Datang Intl H Regulatory News (DAT)

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong KongLimited take no responsibility for the contents of this announcement, make norepresentation as to its accuracy or completeness and expressly disclaim anyliability whatsoever for any loss howsoever arising from or in reliance uponthe whole or any part of the contents of this announcement. DATANG INTERNATIONAL POWER GENERATION CO., LTD. (a sino-foreign joint stock limited company incorporated in the People's Republic of China) (Stock Code: 00991) ANNOUNCEMENT PROVISION FOR INVENTORY IMPAIRMENT, RETIREMENT OF ASSETS AND WRITE-OFF OF PRELIMINARY PROJECT EXPENSES This announcement is made by Datang International Power Generation Co., Ltd.(the "Company") pursuant to provisions on Inside Information Provisions (asdefined under the Rules Governing the Listing of Securities on The StockExchange of Hong Kong Limited (the "Listing Rules")) under Part XIVA of theSecurities and Futures Ordinance (Chapter 571, Laws of Hong Kong) and Rules13.09(2)a and 13.10B of the Listing Rules. The Company convened the seventh meeting of the eighth session of the board ofdirectors (the "Board") on 24 January 2014, in which the "Resolution onProvision for Inventory Impairment, Retirement of Assets and Write-off ofPreliminary Project Expenses by Affiliated Enterprises" was considered andapproved. The details in respect of the provision for inventory impairment,retirement of assets and write-off of preliminary project expenses are set outas below. I. SUMMARY OF PROVISION FOR INVENTORY IMPAIRMENT, RETIREMENT OF ASSETS AND WRITE-OFF OF PRELIMINARY PROJECT EXPENSES (1) Description and basis of provision for inventory impairment Pursuant to the requirement under the "Accounting Standards for Enterprises of PRC No. 1 - Inventories", an enterprise is required to conduct impairment testing on inventories as at the end of each period. A provision for impairment of inventories shall be made for inventories whose costs are higher than their net realisable value. As at the end of 2013, Inner Mongolia Datang International Xilinhaote Mining Company Limited ("Xilinhaote Mining Company"), a subsidiary of the Company, conducted impairment testing for its coal inventory. The testing result indicates that a provision for inventory impairment should be made for coal No. 4. As at 31 December 2013, the Company contemplated to make a provision for inventory impairment of RMB304,003,900. (2) Description and basis of retirement of assets and materials Pursuant to the requirements of "Administrative Measures for Fixed Assets of China Datang Corporation" and related measures of the Company, Inner Mongolia Datang International Tuoketuo Power Generation Company Limited ("Tuoketuo Power Generation Company") and Hebei Datang International Wangtan Power Generation Company Limited ("Wangtan Power Generation Company") found that certain of their fixed assets and inventory materials were no longer of use value and qualified for retirement after stocktaking process. The retired inventory materials of Tuoketuo Power Generation Company valued at RMB25,528,900 and price inclusive of tax amounted to the total sum of RMB29,868,800. The original cost of retired fixed assets of Wangtan Power Generation Company was RMB57,982,700 while the accumulated depreciation and the net value were RMB28,263,600 and RMB29,719,100 respectively. (3) Description and basis of write-off of preliminary project expenses Pursuant to the requirements of "Financial Administrative Measures for Preliminary Expenses of Infrastructure Projects of China Datang Corporation" and relevant opinions on office departure auditing promulgated by the National Audit Office, the Company proposed for writing off its preliminary projects with low economic efficiency and which were inconsistent with the development strategy of the Company. Attributable preliminary project expenses incurred by preliminary projects of affiliated enterprises of the Company, amounted to the total sum of RMB115,305,000, were written off accordingly. II. IMPACT OF PROVISION FOR INVENTORY IMPAIRMENT, RETIREMENT OF ASSETS AND WRITE-OFF OF PRELIMINARY PROJECT EXPENSES ON FINANCIAL POSITION OF THE COMPANY 1. The current provision for inventory impairment is expected to result in a decrease in the Company's profit for 2013 by RMB304,003,900 and a decrease in the Company's net profit attributable to parent company for 2013 by RMB182,402,300. 2. The current retirement of fixed assets and inventory materials is expected to result in a decrease in Company's profit for 2013 by RMB55,248,000 and a decrease in Company's net profit attributable to parent company for 2013 by RMB27,090,500. 3. The current write-off of preliminary project expenses is expected to result in a decrease in Company's profit for 2013 by RMB115,305,000 and a decrease in Company's net profit attributable to parent company for 2013 by RMB84,517,000. The combined effect of the foregoing matters is expected to result in a decrease in Company's profit for 2013 by RMB474,556,900 and a decrease in Company's net profit attributable to parent company for 2013 by RMB294,009,800. III. PROCEDURES FOR CONSIDERATION AND APPROVAL OF PROVISION FOR INVENTORY IMPAIRMENT, RETIREMENT OF ASSETS AND WRITE-OFF OF PRELIMINARY PROJECT EXPENSES The Company convened the seventh meeting of the eighth session of the Board, which considered and approved the "Resolution on Provision for Inventory Impairment, Retirement of Assets and Write-off of Preliminary Project Expenses by Affiliated Enterprises" on 24 January 2014. The Board is of the view that according to relevant laws and regulations of China as well as the business development of the Company, the provision for inventory impairment, the retirement of assets and the write-off of preliminary project expenses are well-founded and prudently made, and the provision for inventory impairment, the retirement of assets and the write-off of preliminary project expenses were approved accordingly. IV. PROVISION FOR INVENTORY IMPAIRMENT, RETIREMENT OF ASSETS AND WRITE-OFF OF PRELIMINARY PROJECT EXPENSES OF THE COMPANY FOR 2013 In 2013, the Company convened the fifth and the seventh meeting of the eighth session of the Board, which considered and approved the provision for impairment, the provision for inventory impairment, the retirement of fixed assets, the retirement of inventory materials and the write-off of preliminary project expenses. All of the above-mentioned matters are expected to result in a total decrease in the Company's profit for 2013 of approximately RMB1,242,802,000 and a total decrease in Company's net profit attributable to parent company for 2013 of approximately RMB992,805,100. By Order of the Board Zhou Gang Secretary to the Board Beijing, the PRC, 24 January 2014 As at the date of this announcement, the directors of the Company are: Chen Jinhang, Hu Shengmu, Wu Jing, Fang Qinghai, Zhou Gang,Li Gengsheng, Cao Xin, Cai Shuwen, Liu Haixia, Guan Tiangang,Dong Heyi*, Ye Yansheng*, Li Hengyuan*, Zhao Jie*, Jiang Guohua* * Independent non-executive directors