable credit status providing substantially thesame cash flows, on the same terms but without the conversion option. The equitycomponent is then determined by deducting the liability component from theproceeds received on the issue of the bonds. Relating interest expenses arerecognised using effective interest rate. (7) Difference in accounting treatment on monetary housing benefits Under PRC GAAP, the monetary housing benefits provided to employees who startedwork before 31 December 1998 were directly deducted from the statutory publicwelfare fund after approved by the general meeting of the Company. Under IFRS, these benefits are recorded as deferred assets and amortised on astraight-line basis over the estimated service lives of relevant employees. (8) Difference in accounting treatment of performance payroll accrual Performance payroll accrued under PRC GAAP, in accordance with relevantgovernment policies, but not paid out at the end of the year does not meet allthe criteria of recognising liabilities under IFRS. Therefore these unpaidbalances were reversed under IFRS. (9) Effect of amortisation of goodwill Under PRC GAAP, goodwill is amortised over its useful life on a straight-line method. Under IFRS, goodwill is no longer amortised since the financial year starting onor after 31 March 2003. Goodwill is tested annually for impairment. (10) Applicable deferred tax impact of the above GAAP differences This represents deferred tax effect on the above GAAP difference where applicable. 3. MAJOR CAPITAL EXPENDITURE PLANS IN FUTURE After estimation, the capital expenditure plans of the Company for the comingtwo years comprise RMB8.34 billion in 2006 and RMB4.05 billion in 2007 (actualcapital expenditure will be adjusted according to approvals and progress ofvarious projects). Future capital expenditure will be mainly for the fixedassets investment of the subsidiaries of the Company. DEFINITIONS In this announcement, unless the context otherwise requires, the followingexpressions have the following meanings: "A Share(s)" the domestic ordinary share(s) with a nominal value of RMB1.00 each which are to be subscribed in RMB and are proposed to be issued by the Company to (i) part of the existing holders of domestic shares of the Company and (ii) natural persons and institutional investors in the PRC "A Shares Issue" the proposed issue of A Shares to (i) part of the existing holders of domestic shares of the Company and (ii) natural persons and institutional public investors in the PRC by the Company. The A Shares, subject to the relevant approval of the relevant authorities in the PRC, are proposed to be listed on the Shanghai Stock Exchange "Board" board of Directors "CDGC" China Datang Corporation, a state-owned enterprise established under the laws of the PRC and is a substantial shareholder of the Company holding approximately 35.43% of the issued share capital of the Company "Company" Datang International Power Generation Co., Ltd., a sino-foreign joint stock limited company incorporated in the PRC on 13 December 1994, the H Shares are listed on the Hong Kong Stock Exchange and the London Stock Exchange "Convertible Bond" the convertible bond issued by the Company on 3 September 2003 which can be converted into new H Shares "CSRC" China Securities Regulatory Commission "Directors" directors of the Company "Group" the Company and its subsidiaries from time to time "Hong Kong" the Hong Kong Special Administrative Region of the PRC "Hong Kong Stock Exchange" The Stock Exchange of Hong Kong Limited "H Shares" the overseas listed foreign shares of the Company with a nominal value of RMB1.00 each and are listed on the Hong Kong Stock Exchange and the London Stock Exchange "IAS" International Accounting Standards "IFRS" International Financial Reporting Standards "Listing Rules" the Rules Governing the Listing of Securities on the Hong Kong Stock Exchange "PRC" the People's Republic of China "PRC GAAP" the applicable accounting rules and financial regulations in the PRC "Relevant Periods" for the years ended 31 December 2003, 2004 and 2005, and for the six months ended 30 June 2006 "RMB" Renminbi, the lawful currency of the PRC "Shanghai Stock Exchange" Shanghai Stock Exchange of the PRC "Shareholder(s)" shareholder(s) of the Company "TJIC" Tianjin Jinneng Investment Company, a state-owned enterprise established under the laws of the PRC and a substantial shareholder of the Company holding approximately 10.84% of the issued share capital of the Company "US dollar" United States dollars, the lawful currency of the United States of America By Order of the BoardYang HongmingCompany Secretary Beijing, the PRC, 16 November 2006 As at the date of this announcement, the Directors are: Zhai Ruoyu, Zhang Yi, Hu Shengmu, Fang Qinghai, Yang Hongming, Liu Haixia, GuanTiangang, Su Tiegang, Ye Yonghui, Tong Yunshang, Xie Songlin*, Xu Daping*, LiuChaoan*, Yu Changchun* and Xia Qing* * Independent non-executive Directors This information is provided by RNS The company news service from the London Stock Exchange