Notice of the 2022 Annual General Meeting

SDIC Power Holdings Co., LTD

06 June 2023

 

SDIC Power Holdings CO., LTD.  

(GDR under the symbol: "SDIC")

NOTICE OF THE 2022 ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the 2022 Annual General Meeting of SDIC Power Holdings CO., LTD. will be held at Room 207, No.147 Xizhimen Nanxiao Street, Xicheng District, Beijing, the PRC, on Tuesday, 27 June 2023 at 14:00 p.m., for the purpose of considering, and if thought fit, passing the following resolution.

ORDINARY RESOLUTION

1. To consider and approve the 2022 Work Report of the Board of Directors

2. To consider and approve the 2022 Work Report of the Supervisory Committee

3. To consider and approve the Proposal on 2022 Work Report of Independent Directors

4. To consider and approve the Report on Final Accounts of the Company for 2022

5. To consider and approve the Proposal on 2023 Operation Plan

6. To consider and approve the Proposal on 2022 Annual Profit Distribution Plan

7. To consider and approve the Proposal on the Subsidiary's Registration and Release of Medium-Term Notes and Corporate Bonds

The Board of Directors of SDIC Power Holdings CO., LTD.

June 6, 2023

The resolutions hereunder contain the English translation of the Chinese version of "Meeting materials for the 2022 Annual General Meeting" as published on the website of the Shanghai Stock Exchange, and are provided for your reference only. In case of discrepancy between the Chinese version and the English version, the Chinese version shall prevail.

Proposal I

SDIC Power Holdings Co., Ltd.

2022 Work Report of the Board of Directors

Dear shareholders and shareholder representatives,

In the year 2022, in the new stage and under the new pattern of power industry development, the Board of Directors of the Company seized the opportunity to control the epidemic, stabilize economic and safe development, promote quality and efficiency improvement and special governance, and firmly advance the reform and development around its "14th Five-Year Plan" strategy. Meanwhile, the Board of Directors of the Company conscientiously fulfilled the functions and powers granted to it by the Company Law and the Articles of Association, achieved sound operation, improved quality while keeping excellent, and effectively safeguarded the legitimate rights and interests of all shareholders.

The work of the Board of Directors in 2022 and the work plan for 2023 are hereby reported as follows:

Part I    Work of the Board of Directors in 2022

I. Operating Achievements of the Company

The operating indicators of the Company continued to improve. By the end of 2022, the holding installed capacity was 37.7642 million kW; the total assets were RMB 258.254 billion, an increase of RMB 16.849 billion over the end of the previous period; and the asset-liability ratio was 63.75%, a year-on-year increase of 0.24 percentage points.

There were no ordinary or above accidents throughout 2022. The new installed capacity (acquisition and green space construction) this year totaled 1,545,900 kW, with a completed power generation of 156.7 billion kWh, up 1.86% year on year; the average on-grid tariff was RMB 0.351/kWh, up 10.03% year on year. The annual operating revenue was RMB 50.489 billion, a year-on-year increase of 15.36%; the net profit attributable to shareholders of the Company was RMB 4.079 billion, a year-on-year increase of 66.11%; and the basic earnings per share was RMB 0.5213, a year-on-year increase of 61.45%.

The overall production, operation and safety situation throughout the year was stable. The Company has successfully completed the power guarantee tasks in anti-epidemic, anti-drought, anti-earthquake, anti-freezing and other special periods, establishing a responsible image as a central enterprise.

II. Convening of Board Meetings

In 2022, the Company held a total of 18 board meetings and deliberated 73 proposals. All directors of the Company attended all the board meetings during the year and no absence occurred. The matters deliberated are as follows:

(I) Personnel changes

In January 2022, Mr. Zhang Yuanling resigned as a director of the Company due to a job adjustment. According to the relevant provisions of the Company Law and the Articles of Association, the Board of Directors recommended Mr. Li Junxi as a candidate for new directors. The Proposal on Election of Directors of the Company was deliberated and approved at the General Meeting of Shareholders in March 2022, agreeing that Mr. Li Junxi would be a member of the Eleventh Board of Directors of the Company.

In September 2022, the term of the Eleventh Board of Directors expired and a general election was held in accordance with relevant provisions of the Company Law and the Articles of Association. Zhu Jiwei, Luo Shaoxiang, Li Junxi, Zhang Wenping and Zhan Pingyuan were recommended as candidates for directors (non-independent directors and non-employee directors) of the Twelfth Board of Directors according to the nomination by the shareholders of the Company and the Nomination Committee of the Board of Directors. At the same time, Zhang Lizi, Xu Junli and Yu Yingmin were nominated as candidates for independent directors of the Twelfth Board of Directors. The Proposal on General Election of the Twelfth Board of Directors was deliberated and approved at the General Meeting of Shareholders in September 2022. It was agreed that Zhu Jiwei, Luo Shaoxiang, Li Junxi, Zhang Lizi, Xu Junli, Yu Yingmin, Zhan Pingyuan and Zhang Wenping were members of the Twelfth Board of Directors.

(II) System revision

In accordance with the Company Law of the People's Republic of China, Listing Rules of the Shanghai Stock Exchange, Code of Corporate Governance for Listed Companies and other laws and regulations, the Board of Directors presided over the revision of 16 systems in 2022. The revised system met the latest regulatory requirements of listed companies and provided a guarantee for the steady and compliant operation of the company. The specific systems included: Internal Audit Management System, Administrative Measures for Rectification of Problems Found in Audit, Administrative Measures for Remuneration of Persons-in-Charge, Confidentiality System for Inside Information, Management System for Information Disclosure Affairs, Measures for the Administration of Internal Reporting of Major Information, Management System for Shares of the Company Held by Directors, Supervisors and Senior Executives and Their Changes, Rules of Procedure of the General Meeting of Shareholders, Rules of Procedure of the Board of Directors, Working Rules of General Manager, Administrative Measures for Performance Assessment of Senior Executives, Foreign Investment Management System, External Guarantee Management System, Management System of Related-party Transactions, Working Rules of Audit Committee of Board of Directors, and Rules of Procedure for General Manager's Office Meeting.

In addition, the Board of Directors presided over three revisions to the Articles of Association due to changes in total share capital and updates to the Guidelines for the Supervision of Listed Companies.

(III) Debt financing

In order to further improve the Company's debt structure, broaden its financing channels and meet its capital needs, in accordance with the provisions of relevant laws and regulations such as the Company Law, Securities Law and Administrative Measures for Information Disclosure for Corporate Credit Bonds, and in combination with the bond market and the Company's capital needs, the Board of Directors deliberated and agreed to publicly issue renewable corporate bonds to professional investors, with an issuance scale not exceeding RMB 5.7 billion. The above proposal was deliberated and approved at the General Meeting of Shareholders in July 2022, and the registration application for public issuance of renewable corporate bonds to professional investors was approved by China Securities Regulatory Commission (CSRC) in August 2022.

(IV) Guarantees

In order to ensure the normal progress of the Company's overseas projects, the Board of Directors deliberated and approved a total of three external guarantee matters in 2022, providing guarantees for Benbrack Wind Farm Limited with no more than EUR 48 million, Inch Cape Offshore Limited with no more than GBP 25 million and EUR 6.8 million, and for PT North Sumatera Hydro Energy not to exceed USD 1.251 billion.

The matters of providing guarantees for Inch Cape Offshore Limited and PT North Sumatera Hydro Energy were deliberated and approved at the General Meeting of Shareholders in September 2022 and December 2022 respectively.

(V) Related-party transactions

As required by the needs of business development, it is estimated that the Company and its controlled subsidiaries will have daily related-party transactions such as deposits, loan capital transactions, receiving labor services provided by affiliated parties and selling commodities to affiliated parties with the controlling shareholder State Development & Investment Corp., Ltd. and its holding subsidiaries in 2023. In addition, the Company signed a Financial Service Agreement with SDIC Finance Co., Ltd. After deliberation by the Board of Directors and the General Meeting of Shareholders, it was agreed that SDIC Finance Co., Ltd. would handle relevant financial businesses for the Company.

(VI) Periodic reports

The Board of Directors deliberated and approved the 2021 Annual Report, 2022 First-Quarter, Semi-annual and Third-quarter Reports of the Company to ensure true, accurate and complete communication of the Company's financial condition and operating results to the market.

(VII) Profit distribution

The profit distribution in 2021 was based on the total share capital of 7,454,179,797 shares, and a cash dividend of RMB 0.1635 per share was distributed to all shareholders, with a dividend ratio of 50%. It strictly followed the commitments in the Shareholder Return Plan for the Next Three Years (2021-2023) and was recognized by the majority of shareholders.

(VIII) Performance assessment and signing of performance contracts

During the year, the Board of Directors successfully completed the 2021 annual and eleventh-term assessment of the Chairman and all senior executives, and approved and issued the 2021 performance-based remuneration and tenure incentives from September 2019 to August 2022.

The Board of Directors agreed to revise the Administrative Measures for Performance Assessment of Senior Executives, and completed the signing of 2022 performance contracts for professional managers in accordance with the Measures as the basis for the 2022 performance assessment.

(IX) Renewal of employment of accounting firm

The Company agreed to reappoint ShineWing Certified Public Accountants LLP (Special General Partnership) as the auditor of the Company in 2022.

(X) Adjustment of accounting policies

The Company deliberated and approved the Proposal on Change of Accounting Policy, and modified the accounting policies of the Company according to Accounting Standards for Business Enterprises No. 15 issued by the Ministry of Finance.

III. Main Works Done during the Reporting Period

(I) Abiding by the rules and performing duties diligently

In 2022, the Board of Directors proposed 9 general meetings of shareholders, including 1 annual General Meeting of Shareholders and 8 Extraordinary General Meetings of Shareholders, all of which were held by combining on-site voting with online voting. The proposals of all previous General Meetings of Shareholders were highly recognized by the majority of shareholders and successfully passed the vote.

In 2022, the professional committees of the Board of Directors held a total of 20 meetings, including 2 meetings for the Strategy Committee, 3 meetings for the Nomination Committee, 6 meetings for the Remuneration and Assessment Committee and 9 meetings for the Audit Committee. The Strategy Committee was deeply involved in the formulation of the Company's 2022 Operating Plan. At the same time, it actively listened to the post-evaluation report on key projects in 2022 at the end of the year, evaluated the progress of the Company in completing the "14th Five-Year Plan", and provided suggestions for the Board of Directors to formulate strategies and make scientific decisions.  The Audit Committee gave full play to its functions, actively maintained close communication with internal and external audit institutions, put forward guiding opinions and requirements for financial audit and internal control management, and paid attention to the necessity, fairness and pricing fairness of related-party transactions; The Remuneration and Assessment Committee carefully reviewed the remuneration situation and assessment performance results, and revised the Employment Contract and Performance Contract of Professional Managers, Administrative Measures for Remuneration of Persons-in-Charge, Administrative Measures for Performance Assessment of Senior Executives and other systems. The Nomination Committee strictly followed the nomination procedure and successfully completed the election of one director and the general election of the Twelfth Board of Directors.

In 2022, the independent directors gave full play to their respective professional advantages in the power industry, legal compliance and accounting auditing, and conducted prior deliberations or expressed independent opinions on 19 matters such as related-party transactions, external guarantees, nomination, appointment and removal of directors, and renewal of accounting firms. They were diligent and responsible, paid close attention to the Company's business dynamics, put forward professional opinions and suggestions in a timely manner, actively participated in project research, regularly communicated with the management of the Company according to work needs, and actively safeguarded shareholders' rights and interests.

(II) Optimizing governance and delivering corporate values

The Company faithfully fulfilled the information disclosure obligation of listed companies and protected the right to know of investors. Throughout the year, the Company disclosed 4 regular reports and 69 interim announcements on the Shanghai Stock Exchange. In addition, it continued to disclose 29 important production and operation data and periodic reports in Chinese and English to global investors through the London Stock Exchange and its website. With timely, accurate and complete information disclosure, the Company has been awarded the "Grade A Rating of Information Disclosure" by Shanghai Stock Exchange for 6 consecutive years, establishing an image of healthy development and responsibility to investors in the capital market.

The Board of Directors has continuously summarized its experience in multi-channel interaction with investors and always prioritized investor relations management. On the basis of previous online and offline communication channels such as investment hotlines, SSE E-interactions, performance conferences and securities trader strategy exchange meetings, the Board of Directors continuously explored more efficient ways for investors to communicate, established a multi-level investor interaction mechanism, actively delivered company values, discussed industry hot issues, listened to capital market suggestions, and presented investors with a corporate image with clear strategies, effective management and excellent performance.

(III) Improving control and consolidating the cornerstone of the rule of law

Focusing on optimizing the rules and regulations management system, the Company strived to promote the standardization, scientificity and timeliness of the Company's system formulation and revision, and ensured that the system met external requirements and internal supervision. Taking the revision of the Approval Management Manual of the Company as an opportunity, the Company comprehensively sorted out the "Three-important and One-major" matters, governance rights and responsibilities and regulatory requirements, refined the approval process, optimized the approval process, and enhanced the rigid constraints and closed-loop management of system implementation.

The Company fully implemented the key tasks of the "14th Five-Year Rule of Law Plan" and the "Year of compliance management enhancement", improved the working guidelines for responsible directors of investment enterprises, and standardized the management of proposals made at three meetings. The Company earnestly sorted out the governance elements of overseas investment enterprises and standardized the corporate governance of overseas enterprises. Investment enterprises at all levels carried out special investigations of compliance risks in all fields and all-round business operations to prevent problems before they occur and made rectifications.

(IV) Deepening reforms and adhering to high-quality development

In 2022, the Company further improved its market-oriented operation mechanism, and the signing rate of performance contracts for enterprise management personnel and the proportion of open recruitment of employees reached 100%. The Company optimized corporate governance, implemented the functions and powers of the Board of Directors, and comprehensively improved the quality of corporate governance. It was selected by the SASAC as a model for the three-year action of listed companies to promote state-owned enterprise reform, and successfully selected into the "List of Model State-owned Enterprises for Corporate Governance". The three-year action plan for state-owned enterprise reform came to a successful conclusion and achieved the expected goals.

The development of the Company was accelerated in an all-around way. Lianghekou Hydropower Station was put into operation ahead of schedule. The development of the Yalong River Basin Water-Wind-Solar Hybrid Green and Clean Renewable Energy Demonstration Base is expected to accelerate. The construction of the Kala Hydropower Station, and the Kela Solar Power Station Phase I project were commenced. Lianghekou Mixed Pumped-storage Station was approved. Huaxia Phase I Equal Capacity Replacement Project was Commenced on Schedule. Qinzhou Phase III Coalfired Power Generation Project and Zhoushan Gas Turbine Power Generation Projects were approved. The process of new energy development has been accelerating, and a number of domestic new energy projects have been approved or filed throughout the year, with high growth in installed capacity. In terms of overseas business, Batang Toru Hydropower Station in Indonesia was promoted in an orderly manner.

Part II 　Work Plan of the Board of Directors in 2023

The year 2023 is a key year for the implementation of the "14th Five-Year Plan" of the Company to connect the past with the future and accelerate development, as well as the beginning of a new journey to build a modern socialist country in an all-around way. The Board of Directors will correctly understand and grasp the core competitiveness of the Company, thoroughly implement the new development concept, and strive to set an example for the outstanding main business, excellent development, perfect governance and honest management in the capital market. The main work plan is detailed as follows:

I. Setting the Right Course and Executing Strategic Plans More Targeted

A well-developed plan, meticulous arrangements and proactive execution lead to success. Focusing on the positioning of "the pioneer of clean energy and the leader in industry investment" and adhering to the core pursuit of "Greener Energy, Better Nature", the Board of Directors of the Company will strive towards the goal of "becoming a globally trusted integrated energy investment operator" with the determination in a pragmatic style.

The development of the energy industry continues to accelerate, enterprise management changes with each passing day, and new technologies and formats continue to emerge. Facing the new development law of domestic and foreign power markets, the Board of Directors will actively adapt to the strategic development needs of the Company, accurately grasp the new situation and deeply understand the new journey. The Board of Directors will start by enhancing the core competitiveness of the Company and serve to build a clean, low-carbon, safe and efficient energy system and a new power system, timely adjust development planning, make strategic resource reserves, improve investment decision-making procedures, and strengthen scientificity of decision-making. On the one hand, the Board of Directors will continue to learn and think deeply to continuously improve the operation and management level; on the other hand, they will evaluate and test the effectiveness of operation and management in the market. Through regional benchmarking and industry benchmarking, they will find gaps, make up for shortcomings, discover potentials, create benefits, be realistic and pragmatic, and do everything well.

II. Implementing Low-carbon Transition and Inheriting Green Genes to Make Great Achievements

Nature empowers development. Anchoring the "Dual Carbon" goals, the Company is firmly confident to take a green and low-carbon path and promote the development of enterprises towards a cleaner and more efficient direction.

The Company will focus on clean energy, concentrate resources for great achievements, and make substantial breakthroughs in key projects; continuously improve the intensive management ability of new energy businesses, expand investment in advantageous regions, compete for high-quality resources, and strive for project opportunities in economically developed areas with guaranteed consumption. The Company will reserve strategic resources and further strengthen the follow-up research on new industries and technologies. In terms of thermal power, the Company will control the increase and optimize the stock, consider the location, cost and other conditions as a whole, and develop thermal power projects in line with the long-term development layout; and ensure the flexible transformation of units to enhance the competitiveness of auxiliary services.

III. Demonstrating the Enterprise Essence by Work Safety, Strengthening the Compliance Cornerstone and Guarding the Bottom Line

As the saying goes, only with strict laws can people follow them. The Company will improve the compliance management system and strengthen the effectiveness of compliance management; improve the institutional system, strengthen the institutional construction in key areas, embed compliance requirements and control measures into key processes and key nodes, carry out effectiveness evaluation of the compliance management system, and promote the closed-loop implementation of the compliance management system. The Company will strengthen risk management, establish and improve the internal control system, draw inferences from other cases, find out possible loopholes in business processes, and strengthen the construction of an internal control system with risk prevention as the core.

The Company will consolidate safety and environmental protection responsibilities. Based on the new Work Safety Law of the People's Republic of China, the Company will perform duties as an example and earnestly implement the first responsibility for work safety; strengthen the incentive mechanism of the HSE management system and solidly carry out system reviews; pay attention to "promoting work safety through science and technology" and continuously consolidate intrinsic safety by means of science and technology and information. The Company will do a good job in environmental protection to strictly prevent the occurrence of ecological environmental protection incidents according to various regulatory standards and requirements; strengthen the supervision and management of safety and environmental protection work of newly acquired and invested enterprises, and firmly guard the bottom line and red line of safety and environmental protection.

IV. Empowering New Energy from Top to Bottom, Optimizing Internal Management and Building Consensus

Keep improving and progressing constantly. The Company will focus on improving the management level, strengthen the construction of functional management system, and continuously optimize the indicators and standards of the lean management system; accelerate the construction of a marketing system, build a unified and standardized electricity sales management system, and further enhance market competitiveness through policy and market research and judgment and strengthening trading ability.

The Company will improve the incentive and restraint mechanism of the Company, and further enhance coordination between superiors and subordinates; strengthen the orientation of pragmatism, responsibility and employment, create a working atmosphere for entrepreneurship, improve the professional capacity building of the staff, and build a high-quality talent team. The Company will strengthen talent exchanges and establish the employment orientation of "emphasizing practice and actual performance"; give full play to the role of performance assessment and strengthen the rigid cashing of assessment results; continuously optimize the performance assessment system, focus on performance contribution and value creation, unblock the transmission channel of responsibility pressure around the Company's key and difficult points, encourage attention to practical results, and effectively promote the implementation of work.

V. Promoting Sustainable Development and Fulfilling Social Responsibility

Pursue for highest virtue and perfection. The Company adheres to the concept of high-quality and sustainable development and works hand in hand with stakeholders to create a better life. The Company pays taxes in good faith so that enterprise development can benefit local development. The Company adheres to the people-oriented concept, caring for the rights and interests of employees and enhancing their sense of gain. The Company actively participates in public welfare undertakings, encourages employees to participate in community construction and public welfare undertakings through various means such as industry, education, infrastructure and care for special groups, and expand and consolidate the achievements of poverty alleviation.

The Company will make unremitting efforts to build a modern energy system with harmonious coexistence between man and nature, develop green and clean energy and technologies, and promote the sustainable development of human society. This is not only the expectation of a better life for society, but also the responsibility of state-owned enterprises.

In 2022, the work of the Company's Board of Directors proceeded smoothly under the support of shareholders. The year 2023 will be a crucial year for China's future economic development, filled with both opportunities and challenges. The Board of Directors will closely follow the "3060" national strategies (carbon dioxide peaking before 2030 and carbon neutrality before 2060), actively embrace change, continue to strengthen its sense of mission and responsibility, keep moving forward steadily, dare to explore and innovate, aim at further accelerating the construction of a globally trusted comprehensive energy investment operator, and write a new chapter for high-quality development in the new era.

The above proposal has been deliberated and approved at the 10th Meeting of the Twelfth Board of Directors on April 27, 2023, and it is hereby presented to you for deliberation and approval.

Please deliberate on the above proposal.

Proposal II

SDIC Power Holdings Co., Ltd.

2022 Work Report of the Supervisory Committee

Dear shareholders and shareholder representatives,

In 2022, the Supervisory Committee of SDIC Power Holdings Co., Ltd. (hereinafter referred to as "the Company") satisfactorily fulfilled all its work with the powers conferred by the Company Law and the Articles of Association of SDIC Power and safeguarded the legitimate rights and interests of the Company and all its shareholders. During the reporting period, members of the Supervisory Committee attended all previous meetings of the Company's Supervisory Committee on site or by means of correspondence, fulfilled their duties and effectively supervised the Company's legal enterprise governance, standardized financial operation, related-party transactions, changes in accounting policies, etc.

I. Convening of the 2022 Meetings of the Supervisory Committee

During the reporting period, the Supervisory Committee held 11 meetings as follows:

(I) On April 27, the 18th Meeting of the Eleventh Supervisory Committee was held and the following ten proposals have been deliberated and approved at the Meeting: 2021 Work Report of the Supervisory Committee, 2021 Annual Report, Proposal on 2021 Profit Distribution Plan, Proposal on 2021 Financial Final Accounts, Proposal on Deliberation on 2021 Internal Control Evaluation Report, Proposal on Deliberation on 2021 Comprehensive Risk Management Report, Proposal on Deliberation on 2021 Internal Audit Work Report, Continuous Risk Assessment Report on SDIC Finance Co., Ltd., Report of the Company for the First Quarter of 2022, and Special Report on the 2021 Annual Deposit and Use of Raised Funds.

(II) On May 12, the 19th meeting of the Eleventh Supervisory Committee was held, and two proposals were deliberated and approved: Proposal on the Cancellation for Transferring of 60% Equity of Newsky (China) and Related-party Transactions and Proposal on Formulating the Risk Disposal Plan for Handling Deposit and Loan Business in SDIC Finance Co., Ltd.

(III) On May 30, the 20th Meeting of the Eleventh Supervisory Committee was held, and the Proposal on Amending the Rules of Procedure for the Supervisory Committee was deliberated and approved.

(IV) On June 29, the 21st Meeting of the Eleventh Supervisory Committee was held, and two proposals were deliberated and approved: Proposal on Signing a Financial Service Agreement and Related-party Transaction with SDIC Finance Co., Ltd. and Risk Assessment Report on SDIC Finance Co., Ltd.

(V) On August 19, the 22nd Meeting of the Eleventh Supervisory Committee was held, and the Proposal on the General Election of the Twelfth Supervisory Committee was deliberated and approved.

(VI) On August 30, the 23rd Meeting of the Eleventh Supervisory Committee was held, and three proposals were deliberated and approved: Proposal on Changes in Accounting Policies, 2022 Semiannual Report of SDIC Power Holding Co., Ltd., and Continuous Risk Assessment Report of SDIC Power Holdings Co., Ltd. on SDIC Finance Co., Ltd.

(VII) On September 6, the first meeting of the Twelfth Supervisory Committee was held, and the Proposal on the Election of the Chairman of the Supervisory Committee of the Company was deliberated and approved.

(VIII) On October 28, the second meeting of the Twelfth Supervisory Committee was held and the Report of the SDIC Power for the Third Quarter of 2022 was deliberated and approved.

(IX) On November 24, the third meeting of the Twelfth Supervisory Committee was held, and the Proposal on Amendment to Management Systems for Related-party Transactions was deliberated and approved.

(X) On December 12, the fourth meeting of the Twelfth Supervisory Committee was held, and the Proposal on Renewal of Employment of Accounting Firms was deliberated and approved.

(XI) On December 30, the fifth meeting of the Twelfth Supervisory Committee was held, and the Proposal on 2023 Estimated Daily Related-party Transactions was deliberated and approved.

II. Independent Opinions of the Supervisory Committee in 2022

(I) Independent opinions on the conditions of law-based enterprise management

In 2022, each supervisor inspected and supervised the Company's production and operation, financial status, decision-making on important matters and other matters related to the interests of minority shareholders with a rigorous and prudent working attitude. The Supervisory Committee attended the board meetings as a nonvoting delegate and reviewed all proposals of the Board of Directors. The Supervisory Committee believes that the decision-making procedures of the Board of Directors of the Company are legal, and finds no director or managerial force performs any acts that may harm the interests of shareholders of the Company while performing their duties, nor any other behavior that violates laws and regulations.

(II) Independent opinions on the financial situation of the Company

In 2022, the Supervisory Committee kept abreast of the Company's operation and financial situation, and reviewed documents submitted by the Board of Directors, including quarterly, semi-annual and annual financial reports. The Supervisory Committee believes that these financial reports objectively and truly reflect the financial status and operating results of the Company, and are free of false records, misleading statements or major omissions; ShineWing Certified Public Accountants LLP (Special General Partnership) has issued standard unqualified audit reports on the Company's annual financial report, which were objective and fair.

(III) Independent opinions on conditions of related-party transactions of the Company

During the reporting period, the Supervisory Committee continuously supervised the related-party transactions of the Company and believed that: the review procedures for the Company's related-party transactions were legal and effective, the principle of related-party pricing was fair, the related-party transactions met the needs of the Company's operation and development, and there was no damage to the interests of the Company and its shareholders, especially minority shareholders.

(IV) Independent opinions on fund raising of the Company

During the reporting period, the Supervisory Committee continuously ensured that the use and management process of raised funds were in compliance with laws and regulations, reviewed the special report on the storage and use of raised funds, checked the relevant progress of raised investment projects, and found no damage to the rights and interests of the Company and minority shareholders.

(V) Review and comment on the internal control self-assessment report

During the reporting period, the Supervisory Committee reviewed the annual internal control evaluation report, understood the construction and operation of the internal control system, and gave full play to its supervision and guidance role. The Supervisory Committee believes that the internal control self-assessment report of the Company can truly and objectively reflect the overall situation of the Company in the aspects of internal control; the existing internal control system of the Company has made clear system regulations on major businesses, processes and significant issues, and has played a good role in risk prevention and control in the operation and management.

(VI) Independent opinions on changes in accounting policies

The Supervisory Committee agreed to make changes to the Company's accounting policies in accordance with Accounting Standards for Business Enterprises No. 15 issued by the Ministry of Finance in 2021.

III. Outlooks

In 2023, the Supervisory Committee will continue to play its supervisory function, be diligent, responsible, timely and efficient, maintain close communication with the management, ensure that the Board of Directors and the management of the Company carry out their work in strict accordance with the relevant provisions of the Company Law and the Articles of Association, implement the resolutions of the General Meeting of Shareholders, and safeguard the legitimate rights and interests of all shareholders.

The above proposal has been deliberated and approved at the 7th Meeting of the Twelfth Supervisory Committee on April 27, 2023, and it is hereby presented to you for deliberation and approval.

Please deliberate on the above proposal.

Proposal III

SDIC Power Holdings Co., Ltd.

2022 Work Report of Independent Directors

Dear shareholders and shareholder representatives,

As independent directors of SDIC Power Holdings Co., Ltd. (hereinafter referred to as the Company), we have completed the relevant work in 2022 with a prudent and conscientious attitude from the perspective of safeguarding the interests of all shareholders, strictly following the laws and regulations such as the Company Law and the Code of Corporate Governance for Listed Companies, as well as the Articles of Association, Working System for Independent Directors and Annual Report Working System for Independent Directors.

The work of independent directors in 2022 is hereby reported as follows:

I. Basic Information of Independent Directors

At present, there are three independent director members in the Twelfth Board of Directors of the Company, namely Ms. Zhang Lizi, Mr. Xu Junli and Mr. Yu Yingmin. The term of office of the Eleventh Board of Directors expired on September 6, 2022. After deliberation and approval at the 13th meeting of the Nomination Committee of the Eleventh Board of Directors and the 49th meeting of the Eleventh Board of Directors, it was agreed on the 5th Extraordinary General Meeting of Shareholders in 2022 that Ms. Zhang Lizi, Mr. Xu Junli and Mr. Yu Yingmin would become members of the Twelfth Board of Directors of the Company as independent directors of the Company.

Coming from the power industry, legal compliance, accounting and audit professional fields respectively, the independent directors of the Company account for one-third of the members of the Board of Directors and are capable of providing suggestions for the Company's decision-making and strategic development. Their work experience, job performing ability, part-time work and years of working, etc. have been reviewed in advance by the Board of Directors, meeting the relevant requirements of laws and regulations.

II. Attendance at Meetings and Voting

In 2022, the Company held 18 meetings of the Board of Directors and 20 meetings of professional committees of the Board of Directors, including 2 meetings of the Strategy Committee, 3 meetings of the Nomination Committee, 6 meetings of the Remuneration and Assessment Committee and 9 meetings of the Audit Committee. The independent directors attended all the meetings.

We are the majority in the Audit Committee, the Remuneration and Assessment Committee and the Nomination Committee, serving as the chairman of the committee. We also serve on the Strategy Committee, which fully ensures the reasonable implementation of our opinions.

Attendance of Independent Directors in 2022

Name of independent director	Tenure	Number of the meetings of the Board of Directors that should be attended this year	Attendances in person	Attendances by proxy	Number of absence
Yu Yingmin	January 1 to December 31	18	18	0	0
Xu Junli	January 1 to December 31	18	18	0	0
Zhang Lizi	January 1 to December 31	18	18	0	0

III. Expression of Independent Opinions

In 2022, in accordance with the relevant provisions of the Code of Corporate Governance for Listed Companies and the Articles of Association, the independent directors of the Company reviewed the relevant proposals submitted to the Board of Directors in advance from the perspective of safeguarding the interests of all shareholders, especially small and medium-sized shareholders, and expressed prior approval or independent opinions on the following 19 matters: Proposal on Election of Directors of the Company, Special Statement on 2021 External Guarantee of the Company, Proposal on 2021 Profit Distribution Plan, 2021 Annual Internal Control Evaluation Report of the Company, Continuous Risk Assessment Report on SDIC Finance Co., Ltd., Special Report on Deposit and Use of Raised Funds in 2021, Proposal on the Cancellation for Transferring of 60% Equity of Newsky (China) and Related-party Transactions, Proposal on Formulating the Risk Disposal Plan for Handling Deposit and Loan Business in SDIC Finance Co., Ltd., Proposal on Signing a Financial Service Agreement and Related-party Transaction with SDIC Finance Co., Ltd., Risk Assessment Report on SDIC Finance Co., Ltd., Proposal of SDIC Power Holdings Co., Ltd. on Providing Guarantee for BWFL Company, Proposal of SDIC Power Holdings Co., Ltd. on Providing Guarantee for ICOL Company, Proposal on General Election of the Twelfth Board of Directors, Proposal on Changes of Accounting Policy, Continuous Risk Assessment Report on SDIC Finance Co., Ltd., 2021 Work Report of the Remuneration and Assessment Committee of the Eleventh Board of Directors of the Company, Proposal of SDIC Power Holdings Co., Ltd. on Providing Guarantee for NSHE Company, Proposal on Renewal of Employment of Accounting Firms and Proposal on 2023 Estimated Daily Related-party Transactions. They believed that the above proposals conformed to the development strategy of the Company, reflected the principles of openness, fairness and impartiality for the needs of equity financing, business development and policy implementation, did not affect the independence of the listed company, and served the interests of all shareholders of the Company.

IV. On-site Investigation of the Company

In compliance with the relevant regulations such as Working System of Independent Directors of the Company, Annual Report Working System of Independent Directors of the Company, we attended the board meetings and Independent Director communication meetings on time to conduct deep researches on the operation and development plan of the Company and make preparations for the subsequent deliberation of the proposals submitted by the Board of Directors.

During the annual audit, we conducted on-site communication and exchange with the Company's Planning and Finance Department, Audit Department and accounting firm for the annual audit on the annual report audit, internal control system construction, consolidated statements, accounting treatment and other contents, proposed reasonable suggestions based on our practical experience, exercised effectively the rights and obligations of independent directors, and improved the efficiency and level of annual audit work.

V. Work of Protecting Legal Interests of Shareholders

We will continuously supervise the information disclosed by the Company. In 2022, in strict accordance with the relevant provisions of the Rules Governing the Listing of Stocks and the Management System for Corporate Information Disclosure Affairs, we supervised the disclosure of major matters from the perspective of investor protection and urged the Company to make information disclosure true, accurate and complete.

Normalized supervision of corporate governance was carried out to urge the Company to constantly improve its governance level. In terms of system construction, the Company was required to revise and supplement to the existing systems and build a perfect system according to the latest laws and regulations and the actual situation of the Company. In accordance with the above requirements, the Company organized relevant departments to revise some provisions of the Internal Audit Management System, Administrative Measures for Rectification of Problems Found in Audit, Administrative Measures for Remuneration of Persons-in-Charge, Confidentiality System for Inside Information, Management System of Information Disclosure Matters, Administrative Measures for Internal Reporting of Major Information, Management System of Shares of the Company Held by Directors, Supervisors and Senior Executive and Their Changes, Rules of Procedure of the General Meeting of Shareholders, Rules of Procedure of the Board of Directors, Working Rules of General Manager, etc., providing an institutional basis for the Company to improve its governance level. During the daily operation, we kept close communication with the Company, strictly fulfilled the approval process for significant matters and performed our normalized supervision obligations as independent directors.

The matters relating to the interests of medium and small shareholders were supervised as a focus. In 2022, we carried out supervision work in strict accordance with the related regulations of the China Securities Regulatory Commission and Shanghai Stock Exchange, and we expressed our independent opinions on external guarantees, related-party transactions, nomination, appointment and dismissal of Directors, change in accounting policies, engagement of accounting firms and other matters that may damage the interests of the medium and small shareholders as the focus of our supervision and guidance.

VI. Work Done during the Annual Report Period

According to the Working System for Annual Report of Independent Directors and other related regulations, we deliberated the 2022 Audit Work Arrangement and other related information of the Company before the arrival of the audit company for 2022 of the Company; Upon the issuance of preliminary audit opinions, we communicated with the external auditors on the site and listened to their detailed report regarding the audit of the annual report; Before the annual report was audited by the Audit Committee, we proposed revision suggestions on the audit report and annual report again. We also listened to the report of the Company regarding financial operations, the development of domestic and international businesses and the progress of other significant matters, which deepened our understanding of the Company and laid a foundation for scientific decision-making.

VII. Summary and Outlook

Over the past year, we have attended the meetings of the Board of Directors and various professional committees on time in compliance with the laws and regulations, Articles of Association and other related regulations, and put forward constructive opinions in the development process of the Company by utilizing our professional advantages, and the same have been implemented by the Company. We seriously performed our duties as independent directors with due diligence, objectivity and fairness, playing an important supervisory role in standardizing the related-party transactions of the Company, preventing external guarantee risks, ensuring the legal operation of the Company and other aspects, and effectively safeguarding the interests of the whole shareholders and the Company. Other directors, supervisors and the management also gave strong support and active cooperation to the independent directors in performing their duties.

In 2023, we will continue to further improve our ability to perform duties in the spirit of diligence and impartiality in accordance with new regulatory requirements, participate in corporate governance independently and objectively, strive to safeguard shareholders' rights and interests, and make a contribution to building SDIC Power into a globally trusted comprehensive energy investment operator.

The above proposal has been deliberated and approved at the 10th Meeting of the Twelfth Board of Directors on April 27, 2023, and it is hereby presented to you for deliberation and approval.

Please deliberate on the above proposal.

Proposal IV

SDIC Power Holdings Co., Ltd.

Report on Final Accounts of the Company for 2022

Dear shareholders and shareholder representatives,

Based on the audit by ShineWing Certified Public Accountants LLP (Special General Partnership), SDIC Power Holdings Co., Ltd. (hereinafter referred to as "the Company") achieved a total profit of RMB 9.433 billion in 2022 and the net profit attributable to the owners of the parent company of RMB 4.079 billion. As of December 31, 2022, the total assets in the Company's consolidated statements were RMB 258.254 billion, and the total equity attributable to owners of the parent company was RMB 54.517 billion, with an asset-liability ratio of 63.75%.

I. Key Financial Indicators in 2022

Unit: RMB 10,000 Currency: RMB

	2022	2021	YoY (%)
Operating revenue	5,048,924.36	4,376,625.45	15.36
Net profits attributed to shareholders of listed company	407,937.57	245,581.95	66.11
Net profits attributable to the shareholders of the listed company after deducting non-recurring gain or loss	395,011.02	218,969.08	80.40
Net cash flow from operating activities	2,196,350.17	1,463,138.92	50.11
Net assets attributed to shareholders of the listed company	5,451,669.34	5,147,492.69	5.91
Total assets	25,825,445.50	24,140,570.82	6.98
Basic earnings per share (RMB/share)	0.5213	0.3229	61.45
Diluted earnings per share (RMB/share)	0.5213	0.3229	61.45
Basic earnings per share net of non-recurring gain or loss (RMB/share)	0.5040	0.2849	78.60
Weighted average return on equity (%)	8.25	5.39	An increase of 2.86 %
Weighted average return on equity (%) net of non-recurring gain or loss	7.97	4.75	An increase of 3.22 %

In 2022, the Company achieved operating revenue of RMB 50.489 billion, with a year-on-year increase of 15.36%, mainly due to the year-on-year growth in on-grid energy and tariff. The total profit was RMB 9.433 billion, up 43.24% year on year; the net profit attributable to owners of the parent company was RMB 4.079 billion, a year-on-year increase of 66.11%; and the earnings per share was RMB 0.5213, a year-on-year increase of 61.45%.

The specific analysis of the main business revenue and operating cost is as follows:

In 2022, the main business revenue of the Company reached RMB 50.086 billion, an increase of RMB 4.036 billion over 2021. There are two main reasons: first, the on-grid energy of hydropower enterprises increased by 12.39% year-on-year, resulting in an increase in revenue; second, the rise in tariffs after the market-oriented reform in 2022 resulted in a year-on-year increase in revenue.

The main business revenue of thermal power was RMB 20.227 billion, an increase of 6.13% over 2021. This is mainly due to the rise in settlement tariffs and the struggle for energy supply guarantee subsidies affected by the reform of the power market this year.

The main business revenue of hydropower was RMB 23.767 billion, an increase of 19.89% over 2021. The main reasons were as follows: first, the tariff rose, which promoted the rise in the tariff from Sichuan to Jiangsu this year; second, the electric quantity increased. Lianghekou and Yangfanggou Hydropower Stations were put into operation throughout the year, and the on-grid energy of the hydropower sector increased by 12.39% compared with the previous year, resulting in a year-on-year increase in revenue.

The main business revenue of wind power was RMB 2.354 billion, an increase of 7.73% over 2021, mainly due to the following reasons: first, a number of wind power projects of the Company were connected to the grid and put into operation this year, including Beiqi Wind Power 400MW Area A and B Projects, Longmen Wind Power Phase III Project (100MW), Tianjin Ninghe Wind Power Phase II Project (9MW) and Hangjinqi Wind Power (150MW); second, the Hainan High Emission Project (48MW) acquired by the Company in 2021 was put into operation throughout the year, with a year-on-year increase of 2.35% in power generation this year; third, the settlement price of wind power increased by 5.03% year on year.

The main business revenue of solar power generation was RMB 1.264 billion, down by RMB 21 million from 2021. The main reason is the increase in proportion of  market-oriented power transaction this year. Although the newly installed capacity of Guazhou Solar Power Project (50MW) and Pingtang Leyang Solar Power Project (52MW) this year further improved the solar power generation capacity, it has no impact on the increase of electric quantity due to the late operation time and the grid connection time close to the end of the year.

The main business revenue of waste-to-energy generation was RMB 132 million, down RMB 3 million from 2021, mainly due to the decline in power generation affected by maintenance operations, resulting in a year-on-year decrease in revenue.

Other main business revenue was RMB 2.339 billion, an increase of RMB 1.542 billion over 2021. The main reasons were as follows: first, the heat supply business revenue increased this year; second, the confirmed construction period income of the Batang Toru Hydropower Project in Indonesia increased.

In 2022, the main operating costs of the Company totaled RMB 34.125 billion, an increase of RMB 3.358 billion or 10.92% over 2021. Specifically:

The main operating cost of thermal power was RMB 20.628 billion, an increase of RMB 196 million or 0.96% over 2021. This is mainly due to the continued sharp rise in the prices of coal and imported coal in the domestic market in 2022 and a 17% increase in the unit price of standard coal of the Company.

The main operating cost of hydropower was RMB 9.134 billion, an increase of RMB 1.509 billion or 19.79% over 2021, mainly due to the year-on-year increase in depreciation expenses and reservoir fund costs after Yangfanggou and Lianghekou Hydropower Stations on Yalong River were put into operation.

The main operating cost of wind power was RMB 995 million, an increase of RMB 90 million or 9.91% over 2021, mainly due to the increase in depreciation costs caused by the increase in installed capacity of wind power this year.

The main operating cost of solar power generation was RMB 571 million, an increase of RMB 14 million or 2.60% over 2021, mainly due to the increase in main operating costs caused by new projects this year.

The main operating cost of waste-to-energy generation was RMB 76 million, basically the same as that of the previous year.

Other main operating costs were RMB 2.722 billion, an increase of RMB 1.548 billion over the previous year. On the one hand, it was affected by the rise in heating business volume and coal cost; on the other hand, the construction of the Batang Toru Hydropower Project in Indonesia was promoted, and the construction cost rose year-on-year.

II. Profit Realization of the Company's Important Holding Companies in 2022

Unit: RMB 10,000 Currency: RMB

No.	Company name	Shareholding ratio (%)	2022 net profit
1	Yalong Hydro	52.00	736,051.74
2	SDIC Dachaoshan	50.00	66,025.52
3	Genting Meizhouwan	51.00	-21,834.22
4	SDIC New Energy	64.89	61,097.67
5	SDIC Beijiang	64.00	-128,363.18
6	SDIC Qinzhou	61.00	-17,421.15
7	SDIC Xiaosanxia	60.45	38,302.56
8	Huaxia Power	56.00	-7,196.86
9	SDIC Panjiang	55.00	8,894.29

As for the large fluctuations in the operating performance of major investment companies, the analysis is as follows:

Unit: RMB 10,000 Currency: RMB

No.	Company name	Net profit		Increase or decrease amount	Year-on-year increase/decrease	Explanation of main reasons for increase or decrease
		2022	2021
1	Yalong Hydro	736,051.74	636,014.35	100,037.39	15.73%	First, the hydropower stations put into operation in the previous year were effective throughout the year, and the power generation increased year on year; Secondly, the increase in settlement tariffs as a result of benefiting from the electricity market reforms this year has led to an increase in profits.
2	SDIC Beijiang	-128,363.18	-165,452.41	37,089.23	22.42%	Affected by the power market reform this year, the rise in tariffs led to a year-on-year increase in net profit.
3	SDIC Genting Meizhouwan	-21,834.22	-51,699.07	29,864.85	57.77%	Affected by the reform of the electricity market and the rise of tariffs in the inter-provincial market, the net profit increased significantly year on year.
4	SDIC New Energy Investment	61,097.67	49,243.26	11,854.41	24.07%	First, the projects put into operation last year came into full play throughout the year, and new projects were put into operation successively this year, thus enhancing profitability; Second, Guangxi, the main place of business, has good natural resources this year, and the increase in electricity consumption leads to an increase in profitability; Third, large renewable energy subsidies were recovered this year, so the credit impairment loss of RMB 140 million was reversed.
5	Red Rock Investment	6,834.29	4,135.32	2,698.96	65.27%	First, the power generation of onshore wind power projects affected by natural resources increased significantly this year, resulting in year-on-year profits; Second, the higher tariff led to an increase in net profit affected by the situation in Russia and Ukraine this year.
6	SDIC Qinzhou	-17,421.15	-20,266.08	2,844.93	14.04%	The net profit increased due to the year-on-year increase in heat sales as a result of the increase in demand for the heating business this year.
7	Huaxia Power	-7,196.86	-13,854.25	6,657.39	48.05%	Affected by the power market reform this year, the rise in tariffs led to a year-on-year increase in net profit.
8	SDIC Dachaoshan	66,025.52	59,184.81	6,840.71	11.56%	Affected by the increase in water inflow from the basin, the power generation in this period increased, and the profit this year increased year on year.

III. External Investment of the Company

In 2022, the headquarters of the Company completed an external capital investment of RMB 2.806 billion. The details are as follows:

Unit: RMB 10,000 Currency: RMB

No.	Name of the invested company	Investment amount in 2022
1	SDIC New Energy Investment Co., Ltd.	57,625.89
2	Yalong River Hydropower Development Co., Ltd.	78,000.00
3	Tianjin SDIC Jinneng Electric Power Co., Ltd.	65.43
4	Pingtang Leyang New Energy Co., Ltd.	13,000.00
5	Hainan Dongfang Gaopai Wind Power Generation Co., Ltd.	11,160.00
6	SDIC Jiuquan New Energy Co., Ltd.	500.00
7	SDIC Qinzhou Second Power Co., Ltd.	31,500.00
8	SDIC Jineng (Zhoushan) Gas Power Co., Ltd.	12,240.00
9	Yunxian Qianrun New Energy Co., Ltd.	16,910.00
10	Liaoning Dalian Pumped-Storage Co., Ltd.	773.00
11	SDIC Tibet New Energy Co., Ltd.	500.00
12	Ceheng Huifeng New Energy Co., Ltd.	10,000.00
13	Tianjin Baodi Huifeng New Energy Co., Ltd.	510.00
14	Yunjiang County Qianrun New Energy Co., Ltd.	6,000.00
15	SDIC Guizhou New Energy Co., Ltd.	1,500.00
16	SDIC Shanxi Hejin Pumped-Storage Co., Ltd.	5,000.00
17	SDIC Xinjiang New Energy Co., Ltd.	2,000.00
18	SDIC (Guangdong) Offshore Wind Power Development Co., Ltd.	1,020.00
19	SDIC (Hunan Anren) Pumped Storage Co., Ltd.	6,500.00
20	SDIC Jilin Dunhua Pumped-Storage Co., Ltd.	4,980.00
21	SDIC Guangxi New Energy Co., Ltd.	3,000.00
22	Aksai Kazak Autonomous County Huidong New Energy Co., Ltd.	15,000.00
23	SDIC Hebei New Energy Co., Ltd.	2,000.00
24	SDIC Yunnan New Energy Co., Ltd.	800.00
	Total	280,584.32

IV. Assets Impairment

In 2022, the total provision for impairment within the consolidation scope of the Company was RMB 62,821,000, including asset impairment loss of RMB 184,171,200 and credit impairment loss of RMB -121,350,200.

The main provision for impairment is as follows:

Unit: RMB 10,000 Currency: RMB

Impairment item	Amount
Asset impairment loss - impairment of coal deposit in thermal power enterprises	16,050.98
Credit impairment loss - impact on the recovery of accounts receivable with provision for bad debts by individual item	-14,334.59

V. Guarantee

Unit: RMB 10,000　Currency: RMB

No.	Guarantor	Guaranteed party	Guarantee method	Actual guaranteed amount	New guaranteed amount this year
1	SDIC Power Holdings Co., Ltd.	Inch Cape Offshore Limited	Credit	28,131.35	26,032.82
2	SDIC Power Holdings Co., Ltd.	Benbrack Wind Farm Limited	Credit	35,629.92	35,629.92
3	Red Rock Power Limited	Afton Wind Farm Limited	Pledged	48,264.95
4	Newsky (China) Environment & Technology Co., Ltd.	Newsky (Bangkok) Environment & Technology Co., Ltd.	Joint and several liability guarantee	5,800.65
5	Newsky (China) Environment & Technology Co., Ltd.	C&G Environmental Protection (Thailand) Co., Ltd.	Joint and several liability guarantee	7,837.13
-	Total guarantee			125,664.00	61,662.74

VI. Cash Flow

Unit: RMB 10,000 Currency: RMB

Item	2022	2021	Year-on-year increase/decrease (%)	Reasons for increases or decreases
I. Cash flows from operating activities
1. Cash inflows from operating activities	5,673,017.75	4,711,581.75	20.41	Resulting from revenue growth during the year
2. Cash outflow from operating activities	3,476,667.59	3,248,442.83	7.03
3. Net cash flow from operating activities	2,196,350.17	1,463,138.92	50.11
II. Cash flows from investing activities
1. Cash inflows from investing activities	74,476.67	205,484.52	-63.76	Mainly the decrease in cash received from the return on investment in the current year
2. Cash outflow from investing activities	1,643,358.72	1,114,319.40	47.48	Increase in cash paid for the construction of fixed assets, intangible assets and other long-term assets resulting from new projects under construction and the establishment of new subsidiaries to start operation in the current year
3. Net cash flow from investing activities	-1,568,882.06	-908,834.88	-72.63
III. Cash flows from financing activities
1. Cash inflows from financing activities	5,137,520.50	5,380,553.87	-4.52	The amount in the same period of last year was relatively high resulting from the receipt of the private placement and the issuance of renewable bonds
2. Cash outflow from financing activities	5,494,942.06	6,020,648.47	-8.73	Higher amount in the same period resulting from the repayment of large headquarters loans and perpetual bonds in the same period of last year
3. Net cash flow from financing activities	-357,421.56	-640,094.60	44.16
Ⅳ. Net increase in cash and cash equivalents
Net increase in cash and cash equivalents	272,644.01	-89,322.48	405.24

The above proposal has been deliberated and approved at the 10th Meeting of the Twelfth Board of Directors on April 27, 2023, and it is hereby presented to you for deliberation and approval.

Please deliberate on the above proposal.

Proposal V

SDIC Power Holdings Co., Ltd.

Proposal on 2023 Operation Plan

Dear shareholders and shareholder representatives,

The year 2023 marks the first year to fully implement the spirit of the 20th CPC National Congress, and also a key year for promoting the "14th Five-Year Plan". Under the complex and changeable external environment and the general development tone of "prioritizing stability while pursuing progress", SDIC Power Holdings Co., Ltd. (hereinafter referred to as SDIC Power or the Company) is facing both opportunities and challenges.

In terms of power supply and demand, China's economic operation is expected to rebound overall in 2023, driving the growth rate of electricity consumption demand higher than that in 2022. According to the forecast of the China Electricity Council, the electricity consumption of the whole society is expected to increase by about 6% year on year. Driven by the rapid development of new energy, it is estimated that the installed capacity of power generation in China will increase by about 250 million kW throughout the year. The installed capacity of solar power and wind power will exceed that of hydropower for the first time in 2023. It is estimated that the overall power supply and demand balance of China will be tight in 2023.

In terms of the power market, the power market reform continues to advance in-depth: Inter-provincial and intra-provincial market operation, a medium and long-term joint operation of spot and ancillary service markets. Thermal power units can consume electricity by participating in inter-provincial and inter-regional transactions to give full play to the spatial value of electric energy or realize the value of system regulation capacity by providing auxiliary services such as frequency modulation. More electricity will be traded in the market for new energy projects. Combined with the vigorous promotion of national green power trading and green certificate trading, new energy power stations are expected to increase environmental value benefits.

In terms of the coal market, coal supply is gradually recovering to a high level with the continuous release of new production capacity and the successful resumption of coal mine work, and the long-term agreement supply of coal mines in producing areas is relatively sufficient. The prices of imported coal and domestic coal are expected to fall.

In the face of complex internal and external environments, the Company will conduct careful analysis, study and judgment, innovate development models, continuously improve value creation capabilities, build a solid bottom line for risk prevention and control, constantly promote high-quality development, and continuously create better returns on investment for shareholders.

The main business plans for 2023 are as follows:

I. Power Generation Plan

In 2023, it is estimated that SDIC Power will complete 167.1 billion kWh of power generation within the scope of consolidation. Among them, the power generation capacity of the major enterprises of the Company is listed below:

Unit: 100 million kWh

Investment enterprise	Planned power generation in 2023	Actual power generation in 2022	Year-on-year
Tianjin SDIC Jinneng Electric Power Co., Ltd.	174.00	154.9	12%
SDIC Qinzhou Electric Power Co., Ltd.	135.34	141.2	-4%
SDIC Genting Meizhouwan Electric Power Co., Ltd.	129.60	118.7	9%
Xiamen Huaxia International Power Development Co., Ltd.	54.03	61	-11%
SDIC Panjiang Power Co., Ltd.	29.94	29	3%
SDIC Qinzhou Second Power Co., Ltd.	1.11
Yalong River Hydropower Development Co., Ltd.	954.43	892.7	7%
SDIC Yunnan Dachaoshan Hydropower Co., Ltd.	70.79	68.4	3%
SDIC Gansu Xiaosanxia Power Co., Ltd.	36.50	38.3	-5%
SDIC New Energy Investment Co., Ltd.	46.78	41	14%
SDIC New Energy (Honghe) Co., Ltd.	4.36	4.1	5%
Toksun Trina Solar Co., Ltd.	2.21	2.1	7%
Huzhou Xianghui Photovoltaic Power Generation Co., Ltd.	1.11	1.1	-2%
Xiangshui Hengneng Solar Power Generation Co., Ltd.	1.37	1.3	-2%
Xiangshui Yongneng Solar Power Generation Co., Ltd.	0.86	0.3	-1%
Dingbian Angli Photovoltaic Technology Co., Ltd.	1.30	1.3	8%
Jingbian Zhiguang New Energy Development Co., Ltd.	0.26	0.9	0%
Guyuan County Guanghui New Energy Power Generation Co., Ltd.	0.28	0.3	2%
Zhangjiakou Jingke New Energy Co., Ltd.	0.22	0.2	3%
Shenyang Jinbu Photovoltaic Power Co., Ltd.	1.55	0.5	197%
Hengfeng Jinko Power Co., Ltd.	0.59	0.6	-3%
Hainan Dongfang Gaopai Wind Power Generation Co., Ltd.	0.94	0.8	19%
Changzhou Tiansui New Energy Co., Ltd.	0.51	0.5	-3%
Jiangsu Tiansai New Energy Development Co., Ltd.	1.65	1.7	-2%
SDIC Jiuquan New Energy Co., Ltd.	8.10	3	174%
SDIC Inner Mongolia New Energy Co., Ltd.	4.37	0	-
Pingtang Leyang New Energy Co., Ltd.	1.36	0	-
Yunxian Qianrun New Energy Co., Ltd.	1.65	-	-
SDIC Xinjiang New Energy Co., Ltd.	3.89	-	-
SDIC Huanneng Electric Power Co., Ltd.	2.33	1.9	20%
Total	1,671.4	1,565.8	7%

II. Headquarters' Cost Plan

In 2023, the planned annual expenditure of SDIC Power Headquarters is RMB 389.32 million, including taxes and surcharges of RMB 1.41 million, administration expenses of RMB 284.61 million and financial expenses of RMB 103.30 million.

III. Annual Investment Expenditure Plan

SDIC Power plans to invest RMB 7.63 billion in the development of hydropower and new energy projects in 2023.

IV. Annual Financing Plan

In 2023, SDIC Power Headquarters plans to raise a total of RMB 10.5 billion in annual domestic financing, which is planned to be met by public issuance of corporate bonds, medium-term notes and renewable corporate bonds, or through loans from financial institutions such as SDIC Finance Co., Ltd. and banks, State Development ＆ Investment Corp., Ltd and etc.

SDIC Power and its overseas wholly-owned subsidiaries plan to raise a total amount of RMB 6.2 billion in foreign currencies equivalent, which is planned to be solved through loans from Rongshi International Holding Co., Ltd., its subsidiaries and financial institutions.

In order to ensure the smooth business development of the Company, the SDIC Power Headquarters intends to apply for a total credit line of no more than RMB 35 billion from financial institutions, including but not limited to loans, letters of guarantee, letters of credit and other comprehensive credit business.

The above proposal has been deliberated and approved at the 10th Meeting of the Twelfth Board of Directors on April 27, 2023, and it is hereby presented to you for deliberation and approval.

Please deliberate on the above proposal.

Proposal VI

SDIC Power Holdings Co., Ltd.

Proposal on 2022 Profit Distribution Plan

Dear shareholders and shareholder representatives,

SDIC Power Holdings Co., Ltd. (hereinafter referred to as the Company) was audited by ShineWing Certified Public Accountants LLP (Special General Partnership). According to the audit, the net profit attributable to the owner of the parent company in the 2021 annual consolidated statement of the Company is RMB 4,079,375,650.03, and the net profit achieved in the statement of the parent company is RMB 2,700,515,181.88. According to the provisions set out in the Articles of Association and Shareholder Return Plan for the Next Three Years (2021-2023), the 2022 annual profit distribution plan is proposed as follows:

I. Distributable Profits

In accordance with Accounting Standards for Business Enterprises - Merger and the distributable profits of the parent company, the distributable profits of the Company in 2022 are as follows:

Unit: RMB Currency: RMB

	Merged	Parent company
Undistributed profits at end of 2022	26,820,304,459.95	16,638,112,594.55
Including: net profit attributable to the parent company in 2022	4,079,375,650.03	2,700,515,181.88
Distributable opening profits carried forward	24,423,000,533.23	15,619,669,135.98
2021 dividends distributed	1,218,758,396.86	1,218,758,396.86
Appropriation to surplus reserves	270,051,518.19	270,051,518.19
Miscellaneous	193,261,808.26	193,261,808.26

According to the relevant laws and regulations and the Articles of Association of the Company and considering the interests of shareholders and the business development needs of the Company, the Board of Directors hereby submit the 2022 Profit Distribution Plan as follows:

1. The legal accumulation fund should be accrued as 10% of the net profit of the parent company;

2. Cash dividends will be distributed as RMB 0.275 per share (tax-inclusive), accounting for more than 50% of the net profit attributable to the parent company in the consolidated statement of the Company in 2022.

II. 2022 Dividend Distribution Plan

Based on the total share capital of 7,454,179,797 shares at the end of 2022, a cash dividend (tax-inclusive) of RMB 0.275 per share was distributed, and a total cash dividend of about RMB 2,049,899,444.18 was distributed, accounting for 50.25% of the net profit attributable to owners of the parent company in 2022.

Dividend Distribution Plan of the Company in Recent Three Years

Unit: RMB Currency: RMB

Year of dividend distribution	Number of dividend shares per 10 shares (share)	Number of distributed dividends per 10 shares (RMB) (taxes included)	Number of shares increases by transferring per 10 shares (share)	Amount of cash dividends (including tax)	Net profits attributed to shareholders of listed company in the Annual Consolidated Statement of Dividend	Proportion in net profits attributed to shareholders of listed company in the consolidated statement (%)
2022	-	2.7500	-	2,049,899,444.18	4,079,375,650.03	50.25
2021	-	1.6350	-	1,218,758,396.81	2,436,891,836.54	50.01
2020	-	2.8000	-	1,950,444,537.16	5,515,627,276.16	35.36

The cumulative cash dividend amount in the last three years accounts for about 130% of the average annual net profit of the Company's merger in the last three years.

III. Opinions of Independent Directors

The independent directors believe that there is a certain capital demand at the current development stage of the Company, and the above annual profit distribution plan is formulated in accordance with the Articles of Association and relevant regulations, fully considering the interests of all shareholders and the development needs of the Company. The independent directors unanimously agree to submit the plan to the Board of Directors for deliberation.

The above proposal has been deliberated and approved at the 10th Meeting of the Twelfth Board of Directors on April 27, 2023, and it is hereby presented to you for deliberation and approval.

Please deliberate on the above proposal.

Proposal VII

SDIC Power Holdings Co., Ltd.

The Proposal on the Subsidiary's Registration and Release of Medium-Term Notes and Corporate Bonds

Dear shareholders and shareholder representatives:

To optimize the debt structure and satisfy the needs of business development, Yalong River Hydropower Development Co., Ltd. (hereinafter referred to as Yalong River Hydropower), a holding subsidiary of the Company, proposes to register and release medium-term notes and corporate bonds, more specifically not more than RMB 5 billion (inclusive) medium-term notes and not more than RMB 4 billion (inclusive) corporate bonds. With regards to the specific amount to be released, the amount defined in the license consenting to the registration that Yalong River Hydropower has received will control.

To ensure the lawful and efficient registration and release of debt financing instruments, this proposal is submitted to the shareholders' assembly in pursuance of national laws, regulations, and the relevant provisions of the Articles of Association of the Company, requesting your consent to the sole responsibility of Yalong River Hydropower for matters in connection with the registration and release.

The resolution reached for this proposal will be valid for 24 months from the date it is reviewed and adopted by the shareholders' assembly. Yalong River Hydropower can proceed with the said release within the validity period acknowledged in such approval, license, registration, filing, or registration if it gains the approval, license, registration, filing, or registration from the regulatory authorities within the said validity period of the resolution.

The above proposal has been deliberated and approved at the 11th meeting of the Twelfth Board of Directors of the Company on June 6, 2023, and it is hereby presented to you for deliberation and approval.

Please deliberate on the above proposal.

 

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