FORM 6-K


SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549


Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
The Securities Exchange Act of 1934


For the month of September 2020

(Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.)
Form 20-F     X     Form 40-F         

(Indicate by check mark whether the registrant by furnishing the information
contained in this form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)
Yes          No     X    

(If "Yes" is marked, indicate below the file number assigned to registrant in
connection with Rule 12g3-2(b): 82-__________.)
N/A

Huaneng Power International, Inc.
Huaneng Building,
6 Fuxingmennei Street,
Xicheng District,
Beijing, 100031 PRC




This Form 6-K consists of:

An announcement regarding operating results for the six months ended June 30,  2020 of Huaneng Power International, Inc. (the “Registrant”).



HUANENG POWER

THE OBJECTIVES
OF THE COMPANY

As a power company, devoted to providing sufficient, reliable and eco-friendly energy to the community; as a listed company, devoted to creating long-term, stable and increasing returns for shareholders; and as a first class power producer, devoted to having excellency in operation, becoming a leading power enterprise in China and an advanced enterprise internationally.


CONTENTS


2
Interim Results

2
Business Review for the First Half of the Year

4
Prospects for the Second Half of 2020

6
Management’s Discussion and Analysis

19
Share Capital Structure

19
Purchase, Sale or Redemption of Shares

19
Disclosure pursuant to Rule 14A.63 of the Listing Rules

20
Shareholdings of Major Shareholders

21
Material Interests and Short Positions in Shares and Underlying Shares of the Company

22
Directors’ and Supervisors’ Right to Purchase Shares

22
Public Float

22
Dividends

22
Disclosure of Material Events

23
Corporate Governance

38
The Use and Deposit of Funds Raised

39
Review by the Audit Committee

39
Legal Proceedings

39
Documents for Inspection
PREPARED IN ACCORDANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS

41
Interim Consolidated Statement of Financial Position (Unaudited)

43
Interim Consolidated Statement of Comprehensive Income (Unaudited)

45
Interim Condensed Consolidated Statement of Changes in Equity (Unaudited)

47
Interim Condensed Consolidated Statement of Cash Flows (Unaudited)

48
Notes to the Unaudited Interim Condensed Consolidated Financial Information

99
Financial Statements Reconciliation between PRC GAAP and IFRS

1


INTERIM RESULTS
The Board of Directors of Huaneng Power International, Inc. (the “Company”) announces the unaudited operating results for the six months ended 30 June 2020 and a comparison with the operating results for the same period of last year. For the six months ended 30 June 2020, the Company and its subsidiaries recorded consolidated operating revenue of RMB79.127 billion, representing a decrease of 5.35% compared to the same period of last year. The net profit attributable to equity holders of the Company was RMB5.441 billion, representing an increase of 58.10% compared to the same period of last year. The earnings per share was RMB0.30. The net asset (excluding equity interests attributable to minority shareholders) per share was RMB5.46.

Please refer to the unaudited financial information below for details of the operating results.

BUSINESS REVIEW FOR THE FIRST HALF OF THE YEAR
In the first half of the year, the Company firmly focused on the production and operation, reform and development as well as the annual work plan, made every effort to cope with the outbreak of COVID-19 epidemic, actively promoted the resumption of work and production, seized the market opportunities, implemented each project, thus achieved the major production and operating performance targets, laying a solid foundation for the comprehensive and high-quality completion of the goals and tasks of the year.

1.
Power Generation
In the first half of the year, the Company’s total power generation by the power plants within China on consolidated basis amounted to 179.650 billion kWh, representing a decrease of 8.05% over the same period last year. Total electricity sold by the Company amounted to 172.125 billion kWh, representing a decrease of 6.98% over the same period last year. The utilisation hours reached 1,718 hours, representing a decrease of 182 hours over the same period last year.


2


The decrease in the Company’s power generation was mainly attributable to: 1. affected by the epidemic in the first quarter, the national economic growth slowed down, and the Company’s power generation decreased significantly year-on-year; 2. since the second quarter, the domestic epidemic situation has been effectively controlled, and the progress of resumption of production in various industries has accelerated. The Company seized the opportunity to actively strive for planned power, and at the same time strengthened power supervision, reduced unit backup, and increased effective generation, realizing a positive year-on-year growth of the Company’s power generation in the second quarter, and narrowing the decline in power in the first quarter.

2.
Cost Control
In the first half of the year, due to COVID-19 outbreak, safety inspection, shortage of hydro-power generation and other factors, the price pivot has generally moved downward despite the significant fluctuation in the coal prices. In the first half of the year, the CCI5500 index which reflected the price level of thermal coal at ports around the Bohai Rim region averaged at RMB540/tonne, representing a decrease of RMB70/tonne compared to the same period last year. The Company scientifically researched and judged the market trend, flexibly adjusted its procurement strategy and played a supplementary supply role for imported coal, resulting in an overall stable coal supply and a significant decrease in the unit price of standard coal purchase compared to the same period last year. The unit fuel cost of the Company’s domestic power plants throughout the first half of the year incurred for sales of power was RMB206.51/MWh, representing a decrease of 7.73% compared to the same period last year.

3.
Energy Conservation and Environmental Protection
In the first half of the year, the Company made steady progress in implementing the three-year action plan for safety production special rectification, wastewater treatment in key areas and closure of coal yards, which resulted in the continuous improvement of the safety, economic and environmental protection operation of power generation units and continuing to maintain the Company’s leading position in the industry in terms of pollutant emission concentration and energy-consumption index. The average emissions of sulfur dioxide, nitrogen oxides and soot from thermal generating units were all superior to the ultra-low emission standard.

4.
Project Development and Construction
In the first half of the year, the Company proceeded smoothly in the construction of power generation projects. The capacity of the commissioned units was 1,438.42 MW, including gas turbine generation units with a capacity of 472.52 MW, wind generation units with a capacity of 480 MW and photovoltaic generation units with a capacity of 485.9 MW. In the meantime, some of the power plants invested or controlled by the Company underwent changes in capacity. As of 30 June 2020, the Company had a controlled generation capacity of 108,111 MW and an equity-based generation capacity of 94,878 MW. The proportion of the installed capacity of clean energy sources (gas turbine, hydro, wind, photovoltaic and biomass power generation) reached 18.16%.


3


5.
Singapore Business
In the first half of the year, the accumulated power generation of Tuas Power Ltd. (“Tuas Power”), a wholly-owned subsidiary of the Company in Singapore, accounted for a market share of 21.5%, representing an increase of 1.0 percentage point compared to the same period last year. The sales revenue was RMB5.633 billion, representing a decrease of 11.84% compared with RMB6.390 billion of the same period last year. The net profit attributable to the equity holders of the Company from its operations in Singapore was RMB25 million.

6.
Pakistan Business
The Sahiwal 2×660MW coal-fired power plant project in Pakistan is one of the projects which was given priority for implementation under the framework of the China-Pakistan Economic Corridor Energy Project Implementation Agreement. It is the first large-scale coal-fired power plant put into operation in the China-Pakistan Economic Corridor. It greatly eased the power shortage in Pakistan. In the first half of the year, the Pakistan project recorded profit before tax of RMB347 million.

PROSPECT FOR THE SECOND HALF OF 2020
Currently, China’s economy has shown a momentum of recovery growth and gradually returned to stability, which fully demonstrate the strong resilience and ample room for manoeuvers of Chinese economy. Meanwhile, with the spread of the epidemic globally and the increasing complexity of the international situation, it has a greater impact on Chinese economic and social development and brings uncertainty to the growth of electricity generation and consumption. In the second half of the year, the Company will follow the general principle of making progress while maintaining stability, adhere to the new development idea and promote better coordination in epidemic prevention and control as well as economic and social development. The Company will adhere closely to the general direction of supply-side structural reform as the main line, strive to deepen reform and opening-up, firmly grasp the strategic base of expanding domestic demands, promote the high quality economic development and maintain overall social stability, making every efforts to achieve this year’s economic and social development goals and tasks. Based on the work in the first half of the year, the Company will continue to take various effective measures to deal with various risk challenges and complete work tasks of the whole year in relation to risk prevention and control, quality and efficiency improvement, green development, technological innovation, deepening reform, corporate culture construction, etc.

4


In terms of the power market, the national electricity reform will be accelerated, the general industrial and commercial electricity prices will be fully opened up, the responsibility for renewable energy consumption will be implemented, and the promotion of spot pilot projects will be accelerated in the second half of the year. The Company will continue to adapt to the changes in the market and anticipate the dynamics of the national economy and reforms in power market system, actively participate in the construction of power market in China and the places where the Company operated, timely adjust the operation strategies and exert its own advantages to consolidate and expand the market shares. Meanwhile, the Company will uplift the capability of responding to the market and manage market risks, and strengthen the Company’s core competitiveness.

In terms of the coal market, on the demand side, the resilience of hydro-power output increased, the installation of new energy continued to grow rapidly, and thermal power generation further squeezed by clean energy generation, resulting in certain suppression on the demand for thermal coal. On the supply side, driven by the policy of increasing production and supply from relevant national ministries and commissions, coal production organizations were strengthened in various regions and supply would remain steady growth. In addition, environmental protection and safety production standards of domestic coal mines have been greatly improved, and the impact of various inspections on the normal production of coal mines has gradually weakened, and the domestic coal supply would be in a relatively sufficient state. In general, the coal market will maintain a balance between supply and demand in the second half of the year, and the thermal coal price are expected to remain relatively stable with a narrow range of fluctuation. The Company will continue to intensify its efforts to develop new resources, and will strive for railway capacity support for transportation. We will also strive to ensure the performance of the long-term cooperation contracts and full delivery of coal supplies and on site procurement thereunder, optimize imported coal and firmly control the fuel procurement cost.


5


In terms of the capital market, in the first half of the year, in response to the epidemic, the Central Bank comprehensively adopted a variety of monetary policy tools, stepped up counter-cyclical adjustment, lowered interest rates in the financial market, and the capital market was generally loose. The current economic situation is still severe and complex, with great instability and uncertainty. In the second half of the year, the monetary policy will be more flexible, moderate and precise, maintaining the rational growth of money supply and social financing scale, and reducing the comprehensive financing cost significantly. The Company expects that the capital market will continue to maintain a “moderately loose”, and will pay close attention to the capital market, actively manage and prevent risks and reduce capital costs.

In the second half of the year, the Company will hold on to the safety bottom line, focus on preventing fatal and equipment accidents, so as to ensure the safety of infrastructure, production, flood control, and epidemic prevention; go all out to achieve the annual operating tasks, focus on improving quality and efficiency, and continue to reduce financial costs, emphasize improving quality and efficiency of the equity participating enterprises, focus on enhancing the operating performance of Tuas Power, and strive to achieve the annual goal of “resolving stagnant enterprises and enterprises with difficulties”; do its best to push forward transformation development, promote the construction of regional renewable energy, and emphasize the Company’s “Fourteenth Five-Year” development planning; do its best to push forward technological innovation, making a greater breakthroughs for some key and difficult science and technical projects and increase the research and development investment; do its best to deepen internal reform and continuously improve the corporate governance system; do its best to develop corporate culture, and continue to bring long-term, stable and increasing returns to the shareholders of the Company.

MANAGEMENT’S DISCUSSION AND ANALYSIS
(Prepared under International Financial Reporting Standards (“IFRS”))
I.
Comparison and Analysis of Operating Results
General
Based on preliminary statistics of the Company, for the second quarter of 2020, the Company’s total power generation by power plants within China on consolidated basis amounted to 94.949 billion kWh, representing an increase of 3.73% over the same period last year. Total electricity sold by the Company amounted to 91.473 billion kWh, representing an increase of 5.41% over the same period last year. For the first half of 2020, the Company’s total power generation by the power plants within China on consolidated basis amounted to 179.650 billion kWh, representing a decrease of 8.05% over the same period last year. Total electricity sold by the Company amounted to 172.125 billion kWh, representing a decrease of 6.98% over the same period last year. For the first half of 2020, the Company’s average on-grid electricity settlement price for its power plants within China amounted to RMB416.65 per MWh, representing a decrease of 0.68% over the same period last year. For the first half of 2020, the Company’s market based electricity sold amounted to 84.06 billion kwh, with a ratio of 49.89% comparing to the corresponding total electricity sold, representing an increase of 2.84 percentage points over the same period last year.


6


The decrease in the Company’s power generation was mainly attributable to:

1.
Affected by the epidemic in the first quarter, the national economic growth slowed down, and the Company’s power generation decreased significantly year-on-year; and

2.
Since the second quarter, the domestic epidemic situation has been effectively controlled, and the progress of resumption of production in various industries has accelerated. The Company seized the opportunity to actively strive for planned power, and at the same time strengthened power supervision, reduced unit backup, and increased effective generation, realizing a positive year-on-year growth of the Company’s power generation in the second quarter, and narrowing the decline in power in the first quarter.


The power generations (in billion kWh) of the Company, by regions, are listed below:

 
Power Generation
   
Electricity Sold
 
Region
 
April to June 2020
   
Change
   
January to June 2020
   
Change
   
April to June 2020
   
Change
   
January to June 2020
   
Change
 
                                                 
Heilongjiang Province
   
3.745
     
0.27
%
   
6.776
     
0.84
%
   
3.555
     
3.53
%
   
6.329
     
1.83
%
Coal-fired
   
3.422
     
1.00
%
   
6.135
     
1.98
%
   
3.214
     
3.85
%
   
5.703
     
3.13
%
Wind-power
   
0.286
     
-7.47
%
   
0.569
     
-9.85
%
   
0.303
     
0.63
%
   
0.558
     
-9.31
%
PV
   
0.037
     
-1.84
%
   
0.072
     
-0.63
%
   
0.037
     
0.31
%
   
0.069
     
-2.76
%
Jilin Province
   
2.859
     
1.65
%
   
5.222
     
4.97
%
   
2.700
     
1.49
%
   
4.917
     
4.82
%
Coal-fired
   
2.443
     
1.37
%
   
4.468
     
6.03
%
   
2.308
     
1.60
%
   
4.206
     
6.31
%
Wind-power
   
0.303
     
-2.45
%
   
0.567
     
-3.96
%
   
0.286
     
-5.69
%
   
0.536
     
-6.82
%
Hydro-power
   
0.033
     
64.79
%
   
0.042
     
55.35
%
   
0.032
     
66.81
%
   
0.041
     
56.35
%
PV
   
0.016
     
-3.75
%
   
0.032
     
0.38
%
   
0.016
     
-4.26
%
   
0.032
     
-0.86
%
Biomass power
   
0.064
     
15.65
%
   
0.113
     
1.18
%
   
0.057
     
16.92
%
   
0.102
     
1.04
%
Liaoning Province
   
4.058
     
-6.04
%
   
8.184
     
-6.53
%
   
3.801
     
-5.91
%
   
7.597
     
-6.69
%
Coal-fired
   
3.890
     
-6.39
%
   
7.866
     
-6.87
%
   
3.634
     
-9.86
%
   
7.282
     
-7.06
%
Wind-power
   
0.109
     
-5.22
%
   
0.212
     
2.13
%
   
0.108
     
-5.58
%
   
0.211
     
1.94
%
Hydro-power
   
0.012
     
1,147.31
%
   
0.020
     
40.42
%
   
0.012
     
1,152.77
%
   
0.019
     
40.58
%
PV
   
0.047
     
-1.99
%
   
0.086
     
-1.19
%
   
0.046
     
-1.74
%
   
0.084
     
-0.87
%
Inner Mongolia
   
0.059
     
-10.42
%
   
0.107
     
-5.71
%
   
0.059
     
-10.63
%
   
0.106
     
-5.45
%
Wind-power
   
0.059
     
-10.42
%
   
0.107
     
-5.71
%
   
0.059
     
-10.63
%
   
0.106
     
-5.45
%
Hebei Province
   
3.086
     
-6.87
%
   
5.618
     
-15.96
%
   
2.884
     
-7.18
%
   
5.238
     
-16.46
%
Coal-fired
   
2.953
     
-8.94
%
   
5.346
     
-18.42
%
   
2.753
     
-9.38
%
   
4.975
     
-18.99
%
Wind-power
   
0.118
     
113.73
%
   
0.242
     
132.51
%
   
0.116
     
116.51
%
   
0.234
     
129.85
%
PV
   
0.016
     
-1.00
%
   
0.030
     
7.09
%
   
0.016
     
-3.43
%
   
0.029
     
7.68
%
Gansu Province
   
3.371
     
73.49
%
   
7.339
     
26.36
%
   
3.212
     
74.20
%
   
6.988
     
26.66
%
Coal-fired
   
2.667
     
90.62
%
   
6.106
     
27.40
%
   
2.516
     
91.83
%
   
5.776
     
27.63
%
Wind-power
   
0.704
     
29.44
%
   
1.233
     
21.60
%
   
0.696
     
30.74
%
   
1.212
     
22.22
%
Ningxia
   
0.008
     
15.52
%
   
0.013
     
5.27
%
   
0.008
     
15.91
%
   
0.012
     
8.78
%
PV
   
0.008
     
15.52
%
   
0.013
     
5.27
%
   
0.008
     
15.91
%
   
0.012
     
8.78
%
Beijing
   
2.038
     
37.81
%
   
4.098
     
11.30
%
   
1.987
     
38.72
%
   
3.900
     
12.11
%
Coal-fired
   
0.00
     
     
0.709
     
8.03
%
   
0.00
     
     
0.625
     
7.62
%
Combined Cycle
   
2.038
     
37.81
%
   
3.389
     
12.01
%
   
1.987
     
38.72
%
   
3.275
     
13.01
%

7



 
Power Generation
   
Electricity Sold
 
Region
 
April to June 2020
   
Change
   
January to June 2020
   
Change
   
April to June 2020
   
Change
   
January to June 2020
   
Change
 
                                                 
Tianjin
   
1.100
     
-19.91
%
   
3.052
     
-4.68
%
   
1.035
     
-20.12
%
   
2.860
     
-4.89
%
Coal-fired
   
0.937
     
-12.56
%
   
2.358
     
-3.59
%
   
0.876
     
-12.52
%
   
2.187
     
-3.85
%
Combined Cycle
   
0.161
     
-46.22
%
   
0.692
     
-8.32
%
   
0.157
     
-46.18
%
   
0.671
     
-8.15
%
PV
   
0.001
     
-8.62
%
   
0.002
     
-17.71
%
   
0.001
     
-4.18
%
   
0.002
     
-4.23
%
Shanxi Province
   
1.843
     
-15.11
%
   
4.617
     
-11.61
%
   
1.702
     
-15.26
%
   
4.299
     
-11.87
%
Coal-fired
   
1.637
     
-23.54
%
   
3.163
     
-20.64
%
   
1.499
     
-24.24
%
   
2.891
     
-21.26
%
Combined Cycle
   
0.042
     
596.29
%
   
1.233
     
3.08
%
   
0.041
     
560.71
%
   
1.200
     
3.08
%
PV
   
0.164
     
584.50
%
   
0.221
     
426.39
%
   
0.162
     
582.96
%
   
0.208
     
395.37
%
*Shandong Province
   
15.811
     
-24.33
%
   
33.029
     
-22.67
%
   
16.007
     
-19.10
%
   
32.868
     
-18.51
%
Coal-fired
   
15.460
     
-24.66
%
   
32.402
     
-22.92
%
   
15.607
     
-19.62
%
   
32.197
     
-18.85
%
Wind-power
   
0.229
     
-7.26
%
   
0.420
     
-7.66
%
   
0.217
     
-10.55
%
   
0.404
     
-8.51
%
PV
   
0.162
     
26.23
%
   
0.272
     
24.23
%
   
0.183
     
42.71
%
   
0.267
     
22.79
%
Henan Province
   
5.569
     
16.96
%
   
9.630
     
-10.79
%
   
5.232
     
16.86
%
   
9.039
     
-10.97
%
Coal-fired
   
4.912
     
10.05
%
   
8.752
     
-15.52
%
   
4.614
     
10.04
%
   
8.212
     
-15.62
%
Combined Cycle
   
0.364
     
146.22
%
   
0.396
     
112.97
%
   
0.356
     
146.74
%
   
0.387
     
113.37
%
Wind-power
   
0.285
     
101.93
%
   
0.469
     
98.56
%
   
0.255
     
92.67
%
   
0.427
     
89.19
%
PV
   
0.007
     
-1.15
%
   
0.013
     
-2.84
%
   
0.007
     
-7.32
%
   
0.013
     
-0.88
%
Jiangsu Province
   
8.872
     
1.20
%
   
17.008
     
-12.11
%
   
8.379
     
0.94
%
   
16.110
     
-12.16
%
Coal-fired
   
7.304
     
2.34
%
   
13.903
     
-15.88
%
   
6.886
     
2.62
%
   
13.115
     
-15.81
%
Combined Cycle
   
0.874
     
-26.24
%
   
1.761
     
-11.79
%
   
0.857
     
-26.29
%
   
1.729
     
-11.80
%
Wind-power
   
0.659
     
60.78
%
   
1.285
     
66.69
%
   
0.604
     
53.01
%
   
1.210
     
62.08
%
PV
   
0.034
     
-1.65
%
   
0.058
     
2.35
%
   
0.033
     
-3.20
%
   
0.057
     
0.93
%
Shanghai
   
4.070
     
21.49
%
   
7.993
     
-9.46
%
   
3.836
     
21.40
%
   
7.542
     
-9.75
%
Coal-fired
   
3.848
     
29.14
%
   
7.294
     
-5.83
%
   
3.620
     
29.31
%
   
6.861
     
-6.02
%
Combined Cycle
   
0.221
     
-40.15
%
   
0.699
     
-35.43
%
   
0.216
     
-40.11
%
   
0.681
     
-35.51
%
PV
   
0.00017
     
     
0.00017
     
     
     
     
     
 
Chongqing
   
2.270
     
-2.68
%
   
4.415
     
-15.14
%
   
2.111
     
-2.54
%
   
4.117
     
-15.05
%
Coal-fired
   
1.905
     
-3.00
%
   
3.681
     
-18.45
%
   
1.755
     
-2.82
%
   
3.402
     
-18.51
%
Combined Cycle
   
0.305
     
3.12
%
   
0.625
     
8.86
%
   
0.297
     
3.04
%
   
0.609
     
8.81
%
Wind-power
   
0.060
     
-17.72
%
   
0.109
     
-5.03
%
   
0.058
     
-17.89
%
   
0.106
     
-5.37
%
Zhejiang Province
   
7.118
     
22.10
%
   
11.754
     
-2.32
%
   
6.840
     
22.29
%
   
11.269
     
-2.43
%
Coal-fired
   
6.915
     
21.17
%
   
11.489
     
-2.81
%
   
6.641
     
21.35
%
   
11.009
     
-2.94
%
Combined Cycle
   
0.186
     
78.73
%
   
0.237
     
29.72
%
   
0.182
     
77.85
%
   
0.232
     
29.63
%
PV
   
0.017
     
-10.09
%
   
0.028
     
-3.20
%
   
0.017
     
-8.19
%
   
0.028
     
-2.16
%
Hubei Province
   
3.795
     
-6.45
%
   
7.361
     
-24.18
%
   
3.557
     
-6.68
%
   
6.910
     
-24.41
%
Coal-fired
   
3.560
     
-6.72
%
   
6.907
     
-25.81
%
   
3.326
     
-6.98
%
   
6.466
     
-26.11
%
Wind-power
   
0.150
     
-4.82
%
   
0.307
     
9.15
%
   
0.148
     
-4.87
%
   
0.302
     
9.12
%
Hydro-power
   
0.078
     
3.28
%
   
0.136
     
26.70
%
   
0.076
     
2.77
%
   
0.131
     
26.31
%
PV
   
0.007
     
12.74
%
   
0.011
     
11.64
%
   
0.007
     
9.82
%
   
0.011
     
11.99
%
Hunan Province
   
2.482
     
22.75
%
   
4.670
     
-6.04
%
   
2.324
     
23.47
%
   
4.361
     
-6.26
%
Coal-fired
   
2.180
     
24.30
%
   
4.097
     
-6.83
%
   
2.026
     
25.19
%
   
3.802
     
-6.93
%
Wind-power
   
0.174
     
30.96
%
   
0.336
     
3.50
%
   
0.172
     
30.57
%
   
0.326
     
1.13
%
Hydro-power
   
0.114
     
-9.50
%
   
0.215
     
-9.15
%
   
0.112
     
-9.75
%
   
0.212
     
-9.16
%
PV
   
0.014
     
71.96
%
   
0.021
     
92.00
%
   
0.013
     
77.36
%
   
0.021
     
87.46
%

8



 
Power Generation
   
Electricity Sold
 
Region
 
April to June 2020
   
Change
   
January to June 2020
   
Change
   
April to June 2020
   
Change
   
January to June 2020
   
Change
 
                                                 
Jiangxi Province
   
4.708
     
15.75
%
   
9.001
     
-2.82
%
   
4.495
     
15.72
%
   
8.607
     
-2.90
%
Coal-fired
   
4.416
     
12.23
%
   
8.489
     
-5.39
%
   
4.214
     
12.24
%
   
8.112
     
-5.46
%
Wind-power
   
0.234
     
77.40
%
   
0.438
     
50.97
%
   
0.230
     
77.82
%
   
0.430
     
50.74
%
PV
   
0.057
     
     
0.075
     
     
0.050
     
     
0.066
     
 
Auhui Province
   
1.274
     
-7.48
%
   
2.514
     
-16.18
%
   
1.212
     
-7.17
%
   
2.400
     
-16.13
%
Coal-fired
   
1.184
     
-6.88
%
   
2.348
     
-16.40
%
   
1.123
     
-6.56
%
   
2.235
     
-16.36
%
Wind-power
   
0.073
     
5.57
%
   
0.149
     
4.80
%
   
0.072
     
6.18
%
   
0.148
     
4.87
%
Hydro-power
   
0.017
     
-53.90
%
   
0.017
     
-65.43
%
   
0.017
     
-53.43
%
   
0.017
     
-65.19
%
*Fujian Province
   
3.082
     
33.07
%
   
5.352
     
19.60
%
   
3.808
     
46.40
%
   
6.272
     
28.74
%
*Coal-fired
   
3.079
     
33.10
%
   
5.346
     
19.61
%
   
3.805
     
46.44
%
   
6.266
     
28.76
%
PV
   
0.003
     
15.32
%
   
0.006
     
17.60
%
   
0.003
     
11.03
%
   
0.006
     
16.71
%
Guangdong Province
   
6.856
     
22.00
%
   
10.231
     
-3.78
%
   
6.391
     
19.06
%
   
9.618
     
-5.49
%
Coal-fired
   
6.640
     
18.26
%
   
10.011
     
-5.77
%
   
6.358
     
18.56
%
   
9.580
     
-5.78
%
Combined Cycle
   
0.210
     
     
0.210
     
     
0.027
     
     
0.027
     
 
PV
   
0.006
     
18.33
%
   
0.011
     
20.63
%
   
0.006
     
19.95
%
   
0.011
     
17.68
%
Guangxi
   
0.169
     
64.16
%
   
0.289
     
72.06
%
   
0.163
     
65.51
%
   
0.278
     
76.05
%
Combined Cycle
   
0.115
     
57.93
%
   
0.184
     
53.60
%
   
0.111
     
60.07
%
   
0.177
     
54.01
%
Wind-power
   
0.054
     
79.31
%
   
0.105
     
122.87
%
   
0.052
     
78.40
%
   
0.101
     
134.55
%
Yunnan Province
   
2.951
     
211.57
%
   
4.618
     
131.61
%
   
2.727
     
215.09
%
   
4.262
     
131.49
%
Coal-fired
   
2.815
     
252.79
%
   
4.278
     
169.41
%
   
2.595
     
259.85
%
   
3.930
     
171.74
%
Wind-power
   
0.135
     
-4.43
%
   
0.337
     
-15.41
%
   
0.131
     
-3.97
%
   
0.328
     
-15.27
%
Hydro-power
   
0.001
     
-93.22
%
   
0.004
     
-56.18
%
   
0.001
     
-93.24
%
   
0.003
     
-56.46
%
Guizhou Province
   
0.077
     
66.43
%
   
0.166
     
16.84
%
   
0.075
     
64.79
%
   
0.157
     
12.44
%
Wind-power
   
0.051
     
11.51
%
   
0.134
     
-5.65
%
   
0.051
     
11.11
%
   
0.132
     
-5.51
%
PV
   
0.025
     
     
0.032
     
     
0.024
     
     
0.025
     
 
Hainan Province
   
3.638
     
-4.91
%
   
6.527
     
-5.74
%
   
3.376
     
-4.63
%
   
6.069
     
-5.52
%
Coal-fired
   
3.503
     
-5.65
%
   
6.302
     
-6.66
%
   
3.244
     
-5.39
%
   
5.849
     
-6.47
%
Combined Cycle
   
0.074
     
312.15
%
   
0.107
     
409.71
%
   
0.072
     
303.09
%
   
0.104
     
418.35
%
Wind-power
   
0.021
     
16.64
%
   
0.048
     
3.74
%
   
0.021
     
15.45
%
   
0.047
     
3.66
%
Hydro-power
   
0.010
     
-77.87
%
   
0.018
     
-67.41
%
   
0.010
     
-78.36
%
   
0.017
     
-67.78
%
PV
   
0.030
     
-1.23
%
   
0.053
     
3.27
%
   
0.029
     
-0.08
%
   
0.052
     
2.92
%
Total
   
94.949
     
3.73
%
   
179.650
     
-8.05
%
   
91.473
     
5.41
%
   
172.125
     
-6.98
%


*
According to the requirements of relevant policies, as Huaneng Shandong Bajiao Power Plant & Huaneng Fujian Luoyuan Power Plant (which is owned by the Company) acts as an emergency backup power source, the scope of statistics has not included its coal-fired installed capacity nor its volume of power generation. Since those power plants began to generate power revenue, the Company’s electricity sales in Shandong Province & Fujian Province was greater than the power generation.

For the first half of 2020, the power generation of Tuas Power Limited in Singapore, which is wholly-owned by the Company, accounted for a market share of 21.6% in Singapore, representing an increase of 1.6 percentage point compared to the same period of last year. The accumulated power generation for the first half year accounted for a market share of 21.5%, representing an increase of 1.0 percentage point compared to the same period of last year.


9

For the first half of 2020, the net profit attributable to equity holders of the Company was RMB5.441 billion, representing an increase of 58.10% over RMB3.442 billion for the same period last year. The net profit attributable to equity holders of the Company from domestic operations was RMB5.281 billion, representing an increase of 48.89%over the same period last year. The increase was primarily attributable to decline in fuel prices. The net profit attributable to equity holders of the Company from its operations in Singapore was RMB25 million. The net profit attributable to equity holders of the Company from its operations in Pakistan was RMB135 million.

1.
Operating revenue and tax and levies on operations
Operating revenue mainly consists of revenue from electricity sold. For the first half of 2020, the consolidated operating revenue of the Company and its subsidiaries amounted to RMB79.127 billion, representing a decrease of 5.35% from RMB83.603 billion for the same period last year. The operating revenue from domestic operations of the Company decreased by RMB3.350 billion over the same period of last year, while the operating revenue generated from newly acquired entities and newly operated generating units was RMB1.354 billion.

The operating revenue from the operations of the Company in Singapore decreased by RMB0.757 billion over the same period of last year. The operating revenue from the operations of the Company in Pakistan was RMB2.148 billion.

Tax and levies on operations mainly consist of surcharges of value-added tax. According to relevant administrative regulations, these surcharges include City Construction Tax and Education Surcharges calculated at prescribed percentages on the amounts of the value-added tax paid. For the first half of 2020, the tax and levies on operations of the Company and its subsidiaries were RMB0.887 billion, representing a decrease of RMB37 million from RMB0.924 billion for the same period of last year.

2.
Operating expenses
For the first half of 2020, the total operating expenses of the Company and its subsidiaries was RMB65.812 billion, representing a decrease of 8.85% from the same period last year. The operating expenses in domestic operations of the Company decreased by RMB4.960 billion, or 7.75%, from the same period last year, which was primarily attributable to decline of fuel price, while the operating expenses of the newly acquired entities and newly operated entities were RMB0.641 billion.

The operating expenses from the operations in Singapore decreased by RMB1.031 billion, or 16.05%, from the same period last year. The operating expenses from the operations in Pakistan was RMB1.393 billion.

2.1
Fuel costs
Fuel costs account for the majority of the operating expenses for the Company and its subsidiaries. For the first half of 2020, fuel costs of the Company and its subsidiaries decreased by 13.71 percentage point to RMB40.831 billion. The fuel costs from domestic operations of the Company and its subsidiaries decreased by RMB5.812 billion, which was primarily attributable to the decline of fuel price. The fuel costs of the newly acquired entities and new generating units were RMB0.301 billion. Fuel costs in Singapore decreased by RMB675 million from the same period last year.

2.2
Depreciation
For the first half of 2020, depreciation expenses of the Company and its subsidiaries increased by RMB151 million to RMB10.843 billion from the same period last year. The depreciation expenses of domestic operations increased by RMB0.129 billion compared to the same period last year, of which the depreciation costs incurred by the newly acquired entities and new generating units was RMB240 million. The depreciation expenses of the operations in Singapore increased by RMB21 million compared to the same time last year.

10


2.3
Labor
Labor costs consist of salaries to employees and contributions payable for employees’ housing funds, medical insurance, pension and unemployment insurance, as well as training costs. For the first half of 2020, the labor costs of the Company and its subsidiaries amounted to RMB5.566 billion, representing an increase of RMB637 million from RMB4.929 billion for same period last year.

2.4
Maintenance
For the first half of 2020, the maintenance expenses of the Company and its subsidiaries amounted to RMB1.647 billion, representing a decrease of RMB48 million from RMB1.695 billion for the same period last year. The maintenance expenses of the Company’s domestic operations decreased by RMB37 million compared to the same period last year. The maintenance expenses of operations in Singapore decreased by RMB11 million compared to the same period last year.

2.5
Other operating expenses (including electricity power purchase costs)
Other operating expenses include environmental protection expenses, land fee, insurance premiums, office expenses, amortization, Tuas Power’s electricity power purchase costs, impairment losses, government subsidies and net losses on disposal of properties, plant and equipment. For the first half of 2020, other operating expenses of the Company and its subsidiaries was RMB6.925 billion, representing a decrease of RMB644 million from RMB7.569 billion for the same period last year. The other operating expenses from the Company’s domestic operations increased by RMB126 million. Other operating expenses of the newly acquired entities and new generating units were RMB39 million. Other operating expenses of the operations in Singapore decreased by RMB368 million compared to the same period last year. Other operating expenses of the operations in Pakistan was RMB1.384 billion, representing a decrease of RMB402 million compared to the same period last year..

3.
Financial expenses, net
The consolidated net financial expenses of the Company and its subsidiaries for the first half of 2020 amounted to RMB4.934 billion, representing a decrease of RMB0.689 billion from RMB5.623 billion for the same period last year, which is mainly due to the decrease of borrowings. The financial expenses of domestic operations decreased by RMB0.542 billion, of which RMB0.166 billion is attributable to newly operated generating units. The financial expenses of the Company’s operations in Singapore decreased by RMB89 million. The financial expenses of the Company’s operations in Pakistan was RMB431 million.

4.
Share of profits less losses of associates and joint ventures
The share of profits less losses of associates and joint ventures of the Company and its subsidiaries for the first half of 2020 was RMB1.049 billion, representing an increase of RMB310 million from RMB739 million for the same period last year. This was mainly attributable to increased profits of the associates and joint ventures of the Company, including Shenzhen Energy.

5.
Income tax expenses
For the first half of 2020, the Company and its subsidiaries registered consolidated income tax expenses of RMB1.895 billion, representing an increase of RMB0.548 billion from RMB1.347 billion for the same period last year. The income tax expenses for the domestic operations increased by RMB0.490 billion over the same period last year mainly due to the increased profitability of domestic operations during the period.


11


6.
Profit/loss attributable to equity holders of the Company
The net profit attributable to equity holders of the Company for the first half of 2020 amounted to RMB5.441 billion, representing an increase of 58.10% over RMB3.442 billion for the same period last year. The net profit attributable to equity holders of the Company from its domestic operations was RMB5.281 billion, representing an increase of 48.89% over the same period last year. The increase is mainly due to decline in fuel prices. The net profit attributable to equity holders of the Company from its operations in Singapore was RMB25 million. The net profit attributable to equity holders of the Company from its operations in Pakistan was RMB135 million

7.
Comparison of financial positions
As of June 30, 2020, consolidated total assets of the Company and its subsidiaries were RMB439.352 billion, representing an increase of 2.59% from RMB428.250 billion as of December 31, 2019. Total liabilities amounted to RMB289.324 billion, representing a decrease of 2.87% from RMB297.871 billion as at the end of 2019. The gearing ratio was 65.85%.

8.
Major financial position ratios
Calculation formula of the financial ratios:

Ratio of liabilities to shareholders’ equity = balance of liabilities at the end of the period/balance of shareholders’ equity (excluding non-controlling interests) at the end of the period

Current ratio = balance of the current assets at the end of the period/balance of current liabilities at the end of the period

Quick ratio = (balance of current assets at the end of the period – net amounts of inventories at the end of the period)/balance of current liabilities at the end of the period

Multiples of interest earned = (profit before tax + interest expenses)/interest expenditure (including capitalized interest)

   
The Company and its subsidiaries
 
Item
 
As of
June 30, 2020
   
As of
December 31, 2019
 
             
Ratio of liabilities to shareholders’ equity
   
2.27
     
2.74
 
Current ratio
   
0.48
     
0.43
 
Quick ratio
   
0.43
     
0.37
 
                 
Item
 
For the
six months ended
June 30, 2020
   
For the
six months ended
June 30, 2019
 
                 
Multiples of interest earned
   
2.51
     
1.95
 

12


The ratio of liabilities to owner’s equity decreased compared with the beginning of the year, mainly due to the increase in the company’s owner’s equity. The current ratio and the quick ratio increased from the beginning of the year, mainly due to the decrease in short-term interest-bearing debts of the company, which led to an decrease in current liabilities. Multiples of interest earned has increased compared to the same period of last year, mainly due to the increase in profit before tax.

As of June 30, 2020, the Company and its subsidiaries had net current liabilities of RMB70.183 billion. Based on the successful financing history of the Company, the undrawn banking facilities available to the Company and its good credit rating, the Company believes it would be able to meet its liabilities as and when they fall due and secure the funds required for operations.

II.
Liquidity and Cash Resources
1.
Liquidity
Item
 
For the
six months ended
June 30, 2020
   
For the
six months ended
June 30, 2019
   
Change
 
   
(RMB in 100 Million)
   
(RMB in 100 Million)
   
(%)
 
                   
Net cash from operating activities
   
158.36
     
167.39
     
(5
)
Net cash used in investing activities
   
(158.45
)
   
(100.02
)
   
58
 
Net cash from/(used in) financing activities
   
26.89
     
(91.53
)
   
(129
)
Effect of exchange rate fluctuations on cash held
   
(2.15
)
   
(0.46
)
   
370
 
                         
Net increase in cash and cash equivalent
   
24.65
     
(24.62
)
   
(200
)
Cash and cash equivalent at beginning of the reporting period
   
124.43
     
154.18
     
(19
)
                         
Cash and cash equivalent at the end of the reporting period
   
149.09
     
129.56
     
15
 

The net cash provided by operating activities of the Company for the first half of 2020 was RMB15.836 billion, representing an decrease of 5% over the same period last year, which mainly due to the fact that electricity generation has declined in comparison to the same period last year, and the settlement scale of bills has increased this year, which results in a decrease of cash received from product selling and labor services by 10 percent.

Net cash used in investing activities of the Company was RMB15.845 billion, representing An increase of 58% from the same period last year, which was mainly due to increased capital expenditure on renewable energy projects.

13


The financing activities of the Company were principally debt financings. For the first half of 2020, the Company drew down new loans of RMB85.075 billion, issued super short-term notes of RMB8 billion and long-term bonds of RMB4.218 billion, and repaid loans of RMB90.971 billion, super short-term bonds of RMB15 billion and long-term bonds of RMB0 billion upon maturity.

As of 30 June 2020, cash and cash equivalents of the Company and its subsidiaries denominated in RMB and Singapore dollar, U.S. dollar, Japanese Yen and Pakistan Pupee, each of which is measured at RMB equivalent, were RMB12.709 billion, RMB1.594 billion, RMB0.130 billion,  RMB0.3279 million and RMB0.475 billion, respectively.

2.
Capital expenditure and cash resources
2.1
Capital expenditure for infrastructure construction and renovation projects
The capital expenditure for construction and renovation projects of the Company for the first half of 2020 was RMB14.328 billion, including RMB1.649 billion for Liaoning Clean Energy, RMB1.349 billion for Puyang Clean Energy, RMB1.146 billion for Shengdong Rudong Offshore Wind, RMB1.092 billion for Shanxi Integrated Energy, RMB844 million for Pinghu Offshore Wind, RMB760 million for Mengcheng Wind, RMB629 million for Guanyun Clean Energy, RMB562 million for Ruijin Power, RMB452 million for Sheyang New Energy, RMB418 million for Shandong Power Generation, RMB398 million Jiangyin Turbine Engine, RMB389 million for Jilin Power Generation, RMB360 million for Anyang Energy, RMB312 million for Sihong New Energy, RMB254 million for Heilongjiang Power Generation, RMB205 million for Guigang Clean Energy, RMB196 million for Dongguan Turbine Engine and Co-generation, RMB194 million for Lianping Wind Power, RMB187 million for Dalian Thermal Power, RMB165 million for Guanling New Energy, RMB162 million for Diandong Energy, RMB159 million for Xayi Wind Power, RMB142 million for Shidongkou First Plant, and RMB133 million for Diandong Yuwang. The infrastructure and renovation expenditure of other units was RMB2.172 billion.

The above capital expenditures are sourced mainly from internal capital, cash flows provided by operating activities, and debt financing. The Company expects to have significant capital expenditures in the next few years. During the course, the Company will make active efforts to improve project planning process on a commercially viable basis. The Company will also actively develop new projects to pave the way for its long-term growth. The Company expects to finance the above capital expenditures through internal capital, cash flows provided by operating activities, and debt and equity financing.

2.2
Cash resources and anticipated financing costs
The Company expects to finance its capital expenditure and acquisition costs primarily from internal capital, cash flows from operating activities, and debt and equity financings.

Good operating results and sound credit status provide the Company with strong financing capabilities. As of June 30, 2020, the undrawn banking facilities available to the Company and its subsidiaries amount to more than RMB316.0 billion from, among others, Bank of China, China Construction Bank and Industrial and Commercial Bank of China.

The Company issued unsecured super short-term bonds with face value of RMB2 billion, RMB2 billion, RMB2 billion and RMB2 billion bearing annual interest rates of 1.70%, 1.50%, 1.20% and 1.20% on February 1, 2020, February 2, 2020, April 3, 2020 and May 4, 2020, respectively. Such bonds are denominated in RMB, issued at face value and mature in 90 days, 60 days,60 days and 90 days, respectively.

The Company issued two installments of corporate bonds of USD300 million each, with coupon rate of 2.25% and 2.625%, respectively. Each installment of the bonds is issued at par value in USD with maturity in 5 and 10 years after issuance, respectively.


14


As of June 30, 2020, the Company and its subsidiaries had outstanding short-term loans of RMB61.515 billion (RMB67.119 billion as of the end of 2019), of which borrowings from banks were charged at annual interest rates ranging from 0.00% to 4.92% (0.00% to 14.58% at the end of 2019).

As of June 30, 2020, the Company and its subsidiaries had outstanding short-term bonds of RMB2.003 billion (RMB9.026 billion at the end of 2019).

As of June 30, 2020, the Company and its subsidiaries had total long-term borrowings (including long-term borrowings maturing within one year) of RMB134.147 billion (end of 2019: RMB134.023 billion), of which RMB borrowings were RMB114.432 billion (end of 2019: RMB110.947 billion), USD borrowings were approximately $1.543 billion (end of 2019: $1.431 billion), euro borrowings of approximately €13 million (end of 2019: €15 million), Singapore dollar borrowings of S$1.679 million (end of 2019: S$2.479 million), and Japanese yen borrowings of ¥2.317 billion (end of 2019: ¥2.372 billion). US dollar and Singapore dollar borrowings are floating rate borrowings and all other foreign currency loans are fixed rate loans. As of June 30, 2020, the annual interest rate on long-term bank borrowings ranged from 0.75% to 6.55% (end of 2019: 0.75% to 6.82%).

The Company will maintain close watch on fluctuations of exchange rate and interest rate markets, and prudently assess currency and interest rate risks.

In addition to meeting cash requirements from operations, constructions and acquisitions in its ordinary course, the Company, along with due consideration of overall development of power generation industry and growth of the Company, will make efforts to control financing costs and financial risks, establish an optimal capital structure for effective financial management activities, with the view to providing sustainable and stable returns to its shareholders.

2.3
Other financing requirements
The objective of the Company is to bring long-term, consistent and growing returns to its shareholders. In line with this objective, the Company follows a proactive, stable and balanced dividend policy. Upon the approval from the annual general meeting of the shareholders for the year 2019 held on June 24, 2020, the Company declared a cash dividend of RMB0.135 per ordinary share (inclusive of tax), with total dividends of approximately RMB2.119 billion. The Company has not made payment of the dividends as of June 30, 2020.

III.
Performance and Prospects of Significant Investments
The Company acquired 25% equity interests in Shenzhen Energy Group (“Shenneng Group”) with payment of RMB2.390 billion on April 22, 2003. In 2011, Shenneng Group divided into a remainder company Shenneng Group and a new company Shenneng Energy Management Company, and the Company holds 25% equity interests in each of the two successors. The Company acquired 200 million shares from Shenzhen Energy Corporation (“Shenzhen Energy”), a subsidiary of Shenneng Group, in December 2007. Shenzhen Energy allotted shares with its capital surplus in 2011. In February 2013, Shenzhen Energy merged Shenzhen Energy Management Company through the combination of directional seasoned offering and cash payment to the shareholders of Shenzhen Energy Management Company. After the merger, the Company directly held 991,741,659 shares of Shenzhen Energy, representing 25.02% of its equity interests. These investments brought a net profit attributable to the equity holders of the Company of RMB741 million for the Company for the first half of 2020 under IFRS. This investment is expected to provide steady returns to the Company.


15


The Company held 60% direct equity interests in Sichuan Hydropower as of December 31, 2006. In January 2007, Huaneng Group increased its capital investment in Sichuan Hydropower by RMB615 million, thus reducing the Company’s equity interests in Sichuan Hydropower to 49% and making Huaneng Group the controlling shareholder of Sichuan Hydropower. This investment brought to the Company a net profit attributable to the equity holders of the Company of RMB78 million for the first half of 2020 under IFRS. This investment is expected to provide steady returns to the Company.

IV.
Employee Benefits Policies
As of June 30, 2020, the Company and its subsidiaries had 57,415 employees. During this reporting period, there was no significant change regarding remuneration policies and training programs of the Company.

V.
Guarantee for Loans, Bonds and Restricted Assets
As of June 30, 2020, the Company provided guarantees of approximately RMB12.216 billion for the long-term bank loans and long-term bonds of Tuas Power; Huaneng Heilongjiang Power Co., Ltd., a subsidiary of the Company, provided guarantee of approximately RMB350 million, RMB866 million and RMB335 million for the long-term bank loans of its subsidiaries Huaneng Daqing Cogeneration Co., Ltd., Daqing Lvyuan Wind Power Co., Ltd., and Huaneng Tongjing Wind Power Co., Ltd., respectively; Huaneng Daqing Cogeneration Co., Ltd., a subsidiary of the Company, provided guarantee of RMB194 million for the long-term bank loans of its subsidiary, Huaneng Yichun Cogeneration Power Co., Ltd; Huaneng Shandong Power Generation Co., Ltd., a subsidiary of the Company, provided guarantee of RMB1.416 billion for Huaneng Shandong Ruyi (Hong Kong) Energy Co, Ltd.

As of June 30, 2020, the details of secured loans of the Company and its subsidiaries are as follows:

1.
As of June 30, 2020, short-term loans of approximately RMB498 million (RMB659 million at the end of 2019) represented the notes receivable that were discounted with recourse. As these notes receivable had not yet matured, the proceeds received were recorded as short-term loans.

2.
As of June 30, 2020, long-term loans of approximately RMB3.432 billion (RMB3.586 billion at the end of 2019) of the Company and its subsidiaries were secured by certain property, plant and equipment with net book value of RMB3.766 billion (RMB4.913 billion at the end of 2019). As at 30 Jun 2020, short-term loans of RMB566 million were secured by certain equipment.

3.
As of June 30, 2020, long-term loans of approximately RMB6.840 billion (RMB7.287 billion at the end of 2019) were secured by future electricity revenue of the Company and its subsidiaries.

As of June 30, 2020, the restricted bank deposits of the Company and its subsidiaries were RMB481 million (RMB863 million at the end of 2019).

As of June 30, 2020, the discounted or endorsed un-matured accounts receivable have a book value of RMB1.626 billion (RMB2.396 billion at the end of 2019).

As of June 30, 2020, the Company and its subsidiaries had no material contingent liability.


16


VI.
Risk Factors
1.
Risks relating to electricity market
According to China Electricity Council’s report, Electricity growth nationwide experienced slowdown by 1.3% for the first half of 2020 and expectedly increase by 2%-3% for the whole year of 2020 due to COVID-19 outbreak. Unpredictable Climate, wind and water conditions and accelerated installation and operation of renewable energy facilities add uncertainty to the power generation market which is under increasingly intensified competition as a result of continued market reform, liberalization of business power generation sector and enlarged trading in various provinces and regions within China. The Company will overcome the unfavorable factors such as slowdown of power demand, further implement national policies to increase power generation capacity, make in-depth analysis of market supply and demand, proactively participate in the construction of the spot market, strengthen market analysis and judgment, enhance marketing management, and strictly control power market risks.

In addition, Liberalization of the business power generation and consumption market will contribute to considerable growth of market-based electricity transaction. Rapid development of the spot market has resulted in electricity prices in pilot provinces generally lower than the prices under annual agreement, with prices in certain provinces even lower than the variable cost of power generation, the Company’s average settlement price is expected to be exposed to continued decline. The Company will closely follow the development of government policies and power market reform, strengthen communication with central and local price authorities, actively cooperate with the government to establish reasonable, fair and regulated market conditions, take initiatives to respond to market changes, effect timely adjustment to pricing strategies, and make efforts to prevent and control the risks affecting electricity prices.

2.
Risks relating to environmental protection policies
To mitigate air pollution from emissions, the power plants of the Company have completed ultra-low-emissions renovations which are on par with or exceed applicable national standards, but are still exposed to the risk of sporadic non-compliance with emission requirements due to breakdown of environmental protection facilities. To contain discharge of waste water and by coal mines and ash yards, the Company has arranged renovations by investment for wastewater treatment, coal yard closure and ash yard treatment in power plants in strategically important regions, while the weakness of existing facilities in some of these plants could subject those plants to environmental risks before completion of the renovation efforts.


17


3.
Risks relating to fuel procurement market
The first half of 2020 witnessed significant fluctuation of coal prices due to COVID-19 outbreak, safety inspections, and shortage of hydropower generation. The market is expected to be exposed to the following risks during the second half of the year: first, the investigation of irregularities in Inner Mongolia’s coal sector for the past 20 years would add pressure on coal production; secondly, the increased uncertainty in international energy market, coupled with exchange rate fluctuations, would have considerable impact on the supply of imported coal; thirdly, the potential widespread recurrence of COVID-19 outbreak could affect coal supply and demand. The Chinese government has implemented a series of policies to maintain supply and stabilize prices, which would help to manage supply risk and control prices. Coal supply during the second half of 2020 is expected to be generally stable with slight price change. The Company will closely monitor changes in policies and domestic and international coal markets, strengthen cooperation with competitive large mines to ensure strict compliance with long term contracts; continue to explore new coal supply channels and carry out spot bidding in procurement; strengthen inventory management with reinforced and efficient storage in off-peak season, intensify mixed use of economic coal, and make various efforts to reduce fuel procurement costs.

4.
Risks relating to interest and exchange rates
In terms of RMB debt, in the first half of the year, in response to the epidemic, the People’s Bank of China comprehensively adopted a variety of monetary policy tools, stepped up counter-cyclical adjustment, lowered interest rates in the financial market, and the capital market was generally loose in order to cope with the epidemic. The current economic situation is still severe and complex, with great instability and uncertainty. In the second half of the year, the monetary policy of the People’s Bank of China will be more flexible, moderate and precise, maintaining the rational growth of money supply and social financing scale, and reducing the comprehensive financing cost significantly. The Company expects that the capital market will continue to maintain a “moderately loose”. Regarding foreign currency debt, the global COVID-19 outbreak is not under effective control, The interest rates of major currencies such as the US dollar are expected to decline slightly during the second half of 2020. The fluctuation of interest rates of foreign currency debts, which account for an insignificant proportion of our total debts, will have limited impact on the Company. The Company will pay close attention to changes in the domestic and overseas capital markets. While ensuring meeting funding requirements, the Company will focus on controlling financing costs by making timely adjustment to financing strategy, maintaining reasonably selected financing portfolios, and reducing the risk of interest rate fluctuations.


18


SHARE CAPITAL STRUCTURE
As at 30 June 2020, total issued share capital of the Company amounted to 15,698,093,359 shares, of which 10,997,709,919 shares were domestic shares, representing 70.06% of the total issued share capital of the Company, and 4,700,383,440 shares were foreign shares, representing 29.94% of the total issued share capital of the Company. In respect of foreign shares, Huaneng Group through its wholly-owned subsidiaries China Hua Neng Group Hong Kong Limited and China Huaneng Group Treasury Management (Hong Kong) Limited, held 472,000,000 and 131,956,000 shares, representing 3.01% and 0.84% of the total issued share capital of the Company, respectively. In respect of domestic shares, Huaneng International Power Development Corporation (“HIPDC”) owned a total of 5,066,662,118 shares, representing 32.28% of the total issued share capital of the Company, while Huaneng Group held 1,555,124,549 shares, representing 9.91% of the total issued share capital of the Company. Through its controlling subsidiary China Huaneng Finance Corporation Limited, Huaneng Group held 61,194,199 shares, representing 0.39% of the total issued share capital of the Company. Other domestic shareholders held a total of 4,314,729,053 shares, representing 27.49% of the total issued share capital.

PURCHASE, SALE OR REDEMPTION OF SHARES
The Company and its subsidiaries did not sell any other types of securities and did not purchase or redeem its own shares or other securities in the first half of 2020.

DISCLOSURE PURSUANT TO RULE 14A.63 OF THE LISTING RULES
Reference is made to the announcement of the Company dated 1 April 2020 (the “Announcement”).

As disclosed in the Announcement, Huaneng Group guaranteed that the audited actual net profit for 2017, 2018 and 2019 for each of Huaneng Laiwu Power Generation Limited, Huaneng Jiaxiang Power Generation Limited, Huaneng Jining Canal Power Generation Limited, Huaneng Liaocheng Thermal Power Limited and Huaneng Yantai Power Generation Limited (being certain subsidiaries of Huaneng Shandong Power Generation Limited as acquired by the Company) (collectively, “Profit Forecast Companies”, and individually, “Each Profit Forecast Company”) would not be less than the forecasted net profit. In 2019, the forecasted net profit for Each Profit Forecast Company was as follows:

Unit: RMB10,000
Company name
 
Direct or indirect interest held by Huaneng Group at time of equity transfer
   
Forecasted net profit for 2019
 
             
Huanemg Laiwu Power Generation Limited
   
80.00
%
   
59,280.61
 
Huaneng Jiaxiang Power Generation Limited
   
50.00
%
   
3,757.37
 
Huaneng Jining Canal Power Generation Limited
   
98.35
%
   
16,624.85
 
Huaneng Liaocheng Thermal Power Limited
   
75.00
%
   
7,100.78
 
Huaneng Shandong Power Generation Co., Ltd. Yantai Power Plant
   
100.00
%
   
5,619.20
 


19


According to the Specific Audit Report on Situation Description of the Differences Between Actual Net Profit/(Loss) and the Forecast Net Profit, which was audited by Ernst & Young Hua Ming LLP, the aggregate difference between the actual net profit/(loss) (net of the non-recurring items) and the forecasted net profit for 2019 for the Profit Forecast Companies was RMB693.8797 million. As the Actual Net Profit of Each Profit Forecast Company for 2019 fell short of the forecasted net profit and according to the terms and compensation formula set out in the Profit Forecast Compensation Agreement (the “Profit Forecast Compensation Agreement”) entered into between Huaneng Group and the Company on 14 October 2016, Huaneng Group should compensate the Company. The Profit Forecast Companies’ total cash compensation for 2019 was RMB457.727 million. The compensation, which shall be payable by way of cash by Huaneng Group to the Company within 20 working days from the date of disclosure of the specific audit report.

The Company has received the abovementioned cash compensation from Huaneng Group in April 2020. The independent non-executive Directors of the Company were of the opinion that Huaneng Group has fulfilled the payment obligation for its undertaking on 2019 result compensation under the Profit Forecast Compensation Agreement.

SHAREHOLDINGS OF MAJOR SHAREHOLDERS
The following table summarises the shareholdings of the top ten shareholders of the Company’s shares as at 30 June 2020:

Name of Shareholders
 
Total shareholdings as at end of the reporting period
   
Percentage of shareholding in total issued shares (%)
 
             
Huaneng International Power Development Corporation
   
5,066,662,118
     
32.28
%
HKSCC Nominees Limited*
   
4,102,339,882
     
26.13
%
China Huaneng Group Co., Ltd.
   
1,555,124,549
     
9.91
%
Hebei Construction & Investment Group Co., Ltd.
   
527,548,946
     
3.36
%
China Securities Finance Corporation Limited
   
492,186,504
     
3.14
%
China Hua Neng Group Hong Kong Limited
   
472,000,000
     
3.01
%
Jiangsu Guoxin Investment Group Limited
   
416,500,000
     
2.65
%
Dalian Municipal Construction Investment Company Limited
   
301,500,000
     
1.92
%
Liaoning Energy Investment (Group) Limited Liability Company
   
284,204,999
     
1.81
%
Fujian Investment & Development Group Co., Ltd.
   
251,814,185
     
1.60
%


*
HKSCC Nominees Limited acts as nominee of holders of H shares of the Company and its shareholdings in the Company represent the total number of H shares held by it as nominee of H shareholders.


20


MATERIAL INTERESTS AND SHORT POSITIONS IN SHARES AND UNDERLYING SHARES OF THE COMPANY
As at 30 June 2020, the interests or short positions of persons who were entitled to exercise or control the exercise of 5% or more of the voting power at any of the Company’s general meetings (excluding the Directors, Supervisors and chief executive) in the shares and underlying shares of equity derivatives of the Company as recorded in the register required to be kept under Section 336 of the Securities and Futures Ordinance (Hong Kong Law Cap. 571) (the “SFO”) were as follows:

Name of Shareholder
 
Class of shares
 
Number of shares held (share)
 
Capacity
 
Approximate percentage of shareholding in the Company’s total issued share capital
   
Approximate percentage of shareholding in the Company’s total issued domestic shares
   
Approximate Percentage of shareholding in the Company’s total issued H Shares
 
                               
Huaneng International Power Development Corporation(Note 2)
 
Domestic shares
   
5,066,662,118(L)

Beneficial owner
   
32.28%(L)

   
46.07%(L)

   
 
China Huaneng Group Co., Ltd.(Note 3)
 
Domestic shares
   
1,616,318,708(L)

Beneficial owner
   
10.30%(L)

   
14.70%(L)

   
 
China Huaneng Group Co., Ltd.(Note 4)
 
H Shares
   
603,956,000(L)

Beneficial owner
   
3.85%(L)

   
     
12.85%(L)

Luo Yi 駱奕(Note 5)
 
H Shares
   
736,370,000(L)

Interest of spouse
   
4.69%(L)

   
     
15.66%(L)

         
16,088,000(L)

Interest of controlled corporation
   
0.10%(L)

   
     
0.34%(L)

Qiu Guogen 裘國根(Note 5)
 
H Shares
   
736,370,000(L)

Interest of controlled corporation
   
4.69%(L)

   
     
15.66%(L)

         
16,088,000(L)

Interest of spouse
   
0.10%(L)

   
     
0.34%(L)



Note:

(1)
The letter “L” denotes a long position. The letter “S” denotes a short position. The letter “P” denotes interest in a lending pool.

(2)
As of the Latest Practicable Date, China Huaneng Group Co., Ltd. held 75% direct interests and 25% indirect interests in HIPDC.

(3)
Of the 1,616,318,748 domestic shares, China Huaneng Group Co., Ltd. directly held 1,555,124,549 domestic shares, and through its controlling subsidiary, China Huaneng Finance Corporation Limited, China Huaneng Group Co., Ltd. indirectly held 61,194,199 domestic shares.

(4)
China Huaneng Group Co., Ltd. held (i) 472,000,000 H shares through its wholly owned subsidiary, China Hua Neng Group Hong Kong Limited, (ii) 131,956,000 H shares through its wholly owned subsidiary China Huaneng Group Treasury Management (Hong Kong) Limited.

(5)
Long position of 490,980,000 H shares was held by 上海重陽戰略投資有限公司 Shanghai Chongyang Strategic Investment Co., Ltd., while long position of 211,590,000 H shares was held by 上海重陽投資管理股份有限公司Shanghai Chongyang Investment Management Co., Ltd., long position of 30,800,000 H shares was held by 重陽集團有限公司 Chongyang Group Co., Ltd. and long position of 3,000,000 H shares was held by 重陽國際資產管理有限公司 Chongyang International Asset Management Co., Ltd.. Luo Yi is the spouse of Qiu Guogen who is the ultimate beneficial owner of each of Shanghai Chongyang Strategic Investment Co., Ltd., Shanghai Chongyang Investment Management Co., Ltd., Chongyang Group Co., Ltd. and Chongyang International Asset Management Co., Ltd..

Save as stated above, as at 30 June 2020, in the register required to be kept under Section 336 of SFO, no other persons were recorded to hold any interests or short positions in the shares or underlying shares of the equity derivatives of the Company.



21


DIRECTORS’ AND SUPERVISORS’ RIGHT TO PURCHASE SHARES
The Company has adopted a code with the standard not lower than that of the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (“Listing Rules”). Following enquiries made by the Company, all Directors and Supervisors confirmed that they have complied with the Code throughout the first half of 2020.

As at 30 June 2020, none of the directors, chief executive officer or supervisors of the Company had any interest or short position in the shares, underlying shares and/or debentures (as the case may be) of the Company or any of its associated corporations (within the definition of Part XV of the Securities and Futures Ordinance (“SFO”) which was required to be notified to the Company and the Stock Exchange of Hong Kong Limited (“Hong Kong Stock Exchange”) pursuant to Divisions 7 and 8 of Part XV of the SFO (including interest and short position which any such Director, chief executive officer or Supervisor is taken or deemed to have under such provisions of the SFO) or which was required to be entered in the register required to be kept by the Company pursuant to Section 352 of the SFO or which was otherwise required to be notified to the Company and the Hong Kong Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies as contained in Appendix 10 to the Listing Rules.

PUBLIC FLOAT
As at the date of this announcement, the Company has maintained the prescribed public float under the Listing Rules and as agreed with the Hong Kong Stock Exchange, based on the information that is publicly available to the Company and within the knowledge of the directors of the Company.

DIVIDENDS
It was resolved by the Board not to distribute dividends for the first half of 2020.

DISCLOSURE OF MATERIAL EVENTS
1.
Status on Change of the Chairman of the ninth session of the Board of Directors
The “Proposal on the Election of the Chairman of the Board of Directors and Chairman of the Strategy Committee of the Company and the Appointment of the Honorary Chairman” was considered and unanimously passed at the 26th meeting of the ninth session of the Board of Directors of the Company convened on 5 March 2020, whereby the election of Mr. Zhao Keyu as the Chairman of the ninth session of the Board of Directors and the chairman of the Strategy Committee of the Company was approved. Mr. Shu Yinbiao resigned as the Chairman and Director of the Company due to work requirements. In view of the significant contributions made by Mr. Shu Yinbiao to the Company during his term as the Chairman of the Company, the Board of Directors decided to appoint Mr. Shu Yinbiao as the honorary chairman of the Company.


22


2.
Status on re-election of the Board of Directors and the Supervisory Committee
The Company held the annual general meeting, the meeting of the Supervisory Committee and the Board meeting on 16 June 2020, respectively, to complete the election on change of session of each of the Board of Directors and the Supervisory Committee.

Members of the new session of the Board of Directors of the Company are as follows: Zhao Keyu (Chairman), Zhao Ping, Huang Jian, Wang Kui, Lu Fei, Teng Yu, Mi Dabin, Cheng Heng, Guo Hongbo, Lin Chong, Xu Mengzhou (Independent Director), Liu Jizhen (Independent Director), Xu Haifeng (Independent Director), Zhang Xianzhi (Independent Director) and Xia Qing (Independent Director).

Members of the new session of the Supervisory Committee of the Company are as follows: Li Shuqing (Chairman of the Supervisory Committee), Mu Xuan (Vice Chairman of the Supervisory Committee), Ye Cai, Gu Jianguo, Zhang Xiaojun and Xu Jianping.

3.
Change of the President of the Company
The Company has reviewed and approved the Proposal on Appointment of the President of the Company at the 26th meeting of the ninth session of the Board of Directors held on 5 March 2020, and agreed to appoint Mr. Zhao Ping as the President of the Company. Mr. Zhao Keyu resigned as president of the Company.

CORPORATE GOVERNANCE
The Company always places emphasis on corporate governance. After years of experience and practice, the Company has gradually formed a standardised and enhanced governance structure, thereby establishing a sound and effective system that is appropriate to the Company’s own development requirements. The Company persists on maximising the benefits of the Company and its shareholders as a whole, treating all of its shareholders fairly and striving for the long-term, stable and increasing returns for shareholders of the Company.

During the reporting period, the Company has complied with the relevant provisions of Corporate Governance Code and Corporate Governance Report set out in Appendix 14 of the Listing Rules.

(a)
Code of Corporate Governance
In recent years, the Company adopted the following measures in order to strengthen corporate governance and enhance the Company’s operation quality:

(1)
Enhancing and improving corporate governance
In addition to complying with the provisions of the applicable laws, as a public company listed in three markets both domestically and internationally, the Company is subject to the regulations of the securities regulatory authorities of the three listing places and the supervision of investors at-large. Accordingly, our fundamental principles are to adopt a corporate governance structure that balances and coordinates the decision-making powers, supervisory powers and operating powers, to act with honesty and integrity, and to operate in accordance with laws and regulations.


23


Over the years, the Board has formulated and implemented the Rules and Procedures of the General Meetings; Rules and Procedures of the Board of Directors Meetings; the Rules and Procedures of the Supervisory Committee Meetings; the Detailed Rules on the Work of the General Manager; the Detailed Rules on the Work of the Strategy Committee of the Board of Directors; the Detailed Rules on the Work of the Audit Committee of the Board of Directors; the Detailed Rules on the Work of the Nomination Committee of the Board of Directors; the Detailed Rules on the Work of the Remuneration and Appraisal Committee of the Board of Directors; the System on Work of Independent Directors, the System on Work of Independent Directors on the Annual Report and the Work Regulations on Annual Report for the Audit Committee, and amended relevant regulations and systems according to the applicable laws and the development needs of the Company.

The Board of Directors of the Company always regards the enhancement of corporate governance and the regulation of the three meetings as its own responsibility, continuously strengthens its own construction, and operates in compliance with laws and regulations, laying a solid foundation for the Company’s sustained and healthy development. In 2020, the Board of Directors of the Company has continuously led the Company to adhere to strategic leadership, enhanced development planning. In line with the Company’s strategic goals of “Six New Enhancements” and “Two Greater Breakthroughs”, the Company thoroughly implemented the new development concept and implemented the new energy safety strategy of “Four Reforms, One Cooperation” to deepen the supply-side structural reform and conduct the three critical battles, to achieve new improvements in green development, operational excellence, technological innovation, international operations, intrinsic safety, and the quality of party-building works, and make major breakthroughs in structural adjustments and the work of “resolving stagnant enterprises and enterprises with difficulties” thus to accelerate the pace of establishing a world-class listed power company with global competitiveness. At the same time, the Company will strictly abide by the “Guidelines for the Governance of Listed Companies”, with the fundamental aim of maximizing the interests of shareholders, treat all shareholders fairly, maintain a positive, balanced and stable dividend policy, and manage well the relationship between its long-term development of the Company and the short-term benefits of its investors.


24


All members of the Board jointly perform the duty of corporate governance. During the reporting period, the Board has included the followings in its scope of duties and authority:

1.
Establishing and reviewing the Company’s corporate governance policies and codes, and making such amendments as it deems necessary to ensure the effectiveness of such policies and codes;

2.
Reviewing and supervising the training and sustained professional development of the Company’s directors and senior management;

3.
Reviewing and supervising the Company’s policies and codes regarding the observance of laws and regulatory requirements;

4.
Formulating, reviewing and supervising the codes of conduct and compliance handbook applicable to directors and employees; and

5.
Reviewing the Company’s status on compliance with the Code on Corporate Governance Practices and the disclosures made in the Corporate Governance Report.

(2)
Enhancing and improving the information disclosure system
The Company stresses on the importance of external information disclosure. The Company has established the Information Disclosure Committee which comprises the secretary to the Board of Directors, the chief accountant, managers of each functional department to be responsible for reviewing the Company’s regular reports. The Company has implemented the system of holding regular information disclosure meetings every Monday chaired by the secretary to the Board of Directors who will report on the Company’s important matters of the week, thereby ensuring the Company’s performance of the relevant information disclosure obligations. The Company has successively formulated and implemented the relevant information disclosure system, and has made timely amendments thereto according to regulatory requirements. The current functioning systems include the Measures on Information Disclosure Management, the Measures on Connected Transaction Management, Management Measures on Insiders, the Measures on Investor Relations Management, the Detailed Rules on the Work of the Information Disclosure Committee, Management Measures for Pursuing Responsibility regarding Material Errors in Information Disclosure of Annual Report, etc. The above measures and system ensure the regulated operation of the Company, strengthen the truthfulness, accuracy, completeness and the timely disclosure of information, and at the same time enhance the quality as well as transparency of the information disclosure.


25


Relevant departments of the Company compiled answers (and subsequent updates) to questions regarding the hot topics of market concerns, and the Company’s production, operation and operating results in a timely manner. The replies shall become the basis of external communication upon the approval of the Company’s management and the authorised representatives of the Information Disclosure Committee. In addition, the Company engages professional personnel to conduct specialized training for the staff of the Company who are responsible for information disclosure on an irregular basis in order to continuously enhance their expertise.

(3)
Regulating financial management system, strengthening internal control
In 2020, the Company adheres to its principle of good faith and fair treatment to its shareholders and makes a lot of detailed work in preparing the financial reports and connected practice standard and on aspect of internal controls. The credibility of a listed company, to a large extent, relates to the quality of the preparation of financial statements and a regulated operation of financial activities. In order to regulate its financial management, the Company has completed a large amount of specific and detailed work, including:

1.
In order to strictly implement the accounting rules, accounting standards and accounting systems, to strengthen accounting and accounts supervision, and to truthfully and fairly reflect the financial position, operating results and cash flow, the Company has formulated the Measures on Accounting, the Basic Measures on Construction Accounting, the Measures on Fixed Assets Management, Lists of Fixed Assets and the Measures on Cost Management. The Company’s Board, the Supervisory Committee and the Audit Committee have reviewed the Company’s financial reports on a regular basis and the Company has fulfilled the requirements of making the Chairman, the President and the Chief Accountant responsible for the truthfulness and completeness of the financial reports.

2.
In order to safeguard the independence of the listed company, the Company realized the complete separation of the listed company and the controlling shareholder in terms of personnel, assets and finances according to the laws and regulations of the State and the requirements of regulatory rules.


26


3.
In regard to fund management, the Company has formulated a number of management measures including the Measures on Financial Management, the Measures on the Management of the Income and Expenditure of the Funds, the Measures on the Assessment of Management of Receipt and Payment of Funds, the Measures on the Use and Management of Large Amount by Headquarter of the Company, the Measures on the Management of Bills of Exchange, the Measures on Management of Fund Raised, Rules on the Management of Transactions Involving Financial Derivatives, the Measures on the Management of Provision of Security to Third Parties and the Measures for Regulating Fund Transfers with the Related Parties. The Company’s Articles of Association also set out provisions relating to loans, guarantees and investment. In the annual reports of the Company over the previous years, the Company has engaged certified accountants to conduct auditing on the use of funds by the controlling shareholders and other related parties, and issue specific statements according to the requirements of the China Securities Regulatory Commission (“China Securities Regulatory Commission”) and the Shanghai Stock Exchange (“Shanghai Stock Exchange”) for confirmation that there has not been any violation of rules relating to the use of funds. Moreover, the Company also conducted quarterly checking and clearing with related parties in relation to the operational fund transfers in order to ensure the safety of funds.

4.
The overall objective of internal control of the Company is to promote implementation of the corporate strategy. Specific goals are to maintain lawful operation and management of the Company, asset safety, and truthfulness and completeness of financial reports and related information, thus promoting the overall enhancement of operating efficiency and actual effect.

The Company has formulated a comprehensive system, thereby achieving systematic management. The Company has comprehensively sort out internal and external risks and various business processes, and completed the “Internal Control Manual”, the fifth version of which in use detailed 23 business processes and organisational structures including income, material procurement, fuel management and fund management, and 19 soft elements including human resources management, antifraud and risk management in terms of five areas including environment control, risk assessment, process control, information and communication, and monitoring, thereby comprehensively elaborating the Company’s guiding principles and policies, work procedures and job duties of various posts, regulating the standard procedures of various business processes and realising a streamlined system. Currently, the Company is revising the current version, and intends to publish and implement the sixth version of the “Internal Control Manual” by the end of 2020.

27


The Company has compiled the “Internal Control Evaluation Handbook” specifying the three-tier internal control evaluation management system, the internal control evaluation mode comprised of routine evaluation and supervision on key area, regulating the internal control evaluation procedures, evaluation methods, defect defining procedures and standards in order to realize standardisation of internal control evaluation. The Company conducts annual assessment on the applicability and effectiveness of the above system and regularly conducts revision and perfection in order to realise dynamic maintenance of the internal control system.

For the purpose of risk identification, the “Internal Control Manual” stipulates the corresponding control measures and defines key control points. Through the implementation of the “one post for one item system” at each control point, the control responsibility is divided to every post at various levels so that internal control and job responsibilities are combined and all members of staff can participate in the construction of internal control. The Company has implemented the internal control routine evaluation mechanism, set up the post of internal control evaluators in each department and subordinate unit respectively, conducted monthly internal control evaluation, and established a three-tier evaluation quality supervision mechanism respectively at the three levels of the Company, regional offices and basic level units by way of the internal control management system in order to conduct real-time tracking of the implementation of internal control. During the first half of 2020, the Company has successfully completed a six-month internal control routine evaluation, thus effectively protecting and promoting the sustained and healthy development of the businesses of the Company and realising the stable operation of the internal control system. The Company has combined the new requirements and new changes in business and management and constantly advanced experience and common issues, and launched comprehensive and multilevel internal control training each year, and widely publicised internal control concepts and knowledge, thus continuously optimising the internal control environment.

28


The internal control and management departments, internal audit department and external auditors regularly report the internal control work situation to the Audit Committee of the Board of Directors respectively, thus ensuring the continued and effective operation of the internal control system. The Company constantly improves the internal control review system, formulated the “Internal Control Review and Evaluation Management Regulations”, regularly conducts internal control target reviews on an annual basis, thus realizing the review results in a timely manner, effectively guiding the units at all levels to focus on the quality of internal control work and practically realising of the deep level objective of management enhanced by internal control.

Upon full assessment, the management of the Company is of the opinion that the internal control system of the Company is sound and effective.

(b)
Securities transactions by Directors
As the Company is listed in three jurisdictions, the Company has strictly complied with the relevant restrictive provisions on securities transactions by directors imposed by the regulatory authorities of the US, Hong Kong and China and we insist on the principle of complying with the strictest provision, that is, abiding by the strictest provision among three jurisdictions. We have adopted a set of standards not less exacting than the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix 10 to the Listing Rules as the model code for securities dealings by directors of the Company, namely, Management Rules regarding the Company’s Securities Information and Trading. The Company has also formulated and implemented the Management Rules in respect of the Shares of the Company held by the Directors, Supervisors and Senior Management of Huaneng Power International, Inc. The model codes for the trading of securities by the Company’s directors include: trading the Company’s shares strictly in accordance with the Companies Law and relevant regulations, prohibiting those who are in possession of securities transaction inside information using inside information in securities trading; and setting out detailed rules for those who are in possession of inside information. Following a specific enquiry on all the directors, supervisors and senior management of the Company, all the directors, supervisors and senior management currently do not hold any shares of the Company and there is no material contract in which the directors and senior management directly or indirectly have material interests.


29


(c)
Board of Directors
The Board of Directors of the Company comprises of 15 members. Of the members of the tenth session of the board of directors, Mr. Zhao Keyu as the Chairman; Mr. Zhao Keyu and Mr. Zhao Ping as the Executive Directors; Mr. Huang Jian, Mr. Wang Kui, Mr. Lu Fei, Mr. Teng Yu, Mr. Mi Dabin, Mr. Cheng Heng, Mr. Guo Hongbo and Mr. Lin Chong as the Non-executive Directors; and Mr. Xu Mengzhou, Mr. Liu Jizhen, Mr. Xu Haifeng, Mr. Zhang Xianzhi and Mr. Xia Qing as the Independent Non-executive Directors of the Company.

The Board of Directors of the Company has held ten meetings during the reporting period, including regular meetings and ad hoc meetings. For details, please see the relevant announcements.

Details of the attendance of directors at the board meetings are as follows:

Names
 
Number of meetings to be attended
   
Number of meetings attended in person
   
Number of meetings attended by proxy
   
Rate of Attendance
(%)
 
                         
Executive Directors
                       
Zhao Keyu
   
8
     
8
     
0
     
100
%
Zhao Ping
   
3
     
3
     
0
     
100
%
                                 
Non-executive Directors
                               
Huang Jian
   
10
     
10
     
0
     
100
%
Wang Kui
   
3
     
3
     
0
     
100
%
Lu Fei
   
3
     
3
     
0
     
100
%
Teng Yu
   
3
     
3
     
0
     
100
%
Mi Dabin
   
10
     
10
     
0
     
100
%
Cheng Heng
   
10
     
10
     
0
     
100
%
Guo Hongbo
   
10
     
10
     
0
     
100
%
Lin Chong
   
10
     
10
     
0
     
100
%
                                 
Independent non-executive Directors
                               
Xu Mengzhou
   
10
     
10
     
0
     
100
%
Liu Jizhen
   
10
     
10
     
0
     
100
%
Xu Haifeng
   
10
     
10
     
0
     
100
%
Zhang Xianzhi
   
10
     
10
     
0
     
100
%
Xia Qing
   
3
     
3
     
0
     
100
%
                                 
Directors who had resigned
                               
Shu Yinbiao
   
2
     
2
     
0
     
100
%
Wang Yongxiang
   
7
     
7
     
0
     
100
%
Yue Heng
   
7
     
7
     
0
     
100
%


30


As stated in the previous Corporate Governance Reports, the Company’s Articles of Association set out in detail the duties and operational procedures of the Board (please refer to the Company’s Articles of Association for details). The Board of the Company holds regular meetings to hear the reports on the Company’s operating results and makes timely decisions. Material decisions on operation shall be discussed and approved by the Board. Ad hoc meetings may be held if necessary. Board meetings include regular meetings and ad hoc meetings. Regular meetings of the Board include: annual meeting, first quarterly meeting, half-yearly meeting and third quarterly meeting.

All arrangements for regular meetings have been notified to all directors at least 14 days prior to the meeting and the Company has ensured that each director thoroughly understood the agenda of the meeting and fully expressed his/her opinions, while all Independent Non-executive Directors expressed their independent directors’ opinions on their respective duties. Minutes have been taken for all the meetings and filed at the Office of the Board.

Moreover, the Independent Non-executive Directors of the Company have submitted their independent non-executive director confirmation letters of 2020 according to the requirements of the Listing Rules.

The Directors considered that they have complied with the laws and regulations, and provisions of the Articles of Association, and have actively performed the duties faithfully and diligently. Apart from regular and ad hoc meetings, the directors of the Company obtained adequate information through the chairman office meeting in a timely manner in order to monitor the objectives and strategies of the management, the Company’s financial position and operating results and signing and performance of material agreements. The Directors reviewed corporate briefings, data etc. of the Company regularly to understand the situation on production operation of the Company. Through on-site investigation, the independent Directors provided practical resolutions to the Company. All specialized committees under the Board actively carried out works and provided recommendations and policies which formed the basis of accurate policies for the Board.

During the period when the Board was not in session, the Chairman discharged part of the duties of the Board, including but not limited to (1) to examine and approve the proposals in respect of establishing or cancelling development and construction projects; (2) to examine and approve proposals of the in relation to the appointment, removal and transfer of managers of various departments of the Company and managers of external branches; (3) to examine and approve plans on the use of significant funds; (4) to examine and approve proposals on the establishment or cancellation of branch companies or branch organs; and (5) to examine and approve other major issues.


31


The Board has summarised the implementation and execution of work during the reporting period taking into consideration of opinions of the Supervisory Committee and the Senior Management of the Company. The Board is of the opinion that it has effectively fulfilled its duties to safeguard the interests of the Company and its shareholders.

Directors who attended the 2020 first extraordinary general meeting of the Company were Huang Jian (Director), Mi Dabin (Director), Yue Heng (Independent Director and Chairman of the Ninth Session of the Audit Committee), Xu Mengzhou (Independent Director), Liu Jizhen (Independent Director and Chairman of the Ninth Session of the Nomination Committee) and Xu Haifeng (Independent Director); Directors who attended the 2019 annual general meeting of the Company were Zhao Keyu (Chairman), Huang Jian (Director), Xu Mengzhou (Independent Director) and Xu Haifeng (Independent Director).

(d)
Chairman and President
The Company shall have a Chairman and a President who shall perform their duties respectively and separately according to the Articles of Association. During the reporting period, Mr. Shu Yinbiao resigned from the position as the Chairman of the Company due to work reason. The Board resolved to appoint Mr. Zhao Keyu to be the Chairman of the Company on 5 March 2020.

The Board resolved to appoint Mr. Zhao Ping to be the President of the Company to replace Mr. Zhao Keyu on 5 March 2020.

The division of duties of the Board and the senior management remained the same as disclosed in the previous Corporate Governance Reports.

(e)
Non-executive Directors
According to the Articles of Association, the term of office of each member of the Board of the Company shall not exceed three years (inclusive) and the members may be eligible for re-election. However, the term of office of Independent Non-executive Directors shall not exceed six years (inclusive) according to the relevant regulations of the China Securities Regulatory Commission.


32


The respective terms of office of the Non-executive Directors are as follows:

Name of Non-executive Directors
 
Term of office
     
Huang Jian
 
16 June 2020-2023
Wang Kui
 
16 June 2020-2023
Lu Fei
 
16 June 2020-2023
Teng Yu
 
16 June 2020-2023
Mi Dabin
 
16 June 2020-2023
Cheng Heng
 
16 June 2020-2023
Guo Hongbo
 
16 June 2020-2023
Lin Chong
 
16 June 2020-2023

(f)
Directors’ Remuneration
According to the relevant PRC laws and the Articles of Association, the Board has established the Remuneration and Appraisal Committee which operates in accordance with the Detailed Rules on the Work of the Remuneration and Appraisal Committee and is mainly responsible for studying the appraisal standards of the directors and senior management personnel of the Company, conducting appraisals and making proposals; responsible for studying and examining the remuneration policies and proposals of the directors and senior management personnel of the Company. The Remuneration and Appraisal Committee will review and submit annual total wages to the board of directors annually. Each of the Executive Directors has signed a director’s service contract in accordance with the requirement of the Stock Exchange.

Members of the ninth session of the Remuneration and Appraisal Committee of the board of directors were Mr. Zhang Xianzhi, Mr. Guo Hongbo, Mr. Cheng Heng, Mr. Yue Heng, Mr. Liu Jizhen and Mr. Xu Haifeng, among whom Mr. Yue Heng, Mr. Liu Jizhen, Mr. Xu Haifeng and Mr. Zhang Xianzhi were Independent Non-executive Directors and Mr. Zhang Xianzhi was the chairman of the committee.

Members of the tenth session of the Remuneration and Appraisal Committee of the board of directors are Mr. Xu Mengzhou, Mr. Zhao Ping, Mr. Cheng Heng, Mr. Guo Hongbo, Mr. Liu Jizhen, Mr. Xu Haifeng and Mr. Zhang Xianzhi; among whom Mr. Xu Mengzhou, Mr. Liu Jizhen, Mr. Xu Haifeng and Mr. Zhang Xianzhi are Independent Non-executive Directors and Mr. Xu Mengzhou is the chairman of the committee.

The Remuneration and Appraisal Committee under the Board operates in accordance with the Detailed Rules on the Work of the Remuneration and Appraisal Committee. The Remuneration and Appraisal Committee convened the first meeting in 2020 on 30 March 2020, at which the Report of Total Wage Expenses was reviewed and the Company’s arrangement for the total wage in 2020 was approved. In the second half of 2020, the Remuneration and Appraisal Committee will carry out the work according to the actual situation and the above Detailed Rules at appropriate time.


33


During the reporting period, the attendance of meetings of the Remuneration and Appraisal Committee of the Company’s Board was as follows:

Name of meeting
 
Date of meeting
 
Members who attended the meeting in person
 
Members who attended the meeting by proxy
             
First meeting of the Remuneration and Appraisal Committee of the Ninth Session of the Board in 2020
 
30 March 2020
 
Zhang Xianzhi, Guo Hongbo, Cheng Heng, Yue Heng, Liu Jizhen and Xu Haifeng
 

(g)
Nomination of Directors
According to the relevant PRC laws and the relevant provisions of the Articles of Association, the Board has established the Nomination Committee. Governed by the Detailed Rules on the Works of the Nomination Committee, the Committee is mainly responsible for studying the selection standards and procedures for candidates for directors and senior management personnel of the Company according to the directors’ qualifications requirements under the Companies Law and Securities Law and the needs of the operational management of the Company, and making proposals thereon to the Board; searching for qualified candidates for directors and suitable persons for senior management personnel on a wide basis; and examining the candidates for directors and suitable persons for senior management personnel and making proposals thereon. Currently, the nomination of the candidates for directors of the Company is mainly made by shareholders. The nominations, after examination of the relevant qualification by the Nomination Committee, will be submitted to the Board of Directors. The President of the Company was appointed by the Board and the candidates for the Vice President and management were nominated by the President. Such nominations, after examination of the relevant qualification by the Nomination Committee, will be submitted to the Board of Directors.

Members of the ninth session of the Nomination Committee of the board of directors were Mr. Liu Jizhen, Mr. Mi Dabin, Mr. Lin Chong, Mr. Yue Heng, Mr. Xu Mengzhou and Mr. Zhang Xianzhi, among whom Mr. Liu Jizhen, Mr. Yue Heng, Mr. Xu Mengzhou and Mr. Zhang Xianzhi were Independent Non-executive Directors and Mr. Liu Jizhen was the chairman of the committee.

Members of the tenth session of the Nomination Committee of the board of directors are Mr. Liu Jizhen, Mr. Zhao Keyu, Mr. Mi Dabin, Mr. Lin Chong, Mr. Xu Mengzhou, Mr. Zhang Xianzhi and Mr. Xia Qing, among whom Mr. Liu Jizhen, Mr. Xu Mengzhou, Mr. Zhang Xianzhi and Mr. Xia Qing are Independent Non-executive Directors and Mr. Liu Jizhen is the chairman of the committee.

During the Reporting Period, the Nomination Committee held four meetings and reviewed five resolutions such as the “Proposal on Election of Directors of the Company”, “Proposal on Appointment of Vice President of the Company”, “Proposal on Appointment of President of the Company”, “Review Report on Qualifications of Candidates for Directors of the Tenth Session of the Board of Directors” and the “Proposal on Appointment of Vise President and Chief Engineer of the Company”.


34


During the reporting period, the attendance of meetings of the Remuneration and Appraisal Committee of the Company’s Board was as follows:

Name of meeting
 
Date of meeting
 
Members who attended the meeting in person
 
Members who attended the meeting by proxy
             
First meeting of the Nomination Committee of the Ninth Session of the Board in 2020
 
20 January 2020
 
Liu Jizhen, Mi Dabin, Lin Chong, Yue Heng, Xu Mengzhou and Zhang Xianzhi
 
             
Second meeting of the Nomination Committee of the Ninth Session of the Board in 2020
 
5 March 2020
 
Liu Jizhen, Mi Dabin, Lin Chong, Yue Heng, Xu Mengzhou and Zhang Xianzhi
 
             
Third meeting of the Nomination Committee of the Ninth Session of the Board in 2020
 
30 March 2020
 
Liu Jizhen, Mi Dabin, Lin Chong, Yue Heng, Xu Mengzhou and Zhang Xianzhi
 
             
Fourth meeting of the Nomination Committee of the Ninth Session of the Board in 2020
 
22 May 2020
 
Liu Jizhen, Mi Dabin, Lin Chong, Yue Heng, Xu Mengzhou and Zhang Xianzhi
 

(h)
Appointment of Auditors
Ernst & Young and Ernst & Young Hua Ming LLP are appointed as the Company’s international and domestic auditors for 2020.

(i)
Audit Committee
According to the requirements of the regulatory authorities of the jurisdictions where the Company is listed and the relevant provisions of the Articles of Association, the Board has established the Audit Committee. Governed by the Detailed Rules on the work of the Audit Committee, the Audit Committee is mainly responsible for assisting the Board in the supervision of:

(1)
the accuracy of the Company’s financial statements;

(2)
the Company’s compliance with laws and regulations;

(3)
the qualification and independence of the Company’s independent auditors;

(4)
the performance of the Company’s independent auditors and internal auditing departments of the Company; and

(5)
the control and management of the related party transactions of the Company.

35


The Company convenes four regular meetings of the Audit Committee of the Board of Directors each year, at least two of which will be conducted with the Company’s external auditors to listen to reports on audit planning, work arrangement and audit works generally. The Board has formulated the Management Rules on Whistle-Blowing through Hotlines and Mailboxes, and, pursuant to which the Audit Committee will be responsible for the management of the whistle-blowing hotlines and mailboxes.

Members of the Audit Committee comprises of five directors. Members of the ninth session of the Audit Committee of the board of directors were, namely, Mr. Yue Heng, Mr. Xu Mengzhou, Mr. Liu Jizhen, Mr. Xu Haifeng and Mr. Zhang Xianzhi, among whom Mr. Yue Heng was the chairman of the committee.

Members of the tenth session of the Audit Committee of the board of directors are, namely, Mr. Zhang Xianzhi, Mr. Xu Mengzhou, Mr. Liu Jizhen, Mr. Xu Haifeng and Mr. Xia Qing, among whom Mr. Zhang Xianzhi is the chairman of the committee.

During the reporting period, the Audit Committee has held three meetings. As per Audit Committee’s duties, the Audit Committee has communicated separately and respectively with the Company’s counsels, external auditors, management and the relevant functional departments of the Company. With the understandings on the applicable laws and regulations of those jurisdictions in which the shares of the Company are listed, the anti-fraud position in the Company, the recruitment of staff, the implementation and execution of internal control mechanisms, the audit work carried out by external auditors and the responsible officers of the audit department, the Audit Committee has rendered their views and suggestions.

During the reporting period, the attendance of meetings of members of the Audit Committee was as follows:

Name of meeting
 
Date of meeting
 
Members who attended the meeting in person
 
Members who attended the meeting by proxy
             
             
First meeting of the Audit Committee of the Ninth Session of the Board in 2020
 
6 March 2020
 
Yue Heng, Xu Mengzhou, Liu Jizhen, Xu Haifeng and Zhang Xianzhi
 
             
Second meeting of the Audit Committee of the Ninth Session of the Board in 2020
 
30 March 2020
 
Yue Heng, Xu Mengzhou, Liu Jizhen, Xu Haifeng and Zhang Xianzhi
 
             
Third meeting of the Audit Committee of the Ninth Session of the Board in 2020
 
20 April 2020
 
Yue Heng, Xu Mengzhou, Liu Jizhen, Xu Haifeng and Zhang Xianzhi
 


36


(j)
Responsibility assumed by the Directors in relation to the financial statements
The Directors of the Company confirm that they shall assume the relevant responsibility in relation to the preparation of the financial statements of the Company, ensure that the preparation of the financial statements of the Company complies with the relevant laws and regulations and the applicable accounting standards and also warrant that the financial statements of the Company will be published in a timely manner.

(k)
Senior management’s interests in shares
None of the senior management of the Company holds any shares of the Company.

(l)
Strategy Committee
For compliance with the relevant requirements of the regulations in the jurisdictions where the shares of the Company are listed as well as the Articles of Association of the Company, the Board has established a Strategy Committee. Governed by the Detailed Rules on the Work of the Strategy Committee, the Strategy Committee is primarily responsible for:

(1)
reviewing and advising on the Company’s long-term strategic development plan;

(2)
reviewing and advising on the major fund raising proposals that need to be approved by the Board;

(3)
reviewing and advising on the major production and operating projects that need to be approved by the Board;

(4)
studying and advising on the matters that would significantly affect the development of the Company;

(5)
examining the implementation of the abovementioned matters;

(6)
comprehensive risk management of the Company to improve the Company’s overall risk resistance; and

(7)
other matters as requested by the Board of Directors.

The ninth session of the Strategy Committee of the board of directors comprises of four directors, namely, Mr. Huang Jian, Mr. Wang Yongxiang, Mr. Liu Jizhen and Mr. Xu Haifeng, of whom Mr. Liu Jizhen and Mr. Xu Haifeng were Independent Non-executive Directors. Mr. Shu Yinbiao (Chairman) was the ad hoc chairman of the Strategy Committee.

The tenth session of the Strategy Committee of the board of directors comprises of seven directors, namely, Mr. Zhao Keyu, Mr. Zhao Ping, Mr. Huang Jian, Mr. Wang Kui, Mr. Lu Fei, Mr. Liu Jizhen and Mr. Xu Haifeng, of whom Mr. Liu Jizhen and Mr. Xu Haifeng are Independent Non-executive Directors. Mr. Zhao Keyu is the chairman of the Strategy Committee.

The risk management work of the Company has been conducted in an orderly manner, which effectively controlled each risk and successively strengthened and enhanced the Company’s internal controls and risk management system.


37


(m)
Directors’ and senior management’s training
The Company organises its Directors and Supervisors to attend the trainings provided by regulatory authorities every year. During the reporting period, the directors and supervisors of the Company attended training of directors and supervisors according to regulatory requirements. Mr. Huang Chaoquan, Vice President and Secretary of the Board of Directors of the Company, participated in an online seminar on the amendments to the Mandatory Provisions for H Shares of the Hong Kong Institute of Chartered Secretaries; Mr. Zhao Keyu, Chairman of the Board of Directors of the Company, and Mr. Zhao Ping, Director and President of the Company, participated in the 4th Session of the Online Training Series for the Chairman and President of the China Association of Listed Companies; Mr. Zhao Keyu, Chairman of the Board of Directors of the Company, Mr. Zhao Ping, Director and President of the Company, and Mr. Huang Chaoquan, Vice President and Secretary of the Board of Directors of the Company, participated in the Special Training on Securities Law of Listed Companies in Beijing of the Listed Companies Association of Beijing.

The Company conducts introduction by legal counsels of all three listing jurisdictions specifically to all Independent Non-executive Directors of the Audit Committee of the Company twice a year with respect to the updated regulatory laws, the application of relevant systems to the Company and the Company’s performance of the rules and regulations in places where the Company’s shares are listed.

The Company attaches importance to the training and continuing development of senior management. The Company organises members of senior management to participate the training courses provided by relevant State authorities, industrial managing authorities and industrial associations.

THE USE AND DEPOSIT OF FUNDS RAISED
As approved by the China Securities Regulatory Commission with the “Approval on the Non-public Issuance of Shares of Huaneng Power International, Inc. (Zheng Jian Xu Ke [2018] No.696), the Company issued 497,709,919 RMB ordinary shares (A shares) (at nominal value of RMB1.00 per share) at the issue price of RMB6.55 per share under non-public issuance to 7 target subscribers, with total proceeds of RMB3,259,999,969.45 in September 2018. After deducting the expenses such as underwriting and sponsor fees, the net proceeds were RMB3,245,329,969.59. As at 10 October 2018, the proceeds have all been received.

According to the A-share issuance plan and the announcement on changing the certain proceeds-funded investment projects and implementation methods, the proceeds from the non-public issuance of A-shares are used for capital expenditure of Xiegang Gas Turbine Project in Guangdong, Dafeng Offshore Wind Power Project in Jiangsu, Mianchi Phoenix Mountain Wind Power Project in Henan, and Longchi Wind Power Project in Anhui.

As at 30 June 2020, the Company has accumulatively invested RMB2,101,859,694.10 of which RMB155,009,206.16 was used in the first half of 2020) out of the proceeds. The balance of the unused proceeds to temporarily supplement working capital was RMB1,155,060,000.00. The balance of the proceeds amounted to RMB1,170,114,833.74 (inclusive of interests). For details of deposit and the actual use of proceeds in the first half of 2020 of the Company, please refer to an announcement dated 19 August 2020 of the Company.


38


REVIEW BY THE AUDIT COMMITTEE
The interim results of 2020 have been reviewed by the Audit Committee of the Company.

LEGAL PROCEEDINGS
As at 30 June 2020, the Company and its subsidiaries were not involved in any material litigation or arbitration and no material litigation or claim of material importance was pending or threatened against or by the Company as far as the Company is aware.

DOCUMENTS FOR INSPECTION
The Company will also file the interim report in Form 6-K with the US Securities and Exchange Commission. Copies of the interim report for 2020 will be available at the following addresses and websites:


PRC
Huaneng Power International, Inc.
Huaneng Building
6 Fuxingmennei Street
Xicheng District
Beijing
The People’s Republic of China

Telephone Number: (8610) 6322 6999
Fax Number: (8610) 6322 6888
Website: http://www.hpi.com.cn

Hong Kong
Wonderful Sky Financial Group Limited
9th Floor, Central Plaza,
99 Queen’s Road Central,
Hong Kong

Tel: (852) 2851 1038
Fax: (852) 2851 1352

Websites of the Company
http://www.hpi.com.cn;
http://www.hpi-ir.com.hk


 
By Order of the Board
 
Huaneng Power International, Inc.
 
Zhao Keyu
 
Chairman


39


As at the date of this report, the directors of the Company are:

Zhao Keyu (Executive Director)
Zhao Ping (Executive Director)
Huang Jian (Non-executive Director)
Wang Kui (Non-executive Director)
Lu Fei (Non-executive Director)
Teng Yu (Non-executive Director)
Mi Dabin (Non-executive Director)
Cheng Heng (Non-executive Director)
Guo Hongbo (Non-executive Director)
Lin Chong (Non-executive Director)
 
Xu Mengzhou (Independent Non-executive Director)
Liu Jizhen (Independent Non-executive Director)
Xu Haifeng (Independent Non-executive Director)
Zhang Xianzhi (Independent Non-executive Director)
Xia Qing (Independent Non-executive Director)

Beijing, the PRC
19 August 2020
40


INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED)
AS AT 30 JUNE 2020
(Amounts expressed in thousands of RMB)

   
    Notes
   
As at
30 June
2020
   
As at
31 December
2019
 
ASSETS
                 
Non-current assets
                 
Property, plant and equipment
   
5
     
290,151,073
     
285,622,907
 
Right-of-use assets
           
17,541,728
     
17,168,072
 
Investments in associates and joint ventures
           
21,801,087
     
20,783,259
 
Investment properties
           
660,745
     
671,710
 
Other equity instrument investments
           
793,747
     
779,218
 
Power generation licenses
           
4,075,203
     
4,149,468
 
Mining rights
           
1,579,641
     
1,577,505
 
Deferred income tax assets
   
18
     
2,025,153
     
2,160,187
 
Derivative financial assets
           
18,137
     
16,376
 
Goodwill
   
7
     
15,740,493
     
15,934,955
 
Other non-current assets
   
8
     
19,020,138
     
18,605,005
 
Total non-current assets
           
373,407,145
     
367,468,662
 
Current assets
                       
Inventories
           
8,036,983
     
8,883,183
 
Other receivables and assets
   
9
     
6,781,350
     
6,217,763
 
Accounts receivable
   
10
     
35,612,298
     
32,268,939
 
Contract assets
           
69,876
     
30,466
 
Derivative financial assets
           
54,722
     
74,911
 
Bank balances and cash
   
23
     
15,389,507
     
13,306,139
 
Total current assets
           
65,944,736
     
60,781,401
 
                         
Total assets
           
439,351,881
     
428,250,063
 

The notes on pages 48 to 97 are an integral part of this unaudited interim condensed consolidated financial information.


41



   
    Notes
   
As at
30 June
2020
   
As at
31 December
2019
 
EQUITY AND LIABILITIES
                 
Capital and reserves attributable to equity holders of the Company
                 
Share capital
         
15,698,093
     
15,698,093
 
Other equity instruments
         
41,447,319
     
25,127,821
 
Capital surplus
         
25,993,044
     
26,215,137
 
Surplus reserves
         
8,140,030
     
8,140,030
 
Currency translation differences
         
(351,836
)
   
(54,812
)
Retained earnings
         
36,268,149
     
33,677,466
 
           
127,194,799
     
108,803,735
 
                       
Non-controlling interests
         
22,833,561
     
21,575,311
 
Total equity
         
150,028,360
     
130,379,046
 
Non-current liabilities
                     
Long-term loans
   
12
     
117,046,288
     
115,364,598
 
Long-term bonds
   
13
     
25,225,521
     
28,487,115
 
Lease liabilities
           
2,994,826
     
4,279,925
 
Deferred income tax liabilities
   
18
     
3,069,840
     
3,137,791
 
Derivative financial liabilities
           
271,487
     
200,408
 
Other non-current liabilities
   
14
     
4,587,961
     
4,780,770
 
Total non-current liabilities
           
153,195,923
     
156,250,607
 
Current liabilities
                       
Accounts payable and other liabilities
   
15
     
36,770,671
     
37,270,081
 
Contract liabilities
           
928,222
     
2,706,529
 
Taxes payable
           
1,698,406
     
2,101,617
 
Dividends payable
           
3,492,894
     
1,191,036
 
Derivative financial liabilities
           
293,963
     
250,300
 
Short-term bonds
   
16
     
2,003,121
     
9,025,535
 
Short-term loans
   
17
     
61,515,374
     
67,119,368
 
Current portion of long-term loans
   
12
     
17,100,367
     
18,658,114
 
Current portion of long-term bonds
   
13
     
10,297,664
     
2,799,808
 
Current portion of lease liabilities
           
1,961,712
     
432,745
 
Current portion of other non-current liabilities
   
14
     
65,204
     
65,277
 
Total current liabilities
           
136,127,598
     
141,620,410
 
                         
Total liabilities
           
289,323,521
     
297,871,017