Last checked at 30 Apr 2010 07:33
Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong KongLimited take no responsibility for the contents of this announcement, make norepresentation as to its accuracy or completeness and expressly disclaim anyliability whatsoever for any loss howsoever arising from or in reliance uponthe whole or any part of the contents of this announcement. DATANG INTERNATIONAL POWER GENERATION CO., LTD. (a sino-foreign joint stock limited company incorporated in the People's Republic of China) (Stock Code: 991) OVERSEAS REGULATORY ANNOUNCEMENT ANNOUNCEMENT ON CHANGES IN ACCOUNTING ESTIMATES OF FIXED ASSETS Special Notice:
The board of directors (the "Board") and all directors (the "Directors") of theCompany warrant that there are no false representations and misleadingstatements contained in, or material omissions from this announcement, andseverally and jointly accept the responsibility for the truthfulness, accuracyand completeness of the contents of this announcement.This announcement is made pursuant to Rule 13.09(2) of the Rules Governing theListing of Securities on The Stock Exchange of Hong Kong Limited (the "ListingRules").
I. General information regarding the changes in accounting estimates
1. Date of change: 1 January 2010
2. Reason for change: In order to reflect the Company's financial position andoperating results in a fairer and more appropriate manner so that thedepreciation periods for fixed assets is brought closer to their real usefullives, the Company has made changes to the estimated useful lives and estimatednet salvage values of the fixed assets pursuant to the accounting standards andother related accounting and tax regulations in combination with the actualsituation of the Company.3. Details about the situations before and after the changes are set out asfollows: Before the Changes After the Changes Category of Estimated Estimated Annual Category of Estimated Estimated Annual fixed assets useful salvage depreciation fixed assets useful salvage depreciation life rate % rate (%) life rate % rate (%) Generating & 12 3 8.08 Generating & 12-20 5 4.75-7.92 thermal thermal equipment equipment Transmission 30 3 3.23 Transmission 20-35 5 2.71-4.75 lines lines Substation 18 0-3 5.39-5.56 Substation 18-22 5 4.32-5.28 equipment equipment Distribution 14-18 3 5.39-6.93 Distribution 14-22 5 4.32-6.79 lines & lines & equipment equipment Electricity 6 0 16.67 Electricity 7-12 5 7.92-13.57 metering metering equipment equipment Communication 10 3 9.7 Communication 5-14 5 6.79-19 lines lines & equipment Automation 4-8 0 12.5-25 Automation 4-12 5 7.92-23.75 controls and controls and instruments instruments Machinery & 10 3 9.7 Hydraulic 10-20 5 4.75-9.5 equipment machinery & equipment Manufacture, 10-20 5 4.75-9.6 overhaul & maintenance equipment Tools & other 9 0 11.11 Tools & other 5-14 5 6.79-19 production production equipment equipment Transportation 6-10 0-3 9.7-16.17 Transportation 6-12 5 7.92-15.83 facilities facilities Non-production 6-18 0 5.39-16.67 Non-production 5-22 5 4.32-19 equipment & equipment & apparatus apparatus Buildings & 8-45 0 2.22-12.5 Buildings & 8-45 5 2.11-11.88 structures structures
II. Explanations by the Board for the reasonableness of the changes in accounting estimates
The Board held the view that the current changes to the estimated useful livesand estimated net salvage values of the fixed assets are made in view of thecurrent business environment and market conditions and with reference to thestandards of other companies in the industry. The current changes in accountingestimates were made within the ranges of the disclosed depreciation lives ofthe fixed assets and were consistent with the actual situation of the Companyand the relevant regulations. The accounting estimates after the change canreflect the Company's financial position and operating results more accuratelyand reliably.
III. Effect of the changes in accounting estimates on the Company
The changes in the estimated useful lives and estimated net salvage values ofthe fixed assets are changes in accounting estimates and are treated accordingto the prospective application method. Such changes do not have any impact onthe financial statements already disclosed by the Company.
Based on the scope of the existing consolidated statements, the changes in accounting estimates are expected to reduce the Company's depreciation charges by approximately RMB1.8 billion for 2010.
IV. Approval procedures
The matter was considered and approved at the thirty-fifth meeting of the sixthsession of the Board held on 29 April 2010. Both independent Directors and thesupervisory committee have delivered special opinions thereon.
V. Opinion of independent Directors
Independent Directors held the view that the Company made the changes in theestimated useful lives and estimated net salvage values of the fixed assetswith reference to the standards of other companies in the same industry,reflecting the principle of prudence under the Enterprise Accounting Standards.The accounting estimates after the change can reflect the Company's financialposition and operating results more accurately. The consideration and approvalprocess was in compliance with the Articles of Association and the relevantlaws and regulations and the interests of small and medium shareholders werenot prejudiced.
VI. Opinion of the supervisory committee
The supervisory committee held the view that the current changes to theestimated useful lives and estimated net salvage values of the fixed assetswere made in view of the actual situation of the Company and with reference tothe standards of other companies in the same industry. The current changes inaccounting estimates can reflect the Company's financial position and operatingresults in a fairer manner, and provide more reliable and accurate accountinginformation. The consideration and approval process was in compliance with therelevant laws and regulations and the Articles of Association. By Order of the Board Zhou Gang Secretary to the Board
Beijing, the PRC, 29 April 2010
As at the date of this announcement, the directors of the Company are:
Zhai Ruoyu, Hu Shengmu, Cao Jingshan, Fang Qinghai, Zhou Gang, Liu Haixia, GuanTiangang, Su Tiegang, Ye Yonghui, Li Gengsheng, Xie Songlin*, Liu Chaoan*,YuChangchun*, Xia Qing* and Li Hengyuan*.
* Independent non-executive directors
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