Implementation of 2022 Annual Profit Distribution

China Yangtze Power Co. Ltd.

17 July 2023

 

 China Yangtze Power Co., Ltd.

Announcement on Implementation of 2022 Annual Profit Distribution

The board of directors and all directors of China Yangtze Power Co., Ltd. (the "Company") warrant that there are no false representations and misleading statements contained in, or material omissions from, this announcement, and severally and jointly accept the responsibility for the truthfulness, accuracy and completeness of the contents of this announcement.

Important notes:

l Percentage Distribution per Share

Cash dividend 0.8533 CNY per A share (tax-inclusive)

l Relevant dates

Share Class	Equity Registration Date	Last Trading Date	Ex-rights (Ex-dividend) Date	Cash Dividend Distribution date
A-share	20 July, 2023	-	21 July, 2023	21 July, 2023

l Differentiated Cash and Stock Dividend Distribution:  Yes

I.          The session and date of the general shareholders' meeting for the approval of the distribution plan

The 2022 annual profit distribution plan was approved by the Company's annual general meeting held on May 23, 2023.

II.        Distribution Plan

1.   Distribution Year: 2022

2.   Distribution Objects:

As of the afternoon of the record date after the closing of the Shanghai Stock Exchange, shareholders of the Company registered with China Securities Depository and Clearing Corporation Limited Shanghai Branch (hereinafter referred to as the "CSDS Shanghai Branch"), except for China Three Gorges Corporation (hereinafter referred to as the "Three Gorges Group"), Yunnan Provincial Energy Investment Group Co., Ltd. (hereinafter referred to as the "YEIG"), and Sichuan Energy Industry Investment Group Co., Ltd. (hereinafter referred to as the "SCEI"), who acquired 921,922,425 shares through the issuance of shares and cash payment for the acquisition of assets of Three Gorges Jinsha River Yunchuan Hydropower Development Co., Ltd. in the (referred to as the "material asset reorganization").

3.   Differentiated Cash and Stock Dividend Distribution Plan:

 (1) For the net profit attributable to the owners of the parent company realized from February 1, 2022, to December 31, 2022, in the amount of 20,092,277,840.10 CNY, it will be distributed to the shareholders entitled to the distribution rights at a ratio of 100%. Specifically, the cash dividend of 8.533 CNY (including tax) will be distributed for every 10 shares held by the old shareholders of the company before the material asset reorganization, which amounts to 22,741,859,230 shares, and the 804,436,061 shares issued to 19 specific parties for fundraising purposes. No cash dividends will be distributed for the 921,922,425 shares acquired by the Three Gorges Group, YEIG, and SCEI through the material asset reorganization.

 (2) The net profit attributable to the owners of the parent company realized from January 1, 2022, to January 31, 2022, in the amount of 1,216,756,140.84 CNY, will be retained for future annual distributions.

Summary of the Company's Profit Distribution Plan for FY2022
Items	full year	January 2022	February-December 2022
Consolidated net income attributable to owners of the parent company (RMB)	21,309,033,980.94	1,216,756,140.84	20,092,277,840.10
Report of Material asset reorganization on Dividend Payments	-	by 24,468,217,716 shareholders	by 23,546,295,291 shareholders
Cash dividend distribution (RMB)	20,092,277,840.10	0	8.533 per 10 shares
Dividend ratio	94.29 per cent	0 per cent	100%

(3) After the completion of this profit distribution, undistributed profits will be retained for the future distributions. There will be no capital reserve converted into share capital for the year of 2022.

(4) Explanation of Ex-dividend Method: According to the relevant regulations of the Shanghai Stock Exchange, the company calculates the reference price for ex-dividend using the following formula:

Ex-rights (dividend) reference price = (previous closing price - cash dividend) / (1 + proportion of outstanding shares change). Due to the differentiated dividend distribution implemented by the Company, the cash dividend in the above formula refers to the cash dividend per share calculated based on the diluted adjusted total share capital, which is calculated as follows: cash dividend per share = (total shares participating in distribution × actual cash dividend per share) / total share capital = (23,546,295,291 × 0.8533) / 24,468,217,716 ≈ 0.8211 CNY per share. This profit distribution plan only includes cash dividend distribution and does not include other forms of distribution such as capital reserve converted into share capital. Therefore, there is no change in the outstanding shares of the company, and the proportion of outstanding shares change is 0. Based on the above, the ex-rights (dividend) reference price for this equity distribution is (previous closing price - 0.8211) / (1 + 0) = (previous closing price - 0.8211) CNY per share.

III.       Relevant Dates

Share Class	Equity Registration Date	Last Trading Date	Ex-rights (Ex-dividend) Date	Cash Dividend Distribution date
A-share	20 July, 2023	-	21 July, 2023	21 July, 2023

IV.       Implementation of the Distribution

1.   Implementation Method

(1)   No cash dividend will be paid to the 921,922,425 shares acquired by the Three Gorges Group, YEIG, and SCEI through the asset purchase.

(2)   Apart from the recipients designated by the company itself, dividends for the remaining shareholders will be distributed by the CSDC Shanghai Branch through its fund clearing system to shareholders who are registered on the record date and have conducted designated transactions at the Shanghai Stock Exchange. Investors who have completed designated transactions can collect their cash dividends at their designated securities brokerage on the dividend payment date. Dividends for shareholders who have not conducted designated transactions will be temporarily held by the CSDC Shanghai Branch and will be distributed after completing the designated transaction.

2.   Recipients for Direct Distribution

Cash dividends for the Three Gorges Group (account B880942874, account B881639775, and account B883833419), YEIG (account B883032220), and SCEI (account B880720390) will be directly distributed by the Company.

3.   Tax Deduction Explanation

(1)   The income tax on cash dividends directly distributed by the Company will be paid by the recipients.

(2)   Regarding to the individual shareholders and securities investment funds holding the Company's shares, according to the Notice on Relevant Issues of Differentiated Individual Income Tax Policies on Dividends of Listed Companies (Caishui [2015] No. 101) and the Notice on Relevant Issues of Implementing Differentiated Individual Income Tax Policies on Dividends of Listed Companies (Caishui [2012] No. 85) issued by the Ministry of Finance, the State Taxation Administration, and the China Securities Regulatory Commission, the company will not withhold individual income tax when distributing dividends. The actual cash dividend per share will be 0.8533 CNY. The tax payable shall be calculated according to the holding period when the shares are actually transferred.

Individual shareholders and securities investment funds who sell their shares after the record date will have their actual tax amount calculated by the CSDC Shanghai Branch based on their holding period. The tax will be deducted from the individual's funds account by securities firms or other share custodian institutions and transferred to the CSDC Shanghai Branch. The CSDC Shanghai Branch will transfer the tax to the Company within 5 working days of the following month. The Company will declare and pay the tax to relevant authority within the statutory declaration period of the month in which the tax payment is received. The specific applicable tax rates are as follows:

Ÿ For a holding period of up to 1 month (including 1 month): The full amount of dividend income is included in the taxable income, and the actual tax rate is 20%.

Ÿ For a holding period of over 1 month up to 1 year (including 1 year): 50% of the dividend income is temporarily included in the taxable income, and the actual tax rate is 10%.

Ÿ For a holding period exceeding 1 year: Dividend income is temporarily exempt from individual income tax.

(3)   For the Qualified Foreign Institutional Investors (QFIIs) who hold the company's shares, the company will withhold and pay corporate income tax at a rate of 10% in accordance with the Notice on Issues Related to Withholding and Payment of Enterprise Income Tax by Chinese Resident Enterprises to QFIIs (Guoshuihan [2009] No. 47) by the State Taxation Administration. The actual cash dividend per share after tax is 0.76797 CNY. If the relevant shareholders believe that the dividend income should enjoy any tax treatment of any tax agreement (arrangement), they can apply to the competent tax authority after receiving the dividend.

(4)   For investors (both corporations and individuals) from the Stock Exchange of Hong Kong Ltd. who invest in the company's ordinary shares listed on the Shanghai Stock Exchange through the "Stock Connect" program, cash dividends will be distributed by the company in RMB to the shareholders' accounts held by the CSDC Shanghai Branch. Tax deduction will be carried out in accordance with the Notice on Tax Policies for the Pilot Program of Cross-Border Stock Market Trading between Shanghai and Hong Kong (Caishui [2014] No. 81) by the Ministry of Finance, State Taxation Administration, and China Securities Regulatory Commission, with a tax rate of 10%. The actual cash dividend per share after tax is 0.76797 CNY. For investors who are tax residents of other countries and have a tax treaty with China that specifies a lower tax rate for dividend income, corporations or individuals may apply to the competent tax authority of the company to enjoy the tax treaty benefits. After the review by the competent tax authority, the difference between the tax already paid and the tax payable calculated based on the tax treaty rate will be refunded.

The time arrangements for the record date and cash dividend payment date for Stock Connect investors are the same as those for A-share shareholders of the company.

(5)   For eligible investors (hereinafter referred to as "GDR investors") who invest in the company's Global Depository Receipts (GDRs) listed on the London Stock Exchange, cash dividends will be distributed by the company through CSDC Shanghai Branch to the domestic nominal holders of the underlying A-shares corresponding to the GDRs, with Citibank, National Association as the custodian. Withholding tax at a rate of 10% will be deducted in accordance with the relevant tax regulations, including the Enterprise Income Tax Law of the People's Republic of China. After receiving the dividend income from the GDRs, if GDR investors need to enjoy any tax treaty arrangements, they can apply to the competent tax authority of the company as specified.

The record date for GDR investors is the same as the record date for A-share shareholders, and the cash dividends will be distributed to GDR investors by Citibank, National Association through Euroclear Bank SA/NV and Clearstream Banking, S.A. on July 28, 2023, London time.

(6)   For other investors holding the company's shares, the company will not withhold and pay income tax on cash dividends. The income tax on cash dividends should be paid by the investors in accordance with the tax laws. The actual cash dividend per share is 0.8533 CNY.

V.        Consultation Method

Any questions regarding this profit distribution plan, please contact:

Contact Department: Board Office of China Yangtze Power Co., Ltd.

Contact No.: 010-58688900

This announcement is hereby given.

Board of Directors of China Yangtze Power Co., Ltd.

17^th  July, 2023

 

END