CLP Holdings Limited – Half year report – 30 June 2019
[Note: no intersegment revenues in this example]
The Group’s revenue primarily represents sales of electricity and gas, which is recognised over time, and is disaggregated as follows:
(a) Under the SoC Agreements, if the gross tariff revenue in a period is less than or exceeds the total of the SoC operating costs, permitted return and taxation charges, such deficiency shall be deducted from, or such excess shall be added to, the Tariff Stabilisation Fund. In any period, the amount of deduction from or addition to the Tariff Stabilisation Fund is recognised as a revenue adjustment to the extent that the return and charges under the SoC are recognised in the profit or loss.
(b) The operating lease income under PPAs relate to the 25-year PPAs between Jhajjar Power Limited (JPL) and its offtakers. Under the PPAs, the contract price mainly comprises of capacity charge and energy charge. Capacity charge is payable for maintaining availability of the plant for dispatch of electricity, regardless of actual dispatch. Energy charge is a variable amount that depends on actual fuel consumption.
5. Segment Information
The Group operates, through its subsidiaries, joint ventures and associates, in five major geographical regions – Hong Kong, Mainland China, India, Southeast Asia and Taiwan, and Australia. The operating segments are based on geographical regions. Substantially all the principal activities of the Group in each region are for the generation and supply of electricity which are managed and operated on an integrated basis.
Information about the Group’s operations by geographical region is as follows:
EBITDAF = Earnings before interest, taxes, depreciation and amortisation, and fair value adjustments. For this purpose, fair value adjustments include fair value gains or losses on derivative financial instruments relating to transactions not qualifying as hedges and ineffectiveness of cash flow hedges.
Our investments in Mainland China are mainly through joint ventures and associates, whereby under equity method of accounting, CLP shares its proportionate earnings but not the revenues and expenses.
Items affecting comparability refer to significant unusual and infrequent events such as acquisition / disposal, impairment of non-current assets, property valuation gain / loss, provision for legal disputes and change in law or natural catastrophe. They are considered irrelevant for assessing the underlying performance of the Group and are separately disclosed to allow a better understanding and comparison of the financial results. Details of the items affecting comparability can be found on page 9.