Huadian Power International : 2020 Interim Report

Interim Report

*2020

2020 INTERIM REPORT 1

The board of directors (the "Board") of Huadian Power International Corporation Limited* (the "Company") hereby announces the unaudited interim condensed consolidated financial statements of the Company and its subsidiaries (the "Group") for the six months ended 30 June 2020 (the "Period") prepared in accordance with the International Accounting Standard 34 "Interim Financial Reporting". The Group's interim financial report for the Period is unaudited, but has been reviewed by BDO Limited, the overseas auditor of the Company, in accordance with the Hong Kong Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Hong Kong Institute of Certified Public Accountants. The unmodified review report addressed by the BDO Limited to the Board is set out on page 27. The audit committee of the Company (the "Audit Committee") has also reviewed the 2020 interim report and the relevant financial information of the Group.

BUSINESS REVIEW

During the Period, the turnover of the Group amounted to approximately RMB40,943 million, representing a decrease of approximately 5.36% over the corresponding period in 2019; the profit for the Period attributable to equity holders of the Company amounted to approximately RMB2,411 million; the profit for the Period attributable to equity shareholders of the Company amounted to approximately RMB1,975 million; the basic earnings per share were approximately RMB0.200.

INTERIM DIVIDEND

The Board of the Company did not recommend declaring any interim dividends for the Period.

MAJOR ASSETS

The Group is one of the largest comprehensive energy companies in the People's Republic of China ("China" or the "PRC"), primarily engaged in the construction and operation of power plants, including large-scale efficient coal- or gas-fired generating units and various renewable energy projects. The Group's power generating assets are located in 14 provinces, autonomous regions and municipalities across the PRC at the prime location, mainly in the electricity and heat load centres or regions with abundant coal resources. As at the date of this report, the Group had a total of 62 controlled power plants which have commenced operations involving a total of 56,953.3 MW controlled installed capacity, with a total of 43,235 MW attributable to coal-fired generating units, 6,878.1 MW attributable to gas-fired generating units and 6,840.2 MW attributable to renewable energy generating units such as hydropower, wind power and solar power generating units.

2 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

MAJOR ASSETS (CONTINUED)

Details of the Group's major power generating assets which have commenced operations as at the date of this report are as follows:

1. Details of controlled coal- and gas-fired generating units are as follows:

			Equity
			interest
		Installed	held by the	Generating
	Name of power plant/company	capacity	Company	units
		(MW)
1	Zouxian Plant	2,575	100%	1 x 635 MW
				+ 1 x 600 MW
				+ 4 x 335 MW
2	Shiliquan Plant	2,120	100%	2 x 660 MW
				+ 2 x 330 MW
				+ 1 x 140 MW
3	Laicheng Plant	1,200	100%	4 x 300 MW
4	Shuozhou Thermal Power Branch	700	100%	2 x 350 MW
	Company
5	Fengjie Plant	1,200	100%	2 x 600 MW
6	Shenzhen Company	365	100%	1 x 120 MW
				+ 2 x 82 MW
				+ 1 x 81 MW
7	Huadian Zouxian Power	2,000	69%	2 x 1,000 MW
	Generation Company Limited
	("Zouxian Company")
8	Huadian Laizhou Power	4,001.1	75%	4 x 1,000 MW
	Generation Company Limited			+ 1.1 MW
	("Laizhou Company")
9	Huadian Weifang Power	2,002.4	45%	2 x 670 MW
	Generation Company Limited			+ 2 x 330 MW
	("Weifang Company")			+ 2.4 MW

2020 INTERIM REPORT 3

MAJOR ASSETS (CONTINUED)

1. Details of controlled coal- and gas-fired generating units are as follows: (Continued)

			Equity
			interest
		Installed	held by the	Generating
	Name of power plant/company	capacity	Company	units
		(MW)
10	Huadian Qingdao Power	1,220	55%	1 x 320 MW
	Generation Company Limited			+ 3 x 300 MW
	("Qingdao Company")
11	Huadian Zibo Thermal Power	950	100%	2 x 330 MW
	Company Limited			+ 2 x 145 MW
	("Zibo Company")
12	Huadian Zhangqiu Power	925	87.5%	1 x 335 MW
	Generation Company Limited			+ 1 x 300 MW
	("Zhangqiu Company")			+ 2 x 145 MW
13	Huadian Tengzhou Xinyuan	930	93.26%	2 x 315 MW
	Thermal Power			+ 2 x 150 MW
	Company Limited
	("Tengzhou Company")
14	Huadian Longkou Power	880	84.31%	4 x 220 MW
	Generation Company Limited
	("Longkou Company")
15	Huadian Ningxia Lingwu Power	3,320	65%	2 x 1,060 MW
	Generation Company Limited			+ 2 x 600 MW
	("Lingwu Company")
16	Sichuan Guang'an Power	2,400	80%	2 x 600 MW
	Generation Company Limited			+ 4 x 300 MW
	("Guang'an Company")
17	Huadian Xinxiang Power	1,320	90%	2 x 660 MW
	Generation Company Limited
	("Xinxiang Company")

4 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

MAJOR ASSETS (CONTINUED)

1. Details of controlled coal- and gas-fired generating units are as follows: (Continued)

			Equity
			interest
		Installed	held by the	Generating
	Name of power plant/company	capacity	Company	units
		(MW)
18	Huadian Luohe Power	660	75%	2 x 330 MW
	Generation Company Limited
	("Luohe Company")
19	Huadian Qudong Power	660	90%	2 x 330 MW
	Generation Company Limited
	("Qudong Company")
20	Anhui Huadian Suzhou Power	1,260	56.07%	2 x 630 MW
	Generation Company Limited
	("Suzhou Company")
21	Anhui Huadian Wuhu Power	2,320	65%	1 x 1,000 MW
	Generation Company Limited			+ 2 x 660 MW
	("Wuhu Company")
22	Anhui Huadian Lu'an Power	1,320	95%	2 x 660 MW
	Generation Company Limited
	("Lu'an Company")
23	Hangzhou Huadian Banshan	2,415.7	64%	3 x 415 MW
	Power Generation Company			+ 3 x 390 MW
	Limited ("Hangzhou			+ 0.7 MW
	Banshan Company")
24	Hangzhou Huadian Xiasha	246	56%	1 x 88 MW
	Thermal Power Company			+ 2 x 79 MW
	Limited ("Xiasha Company")
25	Hangzhou Huadian Jiangdong	960.5	70%	2 x 480.25 MW
	Thermal Power Company
	Limited ("Jiangdong Company")

2020 INTERIM REPORT 5

MAJOR ASSETS (CONTINUED)

1. Details of controlled coal- and gas-fired generating units are as follows: (Continued)

			Equity
			interest
		Installed	held by the	Generating
	Name of power plant/company	capacity	Company	units
		(MW)
26	Huadian Zhejiang Longyou	417	100%	2 x 127.6 MW
	Thermal Power Company			+ 1 x 130.3 MW
	Limited ("Longyou Company")			+ 1 x 19.5 MW
				+ 12 MW
27	Hebei Huadian Shijiazhuang	928.6	82%	1 x 453.6 MW
	Thermal Power			+ 2 x 200 MW
	Company Limited			+ 3 x 25 MW
	("Shijiazhuang Thermal
	Power Company")
28	Hebei Huadian Shijiazhuang	600	100%	2 x 300 MW
	Yuhua Thermal Power
	Company Limited
	("Yuhua Company")
29	Hebei Huadian Shijiazhuang	660	90%	2 x 330 MW
	Luhua Thermal Power
	Company Limited
	("Luhua Company")
30	Shijiazhuang Huadian Heat	4	100%	2 x 2 MW
	Corporation Limited
	("Shijiazhuang Heat
	Corporation")
31	Shaoguan City Pingshi Electric	600	100%	2 x 300 MW
	Power Plant Company

Limited (Plant B)

("Pingshi Power Company")

6 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

MAJOR ASSETS (CONTINUED)

1. Details of controlled coal- and gas-fired generating units are as follows: (Continued)

			Equity
			interest
		Installed	held by the	Generating
	Name of power plant/company	capacity	Company	units
		(MW)
32	Guangdong Huadian Shaoguan	700	100%	2 x 350 MW
	Thermal Power Company Limited
	("Shaoguan Thermal
	Power Company")
33	Huadian Foshan Energy	165.5	100%	2 x 59 MW
	Company Limited			+ 47.5 MW
	("Foshan Energy Company")
34	Huadian Guangdong Shunde	163.5	90%	2 x 59 MW
	Energy Company Limited			+ 45.5 MW
	("Shunde Energy Company")
35 Tianjin Huadian Fuyuan Thermal	400	63.14%	2 x 200 MW
	Power Company Limited
	("Fuyuan Thermal
	Power Company")
36 Tianjin Huadian Nanjiang Thermal	930	65%	2 x 315 MW
	Power Company Limited			+ 1 x 300 MW
	("Nanjiang Thermal
	Power Company")
37 Huadian Hubei Power Generation	6,944.4	82.56%	2 x 680 MW
	Company Limited			+ 2 x 660 MW
	("Hubei Company") (Note)			+ 2 x 640 MW
				+ 6 x 330 MW
				+ 1 x 300 MW
				+ 2 x 185 MW
				+ 40 x 2 MW
				+ 254.4 MW

2020 INTERIM REPORT 7

MAJOR ASSETS (CONTINUED)

1. Details of controlled coal- and gas-fired generating units are as follows: (Continued)

Note: Details of the installed generating units of Hubei Company are as follows:

		Shareholding
		percentage of
	Installed	Hubei	Generating
Power generation enterprise	capacity	Company	units
	(MW)
Huadian Hubei Power Generation	330	100%	1 x 330 MW
Company Limited Huangshi
Thermal Power Plant ("Huangshi
Thermal Power Plant")
Hubei Xisaishan Power Generation	660	50%	2 x 330 MW
Company Limited
("Xisaishan Company")
Hubei Huadian Xisaishan Power	1,360	50%	2 x 680 MW
Generation Company Limited
("Huadian Xisaishan Company")
Hubei Huadian Xiangyang Power	2,570	60.10%	2 x 640 MW
Generation Company Limited			+ 3 x 330 MW
("Xiangyang Company")			+ 1 x 300 MW
Hubei Huadian Jiangling Power	1,320	100%	2 x 660 MW
Generation Company Limited
("Jiangling Company")
Hubei Huadian Wuchang Thermal	370	100%	2 x 185 MW
Power Company Limited
("Wuchang Thermal Power")
Hubei Huadian Wuxue New Energy	120	100%	40 x 2 MW
Company Limited ("Wuxue New			+ 40 MW
Energy Company")
Hubei Huadian Zaoyang Photovoltaic	100	100%	100 MW
Power Generation Company
Limited ("Zaoyang Photovoltaic
Power Generation Company")

8 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

MAJOR ASSETS (CONTINUED)

1. Details of controlled coal- and gas-fired generating units are as follows: (Continued)

		Shareholding
		percentage of
	Installed	Hubei	Generating
Power generation enterprise	capacity	Company	units
	(MW)
Hubei Huadian Suixian Yindian	100	100%	100 MW
Photovoltaic Power Generation
Company Limited
("Suixian Photovoltaic
Power Generation Company")
Huadian Hubei Power Generation	6.4	100%	6.4 MW
Company Limited Huangshi
Photovoltaic Power Generation
Branch Company
("Huangshi Photovoltaic
Power Generation Company")
Huadian Hubei Power Generation	8	100%	8 MW
Company Limited Wuhan
Photovoltaic Power Generation
Branch Company
("Wuhan Photovoltaic
Power Generation Company")

2020 INTERIM REPORT 9

MAJOR ASSETS (CONTINUED)

1. Details of controlled renewable energy generating units are as follows:

			Equity
			interest
		Installed	held by the	Generating
	Name of power plant/company	capacity	Company	units
		(MW)
1	Sichuan Huadian Luding	920	100%	4 x 230 MW
	Hydropower Company
	Limited ("Luding
	Hydropower Company")
2	Sichuan Huadian Zagunao	591	64%	3 x 65 MW
	Hydroelectric Development			+ 3 x 56 MW
	Company Limited ("Zagunao			+ 3 x 46 MW
	Hydroelectric Company")			+ 3 x 30 MW
3	Lixian Xinghe Power Company	67	100%	3 x 11 MW
	Limited ("Lixian Company")			+ 4 x 8.5 MW
4	Sichuan Liangshan Shuiluohe	648	57%	3 x 70 MW
	Hydropower Development			+ 3 x 62 MW
	Company Limited			+ 3 x 46 MW
	("Shuiluohe Company")			+ 3 x 38 MW
5	Hebei Huadian Complex	83.4	100%	1 x 16 MW
	Pumping-storage Hydropower			+ 2 x 15 MW
	Company Limited			+ 1 x 11 MW
	("Hebei Hydropower			+ 2 x 3.2 MW
	Company")			+ 20 MW
6	Inner Mongolia Huadian	399	54.85%	262 x 1.5 MW
	Mengdong Energy			+ 2 x 3 MW
	Company Limited
	("Mengdong Energy
	Company")
7	Huadian Kezuozhongqi Wind	49.5	100%	33 x 1.5 MW
	Power Company Limited
	("Kezuozhongqi Wind
	Power Company")

10 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

MAJOR ASSETS (CONTINUED)

1. Details of controlled renewable energy generating units are as follows: (Continued)

			Equity
			interest
		Installed	held by the	Generating
	Name of power plant/company	capacity	Company	units
		(MW)
8	Huadian Power International	1,481.5	63.92%	40 x 2.1 MW
	Ningxia New Energy			+ 155 x 2 MW
	Power Company Limited			+ 665 x 1.5 MW
	("Ningxia New Energy			+ 90 MW
	Company")
9	Hebei Huadian Guyuan Wind	290.5	61.87%	167 x 1.5 MW
	Power Company Limited			+ 40 MW
	("Guyuan Wind Power
	Company")
10 Hebei Huadian Kangbao Wind	379.5	100%	72 x 2 MW
	Power Company Limited			+ 137 x 1.5 MW
	("Kangbao Wind Power			+ 30 MW
	Company")
11 Hebei Huarui Energy Group	99	100%	48 x 2 MW
	Corporation Limited			+ 2 x 1.5 MW
	("Huarui Company")
12	Huadian Laizhou Wind	40.5	55%	27 x 1.5 MW
	Power Company Limited
	("Laizhou Wind Power
	Company")
13	Huadian Laizhou Wind	48	55%	24 x 2 MW
	Power Generation
	Company Limited
	("Laizhou Wind Company")
14 Huadian Laizhou Wind Energy	149.4	55%	72 x 2 MW
	Power Company Limited			+ 3 x 1.8 MW
	("Laizhou Wind Energy
	Company")

2020 INTERIM REPORT 11

MAJOR ASSETS (CONTINUED)

1. Details of controlled renewable energy generating units are as follows: (Continued)

			Equity
			interest
		Installed	held by the	Generating
	Name of power plant/company	capacity	Company	units
		(MW)
15	Huadian Longkou Wind	99.3	65%	23 x 1.5 MW
	Power Company Limited			+ 6 x 2.5 MW
	("Longkou Wind Power			+ 24 x 2 MW
	Company")			+ 1 x 1.8 MW
16	Longkou Dongyi Wind	80	55%	20 x 1.5 MW
	Power Company Limited			+ 25 x 2 MW
	("Longkou Dongyi Wind
	Power Company")
17	Huadian Shandong New Energy	613	100%	213 x 2 MW
	Company Limited			+ 3 x 1.9 MW
	("Shandong New Energy			+ 1 x 1.8 MW
	Company")			+ 33 x 1.5 MW
				+ 130 MW
18	Huadian Xuwen Wind	99	100%	48 x 2 MW
	Power Company Limited			+ 2 x 1.5 MW
	("Xuwen Wind Power
	Company")
19	Huadian Xiaxian Wind	100	100%	50 x 2 MW
	Power Company Limited
	("Xiaxian Wind Power
	Company")
20	Huadian Ningxia Ningdong	10	60%	10 MW
	Shangde Solar Power

Company Limited

("Shangde Solar Company")

12 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

MAJOR ASSETS (CONTINUED)

1. Details of controlled renewable energy generating units are as follows: (Continued)

			Equity
			interest
		Installed	held by the	Generating
	Name of power plant/company	capacity	Company	units
		(MW)
21	Huadian Zhangjiakou Saibei	4	100%	4 MW
	New Energy Generation
	Company Limited
	("Zhangjiakou Saibei
	New Energy Company")
22 Huadian Ningbo New Energy	10	100%	10 MW
	Generation Company
	Limited ("Ningbo New
	Energy Company")
23 Huadian Huzhou New Energy	30	100%	30 MW
	Power Generation Company
	Limited ("Huzhou New
	Energy Company")
24	Huadian Taiqian Photovoltaic	100	50%	100 MW
	Power Generation Company
	Limited ("Taiqian
	Photovoltaic Power
	Generation Company")
25 Zezhou County Huadian Wind	98	100%	40 x 2.2 MW
	Power Company Limited			+ 5 x 2 MW
	("Zezhou Wind Power
	Company")

2020 INTERIM REPORT 13

NEWLY-ADDED INSTALLED CAPACITY

From 1 January 2020 up to the date of this report, the details of the Group's newly-added generating units are as follows:

		Installed
Projects	Category	capacity
		(MW)
Shijiazhuang Heat Corporation	Gas-fired	4
Shuiluohe Company	Hydropower	124
Longkou Dongyi Wind Power Company	Wind power	50
Shandong New Energy Company	Wind power	40
Ningxia New Energy Company	Wind power	100
Ningxia New Energy Company	Photovoltaic power	70
Total		388

GENERATING UNITS UNDER CONSTRUCTION

As at the date of this report, the Group's major generating units under construction are as follows:

	Planned
	installed
Type of generating units	capacity
	(MW)
Coal-fired generating units	510
Gas-fired generating units	1,629
Hydropower generating units	168
Wind power generating units	1,716.5
Photovoltaic power generating units	11.3
Total	4,034.8

14 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

MANAGEMENT DISCUSSION AND ANALYSIS

(1) Macroeconomic conditions and electricity demand

According to the relevant information and statistics, in the first half of 2020, the gross domestic product of the PRC amounted to RMB45,661.4 billion, representing a decrease of 1.6% over the corresponding period in 2019 based on comparable prices. Power consumption of the entire society in the PRC totaled 3,354.7 million MWh, representing a decrease of 1.3% over the corresponding period in 2019. Specifically, consumption by the primary industry represented a year-on-year increase of 8.2%, consumption by the secondary industry represented a year-on-year decrease of 2.5% and consumption by the tertiary industry represented a year-on-year decrease of 4.0%, while the household consumption by urban and rural residents represented a year-on-year increase of 6.6%.

(2) Power generation

During the Period, the power generated by the Group amounted to approximately 92.98 million MWh, representing a decrease of approximately 8.66% over the corresponding period in 2019; the on-grid power sold amounted to approximately 87.06 million MWh, representing a decrease of approximately 8.53% over the corresponding period in 2019. Such decrease in the power generated and on-grid power sold was mainly attributable to COVID-19 and the increase in the amount of external power purchased by Shandong. The average utilisation hours of the generating units were 1,638 hours, among which the average utilisation hours of coal-fired generating units were 1,830 hours and the coal consumption for power supply was 288.52g/KWh that was remarkably lower than the national average.

(3) Turnover and profit

During the Period, the turnover of the Group amounted to approximately RMB40,943 million, representing a decrease of approximately 5.36% over the corresponding period in 2019, mainly due to the year-on-year decrease in the revenue of the Group generated from the sale of electricity. The revenue of the Group generated from the sale of electricity amounted to approximately RMB31,742 million, representing a decrease of approximately 7.76% over the corresponding period in 2019, mainly due to the decrease in the volume of on-grid power sold. The revenue generated from the sale of heat amounted to approximately RMB3,702 million, representing an increase of approximately 16.73% over the corresponding period in 2019, mainly due to the increase in the volume of heat sold. The revenue generated from the sale of coal amounted to approximately RMB5,499 million, representing a decrease of approximately 3.19% over the corresponding period in 2019, mainly due to the year-on-year decrease in coal price.

2020 INTERIM REPORT 15

MANAGEMENT DISCUSSION AND ANALYSIS (CONTINUED)

(3) Turnover and profit (Continued)

During the Period, the Group's operating profit amounted to approximately RMB5,182 million, representing an increase of approximately 20.59% over the corresponding period in 2019, mainly due to the decrease in coal price; the profit for the Period attributable to equity holders of the Company amounted to approximately RMB2,411 million, the profit for the Period attributable to equity shareholders of the Company amounted to approximately RMB1,975 million, and the basic earnings per share were approximately RMB0.200.

(4) Major operating expenses

Fuel costs are the major operating expense of the Group. During the Period, the fuel costs of the Group amounted to approximately RMB18,502 million, representing a decrease of approximately 14.96% over the corresponding period in 2019. This was mainly due to the year-on-year decrease in the volume of power generation and coal price.

During the Period, the cost of sales of the Group for coal amounted to approximately RMB4,962 million, representing a decrease of approximately 6.60% over the corresponding period in 2019. This was mainly due to the year-on-year decrease in coal price.

During the Period, the depreciation and amortization expenses of the Group amounted to approximately RMB5,832 million, representing an increase of approximately 5.03% over the corresponding period in 2019. This was mainly due to the commencement of operation of new generating units.

During the Period, the repairs, maintenance and inspection expenses of the Group amounted to approximately RMB1,872 million, representing an increase of approximately 0.82% over the corresponding period in 2019. This was mainly due to the commencement of operation of new generating units.

During the Period, the personnel costs of the Group amounted to approximately RMB2,852 million, representing a decrease of approximately 0.06% over the corresponding period in 2019. This was mainly due to the timing difference for inclusion in the cost.

16 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

MANAGEMENT DISCUSSION AND ANALYSIS (CONTINUED)

(4) Major operating expenses (Continued)

During the Period, the administration expenses of the Group amounted to approximately RMB666 million, representing an increase of approximately 12.51% over the corresponding period in 2019. This was mainly due to the commencement of operation of new generating units.

During the Period, the tax and surcharges of the Group amounted to approximately RMB538 million, representing an increase of approximately 7.49% over the corresponding period in 2019. This was mainly due to the decrease in deducted input tax and increase in value added tax payables resulted by the decrease in coal price.

During the Period, the other operating expenses of the Group amounted to approximately RMB536 million, representing a decrease of approximately 1.09% over the corresponding period in 2019. This was mainly due to the year-on-year decrease in heat purchase charges and water charges.

(5) Other revenue and net income

During the Period, the other revenue and net income of the Group amounted to approximately RMB892 million, representing an increase of approximately 50.75% over the corresponding period in 2019. This was mainly due to the year-on-year increase in revenue from sales of by-products of power generation such as coal ash and gypsum.

(6) Finance costs

During the Period, the finance costs of the Group amounted to approximately RMB2,428 million, representing a decrease of approximately 8.39% over the corresponding period in 2019. This was mainly due to the year-on-year decrease in equity instruments issued, interest-bearing debt and the capital cost rate.

(7) Share of results of associates and joint ventures

During the Period, the share of results of associates and joint ventures of the Group amounted to approximately RMB250 million, representing a decrease of approximately 22.24% over the corresponding period in 2019. This was mainly due to the year-on-year decrease in income of coal mining enterprises invested by the Group.

2020 INTERIM REPORT 17

MANAGEMENT DISCUSSION AND ANALYSIS (CONTINUED)

(8) Income tax

During the Period, the income tax of the Group amounted to approximately RMB806 million, representing an increase of approximately 57.49% over the corresponding period in 2019. This was mainly due to the increase in the Group's profit.

(9) Pledge and mortgage of assets

As at 30 June 2020, the Company and its subsidiaries have pledged their income stream in respect of the sale of electricity and heat to secure loans amounting to approximately RMB17,589 million.

As at 30 June 2020, some subsidiaries of the Company have mortgaged their generating units and relevant equipment, land use rights and mining rights to secure loans amounting to approximately RMB4,162 million.

(10)Indebtedness

As at 30 June 2020, the total borrowings of the Group amounted to approximately RMB93,114 million, of which borrowings denominated in Euro amounted to approximately EUR9 million. The liabilities to assets ratio was approximately 61.14%, representing a decrease of 4 percentage points compared to that at the end of 2019. Borrowings of the Group were mainly at floating rates. In addition, the closing balance of super short-term debentures, medium-term notes payable (including the portion due within one year) and lease liabilities of the Group amounted to approximately RMB300 million, RMB12,489 million and RMB2,230 million, respectively.

(11)Contingent liabilities

As at 30 June 2020, Guang'an Company, a subsidiary of the Company, has provided guarantees to banks for loans amounting to RMB43.58 million which were granted to Sichuan Huayingshan Longtan Coal Company Limited, an associate of Guang'an Company.

(12) Cash and cash equivalents

As at 30 June 2020, the Group had cash and cash equivalents of approximately RMB6,044 million.

18 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

MANAGEMENT DISCUSSION AND ANALYSIS (CONTINUED)

(13) Exchange rate fluctuation risk and related hedging

The Group mainly engages in business and obtains income in China, and has a relatively small amount of foreign currency borrowings. Therefore, the exchange rate fluctuation risk is relatively low. Based on the above consideration, the Group did not adopt relevant hedging measures.

Save as disclosed herein, information with respect to the Group's other matters as set out in paragraph 32 of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Hong Kong Listing Rules") (The Stock Exchange of Hong Kong Limited is referred to as the "Hong Kong Stock Exchange") has not changed materially from that included in the Company's 2019 annual report.

BUSINESS OUTLOOK

In the second half of the year, the Group will be confronted with a business environment where both opportunities and challenges co-exist. The periodical success in prevention and control of the COVID-19 epidemic in China and the quick restoration of the economic and social order have gradually stimulated the increase in electricity consumption, and the development trend of long-term economic upturn in China remains unchanged. Chinese government has strengthened the policies and measures for "six stabilizations" and "six guarantees", reinforced the counter-cyclical regulation on macro-policies, and continuously intensified tax cut and fee reduction, which have provided favorable conditions for the Group to improve quality and efficiency.

Meanwhile, the Group remains facing risks arising from the power market, coal market and environmental protection.

In terms of the power market, the export-driven growth slows down due to the spread of international COVID-19 epidemic and the rise of trade protectionism. In the second half of the year, the electricity power demand will be subject to uncertainty, and the Group will face great downward pressure on power generation. The external electricity purchased by Shandong, Hebei and Henan has occupied the power generation space by coal-fired generating units in these provinces, with serious conflicts caused, and the number of utilization hours of coal-fired generating units is also declining, which will exert certain impact on the Group. As the reform further deepens, the power generation and utilization plan will be fully liberalized, and the medium & long term market and the spot market will be expanded and popularized, thereby leading to fiercer competition at the power market, increasing proportion of traded electricity, and lower overall electricity price level. The Group will strengthen marketing and further enhance the ability to increase income. The Group will make analysis, research and judgment on the power market situation, grasp the opportunity in accelerating recovery of electricity demand, formulate competitive strategies for differentiated markets, and make every effort to improve the power utilization efficiency per KWh.

2020 INTERIM REPORT 19

BUSINESS OUTLOOK (CONTINUED)

In terms of the coal market, China has continuously strengthened macro-control of the coal industry, increased the reduction of production capacity in major coal mines, and accelerated the concentration of resources in Shanxi, Inner Mongolia and Shaanxi and in leading enterprises by virtue of industry merger and restructuring and replacement of production capacity. The increasing proportion of long-distanceelectricity-coal transportation between regions, and the vulnerability of coal transportation to extreme weather and geological disasters along the railway lines have caused corresponding greater impacts on the coal market. As affected by the rebound of coal demand during the summer peak period and the limited supplement of the imported coal market, the electricity-coal market will show a tense situation during the summer peak period, which will somewhat restrict the Group from further improving its benefits. The Group will further enhance the analysis, research and judgment on the coal market situation, improve the market adaptability, scientifically formulate the procurement strategies, expand the procurement channels, optimize the coal intake structure, reasonably control the inventory, and make multiple measures to curb the rebound of coal price.

In terms of environmental protection, the newly revised Law of the People's Republic of China on Prevention and Control of Environmental Pollution by Solid Wastes will come into effect from September 2020, pursuant to which waste solids will be managed more rigidly and vigorously. Enterprises will take more responsibilities and face stricter regulatory control, and may pay more expenses for environmental protection. The Group will resolutely carry out the deployment requirements of the national pollution prevention and control campaign, carefully implement the environmental protection policies, strengthen the operation of environmental protection facilities and the supervision of environmental protection indexes, strictly control the up-to-standard discharge of pollutants, follow up and supervise the rectification and reform of environmental protection issues in subsidiaries, and attach great importance to the control over eco-environmental protection.

SIGNIFICANT EVENTS

Resignation of the Director and Supervisor

On 25 March 2020, due to age, Mr. Tian Hongbao tendered his resignation as the vice chairman, an executive director and a member of the Nomination Committee of the eighth session of the Board of the Company and the general manager of the Company with effect from the same date. On 8 May 2020, due to work arrangement, Mr. Peng Xingyu tendered his resignation as a supervisor of the eighth session of the supervisory committee of the Company with effect from the same date.

For details, please refer to the announcements of the Company dated 25 March 2020 and 8 May 2020.

20 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

SIGNIFICANT EVENTS (CONTINUED)

Change of the Board and Supervisory Committee and Appointment of the General Manager

At the 2019 annual general meeting of the Company (the "AGM") held on 30 June 2020, Mr. Wang Xuxiang, Mr. Luo Xiaoqian and Mr. Feng Rong were re-elected or elected as the executive directors of the ninth session of the Board of the Company; Mr. Ni Shoumin, Mr. Peng Xingyu, Mr. Gou Wei, Mr. Hao Bin and Mr. Wang Xiaobo were re-elected or elected as the non-executive directors of the ninth session of the Board of the Company; Mr. Wang Dashu, Mr. Zong Wenlong, Mr. Feng Zhenping and Mr. Li Xingchun were re-elected or elected as the independent non-executive directors of the ninth session of the Board of the Company; Ms. Chen Wei and Mr. Ma Jing'an were re-elected or elected as the supervisors of the ninth session of the supervisory committee of the Company. On 30 June 2020, according to the laws and regulations of the PRC and the Articles of Association, the employees of the Company democratically elected Mr. Zhang Peng as the employee representative supervisor of the ninth session of the supervisory committee of the Company.

On 30 June 2020, due to the expiry of their terms of office, Mr. Chen Cunlai ceased to serve as the executive director of the Company; Mr. Chen Haibin and Mr. Tao Yunpeng ceased to serve as the non-executive directors of the Company; Mr. Ding Huiping and Mr. Wang Chuanshun ceased to serve as the independent non-executive directors of the Company; Mr. Zha Jianqiu ceased to serve as the independent supervisor of the Company; and Ms. Yuan Yanan and Mr. Ma Jing'an ceased to serve as the employee representative supervisors of the Company.

At the first meeting of the ninth session of the Board of the Company held on 30 June 2020, Mr. Wang Xuxiang and Mr. Ni Shoumin were respectively re-elected as the chairman and vice chairman of the Company, and Mr. Luo Xiaoqian was appointed as the general manager of the Company. At the first meeting of the ninth session of the supervisory committee of the Company held on 30 June 2020, Ms. Chen Wei was re-elected as the chairman of the supervisory committee of the Company.

For details, please refer to the announcements of the Company dated 8 June 2020 and 30 June 2020, and the circular of the Company dated 15 May 2020.

Amendments to the Articles of Association and Its Appendices

In order to further improve corporate governance and strengthen regulated operations of the listed company, the Company has, upon approval at the 27th meeting of the eighth session of the Board and the AGM of the Company, amended the Articles of Association and its appendices, including the Rules of Procedures for General Meetings, the Rules of Procedures for the Board and the Rules of Procedures for the Supervisory Committee, in accordance with the Company Law of the People's Republic of China (2018 Revision), the Guidelines on Articles of Associations of Listed Companies (2019 Revision), the Code of Corporate Governance for Listed Companies (2018 Revision) and other relevant laws and regulations. Such amendments involved provisions in relation to stock repurchase, election of the Board members, constitution of the supervisory committee, serving concurrent positions by senior management, etc.

2020 INTERIM REPORT 21

SIGNIFICANT EVENTS (CONTINUED)

Amendments to the Articles of Association and Its Appendices (Continued)

For details, please refer to the announcements of the Company dated 25 March 2020 and 30 June 2020, and the circular of the Company dated 15 May 2020.

Renewal of Finance Lease Framework Agreement with Huadian Financial Leasing Company Limited ("Huadian Financial Leasing")

On 8 May 2020, the Company entered into the Finance Lease Framework Agreement with Huadian Financial Leasing for a term of three years from 1 July 2020 to 30 June 2023, pursuant to which, Huadian Financial Leasing agreed to provide finance lease services including direct lease services and sale and leaseback services to the Group. For the three years ending 30 June 2023, the cap of the maximum financing balance obtained by the Group from Huadian Financial Leasing is RMB6 billion, and the annual cap for each of the direct lease services and sale and leaseback services is RMB1.5 billion and RMB0.5 billion, respectively.

Huadian Financial Leasing is a subsidiary of the Company's controlling shareholder, i.e. China Huadian Corporation Limited ("China Huadian"), and thus a connected person of the Company under the Hong Kong Listing Rules. The connected transactions contemplated under the Finance Lease Framework Agreement will be carried out on a continuing or recurring basis in the ordinary and usual course of the business of the Group and accordingly constitute continuing connected transactions of the Company under the Hong Kong Listing Rules. As one or more of the percentage ratios in respect of the transactions under the Finance Lease Framework Agreement is more than 0.1% but less than 5%, the transactions are subject to the reporting and announcement requirements but are exempt from the independent shareholders' approval requirement under Chapter 14A of the Hong Kong Listing Rules. However, such transactions are subject to the approval by the independent shareholders of the Company at the general meeting in accordance with the Rules Governing the Listing of Stocks on Shanghai Stock Exchange. Such transactions and the caps thereof have been approved by the independent shareholders of the Company at the AGM.

The finance leases under the Finance Lease Framework Agreement are expected to reduce the Company's finance costs, improve its capital utilization rate and thereby promote its business development. In particular, the finance leases can provide stable, reliable and low-cost financial support for the Group's clean energy power generation projects and lay a solid foundation for the Group's future daily operations.

For details, please refer to the announcements of the Company dated 8 May 2020 and 30 June 2020, and the circular of the Company dated 15 May 2020.

22 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

SHAREHOLDINGS OF SUBSTANTIAL SHAREHOLDERS

So far as the directors of the Company are aware, each of the following persons, not being a director, supervisor, chief executive or members of the senior management of the Company, had an interest or short position as at 30 June 2020 in the Company's shares or underlying shares (as the case may be) which would fall to be disclosed to the Company and the Hong Kong Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the Securities and Futures Ordinance (the "SFO"), or was otherwise interested in 5% or more of any class of issued share capital of the Company as at 30 June 2020, or was a substantial shareholder (as defined in the Hong Kong Listing Rules) of the Company as at 30 June 2020:

			Approximate	Approximate	Approximate
			percentage	percentage	percentage
			of the total	of the total	of the total
			number of	number of	number of
		Number	shares of	A shares of	H shares of
	Class of	of shares	the Company	the Company	the Company
Name of shareholder	shares	held	in issue	in issue	in issue	Capacity

China Huadian	A shares	4,534,199,224	(L)
	H shares	85,862,000	(L)
Shandong Development	A shares	800,766,729	(L)
Investment Holding
Group Co., Ltd.
Pzena Investment	H shares	157,116,672	(L)
Management, LLC
Pandanus Partners L.P.	H shares	86,160,000	(L)
Pandanus Associates Inc.	H shares	86,160,000	(L)
FIL Limited	H shares	86,160,000	(L)

(Note 1)

(Note 2)

(Note 2)

(Note 2)

45.97%	55.66%	-	Beneficial owner
0.87%	-	5.00%	Interest of controlled
			corporation
8.12%	9.83%	-	Beneficial owner
1.59%	-	9.15%	Investment manager
0.87%	-	5.02%	Interest of controlled
			corporation
0.87%	-	5.02%	Interest of controlled
			corporation
0.87%	-	5.02%	Interest of controlled
			corporation

1. = Long position

Note 1: So far as the directors of the Company are aware or are given to understand, these 85,862,000 H shares were held directly by a wholly-owned subsidiary of China Huadian, namely, China Huadian Hong Kong Company Limited, through CCASS in the name of HKSCC Nominees Limited.

Note 2: So far as the directors of the Company are aware or are given to understand, these 86,160,000 H shares were held in the name of HKSCC Nominees Limited. These 86,160,000 H shares were held by FIL Limited through its wholly-owned subsidiaries (namely FIL Asia Holdings Pte Limited, FIL Investment Management (Hong Kong) Limited, FIL Fund Management Limited, FIL Holdings (UK) Limited, FIL Investment Advisors (UK) Limited, FIL Investment Services (UK) Limited, FIL Investments International, FIL PENSIONS MANAGEMENT, FIL Life Insurance Limited and FIL Fund Management (Ireland) Limited). Pandanus Associates Inc. and Pandanus Partners L.P. were deemed to be interested in the same tranche of H shares through their direct or indirect control over FIL Limited.

2020 INTERIM REPORT 23

SHAREHOLDINGS OF SUBSTANTIAL SHAREHOLDERS (CONTINUED)

Save as disclosed above and so far as the directors of the Company are aware, as at 30 June 2020, no other person (other than the directors, supervisors, chief executive or members of senior management of the Company) had any interest or short position in the Company's shares or underlying shares (as the case may be) which would fall to be disclosed to the Company and the Hong Kong Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO and as recorded in the register required to be kept under Section 336 of the SFO, or was otherwise a substantial shareholder (as defined in the Hong Kong Listing Rules) of the Company.

INTERESTS OF DIRECTORS, SUPERVISORS, CHIEF EXECUTIVE OR MEMBERS OF SENIOR MANAGEMENT IN THE SECURITIES

As at 30 June 2020, the interests or short positions of the directors, supervisors, chief executive or members of senior management of the Company in the shares, underlying shares and debentures of the Company or any of its associated corporations (as defined in Part XV of the SFO) which were notified to the Company and the Hong Kong Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they were taken or deemed to have under such provisions of the SFO), or which were recorded in the register required to be kept by the Company under Section 352 of the SFO, or which were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (the "Model Code") adopted by the Company, to be notified to the Company and the Hong Kong Stock Exchange, were as follows:

		Number of
		A shares of the
		Company held as
Name	Position in the Company	personal interest	Capacity in A shares
Gou Wei	Non-executive director	10,000 (Note)	Beneficial owner

Note: Accounted for approximately 0.0001% of the total issued A shares of the Company on 30 June 2020.

24 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

INTERESTS OF DIRECTORS, SUPERVISORS, CHIEF EXECUTIVE OR MEMBERS OF SENIOR MANAGEMENT IN THE SECURITIES (CONTINUED)

Save as disclosed above, as at 30 June 2020, none of the directors, supervisors, chief executive or members of the senior management of the Company and their respective associates had any interest or short position in the shares, underlying shares and/or debentures (as the case may be) of the Company and/or any of its associated corporations (as defined in Part XV of the SFO) which was (i) required to be notified to the Company and the Hong Kong Stock Exchange pursuant to the provisions of Divisions 7 and 8 of Part XV of the SFO (including interest or short position which any such director, supervisor, chief executive or member of senior management of the Company was taken or deemed to have under such provisions of the SFO) or was (ii) required to be recorded in the register kept by the Company pursuant to Section 352 of the SFO, or which was otherwise (iii) required to be notified to the Company and the Hong Kong Stock Exchange pursuant to the Model Code (which for this purpose shall be deemed to apply to the supervisors of the Company to the same extent as it applies to the directors of the Company).

During the Period, the Company has adopted a code of conduct regarding transactions of the directors of the Company in the Company's securities on terms identical to those of the Model Code. Having made specific enquiries of all directors and supervisors of the Company, the Company understands that all of the directors and supervisors have complied with the required standards set out in the Model Code.

PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES

During the Period, neither the Company nor any of its subsidiaries had purchased, sold or redeemed any of its issued securities ("securities" having the meaning as ascribed thereto under paragraph 1 of Appendix 16 to the Hong Kong Listing Rules).

DESIGNATED DEPOSITS AND OVERDUE TIME DEPOSITS

As at 30 June 2020, the Group's deposits placed with financial institutions or other parties did not include any designated or trust deposits, or any material time deposits which could not be collected by the Group upon maturity.

MATERIAL LITIGATION

As of 30 June 2020, certain members of the Group were parties to certain litigations arising from the ordinary course of business or acquisition of assets. However, the management of the Group believes that any possible legal liability which incurred or may incur from the aforesaid litigations will not have any material adverse effect on the financial position and operating results of the Group.

2020 INTERIM REPORT 25

AUDIT COMMITTEE

The unaudited condensed consolidated financial statements for the Period prepared under the International Accounting Standard 34 "Interim Financial Reporting" have been reviewed by the Audit Committee.

EMPLOYEE REMUNERATION POLICY FOR THE GROUP

As at 30 June 2020, the total number of employees of the Group was 26,922. The Group has always complied with the relevant requirements of the PRC, and determined the salary levels of employees according to its economic benefits. It has established an objective, impartial, scientific and effective remuneration distribution mechanism and staff performance appraisal mechanism, according to the talent concept of "identifying talents through performance, selecting talents through competition and awarding talents through remuneration".

CORPORATE GOVERNANCE

The Company has always attached great importance to corporate governance and has continuously implemented management innovation. In strict compliance with the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China, the Rules Governing the Listing of Stocks on the Shanghai Stock Exchange, the Hong Kong Listing Rules and relevant provisions promulgated by domestic and overseas securities regulatory institutions, the Company has improved the structure of corporate governance, enhanced the level of the Company's governance and endeavored to achieve the harmonious development between the growth of the Company and the interest of its shareholders.

The codes on corporate governance of the Company include, but not limited to, its Articles of Association, Rules of Procedures for General Meetings, Rules of Procedures for the Board, Rules of Procedures for the Supervisory Committee, the Terms of Reference for the Audit Committee under the Board, the Terms of Reference for the Remuneration and Appraisal Committee under the Board, and the Terms of Reference for the Nomination Committee under the Board, etc.

The Company has established and improved the standardised operating systems of the general meetings, meetings of the Board and supervisory committee of the Company and its subsidiaries. The independent directors, the Audit Committee and the supervisory committee have actively supervised the preparation of regular reports, whereas non-executive directors and supervisors have performed their duties by carrying out annual reviews and the supervisory committee has further improved its supervisory duties. The Company has upheld transparency and compliance with information disclosures. Trainings regarding corporate governance and regulatory operations were provided to the directors, supervisors and secretaries to the Board of the Company and its subsidiaries. In accordance with the relevant requirements of the risk management and internal control, regular assessments were made on the risk management and internal control of the Company.

26 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

CORPORATE GOVERNANCE (CONTINUED)

In the first half of the year, the Group complied with the environmental, social and governance requirements under the Hong Kong Listing Rules, and continuously tracked the performance indicators of the Group in terms of environmental protection, social responsibility and corporate governance. In accordance with the relevant revisions made to inside information in the Securities Law of the People's Republic of China and the Guidelines of Shanghai Stock Exchange on Insiders Reporting by Listed Companies, the Company has made corresponding revisions to the Registration and Management System for the Insiders with Inside Information.

The Board adheres to the principles of corporate governance in order to achieve prudent management and enhance value for shareholders. Transparency, accountability and independence are enshrined under these principles. The Board has reviewed the relevant requirements prescribed under the codes on corporate governance adopted by the Company and its actual operations, and has taken the view that the corporate governance practices of the Company during the Period have met the requirements under the code provisions in the Corporate Governance Code ("Corporate Governance Code") as contained in Appendix 14 to the Hong Kong Listing Rules. The Company has also adopted the board member diversity policy. In certain aspects, the corporate governance codes adopted by the Company are more stringent than the code provisions set out in the Corporate Governance Code, the major particulars of which are as follows:

• The Company has formulated the Code on Trading in Securities of Huadian Power International Corporation Limited for Directors and Supervisors and the Code on Trading in Securities of Huadian Power International Corporation Limited for Employees, which are on terms no less lenient than those set out in the Model Code.
• In addition to the Audit Committee, the Remuneration and Appraisal Committee and the Nomination Committee, the Company has established the Strategic Committee and has stipulated the Terms of Reference for the Strategic Committee.
• The Audit Committee comprises five members, including two non-executive directors and three independent non-executive directors.

By order of the Board

Huadian Power International Corporation Limited*

Wang Xuxiang

Chairman

Beijing, the PRC

20 August 2020

2020 INTERIM REPORT 27

Report on Review of Condensed

Consolidated Financial Statements

TO THE BOARD OF DIRECTORS OF

HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

華電國際電力股份有限公司

(Incorporated in the People's Republic of China with limited liability)

INTRODUCTION

We have reviewed the condensed consolidated financial statements set out on pages 28 to 70 which comprise the condensed consolidated statement of financial position of Huadian Power International Corporation Limited (the "Company") and its subsidiaries (collectively referred to as the "Group") as of 30 June 2020 and the related condensed consolidated statement of profit or loss and other comprehensive income, condensed consolidated statement of changes in equity and condensed consolidated statement of cash flows for the six-month period then ended, and a summary of significant accounting policies and other explanatory notes (the "condensed consolidated financial statements"). The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited require the preparation of a report on interim financial information to be in compliance with the relevant provisions thereof and International Accounting Standard 34 "Interim Financial Reporting" ("IAS 34") issued by the International Accounting Standards Board. The directors are responsible for the preparation and presentation of the condensed consolidated financial statements in accordance with IAS

34. Our responsibility is to express a conclusion on the condensed consolidated financial statements based on our review. This report is made solely to you, as a body, in accordance with our agreed terms of engagement, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report.

SCOPE OF REVIEW

We conducted our review in accordance with Hong Kong Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Hong Kong Institute of Certified Public Accountants. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Hong Kong Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

CONCLUSION

Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34.

BDO Limited

Certified Public Accountants

Amy, Yau Shuk Yuen

Practising Certificate no. P06095

Hong Kong, 20 August 2020

28 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income

For the Six Months Ended 30 June 2020

				Six months ended 30 June
	Notes	2020		2019
				RMB' 000		RMB'000
				(unaudited)		(unaudited)
Turnover	4		40,942,846	43,263,433
Operating expenses
Fuel costs			(18,501,595)	(21,755,169)
Cost of coal sold			(4,962,286)	(5,312,664)
Depreciation and amortisation			(5,831,713)	(5,552,552)
Repairs, maintenance and inspection			(1,871,703)	(1,856,429)
Personnel costs			(2,852,466)	(2,854,177)
Administration expenses			(666,386)	(592,267)
Taxes and surcharges			(538,282)	(500,789)
Other operating expenses	7(b)	(536,102)	(542,011)
			(35,760,533)	(38,966,058)
Operating profit			5,182,313		4,297,375
Investment income	5		23,174		7,971
Other revenue and net income			892,239	591,860
Interest income from bank deposits			48,552	43,814
Fair value gain on financial liabilities
at fair value through profit or loss				-	201
Finance costs	6		(2,427,861)	(2,650,166)
Share of results of associates and
joint ventures			249,790	321,242
Profit before taxation	7(a)	3,968,207		2,612,297
Income tax	8		(805,969)	(511,744)
Profit for the period			3,162,238		2,100,553

2020 INTERIM REPORT 29

Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (Continued)

For the Six Months Ended 30 June 2020

			Six months ended 30 June
	Notes	2020		2019
			RMB' 000		RMB'000
			(unaudited)		(unaudited)
Other comprehensive income
for the period (net of tax):
Item that may be subsequently
reclassified to profit or loss:
Share of other comprehensive income of
investees accounted for under the
equity method	9	2,595			22,187
Total comprehensive income for the period		3,164,833		2,122,740
Profit for the period attributable to:
Equity holders of the Company		2,411,435		1,637,885
Non-controlling interests		750,803		462,668
		3,162,238		2,100,553
Total comprehensive income for
the period attributable to:
Equity holders of the Company		2,414,030		1,659,329
Non-controlling interests		750,803		463,411
			3,164,833		2,122,740
Basic earnings per share	10		RMB0.200		RMB0.144

30 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

Condensed Consolidated Statement of

Financial Position

At 30 June 2020

			At		At
			30 June		31 December
	Notes	2020		2019
			RMB' 000		RMB'000
			(unaudited)		(audited)
Non-current assets
Property, plant and equipment	11	158,134,297		159,729,585
Right-of-use assets		7,977,192		8,252,067
Construction in progress	12	17,584,015		16,657,612
Investment properties		32,518		32,752
Intangible assets		4,127,970		4,232,732
Goodwill		1,327,522		1,327,522
Interests in associates and joint ventures		11,847,980		11,776,604
Financial assets at fair value through
profit or loss		292,170		279,439
Other non-current assets	13	2,715,530		2,661,438
Deferred tax assets		554,631		614,436
		204,593,825		205,564,187
Current assets
Inventories		3,101,479		3,222,936
Trade debtors and bills receivable	14	11,788,076		12,261,884
Deposits, other receivables and prepayments	15	4,293,246		4,475,544
Tax recoverable		73,325		52,011
Restricted deposits	16	107,192		122,233
Cash and cash equivalents	17	6,044,048		6,465,560
		25,407,366		26,600,168

2020 INTERIM REPORT 31

Condensed Consolidated Statement of

Financial Position (Continued)

						At 30 June 2020
			At		At
			30 June		31 December
	Notes	2020		2019
			RMB' 000		RMB'000
			(unaudited)		(audited)
Current liabilities
Bank loans		26,518,643		29,454,795
Loans from shareholders		200,000		400,000
State loans		4,499		4,466
Other loans	18(a)	3,719,747		4,701,694
Short-term debentures payable	18(b)	300,283		3,541,337
Long-term debentures payable -
current portion	18(c)		-	1,998,796
Amount due to the parent company		72,554		72,785
Lease liabilities		847,709		738,666
Trade creditors and bills payable	19	16,154,246		17,636,233
Other payables	20	8,751,753		8,184,037
Tax payable		580,391		596,975
		57,149,825		67,329,784
Net current liabilities		(31,742,459)	(40,729,616)
Total assets less current liabilities		172,851,366		164,834,571

32 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

Condensed Consolidated Statement of

Financial Position (Continued)

At 30 June 2020

			At		At
			30 June		31 December
	Notes	2020		2019
			RMB' 000		RMB'000
			(unaudited)		(audited)
Non-current liabilities
Bank loans		50,446,635		57,124,722
Loans from shareholders		6,223,729		2,193,730
State loans		52,838		52,881
Other loans	18(a)	5,947,808		5,252,197
Long-term debentures payable	18(c)	12,488,615		10,485,671
Lease liabilities		1,381,822		2,060,661
Long-term payables		256,523		313,791
Provisions		170,821		127,532
Deferred government grants		1,571,326		1,617,262
Deferred income	21	2,828,140		2,777,731
Deferred tax liabilities		2,093,726		2,203,843
Retirement benefit obligations		18,087		16,907
		83,480,070		84,226,928
Net assets		89,371,296		80,607,643
Capital and reserves
Share capital		9,862,977		9,862,977
Perpetual capital securities	23	20,945,954		16,129,055
Reserves		37,360,534		36,609,706
Equity attributable to equity holders of
the Company		68,169,465		62,601,738
Non-controlling interests		21,201,831		18,005,905
Total equity		89,371,296		80,607,643

The condensed consolidated financial statements on pages 28 to 70 were approved and authorised for issue by the board of directors on 20 August 2020 and are signed on its behalf by:

Luo Xiaoqian

Feng Rong

Director

Director

2020 INTERIM REPORT 33

Condensed Consolidated Statement of

Changes in Equity

For the Six Months Ended 30 June 2020

								Attributable to equity holders of the Company
																					Non-
						Statutory	Discretionary			Fair			Perpetual
		Share	Capital	surplus	surplus	Revaluation	value	Retained	capital				controlling	Total
		capital	reserve	reserve	reserve	reserve	reserve	profits	securities	Total		interests	equity
		RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000		RMB'000	RMB'000
																(Note 23)
Balance at 31 December
2019 (audited)	9,862,977	15,149,644	3,571,847	68,089	44,726	(19,410)	17,794,810	16,129,055	62,601,738	18,005,905	80,607,643
Profit for the period	-	-	-	-	-	-	1,974,721	436,714	2,411,435	750,803	3,162,238
Other comprehensive
income(Note 9)	-	-	-	-	-	2,595	-	-	2,595		-	2,595
Total comprehensive
income for the period	-	-	-	-	-	2,595	1,974,721	436,714	2,414,030	750,803	3,164,833
Capital injection from
non-controlling interests	-	-	-	-	-	-	-	-	-	2,865,023	2,865,023
Issue of perpetual capital
securities(Note 23)	-	-	-	-	-	-	-	4,994,599	4,994,599		-	4,994,599
Appropriation of specific reserve	-	-	74,460	-	-	-	(74,460)	-	-		-	-
Utilisation of specific reserve	-	-	(22,954)	-	-	-	22,954	-	-		-	-
Dividends recognised as
distribution(Note 22)	-	-	-	-	-	-	(1,439,995)	-	(1,439,995)		-	(1,439,995)
Dividends declared to
non-controlling interests	-	-	-	-	-	-	-	-	-	(424,861)	(424,861)
Distributions payable to
holders of perpetual capital
securities(Note 23)	-	-	-	-	-	-	-	(614,414)	(614,414)		-	(614,414)
Others	-	213,507	-	-	-	-	-	-	213,507	4,961	218,468
Balance at 30 June 2020
(unaudited)	9,862,977	15,363,151	3,623,353	68,089	44,726	(16,815)	18,278,030	20,945,954	68,169,465	21,201,831	89,371,296

34 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

Condensed Consolidated Statement of

Changes in Equity (Continued)

For the Six Months Ended 30 June 2020

								Attributable to equity holders of the Company
																					Non-
						Statutory	Discretionary			Fair			Perpetual
		Share	Capital	surplus	surplus	Revaluation	value	Retained	capital				controlling	Total
		capital	reserve	reserve	reserve	reserve	reserve	profits	securities	Total		interests	equity
		RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000		RMB'000	RMB'000
Balance at 1 January 2019
(audited)	9,862,977		14,883,689	3,309,073	68,089	44,726	(41,037)	15,894,850	9,108,775	53,131,142	15,110,722	68,241,864
Profit for the period		-	-	-	-	-	-	1,416,521	221,364	1,637,885	462,668	2,100,553
Other comprehensive
income(Note 9)		-	-	-	-	-	21,444	-	-	21,444	743	22,187
Total comprehensive income
for the period		-	-	-	-	-	21,444	1,416,521	221,364	1,659,329	463,411	2,122,740
Capital injection from
non-controlling interests		-	-	-	-	-	-	-	-	-	88,901	88,901
Addition from business
combination		-	-	-	-	-	-	-	-	-	108,923	108,923
Issue of perpetual
capital securities		-	-	-	-	-	-	-	2,994,072	2,994,072		-	2,994,072
Appropriation of specific reserve		-	-	67,944	-	-	-	(67,944)	-	-		-	-
Utilisation of specific reserve		-	-	(54,591)	-	-	-	54,591	-	-		-	-
Dividends recognised as
distribution(Note 22)		-	-	-	-	-	-	(650,956)	-	(650,956)		-	(650,956)
Dividends declared to
non-controlling interests		-	-	-	-	-	-	-	-	-	(146,426)	(146,426)
Distributions payable to holders
of perpetual capital securities		-	-	-	-	-	-	-	(366,940)	(366,940)		-	(366,940)
Others		-	67,945	-	-	-	-	-	-	67,945	1,728	69,673
Balance at 30 June 2019
(unaudited)	9,862,977		14,951,634	3,322,426	68,089	44,726	(19,593)	16,647,062	11,957,271	56,834,592	15,627,259	72,461,851

2020 INTERIM REPORT 35

Condensed Consolidated Statement of

Cash Flows

For the Six Months Ended 30 June 2020

			Six months ended 30 June
	Notes	2020		2019
			RMB' 000		RMB'000
			(unaudited)		(unaudited)
Cash generated from operations		9,655,951	7,083,767
PRC enterprise income tax paid		(885,455)	(806,809)
Net cash generated from operating activities		8,770,496		6,276,958
Net cash used in investing activities	25	(6,191,443)	(4,138,890)
Net cash (used in)/generated from
financing activities	25	(3,000,565)	426,865
(Decrease)/increase in cash and
cash equivalents		(421,512)	2,564,933
Cash and cash equivalents at 1 January		6,465,560		6,638,326
Cash and cash equivalents at 30 June	17	6,044,048		9,203,259

36 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

Notes to the Condensed Consolidated

Financial Statements

For the Six Months Ended 30 June 2020

1. GENERAL

Huadian Power International Corporation Limited (the "Company") was established in the People's Republic of China (the "PRC") on 28 June 1994 as a joint stock limited company.

The Company and its subsidiaries (together referred to as the "Group") are principally engaged in the generation and sale of electricity, heat and coal. Majority of electricity generated is supplied to the local power grid companies where the power plants are located.

The condensed consolidated financial statements is presented with Renminbi ("RMB"), the functional currency of the Company.

2. BASIS OF PREPARATION

The condensed consolidated financial statements have been prepared in accordance with International Accounting Standard 34 ("IAS 34"), Interim Financial Reporting as well as with the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules").

In preparing these condensed consolidated financial statements, the significant judgements made by the management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 December 2019 (the "2019 annual financial statements"), except for those that relate to revised standards or interpretations effective for the first time for periods beginning on or after 1 January 2020. Details are set out in note 3.

2020 INTERIM REPORT 37

Notes to the Condensed Consolidated

Financial Statements (Continued)

For the Six Months Ended 30 June 2020

3. APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS ("IFRSs")

The accounting policies adopted in the preparation of the condensed consolidated financial statements are consistent with those followed in the preparation of the 2019 annual financial statement of the Group, except for the adoption of the following revised standards, which are effective as of 1 January 2020. The Group has not early adopted any new standard, interpretation or amendment that has been issued but is not yet effective for the current accounting period.

Adoption of revised standards and interpretations effective on 1 January 2020:

Amendments to IFRS 3	Definition of a Business
Amendments to IFRS 7, IFRS 9 and IAS 39	Interest Rate Benchmark Reform
Amendments to IAS 1 and IAS 8	Definition of Material

Revised Conceptual Framework for Financial Reporting

The new or amended IFRSs that are effective from 1 January 2020 did not have any significant impact on the Group's accounting policies.

Amendments to IFRS 3: Definition of a Business

The amendments clarify that a business must include, as a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs, together with providing extensive guidance on what is meant by a "substantive process".

Additionally, the amendments remove the assessment of whether market participants are capable of replacing any missing inputs or processes and continuing to produce outputs, whilst narrowing the definition of "outputs" and a "business" to focus on returns from selling goods and services to customers, rather than on cost reductions.

An optional concentration test has also been added that permits a simplified assessment of whether an acquired set of activities and assets is not a business.

38 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

Notes to the Condensed Consolidated

Financial Statements (Continued)

For the Six Months Ended 30 June 2020

3. APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS ("IFRSs")

(CONTINUED)

Amendments to IFRS 7, IFRS 9 and IAS 39: Interest Rate Benchmark Reform

The amendments modify some specific hedge accounting requirements to provide relief from potential effects of the uncertainties caused by interest rate benchmark reform. In addition, the amendments require companies to provide additional information to investors about their hedging relationships which are directly affected by these uncertainties.

Amendments to IAS 1 and IAS 8: Definition of Material

The amendments provide a new definition of material that states "information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity."

The amendments clarify that materiality will depend on the nature or magnitude of information, either individually or in combination with other information, in the context of the financial statements. A misstatement of information is material if it could reasonably be expected to influence decisions made by the primary users.

Revised Conceptual Framework for Financial Reporting

The Conceptual Framework is not a standard, and none of the concepts contained therein override the concepts or requirements in any standard. The purpose of the Conceptual Framework is to assist the International Accounting Standards Board in developing standards, to help preparers develop consistent accounting policies where there is no applicable standard in place and to assist all parties to understand and interpret the standards. The revised Conceptual Framework includes some new concepts, provides updated definitions and recognition criteria for assets and liabilities and clarifies some important concepts.

2020 INTERIM REPORT 39

Notes to the Condensed Consolidated

Financial Statements (Continued)

For the Six Months Ended 30 June 2020

4. TURNOVER

Turnover represents the sale of electricity, heat and coal. Major components of the Group's turnover are as follows:

			Six months ended 30 June
		2020		2019
			RMB' 000		RMB'000
Sale of electricity				34,411,588
31,741,657
Sale of heat	3,702,048		3,171,501
Sale of coal	5,499,141		5,680,344
		40,942,846		43,263,433

The chief operating decision makers review the Group's revenue and profit as a whole, which are determined in accordance with the Group's accounting policies, for resources allocation and performance assessment. Therefore, the Group has only one operating and reportable segment and no further segment information is presented in the condensed consolidated financial statements. The Group's major customers are the power grid operators in relation to the sale of electricity. The revenue from sale of electricity, heat and coal is recognised at point in time. The Group's assets are mainly located in the PRC.

5. INVESTMENT INCOME

			Six months ended 30 June
		2020	2019
			RMB' 000		RMB'000
Dividend income from financial assets
measured at fair value through profit or loss	9,061		-
Gain on disposal of an associate	6,516		-
Interest income from other long-term receivables	7,597	7,395
Gain on deemed acquisition of a subsidiary		-	576
		23,174	7,971

40 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

Notes to the Condensed Consolidated

Financial Statements (Continued)

For the Six Months Ended 30 June 2020

6. FINANCE COSTS

			Six months ended 30 June
		2020		2019
			RMB' 000		RMB'000
Interest on loans and other financial liabilities				2,810,094
2,500,216
Less: interest capitalised	(180,097)	(273,342)
		2,320,119		2,536,752
Net foreign exchange loss/(gain)	1,433		(315)
Interest on lease liabilities	60,914		67,089
Other finance costs	45,395		46,640
		2,427,861		2,650,166

The borrowing costs have been capitalised at an average rate of 4.50% per annum (six months ended 30 June 2019: 4.73% per annum) for construction in progress.

2020 INTERIM REPORT 41

Notes to the Condensed Consolidated

Financial Statements (Continued)

For the Six Months Ended 30 June 2020

7. PROFIT BEFORE TAXATION

1. Profit before taxation is arrived at after charging/(crediting):

			Six months ended 30 June
		2020		2019
			RMB' 000		RMB'000
Amortisation
- Intangible assets	154,721		323,081
Depreciation
- Property, plant and equipment	5,473,024		5,002,620
- Right-of-use assets	203,734		226,851
- Investment properties	234			-
Total amortisation and depreciation	5,831,713		5,552,552
Cost of inventories expensed	25,335,584		28,933,878
Expense relating to short-term leases	28,536		22,266
Research and development costs
recognised as expense	3,994		3,133
Included in other revenue and net income:
- Government grants	(141,724)	(212,789)
- Net (gain)/loss on disposal of property,
plant and equipment	(18,889)	33,299
- Net income from sale of materials	(452,320)	(310,624)

(b) Other operating expenses:

			Six months ended 30 June
		2020	2019
			RMB' 000		RMB'000
Heating				253,444
231,839
Power charges	122,752	96,108
Water charges	159,182	182,466
Environmental restoration expenses	12,422		-
Other expense relating to short-term leases	9,907	2,608
Others		-	7,385
Total other operating expenses	536,102	542,011

42 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

Notes to the Condensed Consolidated

Financial Statements (Continued)

For the Six Months Ended 30 June 2020

8. INCOME TAX

			Six months ended 30 June
		2020		2019
			RMB' 000		RMB'000
Current tax
Charge for PRC enterprise income tax
for the period	843,192		753,962
Under provision in respect of prior years	12,850		7,024
		856,042		760,986
Deferred tax
Origination and reversal of temporary
differences and tax losses	(50,073)	(249,242)
		805,969		511,744

The charge for PRC enterprise income tax is calculated at the statutory rate of 25% (six months ended 30 June 2019: 25%) on the estimated assessable profits of the Group for the six months ended 30 June 2020 determined in accordance with relevant enterprise income tax rules and regulations, except for certain subsidiaries of the Company which are tax exempted or taxed at preferential rates of 7.5%, 12.5% or 15% (six months ended 30 June 2019: 7.5%, 12.5% or 15%).

9. OTHER COMPREHENSIVE INCOME

			Six months ended 30 June
		2020		2019
			RMB' 000		RMB'000
Share of other comprehensive income of
investees accounted for under the equity
method	2,595		22,187
Other comprehensive income, net of income tax	2,595		22,187

2020 INTERIM REPORT 43

Notes to the Condensed Consolidated

Financial Statements (Continued)

For the Six Months Ended 30 June 2020

10. EARNINGS PER SHARE

(a) Basic earnings per share

The calculation of basic earnings per share is based on the profit attributable to equity shareholders of the Company for the period and divided by the weighted average number of ordinary shares in issue during the period.

			Six months ended 30 June
		2020		2019
			RMB' 000		RMB'000
Profit attributable to equity holders
of the Company	2,411,435		1,637,885
Less: Profit attributable to holders of
perpetual capital securities
(Note 23)	(436,714)	(221,364)
Profit attributable to equity shareholders	1,974,721		1,416,521
Weighted average number of
ordinary shares in issue	9,862,976,653	9,862,976,653
Basic earnings per share (RMB)	0.200		0.144

(b) Diluted earnings per share

No diluted earnings per share was presented as there were no potential ordinary shares outstanding during the six months ended 30 June 2020 and 2019.

44 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

Notes to the Condensed Consolidated

Financial Statements (Continued)

For the Six Months Ended 30 June 2020

11. PROPERTY, PLANT AND EQUIPMENT

During the six months ended 30 June 2020, the Group acquired items of property, plant and equipment with an aggregate cost of RMB4,215 million (six months ended 30 June 2019: RMB13,229 million), including RMB3,694 million through transfer from construction in progress (six months ended 30 June 2019: RMB9,676 million through transfer from construction in progress and RMB624 million through consolidation of a former joint venture).

During the six months ended 30 June 2020, the Group disposed of certain property, plant and equipment with an aggregate carrying amount of RMB34.54 million (six months ended 30 June 2019: RMB37.33 million) for cash proceeds of RMB53.43 million (six months ended 30 June 2019: RMB4.03 million), resulting in a gain on disposal of RMB18.89 million (six months ended 30 June 2019: loss on disposal of RMB33.30 million).

As at 30 June 2020, the carrying value of property, generators and related machinery of property, plant and equipment held as collateral of the sales and leaseback agreement signed by the Group for financing purposes (note 18(a)) was RMB1,132 million (31 December 2019: RMB786 million).

12. CONSTRUCTION IN PROGRESS

The acquisition and transfer of items of construction in progress during the six months ended 30 June 2020 and 2019 are as follows:

			Six months ended 30 June
		2020	2019
			RMB' 000		RMB'000
Additions				3,089,033
4,620,657
Transfer to property, plant and equipment	(3,694,254)	(9,676,285)

2020 INTERIM REPORT 45

Notes to the Condensed Consolidated

Financial Statements (Continued)

For the Six Months Ended 30 June 2020

13. OTHER NON-CURRENT ASSETS

		At		At
		30 June		31 December
	2020		2019
		RMB' 000		RMB'000
Financial assets
- Other long-term receivables
with fixed-rate and non-current
feature (Note (i))	231,373		231,358
Deductible Value Added Tax and other tax	2,285,017	2,192,737
Deferred differences arising from sales and
leaseback arrangements (Note (ii))	199,140		237,343
	2,715,530		2,661,438

Notes:

1. Other long-term receivables are balances due from an associate (note 26).
2. Deferred differences arising from sales and leaseback arrangements represent the deficit of sale proceeds over the carrying amounts of the assets disposed under the sales and leaseback arrangements which resulted in finance lease. The differences are deferred and amortised as adjustments to the depreciation of the assets over their estimated useful lives.

46 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

Notes to the Condensed Consolidated

Financial Statements (Continued)

For the Six Months Ended 30 June 2020

14. TRADE DEBTORS AND BILLS RECEIVABLE

		At		At
		30 June		31 December
	2020		2019
		RMB' 000		RMB'000
Trade debtors and bills receivable
for the sale of electricity	9,599,859		10,705,213
Trade debtors and bills receivable
for the sale of heat	1,193,762		645,722
Trade debtors and bills receivable
for the sale of coal	1,283,511		1,199,203
	12,077,132		12,550,138
Less: allowance for impairment	(289,056)	(288,254)
	11,788,076		12,261,884

The ageing analysis of trade debtors and bills receivable (net of allowance for impairment), presented based on the invoice date, which approximated to the revenue recognition date, is as follows:

		At		At
		30 June		31 December
	2020		2019
		RMB' 000		RMB'000
Within 1 year				10,757,651
10,637,375
1 to 2 years	717,910		1,342,010
2 to 3 years	340,563		142,988
Over 3 years	92,228		19,235
	11,788,076	12,261,884

2020 INTERIM REPORT 47

Notes to the Condensed Consolidated

Financial Statements (Continued)

For the Six Months Ended 30 June 2020

15. DEPOSITS, OTHER RECEIVABLES AND PREPAYMENTS

		At		At
		30 June		31 December
	2020		2019
		RMB' 000		RMB'000
Financial assets
- Dividends receivable	665,404		674,258
- Deposits	68,493		87,209
- Other receivables	1,483,080	1,549,125
	2,216,977		2,310,592
Less: allowance for impairment (Note)	(527,000)	(534,000)
	1,689,977		1,776,592
Deductible Value Added Tax	1,819,076	2,076,022
Prepayments	687,654	526,378
Others	96,539	96,552
	4,293,246		4,475,544

Note:

Expected credit losses ("ECLs") are estimated by applying a loss rate approach with reference to the historical loss record of the Group. 12-months ECLs are applied as there has no significant increase in credit risk since initial recognition. The loss rate is adjusted to reflect the current conditions and forecasts of future economic conditions, as appropriate.

As at 30 June 2020, 12-month ECLs of deposits and other receivables of the Group amounted to RMB527 million (31 December 2019: RMB534 million), including allowance for impairment on receivables on Certified Emission Reductions of RMB85 million (31 December 2019: RMB85 million).

48 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

Notes to the Condensed Consolidated

Financial Statements (Continued)

For the Six Months Ended 30 June 2020

16. RESTRICTED DEPOSITS

Restricted deposits mainly represent performance bonds and frozen deposits at banks and other financial institutions with maturity of over three months.

17. CASH AND CASH EQUIVALENTS

		At		At
		30 June		31 December
	2020		2019
		RMB' 000		RMB'000
Cash at banks and in hand				916,108
684,671
Cash at other financial institutions	5,359,377	5,549,452
	6,044,048		6,465,560

18. BORROWINGS

(a) Other loans

		At		At
		30 June		31 December
	2020		2019
		RMB' 000		RMB'000
Due:
Within 1 year
- short-term other loans	2,477,566	3,304,000
- current portion of long-term other loans	1,242,181	1,397,694
	3,719,747		4,701,694
After 1 year but within 2 years	1,464,969	1,560,530
After 2 years but within 5 years	3,032,635	2,748,836
After 5 years	1,450,204	942,831
	5,947,808		5,252,197
	9,667,555		9,953,891

Other loans are borrowed from China Huadian Finance Corporation Limited ("China Huadian Finance"), an associate of the Group and other fellow subsidiaries of the Company. Other loans bear interest rates ranging from 1.50% to 6.09% per annum as at 30 June 2020 (31 December 2019: 1.50% to 6.09% per annum), with maturities from 2020 to 2035 (31 December 2019: 2020 to 2035).

2020 INTERIM REPORT 49

Notes to the Condensed Consolidated

Financial Statements (Continued)

For the Six Months Ended 30 June 2020

18. BORROWINGS (CONTINUED)

(a) Other loans (Continued)

During the period, the Group had 4 sales and leaseback agreements with a fellow subsidiary of the Company (note 26) and three third party financial leasing companies with contract terms of 3 years and 6 years respectively in order to sell certain property, generator and related machinery and equipment (note 11) and at the meantime, lease back those assets. According to the agreements, the Group has an option to buy back the equipment at a nominal price (RMB1 or 0) when the lease term expires. The substance of the transaction was to obtain financing secured by relevant assets within the leasing period and repaid them in instalment. Meanwhile, the Group has certain financing agreements with a fellow subsidiary (note 26). As at 30 June 2020, the loans mentioned above bear interest rate ranging from 1.50% to 5.64% (31 December 2019: 1.50% to 5.64%) and will be due from 2022 to 2032 (31 December 2019: 2022 to 2029).

As at 30 June 2020, the other loans borrowed from China Huadian Finance totalling RMB196 million (31 December 2019: RMB211 million) are secured by the income stream in respect of the sale of electricity. As at 30 June 2020, no loan borrowed from third party financial leasing company (31 December 2019: RMB75 million) are secured by the income stream in respect of the sale of electricity.

Apart from the aforementioned secured loans, all of the other loans are unsecured. All of the other loans are denominated in RMB.

50 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

Notes to the Condensed Consolidated

Financial Statements (Continued)

For the Six Months Ended 30 June 2020

18. BORROWINGS (CONTINUED)

1. Short-termdebentures payable

		At		At
		30 June		31 December
	2020		2019
		RMB' 000		RMB'000
Fourth tranche of super short-term
debentures for the year of 2019		-	3,037,009
First tranche of super short-term
debentures for the year of 2019 - Hubei		-	504,328
First tranche of super short-term
debentures for the year of 2020 - Hubei	300,283			-
	300,283	3,541,337

On 11 June 2020, the Group issued the first tranche of super short-term debentures

• Hubei of 2020 in PRC interbank debenture market. The super short-term debentures was issued at a total par value of RMB300 million with a maturity period of 180 days and bears interest at 1.95% per annum. The tranche is unsecured.

During the current interim period, the Group repaid two tranches of super short-term debentures with a total principal amount of RMB3,500 million (six months ended 30 June 2019: repaid one tranche of super short-term debentures with a total principal amount of RMB4,000 million) at par value.

The effective interest rate of the debenture is ranged from 1.98% to 3.30% per annum (31 December 2019: ranging from 2.20% to 4.55% per annum) after considering the effect of issue costs.

2020 INTERIM REPORT 51

Notes to the Condensed Consolidated

Financial Statements (Continued)

For the Six Months Ended 30 June 2020

18. BORROWINGS (CONTINUED)

1. Long-termdebentures payable

		At		At
		30 June		31 December
	2020		2019
		RMB' 000		RMB'000
First tranche of medium-term notes
for the year of 2016	1,994,462		1,992,113
First tranche of medium-term notes
for the year of 2017	3,496,962		3,496,139
Second tranche of medium-term notes
for the year of 2017		-	1,998,796
First tranche of medium-term notes
for the year of 2019	2,997,876		2,997,594
First tranche of company debentures
for the year of 2019	1,999,856		1,999,825
Third tranche of medium-term notes
for the year of 2020		1,999,459			-
		12,488,615			12,484,467
Less: Long-term debentures due
within one year		-	(1,998,796)
	12,488,615	10,485,671

On 13 May 2020, the Group issued the third tranche of medium-term notes for the year of 2020 in PRC interbank debenture market. The medium-term notes were issued at a total par value of RMB2,000 million with a maturity period of 3 years and bears interest at 2.53% per annum. The tranche is unsecured.

During the current interim period, the Group repaid one tranche of medium-term notes with principal amount of RMB2,000 million (six months ended 30 June 2019: repaid one tranche of medium-term notes with principal amount of RMB2,600 million) at par value.

As at 30 June 2020, the effective interest rates of the long-term debentures are ranged from 2.54% to 4.90% (31 December 2019: from 3.47% to 4.97%) per annum after considering the effect of issue costs.

52 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

Notes to the Condensed Consolidated

Financial Statements (Continued)

For the Six Months Ended 30 June 2020

19. TRADE CREDITORS AND BILLS PAYABLE

As at 30 June 2020, the ageing analysis of trade creditors and bills payable, presented based on the invoice date, is as follows:

		At		At
		30 June		31 December
	2020		2019
		RMB' 000		RMB'000
Within 1 year				12,089,916
10,868,702
1 to 2 years	3,267,199		3,563,282
Over 2 years	2,018,345	1,983,035
	16,154,246		17,636,233

20. OTHER PAYABLES

		At		At
		30 June		31 December
	2020		2019
		RMB' 000		RMB'000
Financial liabilities
- Construction deposits	1,581,449	1,517,143
- Consideration payables on acquisitions	345,964	633,969
- Interest payables	341,513	509,482
- Wages payable	580,481	236,568
- Payables for installed capacity quota	273,530	273,530
- Payables for sewage charges	16,668	32,933
- Dividend payables to
non-controlling interests	363,042	252,825
- Dividend payables to ordinary shareholders	1,439,995		-
- Distribution payables to holders of
perpetual capital securities	550,404	68,740
- Current portion of long-term payables
(Note (i))	60,860		54,950
- Others (Note (ii))	1,773,505		1,831,448
	7,327,411		5,411,588
Other tax payables	931,099		1,015,380
Contract liabilities	493,243		1,757,069
	8,751,753		8,184,037

2020 INTERIM REPORT 53

Notes to the Condensed Consolidated

Financial Statements (Continued)

For the Six Months Ended 30 June 2020

20. OTHER PAYABLES (CONTINUED)

Notes:

1. Current portion of long-term payables mainly represents the current portion of a long-term payable to local government for mining rights.
2. Others mainly include payables on service fees, rental and other miscellaneous items.
3. All of the other payables of the Group are expected to be settled or recognised as income within one year or are repayable on demand.

21. DEFERRED INCOME

Deferred income represents the unearned portion of upfront installation fees received from customers for connecting the customers' premises to the heat network of the Group. The amount is deferred until completion of the installation work and recognised in profit or loss in equal instalments over the expected service terms of the relevant services.

The upfront installation fee recognised for the six months ended 30 June 2020 amounting to RMB96 million (six months ended 30 June 2019: RMB92 million) is included in "Other revenue and net income" in the condensed consolidated statement of profit or loss and other comprehensive income.

22. DIVIDENDS

1. A final dividend of RMB0.146 per share in respect of the year ended 31 December 2019 (six months ended 30 June 2019: RMB0.066 per share in respect of the year ended 31 December 2018) was declared to the equity shareholders of the Company and approved on 30 June 2020. The aggregate amount of the final dividend declared approximately amounted to RMB1,440 million (six months ended 30 June 2019: approximately RMB651 million).
2. The directors of the Company do not recommend the payment of interim dividend for the six months ended 30 June 2020 (six months ended 30 June 2019: Nil).

54 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

Notes to the Condensed Consolidated

Financial Statements (Continued)

For the Six Months Ended 30 June 2020

23. PERPETUAL CAPITAL SECURITIES

During the six months ended 30 June 2020, the Company issued 4 tranches of public perpetual capital securities, which included (1) 1st tranche of medium-term note of 2020 (Type 1); (2) 1st tranche of medium-term note of 2020 (Type 2); (3) 2nd tranche of medium-term note of 2020 (Type 1) and (4) 2nd tranche of medium-term note of 2020 (Type 2), to third parties with an aggregate principal amount of RMB5 billion.

During the year ended 31 December 2019, the Company issued 6 tranches of public perpetual capital securities, which included (1) 2nd tranche of medium-term note of 2019 (Type 1); (2) 2nd tranche of medium-term note of 2019 (Type 2); (3) 3rd tranche of medium-term note of 2019 (Type 1); (4) 3rd tranche of medium-term note of 2019 (Type 2); (5) 4th tranche of medium-term note of 2019 (Type 1) and (6) 4th tranche of medium-term note of 2019 (Type 2), to third parties with an aggregate principal amount of RMB7 billion.

The perpetual capital securities are issued at par value with a range of initial distribution rate from 3.36% to 5.20%. The interests of perpetual capital securities are recorded as distributions, which are payable annually after the approval of the directors of the Company and may be deferred at the discretion of the Company unless compulsory distribution payment events (distributions to ordinary shareholders of the Company or reduction of the registered capital of the Company) occurred.

The perpetual capital securities have no fixed maturity date and are redeemable at the Company's discretion in whole in July 2021, July 2023, August 2021, August 2023, October 2021, November 2021, June 2022, June 2024, September 2022, September 2024, November 2022, November 2024, January 2023, January 2025, February 2023 and February 2025 respectively, the payment of the principal may be deferred for each renewable period as 3 or 5 years.

The applicable distribution rate will be reset on first call date and each renewal period after first call date, to the sum of the applicable benchmark interest rate, the initial spread and 300 basis points per annum.

The directors of the Company are of the opinion that the Group has no contractual obligation to repay the principal or to pay any distribution for the perpetual capital securities. Therefore, the perpetual capital securities are classified as equity instrument and recorded in equity in the condensed consolidated statement of financial position. During the six months ended 30 June 2020, the profit attributable to holders of perpetual capital securities, based on the applicable distribution rate, was approximately RMB437 million (six months ended 30 June 2019: RMB221 million).

2020 INTERIM REPORT 55

Notes to the Condensed Consolidated

Financial Statements (Continued)

For the Six Months Ended 30 June 2020

23. PERPETUAL CAPITAL SECURITIES (CONTINUED)

Movement of the perpetual capital securities is as follows:

		Principal	Distribution	Total
		RMB' 000	RMB' 000	RMB' 000
As at 1 January 2020	15,951,355	177,700	16,129,055
Issue of perpetual capital securities	4,994,599		-	4,994,599
Profit attributable to holders of perpetual
capital securities (note 10(a))		-	436,714	436,714
Distributions payable to holders of
perpetual capital securities		-	(614,414)	(614,414)
As at 30 June 2020
	20,945,954	-	20,945,954

24. CAPITAL COMMITMENTS

The Group had capital commitments as at 30 June 2020 and 31 December 2019 as follows:

		At		At
		30 June		31 December
	2020		2019
		RMB' 000		RMB'000
Contracted for but not provided in the
financial statements
- Development of power plants	9,456,122	10,359,153
- Improvement projects and others	364,665		311,393
	9,820,787		10,670,546

56 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

Notes to the Condensed Consolidated

Financial Statements (Continued)

For the Six Months Ended 30 June 2020

25. NOTES TO CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

			Six months ended 30 June
		2020	2019
			RMB' 000		RMB'000
Investing activities
Payment for the purchase of property,
plant and equipment, construction in
progress and intangible assets	(6,353,843)	(4,342,115)
Proceeds from disposal of property,
plant and equipment	53,434	4,031
Proceeds on disposal of associates	10,293		-
Payment of purchase of financial assets
at fair value through profit or loss	(12,731)	(300)
Payment of investments in associates		-	(157,528)
Interest received	55,732		50,633
Withdrawal of restricted deposits	21,102		533
Placement of restricted deposits	(6,061)	(8,076)
Dividends received	229,554		224,546
Cash and bank balance acquired from
business combination		-	10,685
Entrusted loan to an associate		-	(15,000)
Other investing activities		(188,923)	93,701
Net cash used in investing activities		(6,191,443)	(4,138,890)
Financing activities
Debentures
- Net proceeds from debentures	2,300,000	9,500,000
- Repayment of debentures	(5,500,000)	(6,600,000)
Loans
- Proceeds from loans	35,218,050	24,461,580
- Repayment of loans	(42,078,706)	(29,460,184)
Lease liabilities
- Payment for principal portion of
lease liabilities	(585,586)	(441,716)
Bills financing
- Proceeds from bank acceptance
bills discounted	346,085	130,000
- Repayment of bank acceptance bills	(404,648)	(140,000)
Issue of perpetual capital securities	5,000,000	3,000,000
Capital injection from non-controlling interests	3,066,720	86,454
Dividends paid to non-controlling interests	(207,418)	(70,526)
Dividends on perpetual capital securities	(132,750)		-
Other financing activities	(22,312)	(38,743)
Net cash (used in)/generated from
financing activities	(3,000,565)	426,865

2020 INTERIM REPORT 57

Notes to the Condensed Consolidated

Financial Statements (Continued)

For the Six Months Ended 30 June 2020

26. MATERIAL RELATED PARTY TRANSACTIONS

1. Transactions with shareholders, fellow subsidiaries and associates

Shareholders, fellow subsidiaries and associates that had material transactions with the Group are as follows:

Name of related parties	Nature of relationship
China Huadian Corporation Limited	Parent and ultimate holding
("China Huadian")	company of the Company
China Huadian Engineering Corporation	Fellow subsidiaries of the Company
and its subsidiaries
Huadian Shanxi Energy Company Limited	Fellow subsidiaries of the Company
and its subsidiaries
Guodian Nanjing Automation Company	Fellow subsidiaries of the Company
Limited and its subsidiaries
CHD Power Plant Operation Company	Fellow subsidiaries of the Company
Limited and its subsidiaries
Huadian Sichuan Power Company	Fellow subsidiaries of the Company
Limited and its subsidiaries
China Huadian Materials Company	Fellow subsidiaries of the Company
Limited and its subsidiaries
Huadian Inner Mongolia Energy Company	Fellow subsidiaries of the Company
Limited and its subsidiaries
China Huadian Capital Holdings Company	Fellow subsidiaries of the Company
Limited and its subsidiaries
Huadian Energy Company Limited	Fellow subsidiaries of the Company
and its subsidiaries
China Huadian Advanced Training Centre	A fellow subsidiary of the Company
China Huadian Electrical Construction	A fellow subsidiary of the Company
Technical and Economic Consulting Centre
Huadian Shaanxi Energy Company	Fellow subsidiaries of the Company
Limited and its subsidiaries
Huadian Fuxin Energy Limited Company	Fellow subsidiaries of the Company
and its subsidiaries
Anhui Huadian Lu'an Power Generation	A fellow subsidiary of the Company
Company Limited
China Huadian Clean Energy	A fellow subsidiary of the Company
Company Limited
Huadian Jiangsu Energy Limited	Fellow subsidiaries of the Company
Company and its subsidiaries

58 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

Notes to the Condensed Consolidated

Financial Statements (Continued)

For the Six Months Ended 30 June 2020

26. MATERIAL RELATED PARTY TRANSACTIONS (CONTINUED)

1. Transactions with shareholders, fellow subsidiaries and associates (Continued)

Name of related parties	Nature of relationship
Hunan Huadian Changsha Power Generation	Fellow subsidiaries of the Company
Company Limited and its subsidiaries
Hunan Huadian Changde Power Generation	A fellow subsidiary of the Company
Company Limited
Guizhou Wujiang Hydroelectric Development	Fellow subsidiaries of the Company
Company Limited and its subsidiaries
China Huadian Hong Kong Company Limited	Fellow subsidiaries of the Company
and its subsidiaries
China Huadian Group Science And	Fellow subsidiaries of the Company
Technology Research Institutes
Company Limited and its subsidiaries
Zhejiang Huadian Wuxijiang Hydropower	A fellow subsidiary of the Company
Company Limited
Huadian Electric Power Research Institute	A fellow subsidiary of the Company
Company Limited
Huadian Jinshan Energy Company Limited	A fellow subsidiary of the Company
Hangzhou Huadian Zhakou Power	A fellow subsidiary of the Company
Generation Company Limited
China Huadian Finance Corporation Limited	An associate of the Group
Sichuan Huayingshan Longtan Coal	An associate of the Group
Company Limited
Huadian Coal Industry Group Company	An associate of the Group
Limited
Ningxia Yinxing Coal Company Limited	An associate of the Group
Inner Mongolia Fucheng Mining Company	An associate of the Group
Limited
Shuozhou Tong-coal Wantongyuan Coal	An associate of the Group
Transportation and Sales Company Limited
CNNP CHD Hebei Nuclear Power Company	An associate of the Group
Limited
Otog Front Banner Changcheng Mine	An associate of the Group
Company Limited
Otog Front Banner Changcheng No.3 Mining	An associate of the Group
Company Limited

2020 INTERIM REPORT 59

Notes to the Condensed Consolidated

Financial Statements (Continued)

For the Six Months Ended 30 June 2020

26. MATERIAL RELATED PARTY TRANSACTIONS (CONTINUED)

1. Transactions with shareholders, fellow subsidiaries and associates (Continued)

Name of related parties	Nature of relationship
Otog Front Banner Changcheng No.5 Mining	An associate of the Group
Company Limited
Ningxia Zhongning Power Generation	An associate of the Group
Company Limited
Lu'an Municipal Thermal Power Generation	An associate of the Group
Company Limited
Suzhou Industrial Investment Group	An associate of the Group
Company Limited
Datang Derong Tangdian Hydropower	An associate of the Group
Development Company Limited
Beijing Huabin Investment Company Limited	A subsidiary of an associate of
	the Group
Beijing Huabin Property Management	A subsidiary of an associate of
Company Limited	the Group
Ningxia Ningdong Railway Corporation	A subsidiary of an associate of
Limited	the Group
Yanzhou Coal Mining Company Limited	A connected person of the Group
("Yanzhou Coal") (Note(i))
Shaanxi Coal Transportation and Marketing	A connected person of the Group
(Group) Company Limited ("Shaanxi Coal
Transportation and Marketing") (Note(ii))

Notes:

1. Yanzhou Coal is a substantial minority shareholder of a non-wholly owned subsidiary of the Company.
2. Shaanxi Coal Transportation and Marketing is a company of a substantial minority shareholder of a non-wholly owned subsidiary of the Company.

60 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

Notes to the Condensed Consolidated

Financial Statements (Continued)

For the Six Months Ended 30 June 2020

26. MATERIAL RELATED PARTY TRANSACTIONS (CONTINUED)

1. Transactions with shareholders, fellow subsidiaries and associates (Continued)

The Group had the following material transactions with shareholders, fellow subsidiaries and associates during the six months ended 30 June 2020 and 2019:

		Six months ended 30 June
		2020	2019
		RMB' 000	RMB'000
Sale of electricity to
Fellow subsidiaries	12,217	18,973
Purchase of electricity from
A fellow subsidiary	1,650	3,796
Sale of coal to
An associate	3,533	-
Fellow subsidiaries	4,878,526	4,908,914
A connected person	-	12,503
Purchase of coal from
Associates	2,116,378	1,524,046
Fellow subsidiaries	344,871	624,735
A connected person	1,048,165	1,603,217
Purchase of natural gas from
A fellow subsidiary	260,795	190,427
Sale of construction service and
equipment to
A fellow subsidiary	6,856	9,152

2020 INTERIM REPORT 61

Notes to the Condensed Consolidated

Financial Statements (Continued)

For the Six Months Ended 30 June 2020

26. MATERIAL RELATED PARTY TRANSACTIONS (CONTINUED)

1. Transactions with shareholders, fellow subsidiaries and associates (Continued)

		Six months ended 30 June
		2020	2019
		RMB' 000	RMB'000
Purchase of construction service
and equipment from
An associate	16,627	-
Fellow subsidiaries	747,516	637,034
Loans provided to
An associate	-	15,000
Loans proceeds obtained from
China Huadian	4,630,000	150,000
An associate	9,479,967	2,818,590
A fellow subsidiary	292,620	209,962
Loans repaid to
China Huadian	800,000	150,000
An associate	10,068,000	3,220,040
A fellow subsidiary	2,500	46,000

62 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

Notes to the Condensed Consolidated

Financial Statements (Continued)

For the Six Months Ended 30 June 2020

26. MATERIAL RELATED PARTY TRANSACTIONS (CONTINUED)

1. Transactions with shareholders, fellow subsidiaries and associates (Continued)

			Six months ended 30 June
		2020	2019
			RMB' 000		RMB'000
Bills receivable discounted to
Associates	110,000	280,000
Derecognised bills receivable collected by
Associates		-	215,000
Lease payment to
A fellow subsidiary	465,737	50,941
Interest paid to
China Huadian	95,542	40,257
An associate	186,374	180,651
A fellow subsidiary	16,295	1,075
Interest received from
Associates	50,276	45,281
Rental and property management service
expenses paid to
Associates	29,167	28,457
Fellow subsidiaries	10,307	6,900
Other services expenses paid to
China Huadian	46,402	51,964
Associates	23,084	12,392
Fellow subsidiaries	61,050	46,114
Additional capital injection in
Associates		-	157,528

2020 INTERIM REPORT 63

Notes to the Condensed Consolidated

Financial Statements (Continued)

For the Six Months Ended 30 June 2020

26. MATERIAL RELATED PARTY TRANSACTIONS (CONTINUED)

1. Transactions with shareholders, fellow subsidiaries and associates (Continued)

The balances due from/(to) shareholders, fellow subsidiaries and associates are as follows:

	At 30 June	At 31 December
	2020	2019
	RMB' 000	RMB'000
Construction in progress-
construction and construction
material prepayments
An associate	1,233	7,809
Fellow subsidiaries	308,422	331,958
Trade debtors and bills receivable
Fellow subsidiaries	938,380	869,435
Deposits, other receivables and
prepayments
Associates	97,171	97,197
Fellow subsidiaries	279,207	238,288
A connected person	196,939	54,854
Other long-term receivables
An associate (note 13)	231,373	231,358
Cash and cash equivalents and
restricted deposits
An associate	5,411,377	5,621,452
Loans from a shareholder
China Huadian	(6,400,000)	(2,570,000)
Other loans
An associate	(7,902,098)	(8,490,131)
A fellow subsidiary	(912,281)	(622,162)

64 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

Notes to the Condensed Consolidated

Financial Statements (Continued)

For the Six Months Ended 30 June 2020

26. MATERIAL RELATED PARTY TRANSACTIONS (CONTINUED)

1. Transactions with shareholders, fellow subsidiaries and associates (Continued)

		At 30 June		At 31 December
	2020	2019
		RMB' 000		RMB'000
Trade creditors and bills payable
China Huadian	(47,759)	(11,374)
Associates	(668,948)	(146,588)
Fellow subsidiaries	(1,941,668)	(2,732,741)
A connected person	(259,428)	(123,400)
Other payables
China Huadian	(24,795)	(34,827)
Associates	(21,130)	(15,687)
Fellow subsidiaries	(425,768)	(509,041)
A connected person		-	(100)
Contract liabilities
An associate	(42,000)	(32,000)
Fellow subsidiaries	(15,516)	(32,589)
Lease liabilities
A fellow subsidiary	(1,057,175)	(1,480,952)

Notes:

1. At 30 June 2020, the Group provided guarantees to banks for loans granted to Sichuan Huayingshan Longtan Coal Company Limited amounting to RMB43.58 million (31 December 2019: RMB43.58 million).
2. At 30 June 2020, China Huadian provided guarantee to banks for loans granted to the Group amounting to RMB827 million (31 December 2019: RMB1,102 million).

2020 INTERIM REPORT 65

Notes to the Condensed Consolidated

Financial Statements (Continued)

For the Six Months Ended 30 June 2020

26. MATERIAL RELATED PARTY TRANSACTIONS (CONTINUED)

(b) Transactions with key management personnel

Remuneration for key management personnel, including amounts paid to the Company's directors and supervisors is as follows:

			Six months ended 30 June
		2020		2019
			RMB' 000		RMB'000
Salaries and other emoluments				120
99
Retirement benefits	190		244
Bonuses	1,215		1,461
		1,504		1,825

(c) Contributions to defined contribution retirement plans

The Group participates in various defined contribution retirement plans organised by municipal and provincial governments and China Huadian for its staff. As at 30 June 2020 and 31 December 2019, there was no material outstanding contribution to the post-employment benefit plans.

1. Transactions with other government-related entities in the
   PRC

China Huadian is a PRC state-owned enterprise. Government-related entities, other than entities under China Huadian, over which the PRC government has control, joint control or significant influence are also considered as related parties of the Group ("other government-relatedentities"). The majority of the business activities of the Group are conducted with other government-related entities.

The transactions between the Group and other government-related entities are conducted in the ordinary course of the Group's business within normal business operations. The Group has established its approval process for sales of electricity, purchase of products and services and its financing policy for borrowing. Such approval processes and financing policy do not depend on whether the counterparties are government-related entities or not.

66 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

Notes to the Condensed Consolidated

Financial Statements (Continued)

For the Six Months Ended 30 June 2020

26. MATERIAL RELATED PARTY TRANSACTIONS (CONTINUED)

1. Transactions with other government-related entities in the PRC (Continued)

Having considered the potential for transactions to be impacted by related party relationships, the Group's approval processes and financing policy, and information that would be necessary for an understanding of the potential effect of the relationship on the condensed consolidated financial statements, the directors believe that the following transactions are collectively significant for disclosure purpose:

• sale of electricity to the grid
  The Group sells substantially all its electricity to local government-related power grid companies, and the tariff of electricity is regulated by relevant government. For the six months ended 30 June 2020, management estimates that the aggregate amount of the Group's significant transactions with other government-related entities are at least 99% of its sale of electricity.
• depositing and borrowing
  The Group deposits most of its cash in government-related financial institutions, and also obtains most of short-term and long-term loans from these financial institutions in the ordinary course of business. The interest rates of the bank deposits and loans are regulated by the People's Bank of China.
• other transactions
  Other collectively significant transactions with other government-related entities include a large portion of fuel purchases, and property, plant and equipment construction. The pricing and the selection of suppliers and service providers are not dependent on whether the counterparties are government-related entities or not.

2020 INTERIM REPORT 67

Notes to the Condensed Consolidated

Financial Statements (Continued)

For the Six Months Ended 30 June 2020

26. MATERIAL RELATED PARTY TRANSACTIONS (CONTINUED)

(e) Commitment with related parties

Commitment with related parties is as follows:
		At 30 June At 31 December
		2020		2019
		RMB' 000		RMB'000
Capital commitment		1,001,283	1,451,644
Commitment on properties rental and
management fees		3,779	7,559

27. CONTINGENT LIABILITIES

As at 30 June 2020, some subsidiaries of the Company were the defendant in certain lawsuits for events incurred before the acquisition date. At the end of reporting period, the lawsuits were in progress whose final outcomes cannot be determined at present. The directors of the Company considered that the outcome of these outstanding lawsuits will not result in significant adverse effect on the financial position and operating results of the Group.

Apart from the above guarantees disclosed in note 26(a), the Group has no other material contingent liabilities as at 30 June 2020 (31 December 2019: Nil).

68 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

Notes to the Condensed Consolidated

Financial Statements (Continued)

For the Six Months Ended 30 June 2020

28. FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENT

1. Fair value of the Group's financial assets that are measured at fair value on recurring basis

Some of the Group's financial assets are measured at fair value at the end of each reporting period. The following table gives information about how the fair values of these financial assets are determined (in particular, the valuation technique(s) and inputs used), as well as the level of the fair value hierarchy into which the fair value measurements are categorised (levels 1 to 3) based on the degree to which the inputs to the fair value measurements is observable.

	Fair value as at
	At	At
	30 June	31 December	Fair value	Valuation technique(s) and key
Financial assets	2020	2019	hierarchy	input(s)
Financial assets at	292,170	279,439	Level 3	The financial assets at FVPL are
FVPL - unlisted				unlisted equity securities. The
equity securities				fair value is estimated by the
in the condensed				management. The fair value is
consolidated				measured by applying income
statement of				approach and after considering
financial position				the expected distributable
				profits of the investment

discounted by a range of discount rate from 9.40% to 13.51%.

During the reporting period there is no transfer between instruments in Level 1 and Level 2.

2020 INTERIM REPORT 69

Notes to the Condensed Consolidated

Financial Statements (Continued)

For the Six Months Ended 30 June 2020

28. FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENT (CONTINUED)

(b) Financial instruments carried at other than fair value

Except as detailed in the following table, the directors of the Company consider that the carrying amounts of financial assets and financial liabilities recognised in the condensed consolidated financial statements approximate their fair values.

			30 June 2020		31 December 2019
			Carrying	Fair		Carrying	Fair
			amount	value		amount	value
			RMB' 000	RMB' 000		RMB'000	RMB'000
Fixed rate borrowings and
debentures payable	12,881,284	12,786,710	12,996,541	12,955,189

The fair value measurements of above financial liabilities are within the level 2 category, which have been determined based on a discounted cash flow analysis, with the most significant input being the discount rate that reflects the credit risk of the group entities.

70 HUADIAN POWER INTERNATIONAL CORPORATION LIMITED

Notes to the Condensed Consolidated

Financial Statements (Continued)

For the Six Months Ended 30 June 2020

29. LIQUIDITY RISK MANAGEMENT

The Group is exposed to liquidity risks which arising in the normal course of the Group's business. The financial risk management policies and practices used by the Group to manage the risks are described below.

Individual operating entities within the Group are responsible for their own cash management, including the short-term investment of cash surpluses and the raising of loans to cover expected cash demands, subject to approval by the parent company's board when the borrowings exceed certain predetermined levels of authority. The Group's policy is to regularly monitor its liquidity requirements to ensure that it maintains sufficient reserves of cash and readily realisable marketable securities and adequate committed lines of funding from major financial institutions to meet its liquidity requirements in the short and longer term.

At the end of reporting period, the Group had net current liabilities of RMB31,742 million (31 December 2019: RMB40,730 million). With regards to its future capital commitments and other financing requirements, the Group has unutilised banking facilities of RMB139.4 billion as at 30 June 2020 (31 December 2019: RMB139.5 billion) and an aggregate amount of debentures of RMB37.9 billion (31 December 2019: RMB43.5 billion) registered in the PRC interbank debenture market which has not been issued as at 30 June 2020.

30. EVENTS AFTER THE REPORTING PERIOD

On 21 July 2020, the Group issued the first tranche of super short-term debentures for the year of 2020. The face value is RMB100 per super short-term debentures and it was issued at a total par value of RMB1.5 billion. The first tranche of super short-term debentures ("20 Huadian SCP001") was issued at a total par value of RMB1.5 billion with 120 days period and bears interest at 1.75% per annum.