c6ed5d20992744b5ba6a4d88b6021679

(a joint stock limited company incorporated in the People's Republic of China with limited liability)
Stock Code: 01088
2016 Annual Report
Stock Code: 01088

2016 Annual Report
Promote Eco-Friendly and

Highly-Efficient Utilization of Coal
2016 Annual Report 1
Important Notice
I. The Board, supervisory committee and directors, supervisors and senior management of the Company
warrant that this report does not contain any misrepresentations, misleading statements or material
omissions, and are jointly and severally liable for the authenticity, accuracy and completeness of the
information contained in this report.
II. This report was approved at the 24th meeting of the third session of the Board of the Company, all the
directors of the Company were present at the meeting of the Board.
III. Deloitte Touche Tohmatsu has issued a standard unqualified independent auditors report to the
Company under the International Financial Report Standards for Certified Public Accountants, in
connection with the Companys 2016 financial statements prepared under the Hong Kong Accounting
Standards.
IV. Zhang Yuzhuo, Chairman of the Company, Zhang Kehui, Chief Financial Officer, and Xu Shancheng,
General Manager of the Finance Department of the Company, warrant the authenticity, accuracy and
completeness of the financial statements contained in this report.
V. The Board proposed the payment of: (1) a final dividend in cash of RMB0.46 per share (inclusive of tax)
or RMB9,149 million for year 2016; (2) a special dividend in cash of RMB2.51 per share or RMB49,923
million based on the total share capital of 19,889,620,455 shares of the Company as at 31 December
2016. The above profit distribution proposal is pending the approval by shareholders at the general
meeting.
VI. Disclaimer of forward-looking statements: There are forward-looking statements in this report made on
the basis of subjective assumptions and judgments on future policies and economic conditions, which
are subject to risks, uncertainties and assumptions. The actual outcome may differ materially from
the forward-looking statements. Such statements do not constitute actual commitments to investors.
Investors should be aware undue reliance on or use of such information may lead to risks of investment.
VII. Is there any situation of non-operating appropriation of funds by controlling shareholder(s) and its
subsidiaries? : No
VIII. Is there any situation of violation of decision-making procedures for external guarantee provision? : No
IX. Warning on Major Risks: Impacted by the supply and demand of coal and power generation and the
implementation of industrial policies, the Group is exposed to some uncertainties on achieving the
business targets for 2017. In addition, investors please note that the Company has disclosed risks
including market competition, industrial policies, change in cost, environmental protection and safety
production, etc. in the section headed Directors Report.
Contents
Section I Definitions 4
Section II Company Profile and Major Financial Indicators 7
Section III Business Overview 10
Section IV Chairmans Statement 12
Section V Directors Report 18
Section VI Significant Events 80
Section VII Changes in Share Capital and Shareholders 109
Section VIII Directors, Supervisors, Senior Management and

Employees 117
Section IX Corporate Governance and Corporate Governance Report 134
Section X Supervisory Committees Report 145
Section XI Investor Relations 147
Section XII Index to Information Disclosure 148
Section XIII Independent Auditors Report and Financial Statements 152
Section XIV Documents Available for Inspection 242
Section XV Signing Page for Opinions 243
Section XVI Summary of Major Financial Information for the Recent Five Years 245
4 China Shenhua Energy Company Limited
Section I Definitions
Unless the context otherwise requires, the following terms used in this report have the following meanings:
Shenhua Group Corporation Shenhua Group Corporation Limited
Shenhua Group Shenhua Group Corporation Limited and its controlling subsidiaries
China Shenhua/the Company China Shenhua Energy Company Limited
The Group The Company and its controlling subsidiaries
Shendong Coal Group Corporation Shenhua Shendong Coal Group Co., Ltd.
Shendong Power Company Shenhua Shendong Power Co., Ltd.
Zhungeer Energy Company Shenhua Zhungeer Energy Co., Ltd.
Shuohuang Railway Company Shuohuang Railway Development Co., Ltd.
Shenhua Trading Group Shenhua Trading Group Limited
Huanghua Harbour Administration Shenhua Huanghua Harbour Administration Co., Ltd.

Company
Baotou Energy Company Shenhua Baotou Energy Co., Ltd.
Baotou Coal Chemical Company Shenhua Baotou Coal Chemical Co., Ltd.
Shenbao Energy Company Shenhua Baorixile Energy Co., Ltd.
Shenhua Zhuhai Coal Dock Shenhua Yudean Zhuhai Port Coal Dock Co., Ltd.
Overseas Company China Shenhua Overseas Development & Investment Co., Ltd.
Yu Shen Energy Company Yulin Shenhua Energy Co., Ltd.
Xinjie Energy Company Shenhua Xinjie Energy Co., Ltd.
Shenwan Energy Company Shenwan Energy Company Limited
Fujian Energy Company Shenhua Fujian Energy Co., Ltd.
Shenhua Finance Company Shenhua Finance Co., Ltd.
EMM Indonesia PT.GH EMM INDONESIA

Section I Definitions (Continued)
Panshan Power Tianjin Guohua Panshan Power Generation Co., Ltd.
Sanhe Power Sanhe Power Co., Ltd.
Guohua Zhungeer Inner Mongolia Guohua Zhungeer Power Generation Co., Ltd.
Zhungeer Power Power-generating division controlled and operated by Zhungeer Energy

Company
Zheneng Power Zhejiang Guohua Zheneng Power Generation Co., Ltd.
Shenmu Power CLP Guohua Shenmu Power Co., Ltd.
Taishan Power Guangdong Guohua Yudean Taishan Power Co., Ltd.
Cangdong Power Hebei Guohua Cangdong Power Co., Ltd.
Suizhong Power Suizhong Power Co., Ltd.
Jinjie Energy Shaanxi Guohua Jinjie Energy Co., Ltd.
Dingzhou Power Hebei Guohua Dingzhou Power Generation Co., Ltd.
Guohua Hulunbeier Power Inner Mongolia Guohua Hulunbeier Power Generation Co., Ltd.
Taicang Power Guohua Taicang Power Generation Co., Ltd.
Mengjin Power Shenhua Guohua Mengjin Power Generation Co., Ltd.
Yuyao Power Zhejiang Guohua Yuyao Gas-fired Power Co., Ltd.
Jiujiang Power Shenhua Guohua Jiujiang Power Co., Ltd.
Zhuhai Wind Energy Zhuhai Guohua Huidafeng Wind Energy Development Co., Ltd.
Huizhou Thermal Guohua Huizhou Thermal Power Branch of the Company
Ningdong Power Ningxia Guohua Ningdong Power Generation Co., Ltd.
Xuzhou Power Guohua Xuzhou Power Generation Company Limited
Zhoushan Power Shenhua Guohua (Zhoushan) Power Generation Co., Ltd.
Beijing Gas-fired Power Shenhua Guohua (Beijing) Gas-fired Power Co., Ltd.
Section I Definitions (Continued)
Shouguang Power Shenhua Guohua Shouguang Power Generation Company Limited
Liuzhou Power Shenhua Guohua Guangtou (Liuzhou) Power Generation Co., Ltd.
Guohua Ningdong Shenhua Ningxia Guohua Ningdong Power Generation Co., Ltd.
Shenhua Guangdong Power Sales Shenhua Guohua Guangdong Power Sales Co., Ltd.
Company
Jawa Company Shenhua Guohua (Indonesia) Jawa Power Generation Co., Ltd.
JORC Australasian Code for Reporting of Mineral Resources and Ore

Reserves
Shanghai Stock Exchange Shanghai Stock Exchange
Hong Kong Stock Exchange or The Stock Exchange of Hong Kong Limited
Stock Exchange
Shanghai Listing Rules Rules Governing the Listing of Stocks on Shanghai Stock Exchange
Hong Kong Listing Rules Rules Governing the Listing of Securities on The Stock Exchange of
Hong Kong Limited
Accounting Standards for Business the latest Accounting Standards for Business Enterprises issued by the
Enterprises Ministry of Finance of the Peoples Republic of China and the related
application guidance, interpretations and other related requirements
International Financial Reporting International Financial Reporting Standards issued by the International
Standards Accounting Standards Committee
Articles of Association Articles of Association of China Shenhua Energy Company Limited
EBITDA Profit for the year + net finance costs + income tax expenses +
depreciation and amortisation shares of results of associates
Total debt to total debt and Long-term interest bearing debts + short-term interest bearing debts
total equity ratio (including bills payable)/Long-term interest bearing debts + short-term
interest bearing debts (including bills payable) + total equity
Shanghai-Hong Kong Stock Connect A mutual access mechanism between Shanghai and Hong Kong stock
markets under which Shanghai Stock Exchange and Hong Kong Stock
Exchange allow investors from Shanghai and Hong Kong to trade
eligible shares listed on the others market through local securities firms
(or brokers), which comprises Shanghai Stock Connect and Hong Kong
Stock Connect
RMB Renminbi unless otherwise specified

Section II Company Profile and Major Financial Indicators

I. INFORMATION OF THE COMPANY
Chinese Name of the Company
Abbreviation of Chinese Name of
the Company
English Name of the Company China Shenhua Energy Company Limited
Abbreviation of English Name of CSEC/China Shenhua
the Company
Legal Representative of the Company Zhang Yuzhuo
Authorised Representatives of the Company Ling Wen, Huang Qing
under the Hong Kong Listing Rules
II. CONTACTS AND CONTACT DETAILS

Secretary to the Board Representative of Securities Affairs
Name Huang Qing Chen Guangshui

Address 22 Andingmen Xibinhe Road, 22 Andingmen Xibinhe Road,
Dongcheng District, Beijing Dongcheng District, Beijing
(Postal Code: 100011) (Postal Code: 100011)
Tel (8610) 5813 3399 (8610) 5813 3355
Fax (8610) 5813 1804/1814 (8610) 5813 1804/1814
E-mail 1088@shenhua.cc ir@shenhua.cc
Board and Supervisory

Committee Affairs and
Investor Relations
Department of the Company Hong Kong Office of the Company
Address 22 Andingmen Xibinhe Road, Room B, 60th Floor,

Dongcheng District, Beijing Bank of China Tower, 1 Garden Road,
(Postal Code: 100011) Central, Hong Kong
Tel (8610) 5813 1088/3399/3355 (852) 2578 1635
Fax (8610) 5813 1804/1814 (852) 2915 0638
III. PARTICULARS
Registered Address of the Company 22 Andingmen Xibinhe Road, Dongcheng District, Beijing
Postal Code of Registered Address of 100011
the Company
Office Address of the Company 22 Andingmen Xibinhe Road, Dongcheng District, Beijing
Postal Code of Office Address of 100011
the Company
Company Website http://www.csec.com or http://www.shenhuachina.com
E-mail ir@shenhua.cc
IV. INFORMATION DISCLOSURE AND PLACE FOR DOCUMENT INSPECTION

Designated Media for Information China Securities Journal, Shanghai Securities News,
Disclosure Securities Times and Securities Daily
Internet website designated by CSRC for http://www.sse.com.cn and http://www.hkex.com.hk
publishing annual report
Annual report is available at Shanghai Stock Exchange, Board and Supervisory
Committee Affairs and Investor Relations Department of
the Company and Hong Kong Office of the Company
Section II Company Profile and Major Financial Indicators (Continued)
V. BASIC INFORMATION ON SHARES

Type Stock Exchange Abbreviation Stock Code
A Share Shanghai Stock Exchange China Shenhua 601088

H Share Hong Kong Stock Exchange China Shenhua 01088
VI. OTHER RELEVANT INFORMATION

Auditor engaged Name Deloitte Touche Tohmatsu Certified Public
by the Company Accountants LLP
(the PRC) Office Address 8th Floor, Tower W2, The Towers, Oriental Plaza,
1 East Chang An Avenue, Beijing
Signing Auditors Xu Bin, Yu Chunhui
Auditor engaged Name Deloitte Touche Tohmatsu

by the Company Office Address 35th Floor, One Pacific Place, 88 Queensway,
(Hong Kong) Hong Kong
Signing Auditors Wong Tin Chak, Samuel
A Share/the PRC H Share/Hong Kong
Share Registrar Name China Securities Depository and Computershare Hong Kong Investor
and Transfer Clearing Corporation Limited Services Limited
Office Shanghai Branch
Address 3rd Floor, China Insurance Building, Rooms 17121716, 17th Floor,
166 Lujiazui East Road, Hopewell Centre, 183 Queens Road
Pudong New Area, Shanghai East, Wanchai, Hong Kong
VII. MAJOR ACCOUNTING DATA AND FINANCIAL INDICATORS
Unit 2016 2015 Change

(%)
Revenue RMB million 183,127 177,069 3.4

Profit for the year RMB million 31,970 24,959 28.1
Profit for the year attributable to equity
holders of the Company RMB million 24,910 17,649 41.1
Basic earnings per share RMB/share 1.252 0.887 41.1
Net cash generated from operating activities RMB million 81,883 55,406 47.8
Net cash generated from operating activities
excluding the effect from Shenhua
Finance Company RMB million 92,564 46,341 99.7
As at As at
31 December 31 December
Unit 2016 2015 Change
(%)
Total assets RMB million 576,729 559,791 3.0

Total liabilities RMB million 191,760 195,870 (2.1)
Total equity RMB million 384,969 363,921 5.8
Equity attributable to equity holders of the
Company RMB million 316,975 298,068 6.3
Total share capital at the end of the period RMB million 19,890 19,890 0.0
Equity attributable to equity holders per
share RMB/share 15.94 14.99 6.3
Section II Company Profile and Major Financial Indicators (Continued)
VIII. DIFFERENCES IN ACCOUNTING DATA UNDER DOMESTIC AND OVERSEAS

ACCOUNTING STANDARDS
Unit: RMB million
Net profit attributable to Net assets attributable to

equity holders equity holders
of the Company of the Company
At the end At the end
2016 2015 of 2016 of 2015
Under China Accounting Standards for

Business Enterprises 22,712 16,144 312,357 292,790
Adjusted items and amount in accordance
with International Financial Reporting
Standards:
Adjustment: s imple production
maintenance, safety
production and other related
expenditure 2,198 1,505 4,618 5,278
Under International Financial Reporting
Standards 24,910 17,649 316,975 298,068
Explanation on differences in domestic and overseas accounting standards: Pursuant to the relevant
regulations of the related government authorities in the PRC, the Group accrued provisions for simple
production maintenance, safety production and other related expenditures, recognised as expenses in
profit or loss and separately recorded as a specific reserve in shareholders equity. On utilisation of the
specific reserve as fixed assets within the stipulated scope, the full amount of accumulated depreciation
is recognised at the same time when the cost of the relevant assets is recorded. Under International
Financial Reporting Standards, these expenses are recognised in profit or loss as and when incurred.
Relevant capital expenditure is recognised as property, plant and equipment and depreciated according
to the relevant depreciation method. The effect on deferred tax arising from such difference is also
reflected.
IX. MAJOR FINANCIAL DATA OF EACH QUARTER OF 2016

Unit: RMB million
Second Third Forth

First quarter quarter quarter quarter
(January (April (July (October
March) June) September) December)
Revenue 39,402 39,321 46,080 58,324

Profit for the period attributable to equity
holders of the Company 4,741 6,086 7,821 6,262
Net cash generated from operating activities 15,225 22,982 23,967 19,709
Explanation on the differences between quarterly data and disclosed regular reporting data:
Applicable Not applicable

Section III Business Overview

I. EXPLANATION ON PRINCIPAL BUSINESSES AND OPERATION MODEL OF THE
COMPANY AND INDUSTRY CONDITIONS DURING THE REPORTING PERIOD
China Shenhua Energy Company Limited was established by Shenhua Group Company Limited as
the sole promotor in Beijing in November 2004. China Shenhua was listed on the Hong Kong Stock
Exchange and Shanghai Stock Exchange in June 2005 and October 2007, respectively.
The Group is principally engaged in the production and sale of coal and electricity, railway, port and
shipping transportation, and coal-to-olefins businesses. The integration of coal, power, railway, port,
shipping and coal chemical into one unified operation chain is the Groups unique operation and
profitability model. The Groups development strategy is the transforming into a world first-class
supplier of clean energy.
In terms of sales, the Group is the largest listed coal company in China and globally with the sales
volume of coal reaching 394.9 million tonnes in 2016. In terms of installed capacity of power generators,
the Group holds a leading position among the listed electricity companies in China with the installed
capacity of its controlled and operated power generators reaching 56,288MW by the end of 2016. The
Group controls and operates a network of concentric transportation railways around the major coal
production bases in western Shanxi, northern Shaanxi and southern Inner Mongolia as well as Shenshuo
Shuohuang Line, a major channel for coal transportation from western to eastern China, and at
the end of 2016, it controlled and operated railways with a total length of approximately 2,155 km.
The Group also operates a number of ports and docks, such as Huanghua Port, the largest port
for seaborne coal in 2016 (approximately 270 million tonnes/year seaborne operation capability in
aggregate), possesses the shipping transportation team comprising its own vessels with approximately
2.2 million tonnes of loading capacity; and coal-to-olefins businesses with approximately 0.6 million
tonnes/year of operation and production capacity.
During the reporting period, the Group made no significant change in the scope of its principal
businesses.
For industry conditions in which the Company operates, please refer to the section Directors Report
in the report.
II. EXPLANATION ON MATERIAL CHANGES IN MAJOR ASSETS OF THE COMPANY

DURING THE REPORTING PERIOD
In 2016, the changes in the major assets of the Company: affected by the strategic adjustments made
by the Company to the capital expenditure structure for certain years in the past, at the end of the
reporting period, the asset proportion of railway segment, power-generating segment and port segment
increased and the asset proportion of coal segment decreased compared with that at the beginning of
the reporting period.
As of 31 December 2016, the Groups total assets amounted to RMB576,729 million, representing an
increase of 3.0% as compared with that at the end of last year, and the equity attributable to equity
holders of the Company amounted to RMB316,975 million, representing an increase of 6.3% as
compared with that at the end of last year. The total offshore assets of the Group (including Hong Kong,
Macau and Taiwan) amounted to RMB22,792 million, representing 4.0% to total assets, which are
mainly composed of the assets from USD bonds issued in Hong Kong, PRC, and coal mine and power
generation assets in Australia and Indonesia.
Section III Business Overview (Continued)
III. ANALYSIS ON CORE COMPETITIVENESS DURING THE REPORTING PERIOD

The core competitiveness of the Group are mainly:
1. Unique operation and profitability model: The business model of the Group is vertical
integration which enables deepened cooperation, shared resources, synergy, low-cost operation,
and standardized, professional and all-rounded development, as well as maximizes profits driven
by every stage of coal-based industry. A unified operation chain ensures a stable and reliable
supply and internal demand contributing to lower operation costs and enhance competitiveness.
In 2016, by actively implementing national adjustment and control policy on the industry and fully
developing its advantages of unified operation, the Company achieved favorable results of cost
control and continuous increase in market share. Powerful synergy created among businesses
and strengthening overall competitiveness was clearly seen, resulting in a significant increase in
operating results.
2. Coal mining rights: The Group possesses an abundant pool of high-quality coal resources which
are suitable for modern high-quality and high-efficient shaft mining. As of the end of 2016, under
the coal mining rights possessed and controlled by China Shenhua, it had coal retained resources
of 24.01 billion tonnes and the recoverable coal reserves of 15.43 billion tonnes under the PRC
Standard; the marketable coal reserves of 8.85 billion tonnes under the JORC Standard. The coal
reserves of the Group is among the top of listed coal companies in China.
3. Management team focusing on core business and cutting-edge business minds: The
management team of China Shenhua has profound knowledge and management experience in
the industry, attaches great importance to enhancement of the Companys capabilities in value
creation, conducts operation with a focus on the principal businesses of the Company, and
persistently focuses on clean generation and utilisation in energy sector.
In 2016, the management team of the Company persistently promoted and implemented
the development strategies of clean energy for China Shenhua and promoted the Companys
endeavor towards building itself into a world-class supplier of clean energy, being a market leader
of clean development.
4. Advanced technology and innovation capabilities: With consistent efforts in advancing

its technology and innovation capabilities, China Shenhuas technology in coal exploitation
and production safety has secured a leading position in the global market, and that of clean
coal-fired power generation and heavy-loaded transportation has secured a leading position in
domestic market, basically establishing a unified operation system of technology and resources
and a technological innovation-driven development model comprising decision-making, system
management, research and development, and transformation of achievements.
In 2016, the National Key Laboratory of Water Resources Preservation and Utilisation in
Coal Mining was officially launched, and the Key Technology and Demonstration Project on
Intelligent Coal Mine Construction developed by Shendong Coal Group Corporation was awarded
the Second-Class Prize of the National Science and Technology Progress Award. During the
reporting period, the Group was granted 683 new patents, in which 125 patents were invention
patents.
5. Option and pre-emptive right to acquire: Pursuant to the Non-competition Agreement signed
between the Company and Shenhua Group Corporation, its controlling shareholder, the Company
is granted an option and pre-emptive right to acquire retained businesses and certain potential
businesses from Shenhua Group Corporation.
Section IV Chairmans Statement
Zhang Yuzhuo
Chairman
Section IV Chairmans Statement (Continued)
Dear Shareholders,
On behalf of the Board, I am delighted to present the 2016 annual report of China Shenhua and to report to all
shareholders on the Companys performance for the period.
In 2016, the national economy has been steady amidst slowdown trend and improved smoothly. The supply-
side reform of the coal industry was proactively promoted and preliminary outcome was seen in the progress
of resolving excess production capacities. Affected by dual influence of market and policy on adjusting
production volume, there was improvement in the severe imbalance between the demand for and supply
of coal while the market price has considerably rebounded, resulting in a better operating situation of coal
enterprises. The power consumption of the whole society grew at a faster pace as compared with the
previous year, however, thermal power enterprises were under increasing pressure in their operations due to
the relative overcapacity of thermal power supply and rising cost of power generation.
Facing fluctuating market trend, based on the clean energy development strategy, the staff at all levels of
China Shenhua have worked together to spare no efforts in structural optimisation, market expansion and
cost control, thereby achieving good operating results. In 2016, the Company recorded operating revenue of
RMB183,127 million, profit for the year of RMB31,970 million, profit for the year attributable to equity holders
of the Company of RMB24,910 million and basic earnings per share of RMB1.252, representing a year-on-year
increase of 3.4%, 28.1%, 41.1% and 41.1%, respectively.
As at 31 December 2016, the total market capitalisation of China Shenhua reached US$44.9 billion, ranking the
first among all listed coal companies worldwide and the fourth among all listed integrated mining companies
globally. It was also awarded the CCTV Top 10 Listed Companies in China for 2016 (2016 CCTV
). International credit rating agencies, including Moodys and Fitch, maintained the sovereign rating of the
international credit rating of China Shenhua.
2016: SEIZING MARKET OPPORTUNITIES, OPTIMISING OPERATION UNITS AND

CREATING FAVORABLE OPERATING RESULTS
Promoting clean energy development strategy proactively and developing new characteristics of
business structure
The Company strived to achieve clean production, clean transformation and clean utilisation of coal with
efforts in promoting the clean development of conventional energy. It continued to adjust industrial layout and
develop new characteristics of the business structure according to market changes. In accordance with the
International Financial Reporting Standards, before elimination on consolidation, the Company realised a profit
from operations of RMB17,017 million from the coal business, RMB17,568 million from the transportation
business and RMB11,689 million from the power business for the year, representing 36%, 38% and 25% of
the total profit from operations, respectively. The effective operation of the three business segments improves
the overall competitiveness and adaptability of the Company to changes of market trend.
Optimising the operation, exploring markets, and achieving integrated and efficient operation
Coal segment: The Company arranged production in a reasonable manner in accordance with the industry
policy and the changes in relationship between supply and demand in the markets. It organized its production
orderly in compliance with laws and regulations in response to the changes in policies on production capacities.
The production volume of commercial coal reached 289.8 million tonnes for the year, representing a year-on-
year increase of 3.2%.
The Company seized the opportunities brought by changes in coal market, timely adjusted the price and
strategy of coal sale and strengthened the expansion of new markets including the movement towards the
shipping route from the northern sea to the Yangtze River and transit bases, in order to elevate the market
shares. It focused on raising the sales volume of the seaborne coal with the highest unit gross profit margin
and enhanced the organisation of coal procured externally, in turn maximising the sales efficiency. The sales
volume of coal reached 394.9 million for the year, representing a year-on-year increase of 6.6%, of which
seaborne coal reached 226.4 million tonnes, representing a year-on-year increase of 11.1%.
Power segment: The Company continued to strengthen the management of the reliability of the power
generators and strived for a higher amount of power generation to ensure the stability of the power business.
The gross power generation reached 236.04 billion kWh while the total power output dispatch reached 220.57
billion kWh, representing a year-on-year increase of 4.5% and 4.8%, respectively.
Against the backdrop of overall slowdown in the national thermal power market, the Company actively
addressed to the power market reform, established regional power output dispatch companies and actively
participated in the market competition of direct power purchase by large power users to maintain its market
share. The average utilisation hours of coal-fired power generators were 4,428 hours, surpassing the national
average utilisation hours of thermal power generators by 263 hours.
Transportation segment: The Company proactively addressed to the fluctuation of the coal market, allocated
the transportation resources in a scientific manner, and enhanced the management over the integration
between the upstream and downstream industries, so as to improve service quality and ensure the efficient
synergy of the integration.
Coal chemical segment: The Company continued to optimise the production plan, heighten the production
efficiency and actively develop sales channels in order to achieve the operational stability. The sales volume of
coal-to-olefins products reached 574.7 thousand tonnes for the year.
Promoting macroscopic logistics and proactively achieving new profit growth areas
The Company proactively developed transportation resources. On the basis of delivering a sound performance
in the transportation of its own coal, it progressively opened transportation capacity to the public by utilising
the transportation network comprising Bazhun Railway and Zhunchi Railway, thereby opening up a new phase
of the transition of its transportation system from railways designated for coal transportation towards the
macroscopic logistics permeating Shenhua.
The Company increased the number of trains with the capacity of 10,000 tonnes, effectively increased turnover
of trains and enhanced the coal transportation efficiency, which significantly increased the transportation
capacity of railways and the volume of seaborne coal at its own ports. It established long-term strategic
partnership with major customers through efficient and convenient transportation services, thus excess
transportation capacities were fully utilised. The Companys own railways had a freight turnover of 244.6
billion tonne km, whilst the seaborne coal volume at the Companys own ports reached 201.3 million tonnes,
representing a year-on-year increase of 22.2% and 27.0%, respectively. The coal shipping volume at Huanghua
Port increased significantly, being the largest port for seaborne coal volume domestically for the first time.
The Company positively carried out macroscopic logistics transportation business in a long-distance and
pendulum manner and took the initiative to expand the scale of transportation of non-coal materials and reverse
transportation in order to improve the profitability of the transportation segment. The transportation services of
the railway segment provided to third parties generated revenue of 4,174 million, representing a year-on-year
increase of 22.0%.
Strengthening technological innovation and promoting clean development
The Company continued to promote the ultra-low emission renovation of coal-fired generating units and was
the first among power companies to complete the ultra-low emission renovation for all coal-fired generating
units in Beijing, Tianjin, Hebei and Anhui areas, leading the clean coal power generation development in China.
The ultra-low emission renovation of 16,460MW coal-fired generating units was completed, and the total
installed capacity of coal-fired generating units with ultra-low emission technology reached 36,770MW,
accounting for 67.6% of the total installed capacity of all coal-fired power generating units of the Company.
The emission performance for soot, sulphur dioxide and nitrogen oxides of thermal power generators for the
year were 0.021g/kWh, 0.096g/kWh and 0.16g/kWh respectively, which signified the encouraging result of the
prevention and control on air pollution. As of the end of the year, 48 ultra-low emission coal-fired generating
units were supported by policies including tariff subsidies, which facilitated profit realisation of the power
business of the Company under the market slowdown.
The Company accelerated the promotion of the establishment of digital mines and ecological construction and
explored green and efficient production methods of coal. The Key Technology and Demonstration Project on
Intelligent Coal Mine Construction launched was awarded the Second-Class Prize of the National Science and
Technology Progress Award. The National Key Laboratory of Water Resources Preservation and Utilisation
in Coal Mining was officially launched and a research and development system for clean coal was gradually
formed, which support the sustainable clean development of the coal business of the Company.
Implementing refined management and achieving outstanding performance in cost control
The strict implementation of a budget control system and quarterly assessment of cost and profit indicators
resulted in a significant effect in controlling costs of principal business segments. The unit production cost of
self-produced coal for the year amounted to RMB109.6/tonne, representing a year-on-year decrease of 11.0%,
which was better than that predicted at the beginning of the year.
The Company continued to optimise capital and debt structure, exercise effective management over
accounts and notes receivable. By conducting specific investigations on current accounts and assets as well
as controlling finance cost effectively with refined management, the capital risk was reduced. It vigorously
promoted the structural reform and optimisation of material management and proactively promoted the
communal storage and usage of materials of coal, power and transportation businesses in order to control the
increase in the inventory, striving to make materials management a third profit source.
Proactively fulfilling social responsibility and achieving safe and green development
The Company practically promoted the construction of risk prevention and safety control system, made more
efforts in safety control and inspection, and strengthened the implementation of accountability for safety
management, thereby elevating the level of production safety. The fatality rate per million tonne of coal output
of coal mines was zero in 2016, for which China Shenhua maintained a world-leading level in respect of safety
production in the industry.
By setting up a comprehensive on-line monitoring platform, strengthening the equipment upgrade and
renovation continuously and devoting more efforts to checks and rectification of hidden safety hazards, the
level of energy conservation and environmental protection of the Company was effectively raised. In 2016, the
Company invested a total amount of RMB2.605 billion in energy conservation and environmental protection
projects, which were mainly used in environmental protection projects such as removal of sulphur oxides,
nitrogen oxides and dust and energy conservation projects such as boiler improvement.
The reduction of carbon emission was actively promoted and Company-wide investigations and examination of
carbon were completed. The filings of voluntary emission reduction projects were systematically carried out for
the year, which laid a solid foundation to cope with the changes in policies on carbon emissions reduction and
carbon transactions.
For more information about our social responsibility efforts, please refer to the 2016 Corporate Social
Responsibility Report of the Group.
2017: OPTIMISING OPERATION AND ORGANISATION, IMPROVING QUALITY WHILE

ENHANCING EFFICIENCY COMPREHENSIVELY AND ACCELERATING THE PROMOTION
OF CLEAN AND EFFICIENT DEVELOPMENT
In 2017, it is expected that the global economy will be unstable with increasing uncertainties and slow
recovery. The organic growth of the domestic economy will still require reinforcement. The PRC government
will adhere to the general principle of making progress while ensuring stability. With the key target of
promoting the supply-side reform, it will properly expand the overall demand to facilitate stable and healthy
development of the economy. The government will endeavour to resolve excess production capacities of
coal and safeguard the dynamic balance between demand and supply of coal by eliminating the outdated
production capacities, adjusting the production volume and taking other measures in response to changes in
market demand. The coal price for the year will be subject to volatility based on the contract coal price. The
trend of relatively excess supply of thermal power will continue and power generation costs will rise, the
competition among power generation enterprises will increase.
China Shenhua will firmly adopt the clean energy development strategy as the leading strategy to further
leverage core competitiveness of the integrated operation, enhance the coordination and organisation of coal
production, transportation and marketing, strictly control the increase in costs and endeavour to achieve the
operating targets. Key emphasis will be placed on the following aspects:
Coordinating the production, transportation and marketing to further improving the operational
efficiency. Firstly, the Company will proactively implement the policy of excess capacity elimination, optimise
the production units and raise the production volume of the type of coal with good quality and high economic
efficiency based on the relationship between supply and demand. It will strive to secure the fulfilment of
contract coal based on the market environment, support the relative stability of coal price, endeavour to
raise the sales volume of seaborne coal with the greatest cost-efficiency and increase its efforts to promote
e-commerce sale, in a bid to increase the market share and ensure the sales revenue. Secondly, on the basis
of strengthening the refined management of power plants, the Company will actively promote the business of
direct power purchase by large internal and external power users and keep promoting the establishment of a
marketing system which is in line with the market practice, which strive to raise power output dispatch volume
and the higher average level of utilisation hours of generators than those of the same type of generators
in the same regions. Thirdly, on the basis of maintaining the cooperation with the existing key customers
in macroscopic logistics business. The Company will seek potential quality customers featured by reverse
transportation, bulk cargoes, long distance and mass transportation volume to further improve its economic
benefits.
Accelerating the implementation of clean energy development strategy. Firstly, the Company will
continue to increase its efforts in coal quality management, endeavour to develop clean coal products and
expand the regions by where clean coal will be replaced. It will continue to promote the construction of
smart and green digital mines, and push forward the technological reform for a safe, green, efficient and
environmental-friendly mine industry. Secondly, the Company will further accelerate the ultra-low emission
renovation of coal-fired generators and strive to achieve "ultra-low emission" of all coal-fired generators in
the eastern and central regions. the Company plans to complete the ultra-low emission renovation of 12
coal-fired generators with the total capacity of approximately 7,820MW to build a green model in coal-fired
power industry. Thirdly, it promotes the development of the logistic industry under the Internet+ logistics
model, thus providing the society with green, convenient and economical transportation channels.
Optimising the asset structure and enhancing efficiency while increasing quality on an on-going basis.
Firstly, the Company makes full use of existing resources to improve its profitability. It will continue to devote
its efforts to controlling costs and strive to achieve a continuous year-on-year decrease in the unit production
cost of self-produced coal and the controllable costs of other business segments remain constant as compared
to last year. The Company will further vitalise its assets to improve asset operational efficiency. Secondly, it
will strengthen the planning and management of capital expenditure and strictly control project investment for
sustainable development. The Company will optimise the risk assessment for project commencement and
the tracking and evaluation mechanism for economic benefits of key projects to further the risk control and
management level of investment projects. According to the investment return analysis on the total life cycle of
projects, it will properly arrange the construction schedule of projects to ensure the construction progress of
quality projects. The Company will proactively promote the project construction including the renovation of the
300 million tonne expansion capacity project of Shenshuo Railway and the construction of Huangda Railway.
The coal-fired power projects of Sumsel-1 Coal Power (2300MW) and Jawa-7 Coal Power (21,000MW) in
Indonesia will proceed in an orderly manner.
Focusing on safety and environmental protection and technological innovation to strengthen the
ability of sustainable development. The Company strengthen the accountability for safety production with
a focus on implementing the safety overhaul and devoting more efforts to checks and rectification of hidden
safety hazards, striving to remain zero fatality in its safety production. It will continuously optimise assessment
and accountability mechanisms and on-line monitoring platform of environmental safety, improve the work in
energy conservation and environmental protection in the whole industrial chain to prevent incidents relating to
environmental protection from happening. The Company will increase its investments in scientific research and
leverage the technological innovation to grasp the core technologies with their own intellectual property rights,
in order to accelerate the industrialization of the technology innovation outcome.
In 2017, China Shenhua will work pragmatically with steady confidence. It will facilitate the in integration of
various businesses and realise a healthy and sustainable development in order to create greater value for
investors.
Zhang Yuzhuo
Chairman
17 March 2017
Section V Directors Report
Overview of China Shenhuas Operating Results for the year of 2016
Table 1 Business targets for 2017 Table 2 Financial Indicators Table 3 Results of Each Segment
Target for Actual amount for 2016 2015 Change % Coal Power Railway Port Shipping Coal chemical Unallocated items Eliminations Total
Item Unit 2017 2016 Change % 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015
Revenue RMB million 183,127 177,069 3.4
Commercial coal production 100 million 2.98 2.898 2.8 RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million
Profit for the year RMB million 31,970 24,959 28.1
tonnes
EBITDA RMB million 70,762 62,597 13.0 Revenue from external customers 102,283 93,502 69,613 72,768 4,174 3,420 575 317 380 541 4,831 5,547 1,271 974 183,127 177,069
Coal sales volume 100 million 4.07 3.949 3.1 Inter-segment revenue 29,074 27,956 237 285 29,356 23,812 4,465 3,452 1,732 1,461 3 966 864 (65,830) (57,833)
Profit for the year attributable to RMB million 24,910 17,649 41.1
tonnes Sub-total of segment revenue 131,357 121,458 69,850 73,053 33,530 27,232 5,040 3,769 2,112 2,002 4,831 5,550 2,237 1,838 (65,830) (57,833) 183,127 177,069
equity holders of the Company
Power output dispatch billion kWh 214.7 220.57 (2.7) Segment cost of sales (109,404) (107,493) (53,939) (49,788) (17,350) (14,595) (2,523) (2,026) (1,707) (1,760) (4,330) (4,720) (67) (196) 64,477 57,237 (124,843) (123,341)
Basic earnings per share RMB/share 1.252 0.887 41.1
Revenue RMB100 million 2,036 1,831.27 11.2 Segment profit/(loss) from
Cost of sales RMB100 million 1,428 1,248.43 14.4 Net cash generated from RMB million 81,883 55,406 47.8 operations 17,017 6,433 11,689 18,810 15,000 10,070 2,302 1,350 266 133 254 649 1,261 808 (1,345) (596) 46,444 37,657
Selling, general and administrative RMB100 million 147 140.58 4.6 operating activities
expenses and net finance costs Net cash generated from RMB million 92,564 46,341 99.7 As at As at As at As at As at As at As at As at As at As at As at As at As at As at As at As at As at As at
Change in unit production costs of / year-on-year year-on-year / operating activities 31 December 2016 31 December 2015 31 December 2016 31 December 2015 31 December 2016 31 December 2015 31 December 2016 31 December 2015 31 December 2016 31 December 2015 31 December 2016 31 December 2015 31 December 2016 31 December 2015 31 December 2016 31 December 2015 31 December 2016 31 December 2015
self-produced coal decrease of decrease of excluding Shenhua RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million
1% to 2% 11.0% Finance Company Segment total assets 198,140 246,972 207,879 229,773 125,152 124,661 22,489 22,303 8,038 8,189 11,621 12,564 377,853 348,720 (374,443) (433,391) 576,729 559,791
Segment total liabilities (116,711) (115,814) (134,519) (131,373) (65,396) (61,284) (10,135) (10,950) (2,063) (2,363) (4,686) (5,593) (137,179) (185,478) 278,929 316,985 (191,760) (195,870)
Table 4 Operation Data Table 5 Commercial Coal Production Volume

Table 6 Power Business Table 7 Cost of Sales of Coal Segment Table 8 Cost of Sales of Power Segment
2016 2015 Change % 2016 2015 Change
Standard coal Increase/ 2016 2015 2016 2015
Commercial coal production million tonnes 289.8 280.9 3.2 million tonnes million tonnes %
consumption Total installed (decrease) Total installed Equity installed Cost Volume Unit cost Cost Volume Unit cost Change in Power Power
Coal sales million tonnes 394.9 370.5 6.6 Total production 289.8 280.9 3.2 RMB million RMB/ RMB million RMB/ unit cost output output
Total power Average rate for power capacity as at in installed capacity as at capacity as at
Including: Self-produced coal million tonnes 285.5 289.3 (1.3) By mines Gross power output utilisation output 31 December capacity for 31 December 31 December million tonnes tonne million tonnes tonne % Cost dispatch Unit cost Cost dispatch Unit cost Change in
Purchased coal million tonnes 109.4 81.2 34.7 Shendong Mines 183.0 177.0 3.4 RMB 100 million 100 million unit cost
Power plants Regional grid Location generation dispatch hours dispatch Power tariff 2015 2016 2016 2016 Cost of coal purchased 26,286 109.4 240.3 17,264 81.2 212.6 13.0
Gross power generation billion kWh 236.04 225.79 4.5 Zhungeer Mines 62.9 63.6 (1.1) million kWh RMB/mWh RMB million kWh RMB/mWh %
100 million kWh 100 million kWh hours g/kWh RMB/mWh MW MW MW MW Production cost of self-produced 31,297 285.5 109.6 35,654 289.3 123.2 (11.0)
Total power output dispatch billion kWh 220.57 210.45 4.8 Shengli Mines 16.0 12.1 32.2 Cost of power output 52,472 2,205.7 237.9 48,269 2,104.5 229.4 3.7
Zhungeer Power North China Power Grid Inner Mongolia 36.3 32.1 3,784 385 198 960 960 554 coal
Polyethylene sales thousand tonnes 292.6 319.2 (8.3) Baorixile Mines 25.0 25.1 (0.4) dispatch
Baotou Mines 1.1 1.2 (8.3) Guohua Zhungeer North China Power Grid Inner Mongolia 48.4 43.6 3,669 314 207 1,320 1,320 639 Materials, fuel and power 5,220 285.5 18.3 5,949 289.3 20.6 (11.2)
Polypropylene sales thousand tonnes 282.1 312.9 (9.8) Materials, fuel and power 34,438 2,205.7 156.1 31,676 2,104.5 150.5 3.7
Others 1.8 1.9 (5.3) Guohua Hulunbeier Power Northeast Power Grid Inner Mongolia 46.4 41.5 3,864 328 229 1,200 1,200 960 Personnel expenses 5,030 285.5 17.6 5,122 289.3 17.7 (0.6)
Transportation turnover of billion tonne km 244.6 200.1 22.2 Personnel expenses 3,720 2,205.7 16.9 3,526 2,104.5 16.8 0.6
Shendong Power Northwest/North China/ Inner Mongolia 297.1 273.8 3,629 340 251 8,187 8,187 7,534 Repairs and maintenance 2,474 285.5 8.7 2,674 289.3 9.2 (5.4)
By regions Repairs and maintenance 2,732 2,205.7 12.4 2,609 2,104.5 12.4
self-owned railway Depreciation and amortization 6,260 285.5 21.9 7,282 289.3 25.2 (13.1)
Inner Mongolia 191.1 183.2 4.3 Shaanxi Provincial Local Depreciation and 9,095 2,205.7 41.2 8,517 2,104.5 40.5 1.7
Seaborne coal million tonnes 226.4 203.8 11.1 Shaanxi 92.7 92.1 0.7 Others 12,313 285.5 43.1 14,627 289.3 50.5 (14.7) amortization
Power Grid
Shipping volume million tonnes 79.2 79.8 (0.8) Shanxi 4.2 3.7 13.5 Cost of coal transportation 42,221 38,488 Others 2,487 2,205.7 11.3 1,941 2,104.5 9.2 22.8
Cangdong Power North China Power Grid Hebei 139.0 132.4 5,515 304 297 2,520 2,520 1,285
Shipment turnover billion tonne nm 63.0 64.1 (1.7) Overseas 1.8 1.9 (5.3) Other operating costs 4,313 11,645 Other operating costs 483 823
Sanhe Power North China Power Grid Hebei 63.3 58.9 4,870 296 304 1,300 1,300 501
Tax and surcharges 5,287 4,442 Tax and surcharges 984 696
Dingzhou Power North China Power Grid Hebei 137.5 127.2 5,457 317 301 2,520 2,520 1,021
Total cost of sales 109,404 107,493 Total cost of sales 53,939 49,788
Table 9 Domestic Coal Sales Volume Table 10 Capital Expenditure Plan for 2017 Taishan Power South China Power Grid Guangdong 177.5 165.9 3,550 313 375 5,000 5,000 4,000
Huizhou Thermal South China Power Grid Guangdong 30.6 27.7 4,642 328 380 660 660 660
2016 Proportion of 2015 Change Plan for 2017 Completion in 2016 Zheneng Power East China Power Grid Zhejiang 198.8 187.8 4,518 303 342 4,400 4,400 2,640
Table 11 Cost of Sales of Transportation and Coal
domestic sales Total amount Including: First batch Zhoushan Power East China Power Grid Zhejiang 43.6 40.8 4,792 342 347 910 910 464
million tonnes % million tonnes % Shenwan Energy East China Power Grid Anhui 214.8 204.5 4,669 301 301 4,600 4,600 2,346 Coal Chemical Segments Railway Port Shipping Chemical
100 million 100 million 100 million
Domestic sales 386.2 100.0 365.5 5.7 Taicang Power East China Power Grid Jiangsu 66.0 63.2 5,241 298 315 1,260 1,260 630 2016 2015 Change 2016 2015 Change 2016 2015 Change 2016 2015 Change
Coal segment 17.6 58.3 Chenjiagang Power East China Power Grid Jiangsu 68.8 65.6 5,212 288 310 1,320 1,320 726 RMB million RMB million % RMB million RMB million % RMB million RMB million % RMB million RMB million %
By region Northern China 185.6 48.1 210.8 (12.0)
Xuzhou Power East China Power Grid Jiangsu 103.9 98.6 5,193 289 313 2,000 2,000 2,000
Eastern China 126.2 32.7 95.8 31.7 Power segment 109.5 178.3 Cost of internal transportation business 14,331 12,352 16.0 2,160 1,810 19.3 1,386 1,147 20.8 / / /
Suizhong Power Northeast Power Grid Liaoning 164.1 153.7 4,365 311 300 3,760 3,760 1,880
Central China and 46.6 12.0 38.9 19.8 Transportation segment 41.6 55.7 Materials, fuel and power 2,444 2,034 20.2 317 258 22.9 216 308 (29.9) 1,968 2,269 (13.3)
Fujian Energy East China Power Grid Fujian 105.1 99.8 4,589 308 304 3,240 (540) 2,700 1,324
Southern China Personnel expenses 2,856 2,433 17.4 258 235 9.8 / / / 276 270 2.2
Including: Railway 38.2 38.2 Jinjie Energy North China Power Grid Shaanxi 147.5 135.3 6,144 325 244 2,400 2,400 1,680
Northeast China 24.9 6.4 19.1 30.4 Repairs and maintenance 3,392 2,804 21.0 232 134 73.1 26 14 85.7 362 251 44.2
Shenmu Power Northwest Power Grid Shaanxi 9.0 7.9 4,094 382 296 220 220 112
Others 2.9 0.8 0.9 222.2 Port 3.0 17.4 Depreciation and amortization 3,624 3,174 14.2 831 743 11.8 205 168 22.0 907 868 4.5
Shenhua Sichuan Energy Sichuan Power Grid Sichuan 24.0 21.6 1,901 332 375 1,260 1,260 604
By usage Thermal coal 289.2 74.9 244.2 18.4 Shipping 0.4 0.1 (coal-fired power) External transportation charges 701 572 22.6 / / / 701 424 65.3 / / /
Metallurgy 6.7 1.7 6.0 11.7 Coal chemical business 0.8 1.0 Mengjin Power Central China Power Grid Henan 44.4 41.8 3,701 308 307 1,200 1,200 612 Others 1,314 1,335 (1.6) 522 440 18.6 238 233 2.1 119 260 (54.2)
Chemical (including 32.3 8.4 31.2 3.5 Shouguang Power North China Power Grid Shandong 25.6 24.1 5,034 290 294 2,000 2,000 1,200 Cost of external transportation business 2,145 1,867 14.9 252 140 80.0 318 612 (48.0) / / /
Others 0.5
coal slurry) Panshan Power North China Power Grid Tianjin 52.9 49.6 4,994 314 331 1,060 1,060 482 Sub-total cost of prime business 16,476 14,219 15.9 2,412 1,950 23.7 1,704 1,759 (3.1) 3,632 3,918 (7.3)
Others 58.0 15.0 84.1 (31.0) Total 350 169.5 293.8 Ningdong Power Northwest Power Grid Ningxia 34.2 30.6 5,184 359 205 660 660 660 Other operating costs 497 158 214.6 72 60 20.0 / / / 533 538 (0.9)
Liuzhou Power Guangxi Power Grid Guangxi 2.1 1.9 3,095 320 328 700 700 364 Tax and surcharges 377 218 72.9 39 16 143.8 3 1 200.0 165 264 (37.5)
EMM Indonesia PLN Indonesia 16.4 14.3 5,470 369 476 300 300 210 Total cost of sales 17,350 14,595 18.9 2,523 2,026 24.5 1,707 1,760 (3.0) 4,330 4,720 (8.3)
Table 12 Coal Sales Price
Total for coal-fired power plants/weighted average 2,297.3 2,144.2 4,428 315 301 52,257 2,160 54,417 35,089
2016 2015 Change Other power plants Table 14 Seaborne Coal at Ports Table15 Railway Cargo Transportation Turnover
Sales Percentage Sales Percentage
Zhuhai Wind Energy South China Power Grid Guangdong 0.3 0.3 1,952 596 16 16 12 2016 2015 Change 2016 2015 Change
volume to total volume to total Sales million tonnes million tonnes %
Shenhua Sichuan Energy Sichuan Provincial Local Sichuan 6.7 6.5 5,331 223 125 125 48 billion tonnes km billion tonnes km %
million sales volume Price RMB/ million sales volume Price RMB/ volume Price (hydropower) Power Grid Self-owned ports 201.3 158.5 27.0 Self-owned railways 244.6 200.1 22.2
tonnes % tonne tonnes % tonne % % Beijing Gas-fired Power North China Power Grid Beijing 40.1 39.1 4,218 211 509 950 950 950 Huanghua Port 158.6 111.6 42.1 Shenshuo Railway 49.2 45.6 7.9
I. Domestic sales 386.2 97.8 317 365.5 98.7 293 5.7 8.2 Yuyao Power East China Power Grid Zhejiang 16.0 15.6 2,055 231 608 780 780 624 Shenhua Tianjin Coal Dock 39.5 40.3 (2.0) Shuohuang-Huangwan Railway 154.3 118.7 30.0
(I) Self-produced coal and purchased coal 374.4 94.8 316 354.1 95.6 292 5.7 8.2 Shenhua Zhuhai Coal Dock 3.2 6.6 (51.5) Dazhun Railway 24.2 25.7 (5.8)
1. Direct arrival 151.3 38.3 229 151.5 40.9 221 (0.1) 3.6 Baoshen Railway 7.3 7.8 (6.4)
2.Seaborne 223.1 56.5 376 202.6 54.7 345 10.1 9.0
Table 13 Coal Resources Reserve Third-party ports 25.1 45.3 (44.6)
Ganquan Railway 0.9 0.5 80.0
Coal resources (under PRC standard) Recoverable reserve (under PRC standard) Marketable reserve (under JORC standard) Total seaborne coal 226.4 203.8 11.1 Bazhun Railway 1.2 0.4 200.0
(II) Sales of domestic trading coal 11.6 2.9 339 11.2 3.0 318 3.6 6.6
(III) Sales of imported coal 0.2 0.1 415 0.2 0.1 413 0.5 As at As at As at As at As at As at Zhunchi Railway 7.5 1.4 435.7
Tahan Railway /
II. Export sales 3.3 0.8 407 1.2 0.3 443 175.0 (8.1) Mines 31 December 2016 31 December 2015 Change 31 December 2016 31 December 2015 Change 31 December 2016 31 December 2015 Change Table 16 Shipping Volume
100 million tonnes 100 million tonnes % 100 million tonnes 100 million tonnes % 100 million tonnes 100 million tonnes % State-owned railways 26.6 41.3 (35.6)
III. Overseas coal sales 5.4 1.4 276 3.8 1.0 218 42.1 26.6
2016 2015 Change
(I) EMM Indonesia 1.8 0.5 97 1.9 0.5 84 (5.3) 15.5 Shendong Mines 164.5 166.6 (1.3) 95.4 97.6 (2.3) 51.6 41.9 23.2 Total railway turnover 271.2 241.4 12.3
million tonnes million tonnes %
(II) Re-export trade 3.6 0.9 367 1.9 0.5 358 89.5 2.5 Zhungeer Mines 40.1 40.7 (1.5) 32.2 32.8 (1.8) 21.7 19.3 12.4 Planned annual
Shengli Mines 20.6 20.7 (0.5) 14.1 14.2 (0.7) 2.5 7.3 (65.8) Shenhua Zhonghai Shipping Company
Total sales volume/average price 394.9 100.0 317 370.5 100.0 293 6.6 8.2 Self-owned railways under transportation Commencement Estimated
Baorixile Mines 14.4 14.6 (1.4) 12.2 12.4 (1.6) 12.6 12.8 (1.6) The Groups internal customers 60.7 52.3 16.1
Including: Sales to external customers 305.5 77.4 321 281.6 76.0 294 8.5 9.2 construction Length capacity year completion year
Baotou Mines 0.5 0.5 0.4 0.4 0.1 0.1 External customers 18.5 27.5 (32.7)
Sales to internal power segment 85.4 21.6 308 84.6 22.8 292 0.9 5.5 Huangda Railway (under construction) 210.2km 40 million tonnes 2015 2018
Sales to internal coal chemical segment 4.0 1.0 237 4.3 1.2 236 (7.0) 0.4 Total of China Shenhua 240.1 243.1 (1.2) 154.3 157.4 (2.0) 88.5 81.4 8.7 Total of shipping volume 79.2 79.8 (0.8) Amo Railway (construction suspended) 97km 15.52 million tonnes / /

Assets Distribution Map 2017

Hulunbeier Molidawaqi
B8 C11
COAL MINE POWER
A4
CHINA Amoqi B1. B8. B15. B22.
Heilongjiang A1. Cangdong Power Guohua Hulunbeier Power Taishan Power Shenhua Sichuan Energy
Qiqihar Shendong Mines
B2. B9. B16. B23.
A2. Sanhe Power Beijing Gas Power Huizhou Thermal Shenhua Fujian Energy
Zhungeer Mines
B3. B10. B17. B24.
A3. Dingzhou Power Suizhong Power Mengjin Power Ningdong Power
Shengli Mines
B4. B11. B18. B25.
A4. Panshan Power Zheneng Power Taicang Power
EMM Nansu
Baorixile Mines
B5. B12. B19. B26.
A5. Zhuhai Wind
Zhungeer Power Zhoushan Power Chenjiagang Power
Inner Mongolia Autonomous Region Baotou Mines B27.
Jilin B6. B13. B20.
Tavan Tolgoi A6. Yuyao Power
Shendong Power Jinjie Energy Xuzhou Power
B25 Xinjiang
Watermark Coal Project in Australia (plans under review)
B7. B14. B21.
B28.
A7. Shouguang Power
A3 Guohua Zhungeer Shenmu Power Shenwan Energy
Xinjie Taigemiao Exploration Area (preliminary work in progress) B29.
Liuzhou Power
Liaoning
RAILWAY PORT COAL CHEMICAL

Beijing C1. D1. F1.
Shenshuo Railway Huanghua Port Baotou Coal Chemical
C2. D2.
Tianjin Shuohuang Railway
Tianjin Coal Dock
A6 C3.
Huangwan Railway D3.
C4. Zhuhai Coal Dock SHIPPING
Dazhun Railway D4. ()
B24 Hebei C5. Luoyuan Wan Project (under preparation)
E1.
Baoshen Railway Shenhua Zhonghai Shipping Company
Ningxia C6.
Bazhun Railway

Qinghai C7.
Ganquan Railway
Shanxi Shandong
B17 C8.
Zhunchi Railway
C9.
Gansu B20 Huangda Railway (under construction)
C10.
Shaanxi
Tahan Railway
Henan Jiangsu C11.
Amo Railway (construction suspended)
2017317
Tibet
Note: This map as at 17 March 2017 is for illustrative purpose only.
B19
E1

Anhui
B18
B21 Shanghai
Ganqimaodu
B22 Hubei
Sichuan B12
INNER MONGOLIA AUTONOMOUS REGION
Legend B27

Chongqing
Zhejiang B11

BEIJING
B9 B10
Waixigou
Provincial Boundary C7
Daqin Railway
B4 Qinhuangdao Port
Datong East
Jiangxi
Hunan A5 C4
B2

State-owned or Local Railway F1
Baotou
B23 A2 Diandaigou
Guizhou Diaoyu Islands
Tarangaole C5 Hanjiacun
Fujian C8
Self-owned Railway (in operation) Dongsheng B5
D4 C10
C6
B7 TIANJIN

Zhungeer
D2

Self-owned Railway (under construction) Batuta Caofeidian Port
Yunnan HEBEI
B29 A7 A1

Shuozhou West
Shendong

Taiwan C3
Guangdong
Self-owned mines Guangxi B16
B6
Shenchi B1
B13 B14 Shenchi South D1
B3
B15
Shenmu North C1 C2
Huanghua
B26 Dingzhou West
Hongkong Suning North
D3

Macau
SHANXI Dongying
SHAANXI C9
B28

Dajiawa
Hainan
51.00% CLP Guohua Shenmu Power Co., Ltd.
Equity structure diagram 60.00% Zhejiang Guohua Zheneng Power Generation Co., Ltd.
73.33% Zhuhai Guohua Huidafeng Wind Energy Development Co., Ltd.
80.00% Zhejiang Guohua Yuyao Gas-fired Power Co., Ltd.
100.00% Shenhua Shendong Coal Group Co., Ltd. 51.00% Hebei Guohua Cangdong Power Co., Ltd.
57.76% Shenhua Zhungeer Energy Co., Ltd. 40.50% Hebei Guohua Dingzhou Power Generation Co., Ltd.
62.82% Shenhua Beidian Shengli Energy Co., Ltd. 80.00% Guangdong Guohua Yudean Taishan Power Co., Ltd.
60.00% Shenhua Xinjie Energy Co., Ltd. 70.00% Shenhua Guohua International Power Co., Ltd.
H Share Coal Production Major Controlling Companies 70.00% Shaanxi Guohua Jinjie Energy Co., Ltd.
17.09% 100.00% Shenhua Baotou Energy Co., Ltd.
Shareholders
56.61% Shenhua Baorixile Energy Co., Ltd. 65.00% Tianjin Guohua Jinneng Power Co., Ltd.
55.00% Jiangsu Guohua Chenjiagang Power Co., Ltd.

50.10% Yulin Shenhua Energy Co., Ltd.
Major
Controlling 70.00% PT GH EMM Indonesia
60.00% Shenhua Bayannur Energy Co., Ltd. Companies
92.00% Shenhua Guohua Beijing Electric Power Research Institute Co., Ltd.
Shenhua Australia Holdings Pty Limited
60.00% Shenhua Guohua Shouguang Power Generation Company Limited
Shendong Coal Branch
Major Branches 100.00% Shenhua Shendong Power Co., Ltd.
Haerwusu Coal Branch
Shenhua Group
Corporation 73.06%
100.00% Shenhua Fujian Energy Co., Ltd.
Limited 51.00% Shenwan Energy Co., Ltd.
51.00% Shenhua Guohua Mengjin Power Generation Co., Ltd.

Coal Sales 100.00% Shenhua Sales Group Co., Ltd.
51.00% Shenhua Guohua Zhangzhou Power Co., Ltd.
80.00% Inner Mongolia Guohua Hulunbeier Power Generation Co., Ltd.

Other A Share 9.85% Power Generation 51.00% Shenhua Sichuan Energy Co., Ltd.
Shareholders 100.00% Shenhua Baoshen Railway Group Co., Ltd.
52.00% Shenhua Guohua Guangtou (Beihai) Power Generation Co., Ltd.
88.16% Shenhua Baoshen Railway Co., Ltd.
88.46% Shenhua Ganquan Railway Co., Ltd. 100.00% Shenhua Guohua (Beijing) Gas Thermal Power Co., Ltd.
90.00% Shenhua Xinzhun Railway Co., Ltd. 50.00% Guohua Taicang Power Co., Ltd.
52.72% Shuohuang Railway Development Co., Ltd. 100.00% Shenhua Guohua Jiujiang Power Co., Ltd.
Major Controlling Companies 85.00% Shenhua Zhunchi Railway Company Limited 100.00% Shenhua Guohua Yongzhou Power Co., Ltd.
100.00% Shenhua Mengdong Railway Co., Ltd.
52.20% Shenhua Guohua Guangtou (Liuzhou) Power Generation Co., Ltd.
Railway 100.00% Shenhua Railway Transportation Co., Ltd.
100.00% Guohua Xuzhou Power Generation Co., Ltd.
Shenshuo Railway Branch
China Shenhua Major Branches 100.00% Ningxia Guohua Ningdong Power Generation Co., Ltd.
Energy Company Limited Railway Track Mechanical Maintenance Branch
51.00% Shenhua Guohua (Zhoushan) Power Generation Co., Ltd.
70.00% Shenhua Huanghua Harbour Administration Co., Ltd.
51.00% Shenhua Guohua Qingyuan Power Generation Co., Ltd.
Port 55.00% Shenhua Tianjin Coal Dock Co., Ltd.
40.00% Shenhua Yudean Zhuhai Port Coal Dock Co., Ltd. 75.00% PT. Shenhua Guohua Lion Power Indonesia
70.00% Shenhua Guohua (Indonesia) Jawa Power Generation Co., Ltd.

Shipping 51.00% Shenhua Zhonghai Shipping Co., Ltd.
100.00% Shenhua Guohua Guangdong Electricity Sales Co., Ltd.
100.00%
(Directly and
Shenhua Finance Co., Ltd.
Shenhua Baotou Coal indirectly controlled) 100.00% Shenhua Guohua (Beijing) Distributed Energy Technology Co., Ltd.
Coal Chemical 100.00%
Chemical Co., Ltd. 100.00% Shenhua Logistics Group Corporation Limited
100.00% Shenhua Information Technology Co., Ltd.
56.77% Shenhua Guohua Ningdong Power Generation Co., Ltd.
Others Major Controlling Companies 100.00% Shenhua Geological Exploration Co., Ltd. 65.00% Tianjin Guohua Panshan Power Generation Co., Ltd.
100.00% China Shenhua Overseas Development and Investment Co., Ltd.
100.00% 55.00% Sanhe Power Co., Ltd.
100.00% Shenhua Hong Kong Limited 50.00% Suizhong Power Co., Ltd.
100.00% Shenhua Zhunneng Group Co., Ltd. 65.00% Inner Mongolia Guohua Zhungeer Power Generation Co., Ltd.
Note: The equity structure diagram of China Shenhua (including major branches/ 51.00% Shenhua (Tianjin) Financial Leasing Co., Ltd.
subsidiaries) as at 31 December 2016 is for illustrative purpose only.
Guohua Power Branch
Major
Branches Shengli Energy Branch
Guohua Huizhou Thermal Power Branch
51.00% Shenhua Funeng Power Generation Co., Ltd.

Section V Directors Report

I. BUSINESS REVIEW
In 2016, the demand and supply in the coal industry had been developed towards balance, while the
competition increased in the power industry. Under the complex and changing business environment,
China Shenhua organized operation delicately, intensified its efforts to explore new market opportunities,
prioritized seaborne coal sales, enhanced marketing efforts in the power segment, improved the
utilisation rate of transportation assets, and strengthened cost control, which enabled the Company to
meet its annual business objectives.
The Group recorded a profit for the year of RMB31,970 million in 2016 (2015: RMB24,959 million)
representing a year-on-year increase of 28.1%; a profit for the year attributable to equity holders of the
Company of RMB24,910 million (2015: RMB17,649 million); and basic earnings per share of RMB1.252/
share (2015: RMB0.887/share), representing a year-on-year increase of 41.1%.
Actual Actual
amount for Target for Proportion of amount for Year-on-year
2016 2016 completion 2015 change
(after
adjustments) (%) (%)
Commercial coal production 100 million tonnes 2.898 2.8 103.5 2.809 3.2
Coal sales 100 million tonnes 3.949 3.55 111.2 3.705 6.6
Total power output dispatch Billion kWh 220.57 211.40 104.3 210.45 4.8
Revenue RMB100 million 1,831.27 1,560 117.4 1,770.69 3.4
Cost of sales RMB100 million 1,248.43 1,104 113.1 1,233.41 1.2
Selling, general and RMB100 million 140.58 150 93.7 148.13 (5.1)
administrative expenses
and net finance costs
Changes in unit production / Year-on-year Year-on-year / Year-on-year /
costs of self-produced decrease of decrease of decrease of
coal 11.0% 5% 6.7%
Note: Upon the approval at the 18th meeting of the third session of the Board, the Company has made adjustments to the
operating target for 2016 pursuant to industry policies and based on market environment and operation of the Company.
Major financial indicators of the Group for 2016 are as follows:
2016 2015 Change

(%)
Return on total assets as at the % 5.5 4.5 Increased by 1.0

end of the period percentage point
Return on net assets as at the % 7.9 5.9 Increased by 2.0
end of the period percentage points
EBITDA RMB million 70,762 62,597 13.0
As at As at
2016 2015 Change
(%)
Equity attributable to equity RMB/share 15.94 14.99 6.3

holders per share
Gearing ratio % 33.2 35.0 Decreased by 1.8
percentage points
Total debt to total debt and total % 22.0 23.1 Decreased by 1.1
equity ratio percentage points
Note: Please refer to the section headed Definitions of this report for the calculations of the above indicators.
Section V Directors Report (Continued)
II. DISCUSSION AND ANALYSIS ON MAJOR OPERATION DATA DURING THE

REPORTING PERIOD
(I) Analysis on principal business
Changes in the Major Items in the Consolidated Statement of Profit or Loss and Other
Comprehensive Income and Consolidated Statement of Cash Flows
Unit: RMB million
Items 2016 2015 Change

(%)
Revenue 183,127 177,069 3.4

Cost of sales (124,843) (123,341) 1.2
General and administrative expenses (8,423) (9,714) (13.3)
Other gains and losses (3,078) (5,856) (47.4)
Other income 1,379 1,659 (16.9)
Other expenses (1,511) (626) 141.4
Interest income 723 608 18.9
Finance costs (5,748) (5,123) 12.2
Share of results of associates 237 428 (44.6)
Income tax expense (9,283) (9,561) (2.9)
Net cash generated from operating activities 81,883 55,406 47.8
Of which: Net cash (used in)/generated from
operating activities of Shenhua
Finance CompanyNote (10,681) 9,065 (217.8)
Net cash generated from operating activities
excluding the effect of Shenhua Finance
Company 92,564 46,341 99.7
Net cash used in investing activities (64,654) (26,123) 147.5
Net cash used in financing activities (18,490) (23,157) (20.2)
Note: As Shenhua Finance Company provides financial services including deposits and loans for entities other than the
Group, the item represents the cash flows of deposits and loans and interest, fees and commission used by this
business.
1. Revenue and costs
(1) Factors affecting the revenue
The revenue of the Group in 2016 recorded a year-on-year increase of 3.4%. The
main reasons for such change are:
The enhancement of effort in the sales of purchased coal by making good use
of self-owned transportation of the Group, resulting in a year-on-year increase
of 6.6% in the sales of coal to 394.9 million tonnes for year 2016 (2015: 370.5
million tonnes). Affected by the recovery of the market, the average sales
price of coal was RMB317 per tonne (2015: RMB293 per tonne), representing
a year-on-year increase of 8.2%;
The power output dispatch of the Group in 2016 was 220.57 billion kWh
(2015: 210.45 billion kWh), representing a year-on-year increase of 4.8%;
being affected by the decrease in on-grid tariff, the average power tariff of the
Group was RMB307/mWh (2015: RMB334/mWh), representing a year-on-year
decrease of 8.1%;
A decrease in the materials trading business volume.
Changes
for 2016
compared
with that
Major operating indicators Unit 2016 2015 for 2015 2014
(%)
(I) Coal
1. Commercial coal production Million tonnes 289.8 280.9 3.2 306.6
2. Coal sales Million tonnes 394.9 370.5 6.6 451.1
Of which:
Self-produced coal Million tonnes 285.5 289.3 (1.3) 298.7
Purchased coal Million tonnes 109.4 81.2 34.7 152.4
(II) Power generation
1. Gross power generation Billion kWh 236.04 225.79 4.5 234.38
2. Total power output dispatch Billion kWh 220.57 210.45 4.8 218.42
(III) Coal chemical
1. Sales of polyethylene Thousand 292.6 319.2 (8.3) 265.5
tonnes
2. Sales of polypropylene Thousand 282.1 312.9 (9.8) 268.1
tonnes
(IV) Transportation
1. Turnover of self-owned railway Billion tonne km 244.6 200.1 22.2 223.8
2. Seaborne coal Million tonnes 226.4 203.8 11.1 235.8
Of which:
Via Huanghua Port Million tonnes 158.6 111.6 42.1 131.6
Via Shenhua Tianjin Million tonnes 39.5 40.3 (2.0) 36.6
Coal Dock
Via Shenhua Zhuhai Million tonnes 3.2 6.6 (51.5) 5.8
Coal Dock
3. Shipping volume Million tonnes 79.2 79.8 (0.8) 87.7
4. Shipment turnover Billion tonne 63.0 64.1 (1.7) 72.2
nautical miles
(2) Changes in costs
Unit: RMB million
Change in
amount for
Percentage Percentage the year
to cost of Amount for to cost of over that of
Amount for sales for the previous sales for the the previous
Breakdown of cost items the year the year year previous year year
(%) (%) (%)
Cost of coal purchased 26,286 21.1 17,264 14.0 52.3

Materials, fuel and power 16,405 13.1 15,816 12.8 3.7
Personnel expenses 12,661 10.1 11,874 9.6 6.6
Depreciation and amortization 21,744 17.4 21,134 17.1 2.9
Repairs and maintenance 9,509 7.6 8,619 7.0 10.3
Transportation charges 10,172 8.2 12,193 9.9 (16.6)
Taxes and surcharges 6,922 5.6 5,833 4.7 18.7
Others 21,144 16.9 30,608 24.9 (30.9)
Total cost of sales 124,843 100.0 123,341 100.0 1.2
The cost of sales of the Group in 2016 represented a year-on-year increase of 1.2%,
of which:
The cost of coal purchased represented a year-on-year increase of 52.3%,

which was mainly attributable to: firstly, the enhancement of effort on sales of
purchased coal by the Group, the sales of purchased coal represented a year-
on-year increase of 34.7%; secondly, being affected by the increase in coal
price for the second half of year, the average purchase costs of purchased
coal for the year represented a year-on-year increase;
Repairs and maintenance expenses represented a year-on-year increase

of 10.3%, which was mainly attributable to the increase in repairs and
maintenance expenses of transportation business as a result of the increase
of transportation turnover of self-owned railways and seaborne coal volume
via ports;
Transportation charges represented the costs incurred through external

railway, expressway, shipping transportation, the use of external port and
so forth. Such charges represented a year-on-year decrease of 16.6% in
2016, which was mainly attributable to the decrease in transportation volume
through national railways;
Taxes and surcharges represented a year-on-year increase of 18.7%, which

was mainly attributable to the inclusion of tax on vehicles and vessels use,
real estate tax, land-use tax and stamp duty originally included in general
and administrative expenses to taxes and surcharges since 2016 based on
relevant requirements; and the increase in resource tax and relevant surtaxes
resulting from an increase in coal price;
Other costs represented a year-on-year decrease of 30.9%, which was mainly

attributable to the decrease in the materials trading business volume.
(3) Major Business segments
The major business model of the Group is the integrated coal industry chain: i.e. coal
production coal transportation (railway, port and shipping) use of coal (power
and coal chemical), and there are business intercourses between each segment. The
revenue and cost of sales of the following business segments are the data before
eliminations on consolidation of each segment.
Unit: RMB million
Major business segments in 2016 (before eliminations)
Increase/ Increase/
decrease in decrease in
revenue as cost of sales Increase/decrease
compared as compared in gross profit
Business Gross profit with last with last margin as compared
segment Revenue Cost of sales margin year year with last year
(%) (%) (%)
Coal 131,357 109,404 16.7 8.2 1.8 Increased by 5.2

percentage points
Power 69,850 53,939 22.8 (4.4) 8.3 Decreased by 9.0
percentage points
Railway 33,530 17,350 48.3 23.1 18.9 Increased by 1.9
percentage points
Port 5,040 2,523 49.9 33.7 24.5 Increased by 3.7
percentage points
Shipping 2,112 1,707 19.2 5.5 (3.0) Increased by 7.1
percentage points
Coal 4,831 4,330 10.4 (13.0) (8.3) Decreased by 4.6
chemical percentage points
The percentages of the profit from operations attributable to the coal, power,
transportation and coal chemical segments of the Group before elimination on
consolidation changed from 17%, 50%, 31% and 2% in 2015 to 36%, 25%, 38%
and 1% in 2016 respectively, such significant changes were mainly due to the
following reasons:
The increases in both sales volume and price of coal due to the tendency
towards demand and supply balance in the coal market facilitated by the the
supply-side reform of the coal industry and the decreases in both the unit
production cost of self-produced coal and volume of material trading business
led to a significant increase in the profit from operations attributable to the
coal segment;
The decrease in on-grid tariff of coal-fired power and the increase in the
procurement price of thermal coal resulted in a significant decrease in the
profit from operations attributable to the power segment;
Benefiting from the growth of coal sales volume and the implementation of
macroscopic logistics strategy, the growth of coal and non-coal commodities
transported by self-owned railway and ports led to a significant increase in the
profit from operations attributable to the transportation segment.
(4) Analysis of the production and sales volume
Increase/
decrease in
Year-on-year inventory as
increase/ Year-on-year compared
decrease in increase/ with the
Major Production Sales production decrease in beginning of
products volume volume Inventory volume sales volume the year
(%) (%) (%)
Coal 289.8 million 394.9 million 29.4 million 3.2 6.6 30.1
tonnes tonnes tonnes
Power 236.04 billion 220.57 billion / 4.5 4.8 /
kWh kWh
(5) Major customers
2016
Percentage to
Revenue revenue
No. Top five customers RMB million %
1 First 11,481 6.3

2 Second 8,771 4.7
3 Third 7,656 4.2
4 Fourth 7,286 4.0
5 Fifth 6,943 3.8
Total 42,137 23.0
Among the above major customers, the sales revenue generated from connected
parties amounted to RMB11,481 million, which accounted for 6.3% of the revenue
for the year.
(6) Major suppliers
During the reporting period, the total procurement from the top five suppliers of
the Company amounted to RMB14,340 million, accounting for 14.4% of the total
procurement for the year. Among which, the procurement made from connected
parties were RMB6,484 million, accounting for 6.5% of the total procurement for the
year.
2. Other items of income statement
(1) General and administrative expenses: representing a year-on-year decrease of

13.3% in 2016, which was mainly attributable to the inclusion of tax on vehicles and
vessels, real estate tax, land-use tax and stamp duty originally included in general
and administrative expenses to taxes and surcharges under cost of sales since 2016
based on relevant requirements.
(2) Other gains and losses: representing a year-on-year decrease of 47.4% in 2016,
which was mainly attributable to the decrease in losses on asset impairment as
compared with last year. Pursuant to the assessment result of asset impairment at
the end of 2016, the Group made provision for impairment on electric machinery
and equipment demolished due to energy saving and environmental protection
reconstruction, the power generators and related equipment in closed Longyan
Power Plant of Fujian Energy Company and parts of inventories.
(3) Other income: representing a year-on-year decrease of 16.9% in 2016, which

was mainly attributable to the decrease in government grants for power and
transportation segments.
(4) Other expenses: representing a year-on-year increase of 141.4% in 2016, which was
mainly attributable to the increase of donation for public welfare.
(5) Interest income: representing a year-on-year increase of 18.9% in 2016, which was
mainly attributable to the increase of time deposits.
(6) Finance costs: representing a year-on-year increase of 12.2% in 2016, which was
mainly attributable to the decrease in capitalised interests for 2016 as a result of the
commencement of operation of Bazhun Railway, Zhunchi Railway and other projects
in 2015, which in turn increased the interest expenses included in finance costs.
(7) Share of results of associates: representing a year-on-year decrease of 44.6% in

2016, which was mainly attributable to the decrease in revenue generated from
associated power generation enterprises.
(8) Income tax expense: representing a year-on-year decrease of 2.9% in 2016, and the
average rate of income tax in 2016 was 22.5% (2015: 27.7%), with a decrease of
5.2 percentage points, which was mainly attributable to the increase in percentage
of profits in the coal segment, which is entitled to more preferential tax rates, and
the decrease in percentage of profits in the power segments, which are entitled
to less preferential tax rates, and the decrease in deductible losses and deductible
temporary differences of unrecognized deferred tax assets as compared with last
year.
3. Investment in research and development
Expensed research and development expenditure in the period

(RMB million) 400
Capitalized research and development expenditure in the period
(RMB million) 175
Total research and development expenditure (RMB million) 575
Ratio of capitalized research and development expenditure (%) 30.4
Percentage of total research and development expenditure to revenue
(%) 0.3
Number of research and development personnel in the Company
(number of person) 2,468
The ratio of research and development personnel to the total number of
persons in the Company (%) 2.7
In 2016, investment in the research and development by the Group, representing a

year-on-year decrease of 25.3% (2015: RMB770 million), is mainly used for research in
various aspects including research and production of key equipment on digital mines, mine
transportation and deployment system, comprehensive use of coal ash after combustion
and preservation and usage of water resources in mining area.
4. Cash flow
(1) Net cash generated from operating activities: a year-on-year increase of 47.8% in
2016, of which, net cash used in operating activities of Shenhua Finance Company
amounted to RMB10,681 million (2015: net cash inflow of RMB9,065 million),
representing a year-on-year change of 217.8%, which was mainly due to the
decrease in deposits by Shenhua Finance Company. After eliminating the effects
of Shenhua Finance Company, net cash generated from operating activities of the
Group represented a year-on-year increase of 99.7%. This was mainly due to the
increase of bank acceptance bills receivable and account receivable were significantly
less than that of last year and the decrease in tax paid.
(2) Net cash used in investing activities: representing a year-on-year increase of 147.5%
in 2016. This was mainly due to the increase in cash paid for the purchase of wealth
management products.
(3) Net cash used in financing activities: representing a year-on-year decrease of 20.2%
in 2016. This was mainly due to the decrease in cash paid for dividend for 2016, and
the consideration paid for merger of subsidiaries under common control in 2015.
(II) Explanation on the material changes in profit incurred from non-principal business
Pursuant to the assessment result of asset impairment at the end of 2016, the Group made
provision for impairment of RMB2,807 million in total on power machinery and equipment
demolished due to energy saving and environmental protection reconstruction, the power
generators and relevant equipment in closed Longyan Power Plant of Fujian Energy Company and
parts of inventories.
(III) Analysis on Assets and Liabilities
1. Assets and Liabilities
Unit: RMB million
Percentage of Percentage of
Amount at total assets at Amount at the total assets at
the end of the end of end of the the end of the Change of
Items the year the year previous year previous year the amount Main reasons for changes
(%) (%) (%)
Construction in progress 35,220 6.1 33,610 6.0 4.8 Increase in materials for power
business projects
Other non-current assets 36,749 6.4 34,562 6.2 6.3 Increase in loan balance issued by
Shenhua Finance Company
Accounts and bills 20,573 3.6 41,019 7.3 (49.8) Decrease in notes being become
receivable due for repayment and receipt
of bank acceptance bills; and
decrease in receivables from coal
sales of coal segment
Prepaid expenses and 48,792 8.5 19,351 3.5 152.1 Increase in purchase of wealth
other current assets management products by the
Company and Shenhua Finance
Company
Restricted bank deposits 6,141 1.1 4,611 0.8 33.2 Increase in statutory deposit
reserves balance of Shenhua
Finance Company placed at the
central bank
Time deposits with 3,428 0.6 916 0.2 274.2 Maturity of time deposits
original maturity over
three months
Short-term debentures 0 0.0 4,998 0.9 (100.0) Maturity of super short-term
Accounts and bills payable 35,156 6.1 33,990 6.1 3.4 Increase in payables of bank
acceptance bills from power
segment
Accrued expenses and 41,361 7.2 47,519 8.5 (13.0) Decrease in balance of deposits
other payables placed with Shenhua Finance
Company
Current portion of 19,989 3.5 0 0.0 / Increase of medium-term notes
medium-term notes due within one year
Long-term borrowings 58,462 10.1 54,179 9.7 7.9 Increase in balance of long-term
borrowings from power segment
Medium-term notes 4,985 0.9 24,955 4.5 (80.0) Medium-term notes to be due
within one year were reclassified
to non-current liabilities due
within one year
2. Restriction on the major assets
As of the end of 2016, the balance of restricted assets of the Group amounted to
RMB6,933 million, which mainly consists of statutory deposit reserves balance of Shenhua
Finance Company placed at the central bank and fixed assets as collaterals for bank
borrowings. None of the major assets of the Group were seized nor detained.
(IV) Operation results by business segment
1. Coal segment
(1) Production, operation and construction
The majority of the coal products produced and sold by the Group were thermal
coal. In 2016, under the continued deepening the supply-side reform of the coal
industry, the Group proactively coped with the changes in industrial policies and
market conditions to adjust the production volume in time according to regulations,
so as to strengthen the profitability of the coal segment by quality enhancement
and structural adjustment. During the year, commercial coal production volume of
the Group reached 289.8 million tonnes (2015: 280.9 million tonnes), representing
a year-on-year increase of 3.2%. The total footage of advancing tunnels was 380
thousand meters (2015: 564 thousand meters), representing a year-on-year decrease
of 32.6%. Specifically, Shendong Mines recorded footage of advancing tunnels of
366 thousand meters (2015: 547 thousand meters), and Baotou Mines recorded
footage of advancing tunnels of 14 thousand meters (2015: 17 thousand meters).
The calorific value of thermal coal has been increasing, and the average calorific value
of commercial coal for the year reached 5,003 kcal/kg, representing a year-on-year
increase of 36 kcal/kg. With the further optimisation of coal product structure, the
proportion of low-sulphur eco-friendly coal and high value-added special coal output
has further increased.
Shendong Mines coordinated its coal production and loading in a scientific way which
optimised production and loading according to market demand, so as to maximize
the production of marketable products. Zhungeer Mines enhanced its efficiency by
way of improvement of quality and efficiency, lump coal sales, accurate loading and
collaborative mining. Guided by the market and efficiency, Shengli Mines, Shenbao
Mines and Baotou Mines organized the coal production.
Guojiawan Coal Mine has commenced operation with an approved production

capacity of 8.0 million tonnes/year, and the construction of its dedicated railway
remained in progress stably. The expansion works for Qinglongsi Coal Mine with
an approved production capacity of 3.0 million tonnes/year was progressing as
planned and entered into the stage of collaborative trial operation. For the relevant
construction progress, please refer to note 16 Construction in Progress to the
financial statements in this report.
Production and sales volumes of all coals in 2016 of the Group are as below:
Production Sales Cost of

Types of coal volume volume Revenue sales Gross profit
Million Million
tonnes tonnes RMB million RMB million RMB million
Thermal coal 289.8 394.7 125,189 99,663 25,526

Coking coal / 0.2 141 141 0
Total / 394.9 125,330 99,804 25,526
In 2016, the Companys coal exploration expenses (which were incurred before the
conclusion of feasibility study and represented the expenses related to exploration
and evaluation of coal resources) amounted to approximately RMB25 million
(2015: RMB96 million), which was mainly attributable to the relevant expenses of
Watermark Coal Project in Australia and Guohua Sumsel Coal Power Project (Phase
I) in Indonesia. The Companys relevant capital expenditure of mining development
and exploration amounted to approximately RMB4,551 million (2015: RMB3,539
million), which was mainly attributable to the expenditure related to coal mining,
consideration payment for mining rights and acquisition of fixed assets for Shendong
Mines, Zhungeer Mines and Shenbao Mines as well as the exploration expenditure
of Guojiawan Coal Mine and Qinglongsi Coal Mine.
The Group has independently operated railway collection and distribution channels.
These channels are centralized and distributed in the rim of self-owned core mines,
and can transport coal in the core mines.
(2) Sales of coal
The Group implemented specialized division management. Production enterprises

are responsible for production of coal, and Shenhua Trading Group is mainly
responsible for sales of coal. Customers have different industry background, such
as power, metallurgy, chemical and construction materials. In 2016, the Group
adopted various measures to cope with the market volatility, increased the number
of channels for coal resources procurement, enhanced the marketing efforts in the
region of the movement towards the shipping route from the northern sea to the
Yangtze River and clean coal market, and proactively promoted coal trading. Thus,
the sales volume of coal amounted to 394.9 million tonnes (2015: 370.5 million
tonnes), representing a year-on-year increase of 6.6%; among which the domestic
sales volume of coal amounted to 386.2 million tonnes, accounting for 12.1% of the
domestic sales volume of coal for the same period which amounted to 3.18 billion
tonnes1.
Data source: State Administration of Coal Mine Safety

1
To maximize the efficiency of the integrated operation, the Group increased the
sales volume of seaborne coal by an optimised arrangement of coal with a higher
loading volume at self-owned ports. The annual seaborne coal sales was 226.4
million tonnes (2015: 203.8 million tonnes), representing a year-on-year increase of
11.1%. The seaborne coal sales through self-owned Huanghua Port and Shenhua
Tianjin Coal Dock, accounted for 87.5% of the total seaborne coal sales of the Group,
representing a year-on-year increase of 13.0 percentage points.
The Group increased the number of sales channels and the procurement volume
of coal through Shenhua Coal Trading Network (https://www.e-shenhua.com)
developed by the Group, and effectively cut the cost. In 2016, the coal sales volume
and coal procurement volume of the Group through Shenhua Coal Trading Network
reached 191.4 million tonnes and 10.2 million tonnes, respectively.
In view of the rebound of thermal coal prices in the second half of the year, the Group
recorded an average coal sales price of RMB317 /tonne in 2016 (2015: RMB293/
tonne) (excluding tax), representing a year-on-year increase of 8.2%.
By sales regions
2016 2015 Change

Proportion Proportion
Sales of total Sales of total Sales
volume sales Price volume sales Price volume Price
Million Million
tonnes % RMB/tonne tonnes % RMB/tonne % %
I. Domestic sales 386.2 97.8 317 365.5 98.7 293 5.7 8.2
(I) Self-produced coal
and purchased
coal 374.4 94.8 316 354.1 95.6 292 5.7 8.2
1. Direct arrival 151.3 38.3 229 151.5 40.9 221 (0.1) 3.6
2. Seaborne 223.1 56.5 376 202.6 54.7 345 10.1 9.0
(II) Sales of domestic
trading coal 11.6 2.9 339 11.2 3.0 318 3.6 6.6
(III) Sales of imported
coal 0.2 0.1 415 0.2 0.1 413 0.0 0.5
II. Export Sales 3.3 0.8 407 1.2 0.3 443 175.0 (8.1)
III. Overseas coal sales 5.4 1.4 276 3.8 1.0 218 42.1 26.6
(I) EMM Indonesia 1.8 0.5 97 1.9 0.5 84 (5.3) 15.5
(II) Re-export trade 3.6 0.9 367 1.9 0.5 358 89.5 2.5
Total sales volume/average

price 394.9 100.0 317 370.5 100.0 293 6.6 8.2
Note: Sales prices of coal in this report are all exclusive of tax.
In 2016, the sales volume of the Company to the top five domestic customers
of coal was 35.3 million tonnes, which accounted for 9.1% of the domestic
sales volume. In particular, the sales volume to the largest customer was
9.0 million tonnes, which accounted for 2.3% of the domestic sales volume.
The top five domestic customers of coal were primarily coal, power and coal
trading companies.
By internal and external customers
2016 2015
Sales Sales Change in
volume Percentage Price volume Percentage Price price
Million Million
tonnes % RMB/tonne tonnes % RMB/tonne %
Sales to external customers 305.5 77.4 321 281.6 76.0 294 9.2
Sales to internal power
segment 85.4 21.6 308 84.6 22.8 292 5.5
Sales to internal coal chemical
segment 4.0 1.0 237 4.3 1.2 236 0.4
Total sales volume/average
price 394.9 100.0 317 370.5 100.0 293 8.2
In 2016, the sales volume of internal power segment and coal chemical
segment respectively accounted for 21.6% and 1.0% of the coal segment
of the Group, representing a decrease of 1.2 percentage points and 0.2
percentage point as compared with last year, respectively. The Company
adopted unified pricing policies in coal sales to the internal power segment,
coal chemical segment and external customers.
(3) Production safety
In 2016, the Group continued to raise the awareness of production safety within the
Group with the implementation of production safety accountability system as the
focus. It also pushed forward the establishment of the safety risk prevention and
control system and conducted specialized safety inspection and key supervision for
coal mines. There was no major or more serious safety accident occurred during the
year. In 2016, the fatality rate per million tonne of coal mines of the Group was zero,
enabling the Company to maintain its internationally leading position.
Efforts in ensuring safe coal production are detailed in the 2016 CSR Report of the
Group.
(4) Environmental protection
In 2016, the Group continued to innovate its coal mining technologies and reinforce
the establishment of the environmental protection system in coal mines to raise the
production capacity of clean coal. Additionally, it actively promoted the construction
of ecological mines and eco-friendly mines as well as the green development of
coal mines by protection and utilisation of water resources, reduction of dust and
consumption, ecological construction and restoration, screening of environmental
protection risks and establishment of ecological management funds in mining areas
and other protection measures. There was no major or more serious environmental
safety incident occurred during the year.
During the year, the Group invested a total of RMB117 million in conservation of soil
and water and ecological construction and a total of RMB235 million in energy saving
and environmental protection projects, paid RMB50 million for sewage charges for
its coal segment, and used mining waste water of 72.53 million tonnes. At the end
of 2016, balance of the accrued reclamation obligations amounted to RMB2,549
million, serving as strong financial guarantee for ecological construction.
Measures which are taken by the Company for environmental protection are detailed
in the 2016 Corporate Social Responsibility Report of the Group.
(5) Coal resources
As at 31 December 2016, under the PRC Standard, the Group had coal resources
amounting to 24.01 billion tonnes, representing a decrease of 1.2% as compared
with that of the end of 2015; and recoverable coal reserve amounting to 15.43
billion tonnes, representing a decrease of 2.0% as compared with that of the end of
2015. The Groups marketable coal reserve amounted to 8.85 billion tonnes under
the JORC Standard, representing an increase of 8.7% as compared with that of the
end of 2015, which was mainly due to the increase in the marketable coal reserve
of Shendong Mines and Zhungeer Mines and the decrease in the marketable coal
reserve of Shengli Mines according to the comprehensive reassessment of the
marketable coal reserve of the Companys coal mines under the JORC Standard
conducted by competent professional institution under the engagement by the
Company in 2016.
Unit:00 million tonnes
Marketable
Recoverable coal reserve
Coal resources coal reserve (under
(under the PRC (under the PRC the JORC
Mines Standard) Standard) Standard)
Shendong Mines 164.5 95.4 51.6

Zhungeer Mines 40.1 32.2 21.7
Shengli Mines 20.6 14.1 2.5
Baorixile Mines 14.4 12.2 12.6
Baotou Mines 0.5 0.4 0.1
Total 240.1 154.3 88.5

Characteristics of the commercial coal produced in the Companys major mines are as
follows:
Calorific value
of major
commercial Sulphur
No. Mines Major types of coal coal products content Ash content
(kcal/kg) (%) (average, %)
1 Shendong Mines Long flame coal/ Approximately 0.49 Approximately

non-caking coal 5,500 11.8
2 Zhungeer Mines Long flame coal Approximately 0.48 Approximately
4,680 26.3
3 Shengli Mines Lignite Approximately 0.81 Approximately
3,095 20.2
4 Baorixile Mines Lignite Approximately 0.22 Approximately
3,650 14.5
5 Baotou Mines Non-caking coal Approximately 0.72 Approximately
4,410 16.2
Note: The above calorific value, sulphur content and ash content of major commercial coal products
produced by each mine may be inconsistent with the characteristics of the commercial coal
products produced by individual mine and those of the commercial coal products sold by the
Company due to such factors as geological conditions, mining area, coal washing, selecting and
processing, transportation loss and coal blending ratio.
(6) Operating results
The operating results of the coal segment of the Group before elimination on
consolidation
2016 2015 Change Main reasons for changes

(%)
Revenue RMB 131,357 121,458 8.2 The supply-side reform of the

million coal industry mitigated the
over-supply in coal market,
resulting in the recovery of
coal price and sales volume
Cost of sales RMB 109,404 107,493 1.8 The increase in the
million procurement of purchased
coal for meeting market
demand led to a significant
increase in the cost of
purchased coal; and the
related transportation cost
increased in line with the
increase in sales volume of
coal

(%)
Gross profit % 16.7 11.5 Increased

margin by 5.2
percentage
points
Profit from RMB 17,017 6,433 164.5 Other than the above factors,
operations million the volume of material
trading business and the
impairment loss of coal-
related assets recorded
a significant year-on-year
decrease
Profit margin % 13.0 5.3 Increased
from by 7.7
operations percentage
points
The sales and gross profit of the coal of the Group before elimination on
consolidation
2016 2015
Gross Gross
Gross profit Gross profit
Revenue Costs profit margin Revenue Costs profit margin
RMB RMB RMB RMB RMB RMB
million million million % million million million %
Domestic 122,486 97,487 24,999 20.4 107,041 90,179 16,862 15.8

Export and
overseas 2,844 2,317 527 18.5 1,372 1,229 143 10.4
Total 125,330 99,804 25,526 20.4 108,413 91,408 17,005 15.7
The coal sold by the Group is mainly produced in its self-owned mines. In
order to fulfill the needs of customers and adequately make use of railway
transportation, the Group also purchased the coal from third parties in the
surrounding areas of the self-owned mines and railways and produced
different kinds and level of coal products and sold them to external customers.
As there are many kinds of coal products and different ratios of mixture of
purchased coal, it may be difficult to review the revenue, costs and gross
profit of coal in accordance with the sources of coal (self-produced coal and
purchased coal).
Unit production cost of self-produced coal
Unit: RMB/tonne

(%)
Materials, fuel and 18.3 20.6 (11.2) Decrease in tunneling footage

power for underground mines
year-on-year through
optimizing the production
units; Decrease in fuel price
Personnel expenses 17.6 17.7 (0.6)
Repairs and 8.7 9.2 (5.4) Decrease in expenditures for
maintenance outsourcing repairs due to the
enhancement of efficiency
in self-owned maintenance;
Extend the maintenance
cycle of equipment through
technology renovation
Depreciation and 21.9 25.2 (13.1) Decrease in amortization of
amortization long-term deferred expenses
including compensation for
land use and relocation as a
result of a decrease in land
requisition for production use
Other costs 43.1 50.5 (14.7) Decrease in outsourcing mining
engineering expenses and
auxiliary production expenses
due to the enhancement of
efficiency in self-owned team;
Decrease in taxes and fees
Unit production cost 109.6 123.2 (11.0)

of self-produced
coal
Other costs consist of the following three components: (1) expenses directly
related to production, including coal washing, selecting and processing
expenses, and mining engineering expenses, etc., accounting for 62%; (2)
auxiliary production expenses, accounting for 13%; (3) land requisition and
surface subsidence compensation, environmental protection expenses, tax,
fees levied by local government, etc., accounting for 25%.
Cost of coal purchased from third parties
The coal purchased from third parties by the Company includes coal
purchased from the surrounding areas of the self-owned mines and railways,
domestic trading coal, imported and re-exported coal.
In 2016, sales volume of coal purchased by the Group from third parties was
109.4 million tonnes (2015: 81.2 million tonnes), representing a year-on-year
increase of 34.7%, and its proportion of the Companys total sales volume
of coal increased to 27.7% from 21.9% in 2015. The costs of coal purchased
from third parties for the year was RMB26,286 million (2015: RMB17,264
million), representing a year-on-year increase of 52.3%. The increase was
mainly due to the increase of sales volume of coal purchased by the Company
from third parties according to the demand and supply in the coal market, and
the rise of procurement price in coal.
2. Power segment
(1) Production and operations
In 2016, under the overall downturn of the domestic thermal power market, the
Group enhanced its marketing efforts based on its advantage of clean power
generation to strive for a higher amount of power generation. The gross power
generation amounted to 236.04 billion kWh (2015: 225.79 billion kWh), representing a
year-on-year increase of 4.5%; and total power output dispatch of 220.57 billion kWh
(2015: 210.45 billion kWh), representing a year-on-year increase of 4.8%, accounting
for 3.7% of 5,919.8 billion kWh1 of the total power consumption of society at the
same period.
The Group continued to promote the clean development of coal-fired power

by proactively implementing the ultra-low emission renovation of coal-fired
generators, and its proportion of the installed capacity of ultra-low emission
coal-fired generators maintained at an industry-leading level. The Group has
completed the ultra-low emission renovation for all coal-fired power plants in
the Beijing-Tianjin-Hebei region. Following the completion of construction and
commencement of operation, Guohua Shouguang Power Plant and Liuzhou Power
Plant became the first ultra-low emission power plant in Shandong Province and
Guangxi Province, respectively.
In view of the Groups proactive adaption to the reform of power market, the
transacted power generation and, in particular, the direct power supply to users
recorded a significant increase as compared with the previous year. For 2016,
the sales volume of direct power supply of the Group amounted to approximately
42.3 billion kWh, representing a year-on-year increase of approximately 119%,
and its proportion of the total power output dispatch increased by approximately
10 percentage points. Shenhua Fuping Integrated Energy Demonstration Project
was one of the first batch of experimental units for reform of incremental power
distribution business of China, the preliminary work of the constrction of power
distribution networks remained in progress stably and Shenhua Guangdong Power
Sales Company was incorporated.
Taking an important role in the internal market, the power segment collaborates with
the coal and transportation segments for coal field management in power plants
and handling and unloading of thermal coal. During the year, the power segment
consumed coal from China Shenhua of 88.0 million tonnes, accounting for 89.0% of
the total coal consumption.
Data Source: National Energy Administration

1
(2) Power consumption and power tariffs
Classified by power type
Gross power generation Total power output dispatch Power tariff

(billion kWh) (billion kWh) (RMB/mWh)
Power type 2016 2015 Change 2016 2015 Change 2016 2015 Change
(%) (%) (%)
Coal-fired power 229.73 221.75 3.6 214.42 206.51 3.8 301 331 (9.1)
Wind power 0.03 0.02 50.0 0.03 0.02 50.0 596 598 (0.3)
Hydro power 0.67 0.67 0.0 0.65 0.65 0.0 223 232 (3.9)
Gas-fired power 5.61 3.35 67.5 5.47 3.27 67.3 537 560 (4.1)
Total 236.04 225.79 4.5 220.57 210.45 4.8 307 334 (8.1)
Classified by location
Power generation Power output dispatch Power tariff

Location/ Year-on- Year-on- Year-on-
Type of power 2016 2015 year 2016 2015 year 2016 2015 year
(%) (%) (%)
Domestic in total/
weighted average 234.40 223.81 4.7 219.14 208.69 5.0 306 333 (8.1)
Hebei 33.99 32.30 5.2 31.84 30.12 5.7 300 335 (10.4)
coal-fired power 33.99 32.30 5.2 31.84 30.12 5.7 300 335 (10.4)
Jiangsu 23.87 26.23 (9.0) 22.74 24.94 (8.8) 313 329 (4.9)
coal-fired power 23.87 26.23 (9.0) 22.74 24.94 (8.8) 313 329 (4.9)
Zhejiang 25.84 25.43 1.6 24.42 24.07 1.5 360 409 (12.0)
coal-fired power 24.24 23.63 2.6 22.86 22.31 2.5 343 387 (11.4)
gas-fired power 1.60 1.80 (11.1) 1.56 1.76 (11.4) 608 698 (12.9)
Inner Mongolia 20.95 23.51 (10.9) 18.88 21.09 (10.5) 209 239 (12.6)
coal-fired power 20.95 23.51 (10.9) 18.88 21.09 (10.5) 209 239 (12.6)
Guangdong 20.85 22.74 (8.3) 19.39 21.17 (8.4) 376 409 (8.1)
coal-fired power 20.82 22.72 (8.4) 19.36 21.15 (8.5) 375 409 (8.3)
wind power 0.03 0.02 50.0 0.03 0.02 50.0 596 598 (0.3)
Shaanxi 24.25 22.08 9.8 22.11 20.17 9.6 252 292 (13.7)
coal-fired power 24.25 22.08 9.8 22.11 20.17 9.6 252 292 (13.7)
Anhui 21.48 17.49 22.8 20.45 16.59 23.3 299 342 (12.6)
coal-fired power 21.48 17.49 22.8 20.45 16.59 23.3 299 342 (12.6)
Liaoning 16.41 14.90 10.1 15.37 13.96 10.1 300 321 (6.5)
coal-fired power 16.41 14.90 10.1 15.37 13.96 10.1 300 321 (6.5)
Power generation Power output dispatch Power tariff

Location/ Year-on- Year-on- Year-on-
Type of power 2016 2015 year 2016 2015 year 2016 2015 year
(%) (%) (%)
Fujian 10.51 9.49 10.7 9.98 8.99 11.0 280 329 (14.9)
coal-fired power 10.51 9.49 10.7 9.98 8.99 11.0 280 329 (14.9)
Xinjiang 4.16 5.72 (27.3) 3.82 5.31 (28.1) 197 208 (5.3)
coal-fired power 4.16 5.72 (27.3) 3.82 5.31 (28.1) 197 208 (5.3)
Tianjin 5.29 5.41 (2.2) 4.96 5.06 (2.0) 331 350 (5.4)
coal-fired power 5.29 5.41 (2.2) 4.96 5.06 (2.0) 331 350 (5.4)
Henan 4.44 4.87 (8.8) 4.18 4.59 (8.9) 307 347 (11.5)
coal-fired power 4.44 4.87 (8.8) 4.18 4.59 (8.9) 307 347 (11.5)
Sichuan 3.06 3.75 (18.4) 2.82 3.44 (18.0) 340 364 (6.6)
coal-fired power 2.39 3.08 (22.4) 2.17 2.79 (22.2) 375 395 (5.1)
hydropower 0.67 0.67 0.65 0.65 223 232 (3.9)
Ningxia 3.42 3.48 (1.7) 3.06 3.14 (2.5) 205 226 (9.3)
coal-fired power 3.42 3.48 (1.7) 3.06 3.14 (2.5) 205 226 (9.3)
Chongqing 5.71 3.35 70.4 5.45 3.20 70.3 343 333 3.0
coal-fired power 5.71 3.35 70.4 5.45 3.20 70.3 343 333 3.0
Beijing 4.01 2.11 90.0 3.91 1.99 96.5 509 404 26.0
coal-fired power 0.56 (100.0) 0.48 (100.0) 413 (100.0)
gas-fired power 4.01 1.55 158.7 3.91 1.51 158.9 509 401 26.9
Shanxi 3.39 0.95 256.8 3.16 0.86 267.4 239 292 (18.2)
coal-fired power 3.39 0.95 256.8 3.16 0.86 267.4 239 292 (18.2)
Shandong 2.56 / 2.41 / 294 /
coal-fired power 2.56 / 2.41 / 294 /
Guangxi 0.21 / 0.19 / 328 /
coal-fired power 0.21 / 0.19 / 328 /
Overseas in total/
weighted average 1.64 1.98 (17.2) 1.43 1.76 (18.8) 476 431 10.4
Indonesia 1.64 1.98 (17.2) 1.43 1.76 (18.8) 476 431 10.4
coal-fired power 1.64 1.98 (17.2) 1.43 1.76 (18.8) 476 431 10.4
Total/weighted
average 236.04 225.79 4.5 220.57 210.45 4.8 307 334 (8.1)
(3) Installed capacity
At the end of the reporting period, the total installed capacity of power generation of
the Group reached 56,288MW, which represented an increase of 4.0% as compared
with the end of last year, accounting for 3.4% of 1.65 billion kW1 of the total installed
capacity of power generation of China; among which, the total installed capacity
of the coal-fired power generators is 54,417MW, which was 96.7% of the total
installed capacity of the Group.
Unit: MW
Installed
capacity
increased/ Gross
Gross installed (decreased) installed
capacity as at during the capacity as at
31 December reporting 31 December
Power type 2015 period 2016
Coal-fired power 52,257 2,160 54,417

Wind power 16 16
Hydro power 125 125
Gas-fired power 1,730 1,730
Total 54,128 2,160 56,288
Newly
Projects put into added
operation during installed
the reporting period Location capacity
(MW)
Shouguang Power Shouguang City, Shandong 21,000

Province
Liuzhou Power Liuzhou City, Guangxi Zhuang 2350
Autonomous Region
Total / 2,700
According to the Shut-down Programme of Small-scale Coal-fired Power Generators

in Fujian Province, the 4135MW coal-fired generators in Longyan Power Plant
under Fujian Energy Company were shut down at the end of 2016, but the power
generation quota planned for the future three years was retained for disposal and
replacement.
Data source: China Electricity Council

1
(4) Utilisation Rate of power generation equipment
In 2016, the growth of the total power consumption of China has rallied. However,
affected by the significant growth of non-fossil fuel power generation as well as
the increase in the installed capacity of thermal power generators, the average
utilisation hours of thermal power equipment in the PRC recorded a continuous
decrease year-on-year. The average utilisation hours of coal-fired generators
of the Group reached 4,428 hours for the year, representing a year-on-year
decrease of 203 hours and 263 hours above the national average utilisation
hours of 4,165 hours1 of thermal power equipment with capacity of 6,000kW
and above. The efficiency of power generation improved constantly and the
power consumption rate of the power plant decreased 0.25 percentage point as
compared with the same period last year. As at the end of the reporting period, the
installed capacity of circulating fluidized bed generating units of the Group reached
6,484MW, which was 11.9% of the installed capacity of the coal-fired generating
units of the Group.
Power consumption
Average utilisation hours ratio of power plant
(Hour) (%)
Power type 2016 2015 Change 2016 2015 Change
(%)
Coal-fired 4,428 4,631 (4.4) 5.95 6.14 Decreased by 0.19

power percentage point
Wind power 1,952 1,478 32.1 0.90 1.08 Decreased by 0.18
percentage point
Hydropower 5,331 5,364 (0.6) 0.23 0.25 Decreased by 0.02
percentage point
Gas-fired 3,243 2,889 12.3 2.03 2.15 Decreased by 0.12
power percentage point
Weighted 4,391 4,591 (4.4) 5.84 6.09 Decreased by 0.25

average percentage point
(5) Environmental protection
The power segment proactively implemented the renovation of green power

generation in energy conservation, consumption reduction and emission reduction,
and continued to expand its efforts in environmental protection. The total investment
of energy saving and environmental protection amounted to RMB2,138 million,
among which, investment in environmental protection amounted to RMB1,105
million, and the sewage charges paid amounted to RMB26 million. As at the end
of the reporting period, the desulfurization renovation for all of its national coal-fired
power generators of the Group was completed. The proportion of coal-fired power
generators with denitrification equipment in operation which had passed completion
verification reached 100%, representing a leading position in the industry. The
power segment continued to implement the ultra-low-emission renovation of
coal-fired generators. As at the end of the reporting period, 66 ultra-low-emission
coal-fired generators with total capacities of 36,770MW were newly constructed
and renovated, which was 67.6% of the total installed capacity of coal-fired power
generator of the Group. The average standard coal consumption for power sold of
coal-fired power generators of the Group for the year was 315 g/kWh, representing a
decrease of 3 g/kWh as compared with the same period last year.
Data source: China Electricity Council

1
(6) Capitalized Expenses
In 2016, the completed capitalized expenses of the power segment of the Group
were RMB17.83 billion, primarily used in projects including the Shenhua Guohua
Jiangxi Jiujiang New Coal Reserve (Transit) and Power Generation Integration
Project (21,000MW), Shenhua Fujian Luoyuan Bay Coal Storage Integrated Power
Plant Project (21,000MW), Shenhua Bashu Jiangyou New Coal-fired Power
Generator Construction Project (21,000MW) and Phase II of Guohua Ningdong
Power Expansion Project (2660MW), and technical reformation expenditure on
environmental protection at plants.
(7) Analysis of operation results
The operation results of the power segment of the Group before elimination
on consolidation:

(%)
Revenue RMB 69,850 73,053 (4.4) Decrease in power output

million sales prices due to the
reduction in on-grid power
tariff of coal-fired power
generation
Cost of sales RMB 53,939 49,788 8.3 Increase in purchase costs
million of coal of power plants
resulting from the growth
in coal price; Power
output dispatch increased
year-on-year
Gross profit % 22.8 31.8 Decreased
margin by 9.0
percentage
points
Profit from RMB 11,689 18,810 (37.9)
operations million
Profit margin % 16.7 25.7 Decreased
from operations by 9.0
percentage
points
Revenue and cost from the sale of power of the Group before elimination on
consolidation
Unit: RMB million
Revenue from sale of power Cost of sale of power

Percentage Percentage
to total to total Change in
costs of costs of 2016 over
Power type 2016 2015 Change 2016 2016 2015 2015 2015
(%) (%) (%) (%)
Coal-fired power 66,047 68,349 (3.4) 49,507 94.4 46,123 95.5 7.3
Wind power 18 14 28.6 9 0.0 10 0.0 (10.0)
Hydro power 145 152 (4.6) 66 0.1 74 0.2 (10.8)
Gas-fired power 2,936 1,830 60.4 2,890 5.5 2,062 4.3 40.2
Total 69,146 70,345 (1.7) 52,472 100.0 48,269 100.0 8.7
The Groups cost of sale of power mainly comprised such costs as raw
materials, fuel and power, personnel expenses, repairs and maintenance,
depreciation and amortization and other cost. The unit cost of power output
dispatch of the Group in 2016 was RMB237.9/mWh (2015: RMB229.4/mWh),
representing a year-on-year increase of 3.7%. The increase was mainly due
to the increase in purchase costs of coal of coal-fired power plants, and the
impact of additional provision of special fund for the structural adjustment of
industrial enterprises.
Analysis on cost of sale of power of coal-fired power plant of the Group before
elimination on consolidation
2016 2015 Change

Costs Percentage Costs Percentage in costs
RMB million % RMB million % %
Raw material, fuel and

power 31,996 64.7 29,958 65.0 6.8
Personnel expenses 3,667 7.4 3,477 7.5 5.5
Repairs and
maintenance 2,645 5.3 2,503 5.4 5.7
Depreciation and
amortization 8,959 18.1 8,329 18.1 7.6
Others 2,240 4.5 1,856 4.0 20.7
Total cost of power

output dispatch of
coal-fired power
plant 49,507 100.0 46,123 100.0 7.3
3. Railway segment
(1) Overview of production and operations
As Bazhun Railway and Zhunchi Railway commenced operation, the overall

railway transportation capacity of the Company was significantly enhanced, which
substantially alleviated the tight market in transportation. In 2016, the railway
segment brought its underlying services for the integrated operations into full play,
which effectively secured the transportation for its principal coal business. With
the implementation of the macroscopic logistic strategy and efforts on opening the
transportation business to the public, it has embarked on the operations of coal
transportation for external customers and endeavored to foster the transportation
for commodities other than coal. The number of pairs of 20,000-tonne combination
trains and 3+0 unit 10,000-tonne trains was further increased, and the utilisation
rates of Baoshen South Line, Shenshuo Railway and other major routes for
transportation exceeded 90%. The transportation volume of Bazhun Railway and
Zhunchi Railway amounted to approximately 10.2 million tonnes and 40.4 million
tonnes, respectively. The transportation volume of self-owned railways of the
Company for the year hit a record high. The transportation turnover of self-owned
railways was 244.6 billion tonne km, representing a year-on-year increase of 22.2%;
among which, the turnover of providing railway transaction services to third parties
amounted to 21.8 billion tonne km (2015: 17.6 billion tonne km), representing a
growth of 23.9% year-on-year, the revenue generated from providing transportation
services for third parties amounted to RMB4,174 million (2015: RMB3,420 million),
representing a year-on-year increase of 22.0%.
(2) Progress of projects
During the reporting period, the construction work of Huangda Railway continued
to advance, and was expected to complete in the second half of 2018. Due to the
preliminary work progress of the project, the construction work of Amo Railway was
suspended, and the construction period will be subject to adjustment according to
the actual conditions.
The operation results of the railway segment of the Group before elimination on
consolidation are as follows:

(%)
Revenue RMB 33,530 27,232 23.1 With the recovery of coal market,
million there was an increase in coal
transportation turnover of railways
year-on-year; expansion in third
party coal transportation and non-
coal transportation businesses by
the Company
Cost of sales RMB 17,350 14,595 18.9 Increase in depreciation and
million amortization, personnel expenses
and repairs as a result of the
commencement of the operations
of new railway lines; Increase in
fuel and power costs in relation
to railway operation arising from
the increase in coal transportation
volume
margin by 1.9
percentage
points
Profit from RMB 15,000 10,070 49.0
operations million
from by 7.7
points
In 2016, the revenue generated from the internal transportation services provided
by the railway segment for the Group amounted to RMB29,356 million (2015:
RMB23,812 million), representing a year-on-year increase of 23.3%, accounting for
87.6% of the revenue of the railway segment (2015: 87.4%).
In 2016, the unit transportation cost in the railway segment was RMB0.067/
tonne km (2015: RMB0.071/tonne km), representing a year-on-year decrease of
5.6%, mainly due to the significant increase in transportation turnover volume of
self-owned railways.
4. Port Segment
The port segment implemented the strategy of macroscopic logistics and

strengthened the connection between upstream and downstream in 2016 by
improving the efficiency of loading vessels to ensure steady and integrated
operation. The Group further increased the seaborne coal sales through the
self-owned ports according to the principle of maximization of overall efficiency.
The proportion of the seaborne coal sales through the self-owned ports increased
to 88.9% to the total seaborne coal sales from 77.8% last year. The seaborne coal
sales through Huanghua Port for the year was 158.6 million tonnes, representing
a year-on-year increase of 42.1%. The seaborne coal sales through Shenhua
Tianjin Coal Dock was 39.5 million tonnes, representing a year-on-year decrease of
2.0%. Non-coal business recorded a relatively rapid growth with bulk cargo and oil
throughput exceeding 10 million tonnes.
(2) Analysis of operating results
The operating results of the port segment of the Group before eliminations on

(%)
Revenue RMB 5,040 3,769 33.7 Increase in sales of seaborne coal

million due to the recovery of domestic
coal market; Increase in the
throughput of non-coal cargo
due to the continued promotion
of implementing the strategy
of macroscopic logistics by the
Group
Cost of sales RMB 2,523 2,026 24.5 Increase in relevant transportation
million costs as a result of the increase in
seaborne coal sales
margin by 3.7
percentage
points
Profit from RMB 2,302 1,350 70.5
operations million
from by 9.9
points
In 2016, the revenue generated from the internal transportation services provided
by the port segment to the Group amounted to RMB4,465 million (2015: RMB3,452
million), representing a year-on-year increase of 29.3% and accounting for 88.6%
(2015: 91.6%) of the revenue of the port segment. Costs of internal transportation
services provided for the Group amounted to RMB2,160 million.
5. Shipping Segment
The shipping segment strengthened the self-owned vessel management and vessel
allocation and coordinated with coal sales activities to contribute to the integrated
operation. In 2016, shipping volume amounted to 79.2 million tonnes, and shipment
turnover amounted to 63.0 billion tonne nautical miles.
The operating results of the shipping segment of the Group before eliminations on

(%)
Revenue RMB 2,112 2,002 5.5 Increase in shipping price in coastal

million markets affected by factors
including the tight supply of coal
in coastal areas and the weather;
Increase in coal transportation
volume over internal power plants
Cost of sales RMB 1,707 1,760 (3.0) Decrease in fuel price, and improved
million control on costs
margin by 7.1
percentage
points
Profit from RMB 266 133 100.0
operations million
from by 6.0
points
In 2016, the unit transportation cost of the shipping segment was RMB0.027/tonne
nautical mile (2015: RMB0.027/tonne nautical mile), representing a flat year-on-year
growth.
6. Coal Chemical Segment
The coal chemical segment of the Group comprises the coal-to-olefins project
which was operated by Baotou Coal Chemical Company. Its main products consist
of polyethylene (with production capacity of approximately 300,000 tonnes/year)
and polypropylene (with production capacity of approximately 300,000 tonnes/year)
and other minor byproducts include industrial sulfur, mixed C5, industrial propane,
mixed C4, industrial methanol, etc.. The methanol-to-olefins (MTO) equipment of the
coal-to-olefins project was the first large-scale MTO equipment in China.
The sales of polyethylene and polypropylene products of the Group in 2016 is as follows:
2016 2015 Change

Sales Sales Sales
volume Price volume Price volume Price
Thousand Thousand
tonnes RMB/tonne tonnes RMB/tonne % %
Polyethylene 292.6 7,222 319.2 7,432 (8.3) (2.8)

Polypropylene 282.1 5,958 312.9 6,508 (9.8) (8.5)
(2) Analysis of operating results
The operating results of the coal chemical segment of the Group before eliminations
on consolidation are as follows:

(%)
Revenue RMB 4,831 5,550 (13.0)Decrease in production and sales

million volume of olefins products resulting
from the suspended production
for repairs for about one month in
2016; Decrease in sales price in
olefins products as affected by the
fluctuation of fossil oil price at the
low level
Cost of sales RMB 4,330 4,720 (8.3) Decrease in production and sales
million volume in olefins products
Gross profit % 10.4 15.0 Decreased
margin by 4.6
percentage
points
Profit from RMB 254 649 (60.9)
operations million
Profit margin % 5.3 11.7 Decreased
from by 6.4
points
(3) Unit production cost of main products
2016 2015 Change

Unit Unit Unit
Production production Production production Production production
volume cost volume cost volume cost
Thousand Thousand
tonnes RMB/tonne tonnes RMB/tonne % %
Polyethylene 294.6 5,839 314.7 5,348 (6.4) 9.2

Polypropylene 284.0 5,373 308.7 5,074 (8.0) 5.9
All the coals consumed by the coal chemical segment were the Groups coals. The
coals consumed in 2016 were 4.0 million tonnes, representing a decrease of 4.8%
as compared to 4.2 million tonnes of last year. The year-on-year increase in unit
production cost of olefin products was mainly due to the suspension of operation
for all equipment of the coal-to-olefins project in early April 2016 due to the system
overhaul lasted for about one month, which in turn reduced the production volume
of olefin products.
In 2016, Baotou Coal Chemical Company contributed approximately RMB27 million

on environmental protection, mainly for desulfurization and water-saving renovation.
During the reporting period, the coal-to-olefins project is in compliance with the
emission standard with no occurrence of major environmental pollution incidents.
(V) Regional operation analysis
Unit: RMB million
2016 2015
Revenue from external transactions in domestic markets 179,859 175,129

Revenue from external transactions in overseas markets 3,268 1,940
Total 183,127 177,069
Note: Revenue from external customers was classified based on the locations where the services were provided or the
products were purchased.
The Group is mainly engaged in the production and sales of coal and power, railway, port and
shipping transportation as well as coal-to-olefins businesses in PRC. In 2016, the revenue from
external transactions in domestic markets was RMB179,859 million, accounting for 98.2% of the
Groups revenue. Affected by factors such as the increase in sale of coal and domestic coal price
as well as the growth of transportation business, revenue from external transactions in domestic
markets increased by 2.7% year-on-year. Affected by the significant increase in the volume
of exported coal, revenue from external transactions in overseas markets increased by 68.5%
year-on-year.
In 2016, the Group proactively respond to the promotion of the Belt and Road initiative of
the state by putting more efforts in international exploration. The operation of Guohua Sumsel
Coal Power Project (Phase I) (2 x 150MW) in Indonesia was running steadily. Sumsel-1 Coal
Power Project (2 x 300MW) in Indonesia obtained on-site permission approval in Indonesia
to commence construction preparation works. The financing activities of Jawa-7 Coal Power
Project (2 x 1,000MW) in Indonesia were completed and obtained environmental permission,
construction permission and other approvals in Indonesia. The progress of the project was in line
with the overall schedule. 17 out of 29 gas wells were under production process in the shale
gas project in the United States and have produced gas volume of 330 million m3 attributable to
the proportionate interest of Shenhua during the reporting period. The Watermark Coal Project
in Australia continued to push forward the renewal of exploration rights and other works. Other
external projects are commencing under the principle of stability and prudence.
(VI) Analysis on Investments
The equity investments of the Company in 2016 amounted to RMB5,473 million (2015:
RMB10,448 million), representing a year-on-year decrease of 47.6%. Equity investments mainly
included capital increase in Baotou Energy Company, Shendong Power Company, Overseas
Company and Shouguang Power, as well as the new establishment of Shenhua Guohua (Beijing)
Distributed Energy Technology Company Limited, Jawa Company, Guohua Ningdong and
Shenhua Guangdong Power Sales Company.
For information on the principal business of major subsidiaries of the Company and the
percentages of equity interest held by the Company, please refer to note 43 to the financial
statements of this report on investment in subsidiaries.
(1) Material investment in equity interest
(2) Material investment in non-equity interest
(3) Financial assets at fair value
Financial assets at fair value held by the Group at the beginning of the period were swap
instruments (cross currency interest rate swaps), which were mainly used to hedge the risk
of currency exchange and interest rate incurred by foreign currency borrowings. The above
contracts were all expired in 2016.
At the end of the reporting period, financial assets at fair value of the Group were trust
management products held by Shenhua Finance Company and a handful of thermal coal
futures. The initial investment cost of the trust management products held by Shenhua
Finance Company amounted to RMB50 million; and the deposit for thermal coal futures
amounted to RMB2 million, which was used to hedge the risk of changes in coal price.
(VII) Disposal of material assets and equity interest
(VIII) Analysis on major holding and associated companies
1. Major subsidiaries
Unit: RMB million
Registered Total Net Net profit attributable to

capital assets assets the equity holders of the parent company
No. Company As at 31 December 2016 2016 2015 Change Main reasons for changes
(%)
1 Shendong Coal Group 4,989 35,627 14,565 7,433 3,601 106.4 Increase in coal prices
Co., Ltd. and sales volume
2 Shuohuang Railway 5,880 37,057 29,308 6,487 5,059 28.2
Development Co.,
Ltd.
3 Jinjie Energy 2,278 9,193 5,564 1,469 2,374 (38.1) Impact of the decrease
in the power output
dispatch and power
tariff
4 Shenhua Trading Group 1,889 24,844 5,888 1,465 (378) (487.6) Sales model was changed
from the buyout model
to agency model
5 Zhungeer Energy 7,102 31,584 24,678 1,278 1,305 (2.1)
Company
6 Huanghua Harbour 6,790 15,787 9,385 1,213 506 139.7 Increase in the loading
Administration volume of vessels at
Company the port
7 Taishan Power 4,670 12,467 7,320 1,059 1,701 (37.7) Decrease in the power
output dispatch and
power tariff
8 Zheneng Power 3,255 11,616 5,529 1,034 1,618 (36.1) Decrease in the power
tariff
9 Shenwan Energy 4,696 13,437 8,115 886 1,212 (26.9)
Company
10 Dingzhou Power 1,561 6,237 2,987 869 991 (12.3)
Note: 1. The financial information of the major subsidiaries disclosed in the above table (unassessed
adjustment before consolidation) was prepared in accordance with the Accounting Standards for
Business Enterprises. The data have not been audited or reviewed.
2. Shendong Coal Group Corporation recorded a revenue of RMB39,256 million and a profit from
operations of RMB9,004 million in 2016.
3. Shuohuang Railway Company recorded a revenue of RMB17,250 million and a profit from operations
of RMB8,557 million in 2016.
Details regarding the Companys acquisition of subsidiaries are set out in investment in
subsidiaries of note 43 to the financial statements of this report.
2. Shenhua Finance Company
As of the end of the reporting period, the Company directly and indirectly held 100% equity
interest in Shenhua Finance Company.
Percentage
of equity
No. Name of Shareholder interest held
(%)
1 China Shenhua Energy Company Limited 81.43

2 Shuohuang Railway Development Co., Ltd. 7.14
3 Shenhua Zhungeer Energy Co., Ltd. 7.14
4 Shenhua Baoshen Railway Co., Ltd. 4.29
Total 100.00
During the reporting period, Shenhua Finance Company strictly implemented the following
resolutions passed at the 12th meeting of the second session of the Board of China
Shenhua held on 25 March 2011: (1) China Shenhua currently had no intention or plan to
change the existing operation policies and strategies of Shenhua Finance Company; (2)
the deposits placed by China Shenhua and its subsidiaries and branches with Shenhua
Finance Company would be used solely for the credit business of China Shenhua and its
subsidiaries and branches, and would be deposited in the Peoples Bank of China and the
five major commercial banks (namely, Industrial and Commercial Bank of China, Agricultural
Bank of China, Bank of China, China Construction Bank and Bank of Communications), and
would not be invested in the public market/private equity market and real estate, etc.
(1) Governance of Shenhua Finance Company is as follows:
A. Board of directors
Members of the board at the end

No. of the reporting period Position
1 Zhang Kehui Chairman

2 Han Weiping Executive director, general
manager
3 Mei Xueyan Executive director
4 Zhang Ying Executive director, deputy
general manager
5 Feng Ning Non-executive director
6 Du Shengli Independent director
7 Zhang Donghui Employee director
Note: According to the resolutions passed at the second shareholders general meeting of
Shenhua Finance Company in 2016, it was proposed to recommend the appointment
of Mr. Xu Shancheng to serve as a director of the company, and Mr. Hao Jianxin will no
longer serve as a director of the company. The approval procedure on the qualification
for appointment of Mr. Xu Shancheng is under progress and will be duly valid upon the
approval from the Beijing Branch of China Banking Regulatory Commission.
Dr. Zhang Kehui, the chairperson of Shenhua Finance Company, has many
years of financial management and auditing experience, she has served as
the deputy general manager of the financial department of Shenhua Group
Corporation and head of the auditing department of China Shenhua. Dr. Zhang
Kehui also serves concurrently as the chief financial officer of China Shenhua.
Each of the three executive directors has extensive experience in financial

and risk management. Mr. Han Weiping, executive director, has over 30 years
of experience in financial management. He served as the deputy general
manager of the financial department of Shenhua Group Corporation in 1996,
and deputy general manager and general manager of Shenhua Real Estate
Co Ltd. since 2001. Mr. Han has extensive experience in management.
Ms. Mei Xueyan, executive director, has served as a director of Shenhua
Finance Company since January 2005 and had served as the general manager
of Shenhua Finance Company. Ms. Mei Xueyan had worked on capital
planning, finance investment and internal control at the headquarters of China
Construction Bank for eight years. Mr. Zhang Ying, executive director, joined
Shenhua Finance Company in 2000 and has served as a deputy general
manager of Shenhua Finance Company since November 2011. Working at
Shenhua Finance Company for many years, Mr. Zhang Ying is familiar with
the business and conditions of Shenhua Finance Company and possesses
extensive management experience.
Mr. Feng Ning, non-executive directors, and Ms. Zhang Donghui, employee
director, participated in the decision-making process of the Company by
attending board meetings.
Mr. Du Shengli, an independent director, is an associate professor of Tsinghua

University School of Economics and Management. He has over 20 years
of experience in capital operation management and corporate financial
operation, group management control and performance evaluation, corporate
governance and financial company management, state-owned assets
supervision and state-owned enterprise operation, and 15 years of experience
as an independent director.
The board of Shenhua Finance Company Limited operates in accordance

with the Articles of Association of Shenhua Finance Company Limited. Any
resolution passed at the board meetings of Shenhua Finance Company will
only be valid if consent is obtained from two-thirds or more of directors
present at the meeting, at which more than one-half of all directors shall be
present.
In 2016, the board of Shenhua Finance Company held three meetings.

B. Board Committees
The board of Shenhua Finance Company currently has three board

committees, namely the Related Party Transaction Control Committee, Risk
Management Committee and Audit Committee.
(A) Related Party Transaction Control Committee
Related Party Transaction Control Committee of Shenhua Finance

Company is responsible for administration over the related party
transactions of the company, including identification, statistics,
forecasts, reporting, limit management and recommendations in
respect of the related party transactions.
In 2016, the Related Party Control Transaction Committee held one

meeting.
(B) Risk Management Committee
Risk Management Committee of the board of Shenhua Finance

Company is responsible for assisting the board of Shenhua Finance
Company to review the companys overall target of risk management,
risk management policies, risk management procedures and internal
control processes, and monitor and assess the risk management
endeavors of relevant senior management members and the risk
management function.
In 2016, the Risk Management Committee held one meeting.
(C) Audit Committee
In order to further improve the corporate governance structure and the

internal audit management mechanism, Shenhua Finance Company
approved the Proposal on Establishment of the Audit Committee on
the 7th meeting of the fourth session of the board of directors held on
10 November 2016, and established the Audit Committee which was
responsible for advising the internal audit of the company and providing
advice and consultation for board decision-making.
In 2016, the Audit Committee did not hold any meeting.

(2) Risk Management and Internal Control
Shenhua Finance Company establishes a comprehensive risk management system

for all business departments by means of real-time assessment by risk management
department and internal audit based on corporate governance.
The establishment of a comprehensive risk management system consists of

one objective: comprehensive risk management objective; two levels: corporate
governance level and company management level; three dimensions of control:
all-round control, entire-process control and all-member control; four sub-systems:
organization sub-system, scheme sub-system, control sub-system and supervision
sub-system; and five elements: internal environment, risk identification and
assessment, control activities, information and communication and internal
supervision.
Shenhua Finance Company established a comprehensive risk management

framework with one basis and three lines of defense. One basis refers to a sound
corporate governance structure; and three lines of defense refer to the front line
of defense comprising all business and functional departments of the company,
the middle line of defense comprising the risk management and compliance
departments, and the back line of defense comprising the audit and internal audit
departments.
With a strategic objective of building an internal control system compatible with

the intrinsic safety management framework of the Group and in compliance with
external regulatory requirements with an aim of increasing value of the shareholders
capital, targeted at risks and in a means of process based on the companys
development strategy, Shenhua Finance Company has progressively established an
effective inspection and supervision mechanism to conduct regular or spot tracking
inspection and supervision on internal control and stringent rectification of identified
internal control defects.
(3) Deposits and Loans of Shenhua Finance Company during the reporting period
A. Total deposits and loans at the end of the reporting period
Unit: RMB million
As at As at
2016 2015 Change
(%)
Balance of deposits 46,603 51,282 (9.1)

Balance of loans 30,672 29,380 4.4
Of which: b
alance of
guaranteed loans 0 0 /
B. Balance of deposits and borrowings of the top ten customers
(a) Balance of deposits of the top ten customers
Unit: RMB million
As at
31 December
No. Name of customer 2016
1 China Shenhua Energy Company Limited 33,111

2 Shenhua Guoneng Group Company Limited 3,777
3 China Shenhua Coal Liquefaction and Chemical 1,736
Company Limited
4 Beijing Guohua Power Company Limited 1,647
5 China Shenhua International Construction 1,193
Company Limited
6 China Energy Conservation and Environmental 1,017
Protection Group
7 Guohua Energy Investment Co., Ltd. 798
8 Shenhua Wuhai Energy Co., Ltd. 703
9 Shenhua Ningxia Coal Industry Group Co., Ltd. 684
10 Shenhua Group Corporation Limited 620
Note: Data of all companies were consolidated except those of Shenhua Group
Corporation, which were based on the headquarters of the company.
(b) Balance of loans of the top ten customers
Unit: RMB million
As at
31 December
No. Name of customer 2016
1 Shenhua Ningxia Coal Industry Group Co., Ltd. 4,500

2 Shenhua Xinzhun Railway Co., Ltd. 3,500
3 State Grid Energy Hami Coal and Electricity 3,000
Co., Ltd.
4 Shenhua Zhunchi Railway Company Limited 3,000
5 Shenhua Yili Energy Co., Ltd. 2,198
6 Shenhua Bayannur Energy Co., Ltd. 2,129
7 Shenhua Ganquan Railway Co., Ltd. 1,857
8 Shenhua Guoneng Jiaozuo Power Plant 1,500
Company Limited
9 Shenhua Group Corporation Limited 1,000
10 China Shenhua Coal Liquefaction and Chemical 1,000
Company Limited
11 Inner Mongolia Dayan Mining Industry Group 1,000
Co., Ltd.
C. Approval of loans during the reporting period
Unit: RMB million
Item 2016
Amount of contracted loans 10,620

Amount of granted loans (including discounted assets) Note 8,082
Of which: amount of guaranteed loans
(including discounted assets)Note 0
Amount of rejected loans /
Note: The amount of granted loans refers to the balance as at 31 December 2016 of the loans
granted in the current year in connection with the loans contracts signed in 2016.
(IX) Structured Vehicle Controlled by the Company
(X) Environmental Policies and Performance
The Group is committed to the long-term sustainability of the environment and communities
in which it operates. Acting in an environmentally responsible manner, the Group endeavors
to comply with laws and regulations regarding environmental protection and adopt effective
measures to achieve efficient use of resources, energy saving and waste reduction.
Please refer to the Social Responsibility Report of the Group for information in respect of
environmental protection of the Company.
(XI) Compliance with Relevant Laws and Regulations
As far as the Board and management are aware, the Group has complied in all material aspects
with the relevant laws and regulations that are related to the business and operation of the
Group. In 2016, there was no material breach of or non-compliance with the applicable laws and
regulations by the Group.
(XII) Relationship with Stakeholders
For details of remuneration and training of the Groups employees, please refer to the section
headed Directors, Supervisors, Senior Management and Employees. The Group also
understands that it is important to maintain good relationships with customers, suppliers and
other business partners to achieve its long-term goals. Accordingly, our senior management have
kept good communication, promptly exchanged ideas and shared business updates with them
when appropriate. In 2016, there was no material and significant dispute between the Group and
its customers, suppliers and other business partners.
(XIII) Subsequent Events
On 4 January 2017, Dr. Han Jianguo has resigned as the president of the Company, and the
Board of the Company accepted his resignation. Upon his resignation from the position as the
president of the Company, Dr. Han Jianguo will continue to serve as an executive director of the
third session of the Board, and as a member of the Strategy Committee and the Safety, Health
and Environment Committee of the Board of the Company.
As considered and approved on the 22nd meeting of the third session of the Board of the
Company held on 4 January 2017, it was approved that Dr. Ling Wen, the vice chairman of
the Company, has been appointed as the president of the Company for a term of three years
commencing from the date of approval by the Board, and may be re-appointed upon the expiry of
the term.
III. DISCUSSION AND ANALYSIS ON FUTURE DEVELOPMENT OF THE COMPANY1
(I) Competition and Development Trend in the Industry
1. Macro economy
In 2016, facing the complex domestic and overseas economic environment, the Chinese
government continued to strengthen supply-side reform, and further promoted the five
missions of eliminating excessive capacities, destocking, deleveraging, lowering costs
and shoring up growth in weak areas. The national economy has been steady amidst
slowdown trend and improved at a steady pace. The GDP was recorded a year-on-year
increase of 6.7%, representing a decrease of 0.2 percentage point compared with the
same period of last year. The Consumer Price Index (CPI) was recorded a year-on-year
increase of 2.0%, representing an increase of 0.6 percentage point compared with
the same period of last year. The PPI was recorded a year-on-year decrease of 1.4%,
representing a decrease of 3.8 percentage points compared with the same period of last
year.
In 2017, Chinese economy is still confronted with various uncertainties. The government
will adhere to the general principle of making progress while ensuring stability, and focus
on the quality and effectiveness enhancement. With the key target of promoting the
supply-side reform, it will properly expand the overall demand, and take various measures
including maintaining a stable growth of the economy, promoting reforms, making
structural adjustments, benefitting peoples livelihood and preventing risks to facilitate
stable and healthy development of the economy. It is expected that in 2017, the GDP
growth will be around 6.5%, the CPI increase will maintain at around 3%, and the PPI will
increase compared with the same period of last year. The all-year coal demand is expected
to remain stable, and electricity demand is expected to remain at a growing momentum.
This section is for reference only and does not constitute any investment advice. The Company has used its best endeavors
1
to ensure the accuracy and reliability of information in this section, but does not assume any liability or provide any form of
guarantee for the accuracy, completeness or validity of all or part of its content. If there is any error or omission, the Company
does not assume any liability. The content in this section may contain certain forward-looking statements based on subjective
assumptions and judgments of future political and economic developments; therefore there may exist uncertainties in these
statements. The Company does not undertake any responsibility for updating the information or correcting any subsequent
error that may appear. The opinions, estimates and other data set out herein can be amended or withdrawn without further
notice. The data contained in this section are mainly derived from sources such as the National Bureau of Statistics, China Coal
Market Network, China Coal Resource Network, China Electricity Council, and China Coal Transportation & Sales Society etc.
2. Market environment of the coal industry
(1) Thermal coal market in the PRC
Review of 2016
In 2016, the condition of excessive production capacity of coal subsisted without

substantial changes. Affected by supply-side reform policy of the industry and
seasonal factors, however, the supply and demand fluctuated greatly in the market.
Coal mines in the PRC have implemented a system of 276 working days each year
since 1 May. Therefore, the coal supply volume was restrained. The coal market
has turned to a direction in favourable to the supplier, and thus, the coal price has
rallied. When entering the third quarter, both the production of thermal power and
demand for thermal coal increased. The supply and demand of coal turned within a
short period from basically balanced to a tight supply in certain districts with rapidly
increasing coal price. In order to suppress the excessive growth of coal price, the
Government orderly utilised safe and advanced production capacity of high efficiency
since 1 October 2016. Since November, with the gradual utilisation of advanced
production capacity, a tight supply of coal resources in certain districts has been
alleviated to some extent and the coal price has decreased slightly. As of the end
of 2016, the price index of Bohai Bay thermal coal (5,500 kcal) was RMB593/tonne,
increasing by RMB222/tonne compared with the beginning of the year (RMB371/
tonne). During the year, the average price of Bohai Bay thermal coal price index was
RMB460/tonne, representing a year-on-year increase of 7.5%.
Year-on-year
2016 2015 change
(%)
Raw coal output

(million tonnes) 3,410 3,747 (9.0)
Coal import
(million tonnes) 255.6 204.1 25.2
Coal transportation by
railway (million tonnes) 1,900 1,994 (4.7)
In 2016, raw coal production of in the PRC was 3,410 million tonnes, representing
a year-on-year decrease of 9.0%, of which the decline was further larger compared
with last year, among which, Inner Mongolia accounted for 840 million tonnes,
representing a year-on-year decrease of 8.1%; Shanxi accounted for 820 million
tonnes, representing a year-on-year decrease of 14.4%; Shaanxi accounted for 510
million tonnes, representing a year-on-year decrease of 2.8%.
Affected by a tight supply of domestic coals at certain stages, the import volume
of coal was significantly rebounded. The accumulated import volume of coal for the
year amounted to 256 million tonnes, representing a year-on-year increase of 25.2%.
Consumption volume of coal in the PRC in 2016 decreased by 4.7% year-on-year

following the decrease for two consecutive years. In the main coal consumption
downstream industry, the coal consumption of power and chemical industries
increased year-on-year while the coal consumption of iron and steel and building
material industries still declined compared with the same period of last year.
The coal transportation volume through railways in China was 1,900 million tonnes
during the year, representing a year-on-year decrease of 4.7%. Coal outbound
shipment through major ports in China was 640 million tonnes, which basically
remained at the same level as last year.
The coal inventory level decreased. As of the end of 2016, the coal inventories at
major ports in northern areas, major coal enterprises and major power plants were
175.8 million tonnes in aggregate, representing a decrease of 37.0 million tonnes or
26.6% compared with the beginning of the year.
Prospects for 2017
In 2017, it is expected that the gross domestic product (GDP) growth of China will
maintain at around 6.5%, which is beneficial to the stability of the domestic coal
demand. The Chinese government will further push forward the supply-side reform
of the coal industry. The dynamic balance between demand and supply of coal will
be safeguarded by the elimination of backward production capacity, adjustment to
the production volume and other measures in response to changes in demand and
prices. It is expected that the annual coal supply will undergo dynamic fluctuation
under the influence of the policies.
Under the influence of certain factors including the seasonal relationship between
supply and demand of coal in the PRC and transportation cost, it is expected that the
coal import volume will remain at a proper scale throughout the year.
The demand for thermal coal is expected to experience seasonal fluctuation.

Under the dual adjustments of demand and the government, the market will be
gradually rationalised and the demand and supply has been balanced with a slight
overcapacity. The price will be subject to volatility based on the contract coal price.
(2) Thermal coal market in the Asia Pacific region
Review of 2016
In 2016, as the economic recovery failed to meet the expectation and the structural
adjustment in energy sector continued to be advanced, coal demand in countries
with traditionally high coal consumption dropped as a whole. Affected by influence of
certain factors including the decrease in production volume of major coal producing
countries, the supply in global coal market shrunk further while the international
coal price rose under fluctuation. The spot price of Newcastle NEWC thermal coal
increased from US$49.11/tonne at the beginning of the year to US$94.44/tonne at
the end of the year.
There is a decrease in total export volume of major coal exporters in 2016. Australia
exported 380 million tonnes of coal, representing a year-on-year decrease of 2.3%.
Indonesia exported 310 million tonnes of coal, representing a year-on-year decrease
of 16.3%. The United States exported 50 million tonnes of coal, representing
a year-on-year decrease of 23%. Russia exported 170 million tonnes of coal,
representing a year-on-year increase of 5.8%.
Affected by the increase in coal production volume in India, the import of thermal
coal experienced a downward trend with a cumulative import volume of 200 million
tonnes of coal during the year, representing a year-on-year decrease of 2.6%. The
import scales of Japan and Korea were basically stable. Japan imported 190 million
tonnes of coal, representing a year-on-year decrease of 0.5% whereas Korea
imported 140 million tonnes of coal, representing a year-on-year increase of 1.2%.
Prospects for 2017
In 2017, there will be a sufficient supply of goal. The implementation of China

Australia Free Trade Agreement is beneficial to the coal export of Australia. Despite
the impact of exchange rate and the decrease in domestic coal demand, the coal
export of Russia will increase steadily. By virtue of the increase of domestic demand
of thermal coal in Indonesia, the coal export is expected to decrease. Given the
decrease in production volume in the United States and other factors, the coal export
will remain relatively sluggish.
China and India will remain as the major consumers of coal. Demand for thermal
coal in India will remain at a relatively high level, and yet, with the significant growth
in production volume of coal in the nation, the export volume will experience a
downturn. Coal import volume in Japan, South Korea and other countries is expected
to remain stable.
Impacted by the slackened global economy growth, structural adjustment of energy,

slow energy consumption growth and other factors, it is expected that coal demand
in 2017 will decrease steadily and the price of thermal coal will drop.
3. Market environment of the power industry
Review for 2016
In 2016, as a result of the steady improvement trend of macro economy, the low base
for the same period in 2015, the high temperature in summer and other factors, the
power consumption of the whole society in 2016 remained a relatively rapid growth. The
cumulative power consumption of the whole society for the year was 5,919.8 billion kWh,
representing a year-on-year growth of 5.0% and an increase of 4 percentage points in
growth rate as compared with that of 2015.
The installed capacity of the power generation generators nationwide will continue
to increase. As at the end of 2016, the power generation generators of power plants
nationwide with an installed capacity of 6,000kW or above reached 1.65 billion kW,
representing a growth of 8.2% as compared with the end of last year, of which the
installed capacity of thermal power was 1.05 billion kW, representing a growth of 5.3%
and a year-on-year decrease of 2.5 percentage points in growth rate. The installed capacity
of power generation by non-fossil energy such as hydropower and nuclear power will
continue to increase with a high speed.
Thermal power generation by power plants above the scale in the PRC amounted to
4,395.8 billion kWh, representing a year-on-year growth of 2.6%; while hydropower
generation amounted to 1,051.8 billion kWh, representing a year-on-year growth of 5.9%. As
influenced by the relative overcapacity of thermal power generation, the increase in power
generation capacity by non-fossil energy and other factors, the utilisation hours of thermal
power generators was 4,165 hours during the year, representing a year-on-year decrease
of 199 hours and being a new low since 1964; the average utilisation hours of hydropower
and wind power generators remained a year-on-year increase.
The nationwide demand and supply of power was generally on ease. There was a balanced
demand and supply of power in northern region and an easing demand and supply of
power in eastern, central and southern regions in general, while there was sufficient power
supply in northeastern and northwestern regions.
Prospects for 2017
In 2017, in consideration of factors including the macro economy and the expected growth
in power consumption of the service industry and for domestic use, it is expected that the
demand of power consumption for the year will remain at a growing momentum.
In 2017, the power supply nationwide will be adequate. It is expected that the momentum
of rapid increase of installed capacity of thermal power generators will be under effective
control and the proportion of installed capacity of power generation by non-fossil energy
will further increase.
The demand and supply of power nationwide in 2017 will remain at the overall stagnant
trend and the power consumption structure and regional demand and supply distribution
will remain basically the same as last year. It is expected that the utilisation hours of
thermal power generators for the year will continue to experience a year-on-year downturn
under the influence of the increase in power generation capacity by non-fossil energy and
other factors. By virtue of the rise of coal-fired power generation costs, thermal power
generation enterprises will encounter more severe difficulties and challenges.
4. Impact of the Thirteen Five-Year Plan on Coal and Electricity Market
Adhering to the clean, low-carbon, efficient and concentrated principal determined

by the Thirteen Five-Year Plan for the Development of Coal Industry, excessive and
obsolete production capacity will be eliminated by approximately 800 million tonnes per
year while advanced production capacity will be increased by 500 million tonnes per year
through replacement of existing capacities with less amount and layout optimisation during
the Thirteen Five-Year Plan Period, hence the production capacity of coal is expected
to reach 3.9 billion tonnes by 2020. The country strives to further centralise the national
coal production and development towards large-scale coal production bases and further
optimise the coal production structure in order to further raise the degree of concentration
of the industry. Meanwhile, the construction of intelligent coal mines and eco-civilized
mining areas will be proactively pushed forward to enhance the quality and the clean and
efficient use of coal products, which enables the clean development and utilisation of coal
to enter into a new stage. It is expected that, by the end of the Thirteen Five-Year Plan
Period, the overcapacity in coal industry will be further mitigated with a more balanced
market demand and supply and a significantly optimised industry structure, and substantive
progress will be achieved for transformation to clean and efficient coal utilisation in the coal
industry.
According to the Thirteen Five-Year Plan for the Development of Electricity, by 2020,
the proportion of the installed capacity of power generators of non-fossil energy will
be approximately 39%, representing a year-on-year increase of 4 percentage points as
compared with that of 2015, while the proportion of power generation will increase to
31%, and the effects of alternative power generation by non-fossil energy will further
emerge. Acceleration in the transformation and upgrade of coal power generation,
stringent control on planning and construction of coal power plants and reasonable control
on the construction progress of coal power generation base are necessary for promoting
the transformation and upgrade of coal power generation and the orderly development of
clean coal utilisation. During the Thirteen Five-Year Plan Period, the scale of the installed
capacity of coal power generators nationwide is strived to be controlled within 1.1 billion kW
and the proportion will decrease to approximately 55% while the postponement and
cancelation of coal power construction projects exceed 150 million kW. It is expected that
the rapid growth in installed capacity of thermal power generators will be subject to change
during the period of Thirteen Five-Year Plan, and the coal-fired power plants which firstly
complete the clean transformation will have a space for survival and development among
the market competition.
(II) Development Strategy of the Company
1. China Shenhuas opportunities for future development
As a major energy source and industrial material, coal will remain as one of the primary
energy sources in China in the medium and long term. It offers fundamental protection
of a safe and stable supply of energy in China. The safe, green and efficient development
as well as the technology of clean, efficient and low-carbon utilisation of coal can further
explore the use of coal.
The market share of coal-fired power generation has declined but its dominant position
has not changed. As clean and efficient coal-fired power generation technology keeps
improving, the competitiveness of high-quality thermal power will be enhanced, which in
turn provides a key support for the development of the industry.
The concept of the Belt and Road strategy initiated by China provides important external
opportunities for exploring international markets, which creates enormous potential in
overseas business development.
The supply-side reform will accelerate the elimination of backward production capacity
and promote mergers and acquisitions of coal and electric power enterprises in order to
achieve large-scale and clean development. New acquisitions and investment opportunities
will come along with the states transport corridor and local railway construction. The
advancement of technology will also provide investment opportunities for promoting
technology industrialization.
2. China Shenhuas future main challenges:
In 2017, the new normal state of the coal industry will become defined. The development
mode of coal industry on the expansion of output and capacity has changed, which in turn
causes changes in the market competition model.
The slow international economy recovery and the national economy structure under
adjustment will slacken the growth in the demand for energy, including coal. The coal
market will fluctuate and the pressure for falling coal prices will linger in long term despite
the recovery of coal price in 2016.
The power business has encountered more difficulties in accelerating development. The
growth in demand for power will decrease as affected by the slow growth in economy; the
government accelerated the adjustment of the power structure, and imposes a strict limit
on the newly installed capacity of coal-fired power; factors such as the structural reform of
the power industry will intensify the competition in the industry.
With regard to the tightening regulation on energy and the environment, the potential
risks posed by environmental and ecological protection are gradually increasing. The entry
requirements for coal exploitation and coal-fired power development and standards for
energy saving, environmental protection and production safety, etc. are becoming more
stringent. Restraints on water resources and significant investment in infrastructure are the
key factors that affect the development of the coal chemical business.
3. Development Strategy of China Shenhua
China Shenhua will step up the implementation of the clean energy development
strategy. Focusing on the goal of building itself into a world first-class supplier of
clean energy, China Shenhua will accelerate the change in the concept and mode of
development and facilitate the four developments, namely safe development, transitional
development, innovative development and harmonious development, and achieve the
five enhancements, namely enhancing the quality and efficiency of development,
the standards of management, the capability of internationalization, the soft power of
the enterprise and the ability to fulfill social responsibilities. With the emphasis on
optimising and strengthening the integrated operation model based on the concept
of clean development, China Shenhua will reinforce coal sales to promote clean coal
products, develop signature products for Shenhua, strengthen the integrated operation of
coal production, transportation and marketing, improve the production chain of clean and
efficient exploration, utilisation and conversion of coal, and refine the technological system
of clean combustion and efficient conversion of coal to form a reliable income source.
Furthermore, China Shenhua will initiate new businesses in line with the direction of future
development, progressively develop overseas business and actively reach out to the
power sales market. Also, it will launch the macroscopic logistics business provided that
its transportation capacity meets its demand, so as to explore new room for development
and create new points of profit growth. Through the implementation of clean energy
strategy, China Shenhua improves its comprehensive competitiveness, profitability and risk
resilience, adhere to the continuity and stability of the profit distribution policy, and dutifully
assume its social responsibility, building China Shenhua into a reputable international
company and creating greater value for its shareholders.
(III) Business Targets for 2017
Accomplishment Increase/
Item Unit Target of 2017 in 2016 (decrease)
(%)
Commercial coal production 100 million tonnes 2.98 2.898 2.8

Coal sales 100 million tonnes 4.07 3.949 3.1
Power output dispatch billion kWh 214.7 220.57 (2.7)
Revenue RMB100 million 2,036 1,831.27 11.2
Cost of sales RMB100 million 1,428 1,248.43 14.4
Selling, general and administrative RMB100 million 147 140.58 4.6
expenses and net finance costs
Percentage change of unit production / Year-on-year Year-on-year /
cost of the self-produced coal decrease decrease of
ranging 1% to 11.0%
2%
As influenced by factors such as rebound of coal price, the year-on-year increase in profit for the
period attributable to equity holders of the Company in January to March 2017 is expected to
reach or exceed 50%.
The above business targets and estimates are subject to risks, uncertainties and assumptions.
The actual outcome may differ materially from these statements. Such statements do not
constitute actual commitments to investors. Investors should be aware that undue reliance on or
use of such information may lead to investment risks.
(IV) Capital expenditures plans for 2017
Unit: RMB100 million
Accomplishment
Plans for 2017 in 2016
Of which:
Total amount first batch
1. Coal segment 17.6 58.3

2. Power segment 109.5 178.3
3. Transportation segments 41.6 55.7
Of which: Railway 38.2 38.2
Port 3.0 17.4
Shipping 0.4 0.1
4. Coal chemical segment 0.8 1.0
5. Others 0.0 0.5
Total 350 169.5 293.8

Total capital expenditures of 2016 amounted to RMB29.38 billion, which were mainly used for
(1) power segment: constructions including the Jiangxi Jiujiang New Coal Reserve (Transit) and
Power Generation Integration Project of Shenhua Guohua, Phase II of Guohua Ningdong Power
Expansion Project, Luoyuan Bay Coal Storage Integrated Power Plant Project of Shenhua Fujian,
and Fuping Thermal Power Project; (2) coal segment: coal mining in and consideration payment
for mining rights for Shendong Mines, Zhungeer Mines and other mines, and the construction of
Qinglongsi Coal Mine and Coal Processing Plant; and (3) transportation segment: the construction
of Huangda Railway, constructions along Zhunchi Railway and Shenshuo 10,000-tonne Train
Expansion Project. Total capital expenditures of 2016 exceeded the annual budget plan, mainly
attributable to the consideration payment for mining rights for certain mines in Shendong Mines,
Zhungeer Mines and Baorixile Mines, and the acquisition of land use rights by Shenhua Zhuhai
Coal Dock.
Based on the principles of maintaining the strict limit of investment scale and the continuity of
major construction projects, the Board approved total planned capital expenditures of 2017 of
no more than RMB35 billion (exclusive of equity and asset acquisitions), and implemented in
batches. The first batch of planned capital expenditures of 2017 amounted to RMB16.95 billion.
Regarding the capital expenditures for coal segment, the expenditures for maintaining production
capacity and conducting technology transformation amounted to approximately RMB1.41 billion,
the expenditures for equipment procurement amounted to approximately RMB0.27 billion, and
the expenditures approved for the construction of new coal mines amounted to approximately
RMB0.08 billion. Regarding the capital expenditures for power segment, the expenditures for
the construction of new projects and expansion projects (inclusive of equipment procurement)
amounted to approximately RMB10.29 billion, and the expenditures for green technology reform
of ultra-low emission of plants amounted to approximately RMB0.66 billion.
The capital expenditure plans of the Group in 2017 are subject to the development of business
plans (including potential acquisitions), progress of investment projects, market conditions,
outlook for future operation environment and the obtaining of the requisite permissions and
approval documents. Unless required by laws, the Company shall not assume any responsibilities
for updating the data of its capital expenditure plans. The Company intends to finance its capital
expenditures by cash generated from operating activities, short-term and long-term borrowings,
and other debt and equity financing.
(V) Major risks faced
The Company has established a closed-loop risk management system: it will perform risk
identification and determine the major risks upon assessment at the beginning of each year,
then monitor such risks on a daily basis by way of specialized inspection, internal audit, quarterly
report of subsidiaries and branches and other methods, and assess its major risk management
at the year end. This facilitates and improves the decision-making process, refines the internal
control system, and continues to raise the risk management standard. The Board and the
Audit Committee of the Company is of the view that such mechanism is able to assess the
effectiveness of the operation of the risk management of the Company. Investors should be
aware that although the Company has reviewed and listed the major risks, and adopted relevant
countermeasures, there is no absolute guarantee that all adverse impact could be eliminated due
to the limitation of various factors.
1. Risk of macroeconomic fluctuations
The industry in which the Group operates is closely correlated to the prosperity of the
national economy. In 2016, the GDP of China grew by 6.7%, which was a record low since
1990. Uncertainties will still remain amid the steady pace of the macro-economy, which
may materially affect the Groups results.
To cope with the risk of macroeconomic fluctuations, the Group will further strengthen
the studies on relevant industrial trends, optimise production structure, and implement
strategies of green energy to continuously upgrade the quality of development.
2. Risk of market competition
In the coal market, China intended to eliminate production capacity of 150 million tonnes in
2017 at a reasonable pace of eliminating excessive capacities while ensuring the effective
transition between those capacities with the following resources and stable coal supply
to prevent any abnormal fluctuation of coal price beyond the reasonable range. There will
be oversupply in the market in 2017 in general. In the power market, under the inevitable
oversupply in installed power capacity in short term due to the slowdown in economic
growth and sluggish growth in the total power consumption of the society, the power
reform and the opening of power generation planning in 2017 will result in intensified
competition and declining transaction prices in the thermal market. In the coal chemical
market, it is affected relatively by exchange rate fluctuations and swinging international
crude oil prices. Such factors may lead to adverse impacts on the Company, such as lower
sales prices of coal, coal chemical products and lower power generation than expected,
indications of impairment on relevant assets, and therefore may affect the Companys
business results.
In response to the risks of market competition, the Company will reinforce the efforts on
its coal market research and judgment and proactively respond to the price changes. With
further implementation of the requirements of power reform, new regional power sales
companies will be established when appropriate to actively participate in the pilot reform.
Furthermore, it will adhere to a balanced sales and control its inventory on coal chemical
product at a reasonable level. Last but not least, it will promptly perform impairment
assessment and make relevant provision for impairment in accordance with applicable
accounting standards, so as to reflect the status of the Companys assets in an objective
and fair manner.
3. Risk of changes in industry policies
The Groups business activities are subject to the industrial regulatory policies in China.
According to the national Thirteen Five-Year Plan for Energy published at the beginning
of 2017, the total energy consumption shall be controlled at no more than 5.0 billion tonnes
of standard coal by 2020. According to the Thirteen Five-Year Plan for Ecosystem issued
by the State Council on at the end of 2016, the proportion of coal consumption to the total
energy consumption shall be reduced from 62.6% in 2016 to below 58% by 2020. For
2017, China demands the total consumption of primary energy to be controlled at 4.4 billion
tonnes of standard coal, the proportion of non-fossil energy consumption to total primary
energy consumption to be raised to 14.3%, and the proportion of coal consumption to be
reduced to approximately 60%. Currently, the nationwide power supply has entered into
the stage of relative oversupply. In 2016 and 2017, the National Energy Administration
issued the Notice on Further Regulation on Coal-fired Power Generation Planning and
Construction and the Notice on Further Improvement of Approved Construction of
Coal-fired Projects and other documents to strict control on planning and construction of
coal-fired power generation, regulate on the sequence of coal-fired power operation and
construction and exact regulation on the projects in compliance with laws and regulations.
To cope with the risk of changes in industry policies, the Group will strengthen its research
on the latest industry policies and regulations in the PRC and promote industrial upgrading
and structural adjustment through a rational investment portfolio across the business
segments and further regulating on projects approval and construction works of the Group.
4. Risk of rising costs
As the mining process proceeds further and production conditions become increasingly
complicated, the Groups corporate mining cost may increase gradually. Furthermore, a
number of factors, including the long-term price increase of productive resources, increase
in resource and environmental constraints and changes in fiscal and taxation policies, may
lead to an increase in the Groups costs.
To cope with the risk of increasing costs, the Group will establish the value-creation
concept and strengthen the strategic cost control; optimise the cost accountability system;
strengthen taxation planning; improve the preparation of rolling budget to refine cost
management and improve the quality of cost control.
5. Risk of environmental protection
The national policies on energy saving and environmental protection have been further
tightened. Following the promulgation of policies including the Implementation Plan for
Pollutant Discharge Regulation and Approval System, the Thirteen Five-Year Working
Plan for Regulation on Greenhouse Gas Emissions and the Thirteen Five-Year Integrated
Working Plan for Energy Saving and Environmental Protection, the constraints on energy
saving, carbon reduction and environmental protection are further imposed on the Group.
The Group focuses on the development strategy of clean energy. With the efficient
development, use and conversion of clean coal as the core, it spares no effort in
constructing ecological civilization. The Company is also building the brand image of
ultra-low emissions in coal power. It further improves the environmental risk pre-control
management system and strengthens the identification, remediation of potential issues
and environmental emergency management in order to achieve energy conservation and
emission reduction targets as well as to prevent severe environmental pollution incidents.
The management of the Group is of the view that other than those accounted for in the
financial statements, there are currently no environmental lability that may have material
adverse effect on the Groups financial position.
6. Risks of production safety for coal mines
The Group has established the safety production targets of preventing serious
work-related accidents and general accidents, striving to reduce cases of light and serious
injuries, creating long-term mechanism for production and work safety. Although the
Group has been sustaining stable performance in safe production for its coal mines, there
are uncertainties in the course of safe production and any major safety accident would have
a material impact on the Group.
To cope with the risks of production safety for coal mines, the Group will strengthen
various areas in respect of the implementation of its safety risk prevention and control
management system, inspections and treatments and assessment of significant risks,
improvement on three-breaching control mechanism, reinforcement of contractor
management in production safety, enhancement of site management level, safety
production training, emergency rescue management, and consolidation of safety production
fundamentals.
7. Risk of integrated operations
The Groups advantages in integrated coal mines, power, transportation and coal chemical
operations come along with the risks raising from the interruption of individual parts of the
entire integrated chain. In case of poor organization or coordination or a discontinuation of
any link, the balance and high efficiency of integrated organization and operations will be
affected and the impact may adversely affect the Groups business results.
To cope with the risk of integrated operations, the Group will take an array of measures
based on production safety, including scientific scheduling and plan management,
improve railway and port collection and distribution system, strengthen the coordination
of power grid, and strengthen the operation management of production equipment, with
an aim at balanced production and uninterrupted integrated operations to maximize its
competitiveness.
8. Risk of international operations
Due to the complex economic, social, political and religious conditions in the globe and
the fluctuations in exchange rates, the risk of investments in different countries varies
significantly. Given the highly competitive energy market worldwide, the uncertainties in
the Groups international operations may have an impact on its overseas business.
To cope with the risk of international operations, the Group will actively respond to the
national promotion of the Belt and Road, and conscientiously carry out overseas resource
evaluation and project assessment based on sound information analysis prior to making any
decision on overseas project investment so as to ensure economic feasibility. Furthermore,
the Company will strengthen the cultivation and introduction of interdisciplinary talents to
lay a solid cornerstone for its Going Overseas strategy.
9. Risk of natural disasters
The production and operation activities of the Group will be affected by factors including
natural disasters or bad weather. Certain particularly major natural disasters which occurred
in China in recent years had adversely affected the Groups operations to a certain extent.
Factors such as unforeseeable natural disasters and bad weather may bring certain losses
to the Groups operations.
In order to cope with the risks arising from natural disasters, the Group will further
strengthen early warnings of major natural disasters, formulate emergency plans, allocate
necessary resources and perform relevant emergency drills to ensure that the impacts of
natural disasters can be minimized.
The Group carries out centralized management of commercial property insurance with
ongoing review and assessment of risks and risk portfolio. Necessary and appropriate
adjustments which are in line with the needs and practices of the insurance industry in
China have been made to the insurance strategies and actions as safeguard against losses
arising from various exposure.
IV. REASONS AND CAUSES OF FAILURE TO DISCLOSE PURSUANT TO GUIDELINES

BY THE COMPANY DUE TO NON-APPLICATION OF GUIDELINES OR SPECIAL
REASONS
V. PROFIT DISTRIBUTION PLAN
Please refer to Significant Events to this report.

Section VI Significant Events
Section VI Significant Events

I. PROFIT DISTRIBUTION PLAN
(I) Formulation, implementation or adjustment of cash dividend policy
In accordance with the requirements of the relevant laws and regulations and the Articles of
Association, the profit distribution policy of the Company shall maintain continuity and stability
and emphasize on achieving reasonable investment returns for investors. The Company shall give
priority to profit distribution in cash dividends. Subject to conditions, interim profit distribution
may be made by the Company. The profit distribution policy of the Company complies with the
Guideline on Encouragement of Cash Dividend Distribution of Listed Companies announced by
the CSRC.
Pursuant to the Articles of Association, the profit distribution of the Company shall be made
based on the profit for the year attributable to equity holders of the Company in the consolidated
financial statements prepared under the Accounting Standards for Business Enterprises and
the International Financial Reporting Standards, whichever is lower. Annual profit distribution in
cash shall be no less than 35% of the net profit for the year attributable to equity holders of the
Company subject to the relevant conditions.
(II) Profit distribution scheme/plan
1. Final dividend scheme/plan for the year
Profit for
the year
attributable
to equity
holders of the
Company in the
consolidated
financial
statements of Percentage
the respective to the profit
dividend year in for the year
accordance attributable
with to equity
Accounting holders of the
Standards Company in the
Dividend Amount of for Business consolidated
per 10 shares cash dividend Enterprises financial
Year (inclusive of tax) (inclusive of tax) (Unrestated) statements
RMB RMB million RMB million %
Final dividend for 2016

(Proposed) 4.6 9,149 22,712 40.3
Final dividend for 2015 3.2 6,365 16,144 39.4
Final dividend for 2014 7.4 14,718 36,807 40.0
Section VI Significant Events (Continued)
Net profit for the year attributable to equity holders of the Company for 2016 under the
Accounting Standards for Business Enterprises amounted to RMB22,712 million, with
basic earnings per share of RMB1.142/share; profit for the year attributable to shareholders
of the Company under the International Financial Reporting Standards amounted to
RMB24,910 million, with basic earnings per share of RMB1.252/share. As at 31 December
2016, the retained earnings available for distribution to shareholders of the Company under
the Accounting Standards for Business Enterprises amounted to RMB153,846 million.
The Board of the Company recommends the payment of a final dividend for year 2016
in cash of RMB0.46 per share (inclusive of tax) on the basis of the total share capital of
19,889,620,455 shares of the Company as at 31 December 2016, totaling RMB9,149
million (inclusive of tax), which represents 40.3% of the net profit for the year attributable
to equity holders of the Company under the Accounting Standards for Business Enterprises
and 36.7% of the profit for the year attributable to shareholders of the Company under the
International Financial Reporting Standards.
2. Special Dividend Plan
The Board recommends the payment of a special dividend in cash of RMB2.51 per share
(inclusive of tax) on the basis of the total share capital of 19,889,620,455 shares of the
Company as at 31 December 2016, totaling approximately RMB49,923 million (inclusive
of tax), accounting for 32.4% of the retained earnings of RMB153,846 million available for
distribution to shareholders of the Company as at 31 December 2016 (before deducting
the amount of RMB9,149 million under the 2016 final dividend plan) under the Accounting
Standards for Business Enterprises.
3. The above 2016 final dividend plan and special dividend plan are in compliance with the
requirement of the Articles of Association and endorsed by the independent directors and
approved by the Board of the Company. When recommending the plans for the 2016 final
dividend and the special dividend, the Board has attended to and considered the opinions
and concerns of the shareholders of the Company, in particular the minority shareholders.
The Company will hold the 2016 annual general meeting on Friday, 23 June 2017 to
consider and approve the relevant resolutions, including the above dividend plans as
proposed by the Board.
4. The final dividend for year 2016 and the special dividend are denominated and declared in
RMB, which will be distributed together. The final dividend for year 2016 and the special
dividend will be paid in RMB to holders of the Companys A shares, including holders of
the Companys A shares through the Northbound Trading Link of the Shanghai-Hong Kong
Stock Connect (hereinafter referred to as the Northbound shareholders) and holders of
the Companys H shares through the Southbound Trading Link (hereinafter referred to as
the Southbound Shareholders). Dividends to holders of the Companys H shares, except
the Southbound Shareholders, are paid in HKD. The dividend paid in HKD is calculated
according to the exchange rate based on the average benchmark rate of RMB against HKD,
as published by the Bank of China five business days preceding the date of declaration of
such dividend.
In accordance with the preliminary arrangement of profit distribution plan and annual
general meeting, the 2016 final dividend and the special dividend for the Companys H
shareholders are estimated to be distributed on or about 22 August 2017.
5. Pursuant to the Articles of Association:
(1) After the Shanghai Stock Exchange is closed in the afternoon on Wednesday, 24
May 2017, the shareholders of A shares of the Company (including the Northbound
Shareholders) and the proxies of shareholders as registered in the China Securities
Depository and Clearing Corporation Limited Shanghai Branch are entitled to attend
and vote at the 2016 annual general meeting of the Company;
(2) Under the relevant regulations of China Securities Depository and Clearing
Corporation Limited Shanghai Branch and according to the market practice adopted
for final dividend distribution for A shares, the Company will publish a separate
announcement in respect of the final dividend for year 2016 and the special dividend
distribution to holders of A shares (including the Northbound Shareholders) after
the 2016 annual general meeting to determine the record date, ex-rights date and
dividend distribution date for the final dividend for year 2016 and the special dividend
distribution to holders of A shares.
6. The arrangement of temporary closure of the register of members of H shares of the

Company:
Temporary closure of the register of members

The
Companys
share
Corresponding First Day Last Day The last day for registrar for
No. Rights (inclusive) (inclusive) registering members H shares
1 Attending and voting 24 May 2017, 23 June 2017, 23 May 2017, Computershare
at the 2016 annual Wednesday Friday Tuesday 4:30 p.m. Hong Kong
general meeting Investor
Services
Limited
2 Entitled to the final 3 July 2017, 7 July 2017, 30 June 2017, Computershare
dividend for year Monday Friday Friday 4:30 p.m. Hong Kong
2016 and the Investor
special dividend Services
Limited
7. In accordance with the Enterprise Income Tax Law of the PRC and its implementation
regulations which came into effect on 1 January 2008, the Company is required to withhold
and pay enterprise income tax at the rate of 10% on behalf of the non-resident enterprise
shareholders whose names appear on the register of members for H shares of the
Company when distributing final dividends. The Company shall withhold and pay enterprise
income tax in respect of the final dividend for year 2016 and the special dividend of the
Company for the non-resident enterprise shareholders whose name would appear on the
register of members for H shares of the Company on 7 July 2017.
8. According to Guo Shui Han [2011] No. 348 issued by the State Administration of Taxation,
the Company shall withhold and pay individual income tax for dividend payable to the
individual shareholders of H shares. The individual shareholders of H shares are entitled
to the relevant preferential tax treatment pursuant to the provisions in the tax agreements
entered into between their countries of residence and China or the tax arrangements
between mainland China and Hong Kong (Macau).
If the individual shareholders of the H shares who are Hong Kong or Macau residents or
residents of the countries which have an agreed tax rate of 10% with China, the Company
shall withhold individual income tax at a rate of 10%. If the individual shareholders of the
H shares are residents of countries which have an agreed tax rate of less than 10% with
China, the Company shall withhold individual income tax on behalf of them in accordance
with relevant provisions required by the Announcement of the State Administration of
Taxation in relation to the Administrative Measures on Preferential Treatment Entitled
by Non-resident Taxpayers under Tax Treaties (No. 60 Announcement of the State
Administration of Taxation in 2015). If the individual shareholders of the H shares are
residents of countries which have an agreed tax rate of over 10% but less than 20% with
China, the Company shall withhold the individual income tax at the agreed actual rate. In
case the individual shareholders of the H shares are residents of countries which have not
entered into any tax agreement with China, or the agreed tax rate with China is 20% or
otherwise, the Company shall withhold the individual income tax at a rate of 20%.
The Company shall use the registered address (hereinafter referred to as registered
address) as recorded in the register of members of H shares on 7 July 2017 as the
criterion in determining the residence of the individual shareholders of H shares who are
entitled to receive the final dividend for year 2016 and the special dividend of the Company,
and withhold and pay individual income tax accordingly. If the residence of the individual
shareholders of H shares is inconsistent with the registered address, such shareholders
shall notify the Companys share registrar for H shares at or before 4:30 p.m. on 30 June
2017 with the relevant evidence at Computershare Hong Kong Investor Services Limited of
17M Floor, Hopewell Centre, 183 Queens Road East, Wan Chai, Hong Kong.
9. With respect to the Southbound Shareholders, according to the relevant requirements of

China Securities Depository and Clearing Corporation Limited, China Securities Depository
and Clearing Corporation Limited Shanghai Branch shall receive cash dividends distributed
by the Company as the nominee of the Southbound Shareholders and distribute such cash
dividends to the relevant Southbound Shareholders through its depository and clearing
system.
According to the relevant provisions under the Notice on Tax Policies for
Shanghai-Hong Kong Stock Connect Pilot Programme (Cai Shui [2014] No. 81), the
Company shall withhold individual income tax at the rate of 20% with respect to dividends
received by Mainland individual investors for investing in H-shares listed in Hong Kong
Stock Exchange through Shanghai-Hong Kong Stock Connect. For Mainland securities
investment funds investing in shares listed on Hong Kong Stock Exchange through
Shanghai-Hong Kong Stock Connect, the above rules also apply and individual income tax
shall be levied on dividends derived therefrom. The Company is not required to withhold
income tax on dividends derived by Mainland enterprise investors, and such enterprises
shall report the income and make tax payment by themselves. The record date and the
relevant arrangements of dividend distribution for Southbound Investors are the same as
that of the Companys shareholders of H shares.
10. The Company assumes no responsibility arising from any delayed or inaccurate
determination of the status of the shareholders or any dispute over the mechanism of
withholding. Shareholders should consult their tax advisers regarding the PRC, Hong Kong
and other tax implications of owning and disposing of the Companys H shares.
II. PERFORMANCE OF COMMITMENTS
Detailed Further steps

Timely reasons shall shall be
and Strict be specified if specified if
Date and Performance commitment commitment
Background of Type of Duration of Any Time Limit of is not fulfilled is not fulfilled
Commitment Commitment Covenantor Commitment Commitment for Commitment Commitment in time in time
Commitment Non- Shenhua Group The Company and Shenhua Group 24 May 2005, Yes Yes, in process N/A N/A
in relation to competition Corporation Corporation entered into a long-term
initial public undertaking Non-competition Agreement
offering on 24 May 2005. Pursuant to
such agreement, Shenhua Group
Corporation has committed not
to compete with the Company
in respect of the Companys
principal businesses whether
inside or outside of the PRC, and
granted the Company priority
trading and pre-emptive right to
acquire and be transferred from
Shenhua Group Corporation
any business opportunities and
assets which may pose potential
competition.
Other Commitment Shenhua Group Shenhua Group Corporation From 8 July Yes Yes, completed N/A N/A
commitment in relation to Corporation proposed to increase its 2015 to
increase in shareholding of A shares in the 7 July 2016
shares Company in its own name via the
trading system of the Shanghai
Stock Exchange within 12 months
after 8 July 2015. Shenhua Group
Corporation undertakes that
it will not dispose any share it
holds in the Company during the
period of the implementation of
the increase plan and within the
statutory period.
To further formulate the performance of the Non-competition Agreement, the Resolution on the
Performance of Non-competition Undertaking was approved at the 45th meeting of the second session
of the Board on 27 June 2014 and the Announcement in relation to the Performance of Non-competition
Undertaking was disclosed to public. The Company disclosed that it will commence the acquisition of
14 assets of Shenhua Group and its subsidiaries before 30 June 2019 (submitting the asset acquisition
proposal to the internal competent authorities of China Shenhua for approval procedure); Shareholders
are advised to pay attention to the risks involving the change in scope of acquisition, third-party statutory
right of first refusal and that the commitment may fail to be fulfilled or fail to be performed on time due
to objective reasons. For details, please refer to the H shares announcement dated 27 June 2014 and
the A shares announcement of the Company dated 28 June 2014.
In 2015, the Company completed the acquisitions of three assets, namely Ningdong Power, Xuzhou
Power and Zhoushan Power. There was no relevant asset acquisition was made in 2016.
III. APPROPRIATION OF FUNDS AND PROGRESS OF THE COLLECTION DURING THE

REPORTING PERIOD
IV. AUDIT OPINIONS AND OTHER EXPLANATIONS
(I) Explanation from the board and the supervisory committee for the non-standard
audit report issued by the auditors
(II) The Boards analysis and explanation about the reasons for and impact of changes in
accounting policies, accounting estimates or accounting method
(III) The Boards analysis and explanation about the reasons for and impact of correction
to material previous errors
V. APPOINTMENT AND REMOVAL OF AUDITORS
Name of Domestic Auditors of the Company Deloitte Touche Tohmatsu Certified

Public Accountants LLP
Remuneration of Domestic Auditors of the Company 9.20
(RMB million)
Term of Auditing of Domestic Auditors of the Company (year) 4
Name of International Auditors of the Company Deloitte Touche Tohmatsu
Remuneration of International Auditors of the Company 1.50
(RMB million)
Term of Auditing of International Auditors of 4
the Company (year)
On 17 June 2016, Deloitte Touche Tohmatsu Certified Public Accountants LLP and Deloitte Touche
Tohmatsu were appointed as the domestic and international auditors of the Company respectively for
2016 at the Companys 2015 annual general meeting.
Name Remuneration
Internal Control Auditors Deloitte Touche Tohmatsu Certified Public RMB1.59 million
Accountants LLP
The above auditors also served as the external auditors of several subsidiaries of the Company and their
remuneration relating to audit services amounted to approximately RMB2.08 million during the reporting
period. Deloitte Touche Tohmatsu Certified Public Accountants LLP did not provide non-audit services to
the Company and its subsidiaries during the reporting period.
VI. INSOLVENCY OR RESTRUCTURING RELATED MATTERS

VII. MATERIAL LITIGATION AND ARBITRATION

As at the end of the reporting period, the Group was not involved in any material litigation or arbitration. As
far as the Group was aware, the Group did not have any material litigation or claim which was pending
or threatened against the Group. As at 31 December 2016, the Group was the defendant or the party of
certain non-material litigations. The management of the Company believes that any possible legal liability
which may be incurred from the aforesaid cases will not have any material impact on the financial
position of the Group.
VIII. SANCTIONS AND RECTIFICATIONS IMPOSED ON THE LISTED COMPANY,

DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT, CONTROLLING
SHAREHOLDERS, DE FACTO CONTROLLER AND OFFEROR
IX. EXPLANATION FOR CREDIT OF THE COMPANY AND ITS CONTROLLING

SHAREHOLDERS AND DE FACTO CONTROLLER
Upon self-investigation, as at the end of the reporting period, there has been no failure in fulfilling
the judgment from court or relatively large amount of outstanding debt such as failure in fulfilling the
judgment from court or debit interests owed to external financial institutions due of the Company and
Shenhua Group Corporation.
X. THE SHARE OPTIONS INCENTIVE PLAN, EMPLOYMENT STOCK OWNERSHIP

SCHEME OR OTHER EMPLOYEE INCENTIVE SITUATION OF THE COMPANY AND
THEIR IMPACTS
XI. MATERIAL CONNECTED TRANSACTIONS

(I) Connected transactions during the daily operation
Pursuant to the requirements under the Guidelines of Shanghai Stock Exchange on Connected
Transactions of Listed Companies, the Audit Committee of the Board of the Company shall
perform the duties of control and daily management of connected transactions of the Company.
The Company has a connected transaction team under the direct supervision of the Chief
Financial Officer, which is responsible for the management of connected transactions; and has
established a business process, which properly delineates the responsibilities of the Company,
its subsidiaries and branches in the management of connected transactions. The team has
also established routine examinations, reporting systems and accountability systems in the
subsidiaries and branches of the Company.
(1) Non-exempt continuing connected transactions between the Group and Shenhua
Group
In order to ensure a reliable and quality-assured provision of materials and services for the
Company, lower operation risks and costs, and allow Shenhua Finance Company, in which
the Company has controlling shareholding, to provide financial services to the companies
under the Group and Shenhua Group Corporation so that it can fully leverage on its
functions as an internal financing platform and capital management platform, and to further
contain risks and increase income. The Company entered into the following continuing
connected transaction agreements with Shenhua Group Corporation:
A. Mutual Coal Supply Agreement
The Company entered into the Mutual Coal Supply Agreement with Shenhua
Group Corporation on 22 March 2013. The Mutual Coal Supply Agreement was
effective between 1 January 2014 and 31 December 2016. Pursuant to the Mutual
Coal Supply Agreement, the Group and Shenhua Group mutually sold and supplied
various types of coal. The price of the coal supplied under the Mutual Coal Supply
Agreement is market price, namely, the price charged by an independent third party
for the supply of coal of the same grade based on the normal commercial terms
concluded on the normal commercial conditions in the same region or its vicinity, or
the price of coal of the same grade supplied to or purchased from an independent
third party by the parties separately based on the normal commercial terms
concluded on the normal commercial conditions. The price of the coal supplied
under the Mutual Coal Supply Agreement was determined by the Company and
Shenhua Group Corporation through fair negotiation with reference to the Bohai-Rim
Steam-Coal Price Index. In accordance with the provisions of the Mutual Coal Supply
Agreement, priority will be given to the other party when one party purchases coal
unless the terms of sales provided by a third party are more favorable.
On 24 March 2016, the Company renewed the Mutual Coal Supply Agreement with
Shenhua Group Corporation. The new Mutual Coal Supply Agreement is effective
from 1 January 2017 and will expire on 31 December 2019. Pursuant to the new
Mutual Coal Supply Agreement, the Group and Shenhua Group mutually sold and
supplied various types of coal.
The supply price under the new Mutual Coal Supply Agreement is the product of the
unit price RMB/tonne multiplied by the actual weight. The unit price of coal shall be
determined by both parties after arms length negotiations with reference to the then
market price and conditions and the following factors, provided that the transaction
terms shall not be less favourable than those provided by third parties:
(1) The national industrial policy as well as industry and market conditions in the
PRC;
(2) The specified guidelines issued by NDRC setting out the coal purchase prices (if
any);
(3) The current transacted coal prices of the local coal exchange or market in the
PRC, i.e., the coal price with same quality that is offered to or offered by third
parties under normal market conditions and normal commercial terms in the
same or nearby regions. For local spot coal price, reference is generally made
to (i) the spot price index of the local coal exchange or market in Bohai-rim
region or nearby provinces as published on the website of
(www.cctd.com.cn) organised by China Coal Transportation & Sale Society
(
) in the PRC; (ii) the sale price of local large-scale coal
enterprises as published by each coal industry website (if any); and/or (iii)
price quotation of a few enterprises with comparable quality, quantity and
location (if any). Considering that the Shenhua Group (including the Group) is
the largest and most technologically advanced coal enterprise in China, and is
the largest coal dealer in the world, there are certain types of coal that other
coal enterprises do not produce or sell. Therefore, for certain types of coal,
the Company may not be able to obtain relevant price quotation of one or
more other enterprises with comparable quality, quantity and location. If the
Company can obtain any price quotation(s) of one or more other enterprises
with comparable quality, quantity and location, the Company will obtain such
price quotation(s), and will adopt the most favourable price obtained;
(4) The quality of the coal (including the estimated calorific value of coal as
required by different coal-fired power generating units);
(5) The quantity of coal; and
(6) The transportation fees.

B. Mutual Supplies and Services Agreement
On 22 March 2013, the Company entered into the Mutual Supplies and Services
Agreement with Shenhua Group Corporation. The Mutual Supplies and Services
Agreement was effective between 1 January 2014 and 31 December 2016. In
accordance with the Mutual Supplies and Services Agreement, in addition to
providing administrative and management services at agreed price, Shenhua Group
also supplied production materials and ancillary services to the Group with a pricing
policy as follows:
Price prescribed by the state if applicable; when there is no state-prescribed price,

the state-guidance price should be applied; where there is neither a state-prescribed
price nor a state-guidance price, the market price (including bidding price); where
there is no comparable market price from independent third parties, transaction
prices can be determined with reference to the prices of non-connected transactions
between a connected party and a third party independent thereof (or the prices of
non-connected transaction between Shenhua Group Corporation and a third party
independent thereof); where none of the above is applicable or where it is not
practical to apply the above pricing policies in reality, the price shall be the contractual
price.
On 24 March 2016, the Company renewed the Mutual Supplies and Services
Agreement with Shenhua Group Corporation. The new Mutual Supplies and Services
Agreement is effective from 1 January 2017 and will expire on 31 December 2019.
Pursuant to the new Mutual Supplies and Services Agreement, the Group and
Shenhua Group mutually sold and provided various types of products and services.
The pricing of the products and services provided under the new Mutual Supplies
and Services Agreement shall be determined in accordance with the general
principles and in the order of the section below:
(a) Government-prescribed price and government-guided price: if at any time, the

government-prescribed price is applicable to any particular product or service,
such product or service shall be supplied at the applicable government-
prescribed price. Where a government-guided fee standard is available, the
price will be agreed within the range of the government guided price;
(b) Tender and bidding price: where tender and bidding process is necessary
under applicable laws and regulations, the price ultimately determined in
accordance with the tender and bidding process;
(c) Market price: to be determined based on normal commercial terms and

the following method. The price of the same or similar products or services
provided by an independent third party during the ordinary course of business
on normal commercial terms. The management shall consider at least two
comparable deals with independent third parties for the same period when
determining whether the price for any product or service transaction under
this Agreement is the market price; and
(d) Agreed price: to be determined by adding a reasonable profit margin over a

reasonable cost. The management shall consider at least two comparable
deals with independent third parties for the same period when determining
the reasonable profit of any product or service transaction under this
Agreement.
In addition to the above, for certain types of product or service, specific pricing policy
is adopted as follows:
(a) Rail transportation: price prescribed by NDRC or other related government

competent authorities;
(b) Construction: where tender and bidding process is necessary under applicable
laws and regulations, the price ultimately determined in accordance with
the tender and bidding process; where tender and bidding process is not
necessary under applicable laws, the market price;
(c) Oil products: government-guided price;
(d) Alternative power generation: price prescribed by NDRC or other related

government competent authorities;
(e) Hardware and software equipment and related services: market price (including
tender and bidding price);
(f) Chemical products: market price;
(g) Production equipment and spare parts, office products: market price;
(h) Tendering services: price prescribed by NDRC;
(i) Technical consulting services: agreed price with a profit margin of

approximately 10%;
(j) Information technology services: the budget is reviewed by professional

institution(s) with pricing reviewing qualification according to relevant national
and industrial rules and regulations on construction pricing, pricing mechanism
and fee standards, with reference to the market customs of the information
technology industry, actual standards and market price, taking into account the
actual condition of the Companys information technology construction. The
parties negotiate and agree on the service price within the scope of budget;
(k) Logistics and support services and training services: agreed price (cost plus a
profit margin of approximately 5%);
(l) Social security and pension management services and staff data recording
services: agreed price (cost plus a profit margin of approximately 5%); and
(m) Various daily administrative services to the headquarters of Shenhua Group

Corporation (exclusive of financial management and services): agreed price
(cost plus a profit margin of approximately 5%).
C. Financial Services Agreement
On 22 March 2013, the Company entered into the Financial Services Agreement
with Shenhua Group Corporation. The Financial Services Agreement was effective
between 1 January 2014 and 31 December 2016. In accordance with the Financial
Services Agreement, the Company provided relevant financial services to Shenhua
Group through Shenhua Finance Company.
The pricing policy of the Financial Services Agreement is as follows:
a. Deposits and loans: The interest rate for deposits placed by Shenhua Group
Corporation, its subsidiaries and associates with Shenhua Finance Company
shall not be lower than the lowest rate allowed by the PBOC for the same
type of deposit; in addition to the above, the interest rate shall be determined
by reference to the rate confirmed by normal commercial banks for offering
the same type of deposits to Shenhua Group Corporation and its subsidiaries
and associates and shall be determined on normal commercial terms. The
interest rate for loans offered by Shenhua Finance Company to Shenhua
Group Corporation and its subsidiaries and associates shall not be higher than
the highest rate allowed by the PBOC for the same type of loans; in addition
to the above, the interest rate shall be determined by reference to the rate
confirmed by normal commercial banks for offering the same type of loans to
Shenhua Group Corporation and its subsidiaries and associates and shall be
determined on normal commercial terms;
b. Paid services: Shenhua Finance Company may offer paid consultancy,

agency, settlement, account transfer, investment, finance leasing, letter of
credit, online banking, entrusted loans and other related services to Shenhua
Group Corporation, its subsidiaries and associates. The fees receivable by
Shenhua Finance Company for offering consultancy, agency, settlement,
account transfer, investment, finance leasing, letter of credit, online banking,
entrusted loans and other related services to Shenhua Group Corporation,
its subsidiaries and associates shall comply with the relevant requirements
on fee standards (if any) stipulated by the PBOC or the CBRC; in addition to
the above, the fees receivable by the Shenhua Finance Company for offering
financial services to Shenhua Group Corporation, its subsidiaries and associates
shall be determined by reference to the fees receivable by normal commercial
banks for offering the same type of financial services to Shenhua Group
Corporation, its subsidiaries, associates and shall be determined on normal
commercial terms.
On 24 March 2016, the Company renewed the Financial Services Agreement with
Shenhua Group Corporation. The new Financial Services Agreement is effective from
1 January 2017 and will expire on 31 December 2019. Pursuant to the new Financial
Services Agreement, the Company provided relevant financial services to Shenhua
Group through Shenhua Finance Company.
The pricing policy of the new Financial Services Agreement is as below:
(1) Subject to compliance with the terms and conditions of the Financial Services
Agreement, Finance Company shall be appointed as one of the financial
institutions to provide financial services to Members of Shenhua Group.
Members of Shenhua Group may obtain financial services from other financial
institutions in addition to or instead of Finance Company, as it thinks fit;
(2) the interest rates for deposits placed by Members of Shenhua Group with
Finance Company under the Financial Service Agreement are negotiated
on arms length terms and with reference to the interest rate prescribed by
the PBOC for the same type of deposit and interest rates charged by major
commercial banks in the PRC for comparable deposits provided to Members
of Shenhua Group;
(3) the interest rates for loans granted by Finance Company to Members of
Shenhua Group under the Financial Service Agreement are negotiated on
arms length terms and with reference to the interest rate prescribed by
the PBOC for the same type of loan and interest rates charged by major
commercial banks in the PRC for comparable loans provided to Members of
Shenhua Group; and
(4) the service fees charged by Finance Company for the provision of the financial
services to Members of Shenhua Group are determined according to the
fee rates fixed by the PBOC or the CBRC, and if such fixed fee rates are not
available, the service fees are negotiated on arms length taking into account
the market conditions and with reference to the fee rates charged by major
commercial banks for comparable services provided to Members of Shenhua
Group.
(2) Non-exempt continuing connected transactions between the Group and other parties
D. Transportation Service Framework Agreement between the Company and Taiyuan

Railway Bureau
Taiyuan Railway Bureau is the parent company of Daqin Railway, which is a

substantial shareholder of 10% shareholding or above of Shuohuang Railway, a
significant subsidiary of the Company under the Hong Kong Listing Rules. Therefore,
Taiyuan Railway Bureau is a connected person of the Company under the Hong
Kong Listing Rules, and the Transportation Service Framework Agreement and the
transactions contemplated thereunder constitute continuing connected transactions
of the Company under the Hong Kong Listing Rules.
In order to secure coal transportation service for the Group, the Company entered
into the Transportation Service Framework Agreement with Taiyuan Railway Bureau
on 22 March 2013. The Transportation Service Framework Agreement was effective
between 1 January 2014 and 31 December 2016. Pursuant to the Transportation
Service Framework Agreement, the transportation fee payable by the Group was
determined in accordance with the following pricing policy: (a) state-prescribed price;
(b) the state-guidance price where there is no state-prescribed price; and (c) where
there is neither a state-prescribed price nor a state-guidance price, the price is
determined by fair negotiation between Taiyuan Railway Bureau and the Group with
reference to the transportation fee received by Taiyuan Railway Bureau for offering
transportation services to a third party.
On 24 March 2016, the Company renewed the Transportation Service Framework

Agreement with Taiyuan Railway Bureau. The new Transportation Service
Framework Agreement is effective from 1 January 2017 and will expire on 31
December 2019. Pursuant to the new Transportation Service Framework Agreement,
the Taiyuan Railway Bureau Group has agreed to provide railway transportation and
related services to the Group, and the Group has agreed to provide rolling stock
leasing service, railway track maintenance and other related services to the Taiyuan
Railway Bureau Group.
The pricing of the services under the new Transportation Service Framework
Agreement shall be agreed in the implementation agreements, but shall be
determined in accordance with the general principles and order of this section:
(1) Government-prescribed price and government-guided price: if at any time,

the government-prescribed price is applicable to any particular service, such
service shall be supplied at the applicable government-prescribed price.
Where a government-guided fee standard is available, the price will be agreed
within the range of the government guided price.
(2) Tender and bidding price: where tender and bidding process is necessary
under applicable laws, regulations and rules, the price ultimately determined in
accordance with the tender and bidding process.
(3) Market price: the price of the same or similar services provided by an
independent third party during the ordinary course of business on normal
commercial terms. The management shall consider at least two comparable
transactions with independent third party for the same period when
determining whether the price for any transaction under the Agreement is
market price.
(4) Agreed price: to be determined by adding a reasonable profit over a reasonable

cost. The management shall consider at least two comparable transactions
with independent third party for the same period when determining the
reasonable profit of any transaction under the Agreement.
In addition to the above, for certain type of service, specific pricing policy is adopted as
follows:
(1) Transportation and related services provided by the Taiyuan Railway Bureau
Group to the Group: price prescribed by NDRC or other related government
authorities.
(2) Rolling stock leasing and other related services provided by the Group to the
Taiyuan Railway Bureau Group: price prescribed by NDRC or other related
government authorities.
(3) Railway track maintenance and other related services provided by the Group
to the Taiyuan Railway Bureau Group: the price is negotiated and agreed by
the parties on the basis of the unit price that the Taiyuan Railway Bureau
Group agreed with third parties in the previous year or the same year.
The agreements A to C above are daily connected transactions under the Shanghai
Listing Rules, while the agreements A to D above are continuing connected
transactions under the Hong Kong Listing Rules.
3. Implementation of and review opinion on the non-exempt continuing connected

transactions
During the reporting period, the implementation of the agreements A to D above is set
out in the table below. The total amount of connected transactions for sale of products
and provision of services by the Group to Shenhua Group Corporation during the reporting
period amounted to RMB10,846 million, which accounted for 5.9% of the operating
revenue of the Group during the reporting period.
Provision of products and services by the Group Purchase of products and services from connected persons
to connected persons and other inflows by the Group and other outflows
Transaction Transaction
amount during Proportion in amount during Proportion in
Prevailing the reporting the same type of Prevailing the reporting the same type of
No. Name of agreement transaction cap period transactions transaction cap period transactions
RMB million RMB million % RMB million RMB million %
A Mutual Coal Supply Agreement

between the Company and
Shenhua Group Corporation 34,800 4,724 4.8 38,400 4,764 18.1
B Mutual Supplies and Services
Agreement between the
Company and Shenhua Group
Corporation 22,300 6,122 12,400 3,100
Including: (1) Products 6,076 8.3 1,361 0.3
(2) Services 46 0.5 1,739 8.8
D Transportation Service Framework
Agreement between the
Company and Taiyuan Railway
Bureau 12,400 3,970 39.0
Transaction
amount
Prevailing during the
Name of transaction reporting
No. agreement Transaction item cap period
RMB million RMB million
C Financial Services 1. Annual total transaction amount of bill 26,000 40

Agreement acceptance and discount services handled for
between the Shenhua Group Corporation, the subsidiaries
Company and of Shenhua Group and the associates of
Shenhua Group Shenhua Group Corporation (excluding the
Corporation Group) (Shenhua Group and its associates)
2. Maximum daily balance (including interests 104,000 15,562
accrued thereon) of deposits placed by
Shenhua Group and its associates
3. Maximum daily balance of loans, consumption 71,500 15,937
credit, buyers credit and financial leasing
(including interests accrued thereon) granted
to Shenhua Group and its associates
4. Maximum daily balance (including interests 78,000 3,742
accrued thereon) of entrusted loans granted
by Shenhua Group to the Group through
5. Annual total fee charged for providing the 520 58
Shenhua Group and its associates with
consultancy, agency, settlement, transfer,
investment, lease finance, letter of credit,
online banking, entrusted loan and other
financial services
The above continuing connected transactions were settled in cash and carried out in
the ordinary course of business of the Company, and were strictly in compliance with
procedures of review and approval by independent directors and independent shareholders
as well as disclosure requirements.
The independent non-executive directors of the Company have confirmed to the Board
of the Company that they have reviewed the transactions contemplated under the
agreements A to D above and are of the view that (1) those transactions were entered
into in the ordinary course of business of the Group; (2) those transactions were on normal
commercial terms or better terms; and (3) those transactions were conducted according to
the agreements governing them on terms that are fair and reasonable and in the interest of
the shareholders of the Company as a whole.
Deloitte Touche Tohmatsu, the international auditors of the Company, have reviewed the
transactions contemplated under the agreements A to D above and issued a letter to the
Board, indicating that they were not aware of any matter for which they would consider
that the continuing connected transactions above (1) had not been approved by the
Companys Board of Directors; (2) were not, in all material aspects, in accordance with the
pricing policy of the Group, (3) were not entered into, in all material aspects, in accordance
with the relevant agreements governing such transactions; and (4) the aggregate amount
of those transactions for the year ended 31 December 2016 had not exceeded the
annual caps disclosed in the Companys announcements on the continuing connected
transactions.
Certain related party transactions set out in Note 41 of the financial statements prepared
under the International Financial Reporting Standards also constituted connected
transactions under the Hong Kong Listing Rules and were required to be disclosed in
accordance with Chapter 14A of the Hong Kong Listing Rules. The Company has complied
with the disclosure requirements of Chapter 14A of the Hong Kong Listing Rules in respect
of the above connected transactions and continuing connected transactions.
4. Caps for the non-exempt continuing connected transactions for 2017 to 2019
Name of Connected Date of Transaction cap Approval

No. agreement Counterparty transaction item agreement (RMB million) procedure
For the year For the year For the year
2017 2018 2019
1 Mutual Coal Supply Shenhua Group Supply of coal by the Group to the Shenhua Group 24 March 2016 11,300 13,500 16,000 Approved at the 2015
Agreement Corporation Supply of coal by the Shenhua Group to the Group 9,400 11,400 13,500 annual general meeting
on 17 June 2016
2 Mutual Supplies Shenhua Group Supply of products and provision of services by the 24 March 2016 11,800 11,200 11,900
and Services Corporation Group to the Shenhua Group
Agreement Supply of products and provision of services by the 8,800 8,800 8,800
Shenhua Group to the Group
3 Financial Services Shenhua Group (1) Total amount of providing financial services 24 March 2016 4,290 4,420 4,550
Agreement Corporation of guarantee (including guarantee business
within the business scope of financial
enterprises, such as performance guarantee
and quotation sharing) to members of
Shenhua Group
(2) Annual total transaction amount of bill 10,400 10,400 10,400
acceptance and discount services
(3) Maximum daily balance (including interests 52,000 58,500 65,000
accrued thereon) of deposits placed by
members of Shenhua Group
(4) Maximum daily balance of loans, consumption 26,000 28,600 32,500
credit, buyers credit and finance leasing
(including relevant accrued interests incurred)
granted to members of Shenhua Group
(5) Maximum daily balance of entrusted loans 13,000 13,000 13,000
(including relevant accrued interests incurred)
advanced by Shenhua Group Corporation
and its subsidiaries to the Company and/
or its subsidiaries through Shenhua Finance
Company
(6) Annual total fee charged for providing 182 221 267
members of Shenhua Group with
consultation, agency, settlement, transfer,
investment, lease finance, letter of credit,
online banking, entrusted loan, guarantee, bill
acceptance and other financial services
4 Transportation Taiyuan Railway Rolling stock leasing, railway track maintenance and 24 March 2016 1,700 1,700 1,700 Approved by the Board on
Service Framework Bureau other related services provided by the Group to the 24 March 2016
Agreement Taiyuan Railway Bureau
Acceptance of railway transportation services and 11,600 14,000 17,000
other related services of the Taiyuan Railway
Bureau by the Group
Under the Mutual Supplies and Services Agreement, the Group and Shenhua Group
entered into the Entrusted Management Services of Asset and Business Agreement (
), which was considered and approved at the 15th meeting
of the third session of the Board of the Company on 24 March 2016. The disclosure of
the renewal of the above agreement was set out in the H shares announcement dated 24
March 2016 and the A shares announcement dated 25 March 2016 of the Company.
(II) Connected transactions regarding acquisition and disposal of assets or equity
(III) Material connected transactions regarding joint external investment
On 20 July 2016, the Company, Zhejiang Provincial Energy Group Co., Ltd. (Zhejiang Energy
Group) and Shenhua Ningxia Coal Industry Co., Ltd. (Shenhua Ningxia Coal) entered into a joint
venture agreement for the establishment of a joint venture company, namely Guohua Ningdong.
Pursuant to the joint venture agreement, the registered capital of Guohua Ningdong is RMB400
million and the Company, Zhejiang Energy Group and Shenhua Ningxia Coal contributed 56.77%,
33.33% and 9.9%, respectively, of the registered capital.
By the end of 2016, the business registration of Guohua Ningdong had been completed and the
capital contribution made by the three shareholders had been received. Guohua Ningdong is a
subsidiary of the Company which is consolidated in the financial statement of the Company.
(IV) Debts and liabilities between related parties
Unit: RMB million
Funds provided to Funds offered by related

related parties parties to the Group
Opening Amount Closing Opening Amount Closing
Related party Relationship balance incurred balance balance incurred balance
Shenhua Group Controlling shareholders and 0 0 0 7,423 (2,599) 4,824

Corporation and its subsidiaries
its subsidiaries
Other related Others 700 0 700 0 0 0
parties
Total 700 0 700 7,423 (2,599) 4,824
Amount of funds provided by the Group to the 0

controlling shareholder and its subsidiaries
during the reporting period
Balance of funds provided by the Group to the 0
controlling shareholder and its subsidiaries
Reasons for debts and liabilities between The above related debts and liabilities incurred were mainly
related parties due to the fact that the Group provided entrusted loans to an
associated company of a subsidiary of the Company through a
bank, and the Group took long-term and short-term loans from
Shenhua Group and performed internal decision procedures in
accordance with relevant requirements.
Repayment of debts and liabilities between Currently, the principal and interests of the above entrusted
related parties loans and borrowings are repaid in a normal manner in
accordance with the repayment schedule.
Undertakings related to debts and liabilities Not applicable

between related parties
Impacts of debts and liabilities between related The above entrusted loans and borrowings are beneficial to
parties on the operating results the normal commencement of relevant project construction
and financial position of the Company and production operation of the Company and have no material
impact on the operating results and financial position of the
Company.
XII. MATERIAL CONTRACTS AND THEIR PERFORMANCE

(I) Trust, contracting and leasing
During the reporting period, the Company did not enter into or have any management and
administration contracts in respect of the whole or any material part of the business of the
Company.
(II) Guarantees
Unit: RMB million
1. Guarantee provided by the Company to external parties (excluding guarantee granted to its subsidiaries)
Date of Whether
Relationship provision of guarantee
between the guarantee Whether Whether is for the
guarantor (execution Beginning performance Whether Amount of Counter benefit of
and the listed Amount date of date of Expiry date Type of has been guarantee guarantee guarantee related
Guarantor company Guaranteed guaranteed agreement) guarantee of guarantee guarantee completed is overdue overdue is provided parties Relationship
Shenbao Subsidiary Hulunbeier Liangyi 108.26 2008.8.30 2008.8.30 2029.8.29 Joint and several No No No No No N/A
Energy Railway Company liability
Company Limited guarantee
Total amount of guarantee provided during the reporting period (excluding guarantee
provided to its subsidiaries) (3.22)
Total balance of guarantee at the end of the reporting period (A) (excluding guarantee
provided to its subsidiaries) 108.26
2. Guarantee provided by the Company and its subsidiaries for the benefit of its subsidiaries
Total amount of guarantee provided for the benefit of subsidiaries during the reporting
period 544.03
Total balance of guarantee provided for the benefit of subsidiaries at the end of the
reporting period (B) 11,032.63
3. Aggregated amount of guarantee (including guarantee for the benefit of its subsidiaries)
Total amount of guarantee (A+B) 11,140.89
Proportion of total amount of guarantee in net assets attributable to shareholders of the
Company at the end of the year (%) 3.6
Including:
Amount of guarantee provided for the benefit of shareholders, de facto controller and their
related parties (C) 0
Amount of guarantee directly or indirectly provided for the benefit of parties with a gearing
ratio in excess of 70% (D) 10,688.29
Portion of the total amount of guarantee in excess of 50% of net assets (E) 0
Aggregated amount of the above three amounts of guarantee (C+D+E) 10,688.29
Description of the potential joint and several repayment liability for outstanding guarantee See below
Description of guarantee See below
Notes: 1. The amount of guarantee provided by the subsidiary to external parties of total balance of guarantee at the
end of the reporting period equals to the amount of external guarantee of the subsidiary times the equity
ratio of the subsidiary held by the Company;
2. Total amount of guarantee accounting for the net asset ratio of the Company = total amount of guarantee/
net assets attributable to equity holders of the Company as at the end of the year under accounting
standards for business enterprises.
At the end of the reporting period, the total balance of the amount of guarantee provided by the
Company and its subsidiaries for the benefit of its subsidiaries and that provided by the Company
and its subsidiaries for the benefit of external parties amounted to RMB11,140.89 million,
including:
(1) At the end of the reporting period, the guarantee provided by Shenbao Energy Company,
a subsidiary of which the Company owns 56.61% of the shares, for the benefit of external
parties was as follows: prior to the acquisition of Shenbao Energy Company by the
Company in 2011 and pursuant to the Guarantee Agreement on the Syndicated Renminbi
Loan for the Cooperative Railway Project Connecting Yimin and Yiershi Newly Constructed
by Hulunbeier Liangyi Railway Company Limited, in 2008, Shenbao Energy Company, as
one of the guarantors, provided joint and several liability guarantee to Hulunbeier Liangyi
Railway Company Limited (hereinafter referred to as the Liangyi Railway Company, of
which Shenbao Energy Company owns 14.22% of the shares) for the syndicated loans.
The major liability guaranteed was the debts due to the lender with a maximum balance
of RMB207.47 million from 2008 to 2027, regardless of whether the debt is due when the
above period expires. The above syndicated loans will fall due by tranches between 2011
and 2026. The Guarantee Agreement provides that the guarantee period of the debts borne
by the guarantor shall be calculated from the due date of each tranche to two years after
the due date of the last tranche, i.e. 2029.
Given that Liangyi Railway Company failed to pay the loan interest on time due to its
deteriorating business operation, as resolved by the shareholders general meeting of
Liangyi Railway Company, additional capital was injected into Liangyi Railway Company
by its shareholders (including Shenbao Energy Company). Shenbao Energy Company has
injected an accumulated amount of RMB11.82 million into Liangyi Railway Company.
As at the end of the reporting period, Shenbao Energy Company, in proportion to its
shareholding, repaid the principal on the loans on behalf of Liangyi Railway Company
Limited amounting to a total of RMB10.374 million. Shenbao Energy Company already
made full provision for impairment on its 14.22% equity interest in Liangyi Railway
Company Limited and the repayment amount paid on its behalf. Together with other
shareholders, Shenbao Energy Company will continue to call for improvement of business
operation of Liangyi Railway Company. As at 31 December 2016, Liangyi Railway Company
had a gearing ratio of 119%.
(2) At the end of the reporting period, the amount of guarantee provided by the Company
for the benefit of its subsidiaries is detailed as follows: on 23 December 2013, the Board
approved the acquisition of Baotou Coal Chemical Company by the Company and the
Company would replace Shenhua Group Corporation in providing guarantee for the Loan of
USD350 million granted by China Development Bank (for a term expired in August 2018)
for the benefit of Baotou Coal Chemical Company.
As at 31 December 2016, the balance of guarantee for the USD Loan was USD65.25
million (equivalent to approximately RMB452.61 million and the gearing ratio of Baotou Coal
Chemical Company was 40%.
(3) According to statistics, as of the end of the reporting period, the amount of guarantee
between subsidiaries in consolidated reports of the Company amounted to approximately
RMB10,580.02 million, which was mainly due to the fact that Shenhua Hong Kong Limited,
the wholly-owned subsidiary of the Company, provided guarantees for the issuance of
USD1.5 billion bonds to China Shenhua Overseas Capital Co., Ltd., its wholly-owned
subsidiary, and Shenhua Funeng Power Co., Ltd. of which the Company indirectly held
51% shares provided guarantees to its two controlling subsidiaries.
For details of the opinions of the independent Directors, please refer to relevant reports disclosed
in conjunction with the report.
(III) Entrusted cash asset management
1. Entrusted wealth management
Unit: RMB million
Amount
Type of Amount of of Whether Whether Whether
entrusted wealth entrusted Initial date of Expiry date of principal Actual the legal Impairment it is a it is
management wealth entrusted wealth entrusted wealth Determination of actually profit process is provision connected involved in
No. Trustor Trustee products management management management compensation redeemed gained taken amount transaction litigations
1 China Industrial and Principal-guaranteed 10,000 2016/12/27 2017/3/27 Principal and interests to Yes No No
Shenhua Commercial with floating be paid together on
Bank of China return expiry date
2 China Industrial and Principal-guaranteed 5,000 2016/12/29 2017/3/29 Principal and interests to Yes No No
Shenhua Commercial with floating be paid together on
Bank of China return expiry date
3 China Shenhua China Construction Principal-guaranteed 16,000 2016/12/23 2017/3/23 Principal and interests to Yes No No
Bank with floating be paid together on
return expiry date
4 Shenhua Finance China Construction Non-principal- 250 2016/12/13 Not yet confirmed Principal and profit to be Yes No No
Company Bank guaranteed with paid on redemption
floating return date
5 Shenhua Finance Everbright Bank Non-principal- 100 2016/12/14 2017/12/14 Principal and profit to be Yes No No
Company guaranteed with paid one-off on expiry
6 Shenhua Finance China Construction Non-principal- 2,000 2016/12/22 2017/1/23 Principal and profit to be Yes No No
Company Bank guaranteed with paid one-off on expiry
7 Shenhua Finance CITIC Trust Non-principal- 50 2016/12/26 Not yet confirmed Principal and profit to be Yes No No
Company guaranteed with paid on redemption
As of the end of 2016, the total amount of entrusted wealth management products of
the Group amounted to RMB33,400 million, which was mainly consisted of principal-
guaranteed products with a relatively lower risk level, and did not have any failure of
receiving principal and profit when overdue.
In accordance with Rule 14.23 of the Hong Kong Listing Rules, transaction Nos. 1 and
2 above constitute a discloseable transaction of the Company when aggregated and
transaction Nos. 3, 4 and 6 constitute a discloseable transaction of the Company when
aggregated. For details, please refer to the H shares announcement dated 3 January 2017
and the A shares announcement dated 4 January 2017 of the Company.
2. Entrusted loans
Unit: RMB million
Balance Whether Whether Whether

of collaterals or it is a Whether it is Gain or
entrusted Interest Use of guarantor is Whether it connected the term is involved in loss from
Borrower loans Maturity rate proceeds provided is expired transaction extended litigations investment
Inner Mongolia Sanxin Railway Co., 37 1 year 6% Working capital Nil Yes No No No 0
Ltd. (Sanxin Railway Company)
Inner Mongolia Yili Chemical Industry 627 10 years 4.9% Replacement of Pledge No No No No 33
Co., Ltd. bank loans
Note: The entrusted loans provided by the Company to Sanxin Railway Company was not repaid when it was
due in February 2015, and both parties are under negotiation in respect of the subsequent relevant
matters.
As of 31 December 2016, the Group did not grant entrusted loans with an amount
exceeding 10% of the Groups latest audited net assets to any individual party. The
Company did not utilise the proceeds raised to grant entrusted loans, and there was no
entrusted loan that was involved in litigations.
Under centralised capital management of the Group, the entrusted loans were provided to
subsidiaries which were short of funds to meet operating and development needs. The part
of entrusted loans has been offset in the consolidated financial statements of the Group.
3. Other investment and wealth management products and derivatives investment
Whether
it is
Investment Product Investment Gain/loss from involved in
type type share Expiry date investment litigations
(lot) (RMB million)
Commodity Futures Thermal coal 460 May 2017 2 No

futures
In addition, during the reporting period, the subject matter of the exchange rate swap
transaction conducted by the Company is the loans denominated in Japanese Yen and the
purpose of the said transaction is to hedge the risk exposure of the loans denominated in
Japanese Yen, and not to procure profits. The specific measures adopted are in line with
the nature of risk-hedging. Upon the full settlement of the final repayment of principal and
interests under the swap transaction on 20 September 2016, the relevant swap transaction
was terminated forthwith.
XIII. PROACTIVE FULFILMENT OF SOCIAL RESPONSIBILITY
(I) Poverty alleviation
1. Targeted poverty alleviation plan
The Group values the poverty alleviation work conforming to the requirements under the
targeted poverty alleviation plan and documents of the State. Adhering to the principle
of contributing based on its ability to benefit the public, the Group has adopted different
measures based on the local circumstances with emphasis on the outcome and focused
on the grassroots and the Three Rural Issues. With continuous improvement of the
production capability, life quality and medical condition in provinces targeted for support,
provinces under focused poverty alleviation and deprived villages as the intention and the
foothold, the Group meticulously organized poverty alleviation projects and constantly
invested supporting funds with standardized management and enhanced supervision while
carrying out various work including education support, hygiene improvement and medical
support, enhancement in construction of rural infrastructure and production facilities
and assistance in the development of special industries in deprived regions. Shenhua
Foundation is the major entity of the Group for execution of poverty alleviation work and
the Group is the key governing unit and the major donor1 of Shenhua Foundation.
2. Summary of the targeted poverty alleviation during the year
In 2016, the Group contributed approximately RMB125 million2 to the targeted poverty
alleviation which was mainly used for the Tibet-support, Qinghai-support, Xinjiang-support
and targeted poverty alleviation work, education subsidy for the students in deprived regions,
construction of roads, schools and libraries in deprived regions, and aids to children with
leukemia and congenital heart disease in impoverished families. Each poverty alleviation
work achieved remarkable results and was well recognized by the local government and
citizens. For the details of Shenhua Foundation and the relevant poverty alleviation work,
please refer to the 2016 CSR Report which is disclosed in conjunction with this report.
In 2016, Shenhua Foundation invested RMB300 million into the Central State-Owned-
Enterprises Poverty Regional Industrial Investment Fund ().

1 The donation from the Group accounts for 82% of the total donation received by Shenhua Foundation
since its establishment.

2 Calculation basis of the capital expenditure for targeted poverty alleviation: capital expenditure of Shenhua
Foundation for targeted poverty alleviation the proportion of donation made by the Group to Shenhua
Foundation + the capital expenditure of the Group directly used for targeted poverty alleviation.
3. Statistical table of the targeted poverty alleviation work in 20161
Index Number and Circumstances
I. General
In which: 1. Capital (RMB0000) 12,541
II. Contribution by Category
1. Education Support (RMB0000) 1,735
In which: 1.1 Subsidy for poor students 279
(RMB0000)
1.2 Number of subsidized poor 1,200
students
1.3 Improvement of educational 1,456
resources in deprived
regions (RMB0000)
2. Health Support (RMB0000) 4,740
In which: Helping poor people with treatment 4,740
for serious illness (RMB0000)Notes
3. Social Support (RMB0000) 4,905
In which: 3.1 Cooperation for poverty 3,977
alleviation in eastern and
western regions (RMB0000)
3.2 Targeted poverty alleviation 928
(RMB0000)
4. Other Projects (RMB0000) 1,161
In which: 4.1. Number of projects 1
4.2. Contribution amount 1,161
(RMB0000)
4.3. Description of other projects Improvement of infrastructure in
deprived villages
III. Awards The Shenhua Loving Care Activities
was awarded the title of State-owned
Enterprise Voluntary Service Brand
by SASAC of the State Council
Notes: It is mainly used to aid children with congenital heart disease and leukemia.
4. Subsequent targeted poverty alleviation plan
In 2017, the Group will earnestly adhere to the spirit of poverty alleviation of the State
and continue to fulfil the political responsibility and social responsibility of a state-owned
enterprise. It will constantly enhance the efforts on Tibet-support, Qinghai-support,
Xinjiang-support and targeted poverty alleviation work, and carry out various poverty
alleviation works with precision and priority to emergency. Support for social public services
segment, such as education support, medical support and technology support, will be
prioritized. It will strive to improve the production capability and living condition in deprived
regions and unearth the relative advantages in deprived regions such as special farming
and husbandry industry and abundant labor resources. By adequately integrating the
poverty alleviation resources of the Group with the local relative advantages and resources,
the Group will gradually enhance the self-development capability of the poor and alter the
economic development mode of the deprived regions with provision of further support and
assistance to the poverty alleviation and wealth acquisition in the deprived regions.

1 The statistical table is based on the Notice of the State Council on the Publication of Poverty Alleviation
Plan for the 13th Five-Year Plan Period (Guo Fa [2016] No. 64).
(II) Corporate social responsibilities
For details of the Groups CSR endeavors, please refer to the 2016 CSR Report which is disclosed
in conjunction with this report.
(III) Environmental issues of listed companies and their subsidiaries in heavy polluting
industries as stipulated by the competent environmental protection authorities of the
PRC
During the reporting period, the Group did not have any material environmental pollution
accidents.
47 enterprises under the Group were categorized as national major pollution source under
supervision (among which 42 were exhaust gas enterprises and 6 were wastewater discharging
enterprises (inclusive of 1 exhaust gas enterprise concurrently)), mainly located in Inner Mongolia,
Shaanxi, Fujian, Hebei, Anhui, Jiangsu and Zhejiang.
The main pollutants emitted by exhaust gas enterprises are soot, sulphur dioxide and nitrogen
oxides, which are emitted to the atmosphere through the chimneys. Exhaust gas enterprises are
mainly distributed in public thermal power plants, coal-to-chemical captive power plants, heating
boilers for mines and coking plants. Emission standards implemented include Emission Standards
for Air Pollutants Produced by Thermal Plants (GB13223-2011), Emission Standards for Air
Pollutants Produced by Boilers (GB13271-2014) and Emission Standards for Pollutants Produced
by Coking Chemical Industry (GB16171-2012). The emission of nitrogen oxides produced by
Bayannur Coking Plant under the Company was up to the standard, while the emission of
soot and sulphur dioxide failed to reach the same in a steady manner. Renovation of pollution
prevention and treatment facilities has been commenced and is scheduled to be put into trial
operation in mid-2017. During the reporting period, save as disclosed above, the common thermal
power plants, self-owned power plant and heating boilers in mining areas under the Group are
well equipped with pollution prevention and treatment facilities and in stable operation which
fulfilled the emission standard.
The main pollutants discharged by wastewater discharging enterprises are chemical oxygen
demand (COD) and ammonia nitrogen, which are discharged to the surface water through the
sewage outfall of the enterprises. Wastewater enterprises are mainly distributed in coal mining
and coal-to-chemical enterprises and wastewater treatment plants. The emission standard
implemented was the Comprehensive Emission Standards for Sewage (GB8978-1996). During
the reporting period, the enterprises under the Group are well equipped with wastewater pollution
prevention and treatment facilities and in stable operation which fulfilled the discharge standard.
For the environmental protection work of the Group, please refer to the 2016 CSR Report which is
disclosed in conjunction with this report.
(IV) Donations
During the reporting period, the Group made external donations of approximately RMB791 million.
XIV. CONVERTIBLE BONDS OF THE COMPANY

Section VII
Changes in Share Capital and Shareholders
Section VII Changes in Share Capital and Shareholders

I. CHANGE IN ORDINARY SHARE CAPITAL
(I) Change in the number of ordinary shares
There was no change in the total number of ordinary shares and the shareholding structure of the
Company during the reporting period. The Company did not issue any preference share.
As at 31 December 2016
Number Percentage
(%)
I. Shares with selling restrictions 0 0.00

II. Shares without selling restrictions 19,889,620,455 100.00
1. RMB ordinary shares 16,491,037,955 82.91
2. Overseas listed foreign shares 3,398,582,500 17.09
III. Total number of shares 19,889,620,455 100.00
For the year ended 31 December 2016, the Group did not purchase, sell, or redeem any of the
Companys securities as defined under the Hong Kong Listing Rules.
The Company has satisfied minimum public float requirement under Rule 8.08 of the Hong Kong
Listing Rules.
(II) Changes of shares with selling restrictions
II. ISSUANCE AND LISTING OF SECURITIES
The Company did not issue any ordinary share, convertible corporate bond, warrant bond, corporate
bond or other derivative securities, nor did it enter into any equity-linked agreement during the reporting
period.
(I) Changes in total number of ordinary shares, shareholding structure and assets and
liabilities structure of the Company
There was no change in the total number of shares, shareholding structure and assets and
liabilities structure of the Company due to bonus issue, capital conversion, placing, issuance of
new shares, non-public offering of shares, exercise of warrants, implementation of share options
incentive plan, business combination, conversion of convertible bonds, reduction of share capital,
listing of shares held by internal employees or otherwise during the reporting period.
(II) Pre-emptive rights
There is no provision for pre-emptive rights under the Articles of Association of the Company and
the PRC laws which would entitle the existing shareholders to have priority to subscribe for new
shares on a pro rata basis in the event of new share issuance by the Company.
Section VII Changes in Share Capital and Shareholders (Continued)
III. SHAREHOLDERS
(I) Total number of shareholders
Total number of shareholders of ordinary shares as

at the end of the reporting period (accounts) 208,908
Including: Holders of A shares (including Shenhua Group Corporation)Note 206,573
Registered holders of H shares 2,335
Total number of ordinary shareholders at the end of last month
prior to the date of this annual report (accounts) 201,755
Including: Holders of A shares (including Shenhua Group Corporation) 199,434
Registered holders of H shares 2,321
Note: The number of holders of A shares is a combination of ordinary securities accounts and margin financing and
securities lending accounts, pursuant to the information disclosed by Shanghai Branch of China Securities
Depository and Clearing Corporation Limited.
(II) Shareholdings of top ten shareholders and top ten holders of marketable shares (or
shareholders not subject to selling restrictions)
Unit: share
Shareholdings of the top ten shareholders

Increase/ Number of
decrease shares held Number
during the at the end of shares Shares subject to
reporting the reporting with selling pledge or lock-up Nature of
Full name of shareholders period period Percentage restrictions Status Number shareholders
(%)
Shenhua Group Corporation Limited 0 14,530,574,452 73.06 0 Nil N/A State-owned

Overseas
HKSCC NOMINEES LIMITED 407,620 3,390,466,096 17.05 0 Unknown N/A corporate
China Securities Finance Corporation
Limited 13,847,602 569,895,835 2.87 0 Nil N/A Others
Central Huijin Asset Management Ltd. 0 110,027,300 0.55 0 Nil N/A State-owned
Hong Kong Securities Clearing Company Overseas
Limited 22,698,660 29,999,534 0.15 0 Nil N/A corporate
Bank of China Limited China Merchants
Fengqing Flexible Configuration Hybrid
Initiated Securities Investment Fund -2,206,906 22,952,488 0.12 0 Nil N/A Others
National Social Security Fund 108 Portfolio 17,029,796 17,029,796 0.09 0 Nil N/A State-owned
Industrial & Commercial Bank of China
Shanghai Index 50 Trading Open-end
Index Securities Investment Fund 152,393 14,648,826 0.07 0 Nil N/A Others
Industrial & Commercial Bank of China
Limited China Southern Consumption
Vitality Flexible Allocation Hybrid Initiated
Securities Investment Fund -931,960 13,082,927 0.07 0 Nil N/A Others
Agricultural Bank of China Limited
Fullgoal CSI State-owned Enterprises
Reform Index Classification Securities
Investment Fund 12,640,466 12,640,466 0.06 0 Nil N/A Others
Shareholdings of top ten shareholders without selling restrictions

Number of Type and number of shares
shares
without selling
Name of shareholders restrictions Type Number
Shenhua Group Corporation Limited 14,530,574,452 RMB ordinary shares 14,530,574,452

HKSCC NOMINEES LIMITED 3,390,466,096 Overseas listed foreign shares 3,390,466,096
China Securities Finance Corporation Limited 569,895,835 RMB ordinary shares 569,895,835
Central Huijin Asset Management Ltd. 110,027,300 RMB ordinary shares 110,027,300
Hong Kong Securities Clearing Company Limited 29,999,534 RMB ordinary shares 29,999,534
Bank of China Limited China Merchants Fengqing
Flexible Configuration Hybrid Initiated Securities
Investment Fund 22,952,488 RMB ordinary shares 22,952,488
National Social Security Fund 108 Portfolio 17,029,796 RMB ordinary shares 17,029,796
Industrial & Commercial Bank of China Shanghai
Index 50 Trading Open-end Index Securities
Investment Fund 14,648,826 RMB ordinary shares 14,648,826
Industrial & Commercial Bank of China Limited
China Southern Consumption Vitality Flexible
Allocation Hybrid Initiated Securities Investment
Fund 13,082,927 RMB ordinary shares 13,082,927
Agricultural Bank of China Limited Fullgoal
CSI State-owned Enterprises Reform Index
Classification Securities Investment Fund 12,640,466 RMB ordinary shares 12,640,466
Statement on the connected relationships Both of HKSCC Nominees Limited and Hong Kong Securities Clearing
among the above shareholders or whether Company Limited are wholly-owned subsidiaries of Hong Kong
they are parties acting in concert Exchanges and Clearing Limited; the custodian bank of both Industrial
& Commercial Bank of China Shanghai Index 50 Trading Open-
end Index Securities Investment Fund and Industrial & Commercial
Bank of China Limited China Southern Consumption Vitality Flexible
Allocation Hybrid Initiated Securities Investment Fund is the Industrial
& Commercial Bank of China Limited. Saved as disclosed above, the
Company is not aware of any connected relationships between the
top ten shareholders not subject to selling restrictions and the top ten
shareholders, and whether they are parties acting in concert as defined
in the Measures for Administration of Acquisition of Listed Companies.
Statement on holders of preference shares N/A

with voting rights restored and number of
shares held
Note: H shares held by HKSCC Nominees Limited are held on behalf of a number of its clients; A shares held by Hong
Kong Securities Clearing Company Limited are held on behalf of a number of its clients.
(III) Substantial shareholders interests and short positions in the shares of the Company
As at 31 December 2016, persons set out in the table below had an interest and/or short position
in the shares or underlying shares of the Company which is required to be recorded in the register
of equity interests and/or short positions pursuant to section 336 of Part XV of the Securities and
Futures Ordinance (the SFO, Chapter 571 of the Laws of Hong Kong):
Percentage
of H shares/
A shares over Percentage of
total issued total issued
Number of H shares/ share capital
H shares/ Nature of Hshares/ A shares of the
No. Name of shareholders Capacity A shares interest A shares held respectively Company
% %
1 Shenhua Group Corporation Beneficial owner A shares N/A 14,530,574,452 88.11 73.06
2 BlackRock, Inc. Interest of corporation H shares Long position 230,288,205 6.78 1.16
controlled by the Short position 1,567,500 0.05 0.01
substantial shareholders
3 JPMorgan Chase & Co. Beneficial owner; Investment H shares Long position 181,187,131 5.33 0.91
manager; Trustee (other Short position 17,734,195 0.52 0.09
than a bare trustee); Shares available 101,578,379 2.98 0.51
Custodian-corporation/ for lending
Approved lending agent
Notes: (1) Information disclosed above is based on the information available on the website of the Hong Kong Stock
Exchange (www.hkex.com.hk).
(2) Among H shares in long position and short position held by BlackRock, Inc., 149,165 H shares in long
position and 632,500 H shares in short position involve derivatives, and their type is unlisted derivatives
cash settled.
(3) Among 181,187,131 H shares in long position held by JPMorgan Chase & Co., 74,136,920 H shares are
held in its capacity as the beneficial owner, 5,458,028 H shares are held in its capacity as the investment
manager, 13,804 H shares are held in its capacity as the trustee (except for bare trustee), 101,578,379
H shares are held in its capacity as the custodian corporation/approved lending agent. In addition, the
following H shares in both long position and short position involve derivatives, including:
a. 4,806,832 H shares in long position and 2,998,500 H shares in short position: derivatives listed on
or traded on the Hong Kong Stock Exchange or traded on the future exchange physically settled;
b. 1,241,000 H shares in short position: derivatives listed on or traded on the Hong Kong Stock
Exchange or traded on the future exchange cash settled;
c. 13,714,465 H shares in long position and 10,833,497 H shares in short position: unlisted
derivatives physically settled;
d. 431,977 H shares in long position and 2,161,198 H shares in short position: unlisted derivatives
cash settled.
Save as disclosed above, as at 31 December 2016, no other person held any interest and/or short
position in the shares or underlying shares of the Company which is required to be recorded in
the register to be kept thereunder, or was a substantial shareholder of the Company pursuant to
section 336 of Part XV of the SFO.
IV. CHANGES IN CONTROLLING SHAREHOLDER AND DE FACTO CONTROLLER
(I) Controlling shareholder
1. Legal person
Name Shenhua Group Corporation Limited
Legal representative Zhang Yuzhuo
Date of incorporation 23 October 1995
Principal business State-owned assets operating activities within the

scope authorized by the State Council; investment
and management activities in various sectors,
including resource products (such as coal), coal
liquefaction, coal chemical, power, thermal,
port, various transportation, finance, domestic
and international trade and logistics, real estate,
advanced technology and information consultation
and etc.; planning, organizing, coordinating and
managing the production and operating activities
of the companies in the Shenhua Group in such
sectors; and sales of chemical materials and
chemical products (excluding hazardous chemicals),
textiles, construction materials, machinery,
electronic equipment and office equipment. (For
projects that are subject to approval pursuant to
the law, business operations shall commence in
accordance with the business scope approved upon
receipt of the approval from revenant authoritie.)
Shareholdings in other domestic and As at the end of the reporting period, Shenhua
overseas listed subsidiaries and Group Corporation held 143,068,000 shares in
associates during the reporting China National Chemical Engineering Co., Ltd.,
period representing 2.90% of its total shares.
2. Index and date of changes in controlling shareholders during the reporting period
There was no change in the controlling shareholder of the Company during the reporting
period.
3. Diagram of the equity and controlling relationship between the Company and the
controlling shareholder
Shenhua Group Corporation Limited
73.06%
China Shenhua Energy Company Limited

(II) De facto controller
1. Legal person
Name State-owned Assets Supervision and Administration Commission of the State Council
2. Index and date of changes in de facto controller during the reporting period
There was no change in de facto controller of the Company during the reporting period.
3. Diagram of the equity and controlling relationship between the Company and the de
facto controller
State-owned Assets Supervision and

Administration Commission of
the State Council
100.00%
Shenhua Group Corporation Limited
73.06%
V. OTHER CORPORATE SHAREHOLDERS WITH MORE THAN 10% SHAREHOLDING IN

THE COMPANY
As at the end of the reporting period, there was no other corporate shareholder with more than 10%
shareholding in the Company.
VI. RESTRICTIONS ON THE REDUCTION IN THE SHAREHOLDING

On 8 July 2015, Shenhua Group Corporation increased its shareholding of A shares in the Company
via the trading system of the Shanghai Stock Exchange, and undertook that it will not dispose of any
share it holds in the Company during the period of the implementation of the shareholding increase
plan and within the statutory period. During the period between 8 July 2015 and 7 July 2016, Shenhua
Group Corporation has increased its shareholding in the Company by 8,727,892 A shares in aggregate,
representing 0.04% of the total issued share capital of the Company. Shenhua Group Corporation has
observed its undertaking. Please refer to the H shares announcement dated 11 July 2016 and the A
shares announcement dated 12 July 2016 of the Company for details.
During the reporting period, Shenhua Group Corporation did not dispose of any share it held in the
Company.
Section VIII Directors, Supervisors, Senior Management and Employees

I. CHANGES IN SHAREHOLDING AND REMUNERATION
(I) Changes in shareholding and remuneration
1. Directors, supervisors and senior management as at the end of the reporting period
Whether
received
remuneration
Total from
remuneration shareholders
before tax of the
received from Including Company or
Date of the Company performance associates
Position as at appointment Scheduled during the remuneration during the
the end of the (from the first expiration of reporting received for reporting
Name reporting period Gender Age appointment date) term of office period previous years period
(RMB ten (RMB ten
thousand) thousand)
Zhang Yuzhuo Chairman Male 54 27 June 2014 Yes

Executive Director 18 June 2010
Ling Wen Vice Chairman Male 53 27 June 2014 Yes
Executive Director 6 November 2004
President 4 January 2017
Han Jianguo Executive Director Male 58 24 May 2011 Yes
President (Resigned) 27 June 2014 4 January 2017
Li Dong Executive Director Male 56 17 June 2016 Yes
Senior Vice 24 May 2011
President
Fan Hsu Lai Tai Independent Non- Female 71 18 June 2010 45.0 No
executive Director
Gong Huazhang Independent Non- Male 70 5 June 2009 45.0 No
executive Director
Guo Peizhang Independent Non- Male 67 18 June 2010 45.0 No
executive Director
Chen Hongsheng Non-executive Director Male 66 25 May 2012 Yes
Zhao Jibin Non-executive Director Male 64 17 June 2016 Yes
Zhai Richeng Chairman of the Male 52 22 August 2014 93.0 17.1 No
Supervisory
Committee
Zhou Dayu Supervisor Male 51 17 June 2016 43.6 No
Shen Lin Supervisor Male 56 22 August 2014 91.6 9.6 No
Wang Jinli Senior Vice President Male 57 27 September 2013 Yes
Wang Yongcheng Vice President Male 54 25 November 2015 92.7 18.5 No
Zhang Zifei Vice President Male 58 25 November 2015 76.6 1.2 No
Wang Shumin Vice President Male 54 25 November 2015 75.9 1.2 No
Zhang Jiming Vice President Male 53 1 July 2016 31.4 No
Huang Qing Secretary to the Board Male 51 6 November 2004 101.1 22.0 No
Zhang Kehui Chief Financial Officer Female 53 22 January 2007 97.9 21.0 No
Total / / / / / 838.8 90.6 /

Section VIII Directors, Supervisors, Senior Management and Employees (Continued)
Notes: (1) The remuneration of directors and senior management received from shareholders of the
Company for 2016 will be disclosed on the website of Shenhua Group Corporation upon
completion of assessment made by the SASAC of the State Council.
(2) The remuneration package of directors and supervisors for 2016 is subject to approval by
the Company at the 2016 annual general meeting; the remuneration package of the senior
management was approved by the Board; the remunerations payable include salaries, allowances,
social benefit payment, income tax and retirement scheme contributions.
(3) The remuneration received by Zhou Dayu from the Company covers the period from July to
December 2016; the remuneration received by Zhang Jiming from the Company covers the
period from August to December 2016; and the remuneration of others received from the
Company covers the entire year.
(4) The personnel mentioned above did not hold any shares in the Company during the reporting
period.
(5) The 2014 first extraordinary general meeting of the Company approved that term of service of the
third session of the Board and the supervisory committee is three years (22 August 2014 to 21
August 2017).
(6) The ages were calculated as at 31 December 2016.
2. Supervisor and senior management resigned during the reporting period
Whether
Total received
remuneration remuneration
before tax Including: from
received from performance shareholders of
the Company remuneration the Company
Position before Date of Date of during the received for during the
Name resignation Gender Age appointment resignation reporting period previous years reporting period
(RMB ten (RMB ten
thousand) thousand)
Wu Xiuzhang Vice President Male 50 25 November 2015 23 March 2016 45.9 26.4 No
Tang Ning Shareholder
representative
supervisor Male 61 18 June 2010 17 June 2016 5.0 5.0 No
Total / / / / / 50.9 31.4 /
Notes: (1) The remuneration package of the senior management was approved by the Board.
(2) The personnel mentioned above did not hold any shares of the Company during the reporting
period.
(3) The ages were calculated as at 31 December 2016.

3. Biographical details of the directors, supervisors and senior management as at the end
of the reporting period
Name Biographical details
ZHANG Yuzhuo
Born in January 1962, Chinese, a researcher and Academician of the

Chinese Academy of Engineering, Dr. Zhang has extensive experience
in corporate management and professional management in the coal
industry in China. He received a Ph.D. degree from the University
of Science and Technology of Beijing in 1989, and conducted
postdoctoral studies and research in clean coal technology at the
University of Southampton in the UK and Southern Illinois University
in the USA from 1992 to 1996.
Dr. Zhang has served as the chairman and an executive director of

Chairman and the third session of the Board of the Company since August 2014,
Executive Director director of Shenhua Group Corporation since December 2008, and
chairman for Shenhua Group Corporation since May 2014.
Dr. Zhang served as the chairman of China Shenhua Coal Liquefaction

Company Limited from 2003 to 2010, chairman of Shenhua Hong
Kong Limited from 2005 to 2010, general manager of Shenhua
Group Corporation from 2008 to 2014, non-executive director of the
second session of the Board of the Company from 2004 to 2010, vice
chairman of the second session of the Board of the Company from
2011 to 2014, executive director of the second session of the Board
of the Company from 2010 to 2014, and chairman of the second
session of the Board of the Company from June to August 2014.
Prior to the foregoing, Dr. Zhang had served in various capacities,

including non-executive director of the first session of the Board of the
Company, deputy general manager of Shenhua Group Corporation,
president of the China Coal Research Institute, chairman of China Coal
Technology Corporation, chairman of Tiandi Science & Technology
Co., Ltd. and deputy general manager of Shandong Yankuang Group
Co., Ltd..
LING Wen
Born in February 1963, Chinese, a professor and Academician

of Chinese Academy of Engineering, Dr. Ling has extensive
management experience in financial institutions and enterprises. He
received a Ph.D. degree from Harbin Institute of Technology in 1991,
and conducted postdoctoral research in Shanghai Jiao Tong University
from 1992 to 1994.
Dr. Ling has served as the president of the Company since January
2017, a vice chairman and an executive director of the third session
of the Board of the Company since August 2014, director of Shenhua
Group Corporation since April 2010, and general manager of Shenhua
Vice Chairman, Group Corporation since May 2014.
Executive Director
and President Dr. Ling served as director and deputy general manager of Shenhua
Group Corporation from 2010 to 2014, chairman of the Board of
Shenhua Finance Company from 2002 to 2014, president of the
Company from 2006 to 2014, executive director of the second
session of the Board of the Company from 2010 to 2014, and vice
chairman of the second session of the Board of the Company from
June to August 2014.
Prior to the foregoing, Dr. Ling had served in various capacities,

including executive director of the first session of the Board, executive
vice president and chief financial officer of the Company, deputy
general manager of the International Business Department of the
Industrial and Commercial Bank of China, deputy general manager of
Industrial and Commercial Bank of China (Asia) Limited and chairman
of UB China Business Management Company Limited.
HAN Jianguo
Born in April 1958, Chinese, a researcher, Dr. Han has extensive
experience in the Chinese coal industry, macroeconomics and
corporate management. He received a masters degree from Tongji
University in 1999, and a Ph.D. degree in Economics from Wuhan
University in 2016.
Dr. Han has served as an executive director of the third session of the
Board of the Company since August 2014, deputy general manager
of Shenhua Group Corporation since August 2003, chief information
officer of Shenhua Group Corporation since March 2009, and director
of Shenhua Group Corporation since July 2014.
Executive Director
He served as the president of the Company from June 2014 to
January 2017, a non-executive director of the first session and second
session of the Board of the Company from 2004 to 2011, executive
director of the second session of the Board of the Company from
2011 to 2014, and senior vice president of the Company from 2011 to
2014.
Prior to the foregoing, Dr. Han had served in various capacities,

including chairman and general manager of Shenhua Coal Trading
Company Limited, and division head of the State Development and
Planning Commission.
LI Dong
Born in January 1960, Chinese, a senior engineer with the qualification

as a professor, Dr. Li has extensive experience in the management of
coal enterprises in China. He obtained a masters degree from China
Europe International Business School in 2005 and a Ph.D. degree
from Liaoning Technical University in 2005.
Dr. Li has served as an executive director of the Company since June

2016, a senior vice president of the Company since May 2011 and
vice general manager of Shenhua Group Corporation since August
2006.
Executive Director and
Senior Vice President Prior to the foregoing, Dr. Li had served in various capacities, including
deputy chief engineer of Shenhua Group Corporation, chairman of
Shenhua Zhungeer Energy Co., Ltd., and head of General Managers
Office of Shenhua Group Corporation.
FAN Hsu Lai Tai
Born in September 1945, Chinese, Ms. Fan has extensive experience

in legislative and supervision affairs. She received a masters degree
from the University of Hong Kong in 1973.
Ms. Fan has served as an independent non-executive director of

the third session of the Board of the Company since August 2014,
independent non-executive director of China COSCO Holdings
Company Limited since January 2009, independent non-executive
director of China Overseas Land & Investment Ltd. since February
2009, independent non-executive director of COSCO Pacific Limited
Independent since May 2011, independent non-executive director of Bank of East
Non-executive Asia Limited since February 2016, and a member of the Standing
Director Committee of the 12th National Peoples Congress of China since
March 2013.
Ms. Fan served as an independent non-executive director of the

second session of the Board of the Company from 2010 to 2014.
Prior to the foregoing, Ms. Fan had served in various capacities,

including deputy to the ninth and tenth National Peoples Congress
of China, member of the Standing Committee of the 11th National
Peoples Congress, member of Preliminary Working Committee for
Preparatory Committee, member of Preparatory Committee, president
of the Legislative Council of the Hong Kong Special Administrative
Region, director of Career Centre of the University of Hong Kong, and
assistant dean of Hong Kong Polytechnic Institute.
GONG Huazhang
Born in February 1946, Chinese, a professor-level senior accountant.

Mr. Gong graduated from Jiangsu Yangzhou Business School in 1965
and has over 40 years experience in accounting.
Mr. Gong has served as an independent non-executive director of

the third session of the Board of the Company since August 2014.
Mr. Gong is also a member of China Valuation Standards Committee,
special councilor of China Appraisal Society and consultant of the
Accounting Society of China and the Pricing Association of China.
Mr. Gong is a part-time professor at Tsinghua University, Nankai
Independent University, Xiamen University, Shanghai National Accounting
Non-executive Institute, Xiamen National Accounting Institute and China University
Director of Petroleum (Beijing) and a professor at Beijing National Accounting
Institute.
Mr. Gong served as an independent non-executive director of

Nanyang Commercial Bank (China) Limited from December 2007
to June 2016 and external director of China National Cereals, Oils
and Foodstuffs Corporation from April 2011 to March 2016. Prior to
the foregoing, Mr. Gong had served in various capacities, including
chief accountant of China National Petroleum Corporation, director of
Petrochina Company Limited, chairman of China Petroleum Finance
Co., Ltd., an independent non-executive director of the first and
second sessions of the Board of the Company.
GUO Peizhang
Born in August 1949, Chinese, a senior economist, Mr. Guo

has extensive experience in macroeconomics and enterprise
management. He graduated from Renmin University of China in 1982
with a bachelors degree.
Mr. Guo has served as an independent non-executive director of the

third session of the Board of the Company since August 2014 and
independent non-executive director of China Railway Group Limited
since June 2014.
Independent
Non-executive Mr. Guo served as an independent Non-executive Director of the
Director second session of the Board of China Shenhua from 2010 to 2014,
party member and head of disciplinary inspection panel of China
Guodian Corporation from 2005 to 2010, chairman of the supervisory
committee of Guodian Power Development Co., Ltd. from 2009 to
2010, and external director of Dongfang Electric Corporation from
2010 to 2015.
Prior to the foregoing, Mr. Guo had served in various capacities,

including deputy director and director of the Department of Regional
Economic Development of State Development and Planning
Commission, and deputy supervisor of the Planning Committee of
Xinjiang Autonomous Region.
CHEN Hongsheng
Born in March 1950, Chinese, a senior economist, Mr. Chen has

extensive experience in the production, operation and management
in the shipping industry. He graduated from Capital University of
Economics and Business in 2001 with a postgraduate diploma in
business administration.
Mr. Chen has served as a non-executive director of the third session

of the Company since August 2014, external director of Shenhua
Group Corporation since February 2012 and of State Development
and Investment Corporation since April 2012.
Non-executive Director
Mr. Chen served as a non-executive director of the second session
of the Board of the Company from 2012 to 2014, external director of
Sinotrans & CSC Holdings Corporation Limited from 2011 to 2016,
executive director, chairman of the Board and non-executive director
of COSCO Pacific Limited from 2003 to 2010, and non-executive
director of China COSCO Holdings Company Limited from 2009 to
2010.
Prior to the foregoing, Mr. Chen had served in various capacities,

including chairman of COSCO Shipping Co., Ltd., executive director
and general manager of China COSCO Holdings Company Limited,
vice president of China Ocean Shipping (Group) Company and general
manager of COSCO International Freight Co. Ltd..
ZHAO Jibin
Born in July 1952, Chinese, a senior engineer. Mr. Zhao has extensive
experience in business administration and railway transportation
administration. He obtained a masters degree from Changchun
Institute of Optics and Fine Mechanics in 2000.
Mr. Zhao has served as a non-executive director of the Company

since June 2016, an external director of Shenhua Group Corporation
since April 2015 and of China National Building Material Group
Corporation since December 2014.
Non-executive Director Mr. Zhao had served as a deputy general manager of China Mobile
Communications Corporation from May 2008 to June 2013 and an
independent non-executive director of China South Locomotive and
Rolling Stock Corporation Limited from December 2007 to June 2014.
Prior to the foregoing, Mr. Zhao had successively held the

posts as the master of Changchun Railway Station, director of
Changchun Railway Sub-bureau, director of Hohhot Railway Bureau
and Zhengzhou Railway Bureau, the chairman of China Tietong
Telecommunications Corporation, deputy to the ninth and tenth
National Peoples Congress, an honorary professor of Beijing Jiaotong
University and Changchun University of Science and Technology.
ZHAI Richeng
Born in July 1964, Chinese, a senior accountant, Mr. Zhai received a

masters degree from China University of Mining and Technology in
2003.
Mr. Zhai has served as the chairman of the third session of the
supervisory committee of the Company since August 2014 and the
director of Property Ownership Administration of the Company and
Shenhua Group Corporation since June 2016.
Mr. Zhai served as a general manager of the financial department of

Chairman of Shenhua Group Corporation from November 2004 to June 2016.
the Supervisory
Committee Prior to the foregoing, Mr. Zhai had served in various capacities,
including deputy manager of the financial department of Shenhua
Group Corporation, director of financial division and chief accountant
of Shenhua Zhungeer Coal Company.
ZHOU Dayu
Born in October 1965, Chinese, a deputy researcher. Mr. Zhou

obtained a bachelors degree in Economic Management at Peking
University in 1986 and a bachelors degree in International Finance at
Peking University in 2001.
Mr. Zhou has served as a supervisor of the Company since June

2016, the general manager of the Capital Operation Department of
the Company since March 2016, and the general manager of the
Capital Operation Department of Shenhua Group Corporation since
March 2016.
Supervisor
Mr. Zhou had been the general manager of the Business
Administration Department of the Company from November
2009 to March 2016, and the general manager of the Business
Administration Department of Shenhua Group Corporation Limited
from November 2009 to March 2016. Prior to the foregoing, Mr. Zhou
had successively held the post of the general manager of the Planning
Department and a deputy director of the Policy and Law Research
Office of Shenhua Group Corporation.
SHEN Lin
Born in May 1960, Chinese, a senior economist, Mr. Shen graduated

from Harbin Institute of Technology in 2005 with a masters degree.
Mr. Shen has served as an employee representative supervisor of

the third session of the supervisory committee of the Company
since August 2014, chief of the Department of Enterprise Culture of
the Company since July 2010 and chief of the Department of Party
Building of Shenhua Group since July 2010.
Mr. Shen served as a deputy chief of the Department of Enterprise

Supervisory Culture of the Company and deputy chief of the Department of Party
Building of the Shenhua Group Corporation from 2009 to 2010.
Prior to the foregoing, Mr. Shen had served for Shenhua Baoshen
Railway Co., Ltd. in various positions such as human resource
manager, deputy chief economist, chief economist, deputy secretary
to the Party committee and secretary to the commission for discipline
inspection.
WANG Jinli
Born in March 1959, Chinese, a researcher and senior engineer, Dr.

Wang has approximately 30 years of operational and managerial
experience in the coal industry in China. Dr. Wang received an EMBA
Degree from Tsinghua University in 2009 and graduated from Liaoning
University of Engineering and Technology with a Ph.D. degree in
2006.
Dr. Wang has served as a senior vice president of the Company since
September 2013 and deputy general manager of Shenhua Group
Corporation since July 2013.
Senior Vice President
Dr. Wang had served as a vice president of the Company between
2004 and 2013, and chairman of Shenhua Coal Trading Co., Ltd., a
subsidiary of Shenhua Group, and chairman of Shenhua Trading Group
Limited, a subsidiary of the Company between 2010 and 2014.
Prior to the foregoing, Dr. Wang had served in various capacities,

including chairman of Shenhua Australia Holdings Pty Limited,
chairman, general manager and deputy general manager of Shenhua
Shendong Coal Company, director of the Changchun Coal Technology
Centre and director of the Huichun Coal Mining Bureau.
WANG Yongcheng
Born in April 1962, Chinese, a senior economist, Mr. Wang has

extensive experience in business management. He obtained an
EMBA degree from Nankai University in 2006.
Mr. Wang has been serving as a vice president of the Company since
November 2015.
Mr. Wang was the chairman of Shenhua Tianhong Trading Co., Ltd.
from August 2002 to November 2011. From November 2011 to
Vice President November 2015, he served as the chairman of Shenhua Logistics
Group Corporation Limited.
Prior to the foregoing, Mr. Wang had previously served as the deputy
manager of the human resources department, the deputy manager
in charge of the business development department of Shenhua
Group Corporation and the deputy manager of the management
administration department of Huaneng Fine Coal Company.
ZHANG Zifei
Born in May 1958, Chinese, a senior engineer with the qualification

as a professor, Mr. Zhang has extensive experience in coal business
management. He graduated from Taiyuan University of Technology
with a masters degree in 2004.
Mr. Zhang has been serving as a vice president of the Company since
November 2015 and the chairman (legal representative) of Shenhua
Wuhai Energy Company Limited since November 2016.
Vice President Mr. Zhang served as an employee representative director of Shenhua

Group Corporation Limited from July 2014 to April 2016, the chairman
of Shenhua Shendong Coal Group Co., Ltd. from June 2011 to
November 2015 and the chairman of Shenhua Xinjie Energy Co., Ltd.
from January 2015 to November 2015.
Prior to the foregoing, Mr. Zhang had previously served as, among
others, the chairman of Shenhua Xinjiang Energy Co., Ltd., the
assistant to general manager, deputy general manager, deputy
director of business development and coordination division and the
chief at Dahaize Mine and Bulianta Mine of Shenhua Shendong Coal
Company .
WANG Shumin
Born in November 1962, Chinese, a senior engineer with the

qualification as a professor. Mr. Wang has extensive experience in
power business management. He graduated from Northeast Dianli
University with a bachelors degree in 1985 and obtained an MBA
degree from China Europe International Business School in 2005.
Mr. Wang has been serving as a vice president of the Company since
November 2015.
Vice President Mr. Wang served as the general manager of Guohua Power Branch
of the Company from December 2010 to November 2015. From
December 2010 to March 2013, he served as general manager
of Beijing Guohua Power Company Limited. From March 2013 to
November 2015, he served as the chairman of Beijing Guohua Power
Company Limited.
Prior to the foregoing, Mr. Wang had previously served as the deputy
general manager of Guohua Power Branch of the Company as well as
the deputy manager of the integrated planning department of North
China Power Group Company.
ZHANG Jiming
Born in November 1963, Chinese, a senior engineer. Mr. Zhang has

extensive experience in chemical business administration. In 1985, he
graduated from Liaoning Petrochemical School.
Mr. Zhang has served as the vice president of the Company since
July 2016, and served as the chairman and the general manager of
China Shenhua Coal to Liquid and Chemical Co., Ltd. from November
2015 to July 2016.
Vice President Mr. Zhang served as the president of China Shenhua Coal to Liquid
and Chemical Co., Ltd. from August 2012 to November 2015, as a
director and a vice president (subsidiary chief level) of China Shenhua
Coal to Liquid Co., Ltd. from January 2011 to August 2012.
Prior to the foregoing, Mr. Zhang had successively held the post
of the chief economist and the deputy general manager of China
Shenhua Coal to Liquid Co., Ltd., the vice director and the director of
Liaoyang Petrochemical Branch Company Refinery Plant.
HUANG Qing
Born in November 1965, Chinese, a senior engineer, Mr. Huang

obtained a board secretary certification from the Shanghai Stock
Exchange in 2004. Mr. Huang is a member of the Hong Kong
Institute of Chartered Secretaries and a senior visiting scholar of the
Eisenhower Foundation. Mr. Huang received a masters degree from
Guangxi University in 1991.
Mr. Huang has served as secretary to the Board of the Company and
company secretary of the Company since November 2004.
Secretory to the Board Prior to the foregoing, Mr. Huang had served in various capacities,
including secretary to the chairman of Shenhua Group corporation,
deputy director of the General Office of Shenhua Group Corporation,
deputy general manager of Hubei Provincial Railway Company and
secretary to the deputy governor of the Hubei provincial government.
ZHANG Kehui
Born in February 1963, Chinese, a researcher, a certified accountant

in China as well as a fellow of certified public accountants of Australia
(FCPA), Dr. Zhang has extensive experience in financial management
and received a Ph.D. degree from Research Institute for Fiscal
Science, Ministry of Finance of the PRC in 2014.
Dr. Zhang has served as the chief financial officer of the Company
since January 2007, and chairman of Shenhua Finance Company, a
subsidiary of the Company, since August 2014.
Chief Financial Officer Prior to the foregoing, Dr. Zhang had served in various capacities,
including head of internal control and audit department of the
Company, deputy manager of the financial department of Shenhua
Group Corporation and assistant to the general manager of
Shuohuang Railway Development Company Limited.
The directors and supervisors of the Company have performed their duties in accordance
with the requirements of the Articles of Association, Rules of Procedure of Board Meeting
and Rules of Procedure of the Supervisory Committee Meeting of the Company.
Under the leadership of the Board, the senior management is responsible for business
operation of the Company. President Ling Wen is responsible for the Board and exercises
his responsibilities as the President in accordance with the requirements of the Articles
of Association. Senior Vice President Li Dong is in charge of coal production, safety
supervision as well as environmental protection and energy conservation. Senior Vice
President Wang Jinli is in charge of production operations and organization, sale of coal as
well as the management of railways, ports and shipment transportation. Vice President
Wang Yongcheng is in charge of the materials procurement business. Vice President Zhang
Zifei is assisting Li Dong in the management of coal production and safety supervision. Vice
President Wang Shumin is in charge of the power generation business and tasks on social
responsibilities. Vice President Zhang Jiming is in charge of the coal chemical business.
Secretary to the Board Huang Qing is in charge of duties of the secretary to the Board; and
Chief Financial Officer Zhang Kehui is in charge of finance related works.
(II) Share incentive plan awarded to directors, supervisors and senior management
during the reporting period
II. POSITIONS OF EXISTING DIRECTORS, SUPERVISORS AND SENIOR

MANAGEMENT DURING THE REPORTING PERIOD
(I) Positions held in the shareholders of the Company
Commencement Expiry of
Name Name of shareholder Position of term of office term of office
Zhang Yuzhuo Shenhua Group Corporation Chairman May 2014

Ling Wen Shenhua Group Corporation Director April 2010
General manager May 2014
Han Jianguo Shenhua Group Corporation Director July 2014
Deputy general manager August 2003
Chief information officer March 2009
Li Dong Shenhua Group Corporation Deputy general manager August 2006
Chen Hongsheng Shenhua Group Corporation External director February 2012
Zhao Jibin Shenhua Group Corporation External director April 2015
Zhai Richeng Shenhua Group Corporation Director of Property June 2015
Ownership Administration
Zhou Dayu Shenhua Group Corporation General manager of Capital March 2016
Operation Department
Shen Lin Shenhua Group Corporation General manager of July 2010
Department of
Party Building
Wang Jinli Shenhua Group Corporation Deputy general manager July 2013
Zhang Zifei Shenhua Group Corporation Employee representative July 2014 April 2016
director
Shenhua Wuhai Energy Chairman (legal November 2016
Company Limited representative)
(II) Positions held in other entities
Commencement Expiry of
Name Name of shareholder Position of term of office term of office
Fan Hsu Lai Tai COSCO Pacific Limited Independent non-executive January 2009
director
China Overseas Land & Independent non-executive February 2009
Investment Limited director
China COSCO Holdings Independent non-executive May 2011
Company Limited director
Bank of East Asia Limited Independent non-executive February 2016
director
Gong Huazhang Nanyang Commercial Bank Independent non-executive December 2007 June 2016
(China) Limited director
COFCO Corporation External director April 2011 March 2016
Guo Peizhang China Railway Group Limited Independent non-executive June 2014
director
Chen Hongsheng SINOTRANS & CSC External director December 2011 February 2016
Holdings Co., Ltd.
State Development & External director April 2012
Investment Corp.
Zhao Jibin China National Building External director December 2014
Material Group Corporation
III. REMUNERATION OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT

Decision-making procedures for the The remuneration package of directors and supervisors
remuneration of directors, supervisors was submitted to the general meeting for approval
and senior management after consideration and approval by the Remuneration
Committee and the Board, and the remuneration package
of senior management was submitted to the Board
for approval after consideration and approval by the
Remuneration Committee.
Basis for determining the remuneration The remuneration package of relevant directors and
of directors, supervisors and senior supervisors was proposed by the Company in accordance
management with international and domestic practices and with
reference to the remuneration of directors and supervisors
of large-scale listed companies in China.
The remuneration package of senior management of the

Company was formulated by the Company in accordance
with Provisional Measures for the Administration of the
Annual Remuneration of the Senior Management.
Remuneration payable for remuneration Please refer to Changes in shareholding and

of directors, supervisors and senior remuneration in this section
management
Total remuneration actually obtained Please refer to Changes in shareholding and

by all directors, supervisors and remuneration in this section
senior management at the end of the
reporting period
IV. CHANGES OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT
(I) Changes during the reporting period
Particular of
Name Position movements Reason for the change
Li Dong Executive Director Elected Passed the election at the annual general
meeting on 17 June 2016
Zhao Jibin Non-executive Director Elected Passed the election at the annual general
meeting on 17 June 2016
Zhou Dayu Shareholder Elected Passed the election at the annual general
representative meeting on 17 June 2016
supervisor
Zhang Jiming Vice President Appointed Approved at the 17th meeting of the
third session of the Board on 1 July
2016
Wu Xiuzhang Vice President Resigned Resigned on 23 March 2016 due to work
change
Tang Ning Shareholder Resigned Resigned on 17 June 2016 due to age
representative
supervisor
(II) Changes after the reporting period
Particular of
Name Position movements Reason for the change
Ling Wen President Appointed Approved at the 22nd meeting of the third
session of the Board on 4 January 2017
Han Jianguo President Resigned Resigned on 4 January 2017 due to
adjustment of work arrangements
V. SANCTION FROM SECURITIES REGULATORY AUTHORITIES IN THE LAST THREE

YEARS
VI. OTHER SIGNIFICANT MATTERS
As at 31 December 2016, none of the directors, supervisors or member of the senior management had
any interest or short position in the shares or underlying shares of the Company or of any its associated
corporations within the meaning of Part XV of the SFO (Chapter 571 of the Laws of Hong Kong).
The securities transactions of the directors of the Company have been carried out in accordance with
the Model Code for Securities Transactions by Directors of Listed Issuers (the Model Code) set out
in Appendix 10 of the Hong Kong Listing Rules. The Model Code is also applicable to the supervisors
and senior management of the Company. The directors, supervisors or senior management have
confirmed that they have fully complied with the Model Code in 2016 or during their terms of office.
All the directors and supervisors have provided relevant training records to the Company and have
participated in training programs in accordance with relevant requirements by regulatory authorities. The
Secretary to the Board of the Company has participated in training programs organized by a number of
institutions including the stock exchanges where the shares are listed and The Hong Kong Institute of
Chartered Secretaries for more than 15 hours in accordance with relevant requirements.
When considering any matters or transactions at any board meeting, the directors are required to
declare any direct or indirect interests and recuse themselves where appropriate. Saved as their own
service contracts and the Mutual Coal Supply Agreement, the Mutual Supplies and Services Agreement,
the Financial Services Agreement and the Agreement on Asset and Business Entrusted Management
Services dated 24 March 2016, all of which were entered into between China Shenhua and Shenhua
Group, the Transportation Service Framework Agreement entered into between China Shenhua and
Taiyuan Railway Bureau on 24 March 2016 and the Shenhua Guohua Ningdong Power Generation Co.,
Ltd. JV Agreement entered into among China Shenhua, Zheneng Group and Shenhua Ningxia Coal on
20 July 2016, none of the directors and supervisors of the Company has any material personal interests,
directly or indirectly, in material contracts entered into by the Company or any of its subsidiaries in 2016
and subsisting during or at the end of the year of 2016; the directors and supervisors of the Company
have confirmed that they and their associates have not entered into any connected transaction with the
Company and its subsidiaries.
The Company has entered into service contracts with all of its directors and supervisors. None of the
directors or supervisors has entered into or proposed to enter into any service contract with members of
the Group which cannot be terminated by the Group within one year without any compensation (other
than the statutory compensation). The Company has maintained appropriate liability insurance for its
directors, supervisors and senior management.
Other than their working relationships in the Company, none of the directors, supervisors or the senior
management has any financial, business or family relationship or any relationship in other material aspects
with each other. For the year ended 31 December 2016, the Company had not granted any equity
securities or warrants to its directors, supervisors and senior management or their respective spouses
or children under the age of 18.
VII. EMPLOYEES OF THE GROUP
(I) Employees
Number of current employees of the headquarter of the Company

(Number of person) 674
Number of current employees of the branches/subsidiaries of
the Company (Number of person) 90,208
Total number of current employees of the Group (Number of person) 90,882
Number of retired employees in respect of which the Company
and subsidiaries bore cost (Number of person) 12,722
Function
Number of
Function person
Operation and repair 56,155

Management and administration 15,317
Finance 1,850
Research and development 2,468
Technical support 10,518
Sales and marketing 1,062
Others 3,512
Total 90,882
Education Level
Number of
Education Level person
Postgraduate and above 2,941

University graduate 28,873
College graduate 24,553
Specialized secondary school graduate 13,470
Graduate of technical school, high school and below 21,045
Total 90,882
(II) Remuneration policy
The Company has formulated a remuneration policy comprising basic salary and performance
assessment. The remuneration policy is competitive within the industry and is favoring the front-
line employees.
(III) Training program
The Company has established a training system with different levels and channels to provide
the employees with appropriate training in job skills, safe production and group management
etc. During 2016, the accrued capital used for training was approximately RMB0.139 billion.
The number of attendances in training was approximately 0.9457 million with training hours of
approximately 3.93 million hours in aggregate. For details, please refer to the 2016 CSR Report of
the Group.
(IV) Outsourced Work
Total number of working hours of outsourced work Approximately 50.845 million hours
Total remuneration paid for outsourced work RMB2 billion
Section IX Corporate Governance and Corporate Governance Report

I. CORPORATE GOVERNANCE
(I) Compliance with domestic regulatory requirements
During the reporting period, there was no material difference between the corporate governance
of the Company and the relevant rules and requirements of the CSRC.
(II) Compliance with the Corporate Governance Code
The Board is responsible for implementing good corporate governance of the Company. The
Company has been in compliance with the requirements of corporate governance policies as
set out in Appendix 14 of the Hong Kong Listing Rules to establish its own system of corporate
governance. As of 31 December 2016, the Company has been in full compliance with the
provisions and most of the recommended best practices as specified therein. For the terms
of reference of the Board and the Board Committees to perform duties under the Corporate
Governance Code, please refer to the Articles of Association, Rules of Procedure of the Board
and rules of procedure of the Board Committees, which have been published on the websites of
the stock exchanges where the Company is listed and on the Companys website.
The convening, voting and disclosure procedures of board meetings of the Company, rules
of procedure of the Board and procedures for nomination and appointment of directors are in
compliance with relevant requirements. The Board is a standing decision-making body of the
Company, is accountable to the shareholders general meeting and exercises its authority in
accordance with the provisions under Article 128 of the Articles of Association and relevant
applicable regulatory requirements. The management comprising the President and other senior
management members is a standing executive body of the Company, is accountable to the Board
and exercises its authority in accordance with the provisions under Article 146 of the Articles of
Association and relevant applicable regulatory requirements. The Articles of Association sets out
the respective duties of the Chairman of the Board and the President in detail. The Chairman of
the Board and the President of the Company is Dr. Zhang Yuzhuo and Dr. Ling Wen, respectively.
The Board of the Company has set out the board diversity policy and members of the Board
constituted in the Company are from a variety of backgrounds, which guarantees the rationality
and reasonableness of decisions made by the Board. Members of the Board are individuals
from various domestic and overseas industries, including one female director. The number of
non-executive directors is over half of all directors. Each directors knowledge base and field of
expertise are professional and complementary in the overall board structure.
For the securities transactions, continuous training and term of office of the directors, please
refer to the section headed Directors, Supervisors, Senior Management and Employees of this
report. For the auditors remuneration, please refer to the section headed Significant Events
of this report. For the strategy and risk assessment of the Company, please refer to the section
headed Directors Report of this report.
Section IX Corporate Governance and Corporate Governance Report (Continued)
II. GENERAL MEETINGS

1. Shareholders rights
As owners of the Company, the shareholders of the Company are entitled to the rights as
stipulated in laws, administrative regulations and the Articles of Association of China Shenhua.
The shareholders general meeting is the highest authority of the Company, through which
shareholders can exercise their rights. The controlling shareholder takes part in the Companys
operations and decisions through shareholders general meetings and the Board.
Pursuant to Articles 68 and 74 of the Articles of Association of China Shenhua, shareholders

may submit written request to the Board for the convening of extraordinary general meetings or
class meetings and submit proposals to the Company at general meetings. Upon providing the
Company with written evidence of the class and number of shares of the Company held, and
following verification of the shareholders identity by the Company, shareholders are entitled
to inspect the relevant information of the Company or obtain the Articles of Association, the
register of members, minutes of general meetings, resolutions of meetings of the Board and the
supervisory committee, regular reports and financial and accounting reports, etc.
The Company discloses information in strict compliance with the listing rules of its places of
listing. The Company makes its investor relations hotline, fax and email available. The Company
has established an effective communication channel with shareholders through an information
disclosure system and an investor reception system.
2. Convening of General Meetings during the Reporting Period
Inquiry index for the Date of disclosure of

designated website for the publication of the
Meetings Date publishing the voting results voting results
2015 Annual General 17 June 2016 The website of the Shanghai 18 June 2016
Meeting Stock Exchange
All the resolutions tabled at the general meeting above were passed. The voting results were
disclosed on the website of the Hong Kong Stock Exchange on 17 June 2016 and the website of
the Shanghai Stock Exchange on 18 June 2016.
The Company accepted registration of shareholders attendance, and arranged a special session
for shareholders for effective consideration of proposals in the meeting. Shareholders actively
participated in such meetings and were entitled to exercise their various rights, such as the right
to know, the right of speech, the right to question and the right to vote. Directors, supervisors and
senior management of the Company attended the meeting. Arranging special Q&A session in the
meeting enabled interactions between shareholders and the management.
The shareholders representative, supervisors representative, witness lawyers and the

representative of Computershare Hong Kong Investor Services Limited acted as scrutineers
at general meetings. The PRC legal advisor of the Company issued the legal opinion.
Representatives of the auditors were present at the Annual General Meeting and announced their
audit opinions.
III. PERFORMANCE OF DUTIES OF THE BOARD

(I) Attendance at Board meetings and general meetings
Attendance at Board meetings

Required
attendance Absent
Independent at Board Attendance at two Attendance
Name of director meetings Attendance by written Attendance meetings at general
director or not this year in Person resolution by proxy Absence in a row meetings
Zhang Yuzhuo No 7 7 1 0 0 No 1/1

Ling Wen No 7 6 1 1 0 No 1/1
Han Jianguo No 7 7 1 0 0 No 1/1
Li Dong No 4 4 1 0 0 No 1/1
Fan Hsu Lai Tai Yes 7 5 1 2 0 No 1/1
Gong Huazhang Yes 7 7 2 0 0 No 1/1
Guo Peizhang Yes 7 7 1 0 0 No 1/1
Chen Hongsheng No 7 7 1 0 0 No 1/1
Zhao Jibin No 4 4 1 0 0 No 1/1
Note: Li Dong and Zhao Jibin were elected as an executive director and a non-executive director, respectively, at the
2015 Annual General Meeting held on 17 June 2016.
Number of Board meetings held during the year 7

Including: Number of meetings held on-site 5
Number of meetings held by correspondence 1
Number of meetings held on-site with correspondence 1
In 2016, the Board of the Company held a total of seven meetings, at which all the resolutions
tabled were passed. Details of the meetings are as follows:
No. Name Date Methods
1 The 14th meeting of the third session of 29 January 2016 On-site

the Board
2 The 15th meeting of the third session of 24 March 2016 On-site
the Board
3 The 16th meeting of the third session of 29 April 2016 On-site
the Board
4 The 17th meeting of the third session of 1 July 2016 Correspondence
the Board
5 The 18th meeting of the third session of 26 August 2016 On-site
the Board
6 The 19th meeting of the third session of 28 October 2016 On-site
the Board
7 The 20th meeting of the third session of 23 December 2016 On-site with
the Board correspondence
(II) Performance of duties of independent directors
During the reporting period, the Company had three independent non-executive directors,
among whom Mr. Gong Huazhang is an accounting professional. The Company has received
written confirmation from each of the independent non-executive directors confirming their
independence. The Company is of the view that all of the independent non-executive directors
are independent. The number and background of the independent directors are in compliance
with the requirements of the listing rules of the places of listing.
During the reporting period, the independent directors of the Company strictly complied with
the requirements of relevant laws and regulations, the Articles of Association of China Shenhua,
relevant rules of procedure of meetings and the independent directors system of China Shenhua.
They maintained their independence of being independent directors, performed their functions
of supervision, participated in the formation of various important decisions of the Company
and reviewed regular reports and financial reports of the Company. Therefore the independent
directors of the Company played an important role in the regulated operation of the Company and
protected the legitimate interests of minority shareholders.
The Company ensured that proper conditions are in place for independent directors to perform
their duties and proactively adopted opinions and suggestions from independent directors.
The Company formulated the independent directors system to provide, in a systematic way,
guarantee for the independent directors to perform their duties, and designated departments
to undertake work related to independent directors affairs and independent board committee,
assisting the independent directors in conducting research and investigation, convening meetings
and expressing independent opinions.
For the attendance of independent directors at Board meetings and general meetings, please
refer to the sections on the attendance at Board meetings and general meetings of the Company.
Dissenting views of independent directors on matters of the Company:

(III) Others
Implementation of resolutions passed at the general meetings by the Board in 2016:
No. General Meeting Subject Matter Status
1 2015 Annual General To approve the profit distribution plan of the Implementation of 2015
Meeting Company for the year 2015 and authorize profit distribution plan
a committee comprising of chairman, vice was completed in the
chairman and president, all being directors third quarter of 2016.
of the Company, to implement the profit
distribution plan.
2 2015 Annual General To approve the appointment of auditors for For details of the
Meeting the year 2016 and authorize a committee appointment and
comprising of chairman, vice chairman, remuneration of
president, all being directors of the auditors for the year
Company, and chairman of the Audit 2016, please refer to
Committee to determine the remuneration the section headed
of the auditors. Significant Events
of this report.
3 2015 Annual General To approve the Mutual Coal Supply For details of the
Meeting Agreement entered into between the Mutual Coal Supply
Company and Shenhua Group and the Agreement, please
caps of the transactions for 20172019 refer to the section
agreed thereunder and authorize a headed Significant
committee comprising of chairman, vice Events of this report.
chairman, president, all being directors of
the Company, and chairman of the Audit
Committee to deal with, at its absolute
discretion, relevant matters relating to the
signing of such agreement.
4 2015 Annual General To approve the Mutual Supplies and Services For details of the Mutual
Meeting Agreement entered into between the Supplies and Services
Company and Shenhua Group and the Agreement, please
caps of the transactions for 20172019 refer to the section
agreed thereunder and authorize a headed Significant
committee comprising of chairman, vice Events of this report.
chairman, president, all being directors of
the Company, and chairman of the Audit
5 2015 Annual General To approve the Financial Services Agreement For details of the
Meeting entered into between the Company Financial Services
and Shenhua Group and the caps of Agreement, please
the transactions for 20172019 agreed refer to the section
thereunder and authorize a committee headed Significant
comprising of chairman, vice chairman, Events of this report.
president, all being directors of the
Company, and chairman of the Audit
IV. THE PERFORMANCE OF DUTIES OF THE COMMITTEES UNDER THE BOARD

DURING THE REPORTING PERIOD
The Company has established five committees under the Board, and the details are as follows:
The third session

Committee Chairman Members
Strategy Committee Zhang Yuzhuo Zhang Yuzhuo, Ling Wen, Han Jianguo
Audit Committee Gong Huazhang Gong Huazhang, Fan Hsu Lai Tai, Guo Peizhang,
Chen Hongsheng
Remuneration Committee Fan Hsu Lai Tai Fan Hsu Lai Tai, Gong Huazhang, Zhao Jibin
Nomination Committee Guo Peizhang Guo Peizhang, Zhang Yuzhuo, Fan Hsu Lai Tai
Safety, Health and Guo Peizhang Guo Peizhang, Ling Wen, Han Jianguo, Li Dong
Environment Committee
Note: Upon the consideration and approval at the 17th meeting of the third session of the Board of the Company held on 1 July
2016, Li Dong was appointed as a member of the Safety, Health and Environment Committee under the Board and Zhao
Jibin was appointed as a member of the Remuneration Committee under the Board.
1. Strategy Committee
The principal duties of the Strategy Committee are to conduct researches and to submit proposals
regarding the long-term development strategies and material investment decisions of the
Company; conduct researches and submit proposals regarding material investments and financing
plans which require approval from the Board; conduct researches and submit proposals regarding
material capital operations and assets operation projects which require approval from the Board;
conduct researches and submit proposals regarding other material matters that may affect the
Companys development; carry out examination on the implementation of the above matters; and
carry out other matters as authorised by the Board.
In 2016, the Strategy Committee of the Board held three meetings to consider resolutions such
as the amendment to administrative measures on investment of the Company, the 2017 annual
production plan of China Shenhua, and 2017 annual size of investment of China Shenhua, all of
which were approved at the meetings. All members of the Committee attended all meetings in
person.
2. Audit Committee
The principal duties of the Audit Committee were: to supervise and assess the work of the
external audit institutions; to guide the internal audit work; to review and provide opinions on the
financial reports of the Company; to evaluate the effectiveness of risk management and internal
control; to coordinate communications between the management, internal audit department and
relevant departments, and the external audit institutions; other duties authorized by the Board and
other issues related to the relevant laws and regulations. During the reporting period, the Audit
Committee carried out its duties strictly in accordance with the Rules of Procedure of Meetings of
the Audit Committee of the Board, Rules on Work of the Audit Committee of the Board and Rules
on Work of Annual Reports of the Audit Committee of the Board of China Shenhua.
In 2016, the Audit Committee held eight meetings to consider resolutions such as the financial
reports and internal control reports of the Company. Suggestions were made on improving the
management of accounts receivable and maintaining reasonable size of monetary capital. All
resolutions were approved at the meetings and all members of the Committee attended all
meetings in person.
The Audit Committee has performed required procedures for the preparation of the 2016 annual
report and internal control report of the Company:
(1) Before the accounting firms for 2016, namely Deloitte Touche Tohmatsu Certified Public
Accountants LLP and Deloitte Touche Tohmatsu (Deloitte), proceeded with on-site
auditing, the Audit Committee had consulted with Deloitte to determine the timing of
the Companys 2016 audit. On 25 October 2016, the Audit Committee reviewed the
Companys plans for the audit plan for the year 2016; on 25 October 2016, the Audit
Committee reviewed the internal control assessment plan for the year 2016.
(2) After Deloitte had issued its preliminary audit opinions, the Audit Committee reviewed the
draft financial statements for 2016. On 27 February 2017, the Audit Committee reviewed
the 2016 Assessment Report on Internal Control (Draft) and 2016 Financial Statements
(Draft) of China Shenhua prepared by the Company.
(3) The Audit Committee received briefings by the management to understand the overall
operation of the Company during the reporting period. On 13 March 2017, the Audit
Committee received a briefing given by Dr. Zhang Kehui, the Chief Financial Officer of the
Company, on the accounting policies and the preparation of the financial statements.
(4) Deloitte completed all audit procedures within the agreed time and intended to issue a
standard unqualified audit report for 2016 to the Audit Committee. On 13 March 2017, the
Audit Committee voted on the audited annual financial statements, the assessment report
on internal control and the corporate social responsibility report for the year 2016 and
agreed to submit such reports to the Board for consideration.
The Audit Committee discussed separately with the external auditors and no inconsistency was
found in the briefings by the management.
3. Remuneration Committee
The main duties of the Remuneration Committee are to make recommendations to the Board
on formulation of the remuneration plan or proposal for directors, supervisors, the president and
other senior management, including but not limited to the criteria, procedures and the major
systems of performance assessment, key incentive and punishment plans and systems; to
examine how directors, supervisors, the president and other senior management of the Company
perform their duties and carry out annual performance assessment on them; and to supervise the
implementation of the remuneration system of the Company. The Remuneration Committee is
delegated by the Board to determine the specific remuneration package, including non-monetary
benefits, pension and compensation (including compensation for loss or termination of office or
appointment) for all executive directors, supervisors, the president and other senior management,
to ensure that none of the directors or any of their associates can determine their own
remuneration; and to carry out other matters as authorised by the Board.
In 2016, the Remuneration Committee held two meetings to consider resolutions including the
remuneration packages of directors, supervisors and senior management for the year 2015, all of
which were approved at the meeting. All members of the Committee attended all the meetings
in person. During the reporting period, the Remuneration Committee reviewed the remuneration
management system of the Company and the remuneration level for directors, supervisors, the
president and other senior management for the relevant period.
The Remuneration Committee is of the view that the Company has a well-established
remuneration management system which reflects the economic benefit-oriented philosophy of a
listed company and political, social and economic responsibility of a state-owned enterprise. The
Remuneration Committee agrees to the remuneration management systems of the Company.
4. Nomination Committee
The main duties of the Nomination Committee are to formulate the board diversity policy,
regularly review the structure, size and diversity of the Board, and to make recommendations
to the Board with regard to any proposed changes; assess and verify the independence of
independent non-executive directors; draft procedures and criteria for election and appointment of
directors, the president and other senior management and make recommendations to the Board;
extensively seek for qualified candidates of directors, the president and other senior management;
examine the aforementioned candidates and make recommendations; nominate candidates for
members of the Board Committees (other than members of the Nomination Committee and
the chairman of any Board Committee); draft development plans for the president, other senior
management and key reserve talents; review the board diversity policy where appropriate, and
review the quantitative objectives set up by the Board to implement the board diversity policy
and their progress of achievement, as well as disclose the results of review in the Corporate
Governance Report annually; and carry out any other matters as authorised by the Board.
In 2016, the Nomination Committee held three meetings to consider resolutions including the
nomination of director candidates and substitute members of relevant special committees under
the Board, all of which were approved at the meetings. All members of the Committee attended
all meetings in person.
5. Safety, Health and Environment Committee
The principal duties of the Safety, Health and Environment Committee are to supervise the
implementation of health, safety and environmental protection plans of the Company; make
recommendations to the Board or the president on material issues in respect of health, safety
and environmental protection of the Company; inquire into the material incidents regarding the
Companys production, operations, property assets, staff or other facilities; as well as review and
supervise the resolution of such incidents and carry out other matters as authorised by the Board.
In 2016, the Safety, Health and Environment Committee held one meeting to consider the 2015
CSR Report, and the resolution was approved at the meeting. All members of the Committee
attended the meeting in person.
During the reporting period, the Committees under the Board did not express any dissenting views in
performing their duties.
V. THE SUPERVISION OPINION OF THE SUPERVISORY COMMITTEE

During the reporting period, the Supervisory Committee did not have any dissenting view over the
matters supervised by the Supervisory Committee.
VI. EXPLANATION OF INDEPENDENCE AND COMPETITION

China Shenhua has an independent and complete business system as well as a market-oriented
self-operation capability. The Company is independent from its controlling shareholder in terms of
business, personnel, assets, organization and finance.
As a transitional measure for the prevention of competition, the Company was entrusted by Shenhua
Group Corporation upon the completion of relevant procedures to provide daily operation management
services for existing assets and businesses of Shenhua Group. As at the end of the reporting period,
the Company engaged three deputy general managers of Shenhua Group Corporation as president and
senior vice presidents of the Company.
The Company is principally engaged in the production and sale of coal and power, as well as railway,
port, shipping transportation and coal-to-olefins. Currently, the major coal, power and olefins products
produced by enterprises such as Shenhua Ningxia Coal Co., Ltd. and Shenhua Guoneng Group Company
Limited which are the existing and continuing assets of Shenhua Group Corporation, the controlling
shareholder of the Company, are similar to those produced by the Company in terms of type and quality,
but each company also has its relatively independent regional markets.
The Company and Shenhua Group Corporation entered into a Non-competition Agreement in 2005.
Pursuant to the agreement, Shenhua Group has committed not to compete with the Company in
respect of the Companys principal businesses whether in or outside of the PRC, and granted the
Company an option and pre-emptive right to acquire from Shenhua Group any potential competing
business. In 2016, Shenhua Group Corporation strictly abided by its undertakings, and there was no
violation of such undertakings.
VII. THE EXAMINATION AND EVALUATION AND THE INCENTIVE MECHANISM FOR
THE SENIOR MANAGEMENT
The Company established the remuneration package of the senior management in accordance with the
Provisional Measures for the Administration of the Annual Remuneration of the Senior Management of
China Shenhua Energy Company Limited. The Company has adopted a performance appraisal system
for senior management which combines annual appraisal of operational performance and appraisal of
operational performance over the terms of office. Such annual appraisal and appraisal over the terms
of office are conducted based on the letter of responsibility of operational performance signed by the
Board and the management.
The remuneration of the management is determined in accordance with the Provisional Measures for
the Administration of the Annual Remuneration of the Senior Management. In addition to the basic
salary, the Board of the Company conducts appraisal based on the performance of the management,
and a performance bonus is determined based on the results of such appraisal.
VIII. INTERNAL CONTROL AND RISK MANAGEMENT

The Company has established a risk-oriented internal control system. The internal control and risk
management procedures of the Company include risk assessment and reporting at the beginning
of the year, quarterly major risk monitoring, daily system risk review and specialized supervision and
inspection on internal control, and annual internal control evaluation, forming an integrated closed-loop
management system. Also, a hierarchical work organizational structure comprising the Board and the
Audit Committee, the functional departments of the headquarters and the subsidiaries and branches
of the Company was established to safeguard the effective operation of internal control and risk
management.
It is the responsibility of the Board of the Company to establish a sound and effective internal control
and evaluate its effectiveness, and make bona fide disclosure on the Self-assessment Report on Internal
Control in accordance with the requirements under the Enterprise Internal Control Normative System.
The Supervisory Committee is responsible for the supervision on the internal control system established
and implemented by the Board, while the management level is responsible for the organization and
guidance of the daily operation of internal control within the enterprise.
The objectives of the internal control of the Company are to provide reasonable assurance on lawful
operation and management, asset safety and the truthfulness and completeness of financial reports
and relevant information, to enhance operation efficiency and effectiveness, and to facilitate the
implementation of development strategies. As there are inherent limitations on internal control, assurance
can only be provided for the above objectives to a certain reasonable extent. In addition, there are
certain risks in predicting the effectiveness of future internal control based on the results of assessment
on internal control given to the inappropriate internal control or the loosened level of compliance with
policies and procedures on internal control that may be resulted by changes in different circumstances.
An internal control supervision and inspection mechanism on was formed to conduct evaluation
on internal control on annual basis. Procedures for internal control evaluation include: formulating a
proposal for internal control evaluation, establishing a working committee of internal control inspection,
conducting self-evaluation on internal control, conducting evaluation on internal control by inspectors,
communicating and identifying deficiencies in internal control, rectifying deficiencies in internal control
and preparing report on internal control. The Company has evaluated the effectiveness of internal control
for 2016 in accordance with the aforementioned procedures.
The 2016 Proposal for Internal Control Evaluation of the Company was considered and approved by
the Audit Committee under the Board, and the 2016 Annual Report on Internal Control Evaluation was
considered and approved by the Board. The Board and the Audit Committee of the Company are of the
view that such inspection and supervision mechanism is able to evaluate the effectiveness of internal
control and risk management operation of the Company.
According to the evaluation, during the Reporting Period, all businesses and matters involving major
risks have been included in the scope of evaluation, and internal control system has been established for
and effectively implemented on major businesses and matters, which accomplished the objectives of
internal control of the Company.
As presented in the 2016 Annual Self-assessment Report on Internal Control of the Board, no material
defects were found in the internal control of financial reporting as at the base date of the Assessment
Report on Internal Control, pursuant to the identification of material defects in the internal control over
the financial reporting of the Company. The Board is of the opinion that the Company has maintained
effective internal control over its financial reporting in all material aspects in accordance with the
requirements under the Enterprise Internal Control Normative System and relevant regulations and its
supplementary guidelines as well as other regulatory requirements on internal control. Based on the
identification of material defects in the internal control over non-financial reporting of the Company, no
material defects were identified by the Company in the internal control over non-financial reporting as at
the base date of the Assessment Report on Internal Control. Nothing that would affect the evaluation
result of the effectiveness of internal control occurred from the base date of the Assessment Report on
Internal Control to the date of issuance of the Assessment Report on Internal Control.
Regarding the treatment and publishing of inside information, the Company has formulated internal
systems such as the Administrative Measures for Preventing Insider Trading and the Internal Reporting
System for Material Matters, which stipulated, among others, the scope of insider information and
insiders, reporting process, registration and filing, and prohibited behaviors. The scope of insiders is
under strict control so as to eliminate the risk of internal information leakage.
Material defects in the internal control during the reporting period:
IX. DESCRIPTION OF THE AUDIT REPORT ON INTERNAL CONTROL

Deloitte Touche Tohmatsu Certified Public Accountants LLP, engaged by the Company, has issued
the standard unqualified Audit Report on Internal Control. The Audit Report on Internal Control is of the
opinion that as at 31 December 2016, China Shenhua had maintained effective internal control over its
financial reporting in all material aspects in accordance with the Basic Standard for Enterprise Internal
Control and the relevant requirements. The above audit opinions are in line with the opinions set out in
the Self-assessment Report of the Board.
Please refer to the relevant announcement disclosed by the Company on the website of the Shanghai
Stock Exchange on 18 March 2017 for the 2016 Assessment Report on Internal Control and Audit
Report on Internal Control.
Section X Supervisory Committees Report

The Supervisory Committee of the Company had, based on the attitude of being responsible to all
shareholders, performed their supervisory duties faithfully and carried out their work proactively and
effectively to protect the lawful interests of the Company and its shareholders in accordance with the relevant
requirements under the Company Law of the Peoples Republic of China and the Articles of Association.
I. PERFORMANCE OF DUTIES OF THE SUPERVISORY COMMITTEE

During the reporting period, in compliance with the requirements of the Articles of Association and
the Rules of Procedures of Meetings of the Supervisory Committee, the Supervisory Committee
conducted strict supervisions on the lawful operations, financial position and the performance of duties
of the Board and the management of the Company.
In 2016, the Supervisory Committee held five meetings in total.
Method of Attendance of
Meeting Date Venue Meeting supervisors Subject matter Poll results
The 7th meeting of the third session 29 January Beijing In writing All Resolution on the proposed provisions Passed unanimously
of the Supervisory Committee for impairment of assets of the
Company
The 8th meeting of the third session 24 March Beijing On-site All Resolution on the 2015 annual report Passed unanimously
of the Supervisory Committee of the Company
Resolution on the 2015 CSR report of Passed unanimously
the Company
Resolution on the 2015 financial report Passed unanimously
of the Company
Resolution on the 2015 profit Passed unanimously
distribution plan of the Company
Resolution on the Special Report Passed unanimously
on Deposit and Actual Use of the
Proceeds of the Company
Resolution on the 2015 Assessment Passed unanimously
Report on Internal Control of the
Company
Resolution on the Supervisory Passed unanimously
Committees report of the Company
for the year 2015
Resolution on the nomination of Passed unanimously
candidates for supervisors to the
Annual General Meeting for the year
2015
The 9th meeting of the third session 29 April Beijing On-site All Resolution on the 2016 first quarterly Passed unanimously
of the Supervisory Committee report of the Company
Resolution on the 2016 first quarterly Passed unanimously
financial report of the Company
The 10th meeting of the third session 26 August Beijing On-site All Resolution on the 2016 interim report Passed unanimously
of the Supervisory Committee of the Company
Resolution on the 2016 interim Passed unanimously
The 11th meeting of the third session 28 October Beijing On-site All Resolution on the 2016 third quarterly Passed unanimously
of the Supervisory Committee report of the Company
Resolution on the 2016 third quarterly Passed unanimously
Section X Supervisory Committees Report (Continued)
II. INDEPENDENT OPINION OF THE SUPERVISORY COMMITTEE ON THE LAWFUL

OPERATION OF THE COMPANY
The Supervisory Committee is of the opinion that the Board and the management of the Company
have acted in strict accordance with the Company Law, the Articles of Association and the relevant
regulations of the jurisdiction where the Company is listed, performed their duties with integrity and
diligence and conscientiously implemented the resolutions of, and exercised the power granted by the
general meetings; and that the decisions and operations are in compliance with the laws and regulations
and the Articles of Association.
During the reporting period, the Supervisory Committee is not aware of any act committed by the Board
and the management of the Company during their performance of duties which were in breach of laws,
regulations and the Articles of Association or prejudicial to the interests of the Company.
III. INDEPENDENT OPINION OF THE SUPERVISORY COMMITTEE ON THE FINANCIAL

POSITION OF THE COMPANY
The Supervisory Committee is of the opinion that the financial statements of the Company give an
objective, true and fair view of the financial position and the operating results of the Company in all
material aspects and are true and reliable with its regulated financial audit and sound internal control
system.
IV. INDEPENDENT OPINION OF THE SUPERVISORY COMMITTEE ON THE

ACQUISITION AND DISPOSAL OF ASSETS OF THE COMPANY
The acquisition and disposal of the assets of the Company were based on fair and reasonable prices and
no insider trading has been identified. The transactions do not prejudice the interests of shareholders
and do not incur any loss of assets of the Company.
V. INDEPENDENT OPINION OF THE SUPERVISORY COMMITTEE ON CONNECTED

TRANSACTIONS OF THE COMPANY
The Supervisory Committee is of the opinion that the connected transactions of the Company have
been carried out in strict compliance with the principles of fairness, equality and openness under the
statutory decision-making procedures, the connected transactions carried out are in accordance with the
requirements of the listing rules, and the disclosure of information is standardized and transparent. The
Supervisory Committee is not aware of any act prejudicial to the interest of the Company.
VI. INDEPENDENT OPINION OF THE SUPERVISORY COMMITTEE ON THE

SELF-ASSESSMENT REPORT ON INTERNAL CONTROL OF THE COMPANY
The self-assessment report on internal control of the Company has truthfully reflected the establishment
and implementation of the internal control of the Company and its internal control system is sound and
effective.
VII. INDEPENDENT OPINION OF THE SUPERVISORY COMMITTEE ON THE

ESTABLISHMENT AND IMPLEMENTATION OF THE MEASURES ON INSIDER
MANAGEMENT
The insider management system of the Company is sound and comprehensive, effective in its
implementation and able to keep all insider information confidential.
The Supervisory Committee will continue to perform its duties with due care to facilitate the
standardized operation of the Company and to safeguard the lawful interests of the Company and its
shareholders in strict compliance with the Company Law and the Articles of Association.
Section XI Investor Relations

In 2016, China Shenhua attached great importance to and make proactive efforts on investor relations works.
With maintenance of an effective channel, provision of quality services and concerns on popular topics, the
Company attained the trust from the market, and enhanced investors confidence.
I. KEEPING ON MAINTAINING FREQUENT COMMUNICATION AND MAINTAINING

AN EFFECTIVE COMMUNICATION CHANNEL
Taking advantage of the opportunity brought by the growing attractiveness of the coal industry in the
capital markets, the Company has further stepped up its efforts in investor relations works and has
communicated with over 700 analysts, fund managers and minority shareholders through results
announcement conferences, roadshows, online forums and other means. We have been able to
conduct weekly market research and engage in daily telephone communication except for the black-out
period. In particular: communications have been made with over 250 persons at roadshows, over 200
persons at investment forums and over 300 persons during company visits and by conference calls and
the Company has held two online forums in May and November, respectively, and a reversal roadshow
in July, which has been engaging in honest and sufficient communication with investors and analysts in
an on-going fashion.
II. HIGHLIGHTING BUSINESS EXPANSION CHARACTERISTICS AND ADEQUATELY

EXPLORING COMPANYS VALUE
In 2016, the railway transportation network of the Company was basically optimised. In order to
adequately utilise the surplus capacity to further enhance railway transportation efficiency as well
as profit per share, the Company gradually opened the transportation system to third parties and
developed macroscopic logistics business. In investor relations activities, the Company has on one
hand kept on attaching paramount significance to clean development measures including green coal
mining, transportation and implementation of ultra-low emission for thermal power generation. On the
other hand, the Company has introduced its macroscopic logistics system and business concepts to
the market to enhance the capital markets knowledge to this new business of the Company, further
strengthen the market image of the Company as a comprehensive energy enterprise, and explore the
value of the Company in the capital markets, thereby boosting the confidence of capital markets to the
Companys future prospect.
III. PROACTIVELY RESPONDING HOT ISSUES CONCERNED IN THE MARKET

AND GUIDING MARKETS TO MAKE JUDGEMENT THAT COMPLIES WITH THE
FACTUALITY OF THE COMPANY
Amid drastic changes in industry trend, the Company commenced its investor relations works under
the guidance of expectation management in order to enable capital markets to better utilise the
fundamentals of the Company. Firstly it carried out deep research on industry changes and policy
status and continuously strengthened the communication and exchange with peer companies.
Secondly, it kept on optimising the disclosure model of annual operating information of annual plan
+ monthly refinement + adjustments during the year in order to lay a solid foundation for the works
on expectation management. Thirdly, it encouraged the participation of all departments within the
Company, overcame difficulties. We provided instant and effective information to the markets. Fourthly,
it regularly consolidated task details, summarized market feedback and liaised with investors in a timely
manner, which guided and realized the synchronization of market valuation and the operation results of
the Company.
In 2016, works in relation to capital markets conducted by China Shenhua obtained recognition in
different aspects, and received the Award of 2016 CCTV Top 10 Best Listed Company in China.
Section XII Index to Information Disclosure

Date of
No. Disclosure document for A Shares (published on the website of Shanghai Stock Exchange) publication
1 Announcement of China Shenhua on the Change of the Representatives of the Sponsor 09/01/2016
2 Announcement of China Shenhua on the 2015 Unaudited Balance Sheet and Income Statement of 19/01/2016
3 Announcement on the Major Operational Data of China Shenhua for December 2015 23/01/2016
4 Preliminary Financial Data of China Shenhua for 2015 30/01/2016
5 Announcement on Resolutions of the 14th Meeting of the third Session of the Board of China 30/01/2016
Shenhua
6 Announcement on Resolutions of the 7th Meeting of the Third Session of the Supervisory Committee 30/01/2016
of China Shenhua
7 Announcement on Provisions for Asset Impairment on China Shenhua 30/01/2016
8 Announcement of China Shenhua on Adjustments to Electricity Tariffs 03/02/2016
9 Announcement on the Major Operational Data of China Shenhua for January 2016 23/02/2016
10 Announcement on the Major Operational Data of China Shenhua for February 2016 17/03/2016
11 Special Explanation of China Shenhua Energy Company Limited on the Appropriation of Funds by the 25/03/2016
Controlling Shareholder and Other Related Parties of the Company in 2015
12 Special Audit Report on Deposit and Use of Proceeds of China Shenhua Energy Company Limited 25/03/2016
for 2015 issued by China International Capital Corporation Limited and China Galaxy Securities
Co., Ltd.
13 Work Report of the Independent Directors of China Shenhua for the Year 2015 25/03/2016
14 Special Report and Audit Report of China Shenhua on Deposit and Actual Use of Proceeds for 2015 25/03/2016
15 2015 Assessment Report on Internal Control of China Shenhua 25/03/2016
16 Special Report of China Shenhua on Deposit and Actual Use of Proceeds for 2015 25/03/2016
17 2015 CSR Report of China Shenhua 25/03/2016
18 Financial Statements and Audit Report of China Shenhua for the Year Ended 31 December 2015 25/03/2016
19 Announcement on Resolutions of the 15th Meeting of the Third Session of the Board of China 25/03/2016
Shenhua
20 Announcement on Resolutions of the 8th Meeting of the Third Session of the Supervisory Committee 25/03/2016
of China Shenhua
21 Report on the Performance of Duties by the Audit Committee of the Board of China Shenhua for 25/03/2016
2015
22 Independent Opinion on the Connected Transactions of the 15th Meeting of the Third Session of the 25/03/2016
Board of China Shenhua by Independent Directors of China Shenhua
23 Special Explanation and Independent Opinion on the Companys External Guarantee by Independent 25/03/2016
Non-executive Directors of China Shenhua
24 Announcement of China Shenhua on the Resignation of Senior Management 25/03/2016
25 Audit Report of China Shenhua on Internal Control for the Year Ended 31 December 2015 25/03/2016
26 Annual Report of China Shenhua 25/03/2016
27 Highlights of the Annual Report of China Shenhua 25/03/2016
28 Announcement on Daily Connected Transactions of China Shenhua 25/03/2016
29 Announcement on the Major Operational Data of China Shenhua for March 2016 26/04/2016
30 First Quarterly Report for the Year 2016 of China Shenhua 30/04/2016
31 H Share Circular of China Shenhua 30/04/2016
Shenhua
33 Announcement of China Shenhua Regarding Online Discussion Forum for Investors 30/04/2016
34 Notice of the 2015 Annual General Meeting of China Shenhua 30/04/2016
35 Clarification Announcement of China Shenhua 09/05/2016
36 Announcement on the Major Operational Data of China Shenhua for April 2016 26/05/2016
37 Information on the 2015 Annual General Meeting of China Shenhua 28/05/2016
38 Announcement on the Major Operational Data of China Shenhua for May 2016 17/06/2016
39 Legal Opinion on 2015 Annual General Meeting of China Shenhua 18/06/2016
40 Announcement on Resolutions Passed at the 2015 Annual General Meeting of China Shenhua 18/06/2016
Section XII Index to Information Disclosure (Continued)
Date of
No. Disclosure document for A Shares (published on the website of Shanghai Stock Exchange) publication
41 Announcement on Resignation and Election of Supervisor of China Shenhua 18/06/2016

42 Announcement of China Shenhua on Final Dividend Distribution for 2015 25/06/2016
Shenhua and Changes in Senior Management
44 Legal Opinion on Shenhua Group Corporation Limiteds Increase of Shareholding in China Shenhua 12/07/2016
Energy Company Limited Issued by Beijing Zhong Lun Law Firm
45 Announcement on Implementation Results of the Plan on Increase in Shareholding by the Controlling 12/07/2016
Shareholder of China Shenhua
46 Announcement of China Shenhua on the Unaudited Balance Sheet and Income Statement of 15/07/2016
Shenhua Finance Company for the First Half of 2016
47 H Share Announcement of China Shenhua 21/07/2016
48 Announcement on the Major Operational Data of China Shenhua for June 2016 26/07/2016
49 Preliminary Financial Data of China Shenhua for the First Half of 2016 10/08/2016
50 Announcement on the Major Operational Data of China Shenhua for July 2016 16/08/2016
51 Half-yearly Report for the Year 2016 of China Shenhua 27/08/2016
52 Highlights of the Half-yearly Report for the Year 2016 of China Shenhua 27/08/2016
Shenhua
54 Independent Opinion on Shenhua Guohua (Indonesia) Jawa Power Generation Co., Ltd.s Acceptance 27/08/2016
of Guarantee for Connected Transactions by Shenhua Group Corporation Limited issued by
Independent Non-executive Directors of China Shenhua
55 Announcement of China Shenhua on the Provision of Guarantee to the Wholly-owned Subsidiary by 27/08/2016
the Controlling Shareholders
56 Announcement on the Major Operational Data of China Shenhua for August 2016 13/09/2016
57 Announcement on the Major Operational Data of China Shenhua for September 2016 20/10/2016
58 Third Quarterly Report for the Year 2016 of China Shenhua 29/10/2016
59 Announcement on Resolutions of the 19th Meeting of the third Session of the Board of China 29/10/2016
Shenhua
60 Announcement of China Shenhua Regarding Online Discussion Forum for Investors 29/10/2016
61 Announcement of China Shenhua on the Provision of Guarantee to Investees by the Wholly-owned 29/10/2016
Subsidiary
62 Announcement on the Major Operational Data for October 2016 19/11/2016
63 Announcement of China Shenhua on the Completion of 168-hour Trial Run of Generator No. 1 of 23/11/2016
Shenhua Guohua Liuzhou Power Plant
Shouguang Power Plant
65 Announcement of China Shenhua on the Approval Obtained for Sanhe Power Plant Phase III 07/12/2016
1x350MW Expansion Construction Project
66 Announcement on the Major Operational Data of China Shenhua for November 2016 17/12/2016
67 Announcement of China Shenhua on the Provision of Guarantee to the Wholly-owned Subsidiary by 24/12/2016
the Controlling Shareholders
Shenhua
69 Announcement of China Shenhua on 2017 Annual Business Plan for Financial Derivatives 24/12/2016
Shenhua Guohua Liuzhou Power Plant
Date of
No. Disclosure documents for H Shares (published on the website of Hong Kong Stock Exchange) publication
1 Overseas Regulatory Announcement 08/01/2016

3 Announcement on the Major Operational Data of December 2015 22/01/2016
4 Announcement on Preliminary Financial Data for the Year 2015 29/01/2016
7 Inside Information Provision for Impairment of Assets 29/01/2016
8 Monthly Return of Equity Issuer on Movements in Securities for 01/02/2016
the Month Ended 31 January 2016
10 Announcement on the Major Operational Data of January 2016 22/02/2016
the Month Ended 29 February 2016
12 Notice of Board Meeting 14/03/2016
13 Announcement on the Major Operational Data of February 2016 16/03/2016
17 Changes in Senior Mangement 24/03/2016
18 Announcement of Annual Results for the Year Ended 31 December 2015 24/03/2016
19 Continuing Connected Transactions Entering into Transportation Service Framework Agreement 24/03/2016
20 Continuing Connected Transactions Entering into Mutual Coal Supply Agreement 24/03/2016
21 Continuing Connected Transactions Entering into Mutual Supplies and Services Agreement 24/03/2016
22 Discloseable Transaction Continuing Connected Transactions Entering Into Financial Services 24/03/2016
Agreement
23 Proposed Appointment of Director and Supervisor 24/03/2016
24 2015 Annual Report 28/03/2016
25 2015 CSR Report 28/03/2016
26 Clarification Announcement 30/03/2016
27 Monthly Return of Equity Issuer on Movements in Securities for the Month Ended 31 March 2016 31/03/2016
29 Announcement on the Major Operational Data of March 2016 25/04/2016
30 Entering into Mutual Coal Supply Agreement, Entering into Mutual Supplies and Services Agreement, 29/04/2016
Entering into Financial Services Agreement and Proposed Appointment of Director and Supervisor
31 Notification Letter and Request Form to Registered Holder 29/04/2016
32 Notification Letter and Request Form to Non Registered Holder 29/04/2016
33 Notice of Annual General Meeting 29/04/2016
34 Reply Slip Annual General Meeting 29/04/2016
35 Form of Proxy for Annual General Meeting 29/04/2016
38 First Quarterly Report for the Year 2016 29/04/2016
39 Monthly Return of Equity Issuer on Movements in Securities for the Month Ended 30 April 2016 03/05/2016
41 Announcement on the Major Operational Data of April 2016 25/05/2016
43 Monthly Return of Equity Issuer on Movements in Securities for the Month Ended 31 May 2016 05/06/2016
44 Announcement on the Major Operational Data of May 2016 16/06/2016
46 Voting Results of 2015 Annual General Meeting 17/06/2016
Date of
No. Disclosure documents for H Shares (published on the website of Hong Kong Stock Exchange) publication
47 Resignation of a Supervisor 17/06/2016

48 Positions Held by Current Directors at the Board and the Board Committees 17/06/2016
50 Monthly Return of Equity Issuer on Movements in Securities for the Month Ended 30 June 2016 30/06/2016
51 Positions Held by Current Directors at the Board and the Board Committees 03/07/2016
52 Appointment of Board Committee Members 03/07/2016
53 Changes in Senior Management 03/07/2016
55 Announcement on Implementation Result of the Plan On Increase 11/07/2016
in Shareholding by the Controlling Shareholder
58 Establishment of Shenhua Guohua Ningdong Power Generation Co., Ltd. 20/07/2016
59 Announcement on the Major Operational Data of June 2016 25/07/2016
60 Monthly Return of Equity Issuer on Movements in Securities for the Month Ended 31 July 2016 01/08/2016
61 Announcement on Preliminary Financial Data for the First Half of 2016 09/08/2016
64 Announcement on the Major Operational Data of July 2016 15/08/2016
68 Announcement of Interim Results for the Six Months Ended 30 June 2016 26/08/2016
69 2016 Interim Report 28/08/2016
70 Monthly Return of Equity Issuer on Movements in Securities for the Month Ended 31 August 2016 01/09/2016
71 Notification Letter and Request Form to Registered Holder 02/09/2016
72 Notification Letter and Request Form to Non Registered Holder 02/09/2016
73 Announcement on the Major Operational Data of August 2016 12/09/2016
the Month Ended 30 September 2016
76 Announcement on the Major Operational Data of September 2016 19/10/2016
79 Third Quarterly Report for the Year 2016 28/10/2016
the Month Ended 31 October 2016
81 Announcement on the Major Operational Data of October 2016 18/11/2016
the Month Ended 30 November 2016
86 Announcement on the Major Operational Data of November 2016 16/12/2016
87 2017 Annual Business Plan for Financial Derivatives 16/12/2016
Section XIII Independent Auditors Report and Financial Statements

TO THE SHAREHOLDERS OF CHINA SHENHUA ENERGY COMPANY LIMITED
(Incorporated in The Peoples Republic of China with limited liability)
OPINION
We have audited the consolidated financial statements of China Shenhua Energy Company Limited (the
Company) and its subsidiaries (collectively referred to as the Group) set out on pages 156 to 241, which
comprise the consolidated statement of financial position as at 31 December 2016, and the consolidated
statement of profit or loss and other comprehensive income, consolidated statement of changes in equity
and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial
statements, including a summary of significant accounting policies.
In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial
position of the Group as at 31 December 2016, and of its consolidated financial performance and its
consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards
(IFRSs) and have been properly prepared in compliance with the disclosure requirements of the Hong Kong
Companies Ordinance.
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities
under those standards are further described in the Auditors Responsibilities for the Audit of the Consolidated
Financial Statements section of our report. We are independent of the Group in accordance with the
International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (the
Code), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that
the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit
of the consolidated financial statements of the current period. These matters were addressed in the context of
our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters.
Section XIII Independent Auditors Report and Financial Statements (Continued)
KEY AUDIT MATTERS (Continued)
Key audit matter How our audit addressed the key audit matter
Impairment assessment on coal mines related non-current assets
We identified non-current assets impairment assessment Our procedures in relation to impairment

on coal mines related non-current assets as a key assessment on coal mines related non-current
audit matter due to significant judgment made by assets included:
management in determining the recoverable amounts of
the corresponding cash-generating units. testing the key controls related to the
assessment on the carrying value of its non-
Owing to oversupply of coals and the unsatisfactory current assets;
financial performance of certain Groups mines, the
management identified certain non-current assets assessing the valuation methodology;
relating to coal mines having impairment indications.
The impairment assessment involves managements analysing and challenging the reasonableness
judgment in certain areas including the discount rate and of significant judgements and estimates
the underlying cash flows projection based on the future built in the underlying cash flows used in
market supply and demand conditions. Any changes managements impairment tests based on our
in managements judgement may result in significant knowledge of the business and industry;
financial impact to the Group.
analysing and reviewing the specific discount
As set out in Note 15 to the consolidated financial rates used by management in impairment
statements, the management concluded that the tests;
recoverable amount of each separate cash-generating
unit was higher than their carrying value and no evaluating the sensitivity analysis performed
impairment provision was required for the current year. by management;
The recoverable amounts of each cash-generating unit
were determined by value in use method. comparing the current year actual results with
the 2016 figures included in the prior years
forecast; and
reconciling input data to supporting evidence,

such as approved budgets and considering the
reasonableness of these budgets.
OTHER INFORMATION
The directors of the Company are responsible for the other information. The other information comprises the
information included in the annual report, but does not include the consolidated financial statements and our
auditors report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
RESPONSIBILITIES OF DIRECTORS AND THOSE CHARGED WITH GOVERNANCEF FOR

THE CONSOLIDATED FINANCIAL STATEMENTS
The directors of the Company are responsible for the preparation of the consolidated financial statements
that give a true and fair view in accordance with IFRSs and the disclosure requirements of the Hong Kong
Companies Ordinance, and for such internal control as the directors determine is necessary to enable the
preparation of consolidated financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the consolidated financial statements, the directors are responsible for assessing the Groups
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Groups financial reporting process.
AUDITORS RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL

STATEMENTS
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that
includes our opinion solely to you, as a body, in accordance with our agreed terms of engagement, and for no
other purpose. We do not assume responsibility towards or accept liability to any other person for the contents
of this report. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these consolidated financial
statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting
a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Groups internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the directors.
AUDITORS RESPONSIBILITIES FOR THE AUDIT OF THE CONSOLIDATED FINANCIAL

STATEMENTS (Continued)
Conclude on the appropriateness of the directors use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Groups ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditors report to
the related disclosures in the consolidated financial statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditors report. However, future events or conditions may cause the Group to cease to continue as a
going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that
may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the consolidated financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditors report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that
a matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in the independent auditors report is Wong Tin Chak, Samuel.
Deloitte Touche Tohmatsu

Certified Public Accountants
Hong Kong
17 March 2017
Consolidated Statement of Profit or Loss and Other Comprehensive Income

For the year ended 31 December 2016
Year ended 31 December

2016 2015
Notes RMB million RMB million
Revenue 5 183,127 177,069

Cost of sales 7 (124,843) (123,341)
Gross profit 58,284 53,728
Selling expenses (610) (584)

General and administrative expenses (8,423) (9,714)
Other gains and losses 10 (3,078) (5,856)
Other income 1,379 1,659
Other expenses (1,511) (626)
Interest income 8 723 608
Finance costs 8 (5,748) (5,123)
Share of results of associates 237 428
Profit before income tax 41,253 34,520

Income tax expense 9 (9,283) (9,561)
Profit for the year 10 31,970 24,959
Other comprehensive income (expense) for the year

Item that will not be reclassified
to profit or loss, net of income tax:
Remeasurement of defined benefit obligations 21 (21)
Items that may be reclassified subsequently
to profit or loss, net of income tax:
Exchange differences 311 192
Share of other comprehensive income (expense) of associates 60 (22)
371 170
Other comprehensive income for the year,

net of income tax 392 149
Total comprehensive income for the year 32,362 25,108
Consolidated Statement of Profit or Loss and Other Comprehensive Income (Continued)


2016 2015
Profit for the year attributable to:

Equity holders of the Company 24,910 17,649
Non-controlling interests 7,060 7,310
31,970 24,959
Total comprehensive income

for the year attributable to:
Equity holders of the Company 25,272 17,783
32,362 25,108
Earnings per share (RMB)

Basic 14 1.252 0.887
Consolidated Statement of Financial Position

At 31 December 2016
2016 2015
Non-current assets
Property, plant and equipment 15 337,785 339,326
Construction in progress 16 35,220 33,610
Exploration and evaluation assets 17 2,344 2,176
Intangible assets 18 3,018 2,964
Interest in associates 19 5,142 5,113
Available-for-sale investments 20 1,800 1,795
Other non-current assets 21 36,749 34,562
Lease prepayments 22 17,359 16,535
Deferred tax assets 28 3,849 2,674
Total non-current assets 443,266 438,755
Current assets
Inventories 23 13,341 12,816
Accounts and bills receivable 24 20,573 41,019
Prepaid expenses and other current assets 25 48,792 19,351
Restricted bank deposits 26 6,141 4,611
Time deposits with original maturity
over three months 3,428 916
Cash and cash equivalents 27 41,188 42,323
Total current assets 133,463 121,036
Current liabilities
Borrowings 29 11,811 12,812
Short-term debenture 30 4,998
Accounts and bills payable 31 35,156 33,990
Accrued expenses and other payables 32 41,361 47,519
Current portion of medium-term notes 30 19,989
Current portion of long-term liabilities 33 403 203
Income tax payable 3,465 1,965
Total current liabilities 112,185 101,487
Net current assets 21,278 19,549
Total assets less current liabilities 464,544 458,304

Consolidated Statement of Financial Position (Continued)

At 31 December 2016
2016 2015
Non-current liabilities
Borrowings 29 58,462 54,179
Medium-term notes 30 4,985 24,955
Bonds 30 10,331 9,651
Long-term liabilities 33 2,451 2,523
Accrued reclamation obligations 34 2,549 2,197
Deferred tax liabilities 28 797 878
Total non-current liabilities 79,575 94,383
Net assets 384,969 363,921
Equity
Share capital 35 19,890 19,890
Reserves 297,085 278,178
Equity attributable to equity holders of the Company 316,975 298,068

Total equity 384,969 363,921
The consolidated financial statements on pages 156 to 241 were approved and authorised for issue by the
Board of Directors on 17 March 2017, and are signed on its behalf by:
Zhang Yuzhuo Ling Wen

Chairman Vice Chairman and President
Consolidated Statement of Changes in Equity

Equity attributable to equity holders of the Company

Non-
Share Share Capital Exchange Statutory Other Retained controlling Total
capital premium reserve reserve reserves reserves earnings Total interests equity
RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB
million million million million million million million million million million
(Note 35) (note (i)) (note (ii)) (note (iii)) (note (iv))
At 1 January 2016 19,890 85,001 3,612 (176) 18,003 (14,308) 186,046 298,068 65,853 363,921
Profit for the year 24,910 24,910 7,060 31,970

Other comprehensive
income for the year 281 81 362 30 392
Total comprehensive
income for the year 281 81 24,910 25,272 7,090 32,362
Dividend declared (Note 13) (6,365) (6,365) (6,365)

Appropriation of maintenance and
production funds (note (iii)) 3,747 (3,747)
Utilisation of maintenance and
production funds (note (iii)) (889) 889
Utilisation of general
reserve (note (iii)) (34) 34
Contributions from non-controlling
shareholders 1,111 1,111
Distributions to non-controlling
shareholders (6,060) (6,060)
At 31 December 2016 19,890 85,001 3,612 105 20,827 (14,227) 201,767 316,975 67,994 384,969
Consolidated Statement of Changes in Equity (Continued)

Equity attributable to equity holders of the Company

Non-
Share Share Capital Exchange Statutory Other Retained controlling Total
capital premium reserve reserve reserves reserves earnings Total interests equity
RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB
million million million million million million million million million million
(Note 35) (note (i)) (note (ii)) (note (iii)) (note (iv))
At 1 January 2015 19,890 85,001 3,612 (353) 16,071 (8,570) 185,047 300,698 64,872 365,570
Profit for the year 17,649 17,649 7,310 24,959

Other comprehensive income (expense)
for the year 177 (43) 134 15 149
Total comprehensive income (expense)

for the year 177 (43) 17,649 17,783 7,325 25,108
Dividend declared (Note 13) (14,718) (14,718) (14,718)

production funds (note (iii)) 5,381 (5,381)
production funds (note (iii)) (3,699) 3,699
Appropriation of general reserve
(note (iii)) 250 (250)
Acquisition of additional
interest in a subsidiary (4) (4)
Acquisition of subsidiaries from
Shenhua Group (5,695) (5,695) (5,695)
Contributions from non-controlling
shareholders 2,288 2,288
Distributions to non-controlling
shareholders (8,628) (8,628)
At 31 December 2015 19,890 85,001 3,612 (176) 18,003 (14,308) 186,046 298,068 65,853 363,921
Notes:
(i) Share premium represents the difference between the total amount of the par value of shares issued and the amount of the net
proceeds received upon the global initial public offering of H shares in 2005 and the issue of A shares in 2007.
(ii) The capital reserve represents the difference between the total amount of the par value of shares issued and the amount of the
net assets, net of other reserves, transferred from Shenhua Group Corporation Limited ("Shenhua Group") in connection with the
Restructuring (as defined in Note 1).
Consolidated Statement of Changes in Equity (Continued)

(iii) Statutory reserves
Statutory surplus reserve
According to the PRC Company Law and the Companys Articles of Association, the Company is required to transfer 10% of
its net profit as determined in accordance with the China Accounting Standards for Business Enterprises (China Accounting
Standards) to its statutory surplus reserve until the reserve balance reaches 50% of the registered capital. The transfer to this
reserve must be made before distribution of a dividend to shareholders.
The statutory surplus reserve has reached 50% of the registered capital in 2009. Accordingly, no appropriation of net profit to the
statutory surplus reserve has been proposed since 1 January 2010.
Statutory surplus reserve can be used to make up losses, if any, or to expand the Companys business, and may be converted into
share capital by the issue of new shares to shareholders in proportion to their existing shareholdings or by increasing the par value
of the shares currently held by them, provided that the balance after such issue is not less than 25% of the registered capital of
the Company. The statutory surplus reserve is not distributable.
Specific reserve for production and maintenance funds
Pursuant to the relevant PRC regulations, the Group is required to transfer production and maintenance funds at fixed rates based
on relevant bases to a specific reserve accounts. The production and maintenance funds could be utilised when expenses or
capital expenditures on production maintenance and safety measures are incurred. The amount of production and maintenance
funds utilised would be transferred from the specific reserve account to retained earnings.
General reserve
Pursuant to relevant regulations issued by the Ministry of Finance, the Companys subsidiary, Shenhua Finance Co., Ltd. (Shenhua
Finance), is required to set aside a general reserve by the end of the financial year through appropriations of profit after tax as
determined in accordance with China Accounting Standards at a certain ratio of the ending balance of gross risk-bearing assets to
cover potential losses against such assets.
Discretionary surplus reserve
The appropriation to the discretionary surplus reserve is subject to the shareholders approval. The utilisation of the reserve is
similar to that of the statutory surplus reserve.
The directors of the Company (the Directors) have not proposed any appropriation to the discretionary surplus reserve in 2016
and 2015.
(iv) Other reserves
Other reserves mainly represents the consideration paid for acquisition of subsidiaries under common control, and share of other
comprehensive income (expense) of associates.
Consolidated Statement of Cash Flows


2016 2015
OPERATING ACTIVITIES
Adjustments for:
Depreciation and amortisation (Note 10) 24,721 23,990
Other gains and losses (Note 10) 3,078 5,856
Interest income (723) (608)
Share of results of associates (237) (428)
Interest expenses 5,062 4,483
Fair value changes on financial instruments (Note 8) (2) 6
Exchange loss, net 688 649
Other income (56)
Operating cash flows before movements in working capital 73,840 68,412

(Increase) decrease in inventories (1,076) 2,214
Decrease (increase) in accounts and bills receivable 20,084 (10,309)
Decrease in prepaid expenses and other receivables 1,146 5,116
Increase (decrease) in accounts and bills payable 2,925 (5,021)
(Decrease) increase in accrued expenses and other payables (6,267) 5,754
Cash generated from operations 90,652 66,166

Income tax paid (8,769) (10,760)
NET CASH GENERATED FROM OPERATING ACTIVITIES 81,883 55,406
INVESTING ACTIVITIES
Acquisition of property, plant and equipment, intangible assets,
exploration and evaluation assets, additions to the
construction in progress and other non-current assets (28,264) (29,685)
Increase in lease prepayments (794) (191)
Proceeds from disposal of property, plant and equipment,
intangible assets and other non-current assets 649 640
Proceeds from disposal of associates 35 3
Proceeds from disposal of debt securities 400
Proceeds from disposal of wealth management products 160
Proceeds from disposal of derivative financial instruments 23
Investments in wealth management products (33,350) (160)
Investments in associates (104) (48)
Purchase of derivative financial instruments (2)
Purchase of tradable wealth management products (50)
Dividend received from associates 375 309
Interest received 710 590
(Increase) decrease in restricted bank deposits (1,530) 1,660
Increase in time deposits with original maturity over three months (5,026) (1,265)
Maturity of time deposits with original maturity over three months 2,514 1,624
NET CASH USED IN INVESTING ACTIVITIES (64,654) (26,123)

Consolidated Statement of Cash Flows (Continued)


2016 2015
FINANCING ACTIVITIES
Interest paid (5,600) (5,730)
Proceeds from borrowings 28,037 26,458
Repayments of borrowings (24,927) (22,756)
Net proceeds from short-term debentures
and medium-term notes 14,985
Net proceeds from bonds 9,049
Repayments of short-term debentures and medium-term notes (5,000) (20,000)
Proceeds from bills discounted 435
Contributions from non-controlling shareholders 1,111 2,288
Distributions to non-controlling shareholders (6,181) (7,343)
Dividend paid to equity holders of the Company (6,365) (14,718)
Cash paid for acquisition of a subsidiary
under common control (5,386)
Acquisition of non-controlling interests (4)
NET CASH USED IN FINANCING ACTIVITIES (18,490) (23,157)
Net (decrease) increase in cash and cash equivalents (1,261) 6,126

Cash and cash equivalents, at the beginning of the year 42,323 35,962
Effect of foreign exchange rate changes 126 235
Cash and cash equivalents, at the end of the year 41,188 42,323
Notes to the Consolidated Financial Statements

1. PRINCIPAL ACTIVITIES AND ORGANISATION
Principal activities
China Shenhua Energy Company Limited (the Company) and its subsidiaries (hereinafter collectively
referred to as the Group) are principally engaged in: (i) the production and sale of coal; and (ii) the
generation and sale of coal-based power to provincial/regional electric grid companies in the Peoples
Republic of China (the PRC). The Group operates an integrated railway network and seaports that are
primarily used to transport the Groups coal sales from its mines. The primary customers of the Groups
coal sales include power plants, metallurgical and coal chemical producers in the PRC.
Organisation
The Company was established in the PRC on 8 November 2004 as a joint stock limited company as part
of the Restructuring (as defined below) of Shenhua Group, a state-owned enterprise under the direct
supervision of the State Council of the PRC.
Effective on 31 December 2003, the coal production and power generation operations previously
operated by various entities wholly-owned or controlled by Shenhua Group were restructured and
managed separately (the Restructuring), and those assets and liabilities related to the operations and
businesses that were transferred to the Company were revalued by China Enterprise Appraisal Co., Ltd.,
an independent valuer registered in the PRC, as at 31 December 2003 as required by the PRC rules and
regulations.
On 8 November 2004, in consideration for Shenhua Group transferring the coal mining and power
generating assets and liabilities to the Company, the Company issued 15,000,000,000 domestic
state-owned ordinary shares with a par value of RMB1.00 each to Shenhua Group. The shares issued to
Shenhua Group represented the entire registered and paid-up share capital of the Company at that date.
In 2005, the Company issued 3,089,620,455 H shares with a par value of RMB1.00 each, at a price
of Hong Kong Dollars (HKD) 7.50 per H share by way of a global initial public offering. In addition,
308,962,045 domestic state-owned ordinary shares of RMB1.00 each owned by Shenhua Group were
converted into H shares. A total of 3,398,582,500 H shares were listed on The Stock Exchange of Hong
Kong Limited.
In 2007, the Company issued 1,800,000,000 A shares with a par value of RMB1.00 each, at a price of
RMB36.99 per A share in the PRC. The A shares were listed on the Shanghai Stock Exchange.
Immediate parent and ultimate controlling party
At 31 December 2016, the Directors consider the immediate parent and ultimate holding company of
the Group to be Shenhua Group.
Notes to the Consolidated Financial Statements (Continued)

2. APPLICATION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING

STANDARDS (IFRSs)
In the current year, the Group has applied, for the first time, the following amendments to IFRSs that are
mandatorily effective for the current year.
Amendments to IFRS 11 Accounting for Acquisitions of Interests in Joint Operations

Amendments to IAS 1 Disclosure Initiative
Amendments to IAS 16 and IAS 38 Clarification of Acceptable Methods of Depreciation and
Amortisation
Amendments to IAS 16 and IAS 41 Agriculture: Bearer Plants
Amendments to IFRS 10, Investment Entities: Applying the Consolidation Exception
IFRS 12 and IAS 28
Amendments to IFRSs Annual Improvements to IFRSs 20122014 Cycle
The application of the amendments to IFRSs in the current year has had no material impact on the
Groups financial performance and positions for the current and prior years and/or on the disclosures set
out in these consolidated financial statements, except for the application of Amendment to IAS 1.
The Group has applied the amendments to IAS 1 Disclosure Initiative for the first time in the current
year. The amendments to IAS 1 clarify that an entity need not provide a specific disclosure required by
an IFRS if the information resulting from that disclosure is not material, and give guidance on the bases
of aggregating and disaggregating information. However, the amendments reiterate that an entity should
consider providing additional disclosures when compliance with the specific requirements in IFRS is
insufficient to enable users of financial statements to understand the impact of particular transactions,
events and conditions on the entitys financial position and financial performance.
The Group has applied these amendments retrospectively. The Segment and Other Information has
been reordered to Note 6 to give prominence to areas of the Groups activities that management
considers to be most relevant to an understanding of the Groups consolidated financial performance
and financial position. The application of the amendments to IAS 1 has not resulted in any impact on the
financial performance or financial position of the Group.
New and revised IFRSs not yet effective and not early adopted
IFRS 9 Financial Instruments1

IFRS 15 Revenue from Contracts with Customers1
IFRS 16 Leases2
IFRIC 22 Foreign Currency Transactions and Advance Consideration1
Amendments to IFRS 2 Classification and Measurement of Share-based Payment
Transactions1
Amendments to IFRS 4 Applying IFRS 9 Financial Instruments with IFRS 4 Insurance
Contracts1
Amendments to IFRS 15 Clarifications to IFRS 15 Revenue from Contracts with
Customers1
Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and its
Associate or Joint Venture3
Amendments to IAS 7 Disclosure Initiative4
Amendments to IAS 12 Recognition of Deferred Tax Assets for Unrealised Losses4
Amendments to IAS 40 Transfers of Investment Property1
Amendments to IFRSs Annual Improvements to IFRS Standards 20142016 Cycle5
1 Effective for annual periods beginning on or after 1 January 2018

3 Effective for annual periods beginning on or after a date to be determined
5 Effective for annual periods beginning on or after 1 January 2017 or 1 January 2018, as appropriate


STANDARDS (IFRSS) (Continued)
New and revised IFRSs not yet effective and not early adopted (Continued)
Other than as further explained below, the Directors do not anticipate that the application of the new
and revised IFRSs above will have a material effect on the Groups consolidated financial statements
and the disclosure.
IFRS 9 Financial Instruments
IFRS 9 introduces new requirements for the classification and measurement of financial assets, financial
liabilities, general hedge accounting and impairment requirements for financial assets.
Key requirements of IFRS 9 are described as follows:
all recognised financial assets that are within the scope of IFRS 9 are required to be subsequently
measured at amortised cost or fair value. Specifically, debt investments that are held within a
business model whose objective is to collect the contractual cash flows, and that have contractual
cash flows that are solely payments of principal and interest on the principal outstanding are
generally measured at amortised cost at the end of subsequent accounting periods. Debt
instruments that are held within a business model whose objective is achieved both by collecting
contractual cash flows and selling financial assets, and that have contractual terms that give rise
on specified dates to cash flows that are solely payments of principal and interest on the principal
amount outstanding, are generally measured at FVTOCI. All other debt investments and equity
investments are measured at their fair value at the end of subsequent accounting periods. In
addition, under IFRS 9, entities may make an irrevocable election to present subsequent changes
in the fair value of an equity investment (that is not held for trading) in other comprehensive
income, with only dividend income generally recognised in profit or loss.
with regard to the measurement of financial liabilities designated as at fair value through profit
or loss, IFRS 9 requires that the amount of change in the fair value of the financial liability that
is attributable to changes in the credit risk of that liability is presented in other comprehensive
income, unless the recognition of effects of changes in the liabilitys credit risk in other
comprehensive income would create or enlarge an accounting mismatch in profit or loss. Changes
in fair value of financial liabilities attributable to a financial liabilitys credit risk are not subsequently
reclassified to profit or loss. Under IAS 39, the entire amount of the change in the fair value of the
financial liability designated as fair value through profit or loss is presented in profit or loss.
in relation to the impairment of financial assets, IFRS 9 requires an expected credit loss model, as
opposed to an incurred credit loss model under IAS 39. The expected credit loss model requires
an entity to account for expected credit losses and changes in those expected credit losses at
each reporting date to reflect changes in credit risk since initial recognition. In other words, it is no
longer necessary for a credit event to have occurred before credit losses are recognised.
Based on the Groups financial instruments and risk management policies as at 31 December 2016,
application of IFRS 9 in the future may have a material impact on the classification and measurement of
the Groups financial assets. The Groups available-for-sale investments, including those currently stated
at cost less impairment, will either be measured as fair value through profit or loss or be designated as
FVTOCI (subject to fulfillment of the designation criteria). In addition, the expected credit loss model may
resulted in early provision of credit losses which are not yet incurred in relation to the Groups financial
assets measured at amortised cost.


STANDARDS (IFRSs) (Continued)
IFRS 9 Financial Instruments (Continued)
Other than above, the Directors do not expect IFRS 9 will have a material impact on the results and
financial position of the Group.
IFRS 15 Revenue from Contracts with Customers
IFRS 15 was issued which establishes a single comprehensive model for entities to use in accounting for
revenue arising from contracts with customers. IFRS 15 will supersede the current revenue recognition
guidance including IAS 18 Revenue, IAS 11 Construction Contracts and the related Interpretations when
it becomes effective.
The core principle of IFRS 15 is that an entity should recognise revenue to depict the transfer of
promised goods or services to customers in an amount that reflects the consideration to which
the entity expects to be entitled in exchange for those goods or services. Specifically, the Standard
introduces a 5-step approach to revenue recognition:
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation
Under IFRS 15, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e.
when control of the goods or services underlying the particular performance obligation is transferred
to the customer. Far more prescriptive guidance has been added in IFRS 15 to deal with specific
scenarios. Furthermore, extensive disclosures are required by IFRS 15.
The Directors anticipate that the application of IFRS 15 in the future may result in more disclosures,
however, the Directors do not anticipate that the application of IFRS 15 will have a material impact on
the timing and amounts of revenue recognised in the respective reporting periods.


STANDARDS (IFRSs) (Continued)
IFRS 16 Leases
IFRS 16, which upon the effective date will supersede IAS 17 Leases, introduces a single lessee
accounting model and requires a lessee to recognise assets and liabilities for all leases with a term of
more than 12 months, unless the underlying asset is of low value. Specifically, under IFRS 16, a lessee
is required to recognise a right-of-use asset representing its right to use the underlying leased asset
and a lease liability representing its obligation to make lease payments. Accordingly, a lessee should
recognise depreciation of the right-of-use asset and interest on the lease liability, and also classifies
cash repayments of the lease liability into a principal portion and an interest portion and presents them
as financing in the statement of cash flows. Also, the right-of-use asset is initially measured at cost
and subsequently measured at cost (subject to certain exceptions) less accumulated depreciation and
impairment losses, adjusted for any remeasurement of the lease liability. The lease liability is initially
measured at the present value of the lease payments that are not paid at that date. The measurement
includes non-cancellable lease payments and also includes payments to be made in optional periods if
the lessee is reasonably certain to exercise an option to extend the lease, or not to exercise an option to
terminate the lease. This accounting treatment is significantly different from the lessee accounting for
leases that are classified as operating leases under the predecessor standard, IAS 17.
In respect of the lessor accounting, IFRS 16 substantially carries forward the lessor accounting
requirements in IAS 17. Accordingly, a lessor continues to classify its leases as operating leases or
finance leases, and to account for those two types of leases differently.
As disclosed in Note 39.2, total operating lease commitments for the Group as at 31 December 2016
amounted to RMB68 million, the Directors do not expect the application of IFRS 16 would result in
significant impact on the Groups results but it is expected that these lease commitments will be
required to be recognised in the consolidated statement of financial position as right-of-use assets and
lease liabilities.
IAS 7 Disclosure Initiative
The amendments require an entity to provide disclosures that enable users of financial statements to
evaluate changes in liabilities arising from financing activities including both changes arising from cash
flows and non-cash changes. Specially, the amendments require the following changes in liabilities
arising from financing activities to be disclosed: (i) changes from financing cash flows; (ii) changes arising
from obtaining or losing control of subsidiaries or other businesses; (iii) the effect of changes in foreign
exchange rates; (iv) changes in fair values; and (v) other changes.
The application of the amendments will result in additional disclosures on the Groups financing activities,
specifically reconciliation between the opening and closing balances in the consolidated statement of
financial position for liabilities arising from financing activities will be provided on application.

3. SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
The consolidated financial statements have been prepared in accordance with IFRS issued by the
International Accounting Standards Board. They are presented in RMB and all values are rounded to the
nearest million (RMBmillion) except when otherwise indicated. In addition, the consolidated financial
statements include applicable disclosures required by the Rules Governing the Listing of Securities
on The Stock Exchange of Hong Kong Limited (Listing Rules) and by the Hong Kong Companies
Ordinance (CO).
The consolidated financial statements have been prepared on the historical cost basis, except for certain
financial instruments as disclosed in Note 37.3, which have been measured at fair value at the end of
each reporting period.
Historical cost is generally based on the fair value of the consideration given in exchange for goods and
services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date, regardless of whether that price is
directly observable or estimated using another valuation technique. In estimating the fair value of an asset
or a liability, the Group takes into account the characteristics of the asset or liability if market participants
would take those characteristics into account when pricing the asset or liability at the measurement
date. Fair value for measurement and/or disclosure purposes in the Groups consolidated financial
statements is determined on such a basis, except for share-based payment transactions that are within
the scope of IFRS 2 Share-based Payment, leasing transactions that are within the scope of IAS 17
Leases, and measurements that have some similarities to fair value but are not fair value, such as net
realisable value in IAS 2 Inventories or value in use in IAS 36 Impairment of Assets.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2
or 3 based on the degree to which the inputs to the fair value measurements are observable and the
significance of the inputs to the fair value measurement in its entirety, which are described as follows:
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that
the entity can access at the measurement date;
Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for
the asset or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability.


3. SIGNIFICANT ACCOUNTING POLICIES (Continued)

The principal accounting policies are set out below.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities
controlled by the Company and its subsidiaries. Control is achieved where the Company:
has power over the investee;
is exposed, or has rights, to variable returns from its involvement with the investee; and
has the ability to use its power to affect its returns.
The Group reassesses whether or not it controls an investee if facts and circumstances indicate that
there are changes to one or more of the three elements of control listed above.
When the Group has less than a majority of the voting rights of an investee, it has power over the
investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities
of the investee unilaterally. The Group considers all relevant facts and circumstances in assessing
whether or not the Groups voting rights in an investee are sufficient to give it power, including:
the size of the Groups holding of voting rights relative to the size and dispersion of holdings of
the other vote holders;
potential voting rights held by the Group, other vote holders or other parties;
rights arising from other contractual arrangements; and
any additional facts and circumstances that indicate that the Group has, or does not have, the
current ability to direct the relevant activities at the time that decisions need to be made, including
voting patterns at previous shareholders meetings.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases
when the Group loses control of the subsidiary. Specifically, income and expenses of a subsidiary
acquired or disposed of during the year are included in the consolidated statement of profit or loss and
other comprehensive income from the date the Group gains control until the date when the Group
ceases to control the subsidiary.
Profit or loss and each item of other comprehensive income are attributed to equity holders of the
Company and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed
to equity holders of the Company and to the non-controlling interests even if this results in the non-
controlling interests having a deficit balance.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring their
accounting policies into line with the Groups accounting policies.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions
between members of the Group are eliminated in full on consolidation.
Changes in the Groups ownership interests in existing subsidiaries that do not result in the Group
losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of
the Groups interests and non-controlling interests are adjusted to reflect the changes in their relative
interests in the subsidiaries. Any difference between the amount by which the non-controlling interests
are adjusted and the fair value of the consideration paid or received is recognised directly in equity and
attributed to owners of the Company.

Business combinations
Except for business combination involving entities under common control, acquisitions of businesses
are accounted for using the acquisition method. The consideration transferred in a business combination
is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets
transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the
equity interests issued by the Group in exchange for control of the acquiree. Acquisition-related costs
are generally recognised in profit or loss as incurred.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at
their fair values, except that deferred tax assets or liabilities, and assets or liabilities related to employee
benefit arrangements are recognised and measured in accordance with IAS 12 Income Taxes and IAS
19 Employee Benefits respectively.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-
controlling interests in the acquiree, and the fair value of the acquirers previously held equity interest in
the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and
the liabilities assumed. If, after re-assessment, the net of the acquisition-date amounts of the identifiable
assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of
any non-controlling interests in the acquiree and the fair value of the acquirers previously held interest in
the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain.
Non-controlling interests that are present ownership interests and entitle their holders to a proportionate
share of the entitys net assets in the event of liquidation is initially measured at the non-controlling
interests proportionate share of the recognised amounts of the acquirees identifiable net assets. The
choice of measurement basis is made on a transaction-by-transaction basis.
Merger accounting for business combination involving entities under common control
The consolidated financial statements incorporate the financial statements items of the combining
businesses in which the common control combination occurs as if they had been combined from the
date when the combining businesses first came under the control of the controlling party.
The net assets of the combining businesses are consolidated using the existing book values from the
controlling partys perspective. No amount is recognised in respect of goodwill or bargain purchase gain
at the time of common control combination.
The consolidated statement of profit or loss and other comprehensive income includes the results
of each of the combining businesses from the earliest date presented or since the date when the
combining businesses first came under the common control, where this is a shorter period.
The comparative amounts in the consolidated financial statements are presented as if the businesses
had been combined at the end of the previous reporting period or when they first came under common
control, whichever is shorter.

Goodwill
Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition
of the business less accumulated impairment losses, if any.
For the purposes of impairment testing, goodwill is allocated to each of the Groups cash-generating units
(or groups of cash-generating units) that is expected to benefit from the synergies of the combination.
A cash-generating unit to which goodwill has been allocated is tested for impairment annually or more
frequently when there is indication that the unit may be impaired. For goodwill arising on an acquisition
in a reporting period, the cash-generating unit to which goodwill has been allocated is tested for
impairment before the end of that reporting period. If the recoverable amount of the cash-generating
unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount
of any goodwill allocated to the unit and then to the other assets of the unit on a pro-rata basis based on
the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised directly in
profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.
On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the
determination of the amount of profit or loss on disposal.
Investments in associates
An associate is an entity over which the Group has significant influence. Significant influence is the
power to participate in the financial and operating policy decisions of the investee but is not control or
joint control over those policies.
The results and assets and liabilities of associates are incorporated in these consolidated financial
statements using the equity method of accounting. The financial statements of associates used for
equity accounting purposes are prepared using uniform accounting policies as those of the Group for
like transactions and events in similar circumstances. Under the equity method, an investment in an
associate is initially recognised in the consolidated statement of financial position at cost and adjusted
thereafter to recognise the Groups share of the profit or loss and other comprehensive income of
the associate. When the Groups share of losses of an associate exceeds the Groups interest in that
associate (which includes any long-term interests that, in substance, form part of the Groups net
investment in the associate), the Group discontinues recognising its share of further losses. Additional
losses are recognised only to the extent that the Group has incurred legal or constructive obligations or
made payments on behalf of that associate.
On acquisition of the investment in an associate, any excess of the cost of acquisition over the Groups
share of the net fair value of the identifiable assets, liabilities of the investee is recognised as goodwill,
which is included within the carrying amount of the investment. Any excess of the Groups share of the
net fair value of the identifiable assets and liabilities over the cost of investment, after reassessment, is
recognised immediately in profit or loss in the period in which the investment is acquired.
The requirements of IAS 39 are applied to determine whether there are any indicators that the Groups
investment in an associate may be impaired. When necessary, the entire carrying amount of the
investment (including goodwill) is tested for impairment in accordance with IAS 36 as a single asset by
comparing its recoverable amount (higher of value in use and fair value less costs of disposal) with its
carrying amount. Any impairment loss is recognised when the recoverable amount is less the current
value of the investment in associates. Any reversal of that impairment loss is recognised in accordance
with IAS 36 to the extent that the recoverable amount of the investment subsequently increases.

Investments in associates (Continued)
When the Group reduces its ownership interest in an associate but the Group continues to use the
equity method, the Group reclassifies to profit or loss the proportion of the gain or loss that had
previously been recognised in other comprehensive income relating to that reduction in ownership
interest if that gain or loss would be reclassified to profit or loss on the disposal of the related assets or
liabilities.
When a group entity transacts with an associate, profits and losses resulting from the transactions with
the associate are recognised in the Groups consolidated financial statements only to the extent of
interests in the associate that are not related to the Group.
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Provided it is probable
that the economic benefits will flow to the Group and the revenue and costs can be measured reliably,
revenue is recognised in profit or loss as follows:
Revenue associated with the sale of coal is recognised when the risks and rewards to the
ownership of the goods have been passed to the customer.
Revenue from sale of power is recognised upon the transmission of electric power to the power
grid companies, as determined based on the volume of electric power transmitted and the
applicable fixed tariff rates agreed with the respective electric power grid companies annually.
Revenue from the rendering of railway, port, shipping and other services is recognised upon the
delivery or performance of the services.
Dividend income from unlisted investments is recognised when the shareholders right to receive
payment is established.
Interest income is recognised as it accrues using the effective interest method.


Leasing
Leases where substantially all the rewards and risks of ownership of assets remain with the lessor are
accounted for as operating leases. Where the Group is the lessor, assets leased by the Group under
operating leases are included in non-current assets, and rentals receivable under the operating leases
are credited to profit or loss on the straight-line basis over the lease terms. Where the Group is the
lessee, rentals payable under operating leases are charged to the profit or loss on the straight-line basis
over the lease terms.
Land using rights under operating leases are presented as lease prepayments in the consolidated
statement of financial position and are initially stated at cost and subsequently charged to the profit or
loss on the straight-line basis over the lease terms.
Foreign currencies
In preparing the financial statements of each individual group entity, transactions in currencies other than
entitys functional currencies (foreign currencies) are recognised at the rates of exchange prevailing on
the dates of the transactions. At the end of the reporting period, monetary items denominated in foreign
currencies are retranslated at the rates prevailing at that date. Non-monetary items that are measured
in terms of historical cost in a foreign currency are not retranslated. Exchange differences on monetary
items are recognised in profit or loss in the period in which they arise.
For the purpose of presenting the consolidated financial statements, the assets and liabilities of the
Groups foreign operations are translated into the presentation currency of the Group (i.e. RMB) using
exchange rates prevailing at the end of each reporting period. Income and expenses items are translated
at the average exchange rates for the period. Exchange differences arising, if any, are recognised
in other comprehensive income and accumulated in equity under the heading of exchange reserve,
attributed to non-controlling interests as appropriate.
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,
which are assets that necessarily take a substantial period of time to get ready for their intended use
or sale, are added to as part of the cost of those assets, until such time as the assets are substantially
ready for their intended use or sale. All other borrowing costs are expensed in the period in which they
are incurred.
Government grants
Government grants are not recognised until there is reasonable assurance that the Group will comply
with the conditions attaching to them and that the grants will be received.
Government grants are recognised in profit or loss on a systematic basis over the periods in which the
Group recognises as expenses the related costs for which the grants are intended to compensate.
Specifically, government grants whose primary condition is that the Group should purchase, construct or
otherwise acquire non-current assets are recognised as deferred income in the consolidated statement
of financial position and transferred to profit or loss on a systematic and rational basis over the useful
lives of the related assets.
Government grants that are receivable as compensation for expenses or losses already incurred or
for the purpose of giving immediate financial support to the Group with no future related costs are
recognised in profit or loss in the period in which they become receivable.


Retirement benefit costs
Payments to state-managed retirement benefit schemes and a supplemental defined contribution

pension plan approved by the government are recognised as an expense when employees have
rendered service entitling them to the contributions.
Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit before
income tax as reported in the consolidated statement of profit or loss and other comprehensive income
because of income or expense that are taxable or deductible in other years and items that are never
taxable or deductible. The Groups current tax is calculated using tax rates that have been enacted or
substantively enacted by the end of the reporting period.
Deferred tax is recognised on temporary differences between the carrying amounts of assets and
liabilities in the consolidated financial statements and the corresponding tax bases used in the
computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary
differences. Deferred tax assets are generally recognised for all deductible temporary differences
to the extent that it is probable that taxable profits will be available against which those deductible
temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the
temporary difference arises from the initial recognition (other than in a business combination) of assets
and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition,
deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of
goodwill.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments
in subsidiaries and associates, except where the Group is able to control the reversal of the temporary
difference and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets arising from deductible temporary differences associated with such investments
and interests are only recognised to the extent that it is probable that there will be sufficient taxable
profits against which to utilise the benefits of the temporary differences and they are expected to
reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced
to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or
part of the asset to be recovered. Unrecognised deferred tax assets are reassessed at the end of each
reporting year and are recognised to the extent that it has become probable that future taxable profit will
be available to allow all or part of the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period
in which the liability is settled or the asset is realised, based on tax rate (and tax laws) that have been
enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow
from the manner in which the Group expects, at the end of the reporting period, to recover or settle the
carrying amount of its assets and liabilities.
Current and deferred tax are recognised in profit or loss, except when they relate to items that are
recognised in other comprehensive income or directly in equity, in which case, the current and deferred
tax are also recognised in other comprehensive income or directly in equity respectively. Where current
tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included
in the accounting for the business combination.

Property, plant and equipment
Property, plant and equipment, which consists of freehold land and buildings, mining structures and
mining rights, mining related machinery and equipment, and others, held for use in the production or
supply of goods or services, or for administrative purposes, are stated in the consolidated statement
of financial position at cost less subsequent accumulated depreciation and subsequent accumulated
impairment losses, if any.
Depreciation is recognised so as to write off the cost of items of property, plant and equipment (other
than freehold land and construction in progress, which are subject to impairment assessment) less
their residual values over their estimated useful lives. The estimated useful lives, residual values and
depreciation method are reviewed at the end of each reporting period, with the effect of any changes in
estimate accounted for on a prospective basis.
Property, plant and equipment, except for freehold land, and mining structures and mining rights, are
depreciated on a straight-line basis at the following rates per annum:
Buildings 1050 years

Mining related machinery and equipment 520 years
Generators related machinery and equipment 20 years
Railway and port 3045 years
Vessel 1025 years
Coal chemical related machinery and equipment 1020 years
Furniture, fixtures, motor vehicles and other equipment 520 years
The Directors reviewed the estimated useful lives of the assets annually based on the Groups historical
experience with similar assets and taking into account anticipated technological changes.
Construction in progress intended to be used for production, supply or administrative purposes are
carried at cost, less any recognised impairment loss. Costs include professional fees and, for qualifying
assets, borrowing costs capitalised in accordance with the Groups accounting policy. Such properties
are classified to the appropriate categories of property, plant and equipment when completed and
ready for intended use. Depreciation of these assets, on the same basis as other property, plant and
equipment, commences when the assets are ready for their intended use.
An item of property, plant and equipment is derecognised upon disposal or when no future economic
benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the
disposal or retirement of an item of property, plant and equipment is determined as the difference
between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.
Mining structures and mining rights
The costs of mining structures and mining rights, which include the costs of acquiring and developing
mining structures and mining rights, are firstly capitalised as construction in progress in the year in
which they are incurred and then reclassified to Mining structures and mining rights under property,
plant and equipment when they are ready for commercial production.
Mining structures and mining rights are depreciated on a units-of-production basis utilising only proved
and probable coal reserves in the depletion base.
The Groups mining rights are of sufficient duration (or convey a legal right to renew for sufficient
duration) to enable all reserves to be mined in accordance with current production schedules.

Property, plant and equipment (Continued)
Mining structures and mining rights (Continued)
Stripping costs incurred to develop a mine (or pit) before the production commences or to improve
access to the component of the ore body during the production stage are capitalised as part of the
cost of constructing the mine (or pit) and subsequently amortised over the life of the mine (or pit) on a
units-of-production basis. Stripping costs and secondary development expenditure, mainly comprising
costs on blasting, haulage, excavation, etc. incurred during the production stage of the ore body are
charged to profit or loss as incurred.
Commercial reserves are proved and probable reserves. Changes in the commercial reserves affecting
unit of production calculations are dealt with prospectively over the revised remaining reserves.
Exploration and evaluation assets
Exploration and evaluation assets comprise costs which are directly attributable to the search for mineral
resources, the determination of technical feasibility and the assessment of commercial viability of an
identified resource:
researching and analysing historical exploration data;
gathering exploration data through topographical, geochemical and geophysical studies;
exploratory drilling, trenching and sampling;
determining and examining the volume and grade of the resource;
surveying transportation and infrastructure requirements; and
conducting market and finance studies.
Expenditure during the initial exploration preparation stage of a project is charged to profit or loss as
incurred. Exploration and evaluation costs, including the costs of acquiring licenses, are capitalised as
exploration and evaluation assets on a project-by-project basis pending determination of the technical
feasibility and commercial viability of the project.
Once the final feasibility study has been completed and a development decision has been taken,
accumulated capitalised exploration and evaluation expenditures in respect of an area of interest are
transferred to property, plant and equipment. In circumstances when an area of interest is abandoned
or management decides it is not commercially viable, any accumulated costs in respect of that area are
written off in the period the decision is made.

Obligations for land reclamation
The Groups obligations for land reclamation consist of spending estimates at both surface and
underground mines in accordance with the PRC rules and regulations. The Group estimates its liabilities
for land reclamation and mine closure based upon detailed calculations of the amount and timing of
the future cash spending to perform the required work. Spending estimates are escalated for inflation,
then discounted at a discount rate that reflects current market assessments of the time value of money
and the risks specific to the liability such that the amount of provision reflects the present value of the
expenditures expected to be required to settle the obligation. The Group records a corresponding asset
associated with the liability for final reclamation and mine closure. The obligation and corresponding
asset are recognised in the period in which the liability is incurred. The asset is depreciated on the
units-of-production method over its expected life and the liability is accreted to the projected spending
date. As changes in estimates occur (such as mine plan revisions, changes in estimated costs, or
changes in timing of the performance of reclamation activities), the revisions to the obligation and the
corresponding asset are recognised at the appropriate discount rate.
Costs for restoration of subsequent site damage which is caused on an ongoing basis during production
are provided for at their net present values and charged to profit or loss as extraction progresses. Where
the costs of site restoration are not anticipated to be significant, they are expensed as incurred.
Intangible assets
Intangible assets acquired separately
Intangible assets with finite useful lives that are acquired separately are carried at costs less
accumulated amortisation and any accumulated impairment losses. Amortisation for intangible assets
with finite useful lives is recognised on a straight-line basis over their estimated useful lives. The
estimated useful life and amortisation method are reviewed at the end of each reporting period, with the
effect of any changes in estimate being accounted for on a prospective basis.
Internally-generated intangible assets research and development expenditure
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
An internally-generated intangible asset arising from development activities (or from the development
phase of an internal project) is recognised if, and only if, all of the following have been demonstrated:
the technical feasibility of completing the intangible asset so that it will be available for use or
sale;
the intention to complete the intangible asset and use or sell it;
the ability to use or sell the intangible asset;
how the intangible asset will generate probable future economic benefits;
the availability of adequate technical, financial and other resources to complete the development
and to use or sell the intangible asset; and
the ability to measure reliably the expenditure attributable to the intangible asset during its
development.

Intangible assets (Continued)
Internally-generated intangible assets research and development expenditure (Continued)
The amount initially recognised for internally-generated intangible asset is the sum of the expenditure
incurred from the date when the intangible asset first meets the recognition criteria listed above. Where
no internally-generated intangible asset can be recognised, development expenditure is recognised in
profit or loss in the period in which it is incurred.
Subsequent to initial recognition, internally-generated intangible asset is measured at cost less

accumulated amortisation and accumulated impairment losses (if any), on the same basis as intangible
assets acquired separately.
Intangible assets acquired in a business combination not under common control
Intangible assets acquired in a business combination are recognised separately from goodwill and are
initially recognised at their fair values at the acquisition date (which is regarded as their cost).
Subsequent to initial recognition, intangible assets acquired in a business combination with finite useful
lives are reported at cost less accumulated amortisation and any accumulated impairment losses, on the
same basis as intangible assets that are acquired separately.
Derecognition of intangible assets
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from
use or disposal. Gains and losses arising from derecognition of an intangible asset are measured as the
difference between the net disposal proceeds and the carrying amount of the asset and are recognised
in profit or loss in the period when the asset is derecognised.
Inventories
Inventories are stated at the lower of cost and net realisable value. Costs of inventories are calculated
using the weighted average method. Net realisable value represents the estimated selling price for
inventories less all estimated costs of completion and costs necessary to make the sale.
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a
past event, it is probable that the Group will be required to settle that obligation, and a reliable estimate
can be made of the amount of the obligation.
Provisions are measured at the best estimate of the consideration required to settle the present
obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding
the obligation. When a provision is measured using the cash flows estimated to settle the present
obligation, its carrying amount is the present value of those cash flows (where the effect of the time
value of money is material).
When some or all of the economic benefits required to settle a provision are expected to be recovered
from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will
be received and the amount of the receivable can be measured reliably.

Financial instruments
Financial assets and financial liabilities are recognised when a group entity becomes a party to the
contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue of financial assets and financial liabilities (other than
financial assets and financial liabilities at fair value through profit or loss) are added to or deducted
from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition.
Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair
value through profit or loss are recognised immediately in profit or loss.
Financial assets
Financial assets within the scope of IAS 39 are classified into the following specific categories: financial
assets at fair value through profit or loss (FVTPL), held-to-maturity investments, loans and receivables
and available-for-sale financial assets (AFS). The Group determines the classification of its financial
assets at initial recognition based on their nature and purpose. All regular way purchases or sales of
financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales
are purchases or sales of financial assets that require delivery of assets within the time frame established
by regulation or convention in the marketplace.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial instrument and
of allocating interest income or expense over the relevant period. The effective interest rate is the rate
that exactly discounts estimated future cash receipts or payments (including all fees and points paid or
received that form an integral part of the effective interest rate, transaction costs and other premiums or
discounts) through the expected life of the financial instrument, or, where appropriate, a shorter period,
to the net carrying amount on initial recognition.
Interest income is recognised on an effective interest basis for debt instruments.
The Groups financial assets include financial assets at FVTPL, loans and receivables and AFS financial
assets. The subsequent measurement of financial assets depends on their classification as follows:
Financial assets at FVTPL
Financial assets are classified as at FVTPL when the financial asset is either held for trading or it is
designated as at FVTPL. The Groups debt securities are classified as held for trading as it has been
acquired for the purpose of selling in the near term. They are stated at fair values, with any gains or
losses arising on remeasurement, net of interest earned, recognised in profit or loss and are included in
other gains and losses line item.
A financial asset is classified as held for trading if:
it has been acquired principally for the purpose of selling it in the near term; or
on initial recognition it is part of a portfolio of identified financial instruments that the Group
manages together and has a recent actual pattern of short-term profit-taking; or
it is a derivative that is not designated and effective as a hedging instrument.


Financial instruments (Continued)
Financial assets (Continued)
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market. Subsequent to initial recognition, loans and receivables (including
accounts and bills receivable, other receivables, loans and advances to Shenhua Group and fellow
subsidiaries, entrusted loans, restricted bank deposits, time deposits with original maturity over three
months and cash and cash equivalents) are measured at amortised cost using the effective interest
method, less any identified impairment.
Interest income is recognised by applying the effective interest rate, except for short-term receivables
where the recognition of interest would be immaterial.
AFS financial assets
AFS financial assets are non-derivatives that are either designated as available-for-sale or are not
classified as other categories of financial assets. The Group designated its investments in unlisted
shares that are not traded in an active market as AFS financial assets.
As the unlisted equity investments do not have a quoted market price in an active market and whose
fair value cannot be reliably measured, it is measured at cost less any identified impairment losses at
end of each reporting period. Dividends on the unlisted equity investment are recognised in profit or loss
when the Groups right to receive the dividends is established in accordance with the policies set out for
Revenue recognition.
Derecognition of financial assets
The Group derecognises a financial asset only when the contractual rights to the cash flows from
the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of
ownership of the asset to another entity. If the Group retains substantially all the risks and rewards of
ownership of a transferred financial asset, the Group continues to recognise the financial asset and also
recognises a collateralised borrowing for the proceeds received.
On derecognition of a financial asset, the difference between the assets carrying amount and the sum
of the consideration received and receivable and the cumulative gain or loss that had been recognised in
other comprehensive income and accumulated in equity is recognised in profit or loss.

Financial assets (Continued)
Impairment of financial assets
Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of
each reporting period. Financial assets are considered to be impaired when there is objective evidence
that, as a result of one or more events that occurred after the initial recognition of the financial asset,
the estimated future cash flows of the financial assets have been affected. The objective evidence of
impairment could include:
significant financial difficulty of the issuer or counterparty; or
breach of contract, such as default or delinquency in interest and principal payments; or
it becoming probable that the borrower will enter bankruptcy or financial re-organisation.
For financial assets carried at cost, the amount of the impairment loss is measured as the difference
between the assets carrying amount and the present value of the estimated future cash flows
discounted at the current market rate of return for a similar financial asset. Such impairment loss will not
be reversed in subsequent periods.
For financial assets carried at amortised cost, the amount of the impairment loss recognised is the
difference between the assets carrying amount and the present value of the estimated future cash
flows discounted at the financial assets original effective interest rate.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets
with the exception of accounts receivables, other receivables, loans and advances to Shenhua Group
and fellow subsidiaries and entrusted loans, where the carrying amount is reduced through the use of
an allowance account. When accounts receivables, other receivables, loans and advances to Shenhua
Group and fellow subsidiaries and entrusted loans are considered uncollectible, it is written off against
the allowance account. Subsequent recoveries of amounts previously written off are credited to profit or
loss.
Financial liabilities and equity instruments
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the group after
deducting all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds
received, net of direct issue costs.
Financial liabilities
Financial liabilities within the scope of IAS 39 are classified as financial liabilities at fair value through
profit or loss and financial liabilities at amortised cost. The Group determines the classification of its
financial liabilities at initial recognition. The Groups financial liabilities including borrowings, accounts
and bills payable, other payables, long-term liabilities, short-term debentures, medium-term notes and
bonds,are recognised initially at fair value, net of directly attributable transaction costs (if any).

Financial liabilities and equity instruments (Continued)
Financial liabilities (Continued)
After initial recognition, financial liabilities at amortised cost are subsequently measured at amortised
cost, using the effective interest rate method unless the effect of discounting would be immaterial,
in which case they are stated at cost. Gains and losses are recognised in the profit or loss when the
liabilities are derecognised. The effective interest rate amortisation is included in finance costs in the
profit or loss.
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Groups obligations are discharged,
cancelled or expire. The difference between the carrying amount of the financial liability derecognised
and the consideration paid and payable is recognised in profit or loss.
Derivative financial instruments
The Groups derivative financial instruments represent cross-currency interest rate swaps, and
are initially recognised at fair value at the date when the derivative contracts are entered into, and
remeasured at fair value at the end of the reporting period, with any gains or losses recognised in profit
or loss.
Impairment of tangible and intangible assets other than goodwill
Where an indication of impairment exists, the assets recoverable amount is estimated. An assets
recoverable amount is the higher of the assets value in use and its fair value less costs of disposal, and
is determined for an individual asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or groups of assets, in which case the recoverable amount is
determined for the cash-generating unit to which the asset belongs.
An impairment loss is recognised only if the carrying amount of an asset exceeds its recoverable
amount. In assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of money and
the risks specific to the asset for which the future cash flow estimates have not been adjusted. An
impairment loss is charged to the profit or loss as other gains and losses.
An assessment is made at the end of each reporting year as to whether there is any indication that
previously recognised impairment losses may no longer exist or may have decreased. If such an
indication exists, the recoverable amount is estimated. A previously recognised impairment loss of an
asset is reversed only if there has been a change in the estimates used to determine the recoverable
amount of that asset, but not to an amount higher than the carrying amount that would have been
determined (net of any depreciation/amortisation), had no impairment loss been recognised for the asset
in prior years. A reversal of such an impairment loss is credited to the profit or loss in the year in which it
arises.

4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION

UNCERTAINTY
In the application of the Groups accounting policies, which are described in Note 3, the Directors are
required to make judgements, estimates and assumptions about the carrying amounts of assets and
liabilities that are not readily apparent from other sources. The estimates and associated assumptions
are based on historical experience and other factors that are considered to be relevant. Actual results
may differ from these estimates.
The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that
period or in the period of the revision and future periods if the revision affects both current and future
periods.
4.1 Critical judgements in applying accounting policies
The following are critical judgements, apart from those involving estimation (see Note 4.2 below),
that the Directors have made in the process of applying the Groups accounting policies and
that have the most significant effect on the amounts recognised in the consolidated financial
statements.
Control over Hebei Guohua Dingzhou Power Co., Ltd. (Dingzhou Power)
Note 43 describes that Dingzhou Power is a subsidiary of the Company although the Company
has only 41% ownership interest and voting rights in Dingzhou Power. The remaining 59% of
ownership interest and voting rights are owned by two shareholders that are unrelated to the
Group as to 19% and 40%, respectively. Details of Dingzhou Power are set out in Note 43.
In making their judgement, the Directors considered that the other shareholders of Dingzhou
Power offered the Company, for the right on appointment of the majority members of the board
of directors which is the governing body of most of the relevant activities of Dingzhou Power
whilst some relevant activities require shareholders approval. The Company considers it has the
practical ability to direct the relevant activities that most significantly affect Dingzhou Powers
returns unilaterally. After assessment, the Directors concluded that the Company has sufficiently
dominant power over the board of directors of Dingzhou Power and therefore the Company has
control over Dingzhou Power.
4.2 Key sources of estimation uncertainty
The following are the key assumptions concerning the future, and other key sources of estimation
uncertainty at the end of the reporting period that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year.
Coal reserves
Engineering estimates of the Groups coal reserves are inherently imprecise and represent
only approximate amounts because of the subjective judgements involved in developing such
information. There are authoritative guidelines regarding the engineering criteria that have to be
met before estimated coal reserves can be designated as proved and probable. Proved and
probable coal reserve estimates are updated at regular basis and have taken into account recent
production and technical information of each mine. In addition, as prices and cost levels change
from year to year, the estimate of proved and probable coal reserves also changes. This change
is considered as a change in estimate for accounting purposes and is reflected on a prospective
basis in related depreciation rates.


UNCERTAINTY (Continued)
4.2 Key sources of estimation uncertainty (Continued)
Coal reserves (Continued)
Despite the inherent imprecision in these engineering estimates, these estimates are used in
determining depreciation expenses and impairment loss. Depreciation rates are determined based
on estimated proved and probable coal reserve quantity (the denominator) and capitalised costs of
mining structures and mining rights (the numerator). The capitalised cost of mining structures and
mining rights are amortised based on the units of coal produced.
Impairment losses
In considering the impairment losses that may be required for certain of the Groups assets which
include property, plant and equipment, construction in progress and interest in associates, the
recoverable amount of the asset needs to be determined. The recoverable amount is the higher
of its fair value less costs of disposal and value in use. It is difficult to precisely estimate fair value
because quoted market prices for these assets may not be readily available. In determining the
value in use, the Group uses all readily available information in determining expected cash flows
generated by the cash-generating unit to which the asset belongs and they are discounted to their
present value, which requires significant judgement relating to cash flow items such as level of
sale volume, selling price, amount of operating costs and future returns.
In considering the impairment losses that may be required for current receivables and other
financial assets, future cash flows need to be determined. One of the key assumptions that has
to be applied is about the ability of the debtors to settle the receivables.
Notwithstanding that the Group has used all available information to make this estimation,
inherent uncertainty exists and actual write-offs may be higher or lower than the amount estimated.
The carrying amounts of the property, plant and equipment, construction in progress and interest
in associates are disclosed in Note15, 16 and 19, respectively.
Depreciation
Other than the freehold land and mining structures and mining rights, property, plant and
equipment are depreciated on a straight-line basis over the estimated useful lives of the assets,
after taking into account the estimated residual value. The Group reviews the estimated useful
lives and residual value of the assets regularly based on the Groups historical experience with
similar assets and taking into account anticipated technological changes. The depreciation
expense for future periods is adjusted if there are significant changes from previous estimates.
The carrying amounts of the property, plant and equipment is disclosed in Note 15.
Deferred tax assets
As at 31 December 2016, deferred tax assets of RMB3,849 million (2015: RMB2,674 million)
have been recognised in the Groups consolidated statement of financial position. No deferred
tax asset has been recognised on the tax losses of RMB6,869 million (2015: RMB5,604 million)
and deductible temporary differences of RMB5,804 million (2015: RMB5,128 million) due to the
unpredictability of future profit streams. The realisation of the deferred tax assets mainly depends
on whether sufficient future profits or taxable temporary differences will be available in the future.
In cases where the actual future profits generated are less or more than expected, a material
reversal or further provision of deferred tax assets may arise, which will be recognised in profit or
loss in the period in which such a reversal or further provision takes place.


UNCERTAINTY (Continued)
4.2 Key sources of estimation uncertainty (Continued)
Obligations for land reclamation
The estimation of the liabilities for final reclamation and mine closure involves the estimates of the
amount and timing for the future cash spending as well as the discount rate used for reflecting
current market assessments of the time value of money and the risks specific to the liability. The
Group considers the factors including development plan of the mines, the geological structure of
the mining regions and reserve volume to determine the scope, amount and timing of reclamation
and mine closure works to be performed. Determination of the effect of these factors involves
judgements from the Group and the estimated liabilities may turn out to be different from the
actual expenditure to be incurred. The discount rate used by the Group may also be altered to
reflect the changes in the market assessments of the time value of money and the risks specific
to the liability, such as change of the borrowing rate and inflation rate in the market. As changes
in estimates occur (such as mine plan revisions, changes in estimated costs, or changes in timing
of the performance of reclamation activities), the revisions to the obligation will be recognised at
the appropriate discount rate. The carrying amounts of the obligations are disclosed in Note 34.
5. REVENUE
2016 2015
Coal revenue 98,126 82,726

Power revenue 68,935 71,347
Transportation revenue 4,610 3,827
Coal chemical revenue 4,293 5,005
175,964 162,905
Other revenue 7,163 14,164
183,127 177,069

6. SEGMENT AND OTHER INFORMATION
The Group manages its businesses by divisions, which are organised by business lines (products and
services). In a manner consistent with the way in which information is reported internally to the Groups
chief operating decision maker (CODM), including president, senior vice president and chief financial
officer, for the purposes of resource allocation and performance assessment, the Group has presented
the following six (2015: six) reportable segments. No operating segments have been aggregated to form
the following reportable segments.
(1) Coal operations which produce coal from surface and underground mines, and the sale of
coal to external customers, the power operations segment and the coal chemical operations
segment. The Group sells its coal under long-term supply contracts, which allow periodical price
adjustments, and at spot market.
(2) Power operations which use coal from the coal operations segment and external suppliers,
thermal power, wind power, water power and gas power to generate electric power for the
sale to coal operations segment and external customers. Electric power is sold to the power
grid companies in accordance with planned power output at the tariff rates as approved by the
relevant government authorities. Electric power produced in excess of the planned power output
is sold at the tariff rate as agreed upon with the respective power grid companies which are
generally lower than the tariff rates for planned power output.
(3) Railway operations which provide railway transportation services to the coal operations
segment, the power operations segment, the coal chemical operations segment and external
customers. The rates of freight charges billed to the coal operations segment, the power
operations segment, the coal chemical operations segment and external customers are consistent
and do not exceed the maximum amounts approved by the relevant government authorities.
(4) Port operations which provide loading, transportation and storage services to the coal operations
segment and external customers. The Group charges service fees and other expenses, which are
reviewed and approved by the relevant government authorities.
(5) Shipping operations which provide shipment transportation services to the power operations
segment, the coal operations segment and external customers. The rates of freight charges
billed to the power operations segment, the coal operations segment and external customers are
consistent.
(6) Coal chemical operations which use coal from the coal operations segment to first produce
methanol and further process into polyethylene and polypropylene, together with other
by-products, for sale to external customers. The Group sells its polyethylene at spot market.

6. SEGMENT AND OTHER INFORMATION (Continued)
6.1 Segment results
For the purposes of assessing segment performance and allocating resources between
segments, the Groups CODM monitors the results attributable to each reportable segment
based on profit before income tax (reportable segment profit). Segment profit represents
the profit earned by each segment without allocation of head office and corporate items. Inter-
segment sales are primarily charged at prevailing market rate which are the same as those
charged to external customers. The accounting policies of the operating segments are the same as
the Groups accounting policies described in Note 3.
Information regarding the Groups reportable segments as provided to the Groups CODM for the
purposes of resource allocation and assessment of segment performance for the years ended 31
December 2016 and 2015 is set out below:
Coal Power Railway Port Shipping Coal chemical Segment total

2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015
RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB
million million million million million million million million million million million million million million
Revenue from external

customers 102,283 93,502 69,613 72,768 4,174 3,420 575 317 380 541 4,831 5,547 181,856 176,095
Inter-segment revenue 29,074 27,956 237 285 29,356 23,812 4,465 3,452 1,732 1,461 3 64,864 56,969
Reportable segment revenue 131,357 121,458 69,850 73,053 33,530 27,232 5,040 3,769 2,112 2,002 4,831 5,550 246,720 233,064
Reportable segment profit 16,084 5,883 10,001 17,628 13,283 9,862 2,049 868 192 48 5 342 41,614 34,631
Including:
Interest expenses 1,517 1,320 1,882 2,048 1,189 637 433 473 86 103 197 275 5,304 4,856
Depreciation and amortisation 7,936 9,280 9,550 8,477 4,635 3,887 1,037 922 292 285 938 903 24,388 23,754
Share of results of associates 50 24 153 391 8 7 211 422
Impairment loss 823 3,076 1,855 1,819 2 879 31 60 2,771 5,774
6.2 Reconciliations of reportable segment revenue, segment profit and other items of
profit or loss for the years ended 31 December 2016 and 2015 are set out below:
Reportable Unallocated head office Elimination of amounts

segment amounts and corporate items inter-segment amounts Consolidated
2016 2015 2016 2015 2016 2015 2016 2015
RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million
Revenue 246,720 233,064 2,237 1,838 (65,830) (57,833) 183,127 177,069

Profit before income tax 41,614 34,631 154 (215) (515) 104 41,253 34,520
Interest expenses 5,304 4,856 1,920 2,483 (2,162) (2,871) 5,062 4,468
Depreciation and amortisation 24,388 23,754 333 236 24,721 23,990
Share of results of associates 211 422 26 6 237 428
Impairment loss 2,771 5,774 44 (1) (8) 2,807 5,773

6.3 Geographical information
The following table sets out information about geographical location of (i) the Groups revenue
from external customers and (ii) the Groups property, plant and equipment, construction in
progress, exploration and evaluation assets, intangible assets, interest in associates, other non-
current assets and lease prepayments (specified non-current assets). The geographical location
of customers is based on the location at which the services were provided or the goods delivered.
The geographical location of the specified non-current assets is based on the physical location
of the asset, in the case of property, plant and equipment, construction in progress and lease
prepayments, and the location of operations, in the case of exploration and evaluation assets,
intangible assets, other non-current assets and interest in associates.
Revenue from external customers Specified non-current assets

Year ended 31 December 31 December 31 December
2016 2015 2016 2015
RMB million RMB million RMB million RMB million
Domestic markets 179,859 175,129 412,502 414,513

Overseas markets 3,268 1,940 9,113 5,173
183,127 177,069 421,615 419,686
6.4 Major customers
Revenue from any individual customer of the Group does not exceed 10% of the Groups
revenue. Certain of the Groups customers are entities, which controlled, jointly controlled or
significantly influenced by the PRC government (government-related entities) and collectively
considered as the Groups major customer. Revenue from major customer of the Groups coal
and power segments represents RMB137,294 million (2015: RMB132,736 million) of the Groups.

6.5 Other information
Certain other information of the Groups segments for the years ended 31 December 2016 and
2015 is set out below:
Coal Power Railway Port Shipping Coal chemical Unallocated items Eliminations Total
2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015
RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB RMB
million million million million million million million million million million million million million million million million million million
Coal purchased 26,286 17,264 26,286 17,264

Cost of coal production 36,584 40,098 (7,664) (9,318) 28,920 30,780
Cost of coal transportation 42,221 38,488 14,708 12,570 2,271 1,886 948 1,176 (44,060) (39,320) 16,088 14,800
Power cost 53,456 48,965 (12,352) (8,299) 41,104 40,666
Cost of coal chemical
production 3,797 4,182 (401) (300) 3,396 3,882
Others 4,313 11,643 483 823 2,642 2,025 252 140 759 584 533 538 67 196 9,049 15,949
Total cost of sales 109,404 107,493 53,939 49,788 17,350 14,595 2,523 2,026 1,707 1,760 4,330 4,720 67 196 (64,477) (57,237) 124,843 123,341
Profit from operations

(note (iii)) 17,017 6,433 11,689 18,810 15,000 10,070 2,302 1,350 266 133 254 649 1,261 808 (1,345) (596) 46,444 37,657
Additions to non-current
assets (note (i)) 5,835 7,001 17,829 19,805 3,819 6,529 1,746 1,387 7 138 95 531 47 35 29,378 35,426
Total assets (note (ii)) 198,140 246,972 207,879 229,773 125,152 124,661 22,489 22,303 8,038 8,189 11,621 12,564 377,853 348,720 (374,443) (433,391) 576,729 559,791
Total liabilities (note (ii)) (116,711) (115,814) (134,519) (131,373) (65,396) (61,284) (10,135) (10,950) (2,063) (2,363) (4,686) (5,593) (137,179) (185,478) 278,929 316,985 (191,760) (195,870)
Notes:
(i) Non-current assets exclude financial instruments and deferred tax assets.
(ii) Unallocated items of total assets include deferred tax assets and other unallocated corporate assets. Unallocated
items of total liabilities include deferred tax liabilities and other unallocated corporate liabilities.
(iii) Profit from operation is calculated as revenue minus cost of sales, selling expenses, general and administrative
expenses and impairment loss.
7. COST OF SALES

2016 2015
Coal purchased 26,286 17,264

Materials, fuel and power 16,405 15,816
Personnel expenses 12,661 11,874
Depreciation and amortisation 21,744 21,134
Repairs and maintenance 9,509 8,619
Transportation charges 10,172 12,193
Taxes and surcharges 6,922 5,833
Other operating costs 21,144 30,608
124,843 123,341

8. INTEREST INCOME/FINANCE COSTS

2016 2015
Interest income from:

bank deposits 691 448
other loans and receivables 32 156
debt securities 4
Total interest income 723 608
Interest on:
borrowings 3,896 3,638
short-term debenture 18 583
medium-term notes 1,289 1,311
bonds 329 310
Total finance costs on financial liabilities not at

fair value through profit or loss 5,532 5,842
Less: amount capitalised 643 1,518
4,889 4,324
Unwinding of discount 173 144

Exchange loss, net 688 649
Fair value changes on financial instruments (2) 6
Total finance costs 5,748 5,123
Net finance costs 5,025 4,515
Borrowing costs capitalised during the year arose on the general borrowing pools and were calculated
by applying a capitalisation rate from 2.48% to 4.63% (2015: from 2.55% to 6.20%) per annum to
expenditure on qualifying assets.

9. INCOME TAX EXPENSE

2016 2015
Current tax, mainly PRC enterprise income tax (EIT) 10,378 10,214
Over provision in respect of prior years 161 224
Deferred tax (1,256) (877)
9,283 9,561
The tax charge for the year can be reconciled to the profit before income tax per consolidated statement
of profit or loss and other comprehensive income as follows:

2016 2015
Tax at PRC income tax rate of 25% (2015: 25%) 10,313 8,630
Tax effects of:
different tax rates of branches and subsidiaries (2,209) (1,235)
non-deductible expenses 636 325
income not taxable (65) (32)
share of results of associates (59) (107)
utilisation of tax losses and deductible temporary difference
previously not recognised (190) (24)
tax losses and deductible temporary difference not recognised 704 1,798
additional tax in respect of prior years 161 224
others (8) (18)
Income tax expense 9,283 9,561
Under the Law of the PRC on Enterprise Income Tax (the EIT Law) and Implementation Regulation
of the EIT Law, the tax rate applicable for PRC group entities is 25% (2015: 25%) except for Groups
overseas subsidiaries and branches as well as subsidiaries operating in the western developing region of
the PRC which are entitled to a preferential tax rate of 15% from 2011 to 2020.

9. INCOME TAX EXPENSE (Continued)

The applicable tax rates of the Groups overseas subsidiaries are as follows:

2016 2015
% %
Australia 30.0 30.0

Indonesia 25.0 25.0
Russia 20.0 20.0
Hong Kong 16.5 16.5
During the year ended 31 December 2016 and 2015,there was no significant assessable profit and
provision for profit tax for the overseas subsidiaries.
10. PROFIT FOR THE YEAR

Profit for the year has been arrived at after charging (crediting):

2016 2015
Personnel expenses, including 20,844 20,067

contributions to defined contribution plans of RMB2,728
million (2015: RMB2,791 million)
Depreciation of property, plant and equipment 22,813 21,639

Amortisation of intangible assets, included in cost of sales 414 329
Amortisation of lease prepayments, included in cost of sales 429 396
Amortisation of other non-current assets 1,065 1,626
Depreciation and amortisation 24,721 23,990
Other gains and losses, represent

losses on disposal of property, plant and equipment,
intangible assets and non-current assets 304 83
gains on disposal of associates (17)
gains on disposal of derivative financial instruments (11)
gains on disposal of a subsidiary (5)
impairment of interest in associates 1
impairment in respect of properties and equipment 1,725 3,834
impairment in respect of construction in progress 22 651
impairment of loans receivable 22 2
allowance for doubtful debts 388 300
write down of inventories 551 950
impairment in respect of other non-current assets 36
impairment in respect of goodwill 98
3,078 5,856
Carrying amount of inventories sold 86,149 82,673

Operating lease in respect of properties and equipment 301 219
Auditors remuneration
audit service 32 22

11. DIRECTORS, SUPERVISORS AND CHIEF EXECUTIVES EMOLUMENTS
Directors and chief executives remuneration for the year, disclosed pursuant to the applicable Listing
Rules and CO, is as follows:
Year ended 31 December 2016

Basic salaries,
housing
and other
allowance Retirement
and benefits Discretionary scheme
Fees in kind bonuses contributions Total
RMB million RMB million RMB million RMB million RMB million
Chief executive
Zhang Yuzhuo (note (i))
Sub-total
Executive directors
Ling Wen (note (i))
Han Jianguo (note (ii))
Li Dong (note (ii) and note (iii))
Sub-total
Non-executive directors
Chen Hongsheng (note (i))
Zhao Jibin (note (ii) and note (iii))
Sub-total
Independent non-executive
directors
Fan Hsulaitai 0.45 0.45
Gong Huazhang 0.45 0.45
Guo Peizhang 0.45 0.45
Sub-total 1.35 1.35
Supervisors
Zhai Richeng 0.45 0.40 0.08 0.93
Zhou Dayu (note (iii)) 0.25 0.15 0.04 0.44
Shen Lin 0.46 0.38 0.08 0.92
Tang Ning (note (iv)) 0.05 0.05
Sub-total 1.16 0.98 0.20 2.34
Total 3.69

11. DIRECTORS, SUPERVISORS AND CHIEF EXECUTIVES EMOLUMENTS (Continued)
Year ended 31 December 2015

Basic salaries,
housing
and other
allowance Retirement
and benefits Discretionary scheme
Fees in kind bonuses contributions Total
RMB million RMB million RMB million RMB million RMB million
Chief executive
Zhang Yuzhuo (note (i))
Sub-total
Executive directors
Ling Wen (note (i))
Han Jianguo 0.19 0.44 0.10 0.73
Wang Xiaolin (note (v)) 0.13 0.35 0.06 0.54
Sub-total 0.32 0.79 0.16 1.27
Non-executive directors
Chen Hongsheng (note (i))
Sub-total
Independent non-executive
directors
Fan Hsulaitai 0.45 0.45
Gong Huazhang 0.45 0.45
Guo Peizhang 0.45 0.45
Sub-total 1.35 1.35
Supervisors
Zhai Richeng (note (ii))
Tang Ning 0.18 0.20 0.03 0.41
Shen Lin 0.41 0.36 0.08 0.85
Sub-total 0.59 0.56 0.11 1.26
Total 3.88

11. DIRECTORS, SUPERVISORS AND CHIEF EXECUTIVES EMOLUMENTS (Continued)
Discretionary bonuses were determined by the remuneration committee in accordance with the relevant
human resources policies.
Notes:
(i) The emoluments of these directors were borne by Shenhua Group during the years ended 31 December 2016 and 2015.
(ii) The emoluments of Mr. Han Jianguo, Mr. Li Dong and Mr. Zhao Jibin were borne by Shenhua Group during the year
ended 31 December 2016.
The emolument of Mr. Zhai Richeng was borne by Shenhua Group during the year ended 31 December 2015.
(iii) Mr. Li Dong was appointed as executive director on 17 June 2016.
Mr. Zhao Jibin was appointed as non-executive director on 17 June 2016.
Mr. Zhou Dayu was appointed as supervisor on 17 June 2016.
(iv) Mr. Tang Ning resigned as supervisor on 17 June 2016. He retired in the year ended 31 December 2015 and no more
emolument achieved after his retirement. The discretionary bonuses he got during the year ended 31 December 2016 is
for his prior years performance.
(v) Mr. Wang Xiaolin resigned as executive director on 20 August 2015.
Except for those emoluments of directors or supervisors whose emoluments were borne by Shenhua
Group, the executive directors and supervisors emoluments shown above were mainly for their
services in connection with the management of the affairs of the Company and the Group.
The independent non-executive directors emoluments shown above were mainly for their services as
directors of the Company.

12. EMPLOYEES EMOLUMENTS
Of the five individuals with the highest emoluments within the Group, nil (2015: one) was director of the
Company. The emoluments of the remaining five (2015: four) individuals were as follows:

2016 2015
Basic salaries, housing and other allowances and benefits in kind 2.23 1.75
Discretionary bonuses 2.13 1.38
Retirement scheme contributions 0.40 0.36
4.76 3.49
Their emoluments were within the following band:

2016 2015
HKD500,001 to HKD1,000,000 1
HKD1,000,001 to HKD1,500,000 5 3
13. DIVIDENDS

2016 2015
Dividend approved and paid during the year:

2015 final RMB0.32 (2015: 2014 final of RMB0.74)
per ordinary share 6,365 14,718
Subsequent to the end of the reporting period, a final dividend in respect of the year ended 31
December 2016 of RMB0.46 (final dividend in respect of the year ended 31 December 2015: RMB0.32)
per ordinary share and a special dividend of RMB2.51 per ordinary share has been proposed by the
Directors and is subject to approval by the shareholders in the following general meeting.
14. EARNINGS PER SHARE
The calculation of basic earnings per share is based on the profit attributable to ordinary equity holders
of the Company of RMB24,910 million (2015: RMB17,649 million) and the number of shares in issue
during the year of 19,890 million shares (2015: 19,890 million shares).
No diluted earnings per share is presented as there were no potential ordinary shares in existence during
both years.

15. PROPERTY, PLANT AND EQUIPMENT
Furniture,
Mining Generators, Coal chemical fixtures,
Mining related related related motor
structures machinery machinery machinery vehicles
Land and and mining and and Railway and and other
buildings rights equipment equipment and port Vessels equipment equipment Total
RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million
COST
At 1 January 2015 56,248 30,574 64,775 138,834 102,470 6,239 13,007 17,498 429,645
Exchange adjustment (66) 123 57
Additions 249 362 576 287 699 6 52 2,231
Transferred from construction
in progress 20,720 172 970 29,075 18,348 903 122 205 70,515
Disposals or write-off (174) (232) (281) (517) (283) (289) (15) (39) (1,830)
At 31 December 2015 76,977 30,876 66,040 167,802 121,234 6,853 13,120 17,716 500,618
Exchange adjustment 114 8 103 225
Additions 28 2,609 689 153 685 8 16 4,188
in progress 5,232 246 1,045 10,403 2,476 27 134 67 19,630
Disposals or write-off (242) (115) (756) (1,275) (946) (44) (34) (3,412)
Transferred to construction in
progress, for overall technical
enhancement (152) (152)
At 31 December 2016 82,109 33,624 67,018 177,186 123,297 6,880 13,218 17,765 521,097
DEPRECIATION AND
IMPAIRMENT
At 1 January 2015 14,853 8,763 31,756 43,984 26,099 119 2,767 9,042 137,383
Exchange adjustment 23 23
Charge for the year 1,930 1,339 4,234 7,900 4,343 290 688 915 21,639
Impairment losses (note (i)) 462 9 273 1,697 929 458 6 3,834
Disposals or write-off (94) (205) (244) (508) (242) (252) (13) (29) (1,587)
At 31 December 2015 17,151 9,906 36,019 53,096 31,129 157 3,900 9,934 161,292
Exchange adjustment 11 25 36
Charge for the year 1,963 1,048 4,700 8,327 4,679 298 732 1,066 22,813
Impairment losses (note (i)) 149 10 1,551 13 2 1,725
in progress 19 18 3 40
Disposals or write-off (43) (84) (655) (1,022) (640) (5) (23) (2,472)
Transferred to construction in
progress, for overall technical
enhancement (122) (122)

15. PROPERTY, PLANT AND EQUIPMENT (Continued)
Coal Furniture,
Mining Generators, chemical fixtures,
Mining related related related motor
structures machinery machinery machinery vehicles
Land and and mining and and Railway and and other
buildings rights equipment equipment and port Vessels equipment equipment Total
RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million RMB million
At 31 December 2016 19,250 10,870 40,092 61,977 35,046 455 4,643 10,979 183,312
CARRYING VALUES
At 31 December 2016 62,859 22,754 26,926 115,209 88,251 6,425 8,575 6,786 337,785
At 31 December 2015 59,826 20,970 30,021 114,706 90,105 6,696 9,220 7,782 339,326
At 1 January 2015 41,395 21,811 33,019 94,850 76,371 6,120 10,240 8,456 292,262
Notes:
(i) Impairment loss
Impairment loss for cash-generating units
In 2016, owing to oversupply of coals and the unsatisfactory financial performance of certain Groups mines, the
management identified certain non-current assets relating to coal mines having impairment indications. The Group tested
the said mines, each of which is a separate cash-generating unit, for impairment by measuring the recoverable amount
of every mine. The recoverable amount is determined based on discounted cash flow covering the shorter of economic
and legal useful life, and pre-tax discount rate ranging from 8.12% to 11.87%. Cash flows beyond the five-year approved
managements budgets are prepared based on zero growth rate.
As a result of the impairment assessment, the Directors recognised no impairment loss in current year against the
non-current assets in coal segment. As a result of the impairment assessment in 2015 utilising the same method, the
Directors recognised impairment loss for mining related assets in coal segment amounting to RMB1,378 million.
Impairment loss for individual assets
In 2016, pursuant to the Notice to Approve Shenhua (Fujian) Energy Co., Ltd.s Application to Close Down Small Thermal
Units (Min Jing Xin Han Neng Yuan [2016] No. 62) issued by Fujian Provincial Commission of Economy and Information
Technology, all four sets of power generators in Shenhua Fujian Energy Co., Ltd. were discontinued from power
generation. The Group assessed the recoverable amounts of those non-current assets and generators which belong to
power segment and as a result the carrying amount of the machineries and the generators was written down by RMB799
million to their recoverable amount as at 31 December 2016.

15. PROPERTY, PLANT AND EQUIPMENT (Continued)
Notes: (Continued)
(i) Impairment loss (Continued)
Impairment loss for individual assets (Continued)
The Group has been upgrading its power plants for energy conservation and environment protection which rendered
certain non-current assets obsolete.The Group assessed the recoverable amounts of those non-current assets and
generators which belong to power segment and as a result the carrying amount of the machineries and the generators
was written down by RMB584 million to their recoverable amount as at 31 December 2016 (2015: RMB985 million).
Pursuant to the Notice to Close Coal-fired Generators at Guohua Beijing Thermal Power Plant (Jing Fa Gai [2015] No. 510)
issued by Beijing Municipal Commission of Development and Reform, the coal-fired generators at Guohua Beijing Thermal
Power Plant was discontinued from power generation in March 2015, the Group assessed the recoverable amounts of
those non-current assets and generators which belong to power segment and as a result the carrying amount of the
machineries and the generators was written down by RMB595 million to their recoverable amount as at 31 December
2015, and an additional RMB173 million impairment loss was recognised in 2016.
The estimates of recoverable amount of above assets were based on the machines and generators fair values less
costs of disposal, using market comparison approach by reference to recent sales price of similar assets within the same
industry, adjusted for differences such as remaining useful lives, if the assets were classified as utilisable. Otherwise, the
fair value was determined by using market comparison approach by reference to sales price of similar material, adjusted
for differences such as geographical location of market. The fair value on which the recoverable amount is based on is
categorised as a Level 3 measurement.
(ii) The Groups freehold land with a carrying amount of RMB1,141 million (2015: RMB1,047 million) are located in Australia.
(iii) The Group was in the process of applying for the title certificates of certain of its properties with an aggregate carrying
amount of RMB11,170 million as at 31 December 2016 (2015: RMB9,690 million). The Directors are of the opinion that
the Group is entitled to lawfully and validly occupy or use the above mentioned properties.
(iv) As at 31 December 2016, the Group has bank loans secured by the Groups property, plant and equipment with carrying
amount of RMB707 million (2015: RMB1,174 million).

16. CONSTRUCTION IN PROGRESS

2016 2015
At the beginning of the year 33,610 78,988

Additions 22,123 29,674
Transferred from property, plant and equipment for overall
technical enhancement 30
Transferred to property, plant and equipment (19,630) (70,515)
Transferred to intangible assets (106) (1,493)
Transferred to lease prepayments (459) (2,263)
Net income from mine trial run (319)
Disposal (47) (228)
Impairment losses (22) (651)
Impairment write-off 98
Impairment transferred to property, plant and equipment 40
At the end of the year 35,220 33,610
Note:
As at 31 December 2016, the Group is in the process of obtaining requisite permits of certain of its construction in progress from
the relevant government authorities. The Directors are of the opinion that the Group will be able to obtain the requisite permits in
due course.
17. EXPLORATION AND EVALUATION ASSETS
The movement of the exploration and evaluation assets is as follows:

2016 2015

Exchange adjustments 119 (119)
Additions 49 83


18. INTANGIBLE ASSETS

The movement of intangible assets, mainly licenses, software and franchises, is as follows:

2016 2015

Exchange adjustment 9 5
Additions 356 255
Transferred from construction in progress 106 1,493
Amortisation (414) (329)
Disposal (3)
19. INTEREST IN ASSOCIATES

2016 2015
Unlisted shares, at cost 3,274 3,184

Share of post-acquisition profits and other comprehensive
income, net of dividend received 1,868 1,929
5,142 5,113
The Groups interests in associates are individually and in aggregate not material to the Groups financial
position or results of operations for both years. The Groups associates are unlisted and established in
the PRC. The following list contains only the particulars of associates, which principally affect the results
or assets of the Group:
Proportion of ownership
Type of interest and voting power
Name of associate legal entity held by the Group Principal activities
2016 2015
% %
Shendong Tianlong Group Co., Ltd. Limited company 20 20 Coal production and sale
Zhejiang Zheneng Jiahua Power Co., Ltd. Limited company 20 20 Generation and sale of electricity
Sichuan Guangan Power Co., Ltd. Limited company 20 20 Generation and sale ofelectricity
Guohua (Hebei) Renewables Co., Ltd. Limited company 25 25 Generation and sale of electricity
Tianjin Yuanhua Shipping Co., Ltd. Limited company 44 44 Provision of transportation

service
Inner Mongolia Yili Chemical Industry Limited company 25 25 Production and sale of chemicals
Co., Ltd.

20. AVAILABLE-FOR-SALE INVESTMENTS
Available-for-sale investments represent investment in unlisted equity securities issued by private

entities incorporated in the PRC. They are measured at cost less impairment at end of the reporting
period because the range of reasonable fair value measurement is significant and the probabilities of the
various estimates cannot be reasonably assessed. The Directors are of the opinion that their fair values
cannot be measured reliably.
21. OTHER NON-CURRENT ASSETS
2016 2015
Prepayments in connection with construction work,

equipment purchases and others (note (i)) 9,165 8,493
Prepayment for mining projects 8,000 8,000
Long-term receivable 2,500 2,500
Loans to Shenhua Group
and fellow subsidiaries (note (ii)) 13,502 11,473
Long-term entrusted loans (note (iii)) 627
Goodwill 889 987
Others 2,693 2,482
36,749 34,562
Notes:
(i) At 31 December 2016, the Group had prepayments to fellow subsidiaries amounting to RMB5 million (2015: RMB28
million).
(ii) The loans to Shenhua Group and fellow subsidiaries bear interest at rates ranging from 4.28% to 4.41% per annum (2015:
4.28% to 4.41% per annum) and are receivable within two to ten years.
(iii) The Group has long-term entrusted loan of RMB627 million to an associate through a PRC state-owned bank, bearing
interest at rates 4.90% per annum (2015: 6.15% per annum), which is receivable within one year and reclassified to other
current assets.
22. LEASE PREPAYMENTS
Lease prepayments represent land use rights paid to the PRCs government authorities. The Group is
in the process of applying for the title certificates of certain land use rights with an aggregate carrying
amount of RMB2,526 million as at 31 December 2016 (2015: RMB2,247 million),of which RMB655
million were newly acquired in 2016. The Directors are of the opinion that the Group is entitled to
lawfully and validly occupy or use the above mentioned lands.

23. INVENTORIES
2016 2015
Coal 5,563 3,152

Materials and supplies 6,424 7,982
Others (note) 1,354 1,682
13,341 12,816
Note: Others mainly represent properties held for sale and properties under development.
24. ACCOUNTS AND BILLS RECEIVABLE
2016 2015
Accounts receivable
Shenhua Group and fellow subsidiaries 3,177 3,049
Associates 284 770
Third parties 13,138 19,745
16,599 23,564
Less: allowance for doubtful debts (420) (194)
16,179 23,370
Bills receivable
Shenhua Group and fellow subsidiaries 18 41
Associates 42 162
4,394 17,649
20,573 41,019
Bills receivable were mainly issued by PRC banks and are expiring within one year. As at 31 December
2016, the bills receivable with the carrying amounts of RMB85 million (2015: RMB36 million) were
pledged to secure bills payable.

24. ACCOUNTS AND BILLS RECEIVABLE (Continued)
The following is an analysis of accounts receivable by age, net of allowance for doubtful debts,
presented based on the date of delivery of goods or services which approximated the revenue
recognition date:
2016 2015
Less than one year 13,035 21,756

One to two years 1,996 1,401
Two to three years 1,010 162
More than three years 138 51
16,179 23,370
The movement of allowance for doubtful debts was as follows:

2016 2015
At the beginning of the year 194 54

Impairment loss
recognised 245 140
amounts recovered (10)
Written off (9)
At the end of the year 420 194
The aging analysis of accounts receivable that are past due but not impaired are as follows:
2016 2015

Two to three years 178 162
More than three years 52 51
3,753 7,556
Receivables that were not overdue or unimpaired relate to a wide range of customers for whom there
was no recent history of default.

24. ACCOUNTS AND BILLS RECEIVABLE (Continued)
Receivables that were past due but not impaired relate to a number of independent customers that have
a good track record with the Group, which the Group does not hold any collateral over these balances.
Based on past experience, the management believes that no impairment is necessary in respect of
these balances as there has not been a significant change in credit quality and the balances are still
considered fully recoverable.
Included in accounts receivable are the following amounts denominated in foreign currencies are set out
below:
2016 2015
United States Dollars (USD) 486 215

European Dollars (EUR) 140 119
Transfers of financial assets
As at 31 December 2016, the Group endorsed bills receivable amounting to RMB2,075 million (2015:
RMB2,478 million) to suppliers to settle the accounts payable of same amounts and discounted
bills receivables amounting to RMB446 million (2015: RMB229 million) to banks. In accordance to
the relevant laws in the PRC, the holders of the bills receivable have a right of recourse against the
Group if the issuing banks default payment. In the opinion of the Directors, the Group has transferred
substantially all the risks and rewards of ownership relating to these bills receivable, and accordingly
derecognised the full carrying amounts of the bills receivable and associated accounts payables, in case
of bills receivable endorsed to suppliers and recognised the cash received, in case of bills receivables
discounted to banks.
The maximum exposure to loss from the Groups continuing involvement, if any, in the endorsed and
discounted bills receivable equals to their carrying amounts. In the opinion of the Directors, the fair
values of the Groups continuing involvement in the derecognised bills receivable are not significant.

25. PREPAID EXPENSES AND OTHER CURRENT ASSETS
2016 2015
Financial assets at FVTPL

Derivative financial instruments 4 12
Tradable wealth management products 50
Wealth management products 33,350 160
33,404 172
Prepaid expenses and deposits 7,029 7,889

Loans and advances to Shenhua Group and fellow
subsidiaries (note) 2,209 3,645
Amounts due from associates 973 378
Deductible VAT and other tax 3,396 4,483
Other receivables 1,781 2,784
48,792 19,351
Note:
As at 31 December 2016, the Group had loans to Shenhua Group and fellow subsidiaries amounting to RMB2,087 million (2015:
RMB3,217 million), which bear interest at rates ranging from 3.92% to 5.04% per annum (2015: 4.14% to 5.04% per annum). The
remaining balances are unsecured, interest-free and have no fixed terms of repayment.
As at 31 December 2016, the Group invested in principal-guaranteed floating income wealth management products amounting
to RMB31,000 million with term of 90 days and expected annual rates of return ranging from 3.20% to 3.35%, and non-principal-
guaranteed floating income wealth management products amounting to RMB2,350 million with term ranging from 32 days to 365
days and expected annual rates of return ranging from 4.10% to 4.55%. The wealth management products held by the Group are
valued by discounting cash flow method, the detailed fair value measurements are disclosed in Note 37.3.
26. RESTRICTED BANK DEPOSITS
Restricted bank deposits as at 31 December 2016 represent statutory deposit reserves at The Peoples
Bank of China (PBOC), collaterals for bills payable and collaterals related to the operating of mines and
ports.

27. CASH AND CASH EQUIVALENTS
Cash and cash equivalents in the consolidated statement of financial position and the consolidated
statement of cash flows comprise cash at bank and in hand, and time deposits with original maturity
within three months.
Included in cash and cash equivalents are the following amounts denominated in foreign currencies are
set out below:
2016 2015
USD 111 220

HKD 2 1
Indonesian Rupiah 3
EUR 28 27
28. DEFERRED TAXATION
For the purpose of the presentation in the consolidated statement of financial position, certain deferred
tax assets and liabilities have been offset. The following is the analysis of the deferred tax balances for
financial reporting purpose.
2016 2015
Deferred tax assets 3,849 2,674

Deferred tax liabilities (797) (878)
3,052 1,796

28. DEFERRED TAXATION (Continued)
The following are the major deferred tax assets and liabilities recognised and movements thereon during
the current and prior year:
At 31
At 1 January Credited in December
2016 profit or loss 2016
RMB million RMB million RMB million
Allowances, primarily for receivables and inventories 417 86 503

Property, plant and equipment 427 342 769
Lease prepayments (171) 2 (169)
Tax losses carried forward 384 77 461
Tax allowable expenses not yet incurred (62) 63 1
Unrealised profits from sales within the Group 558 629 1,187
Accrued salaries and other expenses not yet paid 170 18 188
Others 73 39 112
Net deferred tax assets 1,796 1,256 3,052
(Charged) At 31
At 1 January credited in December
2015 profit or loss 2015
RMB million RMB million RMB million
Allowances, primarily for receivables and inventories 304 113 417

Property, plant and equipment 4 423 427
Lease prepayments (175) 4 (171)
Tax losses carried forward 200 184 384
Tax allowable expenses not yet incurred (329) 267 (62)
Unrealised profits from sales within the Group 730 (172) 558
Accrued salaries and other expenses not yet paid 140 30 170
Others 45 28 73
Net deferred tax assets 919 877 1,796
At the end of the reporting period, the Group have unused tax losses of RMB8,714 million (31 December
2015: RMB7,141 million) and unrecognised deductible temporary differences of RMB5,804 million (2015:
RMB5,128 million) available for offset against future profits. A deferred tax assets has been recognised
in respect of RMB1,845 million (31 December 2015: RMB1,537 million) of such losses. No deferred
tax assets has been recognised in respect of the remaining RMB6,869 million (31 December 2015:
RMB5,604 million) due to the unpredictability of future profit streams. Included in unrecognised tax
losses are losses of RMB398 million (31 December 2015: RMB356 million) that will expire in 2017.

29. BORROWINGS
An analysis of the Groups borrowings is as follows:
2016 2015
Current borrowings:
Short-term bank and other borrowings 4,384 6,435
Current portion of long-term borrowings 7,427 6,377
11,811 12,812
Non-current borrowings:
Long-term borrowings, less current portion 58,462 54,179
70,273 66,991
Secured 9,114 11,594

Unsecured 61,159 55,397
70,273 66,991
The Groups short-term borrowings are unsecured and bear interest at rates ranging from 3.70% to
5.04% per annum (2015: 3.92% to 5.35% per annum).
2016 2015
The exposure of the long-term borrowings and the

contractual maturity dates:
Within one year 7,427 6,377
More than one year, but not exceeding two years 5,657 6,472
More than two years, but not exceeding five years 13,040 15,599
More than five years 39,765 32,108
65,889 60,556

29. BORROWINGS (Continued)
The Groups long-term borrowings comprise:
2016 2015
(Restated)
Loans from banks and other institutions
Renminbi denominated Interest rates ranging from 1.08% to 6.55%

per annum with maturities through
22 January 2036 61,677 57,555
USD denominated Interest rates ranging from Libor+0.7% to

Libor+2.85% per annum with maturities
through 26 December 2034 1,722 484
Japanese Yen (JPY) Interest rates ranging from 1.80% to 2.60%

denominated per annum with maturities through
20 March 2031 2,445 2,448
EUR denominated Interest rate at 2.85% per annum with

maturities through 22 June 2017 45 69
65,889 60,556
Less: current portion of long-term borrowings 7,427 6,377
58,462 54,179
As at 31 December 2016, the Group had entrusted loans from Shenhua Group and fellow subsidiaries
amounting to RMB4,824 million (2015: RMB7,424 million).
Certain borrowings are secured over certain property, plant and equipment with a carrying amount of
RMB707 million (2015: RMB1,174 million) (see Note 15), inter-group long-term receivable of RMB Nil
(2015: RMB1,245 million) which were fully eliminated against relevant payables in the consolidated
financial statement, certain future power revenue to be generated by the Group and a guarantee by a
non-controlling shareholder of a subsidiary.

29. BORROWINGS (Continued)
Included in borrowings are the following amounts denominated foreign currencies are set out below:
2016 2015
USD 1,722 484

JPY 2,445 2,448
EUR 45 69
30. DEBENTURES, MEDIUM-TERM NOTES AND BONDS
On 11 June 2015, the Company issued short-term debentures bearing interest rate of 3.40% per annum
with proceeds of approximately RMB5,000 million, and were paid together with accrued interest on 7
February 2016.
On 7 November 2013, the Company issued medium-term notes with proceeds of approximately
RMB5,000 million and are repayable on 11 November 2018. The notes bear interest rate of 5.49% per
annum, repayable annually. The effective interest rate is 5.69% per annum.
On 19 August 2014, the Company issued medium-term notes with proceeds of approximately
RMB10,000 million and are payable on 21 August 2017. The notes bear interest rate of 5.10% per
annum, repayable annually. The effective interest rate is 5.17% per annum.
On 16 September 2014, the Company issued medium-term notes with proceeds of approximately
RMB10,000 million and are payable on 18 September 2017. The notes bear interest rate of 5.04% per
annum, repayable annually. Its effective interest rate is 5.11% per annum.
On 20 January 2015, China Shenhua Overseas Capital Company Limited (Shenhua Overseas Capital)
issued Dollar bonds with proceeds of approximately RMB3,061 million and are payable on 19 January
2018. The bonds bear interest rate of 2.50% per annum, repayable semi-annually. Its effective interest
rate is 2.84% per annum.
On 20 January 2015, Shenhua Overseas Capital issued Dollar bonds with proceeds of approximately
RMB3,061 million and are payable on 19 January 2020. The bonds bear interest rate of 3.13% per
annum, repayable semi-annually. Its effective interest rate is 3.35% per annum.
On 20 January 2015, Shenhua Overseas Capital issued Dollar bonds with proceeds of approximately
RMB3,061 million and are payable on 19 January 2025. The bonds bear interest rate of 3.88% per
annum, repayable semi-annually. Its effective interest rate is 4.10% per annum.
The net proceeds of the Dollar bonds issued is mainly used for the repayment of loans of subsidiaries.

31. ACCOUNTS AND BILLS PAYABLE
2016 2015
Accounts payable
Shenhua Group, an associate of Shenhua Group and
fellow subsidiaries 2,140 1,847
Associates 218 398
31,982 31,517
Bills payable 3,174 2,473
35,156 33,990
As at 31 December 2016, certain bills payable were secured by bills receivable held by the Group (see
Note 24).
The following is an aging analysis of accounts payable, presented based on invoice date:
2016 2015

Two to three years 2,320 3,305
More than three years 2,356 1,178
35,156 33,990
Included in accounts and bills payable are the following amounts denominated in foreign currencies are
set out below:
2016 2015
USD 486 413

EUR 154 179
HKD 1
Great British Pounds 19 18

32. ACCRUED EXPENSES AND OTHER PAYABLES
2016 2015
Accrued staff wages and welfare benefits 3,727 3,397

Accrued interest payable 705 784
Taxes payable other than income tax 6,911 3,571
Dividends payable 2,665 2,786
Receipts in advances 4,196 3,624
Deposits from Shenhua Group and fellow subsidiaries (note (i)) 13,492 24,500
Other accrued expenses and payables (note (ii)) 9,665 8,857
41,361 47,519
Notes:
(i) As at 31 December 2016, deposits from Shenhua Group and fellow subsidiaries bore interest at 0.42%to 1.62% per
annum (2015: 0.42% to 1.62% per annum).
(ii) Other accrued expenses and payables of the Group include:
31 December 2016 31 December 2015

Amounts due to Shenhua Group and fellow subsidiaries 1,945 1,862

Amounts due to associates 54 44
1,999 1,906
The above balances are unsecured, interest-free and has no fixed terms of repayment.

33. LONG-TERM LIABILITIES
2016 2015
Payables for acquisition of mining rights (note (i)) 1,093 1,263

Deferred income (note (ii)) 1,328 1,213
Defined benefit plans 147 171
Others 286 79
2,854 2,726
Analysed for reporting purpose as:

Current liabilities 403 203
Non-current liabilities 2,451 2,523
2,854 2,726
Note:
(i) The balances mainly represent payables for acquisition of mining rights which are to be settled over the period of
production set out in the contracts on an annual basis. The annual payment is determined by fixed rates on a per tonne
basis with reference to the annual production volume of the acquired mines in the acquisition agreements.
(ii) Deferred income mainly represents grants provided by several local governments in the PRC to encourage the
construction of non-current assets.
34. ACCRUED RECLAMATION OBLIGATIONS

2016 2015

Addition for the year 220
Accretion expense 132 137
Utilisation for the year (42)


35. SHARE CAPITAL
2016 2015
Registered, issued and fully paid:

16,491,037,955 domestic listed A shares of RMB1.00 each 16,491 16,491
3,398,582,500 H shares of RMB1.00 each 3,399 3,399
19,890 19,890
All A shares and H shares rank pari passu in all material aspects.
36. CAPITAL RISK MANAGEMENT
The Groups policy is to maintain a strong capital base so as to maintain investor, creditor and market
confidence and to sustain future development of the business.
The Group manages the capital structure and makes adjustments to it in the light of changes in
economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust
the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital
to shareholders or issue new shares to reduce debts.
The Group monitors capital using a gearing ratio which is total liabilities divided by total assets. The
Group aims to maintain the gearing ratio at a reasonable level. The Groups gearing ratio as at 31
December 2016 was 33% (2015: 35%).
There were no changes in the Groups approach to capital management compared with previous years.
37. FINANCIAL INSTRUMENTS
37.1 Categories of financial instruments
The carrying amounts of each of the following categories of financial assets and financial liabilities
at the end of the reporting period are set out as follows:
2016 2015
Financial assets:
Available-for-sale investments 1,800 1,795
Loans and receivables (including cash and
cash equivalents) 95,651 112,701
Derivative financial instruments 54 12
Investments in wealth management products 33,350 160
Financial liabilities:
Amortised cost 172,081 182,172

37. FINANCIAL INSTRUMENTS (Continued)
37.2 Financial risk management objectives and policies
The Groups major financial instruments include accounts and bills receivable, loans and advances
to/deposits from/amounts due to Shenhua Group and fellow subsidiaries, amounts due from/
to associates, other receivables, accounts and bills payables, borrowings, long-term liabilities,
medium-term notes and bonds. Details of the financial instruments are disclosed in the respective
notes. The risks associated with these financial instruments include market risk (interest rate
and currency risks), credit risk and liquidity risk. The policies on how to mitigate these risks are
set out below. The management manages and monitors these exposures to ensure appropriate
measures are implemented on a timely and effective manner.
Market risk
(i) Currency risk
The functional currency of most of the group entities is RMB in which most of the
transactions are denominated. However, certain of the Groups borrowings, receivables,
bank balances and payables are denominated in foreign currencies. The Group entered into
cross currency interest rate swaps with bank with good reputation in respect of its certain
interest payments of borrowings denominated in JPY in order to mitigate the risk from the
fluctuation of JPY against RMB, and the carrying amounts are set out in Note 29.
The carrying amounts of the Groups foreign currency denominated monetary assets and
monetary liabilities at the end of the reporting period are as follows:
Liabilities Assets
2016 2015 2016 2015
USD 2,208 897 597 435

JPY 2,445 2,448
Other currencies 218 267 170 150
Sensitivity analysis
The following table details the Groups sensitivity to a 10% increase or decrease in
exchange rate of each foreign currency against RMB, while all other variables are held
constant. The sensitivity analysis includes only outstanding foreign currency denominated
monetary items at the end of the reporting period.
USD JPY Other currencies

Year ended 31 December Year ended 31 December Year ended31 December
2016 2015 2016 2015 2016 2015
RMB million RMB million RMB million RMB million RMB million RMB million
(Decrease) increase in profit after tax for the year:

if RMB weakens against foreign currencies (121) (35) (183) (184) (4) (9)
if RMB strengthens against foreign currencies 121 35 183 184 4 9

37.2 Financial risk management objectives and policies (Continued)
Market risk (Continued)
(ii) Interest rate risk
The Group is exposed to fair value interest rate risk in relation to fixed-rate loan and
receivables, borrowings, short-term debenture, medium-term notes and bonds (see
Notes 25, 29 and 30). The Group has entered into cross currency interest rate swaps to
hedge against its exposures to changes in fair values of its certain interest payments of
borrowings (see Note 29).
The Group is also exposed to cash flow interest rate risk in relation to variable-rate
borrowings and variable-rate loans and receivables (see Notes 29 and 21). Other than
the concentration of interest rate risk related to the movements in London Interbank
Offered Rate and the loan interest published by the PBOC, the Group has no significant
concentration of interest rate risk.
The Groups exposures to interest rates on financial liabilities are detailed in the liquidity risk
management section of this note.
Sensitivity analysis
The sensitivity analysis below has been determined based on the exposure to interest
rates for variable-rate borrowings and variable-rate loans and receivables at the end of the
reporting period. No sensitivity analysis has been presented for the exposure to interest
rates for bank balances as the management of the Group considers that, taking into
account that the fluctuation in interest rates on bank balances is minimal, the impact of
profit or loss for the year is insignificant.
The analysis is prepared assuming variable-rate borrowings and variable-rate loans and
receivables outstanding at the end of the reporting period were outstanding for the whole
year.
If interest rates had been 100 basis points (2015: 100 basis points) higher/lower and all
other variables were held constant, the Groups profit for the year ended 31 December
2016 would decrease/increase by RMB259 million (2015: increase/decrease by RMB223
million).

Credit risk
As at 31 December 2016, the Groups maximum exposure to credit risk which will cause a
financial loss to the Group due to failure to discharge an obligation by the counterparties and
financial guarantees provided by the Group is arising from:
the carrying amount of the respective recognised financial assets as stated in the
consolidated statement of financial position;
the Groups continuing involvement in the derecognised bills receivables equal to their
carrying amounts as disclosed in Note 24; and
the amount of contingent liability in relation to the financial guarantees provided by the
Group is as disclosed in Note 39.3.
In order to minimise the credit risk, the management of the Group has delegated a team
responsible for determination of credit limits, credit approvals and other monitoring procedures to
ensure that follow-up action is taken to recover overdue debts. In addition, the Group reviews the
recoverable amount of each individual trade debt on regular basis and at the end of the reporting
period to ensure that adequate impairment losses are made for irrecoverable amounts. In respect
of the risk arising from the provision of financial guarantees, the management of the Group
continuously monitors the credit quality and financial conditions of the guaranteed parties that
the Group issued financial guarantee contracts in favor of to ensure that the Group will not suffer
significant credit losses as a result of the failure of the guaranteed parties on the repayment of
the relevant loans. In this regard, the Directors consider that the Groups credit risk is significantly
reduced.
The credit risk on liquid funds is limited because the counterparties are banks with good
reputation.
Other than concentration of credit risk on liquid funds which are deposited with several banks
with good reputation, the Group does not have any other significant concentration of credit risk.
Accounts receivables consist of a large number of customers, which spread across diverse
industries and located in the PRC.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligation as they fall
due. The approach to managing liquidity is to ensure, as far as possible, that it will always have
sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions,
without incurring unacceptable losses or risk damage to the Groups reputation.
The Group closely monitors cash flow requirements and optimising its cash return. The Group
prepares cash flow forecasts and ensures it has sufficient cash for the servicing of operation,
financial, and capital obligations; this excludes the potential impact of extreme circumstances that
cannot reasonably be predicted, such as natural disasters.

Liquidity risk (Continued)
The following table details the remaining contractual maturity of the Groups financial liabilities at
the end of the reporting period, which are based on contractual undiscounted cash flows (including
interest payments computed using contractual rates or, if floating, based on rates current at the
end of the reporting period) and the earliest date the Group can be required to pay:
31 December 2016
Weighted On demand Total Total
average or less than More than undiscounted carrying
interest rate 1 year 12 years 25 years 5 years cash flows amount
% RMB million RMB million RMB million RMB million RMB million RMB million
Accounts and bills payable, accrued expenses,
other payables and long-term liabilities 65,695 206 436 425 66,762 66,503
Borrowings variable interest rate 4.60 10,676 7,727 18,064 46,839 83,306 60,986
Borrowings fixed interest rate 3.94 4,931 543 2,583 2,653 10,710 9,287
Medium-term notes and bonds 4.58 21,287 8,952 3,986 3,879 38,104 35,305
102,589 17,428 25,069 53,796 198,882 172,081
31 December 2015
Weighted On demand Total Total
average or less than More than undiscounted carrying
interest rate 1 year 12 years 25 years 5 years cash flows amount
% RMB million RMB million RMB million RMB million RMB million RMB million
Accounts and bills payable, accrued expenses,
other payables and long-term liabilities 74,602 265 532 535 75,934 75,577
Borrowings variable interest rate 4.98 13,936 9,199 21,107 39,946 84,188 61,311
Borrowings fixed interest rate 3.66 2,239 594 1,321 2,440 6,594 5,680
Debentures, medium-term notes and bonds 4.45 6,614 21,266 12,320 3,757 43,957 39,604
97,391 31,324 35,280 46,678 210,673 182,172
Saved as discussed above, the Group also makes use of banks and financial institutions facilities as
one of the effective sources of liquidity.
The maximum liability of financial guarantees issued by the Group is disclosed in Note 39.3.

37.3 Fair value measurements
Fair value of the Groups financial assets that are measured at fair value on a recurring basis
As of 31 December 2016, the Group has investments in derivative financial instruments, tradable
wealth management products, and wealth management products which are measured at fair
value of RMB4 million (2015: RMB12 million), RMB50 million (2015: Nil), and RMB33,350 million
(2015: RMB160 million), respectively.
At 31 At 31
December December Fair value Valuation technique(s)
2016 2015 hierarchy and key input(s)
Financial asset:
Derivative financial instruments 4 12 Level 1 Quoted price in an active market.
Tradable wealth management 50 0 Level 2 Discounted cash flow. Future cash flows are
products estimated based on expected rate of return.
Wealth management products 33,350 160 Level 2 Discounted cash flow. Future cash flows are
estimated based on expected rate of return.
There were no transfer between Level 1 and Level 2 during the year ended 31 December 2016
and 2015.
Fair value of financial assets and financial liabilities that are not measured at fair value on a
recurring basis
Except as detailed in the following table, the Directors consider that the carrying amounts of
financial assets and financial liabilities recorded at amortised cost in the consolidated financial
statements approximate their fair values:
At 31 December 2016 At 31 December 2015

Carrying amount Fair value Carrying amount Fair value
Fixed rate bank borrowings 8,507 8,567 4,020 4,387
Fixed rate medium-term notes 24,974 25,282 24,955 26,008
Fixed rate bonds 10,331 10,436 9,651 9,660
The fair value of fixed rate bank borrowings above in the Level 2 category is measured using
discounted cash flow method where the future cash flows are estimated based on the contract
and discounted at a rate that reflects the credit risk of the issuers.
The fair values of medium-term notes and bonds are included in the Level 1 category, which have
been derived from the quoted prices (unadjusted) in an active market.

38. ACQUISITION OF SUBSIDIARIES IN PRIOR

Acquisitions from Shenhua Group
Pursuant to a resolution passed at the directors meeting on 31 October 2015, the Company acquired
the equity interests of certain entities held directly or indirectly by Shenhua Group, including:
100.00% equity interest Ningdong Power Plant;
100.00% equity interest in Xuzhou Power Plant; and
51.00% equity interest in Zhoushan Power Plant.
During the year ended 31 December 2015, the Company had paid RMB5,386 million based on the
valuation of the acquired business as at 30 June 2015 (the Valuation Date), and had paid an additional
consideration of RMB309 million to Shenhua Group, being the excess of the net assets as at the
completion date of the acquisitions over that of the Valuation Date, for the acquired business. The
acquisitions had been accounted as business combinations under common control during the year
ended 31 December 2015.
39. COMMITMENTS AND CONTINGENT LIABILITIES

39.1 Capital commitments
As at 31 December, the Group had capital commitments for land and buildings and equipment as
follows:
2016 2015
Contracted for but not provided

Land and buildings 23,604 26,623
Equipment 17,200 21,170
40,804 47,793
39.2 Operating lease commitments
Operating lease commitments mainly represent business premises leased through

non-cancellable operating leases. These operating leases do not contain provisions for contingent
lease rentals. As at 31 December, future minimum lease payments under non-cancellable
operating leases on business premises having initial or remaining lease terms of more than one
year are payable as follows:
2016 2015
Within one year 45 46

After one year but within five years 23 17
After five years 3
68 66

39. COMMITMENTS AND CONTINGENT LIABILITIES (Continued)
39.3 Financial guarantees issued
At 31 December 2016, the Group had issued certain guarantees in respect of certain banking
facilities granted to an entity which the Group held less than 20% equity interest. The maximum
amount guaranteed is RMB191 million (2015: RMB197 million).
39.4 Legal contingencies
The Group is the defendant in certain lawsuits as well as the plaintiff in other proceedings arising
in the ordinary course of business. While the outcomes of such contingencies, lawsuits or other
proceedings cannot be determined at present, management believes that any resulting liabilities
will not have a material adverse effect on the financial position or operating results of the Group.
39.5 Environmental contingencies
To date, the Group has not incurred any significant expenditure for environmental remediation,
is currently not involved in any environmental remediation, and apart from the provision for land
reclamation costs, has not accrued any further amounts for environmental remediation relating
to its operations. Under the existing legislation, management believes that there are no probable
liabilities that will have a material adverse effect on the financial position or operating results of the
Group. The regulatory bodies, however, have moved, and may move further towards the adoption
of more stringent environmental standards. Environmental liabilities are subject to considerable
uncertainties which affect the Groups ability to estimate the ultimate cost of remediation efforts.
These uncertainties include (i) the exact nature and extent of the contamination at various sites
including, but not limited to coal mines and land development areas, whether operating, closed
or sold; (ii) the extent of required cleanup efforts; (iii) varying costs of alternative remediation
strategies; (iv) changes in environmental remediation requirements; and (v) the identification of
new remediation sites. The amount of such future cost is indeterminable due to such factors as
the unknown magnitude of possible contamination and the unknown timing and extent of the
corrective actions that may be required. Accordingly, the outcome of environmental liabilities
under future environmental legislation cannot reasonably be estimated at present, and could be
material.
40. EMPLOYEE BENEFITS PLAN
In addition to a minimal defined benefit plan operated by its subsidiary, the Group participates, in line
with the regulations of the PRC, mainly in various defined contribution retirement plans organised by
municipal and provincial governments for its employees. The Group is required to make contributions
to the retirement plans at 20% of the salaries, bonuses and certain allowances of the employees. In
addition, as approved by the government, the Group makes contribution to a supplemental defined
contribution pension plan for its employees. The fund is managed by a qualified fund manager. The
Group has no other material obligation for the payment of pension benefits associated with these plans
beyond the annual contributions described above. The Groups contributions for the year ended 31
December 2016 were RMB2,728 million (2015: RMB2,791 million).

41. RELATED PARTY TRANSACTIONS
41.1 Transactions with Shenhua Group, an associate of Shenhua Group, fellow

subsidiaries, and associates of the Group
The Group is controlled by Shenhua Group and has significant transactions and relationships with
Shenhua Group, an associate of Shenhua Group and subsidiaries of Shenhua Group (fellow
subsidiaries). Related parties refer to enterprises over which Shenhua Group is able to exercise
significant influence or control. The Group also has entered into transactions with its associates,
over which the Group can exercise significant influence. Because of the above relationships, it is
possible that the terms of these transactions are not the same as those that would result from
transactions among wholly unrelated parties.
The Group had the following transactions with Shenhua Group, an associate of Shenhua Group,
fellow subsidiaries, and associates of the Group that were carried out in the normal course of
business during both years:
2016 2015
Interest income (i) 634 819

Income from entrusted loans (ii) 33 39
Interest expense (iii) 242 290
Purchases of ancillary materials and spare parts (iv) 1,347 1,385
Mining service income (v) 812
Ancillary and social services (vi) 688 585
Transportation service income (vii) 195 189
Transportation service expense (viii)
Sale of coal (ix) 4,724 4,188
Purchase of coal (x) 6,227 3,697
Property leasing (xi) 48 48
Repairs and maintenance services expense (xii) 44 7
Coal export agency expense (xiii) 9 4
Purchase of equipment and construction work (xiv) 1,021 1,753
Sale of coal chemical product (xv) 3,804 3,104
Other income (xvi) 2,123 2,365
Granting of loans from Shenhua Finance (xvii) 4,768 9,082
Repayment of loans from Shenhua Finance (xviii) 3,900 11,159
Granting of entrusted loan (xix)
Repayment of entrusted loan (xx)
Net deposits received by Shenhua Finance (xxi) (11,008) 5,748
Loans from Shenhua Group (xxii) 2,235
Repayment of loans from Shenhua Group (xxiii) 2,600 3,324
(i) Interest income represents interest earned from loans to Shenhua Group and fellow
subsidiaries. The applicable interest rate is determined in accordance with the prevailing
interest rates published by the PBOC.
(ii) Income from entrusted loans represents interest earned from entrusted loans to an
associate of the Group. The applicable interest rate is determined in accordance with the
prevailing interest rates published by the PBOC.

41. RELATED PARTY TRANSACTIONS (Continued)

subsidiaries, and associates of the Group (Continued)
(iii) Interest expense represents interest incurred from deposits placed and loans from Shenhua
Group and fellow subsidiaries. The applicable interest rate is determined in accordance with
the prevailing interest rates published by the PBOC.
(iv) Purchases of ancillary materials and spare parts represent purchase of materials and utility
supplies related to the Groups operations from fellow subsidiaries.
(v) Mining service income represents income earned from coal mining services to fellow
subsidiaries.
(vi) Ancillary and social services represent expenditures for social welfare and support services
such as property management, water and electricity supply, and canteen expense paid to
Shenhua Group, fellow subsidiaries and associates of the Group.
(vii) Transportation service income represents income earned from Shenhua Group and fellow
subsidiaries in respect of coal transportation services.
(viii) Transportation service expense represents expense related to coal transportation service
provided by a fellow subsidiary of Shenhua Group and associates of the Group.
(ix) Sale of coal represents income from sale of coal to fellow subsidiaries.
(x) Purchase of coal represents coal purchased from associates of the Group and fellow
subsidiaries.
(xi) Property leasing represents rental paid or payable in respect of properties leased from
fellow subsidiaries.
(xii) Repairs and maintenance services expense represents expense related to machinery
repairs and maintenance services provided by fellow subsidiaries and an associate of the
Group.
(xiii) Coal export agency expense represents expense related to coal export agency services
provided by a fellow subsidiary.
(xiv) Purchase of equipment and construction work represents expenditure related to equipment
and construction service provided by fellow subsidiaries.
(xv) Sale of coal chemical product represents income from sale of coal chemical product to
(xvi) Other income includes agency income, repairs and maintenance service income, sales of
ancillary materials and spare parts, management fee income, sales of water and electricity,
financial service income, etc.
(xvii) Granting of loans from Shenhua Finance represents loans granted by Shenhua Finance to
(xviii) Repayment of loans from Shenhua Finance represents loans repaid by fellow subsidiaries
to Shenhua Finance.


(xix) Granting of entrusted loan represents an entrusted loan granted to an associate of the
Group.
(xx) Repayment of entrusted loan represents an entrusted loan repaid by an associate of the
Group.
(xxi) Receipt of deposits by Shenhua Finance represents net deposits received by Shenhua
Finance from Shenhua Group and fellow subsidiaries.
(xxii) Loans obtained by the Group from Shenhua Group and fellow subsidiaries.
(xxiii) Repayment of loans from Shenhua Group and fellow subsidiaries by the Group.
The Directors are of the opinion that the above transactions with related parties were conducted
in the ordinary course of business and in accordance with the agreements governing such
transactions.
The Group entered into a number of agreements with Shenhua Group, an associate of Shenhua
Group, fellow subsidiaries, and associates of the Group. The terms of the principal agreements
are summarised as follows:
(i) The Group has entered into a mutual supply agreement for the mutual provision of
production supplies and ancillary services with an associate of Shenhua Group and
fellow subsidiaries. Pursuant to the agreement, an associate of Shenhua Group and
fellow subsidiaries provide the Group with the production supplies and services, ancillary
production services including the use of the information network system and ancillary
administrative services. On the other hand, the Group provides fellow subsidiaries with
water supplies, rolling stock management, railway management, railway transportation and
other related or similar production supplies or services and use of the information network
system.
The products and services provided under the agreement, other than the sharing of use of
the information network system which is free of charge, are provided in accordance with
the following pricing policy:
price prescribed by the state (including any price prescribed by any relevant local
government), if applicable;
where there is no state-prescribed price but where there is a state-guidance price,

then the state-guidance price;
where there is neither a state-prescribed price nor a state-guidance price, the market
price; or
where none of the above is applicable or where it is not practical to apply the above
pricing policies in reality, the price to be agreed between the relevant parties shall be
based on reasonable costs incurred in providing the goods or services plus a profit
margin of 5% of such costs.


(ii) The Group has entered into coal supply agreements with fellow subsidiaries and associates
of the Group. The coal supplied is charged at the prevailing market price.
(iii) The Group, through Shenhua Finance, has entered into a financial services agreement
with Shenhua Group and fellow subsidiaries. Pursuant to the agreement, Shenhua Finance
provides financial services to Shenhua Group and fellow subsidiaries. The interest rate for
the deposits with Shenhua Finance from Shenhua Group and fellow subsidiaries should
not be lower than the lowest limit published by the PBOC for the same type of deposit.
The interest rate for loans made by Shenhua Finance to Shenhua Group and fellow
subsidiaries should not be higher than the highest limit published by the PBOC for the
same type of loan. The above interest rates should be determined by reference to the rate
charged by normal commercial banks in the PRC for comparable deposits and loans on
normal commercial terms. The fees charged by Shenhua Finance for the provision of other
financial services shall be determined according to the rates chargeable by the PBOC or the
China Banking Regulatory Commission.
(iv) The Group has entered into a property leasing agreement with fellow subsidiaries for
leasing of certain properties to each other. No rent is payable by the Group before fellow
subsidiaries obtains the relevant property ownership certificate. The rental charges are
based on comparable market rates. If fellow subsidiaries negotiate to sell a leased property
to a third party, the Company has a pre-emptive right to purchase such property under
terms no less favorable than other third party.
(v) The Group has entered into a land leasing agreement with fellow subsidiaries. The annual
rent is determined based on the local market rate. The Group is not allowed to sub-let the
leased land.
(vi) The Group has entered into an agency agreement for the export of coal with a fellow
subsidiary. The fellow subsidiary is appointed as a non-exclusive export agent of the Group
and is entitled to receive an agency fee based on the relevant market rates or lower rates.
Currently, the rate is 0.7% of the free on board sales price of coal exported.
(vii) The Group entered into an agency agreement for the sale of coal with fellow subsidiaries.
The Group is appointed as the exclusive sales agent of fellow subsidiaries for thermal coal
and non-exclusive sales agent for coking coal. The Group is entitled to receive an agency
fee, which is based on its related costs incurred plus a profit margin of 5% for sales of coal
outside the Inner Mongolia Autonomous Region. No agency fee is charged for sales of coal
within the Inner Mongolia Autonomous Region.
(viii) The Group has entered into agreements with fellow subsidiaries under which the Group
has been granted the right to use certain trademarks. Fellow subsidiaries bear its own
cost for the registration of such trademarks during the term of the trademarks license
agreement and expenses for enforcement against any infringement of the licensed
trademarks by third parties.


Amounts due from/to Shenhua Group, an associate of Shenhua Group, fellow subsidiaries, and
associates of the Group:
2016 2015
Note RMB million RMB million
Accounts and bills receivable 24 3,458 3,959

Prepaid expenses and other current assets 25 3,182 4,023
Other non-current assets 21 13,507 12,128
Total amounts due from Shenhua Group,

an associate of Shenhua Group, fellow
subsidiaries and associates of the Group 20,147 20,110
Borrowings 29 4,824 7,424

Accounts payable 31 2,358 2,245
Accrued expenses and other payables 32 15,491 26,406
Total amounts due to Shenhua Group, an

associate of Shenhua Group and fellow
subsidiaries, and associates of the Group 22,673 36,075
Other than those disclosed in Notes 21, 25, 29 and 32, amounts due from/to Shenhua Group, an
associate of Shenhua Group, fellow subsidiaries, and associates of the Group bear no interest, are
unsecured and are repayable in accordance with normal commercial terms.
41.2 Key management personnel emoluments
Key management personnel receive compensation in the form of fees, basic salaries, housing and
other allowances, benefits in kind, discretionary bonuses and retirement scheme contributions.
Key management personnel compensation of the Group is summarised as follows:
2016 2015
Short-term employee benefits 8 8

Post-employment benefits 1 1
9 9
Total remuneration is included in personnel expenses as disclosed in Note 10.


41.3 Contributions to post-employment benefit plans
The Group participates in various defined contribution post-employment benefit plans organised
by municipal and provincial governments and a supplemental defined contribution pension plan
approved by the government for its employees. Further details of the Groups post-employment
benefit plans are disclosed in Note 40.
41.4 Transactions with other government-related entities in the PRC
The Company is ultimately controlled by the PRC government and the Group operates in an
economic environment currently predominated by government-related entities.
Other than those transactions with Shenhua Group, an associate of Shenhua Group, fellow
subsidiaries and associate of the Group as disclosed above, the Group conducts business with
other government- related entities which include but are not limited to the following:
Power sales;
Sales and purchases of coal;
Transportation services;
Construction work;
Purchases of ancillary materials and spare parts;
Ancillary and social services; and
Financial services arrangements.
These transactions are conducted in the ordinary course of the Groups business on terms
comparable to those with other entities that are not government-related. The Group has
established its pricing policies in respect of sale of goods and provision of services, and approval
process for purchases of products and services. Such policies and approval process apply to all
counterporties regardless of whether the counterparty is government-related or not.

41.4 Transactions with other government-related entities in the PRC (Continued)
Having considered the potential for transactions to be impacted by related party relationships,
the Groups buying, pricing strategy and approval processes, and what information would
be necessary for an understanding of the potential effect of the relationship on the financial
statements, the Directors are of the opinion that the following transactions with other
government-related entities require disclosure:
Transactions with other government-related entities, including state-controlled banks in the PRC
2016 2015
Coal revenue 69,822 63,347

Power revenue 67,472 69,389
Transportation costs 7,618 10,427
Interest income 691 448
Interest expenses (including amount capitalised) 5,463 5,696
Balances with other government-related entities, including state-controlled banks in the PRC
2016 2015
Accounts and bills receivable 12,354 16,606

Prepaid expenses and other current assets 1,289 1,396
Cash and time deposits at banks 44,602 43,233
Restricted bank deposits 6,141 4,611
Borrowings 64,578 59,567
Accrued expenses and other payables 3,669 2,725
42. EVENTS AFTER THE REPORTING PERIOD
On 17 March 2017, the Board of Directors proposed: (i) a final dividend of RMB0.46 per ordinary share
totaling RMB9,149 million; (ii) a special dividend of RMB2.51 per ordinary share totaling RMB49,923
million to the equity holders of the Company. Further details are disclosed in Note 13.

43. SUBSIDIARIES
Details of the Companys Material Subsidiaries
The Companys subsidiaries are unlisted. Details of the Companys material subsidiaries at the end of
the reporting period are set out below:
Place of Proportion of ownership interest

incorporation Particulars of and voting rights held by
Name of the subsidiary and operation Type of legal entity registered capital the Group Principal activities
2016 2015
% %
Shenhua Sales Group Co., Ltd. PRC Limited company RMB1,888 million 100 100 Trading of coal
Shenwan Energy Co., Ltd. PRC Limited company RMB4,696 million 51 51 Trading of coal
Shenhua Shendong Coal Group PRC Limited company RMB4,989 million 100 100 Trading of coal; provision of
Co., Ltd. integrated services
Shenhua Zhungeer Energy PRC Limited company RMB7,102 million 58 58 Coal mining and development;
Co., Ltd. generation and sale of
electricity
Shenhua Baorixile Energy PRC Limited company RMB1,169 million 57 57 Coal mining; provision of
Industrial Co., Ltd. loading and transportation
services
Shenhua Beidian Shengli PRC Limited company RMB2,674 million 63 63 Coal mining; provision of
Energy Co., Ltd. loading and transportation
services
Shaanxi Guohua Jinjie Energy PRC Limited company RMB2,278 million 70 70 Generation and sale of
Co., Ltd. electricity; coal mining and
development
Shenhua Guohua International PRC Limited company RMB4,010 million 70 70 Generation and sale of
Power Co., Ltd. electricity
Shenhua Shendong Power PRC Limited company RMB3,024 million 100 100 Generation and sale of
Co., Ltd. electricity
Guangdong Guohua Yuedian PRC Limited company RMB4,670 million 80 80 Generation and sale of
Taishan Power Co., Ltd. electricity
Zhejiang Guohua Zheneng PRC Limited company RMB3,255 million 60 60 Generation and sale of
Power Generation Co., Ltd. electricity
Suizhong Power Co., Ltd. PRC Limited company RMB4,029 million 65 65 Generation and sale of
(note (i)) electricity

43. SUBSIDIARIES (Continued)
Details of the Companys Material Subsidiaries (Continued)

2016 2015
% %
Hebei Guohua Cangdong PRC Limited company RMB1,834 million 51 51 Generation and sale of
Power Co., Ltd. electricity
Dingzhou Power (note (ii)) PRC Limited company RMB1,561 million 41 41 Generation and sale of
electricity
Guohua Taicang Power PRC Limited company RMB2,000 million 50 50 Generation and sale of
Co., Ltd. (note (iii)) electricity
Shenhua Sichuan Energy PRC Limited company RMB2,152 million 51 51 Generation and sale of
Co., Ltd. electricity; trading of coal
Shenhua Fujian Energy PRC Limited company RMB2,098 million 100 100 Generation and sale of
Co., Ltd. electricity
Shuohuang Railway PRC Limited company RMB5,880 million 53 53 Provision of transportation

Development Co., Ltd. services
Shenhua Zhunchi Railway Co., PRC Limited company RMB4,710 million 85 85 Provision of transportation
Ltd. services
Shenhua Huanghua Harbour PRC Limited company RMB6,790 million 70 70 Provision of harbour and port
Administration Co., Ltd. services
Shenhua Zhonghai Shipping PRC Limited company RMB5,180 million 51 51 Provision of Transportation
Co., Ltd. services
Shenhua Baotou Coal PRC Limited company RMB5,132 million 100 100 Coal chemical
Chemical Co., Ltd.
Shenhua Railway PRC Limited company RMB4,701 million 100 100 Provision of transportation
Transportation Co., Ltd.
Shenhua Finance PRC Limited company RMB5,000 million 100 100 Provision of financial services
China Shenhua Overseas Hong Kong Limited company HKD5,252 million 100 100 Investment holding
Development & Investment
Co., Ltd.

Details of the Companys Material Subsidiaries (Continued)

2016 2015
% %
Shenhua Australia Holding Australia Limited company AUD400 million 100 100 Coal mining and development;
Pty Ltd. generation and sale of
electricity
Shenhua Watermark Coal Australia Limited company AUD350 million 100 100 Coal mining and development;
Pty Ltd. generation and sale of
electricity
PT GH EMM Indonesia Indonesia Limited company USD63 million 70 70 Coal mining and development;
generation and sale of
electricity
Shenhua Baoshen Railway PRC Limited company RMB10,000 million 100 100 Provision of transportation
Group Co., Ltd. services
(Tianjin) Finance Lease Co., Ltd. PRC Limited company RMB1,000 million 51 51 Provision of financial lease
services
Shenhua Zhunneng Resources PRC Limited company RMB1,200 million 100 100 Comprehensive utilisation of
Development & Utilisation inferior coal resources
Co., Ltd.
Xuzhou Power PRC Limited company RMB1,790 million 100 100 Generation and sale of
electricity
Zhoushan Power PRC Limited company RMB755 million 51 51 Generation and sale of
electricity
The above table lists subsidiaries of the Group which, in the opinion of the Directors, principally affected
the results or assets of the Group. To give details of other subsidiaries would, in the opinion of the
Directors, result in particulars of excessive length.
Notes:
(i) In addition to 15% equity interest held by the Company, the Companys subsidiary owned 50% equity interest in Suizhong
Power Co., Ltd.
(ii) The Company obtained the control over Dingzhou Power through its right to appoint majority members of the board of
directors, details of which are set out in Note 4.1.
(iii) The Company has the control over Guohua Taicang Power Co. through its voting rights over 50%.

Details of non-wholly owned subsidiaries that have material non-controlling interests
Summarised financial information in respect of each of the Groups subsidiaries that has material non-
controlling interests is set out below. The summarised financial information below represents amounts
before intra-group eliminations:
Proportion of ownership
Place of interest and
incorporation voting rights held by Profit allocated to Accumulated
Name of the subsidiary and operation non-controlling interests non-controlling interests non-controlling interests
31 December 31 December Year ended 31 December 31 December 31 December
2016 2015 2016 2015 2016 2015
% % RMB million RMB million RMB million RMB million
Shenwan Energy Co., Ltd. PRC 49 49 434 594 3,976 3,787
Shenhua Zhungeer Energy Co., Ltd. PRC 42 42 576 505 10,636 10,027
Shenhua Baorixile Energy Industrial

Co., Ltd. PRC 43 43 206 275 1,885 1,860
Hebei Guohua Cangdong Power

Co., Ltd. PRC 49 49 329 405 1,449 1,485
Dingzhou Power PRC 59 59 503 575 1,928 1,955
Shenhua Sichuan Energy Co., Ltd. PRC 49 49 (36) 72 1,550 1,588
Shuohuang Railway Development

Co., Ltd. PRC 47 47 3,062 2,388 14,112 12,343
Shenhua Zhonghai Shipping Co., Ltd. PRC 49 49 70 18 2,940 2,870
Guangdong Guohua Yuedian Taishan

Power Co., Ltd. PRC 20 20 206 335 1,525 1,625
Shenhua Huanghua Harbour

Administration Co., Ltd. PRC 30 30 367 156 2,866 2,610
Shenhua Guohua International

Power Co., Ltd. PRC 30 30 302 183 3,010 3,168
Zhejiang Guohua Zheneng Power

Generation Co., Ltd. PRC 40 40 414 647 2,212 2,381
Individually immaterial subsidiaries

with non-controlling interests 48,089 45,699
67,994 65,853


(Continued)
Shenhua Zhungeer Energy Shenhua Baorixile Energy Hebei Guohua Cangdong

Shenwan Energy Co., Ltd. Co., Ltd. Industrial Co., Ltd. Power Co., Ltd.
31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December
2016 2015 2016 2015 2016 2015 2016 2015
Current assets 1,145 1,062 13,580 11,680 1,967 1,976 1,233 1,047
Non-current assets 12,292 12,437 18,506 18,181 5,218 4,885 5,965 6,183
Current liabilities 2,978 3,001 6,458 5,695 2,680 2,557 3,210 3,266
Non-current liabilities 2,345 2,769 448 427 160 18 1,030 934
Total equity 8,114 7,729 25,180 23,739 4,345 4,286 2,958 3,030
Year ended 31 December Year ended 31 December Year ended 31 December Year ended 31 December
2016 2015 2016 2015 2016 2015 2016 2015
Revenue 6,324 5,859 9,677 9,234 2,697 2,972 4,019 4,092

Expenses 5,249 4,174 8,114 7,948 2,146 2,082 3,120 2,998
Profit and total comprehensive

income for the year 886 1,212 1,364 1,196 475 634 672 826
Dividend paid to non-controlling

interests 245 193 254 365 471
Net cash inflow from operating

activities 1,444 2,394 4,199 956 650 390 958 1,063
Net cash inflow (outflow) from
investing activities 1,401 (1,457) (4,045) (962) (184) (295) (348) 171
Net cash outflow from financing
activities (47) (942) (42) (3) (363) (54) (610) (1,234)
Net cash inflow (outflow) 2,798 (5) 112 (9) 103 41



(Continued)
Shenhua Sichuan Shuohuang Railway Shenhua Zhonghai

Dingzhou Power Energy Co., Ltd. Development Co., Ltd. Shipping Co., Ltd.
2016 2015 2016 2015 2016 2015 2016 2015
Current assets 1,060 929 1,031 1,343 8,210 7,475 969 1,436
Current liabilities 2,276 2,072 1,130 598 5,507 8,571 1,376 383
Non-current liabilities 973 1,139 2,087 1,961 2,242 2,117 718 1,999
Total equity 3,240 3,286 3,163 3,241 29,848 26,107 6,000 5,857
2016 2015 2016 2015 2016 2015 2016 2015
Revenue 3,873 4,099 1,106 1,594 17,250 13,386 2,112 2,002

Expenses 2,741 2,780 1,162 1,449 8,737 7,234 1,928 1,971
Profit (loss) and total comprehensive

income for the year 845 967 (74) 147 6,477 5,051 143 36

interests 529 540 2 2 1,435 3,457 529

activities 1,438 1,197 127 463 8,419 4,484 372 472
Net cash outflow from investing
activities (610) (212) (656) (766) (1,935) (2,010) (85) (393)
Net cash (outflow) inflow from
financing activities (828) (985) 531 (394) (6,460) (2,653) (273) (88)
Net cash inflow (outflow) 2 (697) 24 (179) 14 (9)



(Continued)
Guangdong Guohua Yuedian Shenhua Huanghua Harbour Shenhua Guohua Zhejiang Guohua Zheneng
Taishan Power Co., Ltd. Administration Co., Ltd. International Power Co., Ltd. Power Generation Co., Ltd.
2016 2015 2016 2015 2016 2015 2016 2015
Current assets 1,439 1,310 1,419 1,661 3,260 3,677 1,340 1,251
Current liabilities 5,147 4,913 1,304 1,698 7,932 9,291 3,585 3,230
Non-current liabilities 278 5,099 5,630 1,841 2,167 2,501 2,595
Total equity 7,624 8,123 9,554 8,699 10,461 10,559 5,530 5,953
2016 2015 2016 2015 2016 2015 2016 2015
Revenue 6,310 7,607 3,964 2,780 9,794 10,758 6,476 7,275

Expenses 4,963 5,300 2,015 2,022 9,045 10,728 5,135 5,111
Profit and total comprehensive

income for the year 1,031 1,677 1,223 520 490 609 1,034 1,618

interests 306 410 118 455 460 115 583 676

activities 1,646 2,832 1,962 719 2,546 1,860 1,312 2,687
Net cash (outflow) inflow from
investing activities (155) (230) (424) 1,434 (312) (470) (130) 25
Net cash outflow from financing
activities (1,488) (2,600) (1,416) (2,180) (1,890) (1,344) (2,712) (2,712)
Net cash inflow (outflow) 3 2 122 (27) 344 46 (1,530)


44. INFORMATION ABOUT THE FINANCIAL POSITION OF THE COMPANY
2016 2015
NOTES RMB million RMB million
Non-current assets
Property, plant and equipment 52,469 55,404
Construction in progress 3,446 3,469
Intangible assets 1,712 1,780
Investments in subsidiaries 132,569 127,264
Investments in associates 1,065 1,065
Available-for-sale investments 1,647 1,647
Other non-current assets 36,853 31,796
Lease prepayments 3,167 3,245
Deferred tax assets 152 58
Total non-current assets 233,080 225,728
Current assets
Inventories 3,591 4,436
Accounts and bills receivable 22,559 19,385
Prepaid expenses and other current assets 84,782 64,923
Restricted bank deposits 335 649
Time deposits with original maturity over three
months 27,750 9,500
Cash and cash equivalents 19,276 20,414
Total current assets 158,293 119,307
Current liabilities
Short-term debenture 4,998
Accounts and bills payable 6,251 8,693
Accrued expenses and other payables 63,875 57,364
Current portion of long-term liabilities 20,227 200
Income tax payable 1,570 630
Total current liabilities 97,186 80,923
Net current assets 61,107 38,384
Total assets less current liabilities 294,187 264,112


44. INFORMATION ABOUT THE FINANCIAL POSITION OF THE COMPANY (Continued)
2016 2015
NOTES RMB million RMB million
Non-current liabilities
Medium-term notes 4,985 24,955
Long-term liabilities 872 1,115
Accrued reclamation obligations 1,224 1,156
Total non-current liabilities 10,541 31,098
Net assets 283,646 233,014
Equity
Share capital 35 19,890 19,890
Reserves 263,756 213,124
Total equity 283,646 233,014


44. INFORMATION ABOUT THE FINANCIAL POSITION OF THE COMPANY (Continued)
Other
Share Statutory comprehensive Capital and Retained
premium reserves income other reserves earnings Total
RMB million RMB million RMB million RMB million RMB million RMB million
At 1 January 2015 85,001 14,546 1,681 109,219 210,447
Profit for the year 17,395 17,395
Other comprehensive income
Total comprehensive income for the

year 17,395 17,395
Dividend declared (Note 13) (14,718) (14,718)

production funds 4,281 (4,281)
production funds (2,840) 2,840
At 31 December 2015 85,001 15,987 1,681 110,455 213,124
Profit for the year 56,967 56,967
Other comprehensive income 30 30
Total comprehensive income

for the year 30 56,967 56,997
Dividend declared (Note 13) (6,365) (6,365)

production funds 2,699 (2,699)
production funds (398) 398
At 31 December 2016 85,001 18,288 30 1,681 158,756 263,756
According to the Companys Articles of Association, the amount of retained earnings available for
distribution to equity holders of the Company is the lower of the amount determined in accordance
with the China Accounting Standards and the amount determined in accordance with IFRSs after the
appropriation to reserves as detailed in Note (iii) to the consolidated statement of changes in equity.
At 31 December 2016, the aggregate amount of retained earnings determined in accordance with
the China Accounting Standards available for distribution to equity holders of the Company was
RMB153,846 million (2015: RMB104,992 million).
Section XIV Documents Available for Inspection

Documents Available The annual report for the year 2016 signed by the chairman
for Inspection The financial statements signed and sealed by the chairman, the Chief Financial
Officer and the General Manager of the Financial Department
The original copies of all documents sealed by the accounting firm and signed and
sealed by the certified public accountant
The original copies of all documents and announcements of the Company publicly
disclosed in the newspapers designated by the CSRC during the reporting period
The annual report for the year 2016 published on the Shanghai Stock Exchange and
the Hong Kong Stock Exchange
Zhang Yuzhuo, Chairman

Approved by the Board for submission on: 17 March 2017
Section XV Signing Page for Opinions

Pursuant to Article 68 of the Securities Law of the Peoples Republic of China and Article 14 of the Standards
Concerning the Contents and Formats of Information Disclosure by Companies Offering Securities to the
Public No. 2 The Contents and Formats of Annual Report (Revised edition 2016) of the CSRC, having fully
understood and reviewed the 2016 Annual Report of the Company, all directors, supervisors and senior
management are of the opinion that information disclosed in the 2016 Annual Report of the Company is
true, accurate and complete. We hereby guarantee that the information stated in this report does not contain
any false representation, misleading statement or material omission, and jointly and severally accept full
responsibility for the truthfulness, accuracy and completeness of the content thereof.
Directors
(Zhang Yuzhuo) (Ling Wen) (Han Jianguo)
(Li Dong) (Fan Hsu Lai Tai) (Gong Huazhang)
(Guo Peizhang) (Chen Hongsheng) (Zhao Jibin)
Supervisors
(Zhai Richeng) (Zhou Dayu) (Shen Lin)

Section XV Signing Page for Opinions (Continued)
Senior Management
(Ling Wen) (Li Dong) (Wang Jinli)
(Wang Yongcheng) (Zhang Zifei) (Wang Shumin)
(Zhang Jiming) (Huang Qing) (Zhang Kehui)

17 March 2017
Section XVI Summary of Major Financial Information for the Recent Five Years
The finance information below is from the financial statement prepared by the Group in accordance with
International Financial Reporting Standards.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND

OTHER COMPREHENSIVE INCOME
For the year ended 31 December
2012 2013 2014 2015 2016
RMB Million RMB Million RMB Million RMB Million RMB Million
Revenue 259,385 289,230 253,081 177,069 183,127

Cost of sales (178,407) (206,359) (178,109) (123,341) (124,843)
Gross profit 80,978 82,871 74,972 53,728 58,284

Selling expenses (881) (1,031) (794) (584) (610)
General and administrative
expenses (8,458) (9,285) (8,835) (9,714) (8,423)
Other gains and losses (474) (888) (770) (5,856) (3,078)
Other income 1,242 534 939 1,659 1,379
Other expenses (494) (382) (419) (626) (1,511)
Interest income 776 758 803 608 723
Finance costs (3,568) (3,321) (4,459) (5,123) (5,748)
Share of results of associates 477 588 410 428 237
Profit before income tax 69,598 69,844 61,847 34,520 41,253

Income tax (11,116) (13,912) (12,784) (9,561) (9,283)
Profit for the year 58,482 55,932 49,063 24,959 31,970
Profit for the year attributable to:

Equity holders of the
Company 50,264 45,706 39,301 17,649 24,910
Non-controlling interests 8,218 10,226 9,762 7,310 7,060
Earnings per share (RMB)

Basic 2.527 2.298 1.976 0.887 1.252
Section XVI Summary of Major Financial Information for the Recent Five Years (Continued)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December
2012 2013 2014 2015 2016
RMB Million RMB Million RMB Million RMB Million RMB Million
Total non-current assets 369,573 402,759 431,226 438,755 443,266

Total current assets 114,753 122,567 119,646 121,036 133,463
Total assets 484,326 525,326 550,872 559,791 576,729
Total current liabilities 109,377 134,001 110,778 101,487 112,185
Total non-current liabilities 58,679 53,115 74,524 94,383 79,575
Total liabilities 168,056 187,116 185,302 195,870 191,760
Net assets 316,270 338,210 365,570 363,921 384,969
Equity attributable to equity

holders of the Company 266,013 280,113 300,698 298,068 316,975
Non-controlling interests 50,257 58,097 64,872 65,853 67,994
Total equity 316,270 338,210 365,570 363,921 384,969

(a joint stock limited company incorporated in the People's Republic of China with limited liability)
Stock Code: 01088
2016 Annual Report
Stock Code: 01088

2016 Annual Report
Promote Eco-Friendly and

Highly-Efficient Utilization of Coal

c6ed5d20992744b5ba6a4d88b6021679

Uploaded by

Copyright:

Available Formats

c6ed5d20992744b5ba6a4d88b6021679

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

c6ed5d20992744b5ba6a4d88b6021679

Uploaded by

Copyright:

Available Formats

(a joint stock limited company incorporated in the People's Republic of China with limited liability)

Stock Code: 01088

2016 Annual Report

Stock Code: 01088

Promote Eco-Friendly and

Section II Company Profile and Major Financial Indicators 7

Section III Business Overview 10

Section IV Chairmans Statement 12

Section V Directors Report 18

Section VI Significant Events 80

Section VII Changes in Share Capital and Shareholders 109

Section VIII Directors, Supervisors, Senior Management and

Section X Supervisory Committees Report 145

Section XI Investor Relations 147

Section XII Index to Information Disclosure 148

Section XIII Independent Auditors Report and Financial Statements 152

Section XIV Documents Available for Inspection 242

Section XV Signing Page for Opinions 243

Shenhua Group Corporation Shenhua Group Corporation Limited

China Shenhua/the Company China Shenhua Energy Company Limited

The Group The Company and its controlling subsidiaries

Shendong Power Company Shenhua Shendong Power Co., Ltd.

Zhungeer Energy Company Shenhua Zhungeer Energy Co., Ltd.

Shuohuang Railway Company Shuohuang Railway Development Co., Ltd.

Shenhua Trading Group Shenhua Trading Group Limited

Huanghua Harbour Administration Shenhua Huanghua Harbour Administration Co., Ltd.

Baotou Energy Company Shenhua Baotou Energy Co., Ltd.

Shenbao Energy Company Shenhua Baorixile Energy Co., Ltd.

Yu Shen Energy Company Yulin Shenhua Energy Co., Ltd.

Xinjie Energy Company Shenhua Xinjie Energy Co., Ltd.

Shenwan Energy Company Shenwan Energy Company Limited

Fujian Energy Company Shenhua Fujian Energy Co., Ltd.

Shenhua Finance Company Shenhua Finance Co., Ltd.

EMM Indonesia PT.GH EMM INDONESIA

Section I Definitions (Continued)

Panshan Power Tianjin Guohua Panshan Power Generation Co., Ltd.

Sanhe Power Sanhe Power Co., Ltd.

Zhungeer Power Power-generating division controlled and operated by Zhungeer Energy

Zheneng Power Zhejiang Guohua Zheneng Power Generation Co., Ltd.

Shenmu Power CLP Guohua Shenmu Power Co., Ltd.

Taishan Power Guangdong Guohua Yudean Taishan Power Co., Ltd.

Cangdong Power Hebei Guohua Cangdong Power Co., Ltd.

Suizhong Power Suizhong Power Co., Ltd.

Jinjie Energy Shaanxi Guohua Jinjie Energy Co., Ltd.

Dingzhou Power Hebei Guohua Dingzhou Power Generation Co., Ltd.

Taicang Power Guohua Taicang Power Generation Co., Ltd.

Mengjin Power Shenhua Guohua Mengjin Power Generation Co., Ltd.

Yuyao Power Zhejiang Guohua Yuyao Gas-fired Power Co., Ltd.

Jiujiang Power Shenhua Guohua Jiujiang Power Co., Ltd.

Huizhou Thermal Guohua Huizhou Thermal Power Branch of the Company

Ningdong Power Ningxia Guohua Ningdong Power Generation Co., Ltd.

Xuzhou Power Guohua Xuzhou Power Generation Company Limited

Zhoushan Power Shenhua Guohua (Zhoushan) Power Generation Co., Ltd.

Section I Definitions (Continued)

Shouguang Power Shenhua Guohua Shouguang Power Generation Company Limited

JORC Australasian Code for Reporting of Mineral Resources and Ore

Shanghai Stock Exchange Shanghai Stock Exchange

Articles of Association Articles of Association of China Shenhua Energy Company Limited

RMB Renminbi unless otherwise specified

Section VIII Directors, Supervisors, Senior Management and