Stock code: 000037, 200037Stock abbreviation: Shenzhen Nanshan Power A, Shenzhen Nanshan Power BAnnouncement No.: 2025-034

Shenzhen Nanshan Power Co., Ltd.The Semi-Annual Report 2025

August 22, 2025

Section I Important Notes, Table of Contents and Definitions

The Board of Directors, the Board of Supervisors, directors, supervisors and senior officers ofthe Company guarantee that the contents of the semi-annual report are true, accurate andcomplete, and do not contain false records, misleading statements or major omissions, and thatthey bear individual and joint legal liabilities.Kong Guoliang (legal representative), Chen Yuhui (chief accountant), Zhang Xiaoyin (ChiefFinancial Officer), and Lin Xiaojia (head of the accounting department) (accounting officer)declare that the financial reports in this semi-annual report are true, accurate and complete.All directors attended the meeting of Board of Directors at which the semi-annual report wasreviewed.The Company has planned not to distribute cash dividends, give away bonus shares, orincrease share capital by capital reserves.Any forward-looking statements in this semi-annual report, including future plans, do notconstitute a material commitment of the Company to investors. Investors are kindly requestedto pay attention to investment risks.The semi-annual report is prepared in Chinese and English respectively. In case of anyambiguity between the two versions, the Chinese version shall prevail. Investors are advised toread the full text of this semi-annual report carefully.

Table of Contents

Section I Important Notes, Table of Contents and Definitions ...... 2

Section II Company Profile and Key Financial Indicators ...... 6

Section III Management Discussion and Analysis ...... 9

Section IV Corporate Governance, Environment and Society ...... 26

Section V Important Matters ...... 28

Section VI Changes in Shares and Shareholders ...... 35

Section VII Bonds ...... 40

Section VIII Financial Report ...... 41

Section IX Other Data ...... 145

List of Documents for InspectionI. Original of the 2025 semi-annual report bearing the signature of the Company's legal representative.II. Financial statements signed and stamped by the Company's Legal Representative, Chief Accountant,Chief Financial Officer and Head of the Finance Department (Finance Head).III. The originals of all the Company's documents and announcements that have been publicly disclosedin the designated media during the reporting period.IV. Place of inspection: office of the Company's Board of Directors.

Interpretation

Section II Company Profile and Key Financial IndicatorsI. Company profile

II. Contact and contact information

III. Other information

1. Contact information of the Company

Whether the Company's registered address, office address, postal code, website, e-mail address, etc.have changed during the reporting period

□Applicable ?Not applicable

The Company's registered address, office address and postal code, website and e-mail address havenot changed during the reporting period. For details, please refer to the 2024 Annual Report.

2. Place of information disclosure and provision

Whether the place of information disclosure and provision has changed during the reporting period

□Applicable ?Not applicable

The website of stock exchange and the name and URL of the media where the Company discloses itssemi-annual report, and the place of provision of the Company's semi-annual report have not changedduring the reporting period. For details, please refer to the 2024 Annual Report.

3. Other relevant information

Whether other relevant information has changed in the reporting period

□Applicable ?Not applicable

IV. Key accounting data and financial indicatorsWhether the Company needs to retroactively adjust or restate the previous accounting data

□Yes ?No

V. Differences in accounting data under domestic and foreign accounting standards

1. Differences in net profit and net assets in financial reports disclosed in accordance with bothinternational and Chinese accounting standards

□Applicable ?Not applicable

There was no difference between net profit and net assets in the financial reports disclosed inaccordance with both international and Chinese accounting standards during the reporting period of theCompany.

2. Differences in net profit and net assets in financial reports disclosed in accordance with bothinternational and Chinese accounting standards

□Applicable ?Not applicable

There was no difference between net profit and net assets in the financial reports disclosed inaccordance with both international and Chinese accounting standards during the reporting period of theCompany.VI. Non-recurring profit or loss items and amounts

?Applicable □ Not applicable

Unit: RMB

Details of other profit or loss that meet the definition of non-recurring gains and losses:

□Applicable ?Not applicable

The Company had no specific profit or loss items that meet the definition of non-recurring profit or loss.Notes on the definition of the non-recurring profit or loss items listed in the "Interpretive AnnouncementNo. 1 on Information Disclosure of Companies Issuing Securities to the Public - Non-recurring Profit orLoss" as recurring profit or loss items

□Applicable ?Not applicable

The company does not define non-recurring profit or loss listed in the Explanation on defining non-recurring profit or loss listed in the Explanatory Announcement No. 1 on Information Disclosure ofCompanies that Offer Securities to the Public - Non-recurring Gains and Losses as recurring profit orloss.

Section III Management Discussion and AnalysisI. Main business engaged in by the Company during the reporting period

In 1H25, China's electricity consumption demand continued its steady growth trend. The total electricityconsumption of the whole society reached 4,841.8 billion kWh, up 3.7% YoY. By sector, the electricityconsumption of the primary industry was 67.6 billion kWh, up 8.7% YoY; the electricity consumption ofthe secondary industry was 3,148.5 billion kWh, up 2.4% YoY; the electricity consumption of the tertiaryindustry was 916.4 billion kWh, up 7.1% YoY; the urban and rural residential electricity consumptionwas 709.3 billion kWh, up 4.9% YoY, showing a structural growth trend with coordinated developmentacross various sectors in whole.The Company's primary business includes power and heat supply for production and operation, andtechnical consulting and technical services related to power plants (stations). At the end of the reportingperiod, the Company's Nanshan Power Plant had a total of 3 sets of 9E type gas-steam combined cyclegenerating units with a total installed capacity of 540,000 KW. The power plant is located in the powerload center area of Shenzhen and is the peak shaving power supply plant in the region. It is currently innormal production and operation. During the reporting period, Nanshan Power Plant actively fulfilled itspower supply guarantee responsibilities, firmly strengthened safety protocols, and optimized gas-powercoordination through dynamic adjustments to electricity marketing and fuel procurement strategies. Theplant achieved 172 million kWh of grid-connected electricity generation, and 250 million kWh of settledcontracted electricity; Its subsidiary Shenzhen Nanshan Power Environmental Protection Company fullyexpanded electricity retail services, acting as an agent for 21.56 million kWh of end-user electricityconsumption.In 1H25, the Company remained firmly focused on its annual objectives, seizing opportunities in thenew energy sector. While steadily enhancing the profitability of its power generation business, theCompany accelerated the development of an integrated "investment-construction-operation-management-maintenance" platform and committed to building a diversified and intelligentcomprehensive energy service system, thereby further consolidating its core competitive advantages. Interms of key project construction, leveraging its technical and resource strengths, the Companyimplemented full lifecycle quality control in strict compliance with national standards for key projects.The Zhongshan Independent Energy Storage Project (Phase I) was successfully commissioned underthese high-quality benchmarks. and commenced commercial operation in June 2025, fully participatingin frequency regulation and spot markets within the Southern China grid. Meanwhile, as GuangdongProvince's first independent energy storage project is repurposed from a decommissioned coal plant, itsets a significant industry benchmark. In terms of project management, building on the constructionexperience of the Zhongshan Independent Energy Storage Project (Phase I), the Company optimizedand standardized its project management processes, establishing replicable operational mechanismsand profitable business models. This has significantly improved the efficiency and standardization offull-cycle project management while strengthening its integrated "investment-construction-operation-management-maintenance" capabilities. In terms of industry chain expansion, aligned with its vision asa comprehensive energy service provider, the Company actively pursued mergers and acquisitionsacross the industry chain to enhance core competencies. During the reporting period, the Companysuccessfully acquired Sichuan Ruinan Electric Power Construction Engineering Co., Ltd. (renamedShenzhen Nanshan Power Energy Technology (Sichuan) Co., Ltd.), substantially boosting its powerengineering capabilities and laying a solid foundation for deeper engagement in the new energy market.During the reporting period, the Company reported operating revenue of RMB 166.39 million, with netprofit attributable to shareholders of the listed company of -RMB 21.7395 million, and basic earningsper share of -RMB 0.0361.

II. Core competitiveness analysisIn recent years, the Company's primary business has been facing increasing difficulties and challengesdue to the macroeconomic situation and common issues in the gas turbine power generation industry.However, the fundamental core competitiveness formed over more than thirty years of operation anddevelopment, along with strong support from the major shareholders, innovative management practicesadopted by the Company's Board of Directors and management team, have laid a necessaryfoundation for the Company's ongoing operations and pursuit of transformative development. Duringthe reporting period, the Company adhered to the concept of steady development, firmly believed in itsstrategy, flexibly adjusted its business strategy, carefully optimized its resource allocation, successfullyovercame a series of development problems, and further consolidated and enhanced its corecompetitiveness.

1. Management culture of hard work and innovation. The Company has a group of managementpersonnel with a sense of innovation and the spirit of hard work. By deepening human resource reformand building a performance-oriented appraisal and incentive mechanism, the Company advocates andcreates a management culture of unity, hard work, innovation and progress. In addition, the Companyattaches great importance to and vigorously promotes the construction of its institutional, management,and compliance systems. It adheres to a standardized management that is law-abiding, regulation-compliant scientific, rigorous, efficient and orderly. Through process-based, refined and standardizedmanagement guidance, the Company has established a solid foundation for deeply tapping into internalpotential and actively seeking external opportunities.

2. Professional and enterprising technical talents. With more than 30 years of hard work and influencein the gas turbine power generation industry, the Company has attracted and trained a group oftechnical experts and professionals in the gas turbine industry, and has accumulated rich experience inthe construction and operational management of gas turbine power plants. In order to comply with themarket trend of power market-oriented reform in the Guangdong Province, the Company hasestablished a professional power marketing team to study power trading strategies, explore and buildpower marketing mathematical models. The accumulative rich experience in power marketing has laid asolid foundation for the Company to participate in the construction of new power market and integrateinto the wave of power market reform. In addition, with its excellent technical strength, ShenzhenNanshan Power Engineering Company has provided comprehensive professional services such astechnical consulting, commissioning and operation guarantee for dozens of gas turbine power stationsat home and abroad; The Company has successively undertaken the technical personnel trainingbusiness of dozens of power plants at home and abroad. With high-quality training content andprofessional teaching team, it has become a well-known professional talent training base in thedomestic gas turbine industry, and has established a good reputation and professional brand image inthe industry.

3. A level of expertise that is up to date. In recent years, the Company has continued to increase itsR&D efforts and promoted the sci-tech innovation-driven development to constantly enhance its corecompetitiveness. On December 26, 2024, it successfully passed the review again and obtained thenational high-tech enterprise certificate. The Company has a number of independent invention patents,utility model patents and software copyrights, and jointly drafted and prepared 1 national standard.During the reporting period, the Company applied for 6 utility model patents to the China NationalIntellectual Property Administration. The Company had 45 authorized patents in total (including 5invention patents) and 8 software copyrights, which has greatly enhanced the Company's brand imageand industrial competitiveness.

4. Rich experience in industrial exploration. The Company gives full play to its own advantages, makesevery effort to develop the integrated energy service business field, and continuously accumulatesexperience in the construction and operation of new energy industries such as electrochemical energy

storage, photovoltaics, and charging piles. Through the construction and operation of energy storageblack start projects, photovoltaic projects, MTC industrial and commercial energy storage project, theconstruction of Zhongshan independent energy storage power station, and the development ofintegrated photovoltaic, storage and charging projects, the Company has accumulated rich experiencein the construction, commissioning and operation & maintenance of new energy and energy storageprojects, and has trained a group of professional and technical talents. In addition, the talentaccumulation and technical advantages of the traditional power industry have prepared sufficienttechnical and talent resources for the Company to enter the field of integrated energy service and laid asolid foundation.

5. Leading environmental protection level. The Company's power generation units are all gas-firedpower generation units, adopting natural gas as fuel, and the CO2 emission in the flue gas is about42% of that of the coal-fired power plants, providing strong support for the national "double carbon"(carbon peaking and carbon neutrality) construction. According to the requirements of the "2018'Shenzhen Blue' Sustainable Action Plan" of the Shenzhen Municipal People's Government, theCompany has fully completed the "Shenzhen Blue" transformation of #3, #10 and #1 gas turbines ofNanshan Power Plant. After the transformation, the nitrogen oxides emissions of each unit have beenreduced to less than 15mg/m3, reaching the world's most advanced level. Nanshan Power Plant wasalso selected as the best power plant of the Top Plant Award by Power Magazine, the mostauthoritative magazine in the global power industry, founded in 1882.

III. Primary business analysisOverviewPlease refer to the relevant contents of "I. Main businesses engaged in by the Company during thereporting period".Year-on-year changes in key financial data

Unit: RMB

Major changes in the Company's profit composition or profit sources during the reporting period

□Applicable ?Not applicable

There were no major changes in the profit composition or profit source of the Company during thereporting period.Composition of operating revenue

Unit: RMB

Industries, products or regions that account for more than 10% of the Company's operating revenue oroperating profit?Applicable □ Not applicable

Unit: RMB

Under the circumstances that the calculation method of the Company's main business data is adjustedduring the reporting period, the Company's main business data for the latest period is adjustedaccording to the calculation method at the end of the reporting period

□Applicable ?Not applicable

IV. Non-primary business analysis?Applicable □ Not applicable

Unit: RMB

V. Analysis of assets and liabilities

1. Major changes in asset composition

Unit: RMB

2. Main overseas assets

□Applicable ?Not applicable

3. Assets and liabilities measured at fair value

?Applicable □ Not applicable

Unit: RMB

Whether there are significant changes in the measurement attributes of the Company's main assets

during the reporting period

□Yes ?No

4. Restrictions on asset rights as of the end of the reporting period

VI. Investment status analysis

1. Overall situation

?Applicable □ Not applicable

2. Major equity investments acquired during the reporting period

?Applicable □ Not applicable

Unit: RMB

0.00

3. Major ongoing non-equity investments during the reporting period

□Applicable ?Not applicable

4. Financial assets investment

(1) Securities investment situation

□Applicable ?Not applicable

The Company had no securities investments during the reporting period.

(2) Derivatives investment situation

□Applicable ?Not applicable

The Company had no derivative investments during the reporting period.

5. Usage of raised funds

□Applicable ?Not applicable

The Company has not used the raised funds during the reporting period.

VII. Sale of major assets and equity

1. Sale of major assets

?Applicable □ Not applicable

2. Sale of major equity interests

□Applicable ?Not applicable

VIII. Analysis of major holding and shareholding companies?Applicable □ Not applicableInformation about major subsidiary and joint-stock companies that affect the Company's net profit bymore than 10%

Unit: RMB 10,000

Co., Ltd.

Situation of acquiring and disposing subsidiary during the reporting period?Applicable □ Not applicable

Notes to main holding and shareholding companiesShenzhen Nanshan Power Zhongshan Company: On March 4, 2025, Shenzhen Nanshan PowerZhongshan Company entered into a Physical Asset Transaction Contract with Fujian HengjingInvestment Co., Ltd. for two sets of power generation units and related assets with a transferconsideration of RMB 63,726,928.75 (tax exclusive). Fujian Hengjing Investment Co., Ltd. completedthe full payment of the transfer consideration, applicable interest and VAT in installments by May 30,2025, marking the successful completion of the public listing and transfer of Shenzhen Nanshan PowerZhongshan Company's power generation units.

IX. Structured entities controlled by the Company

□Applicable ?Not applicable

X. Risks faced by the Company and countermeasures

1. Primary business: Since 2025, affected by multiple factors, the annual medium- and long-termcontract prices of the Company's Nanshan Power Plant have further dropped. At the same time, withthe official commencement of the Guangdong Province's spot power market, the 9E unit facesprofitability difficulties in competing with more efficient and cost-effective units. As a result, theCompany's main business continues to face severe operational difficulties. The Company will persist inenhancing the operation and management of assets in stocks, proactively adapting to the demands anddynamics of the power market, and striving to optimize the profitability of its primary business andoverall operational efficiency. In June 2025, the Zhongshan Independent Energy Storage Project(Phase I) of the Company commenced commercial operation, fully participating in frequency regulationand spot markets within the Southern China grid. In the future, the Company will focus on theconstruction of a new power system, and actively investigate diverse business models andopportunities to transition from a traditional power generation entity to a comprehensive energy serviceprovider, to foster favorable conditions for the Company's sustained operations and robust growth.

2. Safety management: Under the market-oriented power production model, more flexible schedulingmethods and stricter assessment policies of the grid put forward higher requirements for the worksafety of existing aging power generation equipment of the Company. The Company will continuouslyimprove the maintenance and management level of equipment by formulating scientific and reasonablemaintenance and technical transformation plans, investing corresponding funds and technical forces,implementing primary responsibility for work safety, and ensuring the safe and stable operation ofproduction facilities; simultaneously, the Company will enhance training and emergency responsecapacity, ensuring the implementation of work safety responsibilities across five key areas:

responsibility of work safety, management, investment, training, and emergency response. Doing soaims to prevent any human-induced work safety accidents within the Company's system whilemaintaining the supporting role of the peak-shaving power supply point.

3. Fuel procurement: The Company's natural gas procurement price mainly depends on changes in theinternational fuel market and the sales price of the Company's existing suppliers. In 1H25, spot naturalgas prices exhibited an overall downward trend, though a sudden spike occurred in June due to theIran-Israel conflict before gradually retreating. As a result, the Company's natural gas procurementcosts decreased year-on-year. The natural gas supply situation remained generally stable during thisperiod, with limited supply disruptions. This stability stemmed from: a new equilibrium in global gasdistribution during the post-Russia-Ukraine war era; and newly commissioned power generation units inGuangdong significantly outpacing load growth, thereby alleviating pressure on existing units. However,the implementation of electricity spot market rules and capacity pricing mechanisms continues todemand higher standards for supply stability and flexibility. The Company will further optimize upstreampartnerships, enhance gas supply coordination, ensure reliable fuel supply for power generation, andmaximize efforts to reduce natural gas procurement costs.

4. Land of Nanshan Power Plant: In May 2025, the Company again accessed the Notice of ShenzhenMunicipal Bureau of Planning and Natural Resources on Issuing the Shenzhen Land ConsolidationPlan for 2025 on the official website of Shenzhen Municipal Bureau of Planning and Natural Resources.According to the above notice and its attached table, Shenzhen Land Consolidation Plan for 2025 stillincluded the land acquisition and storage of Nanshan Power Plant and related content, with nosubstantial change from the content of the land consolidation plans disclosed in recent years. TheCompany will maintain close engagement with relevant government authorities, promptlycommunicating its positions and requests to safeguard the legitimate rights and interests of the listedcompany and all shareholders.XI. Formulation and implementation of market value management system andvaluation improvement plan

Whether the Company has formulated a market value management system.

□Yes ?No

Whether the Company has disclosed plans for valuation enhancement.

□Yes ?No

XII. Implementation of the action plan of "Double Improvement of Quality Return"

Whether the company has disclosed the announcement of the action plan of "Double Improvement ofQuality and Return".

□Yes ?No

Section IV Corporate Governance, Environment and SocietyI. Changes in the Company's directors, supervisors and senior officers?Applicable □ Not applicable

II. Profit distribution and conversion of capital reserves into share capital during thereporting period

□Applicable ?Not applicable

The Company has planned not to distribute cash dividends, bonus shares or convert capital reservesinto share capital in the half year.III. Implementation of the Company's equity incentive plans, employee stockownership plans or other employee incentive measures

□Applicable ?Not applicable

The company has no equity incentive plan, employee stock ownership plan or other employee incentivemeasures and their implementation during the reporting period.IV. Environmental information disclosureWhether the listed company and its principal subsidiaries are included in the Environmental InformationDisclosure Compliance List?Yes □No

The Company shall comply with the disclosure requirements for "power supply industry" as set out in"Self-Regulation and Supervision Guidelines No. 3 for Shenzhen Stock Exchange-Listed Companies -Industry Information Disclosure ".

The Company utilizes clean energy natural gas for power generation, which produces no soot or sulfurdioxide (SO?) emissions; it is classified as a non-key water pollution regulated entity, with generalwastewater discharge outlets operating on an intermittent basis, and no quantitative limits are imposedon its water pollutant discharges.Information on environmental accidents occurring in the listed companyNone

V. Social responsibilities

In 1H25, although the Company faced many challenges in production, operation and management, theCompany had the courage to assume social responsibilities, actively ensured power supply when thecost and price of power generation were seriously inverted, and conscientiously performed its socialresponsibilities to the best of its ability. In terms of work safety, the Company has been adhering to theprinciple of work safety, making every effort to ensure the safety and stability of power production,actively exploring the work safety management model under new business and new formats, optimizingand improving the internal work safety management system and mechanism of the Company, andcarrying out work safety, technical supervision, and innovation management in an orderly manner, thusachieving the goal of "five-noes" in work safety. In terms of environmental protection, the Companystrictly complied with national and local environmental protection regulations, and always adhered tothe concept of clean power generation and circular economic development. All environmental protectionwork was effectively implemented, with environmental protection emission meeting the requirement andno environmental pollution accidents. In terms of love assistance, the Company thoroughlyimplemented the strategic decision-making and deployment of the central government for ruralrevitalization, implemented the task of fixed-point assistance for rural revitalization in towns and villages,and dispatched a town-based assistant to actively play a unique role in consumption assistance.

Section V Important Matters

I. Commitments made by the Company's actual controller, shareholders, relatedparties, acquirers, the Company and other related parties that have been fulfilledwithin the reporting period and those that have not been fulfilled within the timelimit as of the end of the reporting period

□Applicable ?Not applicable

During the reporting period, there were no commitments that were made by the actual controllers,shareholders, related parties, acquirers, and other related parties of the Company to be fulfilled duringthe reporting period but failed to be fulfilled as of the end of the reporting period.II. Non-operating capital occupation of the listed company by controllingshareholders and other related parties

□Applicable ?Not applicable

There was no non-operational occupation of funds by the controlling shareholder or other relatedparties of the listed company during the reporting period.

III. Illegal external guarantees

□Applicable ?Not applicable

The Company had no illegal external guarantees during the reporting period.IV. Appointment and dismissal of accounting firmsWhether the semi-annual report has been audited.

□Yes ?No

The Company's semi-annual report has not been audited.

V. Explanation of the Board of Directors and the Board of Supervisors on the"modified report" of the accounting firm during the Reporting Period

□Applicable ?Not applicable

VI. Explanation of the Board of Directors on the "modified report" of the previousyear

□Applicable ?Not applicable

VII. Bankruptcy and restructuring related matters

□Applicable ?Not applicable

The Company had no bankruptcy or reorganization related matters during the reporting period.

VIII. Litigation

Major litigation and arbitration matters

□Applicable ?Not applicable

The Company had no major litigation or arbitration matters during the reporting period.Other litigation events?Applicable □ Not applicable

IX. Penalties and rectification

□Applicable ?Not applicable

The Company had no penalties or rectifications during the reporting period.X. Integrity status of the Company and its controlling shareholders and actualcontroller

?Applicable □ Not applicableDuring the reporting period, the Company and its largest shareholder did not fail to fulfill the effectivecourt judgments, or had large amounts of debts that were not repaid at maturity, and were in goodstanding in terms of integrity. The company had no controlling shareholder or actual controller duringthe reporting period.XI. Major related transactions

1. Related transactions related to daily operations

?Applicable □ Not applicable

2. Related transactions involving acquisition or sale of assets or equity?Applicable □ Not applicable

3. Related transactions involving joint external investment

?Applicable ?Not applicable

EnergyStorageIndustryEquityInvestmentFund LP(LimitedPartnership), ChinaScienceandTechnologyDevelopment InstituteCo., Ltd.

.

4. Related credit and debt accounts

□Applicable ?Not applicable

The Company had no related credit and debt accounts during the reporting period.

5. Transactions with financial companies that have relationship with the Company

□Applicable ?Not applicable

There were no deposits, loans, credit or other financial business between the Company and financialcompanies with relationship and related parties.

6. The transactions between financial companies controlled by the Company and related parties

□Applicable ?Not applicable

There were no deposits, loans, credit or other financial business between financial companiescontrolled by the Company and related parties.

7. Other major related transactions

□Applicable ?Not applicable

The Company had no other major related transactions during the reporting period.XII. Major contracts and their performance

1. Custody, contracting and lease matters

(1) Custody

□Applicable ?Not applicable

The Company had no custody during the reporting period.

(2) Contracting

□Applicable ?Not applicable

The Company had no contracting during the reporting period.

(3) Lease

□Applicable ?Not applicable

The Company had no lease during the reporting period.

2. Material guarantee

□Applicable ?Not applicable

The Company had no material guarantee during the reporting period.

3. Entrusted wealth management

?Applicable □ Not applicableOverview of entrusted wealth management during the reporting period

Unit: RMB 10,000

Specific cases of high-risk entrusted wealth management with a large single amount or low security andpoor liquidity

□Applicable ?Not applicable

The principal of entrusted wealth management is unlikely to be recovered or other cases that may leadto impairment

□Applicable ?Not applicable

4. Other major contracts

□Applicable ?Not applicable

The Company had no other significant contracts during the reporting period.XIII. Explanation of other major matters?Applicable □ Not applicableMatters related to the land of Nanshan Power Plant: in May 2025, the Company accessed the Notice ofShenzhen Municipal Bureau of Planning and Natural Resources on Issuing the Shenzhen LandConsolidation Plan for 2025 again from the official website of Shenzhen Municipal Bureau of Planningand Natural Resources. According to the above notice and its annex, Shenzhen Land ConsolidationPlan for 2025 still includes the land acquisition and storage of Nanshan Power Plant and relatedcontents, with no substantial change from the content of the land consolidation plans disclosed inrecent years. For details, please refer to the relevant announcements disclosed by the Company in theSecurities Times and cninfo.com.cn (Announcement No.: 2025-023)Except for the above matters, the refunds due to the Company's "Project Technical TransformationBenefit Fund" had no progress or change during the reporting period.XIV. Major matters of the Company's subsidiaries?Applicable □ Not applicableMatters related to listing and transfer of units of Shenzhen Nanshan Power Zhongshan Company: OnMarch 6 and June 4, 2025, the Company disclosed the Announcement on the Progress of Relisting andTransfer of Power Generation Unit Assets of the Wholly-Owned Subsidiary Shenzhen Nanshan Power(Zhongshan) Power Co., Ltd. respectively. As of May 30, 2025, Shenzhen Nanshan Power Zhongshan

Company received the full transfer payment, installment interest, and value-added tax from FujianHengjing Investment Co., Ltd., totaling RMB 72,253,308.58. The listing and transfer of ShenzhenNanshan Power Zhongshan Company's power generation units were successfully completed. (Fordetails, please refer to the relevant announcements disclosed by the Company on the Securities Timesand cninfo.com.cn, with Announcement No.: 2024-068, 069, 070, 075, 2025-002, 024)

Section VI Changes in Shares and ShareholdersI. Changes in shares

1. Changes in shares

Unit: share

Reasons for changes in shares

□Applicable ?Not applicable

Approval status of changes in shares

□Applicable ?Not applicable

Transfer status of changes in shares

□Applicable ?Not applicable

Progress of implementation in share repurchase

□Applicable ?Not applicable

Implementation progress of reducing and repurchasing shares through centralized bidding

□Applicable ?Not applicable

The impact of changes in shares on basic earnings per share and diluted earnings per share, netassets per share attributable to the Company's ordinary shareholders, and other financial indicators inthe most recent year and the most recent period

□Applicable ?Not applicable

Other information that the Company deems necessary or that securities regulators require to bedisclosed

□Applicable ?Not applicable

2. Changes in shares with selling restrictions

□Applicable ?Not applicable

II. Issuance and listing of securities

□Applicable ?Not applicable

III. Number of the Company's shareholders and shareholding status

Unit: share

Shareholding status of shareholders holding more than 5% of the shares or the top 10 shareholders (excluding shares

lent through refinancing)

Participation of shareholders holding more than 5% of the shares, the top 10 shareholders and the top10 shareholders of unrestricted tradable shares in refinancing business and lending shares

□Applicable ?Not applicable

Changes of the top 10 shareholders and the top 10 shareholders of unrestricted tradable sharescompared with the previous period due to refinancing lending/repayment

□Applicable ?Not applicable

Whether the Company's top 10 ordinary shareholders and the top 10 ordinary shareholders withoutselling restrictions conducted agreed repurchase transactions during the reporting period

□Yes ?No

The Company's top 10 ordinary shareholders and the top 10 ordinary shareholders without sellingrestrictions did not engage in any agreed repurchase transactions during the reporting period.IV. Changes in shareholding of directors, supervisors and senior officers

□Applicable ?Not applicable

There were no changes in the shareholdings of the Company's directors, supervisors and seniorofficers during the reporting period. For details, please refer to the 2024 Annual Report.

V. Changes in the controlling shareholder or the actual controller

Changes in controlling shareholders during the reporting period

□Applicable ?Not applicable

The Company's controlling shareholder did not change during the reporting period.Changes in actual controller during the reporting period

□Applicable ?Not applicable

The Company's actual controller did not change during the reporting period.

VI. Preferred shares

□Applicable ?Not applicable

There were no preferred shares in the Company during the reporting period.

Section VII Bonds

□Applicable ?Not applicable

Section VIII Financial Report

I. Auditor's report

Whether the semi-annual report has been audited.

□Yes ?No

The Company's semi-annual report has not been audited.II. Financial statementsThe unit in the notes to the financial statements is: RMB

1. Consolidated balance sheet

Prepared by: Shenzhen Nanshan Power Co., Ltd.

Unit: RMB

Legal representative: Kong Guoliang Chief Accountant: Chen Yuhui Chief Financial Officer: ZhangXiaoyin Head of the Finance Department: Lin Xiaojia

2. Parent Company's Balance Sheet

Unit: RMB

Legal representative: Kong Guoliang Chief Accountant: Chen Yuhui Chief Financial Officer: ZhangXiaoyin Head of the Finance Department: Lin Xiaojia

3. Consolidated Income Statement

Unit: RMB

Legal representative: Kong Guoliang Chief Accountant: Chen Yuhui Chief Financial Officer: ZhangXiaoyin Head of the Finance Department: Lin Xiaojia

4. Parent company's income statement

Unit: RMB

Legal representative: Kong Guoliang Chief Accountant: Chen Yuhui Chief Financial Officer: ZhangXiaoyin Head of the Finance Department: Lin Xiaojia

5. Consolidated statement of cash flows

Unit: RMB

Legal representative: Kong Guoliang Chief Accountant: Chen Yuhui Chief Financial Officer: ZhangXiaoyin Head of the Finance Department: Lin Xiaojia

6. Parent company's statement of cash flows

Unit: RMB

Legal representative: Kong Guoliang Chief Accountant: Chen Yuhui Chief Financial Officer: ZhangXiaoyin Head of the Finance Department: Lin Xiaojia

7. Consolidated statements of changes in owners' equity

Amount in the current period

Unit: RMB

Legal representative: Kong Guoliang Chief Accountant: Chen Yuhui Chief Financial Officer: Zhang Xiaoyin Head of the Finance Department: Lin XiaojiaAmount in the previous period

Unit: RMB

Legal representative: Kong Guoliang Chief Accountant: Chen Yuhui Chief Financial Officer: Zhang Xiaoyin Head of the Finance Department: Lin Xiaojia

8. Statement of changes in owners' equity of the parent company

Amount in the current period

Unit: RMB

Legal representative: Kong Guoliang Chief Accountant: Chen Yuhui Chief Financial Officer: Zhang Xiaoyin Head of the Finance Department: Lin Xiaojia

Amount in the previous period

Unit: RMB

Legal representative: Kong Guoliang Chief Accountant: Chen Yuhui Chief Financial Officer: Zhang Xiaoyin Head of the Finance Department: Lin Xiaojia

Shenzhen Nanshan Power Co., Ltd.Notes to the 2025 Semi-Annual Financial Statements(Unless otherwise specified, the monetary unit is RMB)

I. Basic information of the Company(I) Company profileShenzhen Nanshan Power Co., Ltd. (the Company) was reorganized and established from a foreigninvestment enterprise to a joint stock limited company on November 25, 1993, with the approval of theGeneral Office of the Shenzhen Municipal People's Government under document SFBF [1993] No. 897.As approved by the Shenzhen Securities Administration Office under documents SZBF [1993] No. 179and [1994] No. 233, the Company issued 40 million RMB ordinary shares and 37 million domesticallylisted foreign shares to domestic and overseas investors respectively on January 3, 1994. On July 1,1994 and November 28, 1994, the RMB ordinary shares (A shares) and domestically listed foreignshares (B shares) issued by the Company were listed and traded on Shenzhen Stock Exchange.The Company's main business is the production and operation of power supply and heating, as well astechnical consultation and technical services related to power plant (station). The Company's registeredaddress is located at No. 2097 Moon Bay Avenue, Nanshan District, Shenzhen, Guangdong. TheCompany's headquarters office is located at 16F/17F, Hantang Building, Overseas Chinese Town,Nanshan District, Shenzhen, Guangdong.The financial statements were approved for disclosure by the Board of Directors of the Company onAugust 20, 2025.(II) Scope of consolidated financial statementsAs of June 30, 2025, the subsidiaries within the scope of the Company's consolidated financialstatements are as follows:

Note: During the reporting period, Zhuhai Hengqin Zhuozhi Investment Partnership (LimitedPartnership) has been liquidated and deregistered and is no longer included in the scope of theconsolidated financial statements.II. Basis for the preparation of financial statementsBased on the continuing operation and according to the actual transactions and events, the Companyprepares the financial statements in accordance with "the Accounting Standards for Business

Enterprises - Basic Standards " promulgated by the Ministry of Finance and various specific accountingstandards, application guidelines for accounting standards for business enterprises, interpretations andother relevant provisions for accounting standards for business enterprises (hereinafter collectivelyreferred to as the "Accounting Standards for Business Enterprises"), as well as the disclosureprovisions by " General Provisions on Financial Reporting, No. 15 of the Rules for InformationDisclosure and Presentation by Companies that Publicly Issue Securities" issued by the ChinaSecurities Regulatory Commission.The Company has no events or circumstances that cast significant doubt on the going-concern abilitywithin 12 months from the end of the reporting period.

III. Important accounting policies and accounting estimates

Based on its actual production and operation characteristics and the provisions of relevant AccountingStandards for Business Enterprises, the Company has formulated several specific accounting policiesand accounting estimates, which are mainly reflected in the Provision for Bad Debts of AccountsReceivable (Note III (XI) 6), Inventories (Note III (XII)), Fixed Assets (Note III (XVII)), Long-termDeferred Expenses (Note III (XXIII)), Revenue Recognition and Measurement (Note III (XXVIII)),Special Reserves (Note III (XXXIII)) etc.(I) Statement on compliance with Accounting Standards for Business EnterprisesThe financial statements comply with the requirements of Accounting Standards for BusinessEnterprises promulgated by the Ministry of Finance, and truly and completely reflect the Company'sconsolidated and parent company's financial status as of June 30, 2025, as well as the consolidatedand parent company's operating results and cash flows for the year ended June 30, 2025.(II) Accounting periodA fiscal year begins on January 1 and ends on December 31 of the Gregorian calendar.(III) Operating cycleThe Company's operating cycle is 12 months, and the operating cycle is used as the liquidityclassification standard for assets and liabilities.(IV) Recording currencyThe Company uses RMB as the recording currency.(V) Materiality criteria determination method and selection basis

(VI) Accounting treatments for business combinations under common control and not undercommon controlFor a business combination under common control, the assets and liabilities acquired by the combiningparty in a business combination are measured at the book value of the assets and liabilities of thecombined party at the combination date (including goodwill resulting from the acquisition of the

combined party by the ultimate controller) in the consolidated financial statements of the ultimatecontroller. The difference between the book value of net assets acquired in the combination and thebook value of the combination consideration paid (or the total nominal value of shares issued) isadjusted to the equity premium in capital reserve, or to retained earnings if the equity premium in capitalreserve is not sufficient for elimination.For a business combination not under common control, the assets given, liabilities incurred or assumedby the purchaser as consideration for the business combination are measured at fair value at thepurchase date, and the difference between the fair value and its book value is recognized in currentprofit or loss. Goodwill is recognized if the combination cost is greater than the difference in the share offair value of identifiable net assets of the acquiree acquired in the combination; Current profit or loss isrecognized if the combination cost is lower than the difference in the share of fair value of identifiablenet assets of the acquiree acquired in the combination.Costs directly related to business combinations are recognized in current profit or loss as incurred;transaction costs for the issuance of equity securities or debt securities for business combinations arepresented in the amount initially recognized for equity securities or debt securities.(VII) Method of preparation for consolidated financial statements

1. Consolidation scope

The consolidation scope of the consolidated financial statements is determined based on control, andcovers the Company and all subsidiaries.

2. Consolidation procedure

The Company prepares consolidated financial statements based on its own financial statements andthose of its subsidiaries' and other relevant information. When the Company prepares consolidatedfinancial statements, it treats the entire enterprise group as an accounting entity, and reflects the overallfinancial status, operating results and cash flows of the enterprise group in accordance with therecognition, measurement and presentation requirements of relevant Accounting Standards forBusiness Enterprises and in accordance with unified accounting policies.Accounting policies and accounting periods adopted by all subsidiaries included in the consolidationscope of consolidated financial statements are consistent with those of the Company. If accountingpolicies and accounting periods adopted by subsidiaries are inconsistent with those of the Company,necessary adjustments are made when preparing consolidated financial statements in accordance withthe Company's accounting policies and accounting periods. For a subsidiary acquired through businesscombination not under common control, its financial statements are adjusted based on fair value ofidentifiable net assets on the purchase date. For a subsidiary acquired through business combinationunder common control, adjustments are made to its financial statements based on the book value of itsassets and liabilities (including goodwill resulting from acquisition of the subsidiary by ultimatecontroller) in the ultimate controller's financial statements.The subsidiary's owners' equity, current net profit or loss and current comprehensive income belongingto minority shareholders are presented under the item of owners' equity in the consolidated balancesheet, under the item of net profit and under the item of total comprehensive income in the consolidatedincome statement, respectively. The balance resulting from the excess of the minority shareholders'share of the current loss of a subsidiary over the minority's share of the subsidiary's owners' equity atthe beginning of the period is used to offset the minority interests.

(1) Increases in subsidiaries or businesses

If there are increases in subsidiaries or businesses as a result of business combination under commoncontrol during the reporting period, the beginning balance of the consolidated balance sheet is adjusted;Include revenue, expenses and profits of subsidiaries or business combinations from the beginning of

the current period to the end of the reporting period in the consolidated income statement; Include cashflows from the beginning of the period to the end of the reporting period of subsidiaries or businesscombinations in the consolidated statement of cash flows, and adjust the relevant line items in thecomparative statements to deem the consolidated reporting entity to have been in existence since thetime point at which the ultimate controller began to control.If control can be exercised over an investee under common control as a result of an additionalinvestment, etc., the parties involved in the combination are deemed to have been adjusted based ontheir current status when the ultimate controller began to control. For equity investments held prior tothe acquisition of right of control of the combined party, the relevant profit or loss, other comprehensiveincome and other changes in net assets have been recognized between the later of the combinationdate of the original equity and the date on which the merging party and the merged party were undercommon control and the combination date, whichever is later, and are offset against the beginningretained earnings or current profit or loss of comparative statements period.If there are increases in subsidiaries or businesses as a result of a business combination not undercommon control during the reporting period, the beginning balance of the consolidated balance sheetwill not be adjusted; Include revenue, expenses and profits of subsidiary or business from the purchasedate to the end of the reporting period in consolidated income statement; Include the cash flows of thesubsidiary or business from the purchase date to the end of the reporting period in the consolidatedstatement of cash flows.If the Company can control an investee that is not under common control as a result of additionalinvestment, etc., the Company remeasures the acquiree's equity interest held prior to the purchase dateat the fair value of the equity interest at the purchase date of the equity interest. The difference betweenthe fair value and its book value is recognized in current investment income. If the equity interest in theacquiree held prior to the purchase date is related to other comprehensive income accounted for underthe equity method and other changes in owners' equity other than net profit or loss, othercomprehensive income and profit distribution, the other comprehensive income and other changes inowners' equity related to them are transferred to investment income for the period in which they areheld at the purchase date, except for other comprehensive income due to the remeasurement of theinvestee's net liabilities under defined benefit plans or changes in net assets.

(2) Disposal of subsidiaries or businesses

① General treatment method

If the Company disposes the subsidiary or business during the reporting period, the revenue, expensesand profits of the subsidiary or business from the beginning of the period to the date of disposal areincluded in the consolidated income statement; Cash flows of the subsidiary or business from thebeginning of the period to the date of disposal are included in the consolidated statement of cash flows.When the Company loses right of control over the investee due to the disposal of part of the equityinvestments or other reasons, the Company remeasures the remaining equity investments after thedisposal according to its fair value on the date of loss of control. The difference between the sum of theconsideration received for the disposal of equity interest and the fair value of the remaining equityinterest less the sum of the share of the original subsidiary's net assets continuously measured from thepurchase date or the combination date based on the original shareholding ratio and goodwill isrecognized as investment income in the period in which the loss of control occurs. Othercomprehensive income related to equity investments in subsidiaries or other changes in owners' equityother than net profit or loss, other comprehensive income and profit distribution are transferred toinvestment income in the current period upon loss of control, except for other comprehensive incomedue to remeasurement of net liabilities under defined benefit plans or changes in net assets by theinvestee.

If the Company's shareholding ratio decreases due to other investors' capital increase in the subsidiaryand the Company loss of control, accounting treatment is carried out in accordance with the aboveprinciples.

② Disposal of subsidiaries in stages

For the disposal of equity investments in subsidiaries through multiple transactions in stages until theloss of control, it generally indicates that multiple transactions are accounted for as a package oftransactions if the terms, conditions, and economic effects of each transaction of such disposal of equityinvestments in subsidiaries meet one or more of the following circumstances:

i. such transactions are entered into simultaneously or with consideration of their effects on each other;ii. such transactions can only achieve a complete business result when taken as an entirety;iii. The occurrence of a transaction depends on the occurrence of at least one other transaction;iv. a transaction is uneconomical when considered in isolation, but economical when considered inconjunction with other transactions.If the transactions that dispose of the equity investments in subsidiaries until of loss of control belongsto a package of transactions, the Company account for each transaction as a transaction in whichsubsidiary is disposed of and loss of control; however, the difference between the disposal price and thenet asset share of the subsidiary corresponding to the disposal of the investment in each case prior tothe loss of control is recognized in the consolidated financial statements as other comprehensiveincome and transferred to current profit or loss in the period in which the loss of control occurs.If various transactions involving the disposal of equity investments in subsidiaries until loss of control donot belong to a package of transactions, prior to the loss of control, accounting treatment is performedin accordance with the relevant policies for partial disposal of equity investments in subsidiary withoutloss of control; Upon loss of control, accounting treatment is performed in accordance with generalmethod for disposal subsidiary.

(3) Purchase of minority interests in subsidiaries

The difference between the newly acquired long-term equity investments resulting from the purchase ofminority interests and the Company's net asset share of the subsidiaries calculated on the basis of theratio of the newly acquired shares in the subsidiaries' net assets on an ongoing basis from the purchasedate (or the combination date) is adjusted to the equity premium in the capital reserve in theconsolidated balance sheet, or to the retained earnings if the equity premium in the capital reserve isinsufficient to offset the difference.

(4) Partially dispose of equity investments in subsidiaries without loss of controlThe difference between the disposal price obtained from the partial disposal of long-term equityinvestments in subsidiaries without loss of control and the corresponding subsidiaries' net asset shareon a continuing basis from the purchase date (or the combination date) of the long-term equityinvestments disposed of is adjusted to the equity premium in the capital reserve in the consolidatedbalance sheet, or to the retained earnings if the capital reserve is insufficient to offset the difference.(VIII) Joint venture arrangements classification and accounting treatmentsJoint venture arrangements are divided into joint operations and joint ventures.When the Company is a joint party to joint venture arrangements, is entitled to the assets and assumesthe liabilities related to the arrangements, it is a joint operation.The Company confirms the following items related to the interest share in joint operations, and performsaccounting treatments in accordance with the relevant Accounting Standards for Business Enterprises:

(1) recognizing assets held separately by the Company and recognizing jointly held assets based on

the Company's share;

(2) recognizing liabilities borne separately by the Company and recognizing liabilities borne jointlybased on the Company's share;

(3) recognizing revenue from the sale of the Company's share of joint operations outputs;

(4) recognizing revenue from joint operations arising from the sale of output based on the Company'sshare;

(5) recognizing expenses incurred independently, and recognizing expenses incurred by jointoperations based on the Company's share.See Note "III (XV) Long-term equity investments" for the accounting policies of the Company'sinvestment in joint ventures.(IX) Determination criteria for cash and cash equivalentsWhen preparing the statement of cash flows, the Company's cash on hand and deposits that can beused for payment at any time are recognized as cash. Investments that meet the four conditions ofshort term (due within three months from the purchase date), strong liquidity, easy conversion intoknown amounts of cash, and small risk of value changes are determined as cash equivalents.(X) Foreign currency transactions and translation of foreign currency statements

1. Foreign currency transactions

Foreign currency transactions are recorded using the spot exchange rate at the transaction date as thetranslation rate to convert the foreign currency amount into RMB.The balance of foreign currency monetary items on the balance sheet date is translated at spotexchange rate on balance sheet date. The resulting exchange differences are recognized in currentprofit or loss, except for those arising from foreign-currency special borrowings related to the acquisitionand construction of assets eligible for capitalization, which are treated in accordance with the principleof capitalization of borrowing costs.

2. Translation of foreign currency financial statements

Assets and liability items in the balance sheet are translated using spot exchange rate on the balancesheet date; Owners' equity items, except for "undistributed profits", are translated at spot exchange rateat the time of occurrence. Revenue and expense items in the income statement are translated at spotexchange rate on the transaction date.When disposing of an overseas operation, the difference arising from the translation of foreign-currencyfinancial statements related to the overseas operation is transferred from owners' equity items to thecurrent profit or loss in the period of disposal.(XI) Financial instrumentsFinancial instruments include financial assets, financial liabilities and equity instruments.

1. Classification of financial instruments

Based on the Company's business model for managing financial assets and the contract cash flowscharacteristics of financial assets, financial assets are classified upon initial recognition into: financialassets measured at amortized costs, financial assets measured at fair value with changes included inother comprehensive income financial assets (debt instruments) and financial assets measured at fairvalue with changes included in current profit or loss.Financial assets with a business model whose objective is to collect the contractual cash flows andwhose contract cash flows consist solely of payments of principal and interest based on the principalamount outstanding are classified as financial assets measured at amortized costs; Financial assets

with a business model whose objective is both to collect the contractual cash flows and to sell thefinancial assets and whose contract cash flows consist solely of payments of principal and interestbased on the principal amount outstanding are classified as financial assets at fair value with changesincluded in other comprehensive income (debt instruments); Other financial assets beyond these areclassified as financial assets measured at fair value with changes included in current profit or loss.For investments in non-trading equity instruments, the Company determines upon initial recognitionwhether to designate them as financial assets (equity instruments) measured at fair value with changesincluded in other comprehensive income. At the time of initial recognition, in order to eliminate orsignificantly reduce accounting mismatches, financial assets can be designated as financial assetsmeasured at fair value through the current profit or loss. According to the above conditions, the financialassets designated by the Company mainly include: (specifically describe the designated situation)Financial liabilities are classified upon initial recognition into: financial liabilities measured at fair valuewith changes included in current profit or loss and financial liabilities measured at amortized costs.Financial liabilities that meet one of the following conditions can be designated upon initialmeasurement as financial liabilities measured at fair value with changes included in current profit orloss:

1) Such designation can eliminate or significantly reduce accounting mismatches.

2) According to the enterprise risk management or investment strategies stated in formal writtendocuments, the Company manages and evaluates the performance of the financial liabilities portfolio orthe portfolio of financial assets and financial liabilities on the basis of the fair value, and reports to thekey officers within the enterprise on this basis.

3) The financial liabilities contain embedded derivative instruments that need to be separately split.In accordance with the above conditions, such financial liabilities designated by the Company mainlyinclude: (specifically describe the circumstances specified)

2. Recognition basis and measurement method for financial instruments

(1) Financial assets measured at amortized costs

Financial assets measured at amortized costs including notes receivable, accounts receivable, otherreceivables, long-term receivables, debt investments, etc., are initially measured at fair value, withrelated transaction costs included in the initial recognition amount; accounts receivable that do notcontain significant financing components and accounts receivable that the Company decides not toconsider the financing components of less than one year are initial measurement at the contracttransaction prices.Interest calculated using the effective interest method during the holding period is included in currentprofit or loss.When financial assets are recovered or disposed of, the difference between the price obtained and thebook value of the financial assets is recorded in current profit or loss.

(2) Financial assets (debt instruments) measured at fair value with changes included in othercomprehensive incomes.Financial assets (debt instruments) measured at fair value with changes included in othercomprehensive income including receivables financing, other debt investments, etc., are initiallymeasured at fair value, with related transaction costs included in the initial recognition amount. Thesubsequent measurement of the financial assets is carried out at fair value, with fair value changesrecognized in other comprehensive income, except for interest calculated using the effective interestmethod, impairment losses or gains, and foreign exchange profit or loss.

On derecognition, accumulated gains or losses previously included in other comprehensive income aretransferred out of other comprehensive income and included in current profit or loss.

(3) Financial assets (equity instruments) measured at fair value with changes included in othercomprehensive incomeFinancial assets (equity instruments) measured at fair value with changes included in othercomprehensive income including other investments in equity instruments, etc., are initially measured atfair value, with related transaction costs included in the initial recognition amount. The subsequentmeasurement of the financial assets is carried out at fair value, with fair value changes included in othercomprehensive income. Dividend received is included in current profit or loss.On derecognition, accumulated gains or losses previously included in other comprehensive income aretransferred out of other comprehensive income and included in retained earnings.

(4) Financial assets measured at fair value with changes included in current profit or lossFinancial assets measured at fair value with changes included in current profit or loss including financialassets held for trading, derivative financial assets, other non-current financial assets, etc., are initiallymeasured at fair value, with related transaction costs included in current profit or loss. The subsequentmeasurement of the financial assets is carried out at fair value, with fair value changes included incurrent profit or loss.

(5) Financial liabilities measured at fair value with changes included in current profit or lossFinancial liabilities measured fair value with changes included in current profit or loss including financialliabilities held for trading, derivative financial liabilities, etc., are initially measured at fair value, withrelated transaction costs included in current profit or loss. The subsequent measurement of the financialliabilities is carried out at fair value, with fair value changes included in current profit or loss.On derecognition, the difference between the book value and the consideration paid is included incurrent profit or loss.

(6) Financial liabilities measured at amortized costs

Financial liabilities measured at amortized costs including short-term borrowings, notes payable,accounts payable, other payables, long-term borrowings, bonds payable, and long-term payables, areinitially measured at fair value, with related transaction costs included in the initial recognition amount.Interest calculated using the effective interest method during the holding period is included in currentprofit or loss.On derecognition, the difference between the consideration paid and the book value of the financialliabilities is included in current profit or loss.

3. Recognition basis and measurement method for transfer of financial assetsThe Company assesses the extent to which it retains the risks and rewards of ownership of financialassets when a transfer of financial assets occurs and treats them as follows, respectively:

(1) If substantially all the risks and rewards of ownership of financial assets are transferred, the financialassets are derecognized, and rights and obligations arising from or retained in the transfer arerecognized separately as assets or liabilities.

(2) If substantially all the risks and rewards of ownership of financial assets are retained, the financialassets continue to be recognized.

(3) If the Company neither transfers nor retains substantially all risks and rewards of ownership financialassets (i.e., in cases other than those in (1) and (2) of this Article), it treats the financial assets,according to whether or not it retains control over the financial asset, respectively as follows:

1) If control over the financial assets is not retained, the financial assets are derecognized and therights and obligations arising from or retained in the transfer are recognized separately as assets orliabilities.

2) If control of financial assets is retained, the financial assets continue to be recognized to the extent ofcontinued involvement in the transferred financial assets, and related liabilities are recognizedaccordingly. The extent of continued involvement in the transferred financial assets is the extent towhich the Company bears the risk or rewards of changes in the value of the transferred financialassets.In determining whether the transfer of financial assets satisfies the above conditions for derecognitionof financial assets, the principle of substance over form is applied. The Company distinguishes betweentransfer of financial assets in their entirety and partial transfer of financial assets.

(1) When the financial assets are transferred in their entirety to satisfy the conditions for derecognition,the difference between the following two amounts is recognized in current profit or loss:

1) The book value of transferred financial assets on the derecognition date.

2) The sum of the consideration received for the transfer of the financial assets and the amountcorresponding to the derecognized part of the cumulative fair value changes included directly in othercomprehensive income (the financial assets involved in the transfer are financial assets at fair valuewith changes included in other comprehensive income).

(2) If financial assets are partially transferred and the transferred part as a whole meets conditions forderecognition, the book value of the entire financial assets before the transfer is divided between thederecognized part and the continued recognition part (in this case, the retained service assets aredeemed to continue to be recognized as part of financial assets) are amortized according to theirrespective relative fair values on the transfer date , and the difference between the following twoamounts is included in current profit or loss:

1) The book value of derecognized part on the derecognition date.

2) The sum of the consideration received for the derecognized part and the amount corresponding tothe derecognized part of the cumulative amount of fair value changes originally included in othercomprehensive income (the financial assets involved in the transfer are financial assets at fair valuewith changes included in other comprehensive income).If the transfer of financial assets does not satisfy the conditions for derecognition, the financial assetscontinue to be recognized and the consideration received is recognized as financial liabilities.

4. Conditions for derecognition of financial liabilities

If the current obligations for financial liabilities are fully or partially discharged, the financial liabilities, ora part thereof, are derecognized; If the Company enters into an agreement with a creditor to replace theexisting financial liabilities by assuming new financial liabilities, and the contractual terms of the newfinancial liabilities are substantially different from those of the existing financial liabilities, the existingfinancial liabilities are derecognized and the new financial liabilities are recognized simultaneously.If all or part of the contractual terms of the existing financial liabilities are substantially modified, theexisting financial liabilities or a part thereof are derecognized, and the modified financial liabilities arerecognized as new financial liabilities.When financial liabilities are fully or partially derecognized, the difference between the book value of thederecognized financial liabilities and the consideration paid (including non-cash assets transferred outor new financial liabilities assumed) is recognized in current profit or loss.If the Company repurchases part of financial liabilities, it allocates the overall book value of the financialliabilities based on the relative fair values of the continued recognition part and derecognized part on

the repurchase date. The difference between the book value allocated to the derecognized part and theconsideration paid (including non-cash assets transferred out or new financial liabilities assumed) isrecognized in current profit or loss.

5. Methods for determining fair values of financial assets and financial liabilitiesFor financial instruments that have an active market, their fair values are determined based on thequoted price in the active market. For financial instruments that do not have active market, their fairvalues are determined by valuation techniques. In valuing the fair value, the Company uses valuationtechniques that are applicable in the current circumstances and are supported by sufficient availabledata and other information, selects inputs that are consistent with the characteristics of the assets orliabilities that would be considered by a market participant in a transaction for the underlying assets orliabilities, and prioritizes the use of relevant observable inputs. Non-observable inputs are used onlywhen relevant observable inputs are not available or not practicable to obtain.

6. Test method and accounting treatment method of financial assets impairmentThe Company estimates expected credit losses on financial assets measured at amortized costs andfinancial assets measured at fair value with changes included in other comprehensive income (debtinstruments), either individually or in combination, taking into account all reasonable and supportableinformation including forward-looking information. The measurement of expected credit losses dependson whether a significant increase in credit risk has occurred in the financial assets since initialrecognition.The Company uses a simplified measurement method to measure loss provision based on expectedcredit losses over the entire life of all notes receivable, contract assets, accounts receivable and leasereceivables generated from daily operating activities such as sales of goods and provision of servicesthat are regulated by the revenue standard; for notes receivable, receivables financing and otherreceivables classified as portfolio other than these, the Company calculates expected credit losses byreference to historical credit loss experience, current conditions, and projections of future economicconditions by using default risk exposures, and expected credit loss over the life of the instruments ratewithin the next 12 months or over the entire duration.In addition to the above-mentioned simplified measurement methods and various other receivables andtemporary payments other than purchased or originated credit loss, the Company evaluates on balancesheet date whether credit risk of relevant financial instruments has increased significantly since theinitial recognition, measures its provision for losses and recognizes expected credit losses and changestherein, respectively.

(1) Recognition criteria and methods for provision for provision for bad debts of accounts receivablewith individually insignificant amount but individual provision for bad debtsThe Company conducts separate impairment tests on accounts receivable with significant individualamounts, and conducts separate impairment tests on financial assets that have not been impaired andincludes them in financial assets portfolio with similar credit risk characteristics. Accounts receivable forwhich impairment losses are recognized in individual test are no longer included in the portfolio ofaccounts receivable with similar credit risk characteristics for impairment testing.

(2) Accounts receivable with individually insignificant amount but individual provision for bad debtsFor accounts receivable whose individual amounts are not significant but have the followingcharacteristics, such as: accounts receivable that are in dispute with the other party or involved inlitigation or arbitration; The debtor fails to be contacted and there is no third-party pursuer; Theaccounts receivable that have obvious signs that the debtor is likely to be unable to fulfill its repaymentobligations shall be subject to a separate impairment test. If any object evidence proving the existenceof impairment, impairment loss is recognized and provision for impairment is made at the differencebetween present value of future cash flows and their book value.

(3) Determination basis and calculation method of accounts receivable whose expected credit lossesare calculated based on credit risk portfolioWhen sufficient evidence of expected credit losses cannot be assessed at a reasonable cost at theindividual instrument level, the Company divides notes receivable, accounts receivable, otherreceivables, and contract assets into portfolios based on credit risk characteristics by referring tohistorical credit loss experience, taking into account current conditions as well as judgments of futureeconomic conditions, and calculates expected credit losses on a portfolio basis.

(XII) Inventories

1. Classification of inventories

The Company's main business is the power production and sale of power. The Company's inventoriesmainly consist of materials and supplies consumed in the course of production or rendering of services,mainly including fuel, raw materials, spare parts and maintenance equipment, etc.

2. Valuation method for dispatched inventories

Inventories are initially measured at the cost when acquired, but measured at weighted average methodwhen dispatched.

3. Basis for determining net realizable value of different categories of inventoriesFor goods inventories for direct sale, including finished products, stock commodities and materials forsale, their net realizable values shall be recognized at the estimated selling prices minus the estimatedselling and distribution expenses and the relevant taxes and surcharges in the course of normalproduction and operation; For material inventories required for process, in the course of normalproduction and operation, their net realizable values are recognized at the estimated selling prices offinished products minus estimated costs until completion, selling and distribution expenses and relevanttaxes and surcharges; For inventories held to execute sales contract or service contract, their netrealizable values are calculated on the basis of contract price. If the quantities of inventories specified insales contracts are less than the quantities held by the Company, the net realizable value of the excessportion of inventories shall be based on general selling prices.Provision for inventory depreciation will be made at the end of the period on an individual basis.However, for inventories with large quantities and low unit prices, provision for inventory depreciationare made according to the category of inventories; For the inventories related to the series of productsmanufactured and sold in the same area, and of which the final use or purpose is identical or similarthereto, and if it is difficult to measure them by separating them from other items, the provision forinventory depreciation reserve shall be made on a consolidation basis.When making provision for inventory depreciation, if the factors causing any write-down of inventoryvalue have disappeared, leading to the net realizable values of inventories higher than its book value,the amount of write-down shall be reversed from the original provision for inventory depreciation withthe reversal being included in the current profit or loss.

4. Inventory system

The perpetual inventory system is adopted.

5. Amortization method for low-value consumables and packaging materials

(1) Low-value consumables are amortized at lump-sum method.

(2) Packaging materials are amortized at lump-sum method.

(XIII) Contract assets

1. Recognition methods and standards of contract assets

Contract assets refer to the right of the Company to receive consideration for goods or servicestransferred to customers, and the right depends on factors other than the passage of time. TheCompany's unconditional (i.e., subject only to the passage of time) right to receive consideration fromcustomers is presented separately as accounts receivable.

2. Determination method and accounting treatment method of expected credit losses ofcontract assetsFor the determination method and accounting treatments of the expected credit losses of the contractassets, please refer to the accounting treatment of the relevant accounts receivable in Note III "(XI) 6.Test method and accounting treatments of financial assets impairment".(XIV) Assets held for sale

1. The Company classifies non-current assets or disposal groups that meet the followingconditions into the category of assets held for sale:

(1) According to the practice of selling such assets or disposal groups in similar transactions, they canbe sold immediately under the current conditions;

(2) The sale is highly likely to occur, that is, the Company has made a resolution on a sale plan andobtained a firm purchase commitment, and the sale is expected to be completed within one year.Where the relevant regulations require the approval of the relevant authority or regulatory department ofthe Company before the sale, the approval has been obtained.

2. The Company classifies a component that meets one of the following conditions and iscapable of being separately distinguished, and the component has been disposed of orclassified as held for sale:

(1) The component represents an independent major business or a separate major business area;

(2) The component is a part of an associated plan to dispose of an independent major business or aseparate major business area;

(3) The component is a subsidiary acquired for resale.

3. Presentation method

The Company presents separately in the balance sheet the assets in the non-current assets or disposalgroup held for sale from other assets, and the liabilities in the disposal group held for sale from otherliabilities. The assets in the non-current assets held for sale or the disposal group held for sale shall notbe offset against the liabilities in the disposal group held for sale, and shall be presented as the currentassets and current liabilities respectively.The Company presents the profit or loss of continuing operations and the profit or loss of discontinuedoperations in the income statement separately. For non-current assets or disposal groups held for salethat do not meet the definition of discontinued operations, their impairment losses and reversal amountsand disposal profit or loss shall be presented as profit or loss from continuing operations. Operatingprofit or loss such as impairment losses and reversal amount of discontinued operations and disposal

profit or loss shall be presented as the profit or loss from discontinued operations.(XV) Long-term equity investments

1. Judgment criteria for common control and significant influenceCommon control refers to the mutual control over certain arrangement based on relevant agreements,however, activities related to such arrangement can be decided only when the consensus of theparticipating party sharing the right of control is obtained. Where the Company exercises commoncontrol over the investees together with other parties to the joint ventures and enjoys the right on theinvestee's net assets, the investee is a joint venture of the Company.Significant influence refers to the power to participate in making decisions on the financial andoperating policies of an enterprise, but not the power to control, or jointly control, the formulation ofsuch policies with other parties. If the Company can exert significant influence on investees, investeesshall be associates of the Company.

2. Determination of initial investment cost

(1) Long-term equity investments formed by business combination

Business combination under common control: if the Company pays cash, transfers non-cash assets orassumes debts, and issues equity securities as the combination consideration, the share of book valueof acquiring the owners' equity of the combined party in the ultimate controller's consolidated financialstatements is taken as the initial investment cost of long-term equity investments on the combinationdate. In case the Company can exercise control over the investee under common control for additionalinvestments or other reasons, the initial investment cost of long-term equity investments should berecognized at the share of book value of net asset of the combined party after the combination in theconsolidated financial statements of the ultimate controller on the combination date. If there is adifference between the initial investment cost of the long-term equity investments on the combinationdate and the sum of the book value of the long-term equity investments before combination and thebook value of the consideration newly paid by shares acquired on the combination date, the differenceshall be used to adjust the equity premium; and if the equity premium is insufficient to be offset, retainedearnings shall be offset.Business combination not under common control: the Company shall use the combination costdetermined on the purchase date as the initial investment cost of long-term equity investments. If it ispossible to exercise control investees that is not under common control due to additional investment orother reasons, the sum of the book value of the original equity investments plus the cost of the newinvestment will be used as initial investment cost accounted under the cost method.

(2) Long-term equity investments obtained through other means

For long-term equity investments acquired from cash payment, the initial investment cost is the actuallypaid purchasing cost.For the long-term equity investments acquired by issuing equity securities, the initial investment cost isthe fair value of the issued equity securities.On the premise that exchange of non-monetary assets is of commercial nature and the fair value of theasset traded in and out can be measured reliably, the initial investment cost of long-term equityinvestments traded in with non-monetary asset should be determined according to the fair value of theasset traded out and relevant taxes and surcharges payable, unless any concrete evidence indicatesthat the fair value of the asset traded in is more reliable; For exchange of non-monetary assets that donot meet the above premise, the book value of the asset traded out and relevant taxes and surchargespayable should be recognized as the initial investment cost of the long-term equity investments traded.For long-term equity investments obtained through debt restructuring, its book value is determined bythe fair value of the abandoned creditor's right and the other taxes directly attributable to the assets,

and the difference between the fair value of the abandoned creditor's right and the book value isincluded into the current profit or loss.

3. Subsequent measurements and recognition of profit or loss

(1) Long-term equity investments accounted for under the cost method

The Company's long-term equity investments in subsidiary is accounted for under the cost method.Except for the actual price paid for acquisition of investment or the cash dividends or profits containedin the consideration which have been declared but not yet distributed, the Company recognizes theinvestment income in the current period at the cash dividends or profits declared by the investee.

(2) Long-term equity investments accounted for under the equity method

Long-term equity investments in associates and joint ventures are accounted for under the equitymethod. If the initial investment cost is in excess of the share of fair value of identifiable net assets inthe investee when the investment is made, the difference will not be adjusted to the initial investmentcost of long-term equity investments; If the initial investment cost is in short of the share of fair value ofidentifiable net assets in the investee when the investment is made, the difference will be included inthe current profit or loss.The Company should recognize the investment income and other comprehensive income respectivelyin accordance with its share of net profit or loss and other comprehensive income realized by theinvestees that it should enjoy or share, and adjust the book value of long-term equity investments; Thebook value of long-term equity investments will be reduced accordingly in the light of the profits or cashdividends that the investee declares to distribute; For other changes in the owners' equity of investeesother than net profit or loss, other comprehensive income and profit distribution, the book value of long-term equity investments is adjusted and included in owners' equity.When confirming the shares of net profit or loss of the investee which the Company shall enjoy, basedon the fair value of the identifiable net assets of the investee at the time of acquisition of the investment,the Company confirms the net profit of the investee after adjustment in accordance with the Company'saccounting policies and the accounting period. During the period when the investment is held, if theinvestees prepares consolidated financial statements, the accounting shall be made based on theamount attributable to investees in net profit, other comprehensive income and other changes inowners' equity in the consolidated financial statements.The unrealized profit or loss of internal transactions between the Company and associates and jointventures shall be offset according to the proportion attributable to the Company, and the investmentincome shall be recognized on this basis. Unrealized internal transaction loss incurred between theCompany and the investee shall be recognized in full if such loss belongs to the asset impairment loss.If the Company invests or sells assets to associates and joint ventures, and the assets constitutebusiness, the accounting treatment shall be made in accordance with the relevant policies disclosed in"III. (VI) Accounting treatments of business combination under common control and not under commoncontrol" and "III. (VII) Preparation method of consolidated financial statements" in this note.When the Company recognizes the losses of investees that it should share, it shall proceed in thefollowing order: Firstly, reduce book value of long-term equity investments. Secondly, if the book valueof long-term equity investments is not sufficient to offset it, the investment losses will continue to berecognized to the extent of book value of other long-term interests that essentially constitute a netinvestment of the investees, to offset the book value of long-term receivables, etc. Finally, after theabove processing, if the enterprise still bears additional obligations according to the investment contractor agreement, the estimated liabilities will be recognized based on the estimated obligations andincluded in the current investment losses.

(3) Disposal of long-term equity investments

When disposing of long-term equity investments, the difference between the book value and the actualprice obtained shall be included in the current profit or loss.When disposing of long-term equity investments accounted for under the equity method, the portionoriginally included in other comprehensive income will be accounted for in a corresponding ratio on thesame basis as the investees' direct disposal of relevant assets or liabilities. The owners' equityrecognized due to the changes in owners' equity other than net profit or loss, other comprehensiveincome, and profit distribution shall be carried forward to the current profit or loss on a proportionalbasis, except for other comprehensive income arising from the investee's remeasurement of changes innet liabilities or net assets under the defined benefit plans.If common control or significant influence on investees is lost due to the disposal of part equityinvestments or other reasons, the remaining equity after disposal shall be calculated in accordance withrecognition and measurement standards of financial instruments. The difference between its fair valueand book value at the date of loss of common control or significant influence is recognized in thecurrent profit or loss. For other comprehensive income recognized due to the original equityinvestments accounted for under the equity method, it shall be accounted for on the same basis as theinvestees' direct disposal of relevant assets or liabilities when the accounting for equity method is nolonger adopted. The owners' equity recognized due to other changes in owners' equity of the investeeother than net profit or loss, other comprehensive income and profit distribution will all be transferred tothe current profit or loss when accounted for under the equity method is terminated.If the Company loses right of control over investees due to the disposal of part of equity investments orincrease in capital of the subsidiary by other investors, resulting in a decrease in the Company'sshareholding ratio, when preparing individual financial statements, if the remaining equity can exercisecommon control or significant influence over investees, it shall be accounted by under equity method,which shall be deemed to be adjusted under the equity method since the time of acquisition. If theremaining equity cannot common control or exert significant influence on investees, it shall beaccounted for in accordance with the relevant provisions of recognition and measurement standards offinancial instruments, and the difference between its fair value and book value on the date of loss ofcontrol shall be included in the current profit or loss.Where the equity disposed of are acquired through business combination as a result of additionalinvestment and other reasons, if the remaining equities after disposal are calculated under the costmethod or equity method upon preparation of separate financial statements, other comprehensiveincome and other owners' equity recognized in equity investments held before the purchase date as aresult of accounting under equity method shall be carried forward pro rata; If the remaining equity afterdisposal is accounted for in accordance with recognition and measurement standards of financialinstruments, other comprehensive income and other owners' equity will be carried forward.(XVI) Investment propertiesThe investment properties refer to the properties held for earning rentals or/and capital appreciation,including leased land use right, land use right held for transfer upon appreciation, and leased building(including self-built buildings or buildings developed for renting or buildings under construction ordevelopment for future renting).The Company measures its existing investment properties under the cost model. For investmentproperties measured under the cost model - in terms of buildings for renting, the same depreciationpolicy as that for fixed assets of the Company is adopted; for land use rights for renting, the sameamortization policy as that for intangible assets is adopted.(XVII) Fixed assets

1. Recognition conditions of fixed assets

Fixed assets refer to the tangible assets of the Company held for the purpose of producing

commodities, rendering services, renting or business management with service life exceeding oneaccounting year. Fixed assets are recognized when the following conditions are met at the same time:

(1) It is very likely that the economic benefits associated with the fixed assets will flow into theenterprise;

(2) The cost of the fixed assets can be measured reliably.

2. Depreciation method

The depreciation of fixed assets is provided on a category basis by using the straight-line method (or:

unit-of-production method, double declining balance method and sum-of-the-years-digits method, etc.),and the depreciation rate is determined according to the category, estimated service life and estimatednet residual value rate of the fixed assets. If service life of the various components of fixed assets isdifferent or they provide economic benefits to the enterprise in different ways, different depreciationrates or depreciation method should be selected and depreciation should be accrued separately.The depreciation method, depreciation life, residual rate and annual depreciation rate of fixed assetsare as follows:

3. Subsequent expenditures

Subsequent expenditures on fixed assets refer to renovation and reconstruction expenses, repair costs,etc. incurred during the use of fixed assets. Subsequent expenditures such as the renewal andtransformation of fixed assets, if they meet the conditions for capitalization, shall be included in the costof fixed assets, and book value of the replaced part shall be deducted; The repair costs of fixed assetsthat do not meet the conditions for capitalization are included in the current profit or loss when incurred.(XVIII) Construction in progressThe Company's construction in progress is classified into infrastructure projects, technicaltransformation projects, integrated energy service, information construction, etc.The initial book values of the fixed assets are stated at necessary expenditures incurred beforeconstruction in progress reaches the working conditions for its intended use. For construction inprogress that has reached working conditions for its intended use but for which the completion ofsettlement has not been handled, it shall be transferred into fixed assets at the estimated valueaccording to the project budget, construction price, actual cost, etc. from the date when it reaches theworking conditions for its intended use. And the fixed assets shall be depreciated in accordance with

the Company’s policy on depreciation of fixed assets. Adjustment shall be made to the originally andprovisionally estimated value based on the actual cost after the completion of settlement is handled, butdepreciation provided will not be adjusted.The standards for construction in progress to be transferred to fixed assets when they reach thecondition for its intended use are as follows:

(XIX) Borrowing costs

1. Recognition principles for capitalization of borrowing costsThe borrowing costs include borrowing interest, amortization of discounts or premiums, auxiliaryexpenses, and exchange differences arising from foreign currency borrowings, etc.The borrowing costs incurred by the company that can be directly attributed to the purchase,construction or production of assets that meet the capitalization conditions shall be capitalized andincluded in the related asset cost; Other borrowing costs are recognized as expenses based on theamount incurred when incurred and included in the current profit or loss.Assets eligible for capitalization refer to fixed assets, investment properties, inventories and otherassets which may reach their intended use or sale status only after long-time acquisition andconstruction or production activities.Capitalization of borrowing costs begins when the following conditions are met at the same time:

(1) asset expenditures having occurred. Asset expenditures include expenditures in the form of cashpayments, transfers of non-cash assets or interest-bearing debts for the acquisition, construction orproduction of assets that meet capitalization conditions;

(2) borrowing costs having been incurred;

(3) the purchase, construction or production activities necessary to bring the asset to its intendedusable or salable state having begun.

2. Period of capitalization of borrowing costs

The capitalization period refers to the period from the time point at which capitalization of borrowingcosts commences to the time point at which capitalization ceases, excluding the period during whichcapitalization of borrowing costs is suspended.When the acquisition, construction or production of assets that meet the capitalization conditionsreaches the intended usable or salable state, the capitalization of borrowing costs ceases.When part of the projects in the acquisition, construction or production of assets that meet thecapitalization conditions are completed and can be used independently, the capitalization of borrowing

costs of this part of the assets ceases.If each part of an asset purchased, constructed or produced is completed separately, but it cannot beused or sold until the entirety is completed, capitalization of borrowing costs stops when the entire assetis completed.

3. Capitalization suspension period

If an asset that meets the capitalization conditions is abnormally interrupted during the acquisition,construction or production process, and the interruption lasts for more than 3 months, the capitalizationof borrowing costs is suspended; If the interruption is a necessary procedure for the acquired,constructed or produced assets that meet the capitalization conditions to reach the intended usable orsalable state, the capitalization of borrowing costs continues. Borrowing costs incurred during theinterruption period are recognized as current profit or loss, and the capitalization of borrowing costscontinues until the acquisition, construction or production activities of the assets restart.

4. Calculation method for capitalization of borrowing costs rate and capitalization amountFor special borrowings for the purpose of purchasing, constructing or producing assets eligible forcapitalization, the capitalization amount of borrowing costs is determined by the actual borrowing costsincurred in the period of the special borrowing, less the amount of interest income earned on theunused borrowed funds deposited in the bank or investment income earned on the temporaryinvestment.For general borrowings taken up for the acquisition or production of assets eligible for capitalization, theamount of borrowing costs to be capitalized is determined by multiplying weighted average of the assetexpenditures that exceed special borrowings by the capitalization rate of the general borrowingsgeneral borrowings used. The capitalization rate is calculated and determined based on the weightedaverage interest rate of general borrowings.(XX) Right-of-use assetsExcept for short-term leases and leases of low value assets, the Company recognizes the right-of-useassets for the lease on the lease commencement date. The lease commencement date refers to thedate when the lessor provides the leased assets for use by the Company. Right-of-use assets areinitially measured at cost. This cost includes:

1. The initial measurement amount of the lease liabilities;

2. For lease payments paid on or before the lease commencement date, if there is a lease incentive,the amount related to the lease incentive enjoyed shall be deducted;

3. Initial direct costs incurred by the Company;

4. The costs that the Company expects to incur to dismantle and remove leased assets, restore the sitewhere leased assets are located, or restore leased assets to the state stipulated in the lease terms, butdoes not include costs incurred for the production of inventories.The Company shall make provision for depreciation of the right-of-use assets with reference to therelevant depreciation provisions of Accounting Standards for Business Enterprises No. 4 - Fixed Assets.If the Company can reasonably determine that the ownership of leased assets will be obtained at theexpiration of the lease term, the right-of-use assets shall be depreciated within the remaining useful lifeof the leased assets. If there is no reasonable assurance that the ownership of the leased assets canbe obtained at the expiration of the lease term, the depreciation shall be made within the shorter of thelease term or the remaining useful life of the leased assets.The Company determines whether the right-of-use assets have been impaired in accordance with theAccounting Standards for Business Enterprises No. 8 - Asset Impairment, and carries out accountingtreatment for the identified impairment losses.

(XXI) Intangible assetsIntangible assets including land use right, patented technology, software, etc., are initially measured atactual cost.

1. Valuation method of intangible assets

(1) The Company shall initially measure the intangible assets at cost when obtaining the sameThe cost of outsourced intangible assets includes the purchase price, relevant taxes and otherexpenses directly attributable to bringing the assets to the intended use. If the purchase price ofintangible assets is deferred beyond normal credit conditions and is essentially financing in nature, thecost of intangible assets is determined based on the present value of the purchase price.The book value of intangible assets acquired in a debt restructuring for use by the debtor against a debtare determined based on the fair value of the claim waived and other costs directly attributable tobringing the asset to its intended use, such as taxes, and the difference between the fair value of theclaim waived and the book value of the intangible assets is recognized in current profit or loss.Provided that the exchange of non-monetary assets has commercial substance and the fair value ofboth the assets exchanged in and the assets exchanged out can be measured reliably, the intangibleassets exchanged in by exchange of non-monetary assets are recorded at their fair value based on thefair value of the assets exchanged out, unless there is conclusive evidence that the fair value of theassets exchanged in is more reliable; For exchange of non-monetary assets that do not meet the aboveprerequisites, the book value of the exchanged assets and related taxes payable are recognized as thecost of the intangible assets exchanged, and profit or loss is derecognized.

(2) Subsequent measurement

Analyze and determine service life of intangible assets when acquiring them.For intangible assets with limited service life, they are amortized on straight-line method within theperiod that they bring economic benefits to the enterprise; If it is not foreseeable that intangible assetswill bring economic benefits to the enterprise, they are regarded as intangible assets with indefiniteservice life and are not amortized.

2. Estimated service life of intangible assets with limited service life

3. Basis for judgment of intangible assets with indefinite service life and procedures forreviewing their service lifeWhen reviewing the service life of intangible assets with indefinite service life, the service life isestimated and amortized in accordance with the amortization policy for intangible assets with limitedservice life, if there is evidence that the period over which the intangible asset will provide economicbenefits to the enterprise is foreseeable.

4. Specific criteria for dividing research and development stagesThe expenditures of the Company's internal research and development projects are divided intoexpenditures in the research stage and expenditures in the development stage.Research stage: the stage of creative and planned investigation and research activities to obtain andunderstand new scientific or technical knowledge.

Development stage: the stage in which research results or other knowledge are applied to a certainplan or design to produce new or substantially improved materials, devices, products, etc. beforecommercial production or use.Development stage expenditures meet specific criteria for capitalizationExpenditures during the development stage of internal research and development projects arerecognized as intangible assets when the following conditions are met:

(1) It is technically feasible to complete the intangible assets so that it can be used or sold;

(2) Have the intention to complete the intangible assets and use or sell it;

(3) The usefulness of methods for intangible assets to generate economic benefits shall be proved,including being able to prove that there is a potential market for the products manufactured by applyingthe intangible assets or there is a potential market for the intangible assets themselves or the intangibleassets will be used internally;

(4) Have sufficient technical, financial and other resource support to complete the development of theintangible assets, and have the ability to use or sell the intangible assets;

(5) Expenditures attributable to the development stage of the intangible assets can be measuredreliably.(XXII) Asset impairmentFor long-term assets such as long-term equity investments, investment properties measured under thecost model, fixed assets, construction in progress, right-of-use assets, and intangible assets with limiteduseful lives, if there are signs of impairment on the balance sheet date, an impairment test shall beconducted. If the results of impairment test indicate that the recoverable amount of assets is less thanits book value, a provision for impairment is made based on the difference and the assets arerecognized as impairment losses. The recoverable amount is the net of the fair value of the assets lesscosts of disposal and the current value of the expected future cash flows from the assets (whichever ishigher). Provision for asset impairment is calculated and recognized on the basis of individual assets. Ifit is difficult to estimate the recoverable amount of an individual asset, the recoverable amount of anasset group is determined based on the asset group to which the asset belongs. The asset group is thesmallest combination of assets that can independently generate cash inflows.Goodwill, intangible assets with indefinite service life, and intangible assets that have not yet reached ausable state are subject to impairment test at least at the end of each year.The Company performs the impairment test for goodwill. For the book value of goodwill arising from abusiness combination, the Company amortizes it to the relevant asset group on a reasonable methodfrom the purchase date; If it is difficult to be amortized to the relevant asset group, it is amortized to therelevant portfolio of asset groups. When amortizing the book value of goodwill, the Company amortizesit based on the relative benefits that the relevant asset groups or portfolio of asset groups can obtainfrom the synergies of business combination, and performs goodwill impairment test on this basis.In the impairment test for the relevant asset group or combination of asset groups containing goodwill, ifthere are indications of impairment for the asset group or combination of asset groups related togoodwill, the asset group or combination of asset groups that does not contain goodwill is first tested forimpairment, the recoverable amount is calculated and compared with the relevant book value, andcorresponding impairment losses are recognized. An impairment test is then performed on the assetgroup or combination of asset groups containing goodwill by comparing the book value of the relevantasset group or combination of asset groups (including the part of the book value of the goodwillapportioned to it) with its recoverable amount. If the recoverable amount of the relevant asset group orcombination of asset groups is less than its book value, impairment losses on goodwill are recognized.Once the above-mentioned asset impairment losses are recognized, they will not be reversed in

subsequent accounting periods.(XXIII) Long-term deferred expenses

1. Amortization method

The Company's long-term deferred expenses refer to various expenses that have been incurred but thebenefit period is more than one year (excluding one year). Long-term deferred expenses are amortizedin installments according to the benefit period of the expense item. If a long-term deferred expense itemcannot benefit future accounting periods, all the amortized value of the item that has not beenamortized will be transferred to the current profit or loss.The renovation of lease premises is recognized as long-term deferred expenses and amortized over theshorter of the following two periods:

(1) the estimated service life of the renovation (the estimated time until the next renovation);

(2) the estimated remaining service life of the main structure of the propertyThe Company's subsequent expenditure that do not meet the conditions for recognition of fixed assets,such as major repair costs, are recognized as long-term deferred expenses in the year they occur, andare subsequently amortized in installments during the benefit period.

2. Amortization period

(XXIV) Contract liabilitiesContract liabilities refer to the Company's obligation to transfer goods or services to customers forconsideration received or receivable from customers. Contract assets and contract liabilities under thesame contract are presented in the net term.(XXV) Employee compensation

1. Accounting treatments of short-term compensation

During the accounting period when employees provide services for the Company, the Companyrecognizes the actual short-term compensation as a liability and includes it in the current profit or lossor related asset costs.The Company contributes social insurance premiums and housing fund for its employees, as well aslabor union fund and employee education expenses withdrawn as required, and calculates anddetermines the corresponding amount of employee compensation in accordance with the prescribedaccrual basis and accrual ratio during the accounting period in which the employees render services tothe Company.For non-monetary employee benefits, if they can be measured reliably, they are measured at fair value.

2. Accounting treatments for post-employment benefits

Defined contribution plansThe Company pays basic endowment insurance and unemployment insurance for its employees inaccordance with relevant regulations of the local government. During the accounting period whenemployees provide services to the Company, the amount payable is calculated based on the paymentbase and ratio stipulated by the local government, and is recognized as a liability and included incurrent profit or loss or related asset costs.

In addition to basic endowment insurance, the Company has also established an enterprise annuitypayment system (supplementary endowment insurance)/enterprise annuity plan in accordance with therelevant policies of the national enterprise annuity system. The Company pays contributions to localsocial insurance institutions/annuity plans based on a certain ratio of total employee wages, andincludes the corresponding expenditures in current profit or loss or related asset costs.

3. Accounting treatments for dismissal benefits

When the Company cannot unilaterally withdraw dismissal benefits provided by the termination of laborrelationship plan or redundancy proposal, or when it recognizes the costs or expenses related to therestructuring involving the payment of dismissal benefits (whichever is earlier), employee compensationliabilities arising from dismissal benefits are recognized and included in current profit or loss.(XXVI) Lease liabilitiesExcept for short-term leases and leases of low value assets, the Company makes initial measurementof the lease liabilities on the lease commencement date according to the present value of the unpaidlease payments on that date. In calculating the present value of the lease payments, the Company usesthe interest rate implicit in the lease as the discount rate, and if the interest rate implicit in the leasecannot be determined, the incremental borrowing rate is used as the discount rate.Lease payments are payments made by the Company to the lessor in connection with the right to usethe leased assets during the lease term, including:

1. Fixed payment amount (including substantial fixed payment amount), if there is any lease incentive,the relevant amount of the lease incentive shall be deducted;

2. Variable lease payments depending on the index or ratio;

3. The Company reasonably determines the exercise price of the purchase option to be exercised;

4. The lease term reflects the amount to be paid by the Company for exercising the option to terminatethe lease;

5. The amount expected to be paid according to the residual value of the guarantee provided by theCompany.The variable lease payments depending on the index or ratio is determined at the initial measurementaccording to the index or ratio on the commencement date of the lease term. The variable leasepayments not included in the measurement of lease liabilities shall be included in the current profit orloss or the related asset cost when they actually occur.After the lease commencement date, the Company calculates the interest expenses of the leaseliabilities for each period of the lease term at a fixed periodic interest rate and includes it in the currentprofit or loss or related asset cost.After the lease commencement date, if the following circumstances occur, the Company will re-measurelease liabilities and adjust the corresponding right-of-use assets. If the book value of right-of-use assetshas been reduced to zero, but lease liabilities still need to be further reduced, the Company will includethe difference in the current profit or loss.

1. If the lease term changes or the evaluation result of the purchase option changes, the Company shallremeasure the lease liabilities according to the present value calculated by the changed leasepayments and the revised discount rate;

2. If the estimated amount payable according to the guaranteed residual value or the index or ratio usedto determine the lease payments changes, the Company remeasures the lease liabilities according tothe changed lease payments and the present value calculated by the original discount rate. If thechange in lease payments is due to the change in floating interest rate, the revised discount rate shallbe used to calculate the present value.

Lease liabilities are presented as current liabilities or non-current liabilities in the balance sheetaccording to their liquidity. The ending book value of non-current lease liabilities maturing within oneyear from the balance sheet date shall be reflected in the item of "non-current liabilities maturing withinone year".(XXVII) Estimated liabilities

1. Recognition criteria for estimated liabilities

The Company recognizes the obligations related to contingencies such as litigation, debt guarantees,onerous contracts, restructuring matters, etc. as estimated liabilities when the following conditions aremet at the same time:

(1) the obligation being the current obligation of the Company;

(2) the performance of the obligation being likely to cause economic benefits to flow out the Company;

(3) the amount of the obligation being able to be measured reliably.

2. Measurement methods for various types of estimated liabilitiesThe Company's estimated liabilities are initially measured at best estimate of the expenditures requiredto perform the related present obligations.When determining best estimate, the Company comprehensively considers factors such as risks,uncertainty and time value of money related to contingencies. Where the effect on the time value ofmoney is material, the best estimate is determined by discounting the relevant future cash outflows.Best estimate is treated separately as follows:

If there being a continuous range (or interval) of required expenditures, and various outcomes within therange are equally likely to occur, best estimate is determined based on the middle value of the range,that is, the average of the upper and lower limits.If there being no continuous range (or interval) of required expenditures, or if there being a continuousrange but the probabilities of occurrence of the various results within the range are not the same, thebest estimate is determined on the basis of the most probable amount to be incurred if the contingencyrelates to a single item; if the contingency involves multiple projects, best estimate is calculated anddetermined based on various possible outcomes and related probabilities.If all or part of the Company's expenses required to settle estimated liabilities are expected to becompensated by a third party, the compensation amount is recognized separately as an asset when it isbasically certain that it can be received. The recognized compensation amount shall not exceed thebook value of estimated liabilities.(XXVIII) RevenueDisclosure of accounting policies adopted for revenue recognition and measurement according tobusiness type. The Company's revenue mainly comes from the following business types:

(1) Revenue from power production and sales; (2) Revenue from integrated energy services; (3) Otherrevenue.

1. General principles

If the Company fulfills its performance obligations under a contract, that is, when the customer obtainsright of control of the relevant goods or services, revenue is recognized. Performance obligations arecontractual commitments in which the Company transfers clearly distinguishable goods or services tothe customer. Obtaining right of control of the relevant goods or services refers to the ability to controlthe use of the goods or the provision of the services and to derive virtually all of the economic benefitstherefrom.

If one of the following conditions is met, it is performance obligations to be fulfilled within a certainperiod of time, and the Company recognizes revenue over a period of time in accordance with theperformance progress: (1) the customer obtaining and consuming the economic benefits arising fromthe Company's performance at the same time as the Company's performance; (2) the customer beingable to control the goods under construction during the Company's performance; (3) the goodsproduced by the Company during the performance of the contract having irreplaceable uses, and theCompany having the right to collect payment for the cumulative performance part completed so farduring the entire contract period. Otherwise, the Company recognizes revenue at the time point atwhich the customer obtains the right of control of the related goods or services.

2. Sales with a quality guarantee clause

For sales with a quality guarantee clause, if the quality guarantee provides a separate service to thecustomer in addition to the assurance that the goods or services sold meet standards specified herein,the quality guarantee constitutes an individual performance obligation. Otherwise, the Companyaccounts for the quality assurance liability in accordance with the provisions of the AccountingStandards for Business Enterprises No. 13 - Contingencies.

3. Identification of the person with main liabilities and the agentThe Company identifies itself as the person with main liabilities or the agent when engaging intransactions based on whether it has the right of control of the goods or services before transferringthem to the customer. If the Company has the right of control of the goods or services beforetransferring them to the customer, the Company identifies itself as the person with main liabilities andrecognizes revenue based on the total consideration received or receivable; Otherwise, the Companyidentifies itself as the agent and recognizes revenue based on the amount of commissions or handlingcharges that may be received. This amount is determined according to the net amount after deductingthe price payable to other related parties from the total consideration received or receivable, oraccording to the specified commissions amount, ratio or other factors.

4. Principles

If the Company fulfills its performance obligations under a contract, that is, when the customer obtainsright of control of the relevant goods or services, revenue is recognized. Obtaining right of control of therelevant goods or services refers to the ability to control the use of the goods or the provision of theservices and to derive virtually all of the economic benefits therefrom.

(1) Revenue from power production and sales

When the power is transmitted to the power grid company specified in the power sales contract, whichmeans the power grid company has obtained the right of control of the power, the Company shallrecognize the reported sales revenue.

(2) Revenue from integrated energy services

The revenue of services provided between the Company and customers mainly includes engineeringlabor and services such as operation and maintenance, management, commissioning, and overhaul, aswell as energy service revenue for industrial and commercial energy storage and power sales. Ifmultiple performance obligations are involved, they should be reasonably split, and equipment salesshould be handled with reference to the sale of goods business. The provision of labor and services isgenerally dealt with according to the output method based on the performance obligation fulfilled withina certain time period. Requirements are as follows:

1) Sales of supporting equipment

For sales of equipment, revenue shall be recognized when the customer obtains the right of control theequipment. In general, the recognition time point shall be the time when the customer signs afterreceiving the completed or delivered products. Based on the terms of the Contract, the required

attachments for revenue recognition include but are not limited to the sales contract, commodityshipping order, customer receipt sheet, equipment acceptance sheet or customs declaration form, etc.

2) Labor and services provided

① The recognition and settlement of revenue from such business shall comply with the provisions ofthe business contract signed by both parties. At the end of each settlement period, the necessarydocuments stipulated in the Contract, such as the attendance sheet, service application form, etc.confirmed by both parties shall be provided as the proof of the cumulative revenue recognition of thesettlement period and materials for collecting service price.

② On each balance sheet date within the settlement period, revenue shall be tentatively estimatedbased on the performance progress. When using the output method to determine the performanceprogress, the progress is usually determined in combination with the actual measured completionprogress, assessment of achieved results, achieved milestones, progress of the schedule, completed ordelivered products and other output indicators.

3) Energy service income from industrial and commercial energy storage and power salesFor the industrial and commercial energy storage service business, after the expiration of eachsettlement cycle, check and confirm the charging and discharging records of the energy storage projectwith the customer, and sign the confirmation form of electricity charge settlement of energy storagepower station, tentatively estimate the confirmation revenue of service fees, and make formalsettlement according to the actual electricity bill issued by the power supply bureau at the beginning ofeach month, adjust the tentatively estimated revenue, and confirm the energy service revenue.For power sales service, the energy service revenue of the current month shall be confirmed accordingto the power sales revenue statement of Guangdong Power Exchange Co., Ltd.(XXIX) Contract costs

1. Cost of contract acquisition

The incremental costs incurred by the Company to obtain the Contract (that is, costs which would nothave been incurred without obtaining the Contract) that may be recovered shall be recognized as anasset and amortized on the same basis as the revenue recognition of goods or services related to theasset. In addition, the asset shall be included in the current profit or loss. If the amortization period ofthe asset does not exceed one year, the asset shall be included in the current profit or loss whenincurred. Other expenses incurred by the Company to obtain the contract shall be included in thecurrent profit or loss when incurred, unless otherwise the expenses are borne by the customer.

2. Contract performance cost

The costs incurred by the Company to perform the Contract are recognized as an asset if they do notfall within the scope of other provisions specified in the Accounting Standards for Business Enterprisesother than the revenue standards and meet all the following conditions: (1) when the cost is directlyrelated to an existing or expected contract; (2) when the cost increases the Company resources forfulfilling performance obligations in the future; (3) when the cost is expected to be recovered. Theabove-mentioned asset shall be amortized on the same basis as the revenue recognition of goods orservices related to the asset and included in the current profit or loss.

3. Impairment of contract costs

When recognizing impairment losses of assets related to contract costs, the Company shall firstrecognize impairment losses of other assets related to the Contract that are recognized in accordancewith other relevant accounting standards for business enterprises; Then, if book value is higher thandifference between the remaining consideration expected to be obtained by the Company for thetransfer of the goods related to the asset and the estimated cost to be incurred for the transfer of therelated goods, provision for impairment shall be made for the excess, and it shall be recognized as the

asset impairment loss.If the factors of impairment in the previous period subsequently changed, causing the aforementioneddifference to be higher than the book value of the asset, provision for asset impairment that has beenmade previously shall be reversed and the higher part shall be included in the current profit or loss, butthe book value of the asset after the reversal shall not exceed the book value of the asset on the date ofreversal assuming no provision for impairment is made.(XXX) Government subsidies

1. Type

Government subsidies refer to the monetary and non-monetary assets obtained by the Company fromthe government free of charge. Government subsidies are divided into asset-related governmentsubsidies and income-related government subsidies.Asset-related government subsidies refer to government subsidies obtained by the Company and usedto purchase, construct or otherwise form long-term assets. Income-related government subsidies referto government subsidies other than asset-related government subsidies.

2. Recognition time point

If there is evidence that the Company can meet the relevant conditions stipulated in the financialsupport policy and is expected to receive financial support funds, government subsidies shall berecognized based on the amount receivable. Otherwise, government subsidies shall be recognizedwhen they are actually received.If government subsidies are monetary assets, they shall be measured at the amount received orreceivable. If government subsidies are non-monetary assets, they shall be measured at the fair value;If the fair value cannot be obtained reliably, government subsidies shall be measured at the nominalamount (RMB 1). Government subsidies measured at the nominal amount shall be directly included inthe current profit or loss.

3. Accounting treatment

Asset-related government subsidies shall be used to offset the book value of the relevant assets orrecognized as the deferred income. Government subsidies which are recognized as the deferredincome shall be included in the current profit or loss in installments according to a reasonable andsystematic method within service life of the relevant assets (if the government subsidies are related tothe daily activities of the Company, the subsidies shall be included in other income; if the governmentsubsidies are not related to the daily activities of the Company, the subsidies shall be included in non-operating revenue).Income-related government subsidies that are used to compensate the Company for relevant costs orlosses in subsequent periods shall be recognized as the deferred income and included in the currentprofit or loss (if the government subsidies are related to the daily activities of the Company, thesubsidies shall be included in other income; if the government subsidies are not related to the dailyactivities of the Company, the subsidies shall be included in non-operating revenue) or used to offsetrelevant costs or losses; If the subsidies are used to compensate for the relevant costs or lossesincurred by the Company, the subsidies shall be directly included in the current profit or loss (if thegovernment subsidies are related to the daily activities of the Company, the subsidies shall be includedin other income; if the government subsidies are not related to the daily activities of the Company, thesubsidies shall be included in non-operating revenue) or used to offset relevant costs or losses.The policy-based preferential loan interest subsidies obtained by the Company will be accounted fordifferently in the following two situations:

(1) if the central finance allocates interest subsidies to the lending bank, and the lending bank providesloans to the Company at a policy-based preferential interest rate, the Company will use the actual loan

amount received as the entry value of the loan and calculate related borrowing costs based on the loanprincipal and the policy-based preferential interest rate.

(2) if the central finance directly allocates interest subsidies to the Company, the Company will use thecorresponding interest subsidies to offset related borrowing costs.(XXXI) Deferred tax assets and deferred tax liabilitiesFor deductible temporary differences, deferred tax assets shall be recognized with the taxable incomethat is likely to be obtained in the subsequent period to offset deductible temporary differences as thelimit. For deductible losses and tax credits which can be carried forward to subsequent years, thecorresponding deferred tax assets shall be recognized with the future taxable income that is likely to beobtained to offset deductible losses and tax credits as the limit.For taxable temporary differences, except in special circumstances, the deferred tax liabilities shall berecognized.Special circumstances in which deferred tax assets or deferred tax liabilities are not recognized include:

initial recognition of goodwill; Other transactions or matters, except for business combination, that affectneither accounting profits nor taxable income (or deductible losses) when incurred.When the Company is entitled to the legal right to settle on a net basis and intends to settle on a netbasis or obtain assets and pay off liabilities at the same time, the current income tax assets and currentincome tax liabilities shall be reported at the net amount after offsetting.When the Company is entitled to settle current income tax assets and current income tax liabilities on anet basis, and deferred tax assets and deferred tax liabilities are related to income tax levied by thesame taxation department on the same taxpayer or different taxpayers, but in each significant periodwhen deferred tax assets and liabilities are reversed, if the taxpayer involved intends to settle currentincome tax assets and liabilities on a net basis or obtain assets and pay off liabilities at the same time,deferred tax assets and deferred tax liabilities shall be reported at the net amount after offsetting.(XXXII) LeaseLease refers to a contract whereby the lessor transfers the right to use an asset to the lessee inexchange for consideration for a certain period of time.

1. The Company acts as a lessee

The Company shall determine the right-of-use assets on the starting date of the lease term andrecognize lease liabilities based on the present value of the unpaid lease payments. Lease paymentsinclude fixed payments and amounts payable when the purchase option or option to terminate lease islikely to be exercised. Variable rent determined based on a certain ratio of sales amount shall not beincluded in lease payments and shall be included in the current profit or loss when actually incurred.The Company's right-of-use assets include leased houses and buildings, machinery equipment, meansof transport, computers and electronic equipment, etc.For short-term leases with lease term of no more than 12 months and leases of low value assets with asingle asset at a low value when it is new, the Company will not to recognize right-of-use assets andlease liabilities, and the relevant rental expenses will be calculated based on the straight-line method ineach period during lease term and included in the current profit or loss or related asset costs.

2. The Company acts as a lessor

Financing lease refers to the lease that basically transfers all the risks and rewards related to theownership of leased assets. Other leases are operating leases.

(1) Operating leases

When the Company rents out its own buildings, machinery equipment and means of transport, the

rental revenue from operating leases is recognized in accordance with the straight-line method duringlease term. Variable rents, which are determined by the Company at a certain percentage of sales, areincluded in rental revenue when actually incurred.

(2) Financing lease

On the commencement date of the lease term, the Company recognizes the finance lease receivablesfor the financing lease and terminates the derecognition of related assets. The Company lists financelease receivables as long-term receivables, while the finance lease receivables collected within oneyear (including) from the balance sheet date are listed as non-current assets due within one year.(XXXIII) Special reserveThe work safety expenses extracted from the Company's power production and sales business inaccordance with national regulations are included in the cost of related products or current profit or lossas well as in the "special reserve" account. The currently accrual standard is based on operatingrevenue of the previous year, using an excess regressive method to determine the accrual amount forthe current year. Such amount shall be withdrawn evenly every month, and be included in the cost ofrelated products or current profit or loss as well as in the "special reserve" account. When the Companyuses special reserve, the amount shall be charged directly to the special reserve if it belongs to cost ofspending; If fixed assets are formed, they will be recognized as fixed assets when such assets reachthe intended usable state; At the same time, special reserve is offset according to the cost of fixedassets formed, and accumulated depreciation of the same amount shall be recognized. Such fixedassets will no longer be depreciated in subsequent periods.(XXXIV) Changes in significant accounting policies and accounting estimatesDuring the reporting period, there was no change in significant accounting policies and accountingestimates.IV. Taxes(I) Main tax type and rates

The tax subjects with different corporate income tax tax rates are as follows:

(II) Tax preferential treatment

1. Corporate income tax

(1) The Company obtained a national high-tech enterprise certificate numbered GR202444200365,which is valid for 3 years. From 2024 to 2026, the Company's corporate income tax enjoys apreferential income tax rate of 15% for high-tech enterprise.

(2) Shenzhen Nanshan Power Engineering Company obtained a national high-tech enterprisecertificate numbered GR202344200269, which is valid for 3 years. From 2023 to 2025, the Company'scorporate income tax enjoys a preferential income tax rate of 15% for high-tech enterprise.

2. Value-added tax

V. Notes to consolidated financial statements items

(I) Monetary funds

The details of monetary funds that have restrictions on their use due to mortgage, pledge or freezing,as well as those deposited overseas with restrictions on repatriation are as follows:

In addition, as at June 30, 2025, the Company had no monetary funds subject to the restriction to usedue to mortgage, pledge or freezing and with potential recovery risks.(II) Financial assets held for trading

Note: Other financial assets held for trading of the Company are structured deposits deposited incommercial banks and money market funds.(III) Accounts receivable

1. Disclosure of accounts receivable on an aging basis

2. Accounts receivable are classified and disclosed according to the method of provision forbad debts

Continued

Important accounts receivable with provision for bad debts made on an individual basis:

Provision for bad debts made by portfolio:

Items accrued on a portfolio basis:

3. Provision for bad debts accrued, reversed or recovered for the current period

4. Accounts receivable from actual write-off for the current periodThere were no accounts receivable from actual write-off for the current period.

5. Accounts receivable and contract assets of the top five ending balances by debtors

(IV) Advances to suppliers

1. Advances to suppliers are listed based on aging

Note: there were no advances to suppliers with an aging of more than one year and a significantamount at the end of the period.

2. Top five advances to suppliers in ending balances by suppliers

(V) Other receivables

Note: the receivable for land acquisition and storage compensation pertains to the remainingoutstanding compensation payment for Plot A, recognized by the subsidiary Shenzhen Nanshan PowerZhongshan Company. The details are as follows:

On December 12, 2023, Shenzhen Nanshan Power Zhongshan Company signed the Agreement on theRecovery of State-Owned Land Use Rights and the Relocation Compensation Agreement with theCuiheng New District Management Committee. The agreements confirm the compensated land reserveacquisition by the Cuiheng New District Management Committee of three parcels of state-owned landuse rights held by Shenzhen Nanshan Power Zhongshan Company in the Hengmen Industrial Zone,Nanlang Street, Cuiheng New District, Zhongshan City, with a total land acquisition and storagecompensation amount to RMB 584,453,529. Cuiheng New District Management Committee entrustedZhongshan Xiwan Construction Investment Co., Ltd. to pay and advance the project compensationfunds.On November 4, 2024, in order to ensure the construction land demand of the 300 MW/600 MWhindependent energy storage power station (Phase I) project in Cuiheng New District, Zhongshan City,and ensure the smooth progress of the land acquisition and storage of Shenzhen Nanshan PowerZhongshan Company, Shenzhen Nanshan Power Zhongshan Company and Cuiheng New DistrictManagement Committee signed a Supplementary Agreement, which divided the original 434.86 mu plotinto two parts, namely Plot A and Plot B, of which Plot A was about 190.87 mu, and the compensationprice was RMB 224,711,593; Plot B was about 244 mu, and the compensation price was RMB359,741,936.On November 29, 2024, Shenzhen Nanshan Power Zhongshan Company has signed the LandTransfer Confirmation Letter with Cuiheng New District Management Committee for Plot A to completethe transfer confirmation; At the same time, in accordance with the agreement, Shenzhen NanshanPower Zhongshan Company submitted an application to the Zhongshan Municipal Bureau of Natural

Resources for land recovery of all the plot of 434.86 mu, and obtained the Decision on AdministrativeHandling on December 5, 2024, completing the cancellation of registration of the project land.According to the Accounting Standards for Business Enterprises and the CSRC's Guidelines for theApplication of Regulatory Rules - Accounting No. 3, Plot A has met the conditions for derecognition. Asof the end of 2024, the compensation price of Plot A has been collected in total of RMB 112,413,478.According to the agreement, the remaining payment of RMB 112,298,115 will be made by December31, 2026 at the latest.

1. Other receivables

(1) Other receivables disclosed by aging

(2) Disclosure by category

Continued

Provision for bad debts made on an individual basis:

Provision for bad debts made by portfolio:

(3) Provision provision for bad debts

(4) Provision for bad debts made, reversed or recovered for the current period

(5) There were no other receivables actually write-off in the current period

(6) Classification of other receivables by nature of payment

(7) Other receivables of the top five ending balances by debtors

(VI) Inventories

1. Inventories classification

2. Provision for inventory depreciation and provision for impairment of contract performancecosts

(VII) Contract assets

1. Contract assets

2. Classified disclosure of contract assets by the method of provision for bad debts

Continued

(VIII) Assets held for sale

Note: the ending book value of assets held for sale are all carried forward from fixed assets andintangible assets due to land acquisition and storage by the Company's subsidiary, Shenzhen NanshanPower Zhongshan Company. Please refer to the notes to other receivables in Note V (V) to the financialstatements for details of the relevant matters.According to the Relocation Compensation Agreement, the Agreement on the Recovery of State-Owned Land Use Rights and the supplementary agreement signed by Shenzhen Nanshan PowerZhongshan Company and Cuiheng New District Management Committee, Zhongshan City, the landacquisition and storage for Plot B will be completed and handed over to the Management Committeebefore June 30, 2025. If the Company fails to complete the handover of Plot B before the expiration ofthe agreed handover period, the Parties may extend the handover period, and the extension periodshall not exceed 3 months. Based on the irrevocable legal binding nature of the agreements, thesmooth progress of the land acquisition and storage process for Plot A, the orderly preparations for theacquisition and storage of Plot B, the certainty of completing the handover within one year, and thecompliance status where pre-reserve asset usage does not affect the transaction with clearly definedrights and obligations, the Company has classified Plot B and its above-ground structures as the"assets held for sale" in accordance with applicable accounting standards, reflecting their actual statusand anticipated disposal arrangements.(IX) Other current assets

Note: it is collected by the Company's subsidiary, Shenzhen Nanshan Power Zhongshan Company, inrelation to the land acquisition and storage matters. For details of the relevant land acquisition andstorage matters, please refer to the explanatory notes under Other Receivables in Note V (V) of thenotes to the financial statements.In accordance with the Accounting Treatment for Relocation Compensation Matters stipulated in theCSRC's Guidance on the Application of Regulatory Rules - Accounting Category No. 3, ShenzhenNanshan Power Zhongshan Company has classified the expenses incurred for implementing the landacquisition and storage matters, including demolition losses of buildings and ancillary facilities,relocation expenses, and employee compensation paid during the production suspension period, asother current assets following the land reserve process.(X) Long-term equity investments

Continued:

(XI) Other investments in equity instruments

1. Other investments in equity instruments

2. Investment in non-trading equity instruments

(XII) Investment properties

(XIII) Fixed assets

1. Fixed assets and disposal of fixed assets

Note 1: The increase in the ending balance of fixed assets is primarily due to the ZhongshanIndependent Energy Storage Station Project (Phase I) of Shenzhen Nanshan Power Xiwan Company, asubsidiary of the Company, reaching its intended usable condition in May 2025, and preliminary fixed-asset recognition during the current period, leading to an increase of RMB 192 million in the originalvalue of fixed assets at the consolidated financial statement level.Note 2: The decrease in the ending balance of fixed assets held for disposal is primarily due to thepublic listing and transfer of power generation units and related assets by the Company's subsidiary,Shenzhen Nanshan Power Zhongshan Company, which was completed in March 2025. The transactionamount was RMB 63.7269 million (excluding tax), and the full transfer payment and VAT were collectedby May 30, 2025.

2. Fixed assets

3. Fixed assets without the certificate of title

4. Disposal of fixed assets

Note: for details, please refer to the Note V (XIII) 1. "Fixed assets and disposal of fixed assets" to thefinancial statements.(XIV) Construction in progress

1. Construction in progress and project materials

2. Construction in progress