Edgar Filing: HUANENG POWER INTERNATIONAL INC

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

_______________________

FORM 20-F

(Mark One)

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2018

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report

For the transaction period form _______to ______________

Commission file number: 1-13314

华能国际电力股份有限公司

HUANENG POWER INTERNATIONAL, INC.
(Exact name of Registrant as specified in its charter)

PEOPLE'S REPUBLIC OF CHINA
(Jurisdiction of incorporation or organization)

HUANENG BUILDING
6 FUXINGMENNEI STREET, XICHENG DISTRICT, BEIJING, PEOPLE'S REPUBLIC OF CHINA
(Address of principal executive offices)

Mr. Huang Chaoquan
HUANENG BUILDING,
6 FUXINGMENNEI STREET, XICHENG DISTRICT, BEIJING, PEOPLE'S REPUBLIC OF CHINA
Tel: +86 (10) 6322 6999 Fax: +86 (10) 6322 6888
(Name, Telephone, Email and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of Each Class		Name of each exchange on which registered
American Depositary Shares Each Representing 40 Overseas Listed Shares		New York Stock Exchange
Overseas Listed Shares with Par Value of RMB1.00 Per Share		New York Stock Exchange*

*Not for trading, but only in connection with the registration of our American Depositary Shares

Securities registered or to be registered pursuant to Section 12(g) of the Act.

NONE

(Title of Class)

_______________________

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

NONE

(Title of Class)

_______________________

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report:

Domestic A Shares with Par Value of RMB1.00 Per Share			10,997,709,919
Overseas Listed Shares with Par Value of RMB1.00 Per Share			4,700,383,440

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☒ No ☐

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes ☐ No ☒

Note - Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒	Accelerated filer ☐
Non-accelerated filer ☐	Emerging growth company ☐

(Do not check if a smaller reporting company)

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.

☐

† The term "new or revised financial accounting standard" refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☐

International Financial Reporting Standards as issued
by the International Accounting Standards Board ☒

Other ☐

If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes ☐ No ☐

________________________________

iii

TABLE OF CONTENTS

PART I			2
ITEM 1		Identity of Directors, Senior Management and Advisers	2
ITEM 2		Offer Statistics and Expected Timetable	3
ITEM 3		Key Information	3
	A.	Selected financial data	3
	B.	Capitalization and indebtedness	4
	C.	Reasons for the offer and use of proceeds	4
	D.	Risk factors	4
ITEM 4		Information on the Company	15
	A.	History and development of the Company	15
	B.	Business overview	16
	C.	Organizational structure	28
	D.	Property, plants and equipment	29
ITEM 4A		Unresolved Staff Comments	79
ITEM 5		Operating and Financial Reviews and Prospects	79
	A.	General	79
	B.	Operating results	82
	C.	Financial position	100
	D.	Liquidity and cash resources	101
	E.	Trend information	106
	F.	Employee benefits	107
	G.	Guarantees for loans and restricted assets	108
	H.	Off-balance sheet arrangements	108
	I.	Performance of significant investments and their prospects	108
	J.	Tabular disclosure of contractual obligations and commercial commitments	109
	K.	Impairment sensitivity analysis	110
	L.	Prospects for 2019	110
ITEM 6		Directors, Senior Management and Employees	111
	A.	Directors, members of the supervisory committee and senior management	111
	B.	Compensation for Directors, Supervisors and Executive Officers	115
	C.	Board practice	117
	D.	Employees	118
	E.	Share ownership	118
ITEM 7		Major Shareholders and Related Party Transactions	118
	A.	Major shareholders	118
	B.	Related party transactions	121
	C.	Interests of experts and counsel	126
ITEM 8		Financial Information	126
	A.	Consolidated statements and other financial information	126
	B.	Significant changes	127
ITEM 9		The Offer and Listing	127
	A.	Offer and listing details and markets	127
ITEM 10		Additional Information	127
	A.	Share capital	127
	B.	Memorandum and articles of association	127
	C.	Material contracts	134
	D.	Exchange controls	134
	E.	Taxation	135
	F.	Dividends and paying agents	140
	G.	Statement by experts	140
	H.	Documents on display	140
	I.	Subsidiary information	141
ITEM 11		Quantitative and Qualitative Disclosures About Market Risk	141

ITEM 12		Description of Securities Other than Equity Securities	146
	A.	Debt Securities	146
	B.	Warrants and Rights	146
	C.	Other Securities	146
	D.	American Depositary Shares	146
PART II			147
ITEM 13		Defaults, Dividend Arrearages and Delinquencies	147
ITEM 14		Material Modifications to the Rights of Security Holders and Use of Proceeds	147
ITEM 15		Controls and Procedures	147
ITEM 16		Reserved	149
ITEM 16A		Audit Committee Financial Expert	149
ITEM 16B		Code of Ethics	149
ITEM 16C		Principal Accountant Fees and Services	149
ITEM 16D		Exemptions from the Listing Standards for Audit Committees	150
ITEM 16E		Purchases of Equity Security by the Issuer and Affiliated Purchasers	150
ITEM 16F		Change in Registrant's Certifying Accountant	150
ITEM 16G		Corporate Governance	150
ITEM 16H		Mine Safety Disclosure	154
ITEM 17		Financial Statements	154
ITEM 18		Financial Statements	154
ITEM 19		Exhibits	154

INTRODUCTION

We maintain our accounts in Renminbi Yuan ("Renminbi" or "RMB"), the lawful currency of the People's Republic of China (the "PRC" or "China"). References herein to "US$" or "U.S. dollars" are to United States Dollars, references to "HK$" are to Hong Kong Dollars, and references to "S$" are to Singapore Dollars. References to ADRs and ADSs are to American Depositary Receipts and American Depositary Shares, respectively. Translations of amounts from Renminbi to U.S. Dollars are solely for the convenience of the reader. Unless otherwise indicated, any translations from Renminbi to U.S. Dollars or from U.S. Dollars to Renminbi were translated at the middle exchange rate announced by the People's Bank of China (the "PBOC Rate") on December 28, 2018 of US$1.00 to RMB6.8632. No representation is made that the Renminbi or U.S. Dollar amounts referred to herein could have been or could be converted into U.S. Dollars or Renminbi, as the case may be, at the PBOC Rate or at all.

References to "A Shares" are to common tradable shares issued to PRC domestic shareholders.

References to the "central government" are to the national government of the PRC and its various ministries, agencies and commissions.

References to the "Company," "we," "our" and "us" include, unless the context requires otherwise, Huaneng Power International, Inc. and the operations of our power plants and our construction projects.

References to "HIPDC" are to Huaneng International Power Development Corporation and, unless the context requires otherwise, include the operations of the Company prior to the formation of the Company on June 30, 1994.

References to "Huaneng Group" are to China Huaneng Group Co., Ltd.

References to "local governments" in the PRC are to governments at all administrative levels below the central government, including provincial governments, governments of municipalities directly under the central government, municipal and city governments, county governments and township governments.

References to "our power plants" are to the power plants that are wholly owned by the Company or to the power plants in which the Company owns majority equity interests.

References to the "PRC Government" include the central government and local governments.

References to "provinces" include provinces, autonomous regions and municipalities directly under the central government.

References to "Singapore" are to the Republic of Singapore.

References to the "State Plan" refer to the plans devised and implemented by the PRC Government in relation to the economic and social development of the PRC.

References to "tons" are to metric tons.

Previously, the Overseas Listed Foreign Shares were also referred to as the "Class N Ordinary Shares" or "N Shares." Since January 21, 1998, the date on which the Overseas Listed Foreign Shares were listed on The Stock Exchange of Hong Kong Limited by way of introduction, the Overseas Listed Foreign Shares have been also referred to as "H Shares."

GLOSSARY

actual generation

The total amount of electricity generated by a power plant over a given period of time.

auxiliary power

Electricity consumed by a power plant in the course of generation.

availability factor

For any period, the ratio (expressed as a percentage) of a power plant's available hours to the total number of hours in such period.

available hours

For a power plant for any period, the total number of hours in such period less the total number of hours attributable to scheduled maintenance and planned overhauls as well as to forced outages, adjusted for partial capacity outage hours.

capacity factor

The ratio (expressed as a percentage) of the gross amount of electricity generated by a power plant in a given period to the product of (i) the number of hours in the given period multiplied by (ii) the power plant's installed capacity.

demand

For an integrated power system, the amount of power demanded by consumers of energy at any point in time.

dispatch

The schedule of production for all the generating units on a power system, generally varying from moment to moment to match production with power requirements. As a verb, to dispatch a plant means to direct the plant to operate.

GW	Gigawatt. One million kilowatts.

GWh	Gigawatt-hour. One million kilowatt-hours. GWh is typically used as a measure for the annual energy production of large power plants.

installed capacity

The manufacturers' rated power output of a generating unit or a power plant, usually denominated in MW.

kV	Kilovolt. One thousand volts.

kW	Kilowatt. One thousand watts.

kWh	Kilowatt-hour. The standard unit of energy used in the electric power industry. One kilowatt-hour is the amount of energy that would be produced by a generator producing one thousand watts for one hour.

MVA	Million volt-amperes. A unit of measure used to express the capacity of electrical transmission equipment such as transformers.

MW	Megawatt. One million watts. The installed capacity of power plants is generally expressed in MW.

MWh	Megawatt-hour. One thousand kilowatt-hours.

peak load

The maximum demand on a power plant or power system during a specific period of time.

planned generation

An annually determined target gross generation level for each of our operating power plants used as the basis for determining planned output.

total output

The actual amount of electricity sold by a power plant in a particular year, which equals total generation less auxiliary power.

transmission losses

Electric energy that is lost in transmission lines and therefore is unavailable for use.

PART I

ITEM 1

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2

OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3

KEY INFORMATION

A.	Selected financial data

Our consolidated data of financial position as of December 31, 2018 and 2017 and the consolidated income statement and cash flow data for each of the years in the three-year period ended December 31, 2018 are derived from the historical financial statements included herein. Our consolidated data of financial position as of December 31, 2016, 2015 and 2014 and consolidated income statement and cash flow data for each of the years in the two-year period ended December 31, 2015 are derived from the historical financial statements not included herein. The Selected Financial Data should be read in conjunction with the consolidated financial statements and "Item 5 Operating and Financial Reviews and Prospects." The financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board. The Selected Financial Data may not be indicative of future earnings, cash flows or financial position.

	Year Ended December 31,
	2014			2015			2016			2017			2018
	RMB in thousands, except per share data
Consolidated Income Statement Data
Operating revenue		125,406,855			128,904,873			113,814,236			152,459,444			169,550,624
Tax and levies on operations		(932,485	)		(1,157,760	)		(1,177,818	)		(1,376,312	)		(1,788,998	)
Operating expenses		(99,199,728	)		(98,604,187	)		(94,258,678	)		(141,899,742	)		(157,647,361	)
Profit from operations		25,274,642			29,142,926			18,377,740			9,183,390			10,114,265
Interest income		159,550			160,723			147,063			198,906			234,604
Financial expenses, net		(7,823,606	)		(7,970,070	)		(7,067,602	)		(9,604,645	)		(10,647,311	)
Other investment income/(loss)		80,580			115,238			1,070,034			1,742,081			(278,669	)
Gain/(loss) on fair value changes of financial assets/liabilities		42,538			(16,742	)		(12,986	)		856,786			726,843
Share of profits less losses of associates and joint ventures		1,315,876			1,525,975			1,298,889			425,215			1,823,415
Profit before income tax expense		19,049,580			22,958,050			13,813,138			2,801,733			1,973,147
Income tax expense		(5,487,208	)		(5,698,943	)		(3,465,151	)		(1,217,526	)		(643,173	)
Net profit		13,562,372			17,259,107			10,347,987			1,584,207			1,329,974
Attributable to:
Equity holders of the Company		10,757,317			13,651,933			8,520,427			1,579,836			734,435
Non-controlling interests		2,805,055			3,607,174			1,827,560			4,371			595,539
Basic earnings per share		0.76			0.94			0.56			0.10			0.03
Diluted earnings per share		0.76			0.94			0.56			0.10			0.03

	As of December 31,
	2014			2015			2016			2017			2018
	RMB in thousands
Consolidated Financial Position Data
Current assets		37,865,284			33,565,403			36,966,616			48,537,710			61,799,069
Property, plant and equipment		188,379,057			219,673,070			223,061,809			284,328,093			282,061,272
Available-for-sale financial assets		4,333,377			5,077,863			3,406,032			1,604,993			—
Other equity instrument investments		—			—			—			—			2,083,419
Investments in associates and joint ventures		17,626,910			19,745,192			19,632,113			19,517,623			19,553,964
Land use rights and other non-current assets		10,636,352			14,384,078			14,524,284			20,900,635			32,535,803
Power generation license		3,720,959			3,679,175			3,849,199			3,916,246			4,014,972
Deferred income tax assets		884,274			1,064,391			1,263,957			2,300,091			2,282,585
Goodwill		11,725,555			11,677,182			12,135,729			15,484,120			15,572,227
Total assets		275,171,768			308,866,354			314,839,739			396,589,511			419,903,311
Current liabilities		(104,846,121	)		(123,836,633	)		(130,196,251	)		(155,950,488	)		(138,206,214	)

	As of December 31
	2014			2015			2016			2017			2018
	RMB in thousands
Consolidated Financial Position Data
Non-current liabilities		(85,542,941	)		(83,336,032	)		(82,456,751	)		(133,024,419	)		(165,575,427	)
Total liabilities		(190,389,062	)		(207,172,665	)		(212,653,002	)		(288,974,907	)		(303,781,641	)
Total equity		(84,782,706	)		(101,693,689	)		(102,186,737	)		(107,614,604	)		(116,121,670	)

	Year Ended December 31,
	2014			2015			2016			2017			2018
	RMB in thousands, except per share data
Consolidated Cash Flow Data
Purchase of property, plant and equipment		(19,858,216	)		(24,191,285	)		(20,144,903	)		(25,798,009	)		(20,613,314	)
Net cash provided by operating activities		33,320,067			42,362,708			31,510,824			29,197,363			28,727,978
Net cash used in investing activities		(19,470,813	)		(33,015,012	)		(17,649,646	)		(31,748,825	)		(20,375,882	)
Net cash (used in)/generated from financing activities		(10,894,180	)		(14,140,659	)		(13,601,850	)		4,013,180			(2,243,070	)
Other Company Data
Dividend declared per share		0.38			0.47			0.29			0.10			0.10
Number of ordinary shares ('000)		14,420,383			15,200,383			15,200,383			15,200,383			15,698,093

Note:

As a result of the adoption of IFRS 15, Revenue from contracts with customers, with effect from January 1, 2018, the Company and its subsidiaries have changed its accounting policies in respect of revenue recognition. In accordance with the transitional provisions of the standard, the changes in accounting policies were adopted by way of opening balance adjustments to equity as at January 1, 2018. The adoption of IFRS 15 did not have a material impact on the consolidated financial statements. Figures in years earlier than 2018 are stated in accordance with the policies applicable in those years.

The Company and its subsidiaries adopted IFRS 9, Financial instruments, from January 1, 2018. As a result, the Company and its subsidiaries have changed its accounting policies in relation to financial instruments. As allowed by IFRS 9, the Company and its subsidiaries have not restated information relating to prior years. Differences in the carrying amounts of the financial assets resulting from the adoption of IFRS 9 were recognised in reserves at January 1, 2018. There was no difference in the carrying amounts of the financial liabilities. Prior to January 1, 2018, figures were stated in accordance with the policies applicable in those years.

B.	Capitalization and indebtedness

Not applicable.

C.	Reasons for the offer and use of proceeds

Not applicable.

D.	Risk factors

Risks relating to our business and the PRC's power industry

Government regulation of on-grid power tariffs and other aspects of the power industry may adversely affect our business

Similar to electric power companies in other countries, we are subject to governmental and electric grid regulations in virtually all aspects of our operations, including the amount and timing of electricity generations, the setting of on-grid tariffs, the performance of scheduled maintenance, and the compliance with power grid control and dispatch directives as well as environment protection regulations. There can be no assurance that these regulations will not change in the future in a manner which could adversely affect our business.

The on-grid tariffs for our planned output are subject to a review and approval process involving the National Development and Reform Commission ("NDRC") and the relevant provincial government. Since April 2001, the PRC Government has been implementing an on-grid tariff-setting mechanism based on the operating terms of power plants as well as the average costs of comparable power plants. Pursuant to the NDRC circular issued in June 2004, the on-grid tariffs for our newly built power generating units commencing operation from June 2004 have been set on the basis of the average cost of comparable units adding tax and reasonable return in the regional grid. Any future reductions in our tariffs, or our inability to raise tariffs (for example, to cover any increased costs we may have to incur) as a result of the new on-grid tariff-setting mechanism, may adversely affect our revenue and profits.

In addition, the PRC Government started a program in 1999 to effect power sales through competitive bidding in some of the provinces where we operate our power plants. The on-grid tariffs for power sold through competitive bidding are generally lower than the pre-approved on-grid tariffs for planned output. In the more recent few years, power sales through competitive bidding only accounted for a portion of our overall power sales.

Nevertheless, the PRC Government is seeking to expand the program. Any increased power sales through competitive bidding may reduce our on-grid tariffs and may adversely affect our revenue and profits.

Furthermore, the PRC Government started in 2009 to promote the practice of direct power purchase by large power end-users. Pursuant to the circular jointly issued by NDRC, the State Electricity Regulatory Commission ("SERC") and China National Energy Administration in June 2009, the direct transaction price shall include the direct transaction price, the grid transmitting price and the governmental fund and additional charges, of which the direct transaction price shall be freely determined through negotiation between the power generation company and the large power end-user. The price of direct power purchase shall be subject to the demand in the power market. Furthermore, the scale and mode of the transaction are also subject to the structure and level of development of local economy. In terms of power generation companies engaged in direct power purchase, direct power sales constitute a portion of the total power sales, thus affecting the on-grid power sales of the Company. For the past few years, the PRC Government continued the reform in the area of direct power purchase by large power end-users. In 2013, China National Energy Administration officially launched the direct power purchase program in seven provinces where we have power plants and the program has been steadily rolled out in other provinces. Although the direct power purchase may act as an alternative channel for our power sales, there is uncertainty as to the effect of the practice of direct power purchase over our operating results basing on the relatively lower tariffs generally for this portion.

The on-grid tariff-setting mechanism is evolving with the reforming of the PRC electric power industry. The PRC government announced a number of development and reform plans for the power market in 2016, covering areas including laws and regulations, comprehensive pilot plans, power transmission and distribution prices and supply side dynamics, the establishment of the power exchanges, rules and market administration committees, and opening up incremental distribution business. In 2017, the development and reform plans have been further expanded to the nationwide scale, with multiple issuances made by the PRC government governing power development plan, electricity transmission and distribution price, opening up of the electricity generation and consumption plans, supply side dynamics, electricity power stock and ancillary market development, electricity exchange rules, market supervision and clean energy consumption, etc. In 2018, the development and reform entered into a implementation stage, reflected in the areas of distribution price reform, establishment of the power exchanges and ancilliary market and the incremental distribution network reform, etc.

There is no assurance that government regulations on the industry will not change in a manner which could adversely affect our business and results of operations or the measures we take would effectively help us to adapt to the new changes and developments. See "Item 4 Information of the Company – B. Business Overview – Pricing Policy."

If our power plants receive less dispatching than planned generation, the power plants will sell less electricity than planned

Our profitability depends, in part, upon each of our power plants generating electricity to meet or surpass the planned generation, which in turn will be subject to a local demand for electric power and dispatching to the grids by the dispatch centers of the local grid companies.

The dispatch of electric power generated by a power plant is controlled by the dispatch center of the applicable grid companies pursuant to a dispatch agreement with us and to governmental dispatch regulations. In each of the markets we operate, we compete against other power plants for power sales. No assurance can be given that the dispatch centers will dispatch the full amount of the planned generation of our power plants. A reduction by the dispatch center in the amount of electric power dispatched relative to a power plant's planned generation could have an adverse effect on the profitability of our operations. We have not encountered such situation before.

In August 2007, the General Office of the State Council issued a notice, promoting the energy saving electricity dispatch policy, which provides dispatching priority to electricity generated from renewable resources over electricity generated from unrenewable resources. In 2013, the government made continuous effort to encourage energy-saving power distribution. In 2014, the NDRC issued Guidance on Strengthening and Improving the Operation of Power Management Regulation. In 2015, the NDRC and China National Energy Administration ("NEA") jointly issued Guidelines on Improving Electric Power Operations and Deepening Clean Energy Generation confirming a system ensuring the full-priced purchasing of renewable energy, and requests furthering

the electric power differentiation system on coal-fired units. In 2016, the NDRC and China National Energy Administration issued Notice on Issuing the Measures for the Administration of the Guaranteed Buyout of Electricity Generated by Renewable Energy Resources, Directive on the Measures for the Administration of the Guaranteed Buyout of Electricity Generated by Solar, Wind Energy Resources and Provisionary, Measures for Priority Dispatch of Renewable Peaking Power Generation Units and Notice on Power Supply and Notice on the Measures on the Consumption of Renewable Energy in Tri-North Area. In 2017, NDRC and NEA issued Circular on Orderly Opening Up the Electricity Generation and Consumption Plans, Interim Measures for Guaranteeing the Safe Consumption of Nuclear Power, Pilot Rules on Inter-regional Spare Renewable Energy Electricity Power Stock Trading, Circular on the Establishment of Pilot Electricity Power Stock Exchange, Circular on Promoting Hydropower Consumption in Southwest China, and Solutions to Abandoning Hydro, Wind and Solar Energy, to promote the development of the power stock exchange and renewable power consumption. In 2018, the NDRC and NEA issued the Circular on Promoting the Capability to Adjust the Power System and Plan for Consumption of Clean Energy (2018-2020) to further direct the development of the clean energy and push for the reform of the power market. The NEA also solicited for public opinions on the Circular on the Renewable Power Quota System, proposing a coordination between the power suppliers and users to take responsibilities under quota system.

We cannot assure that such implementation will not result in any decrease in the amount of the power dispatched by any of our power plants.

The power industry reform may affect our business

The PRC Government in 2002 announced and started to implement measures to further reform the power industry, with the ultimate goal of creating a more open and fair power market. As part of the reform, five power generation companies, including Huaneng Group, were created or restructured to take over all the power generation assets originally belonging to the State Power Corporation of China. In addition, two grid companies were created to take over the power transmission and distribution assets originally belonging to the State Power Corporation of China. An independent power supervisory commission, the SERC, was created to regulate the power industry. There might be further reforms, and it is uncertain how these reform measures and any further reforms will be implemented and impact our business. In December 2012, the PRC Government issued a notice to further reform the coal pricing mechanism, which mandated (1) the termination of all key coal purchase contracts between power generation companies and coal suppliers, and the abolition of national guidance of the railway transportation capacity plan, and (2) the cancellation of the dual-track coal pricing system, effective from January 1, 2013. For a detailed discussion of the reform, see "Item 4 Information on the Company – B. Business overview – Pricing policy." There can be no assurance that such coal pricing reform will not adversely affect our results of operation. In 2013, the PRC Government continued the reform in power industry. In July 2013, China National Energy Administration issued the Notice on Direct Purchases between Power End-users and Power Generation Companies, which officially implemented the direct purchases programs by large end-users.

On March 15, 2015, the Opinions of CPC Central Committee and State Council Regarding Further Deepening Reform of the Electricity System was released, according to which the reform will be focused and directed to orderly liberalize the tariff of the competitive markets other than electricity transmission and distribution, gradually allow investment from private investors in power distribution and selling businesses, consistently open the power generation market other than those for non-profit purpose or under regulation, push for independent and regulated operation of the parties involved in electricity transactions, continue the study of regional power grid construction and the transmission and distribution system suitable for China, further strengthen government regulations for enhanced power coordination and planning, and further improve safe and efficient operation of electricity and reliable power supply. These reforms will have a profound impact on the business models of power generation enterprises and may intensify the competition which may adversely affect our business. In November 2015, the NDRC and China Energy Administration issued six official documents regarding electricity system reform, namely Opinions on Deepening Electricity Price Reform, Opinions on Furthering Electricity Market Development, Opinions on Establishing and Institutionalizing Electricity Purchasing Organizations, Opinions on Orderly Opening Up Electricity Generation and Consumption, Opinions on Deepening Electricity Sales Reform and Guidelines on Fortifying and Institutionalizing the Management of Coal-fired Power Plants, further confirming the direction of the newest round of reforms of the electricity system.

In 2016, the PRC Government implemented various measures to further reform the power industry on many fronts, including (i) seeking public comments on the proposed amendment to the electric power law of the People's Republic of China, (ii) implementing structural reform pilot programs in nineteen provinces; (iii) establishing national electricity exchanges in Beijing and Guangzhou, (iii) setting up independent third party credit rating system for market players, (iv) promulgating rules governing the price and method of direct power purchase/competitive bidding programs as well as the market entrance and exit mechanism, and (v) furthering reform on the pricing mechanism for power transmission and distribution prices.

In 2017, The PRC Government issued various measures to further reform the power industry, including: (i) establishing the national power development plan covering the consumption share of the non-fossil fuel, heating system reform based on "coal to gas," "coal to electricity" and renewable energy development, and new technology programs; (ii) speeding up the reform of electricity transmission and distribution price; (iii) orderly opening up the electricity generation and consumption plans; (vi) establishing the union of power exchanges and speeding up the electricity stock and ancillary service market development; (v) enhancing the development of the electricity power supply side reform; (vi) issuing the rules for monthly inter-region electricity power trade in South China; and (vii) furthering the development of the power-related credit system.

In 2018, NDRC and NEA issued Circular on Promoting the Capability to Adjust the Power System and Plan for Consumption of Clean Energy (2018-2020), Circular on the Renewable Power Quota System and Notice on Actively Promoting Market-oriented Power Exchange and Further Improving the Trading Mechanism to futher promote the consumption of renewable energy and increase the utilization rate of the renewable energy. From 2018, users from coal, steel, non-ferrous metal and construction materials industries, among others, shall participate in the market-oriented power exchange process instead of applying the catalog price. Users are encouraged to negotiate with power generating enterprises to establish the “baseline with floating adjustment” pricing mechanism.

These reform actions will have a profound impact on the operations of power generation companies and may intensify competition, which may negatively impact our company.

We are effectively controlled by Huaneng Group and HIPDC, whose interests may differ from those of our other shareholders

Huaneng Group, directly or indirectly holds 45.67% of our total outstanding shares, and HIPDC directly holds 32.28% of our total outstanding shares. As Huaneng Group is HIPDC's parent company, they may exert effective control over us acting in concert. Their interests may sometimes conflict with those of our other minority shareholders. There is no assurance that Huaneng Group and HIPDC will always vote their shares, or direct the directors nominated by them to act in a way that will benefit our other minority shareholders.

Disruption in coal supply and its transportation as well as increase in coal price may adversely affect the normal operation of our power plants

A substantial majority of our power plants are fueled by coal. The coal supply for our power plants is arranged through free negotiation between power companies, coal suppliers, and railway authorities. Thus, any material disruption in coal supply and its transportation may adversely affect our operations. To date, we have not experienced shutdowns or reduced electricity generation caused by inadequate coal supply or transportation services.

In addition, our results of operations are sensitive to the fluctuation of coal price. For the past few years, the Chinese coal market was showing a surplus in production, resulting in a significantly decreased coal price. However, the policies of reducing overcapacity of the Chinese coal producers implemented in early 2016 led to a supply shortage with surging coal prices in the Chinese coal market. There is no assurance that the increase in coal prices will not continue in the future, and if the price increase does continue, there is no assurance that we will be able to adjust our power tariff to pass on the increase in the coal price in time. Although the government has established a coal-electricity price linkage mechanism to allow power generation companies to increase their power tariffs to cope with the increase in the coal price, the implementation of the mechanism involves uncertainties. For a detailed discussion of the coal-electricity price linkage mechanism, see "Item 4 Information on the Company – B. Business overview – Pricing policy."

Power plant development, acquisition and construction are a complex and time-consuming process, the delay of which may negatively affect the implementation of our growth strategy

We develop, construct, manage and operate large power plants. Our success depends upon our ability to secure all required PRC Government approvals, power sales and dispatch agreements, construction contracts, fuel supply and transportation and electricity transmission arrangements. Delay or failure to secure any of these could increase cost or delay or prevent commercial operation of the affected power plant. Although each of our power plants in operation and the power plants under construction received all required PRC Government approvals in a timely fashion, no assurances can be given that all the future projects will receive approvals in a timely fashion or at all. In addition, due to national policies and related regulations promoting environment-friendly energy, the approval requirements and procedures for power plant are becoming increasingly stringent, which may negatively affect the approval process of our new projects.

We have generally acted as, and intend to continue to act as, the general contractor for the construction of our power plants. As with any major infrastructure construction effort, the construction of a power plant involves many risks, including shortages of equipment, material and labor, labor disturbances, accidents, inclement weather, unforeseen engineering, environmental, geological, delays and other problems and unanticipated cost increases, any of which could give rise to delays or cost overruns. Construction delays may result in loss of revenues. Failure to complete construction according to specifications may result in liabilities, decrease power plant efficiency, increase operating costs and reduce earnings. Although the construction of each of our power plants was completed on or ahead of schedule and within its budget, no assurance can be given that construction of future projects will be completed on schedule or within budget.

In addition, from time to time, we may acquire existing power plants from HIPDC, Huaneng Group or other parties. The timing and the likelihood of the consummation of any such acquisitions will depend, among other things, on our ability to obtain financing and relevant PRC Government approvals and to negotiate relevant agreements for terms acceptable to us.

Substantial capital is required for investing in or acquiring new power plants and failure to obtain capital on reasonable commercial terms will increase our finance cost and cause delay in our expansion plans

An important component of our growth strategy is to develop new power plants and acquire operating power plants and related development rights from HIPDC, Huaneng Group or other companies on commercially reasonable terms. Our ability to arrange financing and the cost of such financing depend on numerous factors, including general economic and capital market conditions, credit availability from banks or other lenders, investor confidence in us and the continued success of our power plants. Although we have not been materially affected by inflation in the past, there is no assurance that we would not be affected in the future. The Chinese government is expected to implement active fiscal policies and sound monetary policies. The fiscal policies would be focused on reducing taxes and other fiscal levies with the view to addressing, in collaboration with the implementation of monetary polies, funding difficulties and prohibitive funding prices encountered by business enterprises. The sound monetary policies would be implemented to underscore overall economic stability, strengthen counter-cyclical monetary administration, optimize credit structure, and maintain reasonably adequate liquidity. Accordingly, it is expected that the market would have reasonably sufficient funding in 2019 and funding costs are expected to be consistent with slight decline. The interest bearing debts of the Company are mostly denominated in Renminbi, changes in benchmark lending interest rate published by the PBOC will have a direct impact on the Company's cost of debt. Regarding our debts denominated in other currencies, it is less likely that the U.S. and other major economies would further increase interest rates due to expected slowdown of the global economy. As the debts denominated in other currencies represent a small percentage in our total debts, the change of interest rates of foreign currencies are not expected to have material effect on the Company. Though the finance costs are expected to be consistent with slight decline, we may not be able to carry out our expansion plans due to the failure to obtain financing or increased financing costs. Furthermore, although we have historically been able to obtain financing on terms acceptable to us, there can be no assurance that financing for future power plant developments and acquisitions will be available on terms acceptable to us or, in the event of an equity offering, that such offering will not result in substantial dilution to existing shareholders.

Operation of power plants involves many risks and we may not have enough insurance to cover the economic losses if any of our power plants' ordinary operation is interrupted

The operation of power plants involves many risks and hazards, including breakdown, failure or substandard performance of equipment, improper installation or operation of equipment, labor disturbances, natural disasters, environmental hazards and industrial accidents. The occurrence of material operational problems, including but not limited to the above events, may adversely affect the profitability of a power plant.

Our power plants in the PRC currently maintain insurance coverage that is typical in the electric power industry in the PRC and in amounts that we believe to be adequate. Such insurance, however, may not provide adequate coverage in certain circumstances. In particular, in accordance with industry practice in the PRC, our power plants in the PRC do not generally maintain business interruption insurance, or any third party liability insurance other than that included in construction all-risks insurance or erection all-risks insurance to cover claims in respect of bodily injury or property or environment damage arising from accidents on our property or relating to our operation. Although each of our power plants has a good record of safe operation, there is no assurance that the afore-mentioned accidents will not occur in the future.

If the PRC Government adopts new and stricter environmental laws and additional capital expenditure is required for complying with such laws, the operation of our power plants may be adversely affected and we may be required to make more investment in compliance with these environmental laws

Most of our power plants, being coal-fired power plants, discharge pollutants into the environment. We are subject to central and local government environmental protection laws and regulations. The Environmental Protection Tax Law of People’s Republic of China came into effect in 2018 and impose base-level environmental protection tax for various polluting substances. In addition, such environmental protection laws and regulations also set up the goal for the overall control on the discharge volume of key polluting substances. These laws and regulations impose fines for violations of laws, regulations or decrees and provide for the possible closure by the central government or local government of any power plant which fails to comply with orders requiring it to cease or cure certain activities causing environmental damage. Also, the PRC Government requires thermal power plants to equip all units with desulphurization and denitrification facilities, and sets higher anti-dust standards. The Chinese government is working on a pollution prevention and control campaign, which shall subject us to a more stringent standards for our air pollution control, waste water pollution control and ecological environmental protection efforts. Such stringent standards, together with the environmental protection tax, will result in the increases in the environmental protection expenditure and operating costs of power plants and may have an adverse impact on our operating results.

We attach great importance to the environmental related matters of our existing power plants and our power plants under construction. We have implemented a system that is designed to control pollution caused by our power plants, including the establishment of an environmental protection administration system at each power plant, adoption of relevant control and evaluation procedures and the installation and maintenance of certain pollution control equipment. We also upgraded the super low emission facilities on our coal-fired units. We believe our environmental protection systems and facilities for the power plants are adequate for us to comply with applicable central government and local government environmental protection laws and regulations. However, the PRC Government may impose new, stricter laws and regulations on environmental protection, which may adversely affect our operations.

The PRC is a party to the Framework Convention on Climate Change ("Climate Change Convention"), which is intended to limit or capture emissions of "greenhouse" gases, such as carbon dioxide. Ceilings on such emissions could limit the production of electricity from fossil fuels, particularly coal, or increase the costs of such production. At present, ceilings on the emissions of "greenhouse" gases have not been assigned to developing countries under the Climate Change Convention. Therefore, the Climate Change Convention would not have a major effect on us in the short term because the PRC as a developing country is not obligated to reduce its emissions of "greenhouse" gases at present, and the PRC Government has not adopted relevant control standards and policies. If the PRC were to agree to such ceilings, or otherwise reduce its reliance on coal-fired power plants, our business prospects could be adversely affected. In addition, pilot carbon emission trading programs have been conducted in certain regions and are expected to be gradually implemented throughout China. This may also adversely affect our business and financial prospects in the future.

Our business benefits from certain PRC Government tax incentives. Expiration of, or changes to, the incentives could adversely affect our operating results

Prior to January 1, 2008, according to the relevant income tax law, domestic enterprises were, in general, subject to statutory income tax of 33% (30% enterprise income tax and 3% local income tax). If these enterprises are located in certain specified locations or cities, or are specifically approved by State Administration of Taxation, a lower tax rate would be applied. Effective from January 1, 1999, in accordance with the practice notes on the PRC

income tax laws applicable to foreign invested enterprises investing in energy and transportation infrastructure businesses, a reduced enterprise income tax rate of 15% (after the approval of State Administration of Taxation) was applicable across the country. We applied this rule to all of our wholly owned operating power plants after obtaining the approval of State Administration of Taxation. In addition, certain power plants were exempted from enterprise income tax for two years starting from the first profit-making year, after offsetting all tax losses carried forward from the previous years (at most of five years), followed by a 50% reduction of the applicable tax rate for the next three years. The statutory income tax was assessed individually based on each of their results of operations.

On March 16, 2007, the Enterprise Income Tax Law of PRC, or the New Enterprise Income Tax Law, was enacted, and became effective on January 1, 2008 and was amended on February 24, 2017. The New Enterprise Income Tax Law imposes a uniform income tax rate of 25% for domestic enterprises and foreign invested enterprises. Therefore, our power plants subject to a 33% income tax rate prior to January 1, 2008 are subject to a lower tax rate of 25% starting on January 1, 2008. With regard to our power plants entitled to a reduced enterprise income tax rate of 15% prior to January 1, 2008, their effective tax rate gradually increased to 25% within a five-year transition period commencing on January 1, 2008. Accordingly, the effective tax rate of our wholly owned power plants has increased over time. In addition, although our power plants entitled to tax exemption and reduction under the income tax laws and regulations that are effective prior to the New Enterprise Income Tax Law will continue to enjoy such preferential treatments until the expiration of the same, newly established power plants will not be able to benefit from such tax incentives, unless they can satisfy specific qualifications, if any, provided by then effective laws and regulations on preferential tax treatment.

The increase of applicable income tax rate and elimination of the preferential tax treatment with regard to certain of our power plants may adversely affect our financial condition and results of operations. Moreover, our historical operating results may not be indicative of our operating results for future periods as a result of the expiration of the tax benefits currently available to us.

In addition, according to the New Enterprise Income Tax Law and its implementation rules, any dividends derived from the distributable profits accumulated from January 1, 2008 and paid to the shareholders who are non-resident enterprises in the PRC will be subject to the PRC withholding tax at the rate of 10%. The withholding tax will be exempted if such dividends are derived from the distributable profits accumulated before January 1, 2008. Under a notice issued by the State Administration of Taxation of the PRC on November 6, 2008, we are required to withhold PRC income tax at the rate of 10% on annual dividends paid for 2008 and later years payable to our H Share investors who are non-resident enterprises.

Fluctuations in exchange rates could have an adverse effect on our results of operations and your investment

As a power producer operating mainly in China, we collect most of our revenues in Renminbi and have to convert Renminbi into foreign currencies to (i) repay some of our borrowings which are denominated in foreign currencies, (ii) purchase foreign made equipment and parts for repairs and maintenance, (iii) purchase fuel from overseas suppliers, and (iv) pay out dividend to our overseas shareholders.

The value of the Renminbi against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in China's political and economic conditions. The conversion of Renminbi into foreign currencies, including U.S. dollars, is based on rates set by the PBOC. On July 21, 2005, the PRC government introduced a floating exchange rate system to allow the value of Renminbi to fluctuate within a regulated band based on market supply and demand and by reference to a basket of foreign currencies. Renminbi appreciated by more than 20% against the U.S. dollar between July 2005 and July 2008. Between July 2008 and June 2010, this appreciation halted and the exchange rate between the Renminbi and the U.S. dollar remained within a narrow band. On June 19, 2010, the PBOC decided to further promote the reform of the Renminbi exchange rate formation mechanism, and improve the flexibility of Renminbi exchange rate. The Company and its subsidiaries (both domestic and overseas) have debts denominated in foreign currencies, fluctuations in the exchange rates of Renminbi and Singapore dollar into foreign currencies create exchange risk for the Company. With the internationalization process and RMB joining the SDR, RMB exchange rate may continue to fluctuate in the future. In August 2015, the PBOC further improved its midpoint rate determination mechanism, which led to a 2% depreciation of Renminbi against the U.S. dollar. With effect from October 1, 2016, RMB is determined to be a freely usable currency and will be included in the SDR basket as a fifth currency. In the fourth quarter of 2016, the RMB has depreciated significantly in the backdrop of a surging U.S. dollar and persistent capital outflows of China.

In 2017, the RMB has appreciated significantly in the backdrop of a weak U.S. dollar, robust Chinese economy in 2017 and stringent foreign exchange regulation. In the first quarter of 2018, the RMB continued to appreciate. However, the RMB depreciated significantly in the remaining quarters of 2018. However, it is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the Renminbi and the U.S. dollar in the future. There remains significant international pressure on the PRC Government to further liberalize its currency policy, which could result in further fluctuations in the value of the Renminbi against the U.S. dollar. However, there is no assurance that there will not be a devaluation of Renminbi in the future. If there is such devaluation, our debt servicing cost will increase and the return to our overseas investors may decrease.

Our revenues from SinoSing Power Pte. Ltd. ("SinoSing Power") and its subsidiaries are collected in Singapore dollars. However, commencing from 2008, the operating results of SinoSing Power and its subsidiaries were consolidated into our financial statements, which use Renminbi as the presentation currency. The situation of our Pakistan operation is similar after we consolidate our business in Pakistan since December 2018. As a result, we are exposed to foreign exchange fluctuations between Renminbi and the Singapore dollar or Pakistan Rupee. Appreciation of Renminbi against the Singapore dollar or Pakistan Rupee may cause an adverse impact on our operation results and foreign translation difference.

The audit report included in this annual report is prepared by an auditor who is not inspected by the Public Company Accounting Oversight Board and, as such, you are deprived of the benefits of such inspection

Auditors of companies that are registered with the U.S. Securities and Exchange Commission and traded publicly in the United States, including our independent registered public accounting firm, must be registered with the U.S. Public Company Accounting Oversight Board (United States) (the "PCAOB") and are required by the laws of the United States to undergo regular inspections by the PCAOB to assess their compliance with the laws of the United States and professional standards. Because we have substantial operations within the People's Republic of China and the PCAOB is currently unable to conduct inspections of the work of our auditors as it relates to those operations without the approval of the Chinese authorities, our auditor's work related to our operations in China is not currently inspected by the PCAOB. In May 2013, PCAOB announced that it had entered into a Memorandum of Understanding on Enforcement Cooperation with the China Securities Regulatory Commission ("CSRC") and the PRC Ministry of Finance, which establishes a cooperative framework between the parties for the production and exchange of audit documents relevant to investigations undertaken by PCAOB, the CSRC or the PRC Ministry of Finance in the United States and the PRC, respectively. PCAOB continues to be in discussions with the CSRC and the PRC Ministry of Finance to permit joint inspections in the PRC of audit firms that are registered with PCAOB and audit Chinese companies that trade on U.S. exchanges. On December 7, 2018, the Securities and Exchange Commission, or the SEC, and the PCAOB issued a joint statement highlighting continued challenges faced by the U.S. regulators in their oversight of financial statement audits of U.S.-listed companies with significant operations in China. The joint statement reflects a heightened interest in an issue that has vexed U.S. regulators in recent years. However, it remains unclear what further actions the SEC and PCAOB will take to address the problem.

This lack of PCAOB inspections of audit work performed in China prevents the PCAOB from regularly evaluating audit work of any auditors that was performed in China including that performed by our auditors. As a result, investors may be deprived of the full benefits of PCAOB inspections. Investors may lose confidence in our reported financial information and procedures and the quality of our financial statements.

Our independent registered public accounting firm may be temporarily suspended from practicing before the SEC. If a delay in completion of our audit process occurs as a result, we could be unable to timely file certain reports with the SEC, which may lead to the delisting of our stock

On January 22, 2014, Judge Cameron Elliot, an SEC administrative law judge, issued an initial decision suspending the Chinese member firms of the "Big Four" accounting firms, including our independent registered public accounting firm, from, among other things, practicing before the SEC for six months. In February 2014, the initial decision was appealed. While under appeal and in February 2015, the Chinese member firms of "Big Four" accounting firms reached a settlement with the SEC. As part of the settlement, each of the Chinese member firms of "Big Four" accounting firms agreed to settlement terms that include a censure; undertakings to make a payment to the SEC; procedures and undertakings as to future requests for documents by the US SEC; and possible additional proceedings and remedies should those undertakings not be adhered to.

If the settlement terms are not adhered to, Chinese member firms of "Big Four" accounting firms may be suspended from practicing before the SEC which could in turn delay the timely filing of our financial statements

with the SEC. In addition, it could be difficult for us to timely identify and engage another qualified independent auditor. A delinquency in our filings with the SEC may result in NYSE initiating delisting procedures, which could adversely harm our reputation and have other material adverse effects on our overall growth and prospect.

Forward-looking information may prove inaccurate

This document contains certain forward-looking statements and information relating to us that are based on the beliefs of our management as well as assumptions made by and information currently available to our management. When used in this document, the words "anticipate," "believe," "estimate," "expect," "going forward" and similar expressions, as they relate to us or our management, are intended to identify forward-looking statement. Such statements reflect the current views of our management with respect to future events and are subject to certain risks, uncertainties and assumptions, including the risk factors described in this document. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated or expected. We do not intend to update these forward-looking statements.

There can be no assurance that we will not be passive foreign investment company, or PFIC, for United States federal income tax purposes for any taxable year, which could subject United States investors in the ADSs or our H Shares to significant adverse United States income tax consequences

We will be a "passive foreign investment company," or "PFIC," if, in the case of any particular taxable year, either (a) 75% or more of our gross income for such year consists of certain types of "passive" income or (b) 50% or more of the average quarterly value of our assets (as determined on the basis of fair market value) during such year produce or are held for the production of passive income (the "asset test"). For United States federal income tax purposes, and based upon our income and assets, we do not believe that we were classified as a PFIC for the taxable year ended December 31, 2018, and do not anticipate becoming one in the foreseeable future.

While we do not expect to become a PFIC, because the value of our assets for purposes of the asset test may be determined by reference to the market price of the ADSs, fluctuations in the market price of the ADSs may cause us to become a PFIC for the current or subsequent taxable years. The determination of whether we will be or become a PFIC will also depend, in part, on the composition of our income and assets. Under circumstances where we determine not to deploy significant amounts of cash for active purposes, our risk of being a PFIC may substantially increase. Because there are uncertainties in the application of the relevant rules and PFIC status is a factual determination made annually after the close of each taxable year, there can be no assurance that we will not be a PFIC for the current taxable year or any future taxable year.

If we are a PFIC in any taxable year, a U.S. Holder (as defined in "Item 10. Additional Information—E. Taxation—United States federal income tax considerations") may incur significantly increased United States income tax on gain recognized on the sale or other disposition of the ADSs or H Shares and on the receipt of distributions on the ADSs or H Shares to the extent such gain or distribution is treated as an "excess distribution" under the United States federal income tax rules and such holders may be subject to burdensome reporting requirements. Further, if we are a PFIC for any year during which a U.S. Holder holds the ADSs or our H Shares, we generally will continue to be treated as a PFIC for all succeeding years during which such U.S. Holder holds the ADSs or our H Shares. For more information see "Item 10. Additional Information—E. Taxation—United States federal income tax considerations—Passive Foreign Investment Company Considerations."

Risks relating to doing business in the PRC

China's economic, political and social conditions as well as government policies could significantly affect our business

As of December 31, 2018, the majority of our business, assets and operations are located in China. The economy of China differs from the economies of most developed countries in many respects, including government involvement, control of foreign exchange, and allocation of resources.

The economy of China has been transitioning from a planned economy to a more market-oriented economy. After multiple years of strenuous and sustained economic restructuring reforms, China has become a leading player in the global economy and a major contributing force to the economic revival and growth worldwide. The PRC Government has implemented economic reform measures emphasizing utilization of market forces in the development of the economy of China and a higher level of autonomy for the private sector. Some of these measures will benefit the overall economy of China, but may have a negative effect on us for a short term. For example, our operating results and financial condition may be adversely affected by changes in power tariff for our power plants, cost of fuels, increasingly stringent environment protection policies, and changes in State policies affecting the power industry.

Interpretation of PRC laws and regulations involves significant uncertainties

The PRC legal system is based on written statutes and their interpretation by the Supreme People's Court. Prior court decisions may be cited for reference but are not considered as binding precedents.

We are subject to certain PRC regulations governing PRC companies that are listed overseas. These regulations contain certain provisions that are required to be included in the articles of association of these PRC companies and are intended to regulate the internal affairs of these companies. As the PRC regulations are constantly evolving with the goal of better protecting shareholder's interests, we may face greater uncertainties in the interpretation of PRC laws and regulations. Furthermore, the PRC regulations for protection of shareholder's rights are different from those applicable in the United States and/or exchanges where we are listed. Therefore we made it our policy to adopt the strictest standards of any listing rules potentially applicable to us. Some of these standards are incorporated in our articles of association and bylaws with the view to providing most protection for the interests of our shareholders.

Risks relating to our operations in Singapore

Our operations in Singapore are subject to a number of risks, including, among others, risks relating to electricity pricing, dispatching, fuel supply, project development, capital expenditure, environmental regulations, government policies, and Singapore's economic, political and social conditions. Any of these risks could materially and adversely affect our business, prospects, financial condition and results of operations.

Fluctuation in demand and intensified competition may adversely affect Tuas Power's business and results of operations.

Our operations in Singapore depend on market demand and are subject to competition. Overall power system demand grew by 2.2% in 2018 over 2017. The future growth is highly dependent on a sustained recovery in the Singapore and global economies. The liberalization of Singapore's power market and the further deregulation of its power industry have resulted in more intense competition among the power generation companies in Singapore. Tuas Power Group, or Tuas Power, one of our wholly owned business units, is one of the three largest power generation companies in Singapore. If Tuas Power is unable to compete successfully against other power generation companies in Singapore, its business, prospects, financial condition and results of operations may be adversely affected.

An electricity futures market was also established in 2015 through an incentive scheme by the authority to market makers (MM) in the futures market. This has attracted independent retailers which are expected to exert some price competition in the retail market. A Demand Response (DR) scheme is currently being established which could potentially introduce further price competition in the wholesale generation market in Singapore. Furthermore, the Singapore government recently announced plans to raise the adoption of solar energy to 350 MWp by 2020 and 1,000MWp beyond 2020, compared to around 183 MWp in third quarter 2018.

TP Utilities Pte Ltd ("TPU"), an entity in Tuas Power Group, sells utilities, such as steam, industrial water and demineralized water to industrial customers for their direct consumption. The time of potential customers of TPU to site their premises, if at all, is subject to microeconomic situations. The demand of the utilities by these customers may vary as well. Despite Tuas Power's efforts to develop its facilities in stages and/or in modules to provide sufficient capacity matching the demand, and require customers to pay minimum capacity payment charges

to mitigate the demand risk, its business and results of operations may be adversely affected by fluctuation in demand.

Regulatory changes of the vesting regime in Singapore could expose Tuas Power to electricity price volatility and adversely affect its business and results of operations

Tuas Power derives its revenue mainly from sale of electricity to the National Electricity Market of Singapore (the "NEMS") through a bidding process and vesting contracts under which a significant portion of power sales is predetermined by the Energy Market Authority ("EMA"). The vesting contract regime in Singapore is targeted at mitigation of market power in the wholesale electricity spot market. The regime achieves this objective by assigning a quantity of vesting contracts to generation companies, thereby limiting their incentives to exercise whatever level of market power they may possess. Vesting contracts are a form of bilateral contract imposed/vested on the major power generation companies in Singapore. Vesting contract price is set by the EMA, which is Singapore's power market regulator. Vesting contract price is set at the long run marginal cost of the most efficient base-loaded technology plant employed in Singapore and is reviewed every two years. On a quarterly basis, the EMA allows for vesting contract quantity to be adjusted to account for changes in demand (due to seasonality) and the vesting contract price to be adjusted to account for inflation and changes in fuel prices. Such a mechanism helps protect the profit margins of the power generation companies in the Singapore market, such as Tuas Power, to a large degree. The quantity of vesting contract allocated to the power generation company depends on the proportion of such power generation company's capacity to the total licensed or planned generation capacity at the commencement of the vesting contracts regime. A portion of the volume under the Vesting Contract Scheme has also been allocated to the LNG Vesting Scheme - an incentive scheme where players who have committed to an initial tranche of LNG for Singapore are allocated electricity sale contracts. The volume allocated to the generation companies under the LNG vesting scheme is fixed for a period of 10 years until 2023. Following EMA's review of the Vesting Contract Regime in 2016, it is determined that the vesting contract level will be maintained at 25% until the end of the first half of 2018 and it will be reduced to LNG vesting level by the second half of 2019. The vesting contract regime will be phased out by 2023 when the LNG vesting contract expires, which could lead to volatility in electricity prices and adversely affect our business, financial condition and results of operation.

In July 2018, EMA issued a determination paper to allow vesting contract holders with steam turbine generation plants, i.e., Tuas Power, Senoko Energy and YTL PowerSeraya, to retain their allocated vesting quantities irrespective of whether the steam turbine generation plants are retired. This will facilitate the three generation companies in making commercial decisions on whether and when to retire their steam turbine generation plants so as to reduce overhead costs and free up resources.

The fuel cost of Tuas Power is exposed to volatility of international fuel price and foreign currency risk

The fuel for Tuas Power consists of natural gas, coal, biomass, fuel oil and diesel oil. Since the procurement price of natural gas is closely linked to oil price and the procurement price of coal and biomass is linked to a coal index, the fuel cost of Tuas Power is exposed to the volatility of international oil and coal prices. The prices of oil were on upward trend from January to September 2018 and turned downwards in the remaining months of 2018. The price of coal remained strong in 2018. In addition, the commitments for the purchase of fuel are denominated in U.S. dollars, which further exposes Tuas Power to foreign currency risk. Any increase in fuel price and/or appreciation of the U.S. dollar against the Singapore dollar will translate into an increase in fuel cost for Tuas Power. Part of this increase can be passed through electricity sale contracts and utilities sale contracts, while fuel and foreign exchange hedging strategies done appropriately will mitigate the impact of such increase. No assurance can be given that such increase will not adversely affect results of its operation. Tuas Power is highly dependent upon the import of gas via pipelines from Indonesia. The movement in the price of oil over the course of 2018 has resulted in variation in the price for its various sources of gas supply within the same month. Any disruption of such supply would impact the normal operation of Tuas Power significantly. This risk has been mitigated through Tuas Power's contract to buy LNG for its incremental needs, although there is no assurance that, in the event of fuel supply shortfall, Tuas Power's operations will not be adversely affected.

ITEM 4

INFORMATION ON THE COMPANY

A.	History and development of the Company

Our legal and commercial name is Huaneng Power International, Inc. Our head office is at Huaneng Building, 6 Fuxingmennei Street, Xicheng District, Beijing, People's Republic of China and our telephone number is (8610) 63226999. We were established in June 1994 as a company limited by shares organized under the laws of the People's Republic of China.

The SEC maintains an Internet website that contains reports, proxy and information statements, and other information regarding us that filed electronically with the SEC, which can be accessed at http://www.sec.gov. Information about the Company and documents the Company submitted to the SEC are available on our website: http://www.hpi.com.cn/sites/english/Pages/default.aspx.

We completed our initial global public offering of 1,250,000,000 overseas listed foreign shares in October 1994, which were listed on the New York Stock Exchange (Stock Code: HNP) in the United States by issuing 31,250,000 ADSs. In January 1998, the foreign shares of the Company were listed on The Stock Exchange of Hong Kong Limited by way of introduction (Stock Code: 902). Subsequently, in March 1998, the Company successfully completed a global placing of 250,000,000 foreign shares along with a private placing of 400,000,000 domestic shares. In November 2001, the Company successfully completed the issuance of 350,000,000 A Shares (Stock Code: 600011) in the PRC, of which 250,000,000 domestic public shares were listed on the Shanghai Stock Exchange. In December 2010, the Company completed the non-public issuance of 1,500,000,000 A Shares and 500,000,000 H Shares. In November 2014, the Company completed the non-public issuance of 365,000,000 H Shares. In November 2015, the Company completed the non-public issuance of 780,000,000 H Shares. In October 2018, the Company completed the non-public issuance of 497,709,919 A Shares. Currently, the total share capital of the Company amounts to approximately 15.7 billion shares.

As resolved at the second meeting of the 8th session of the board of the Company on October 13, 2014 and adopted at the third extraordinary general meeting of the Company, we entered into the Huaneng Group Interests Transfer Agreement with Huaneng Group, and the HIPDC Interests Transfer Agreement and the Chaohu Power Interests Transfer Agreement with HIPDC. Pursuant to these transfer agreements, we acquired from Huaneng Group 91.8% interests of Hainan Power, 75% interests of Wuhan Power, 53.45% interests of Suzhou Thermal Power, 97% interests of Dalongtan Hydropower and 100% interests of Hualiangting Hydropower at a total price of RMB7.338 billion, and acquire from HIPDC 60% interests of Chaohu Power, 100% interests of Ruijin Power, 100% interests of Anyuan Power, 100% interests of Jingmen Thermal Power and 100% interest of Yingcheng Thermal Power Interests at a total price of RMB1.938 billion. The total consideration is RMB9.647 billion after adjustment of the profits generated from the date of valuation to the acquisition date in accordance with the equity transfer agreements. The transaction was completed in January 2015.

On October 14, 2016, the Company signed the Agreement for the Transfer of Equity Interests in Certain Companies with Huaneng Group (the "Transfer Agreement"). Pursuant to the Transfer Agreement, the Company shall accept the transfer of (i) 80% equity interest of Huaneng Shandong Power Limited; (ii) 100% equity interest of Huaneng Jilin Power Limited; (iii) 100% equity interest of Huaneng Heilongjiang Power Limited; and (iv) 90% equity interest of Huaneng Henan Zhongyuan Gas Power Generation Co., Ltd. from Huaneng Group for the consideration of RMB15,501 million after certain adjustment of the profits generated from the date of valuation to the acquisition date in accordance with the equity transfer agreements. This transaction was considered and approved at the 21st meeting of the Eighth Session of the Board held on October 14, 2016, and was considered and approved at the 2016 Second Extraordinary General Meeting held on November 30, 2016. The acquisition was completed on January 1, 2017, and the total consideration has been settled in cash by December 31, 2017 after netting off with the receivables due from Huaneng Group.

On July 31, 2018, Shandong Power (a subsidiary of the Company) and Taishan Power entered into the Transfer Agreement, pursuant to which Shandong Power shall acquire from Taishan Power (i) 75% interests in the registered capital of Shandong Huaneng Liaocheng Thermal Power Company Limited (“Liaocheng Thermal Power”), (ii) 80% interests in the registered capital of Shandong Huaneng Laizhou Wind Power Generation Company Limited (“Laizhou Wind Power”), (iii) 80% interests in the registered capital of Shandong Huaneng Laiwu Thermal Power Company Limited (“Laiwu Thermal Power”), and (iv) 15% interests in the registered capital of Huaneng Laiwu Power Generation Limited (“Laiwu Power Generation”) at the consideration of RMB1,800,020,000. Upon completion of the Transfer, Liaocheng Thermal Power, Laizhou Wind Power and Laiwu Thermal Power will become subsidiaries of Shandong Power.

See "Item 5 Operating and Financial Reviews and Prospects – Liquidity and Cash Resources" for a description of our principal capital expenditures since the beginning of the last three financial years.

B.	Business overview

We are one of the China's largest independent power producers and we have been striving for innovations in technologies, structure, and management since its incorporation. We were the first to introduce a 600 MW supercritical generating unit into China and we also started operating the first domestically built single 1,000 MW ultra-supercritical coal-fired generating unit, and the first digitalized 1,000 MW ultra-supercritical coal-fired generating unit in China. We completed the construction of the first 1,000 MW generating unit in the world using sea water desulphurization facilities and the 660 MW high-efficiency ultra-supercritical coal-fired generating unit with the highest parameter in China. We completed the construction of the first double reheat ultra-supercritical coal-fired generating unit, and developed the technology for synergistic treatment of fuel gas of coal-fired power plants, which was successfully applied in various environmental protection renovation and newly-constructed projects. We completed the offshore wind power project with the largest generating capacity in Asia and was the first to realize mass production of the wind turbine of 5 MW in China. We also invested and operated the most advanced gas turbine with the largest generation capacity and heat supplying capacity in China. The technical and economic indicators as well as the overall manpower efficiency of the Company have been remaining at the forefront in China's power industry.

As of December 31, 2018, we had controlling generating capacity of 105,991 MW, and total generating capacity of 93,755 MW on equity-ownership basis.

Operations in China

We are engaged in developing, constructing, operating and managing large scale coal-fired and gas turbine power plants, new energy power projects and related facilities, including ports, marine transportation and power distribution. Our domestic power plants are located in 26 provinces, autonomous regions and provincial-level municipalities. In 2018, the Company proactively adapted to the changes in the market and anticipated the dynamics of the reforms in national economy and power market system to promptly realign our operating strategy. Throughout the year, we maintained stable operation of safe and clean production, constantly optimised the power structure, realized increases in both quantity and price in power generation, achieved excellent marketing results, effectively controlled the fuel cost, and steadily carried out capital operation. As a result, we have satisfactorily achieved our annual business objectives and maintained our leading position in the industry.

In 2018, new generating units with a total installed capacity of 653 MW were put into operation. In 2018, our total domestic power generation from all operating power plants on a consolidated basis amounted to 430.457 billion kWh, representing an increase of 9.12% from 2017. The annual average utilization hours of our domestic generating units reached 4,208 hours. Our fuel cost per unit of power sold by domestic power plants increased by 4.85% from the previous year to RMB 236.89 per MWh.

We believe our significant capability in the development and construction of power projects, as exemplified in the completion of our projects under construction ahead of schedule, and our experience gained in the successful acquisitions of power assets in recent years will enable us to take full advantage of the opportunities presented in China's power market.

With respect to the acquisition or development of any project, we will consider, among other factors, changes in power market conditions, and adhere to prudent commercial principles in the evaluation of the feasibility of the project. In addition to business development strategies, we will continue to enhance our profitability by further strengthening our cost control, especially in respect of fuel costs and construction costs, so as to hedge against fluctuations in fuel price and increase competitiveness in the power market.

Operations in Singapore

Tuas Power, one of our wholly owned business units, operates in Singapore and is engaged in the business of generation, wholesale and retail of power and other relating utilities. Tuas Power is comprised of Tuas Power Ltd ("TPL"), the investment holding company, and eight subsidiaries. Among these subsidiaries, Tuas Power Generation Pte. Ltd. ("TPG") is the electricity generation company that owns 100% of Tuas Power Supply Pte Ltd ("TPS"), which is the retail arm of TPG. Separately, TPU, a wholly owned subsidiary of TPL is engaged in the business of production and supply of utilities to industrial customers at Tembusu, Jurong Island in Singapore, as well as the

generation of electricity dispatched to the electricity wholesale market. We have consolidated Tuas Power's results of operations since March 2008. The total assets and revenue of Singapore operations represented approximately 6.49% and 7.08%, respectively, of our consolidated total assets and revenue as of and for the year ended December 31, 2018. In 2018, the power generated by Tuas Power in Singapore accounted for 21.1% of the total power generated in Singapore, slightly lower than 2017.

Operations in Pakistan

We engaged in the business of generation, wholesale and retail of power and other relating utilities through our subsidiaries, Huaneng Shandong Ruyi (Pakistan) Energy (Private) Co., Ltd. (“Ruyi Pakistan Energy”) and Shandong Huatai Electric Power Operation & Maintenance (Private) Co., Ltd. ("Huatai Power") and their subsidiaries. We have consolidated results of operations of Ruyi Pakistan Energy and Huatai Power since December 31, 2018. The total assets of Pakistan represented approximately 3.28% of our consolidated total assets as of December 31, 2018.

Development of power plants

The process of identifying potential sites for power plants, obtaining government approvals, completing construction and commencing commercial operations is usually lengthy. However, because of our significant experience in developing and constructing power plants, we have been able to identify promising power plant projects in China and to obtain all required PRC Government approvals in a timely manner.

Opportunity identification and feasibility study

We initially identify an area in which additional electric power is needed by determining its existing installed capacity and projected demand for electric power. The initial assessment of a proposed power plant involves a preliminary feasibility study. The feasibility study examines the proposed power plant's land use requirements, access to a power grid, fuel supply arrangements, availability of water, local requirements for permits and licenses and the ability of potential customers to afford the proposed power tariff. To determine projected demand, factors such as economic growth, population growth and industrial expansion are used. To gauge the expected supply of electricity, the capacities of existing plants and plants under construction or development are studied.

Approval process

Prior to July 2004, any project proposal and supporting documents for new power plants had to first be submitted to the NDRC for approval and then be submitted to the State Council. In July 2004, the State Council of the PRC reformed the fixed asset investment regulatory system in China. Under the new system, new projects in the electric power industry that do not use government funds will no longer be subject to the examination and approval procedure. Instead, they will only be subject to a confirmation and registration process. Coal-fired projects will be subject to confirmation by the NDRC. Wind power projects with installed capacity of 50 MW or above shall be subject to confirmation and registration with the relevant department of the central government, while wind power projects with an installed capacity lower than 50 MW shall be subject to confirmation and registration with relevant local government departments. Wind power projects confirmed by local government departments at provincial level shall also be filed with the NDRC and China National Energy Administration.

In November 2014, pursuant to the Catalogue of Investment Projects Approved by the Government (2014 Version) issued by the State Council, administrative approval power for certain activities in the energy sector has been delegated to a lower level. The administrative approval power for thermal power stations has been delegated to the provincial level (with coal-fired thermal power station projects being subject to national-level administrative approval based on state-promulgated constructions plans limited by total volume), the administrative approval power for heat power stations has been delegated to the local level (with condensing steam heat power station projects being subject to provincial-level administrative approval based on state-promulgated constructions plans limited by total volume), and the administrative approval power for wind power plants delegated to the local level subject to state-promulgated constructions plans limited by total volume as well as the scope as set out in the annual developmental guides. The Interim Measures for Supervision and Administration of Photovoltaic Power Station Projects issued by China National Energy Administration in 2013 requires that photovoltaic power station projects be regulated by on a filing-based system by the provincial-level energy supervisory departments in accordance with regulations related to investment projects issued by the State Council. The same administrative approval standard was again re-affirmed in December 2016 pursuant to the Catalogue of Investment Projects Approved by the Government (2016 Version) issued by the State Council.

Joint venture power projects are subject to additional governmental approvals. Approval by Ministry of Commerce is also required when foreign investment is involved.

From 2014, China National Energy Administration has placed the stringent control on coal-fired projects within the Beijing-Tianjin-Hebei region, the Yangtze River Delta Region and the Pearl River Delta Region. All new coal-fired generating projects, other than those involving co-generation, were prohibited from being approved. Multi coal-fired generating units may be reconstructed into large capacity units based on the principles of an equivalent replacement for coal but the reduction in replacement pollutant emission.

From 2016, to counter the issue of overcapacity in the coal-fired power sector, China National Energy Administration strengthened the approval of coal-fired projects nationwide, a number of new coal-fired generating projects, other than those involving co-generation, were canceled, postponed or terminated. Considering the increasingly limited availability of prime locations and decreasing subsidies, China National Energy Administration also suspended approval of new wind power plants and photovoltaic power station projects in provinces with wind curtailment rate over 20% and solar curtailment rate over 5%. It is expected that the overcapacity countering policy will be continued in the future.

Permits and contracts

In developing a new power plant, we, like other players in the industry, are required to obtain permits before commencement of the project. Such permits include operating licenses and similar approvals related to plant site, land use, construction, and environment. To encourage the cooperation and support of the local governments of the localities of the power plants, it has been and will be our policy to seek investment in such power plants by the relevant local governments.

Power plant construction

We have generally acted as the general contractor for the construction of our power plants. Equipment procurement and installation, site preparation and civil works are subcontracted to subcontractors through a competitive bidding process. All of our power plants were completed on or ahead of schedule, enabling certain units to enter service and begin generating income earlier than the estimated in-service date.

Plant start-up and operation

We have historically operated and intend to continue to operate our power plants. Our power plants have established management structures based on well-developed management techniques. We select the superintendent for a new power plant from the senior management of our operating plants early in the construction phase of the new plant, invest in the training of operational personnel, adopt management techniques that improve efficiency and structure our plant bonus program to reward efficient and cost-effective operation of the plant in order to ensure the safety, stability and high availability factor of each power plant. Our senior management meets several times a year with the superintendents of the power plants as a group, fostering a team approach to operations, and conducts annual plant performance reviews with the appropriate superintendent, during which opportunities to enhance the power plant's performance and profitability are evaluated.

After a coal-fired generating unit is constructed, the contractor tests its installation and systems. Following such tests, the contractor puts the unit through a continuous 168-hour trial run at full load. After successfully passing the continuous 168-hour test and obtaining approval from the local governments, the unit may commence its commercial operation. Trial run of a wind power project consists of two phases: (i) trial run of single wind power generating unit and (ii) trial run of the entire wind power project as a whole. After successfully passing the trial run, the wind power project may commence its commercial operation.

Development of power plants in Singapore

The Singapore electricity industry had traditionally been vertically integrated and owned by the government. Since 1995, steps have been taken to liberalize the power industry, including the incorporation of the Public Utilities Board ("PUB") in 1995, establishment of Singapore Electricity Pool ("SEP") in 1998, formation of Energy Market Authority ("EMA") in 2001, and the evolvement of the SEP into the New Electricity Market of Singapore ("NEMS") in 2003. The EMA is a statutory body responsible for the economic, technical and competition regulation of the gas and electricity industry in Singapore. In carrying out its functions as the regulator of the power sector, EMA is empowered under the Electricity Act to issue and enforce licenses, codes of practices and

performance standards. Energy Market Company Pte Ltd. (the "EMC") is the market company licensed to operate the wholesale market, or the NEMS.

In Singapore, a company is required to hold a generation license issued by the EMA if it generates electricity by means of one or more generating units with capacity of 10 MW or above. If connected to the power grid, the generating unit(s) must be registered with the EMC and will have to compete with other power generation companies to secure dispatch in the NEMS.

To ensure adequate electricity supply in Singapore, the EMA targets a minimum reserve margin (the excess of generating capacity over peak electricity demand) of 30% based on a loss of load probability (a measure of the probability that a system demand will exceed capacity during a given period, often expressed as the estimated number of days over a year) of three days per year. The 30% required reserve margin is to cater for scheduled maintenance as well as forced outages of generating units in the system. If the reserve margin falls below the required 30% due to demand growth and/or plant retirements, it would be an indication that new generation investments in generation units are needed to maintain system security.

The EMA intends to keep the increase and decrease in generating capacity commercially driven as far as practicable. As a precaution against the risk of insufficient generating capacity in the system, the EMA has planned to put in place a capacity assurance scheme to incentivize new generation planting in case new generating capacity that is required to maintain system security is not forthcoming from the market. EMA has not provided any update on the proposed scheme but given the current oversupply of capacity, it is not anticipated that the scheme will be put into place anytime soon.

By most measures of market power, the Singapore market is highly concentrated, as the three largest power generation companies account for approximately 60% of total power capacity. Since December 2002, EMA has imposed a licensed capacity cap (in MW) on these three power generation companies to prevent them from increasing their market dominance/power. Following a review of the vesting contract regime in 2016, EMA imposed a 25% cap on capacity market share to all generation licensees to prevent structural increases in market concentration/power. With regard to the three largest power generation companies, the cap imposed by EMA is the higher of either the 25% capacity market share cap or their respective licensed capacity cap, until the expiry of their respective generation license. This provides an option for the three largest power generation companies to increase their generation capacities beyond their current generation license up to 25% capacity market share cap.

New entrants as well as existing competitors have invested in new generating capacity or repowering of existing plants to take advantage of the LNG Vesting Scheme. This will impact the market negatively as these new capacities compete for market share as well as to avoid the gas take-or-pay penalties arising out of an oversupplied market.

EMA issued a Singapore Electricity Market Outlook (SEMO) 2018, which provides a long-term outlook of the energy market, such as the projected supply and demand conditions to facilitate power generation investment decisions. Based on the data provided by EMA, annual system demand and system peak demand are projected to grow at a CAGR of 1.4 – 2.0% over the next 10 years (2019 to 2029), while a net reduction of about 1,300 MW of generation capacity is projected over the next 4 years (2019 to 2022).

We are in the process of developing the Tembusu Multi-Utilities Complex (the "TMUC") in Singapore. The TMUC is expected to consist of a co-generation plant, a desalination plant and a wastewater treatment facility, with a total installed capacity of 165 MW. The complex will be developed in multiple phases in order to meet customers' demand. Phase 1 consists of 1 x 450 t/h coal-biomass co-fired circulated fluidized bed boiler, 2 x 200 t/h diesel/natural gas-fired boilers and 1 x 101MW steam turbine-generator, and other components of the plant. Phase 2A consists of 1 x 450 t/h coal-biomass co-fired circulated fluidized bed boiler, 1 x 200 t/h diesel/natural gas-fired boiler and 1 x 32MW steam turbine-generator, and other components of the plant. Phase 1 and Phase IIA commenced commercial operations in March 2013 and June 2014 respectively. The first train of 62.5 m³/h wastewater treatment facility commenced commercial operation in September 2015. TPL owns 100% equity interest in this project.

TPL collaborated with ST Marine Pte. Ltd. (ST Marine), an affiliate of Singapore Temasek Holdings, to participate in the tender for Singapore's Public Utilities Board (PUB)'s fifth desalination plant project under a

Develop-Build-Own-Operate (BDOO) scheme on July 6, 2017. The capacity of the desalination plant is 30 MIGD (137,000 cubic meter per day). The desalination plant is located at Tembusu Jurong Island, adjacent to TMUC in order to achieve synergy. TPL and ST Marine incorporated a concession company, TP-STM Water Resources Pte. Ltd. (TP-STM Water Resources), on November 1, 2017 and executed the Water Purchase Agreement (WPA) with PUB on November 6, 2017. TPL owns 60% equity interests in TP-STM Water Resources. The construction of the desalination plant commenced in August 2018. The project commercial operation date (PCOD) is scheduled for June 2020. The term of concession is 25 years from the PCOD.

Pricing policy

Pricing policy in China

Prior to April 2001, the on-grid tariffs for our planned output were designed to enable us to recover all operating and debt servicing costs and to earn a fixed rate of return. Since April 2001, however, the PRC Government has gradually implemented a new on-grid tariff-setting mechanism based on the operating terms of power plants as well as the average costs of comparable power plants.

On July 3, 2003, the State Council approved the tariff reform plan and made it clear that the long-term objective of the reform is to establish a standardized and transparent tariff-setting mechanism.

Pursuant to the NDRC circular issued in June 2004, on-grid tariffs for newly built power generating units commencing operation from June 2004 should be set on the basis of the average cost of comparable units adding tax and reasonable return in the regional grid. It provides challenges and incentives for power generation companies to control costs for building new generating units.

On March 28, 2005, the NDRC issued the Interim Measures on Regulation of On-grid Tariff, the Interim Measures on Regulation of Transmission and Distribution Tariff, and the Interim Measures on Regulation of End-user Tariff, or collectively the "Interim Measures," to provide guidance for the reform of tariff-setting mechanism in the transition period. Under the Interim Measures, the tariff is classified into on-grid tariff, transmission and distribution tariff and end-user tariff. Transmission and distribution tariff will be instituted by the government. The end-user tariff will be based on on-grid tariff and transmission and distribution tariff. The government is responsible for regulating and supervising power tariffs based on the principles of promoting efficiency, encouraging investment and improving affordability.

In December 2004, the NDRC proposed and the State Council approved the establishment of a linkage mechanism between coal and power prices, pursuant to which, the NDRC may adjust power tariffs if the change of the average coal price reaches 5% within a period of six months compared with the preceding same period. The change in a period, if less than 5%, will be carried forward to the future periods until the accumulated amounts reach 5%. With a goal to encourage power generation companies to reduce cost and improve efficiency, only around 70% of coal price increases will be allowed to pass to end-users through an increase of power tariffs, and power generation companies will bear the remaining 30%. In May 2005, the NDRC activated the coal-electricity price linkage mechanism for the first time to increase on-grid tariffs and end-user tariffs in the northeastern region, central region, eastern region, northwestern region and southern region. We accordingly increased the on-grid tariffs of our power plants in the northeastern region, central region, eastern region and northwestern region on May 1, 2005 and in the southern region on July 15, 2005. In June 2006, the coal-electricity price linkage mechanism was reactivated by the NDRC to increase on-grid tariffs and end-user tariffs in the northeastern region, central region, eastern region, northwestern region and southern region. We accordingly increased the on-grid tariffs of most of our power plants in the same regions on June 30, 2006.

In May 2007, NDRC and the State Environment Protection Administration jointly promulgated Interim Administrative Measures on Electricity Price of Coal-fired Generating Units installed with Desulphurization Facilities and the Operations of Such Facilities, which provided that a premium for desulphurization may be charged on the price of the electricity generated by generating units installed with desulphurization facilities on and from the date on which such desulphurization facilities are tested and accepted by a relevant environment protection regulator. Such pricing policy is also applicable to the old generating units which are installed with desulphurization facilities. The new measures are more stringent on the regulation of the coal-fired power plants with desulphurization facilities, setting forth the categories under which the price including a desulphurization premium will be offset or otherwise

penalized based on the ratio of utilization of the relevant desulphurization facilities on an annual basis. As of December 31, 2013, all of our existing coal-fired generating units have installed and operated the desulphurization facilities and enjoyed the desulphurization premium.

In June 2008, NDRC issued Notice of Raising the Power Tariff, pursuant to which, the power tariff in provincial grids nationwide was increased by an average of RMB0.025 per kWh. In August 2008, NDRC issued Notice of Raising the On-grid Tariffs of the Thermal Power Plants, pursuant to which, the on-grid tariff of thermal power plants, including plants fueled by coal, oil, gas and co-generation, was increased by an average of RMB0.02 per kWh.

On February 25, 2009, NDRC, SERC and China National Energy Administration jointly promulgated the Notice regarding Cleaning up the Concessional Tariff Scheme, pursuant to which, (i) the concessional tariff scheme at the local level is banned, and (ii) certain measures, such as direct purchase by large end-users and adopting peak and off-peak power pricing policy, will be carried out to reduce enterprises' power cost. In addition, the notice emphasizes the supervision and inspection over the setting of power tariffs. For wind power plants located in a specific wind source area, a unified wind power tariff shall be applied. On October 11, 2009, in order to promote a fair market condition and the optimization of electric power resources, NDRC, SERC and China National Energy Administration jointly promulgated the Circular on Regulating the Administration of Electric Power Transaction Tariff to regulate the tariff-setting mechanism for the on-grid tariff, transmission and distribution tariff and end-user tariff and clean up the local preferential power tariffs provided to high energy consumption companies. Pursuant to a notice issued by NDRC, with effect from November 20, 2009, certain adjustments on the on-grid tariffs have been made in various regions of China in order to resolve the inconsistencies in tariffs, rationalize the tariff structure and promote the development of renewable energy.

In 2010, the PRC Government started to implement the direct power purchase policy. As of December 31, 2013, some of the provinces where we operate power plants are approved by the NDRC to implement the direct power purchase by large power end-users. In addition, during 2010 SERC issued several circulars and notices to regulate the trans-provincial and interregional transaction of power and/or power generation right, in which the power purchase price shall be freely determined by negotiation through the market pricing mechanism. In December 2012, SERC issued another circular to further regulate the trans-provincial and interregional transaction of power and/or power generation right.

In May 2011, NDRC issued a notice, increasing the on-grid tariffs of thermal power plants to partially compensate the increased costs incurred by thermal power plants resulting from increases in coal prices. Different adjustments on tariffs were made in different provinces. In November 2011, PRC Government made further nationwide adjustments on power tariffs, including an average of RMB0.026 per kWh increase in on-grid tariff for thermal power plants. In December 2012, NDRC issued a notice, which provided that, from January 1, 2013, NDRC would provide an RMB0.008 per kWh denitrification premium for all coal-fired generating units equipped with denitrification facilities that are inspected and accepted by authorized national or provincial authority.

In March 2012, the PRC Government issued a notice, which mandated the confirmation method for the power generation projects, subsidy standards and fund appropriation standards relating to the application for a subsidy for renewable energy power price of power generation projects. In December 2012, the PRC Government issued the Notice on the Guidelines of Enhancing the Reform of Marketization of Coal Used for Power Generation to further reform the coal pricing mechanism. Effective January 1, 2013, all key coal purchase contracts between power generation companies and coal suppliers were terminated and contracts are directly negotiated between power generation companies and coal suppliers without the interference of local governments. According to the notice, the NDRC will no longer issue inter-provincial guidance on the railway transportation capacity plan. In addition, the dual-track coal pricing system, which included the government regulated mandatory annual contract pricing and spot market prices for the remaining coal production output of each coal supplier, was abolished due to the narrowing gap between the government regulated coal contract price and the spot market price. Pursuant to the notice, future coal contract prices will be determined by the market and freely negotiated between power generation companies and coal suppliers. Furthermore, the coal-electricity price linkage mechanism will continue to be implemented and constantly improved. Once the coal price fluctuates for more than 5% on an annual basis, the on-grid tariff would be adjusted accordingly. The notice also mandates that power generation companies absorb 10% of the coal price fluctuations as compared to 30% prior to 2013. Given the narrow gap between the key contract coal price and the spot market price, the overall on-grid tariff was not adjusted.

In September 2013, NDRC issued the Notice on the Adjustment of Power Tariff for Power Generation Companies and Related Matters, pursuant to which the on-grid tariffs for coal-fired generating units were lowered, by a national average of RMB0.013 per kWh, and the on-grid tariff for gas turbine power plants was slightly increased. The Notice also increased the power tariff for power-generating companies that are equipped with denitrification facilities and dust-removal facilities.

In March 2014, the NDRC and the Ministry of Environmental Protection jointly issued the Measures to Monitor the Operation of Environmental Protection Tariffs and Facilities Regarding Coal-fired Generating Units, under which the standard on-grid electricity tariff incorporating environmental protection element will no longer be applicable to coal-fired generating units unless the coal-fired power generating enterprise has completed renovation for environmental protection acceptable after testing. In August 2014, the NDRC issued the Notice to Further Resolve Conflicts Regarding Environmental Protection Tariff, under which the standard on-grid tariff for coal-fired power generating units is lowered with the view to resolve the environmental protection tariffs conflicts such as denitrification and dedusting of coal-fired power generation enterprises, and setting the tariff subsidy for denitrification and dedusting at RMB0.01/kWh and RMB0.002/kWh, respectively. In December 2014, the NDRC issued the Notice Regarding Adjusting Standard On-grid Tariff for Onshore Wind Powers, under which the standard on-grid tariff for each of Class I, Class II and Class III wind powers is lowered by RMB0.02, and the tariff for Class IV wind power remains unchanged at RMB0.61/kWh. In December 2014, the NDRC issued the Notice Regarding Certain issues of On-grid Tariff of Natural Gas Powers, defining the principles to formulate and modify the tariff of electricity generated by natural gas, aiming to regulate on-grid tariff administration and used facilitate healthy and orderly growth of natural gas power generating sector in China.

In April 2015, the NDRC issued the Notice on Reducing On-grid Tariff for Coal-fired Power and Commercial and Industrial Power Tariff in order to guide on tariffs for natural gas and for companies that utilize denitration or dedusting techniques or with extremely low emissions, to lower commercial and industrial power tariff, and to moderately lower on-grid tariff for coal-fired power, the power tariff in provincial grids nationwide was decreased by an average of RMB0.02 per kWh.

In December 2015, the NDRC issued the Notice on Issues of Perfecting the Mechanism of Coal-electricity Price Linkage, confirming the annual cycle of the mechanism, the NDRC's leading role in implementing the mechanism, and provinces and cities' executor role in implementing the mechanism. The coal-electricity prices with which the mechanism of coal-electricity price linkage is in line are indexed to the national thermal coal price index. The benchmark coal price is the provincial average price in China's thermal coal price index of 2014. And the benchmark tariff is in principle the on-grid tariff in line with the benchmark coal price. In December 2015, the NDRC also issued the Notice on Improving On-grid Tariff Policy for Wind Power and Photovoltaic Power, which established a policy that the benchmark on-grid tariffs for wind power and photovoltaic power decrease in line with the development of these two types of power plants. To further indicate the investment expectation, the Notice confirmed the benchmark on-grid tariffs for wind power of 2016 and 2018. The 2016 benchmark on-grid tariff for photovoltaic power has been confirmed, yet that of 2017 and onward will be confirmed at a later stage.

On January 1, 2016, after the annual review based on the calculations prescribed in the mechanism of coal-electricity price linkage, the NDRC adjusted on-grid tariff for coal-fired power and commercial and industrial power tariff. National on-grid tariffs for coal power decreased by an average of RMB0.03 per kWh, based on the relevant regulations, RMB0.01 per kWh of which shall be contributed to a specialized corporate restructuring fund with the purpose of supporting placement of personnel laid off during the supply-side reform. The NDRC also increased on-grid tariff for renewable power by RMB0.004 per kWh in order to replenish the renewable energy fund and to support emission reduction efforts of coal-fired power generation enterprises and to resolve conflicts regarding environmental protection tariffs.

In December 2016, in order to implement General Office of the State Council's Energy Development Strategic Action Plan (2014-2020) about achieving equal on-grid tariff for wind and solar power with coal power to encourage the orderly development of wind and solar power by properly guiding investments in these areas, the NDRC issued the Announcement on the Adjustment of Standard On-Grid Tariff for Solar and Onshore Wind Power. From January 1, 2017, standard on-grid tariffs for Class I, Class II and Class III solar powers were adjusted to RMB0.65 per kWh, RMB0.75 per kWh and RMB0.85 per kWh, respectively, which is RMB0.15 per kWh, RMB0.13 per kWh and RMB0.13 per kWh lower than the corresponding tariff in 2016. Such standard on-grid tariff will be adjusted annually. 2018 standard on-grid tariff for Class I, Class II and Class III onshore wind power

decreased by RMB0.04 per kWh, RMB0.02 per kWh, RMB0.01 per kWh, respectively. Yunnan Province has been recategorized as Class II from Class IV, which meant the standard on-grid tariff for wind power generated in Yunnan province will decrease by an additional RMB0.12 per kWh.

In June 2017, NDRC issued Circular on Canceling or Reducing Governmental Funds and Additional Charges and Reasonably Adjusting On-Grid Tariff Structure, which cancels the special fund for industrial restructuring charged to the power generating enterprises and reduces major water conservancy project construction fund and large and medium-sized reservoir resettlement support fund by 25% to relieve power generation enterprises from its difficulties in daily operations.

In December 2017, NDRC issued Circular on the Pricing Policy of Photovoltaic Projects in 2018, From January 1, 2018, standard on-grid tariffs for Class I, Class II and Class III solar powers were adjusted to RMB0.55 per kWh, RMB0.65 per kWh and RMB0.75 per kWh, respectively (tax included). All distributed photovoltaic projects commencing operation after January 1, 2018, adopting "Self Generate, Self Consume, with Spare Power Put On-grid" model, shall apply a subsidy of RMB0.37 per kWh. All distributed photovoltaic projects adopting "All Power Put On-grid" model shall apply the price set by the region they locate at.

In May 2018, the NDRC, NEA and MOF issued Circular on the Issues related to Photovoltaic Projects in 2018, reducing the standard on-grid tariffs by RMB0.05 for each of Class I, Class II and Class III solar powers. All distributed photovoltaic projects commencing operation after the issuance of the circular, adopting "Self Generate, Self Consume, with Spare Power Put On-grid" model, shall apply a subsidy of RMB0.32 per kWh. All distributed photovoltaic projects adopting "All Power Put On-grid" model shall apply the price set by the region they locate at. In June 2018, the NDRC, NEA and MOF issued the Notice on Releasing the Catalogue of Additional Subsidies for Renewable Energy Tariff (the Seventh Group), which provides that on-grid renewable energy projects incorporated in the catalogue shall not receive the subsidy from the fund of additional subsidies for renewable energy tariff.

Pricing Policy in Singapore

Pricing Policy of Electricity in Singapore

All licensed power plants in Singapore sell their plant output into the NEMS under a half-hourly competitive bidding process, during which a clearing price is determined based on the projected system demand. All successful bids/power plants that are cleared in each half hour will be dispatched automatically by control signals from the Power System Operator, a division of the EMA, and in turn will receive the cleared price as determined earlier. The cleared price paid to the power plants is the nodal price at their point of injection, and the Market Clearing Engine, the computer software that creates dispatch schedules and determines market clearing prices, automatically produces a different price at each node on the network. A Demand Response scheme is being introduced where demand could be curtailed in response to high prices in return for a share of the total savings arising out of lower prices as a result of demand being reduced.

As there is no certainty in the price or the dispatch levels for any power plants, operators of power plants may enter into short- or long-term financial arrangements with other counterparties or their own subsidiary company involved in the electricity retail market (to end consumers of electricity) to secure stability in their revenue stream and manage the commercial risks associated with operations in a competitive market.

In addition, the major power generation companies, including Tuas Power, are obliged to hold vesting contracts. Vesting contracts are a form of the bilateral contract imposed/vested on the generation companies who had been licensed by the EMA before the establishment of NEMS. Market Support Services Licensee is the counterparty to all of the vesting contracts, and the vesting contracts are settled between the parties through the EMC's settlement system. The quantity of vesting contract allocated to the power generation company depends on the proportion of such power generation company's capacity to the total licensed or planned generation capacity at the commencement of the vesting contract regime. Vesting contract price is set by the EMA at the long-run marginal cost and is adjusted by the EMA on a periodic basis for changes in the long-run marginal cost and on a quarterly basis for inflation and changes in fuel prices and electricity demand. Such mechanism helps protect the profit margins of the power generation companies in the Singapore market. The contract quantity and price are currently recalculated every three months. Following the review of vesting contract regime by EMA in 2016, it is determined that the vesting contract level will maintain at 25% until the end of first half of 2018 and reduce to LNG vesting

level by the second half of 2019. The vesting contract regime will be phased out by 2023 when the LNG vesting contracts expire. There will be increased exposure to pool prices which are volatile in nature. The authority has introduced a demand response scheme where loads can choose to participate in peak load shaving and share in part of the consumer surplus and an Electricity Futures Market which attracts independent retailers to enter the Singapore market. We continue to monitor closely and evaluate the impact of such markets on our business.

The gross pool design adopted in NEMS means all quantity sold by retailers to consumers has to be in turn purchased from the pool. The retailers pay for their electricity purchases at the Uniform Singapore Energy Price, which is a weighted average of nodal prices and is determined on a half-hourly basis in the NEMS.

Pricing Policy of Utilities in Singapore

Utilities supply to industrial customers is based on long-term contracts. The pricing of utilities has both fixed and variable components.

Power sales

Each of our power plants has entered into a written agreement with the local grid companies for the sales of its planned power output. Generally, the agreement has a fixed term of one year and provides that the annual utilization hours of the power plant will be determined with reference to the average annual utilization hours of the similar generating units connected to the same grid.

In 2003, SERC and the State Administration of Commerce and Industry jointly promulgated a model contract form (the "Model Contract Form") for use by power grid companies and power generation companies in connection with electricity sale and purchase transactions. The Model Contract Form contains provisions on the parties' rights and obligations, amount of electricity subject to purchase, payment method and liabilities for breach of contract, etc. We believe that the publication of the Model Contract Form has facilitated the negotiation and execution of electricity purchase contracts between power grid companies and power generation companies in a fair, transparent and efficient manner. In 2016, a majority of the agreements entered into between our power plants and the local grid companies were based on the Model Contract Form. In 2018, our power plants, large power end-users and electric power companies/grid companies started to sign tripartite contracts.

From 2015, several rules have been issued to implement the plan for power market reform, including Regulation on Market Access and Exit of Electric Power Company, Several Opinions on Further Deepening the Reform of the Electric Power System, Regulations on Orderly Opening Up Electricity Distribution Business, Basic Rules for Mid- to Long- Term Electricity Trade (Interim), Circulate on Orderly Opening Up Power Generation and Consumption Plans, Response regarding Approving Regulation on Pilot Inter-Region Incremental Renewable Energy Power Trade (Interim), Circular on Establishment of Pilot Electricity Power Stock Exchange, Notice on Actively Promoting Market-oriented Power Exchange and Further Improving the Trading Mechanism, and Implementing Rules on Allocating the Distribution Region of the Incremental Distribution Business, etc. to further the reform of electricity market and the establishment of the electricity exchange.

Starting from 2016, two nationwide and 33 provincial level electricity exchanges have been established, and we have invested in the electricity exchanges established in Chongqing, Shanxi and Hubei, holding 3%, 5% and 5% equity interests, respectively. In 2018, the NDRC and NEA issued Circular on Promoting the Standardization of the Power Exchanges, which provides the power exchanges shall pursue the variety of shareholders and demands a non-grid capital involvement of more than 20%. More than 20 market administration committees have been established, and we have participated in the market administration committees established in areas such as Beijing, Guangzhou, Jiangsu, Shanxi, Liaoning, Shanghai, Henan, Hubei, Chongqing, Jilin and Shandong.

At the end of 2018, all municipalities, autonomous regions and provinces, except for Tibet, have finished their approval of electricity distribution price. We have established 20 provincial level energy sales companies and 13 municipal level energy sales companies, taking a meaningful market share.

In 2018, all municipalities, autonomous regions and provinces, except for Tibet, have developed direct purchase programs. The national volume of electricity sold in 2018 via the direct purchase programs was approximately 1,400 billion kWh, which represented a huge increase from 2017. Most of the sale was negotiated

between power producers and large end users, with a minority completed through the competitive bidding process or listed transactions. We participated in direct purchase programs in all regions where we have control over power plants, other than Hainan, and obtained market shares similar to our capacity shares.

In general, establishing liberalized power markets represents the general trend in China's power market reform, which is conducive to creating a competitive environment that is fair, transparent and equitable.

Power sales in Singapore

According to EMC, the total registered capacity in commercial operation for 2018 in Singapore was 13,554 MW, of which 10,512 MW belonged to CCGT/Cogen/Trigen facilities. In 2018, the peak demand for electricity was 7,071 MW against 2017's 6,967 MW. The power market in Singapore is competitive, and power generation companies compete to sell their power output into NEMS through a bidding process with hedging via vesting contracts and retail sales. For the year ended December 31, 2018, power sold through vesting contracts represented

approximately 22.5% of total system demand. The existing Vesting Contract Scheme will drop to LNG vesting level in second half of 2019. The decrease in allocated vesting contract volumes will have to be made up through increased retail sales or increased exposure to pool prices which are volatile in nature.

The volatility in the sales price of the revenue associated with the sale of electricity in the NEMS is effectively managed via vesting contracts and direct retail sales which is carried out through a Tuas Power's subsidiary. The effective tariffs Tuas Power received for its electricity output are thus largely dependent on the vesting contract prices and volumes as well as prices secured under retail sales. The EMA has launched the Open Electricity Market (previously known as Full Retail Contestability) in April 2018 progressively based on geographical zones and the nationwide launch of the Open Electricity Market is expected to complete by May 2019.

Utility sales in Singapore

In 2018, TMUC sold 2,385,087 MT of steam to customers, a decrease of 7.5% as compared to 2,579,205 MT in 2017.

Fuel supply arrangements

The majority of our power plants in capacity are thermal plants, which are fueled by coal, gas and oil.

Coal

Our coal supply for our coal-fired power plants is mainly obtained from numerous coal producers in Shanxi Province, Inner Mongolia Autonomous Region and Gansu Province. We also obtain coal from overseas suppliers.

In 2016, we purchased 132 million tons of coal and consumed 132 million tons of coal. Of our total coal purchases, 39% was purchased under annual contracting arrangements and the remainder was purchased on the open market. The coal purchase price for our Company, including transportation costs and miscellaneous expenses, averaged approximately RMB423.16 per ton in 2016, representing an increase of 3.54% compared to 2015. Our average unit fuel cost in 2016 decreased by 1.76% from that in 2015.

In 2017, we purchased 168 million tons of coal and consumed 172 million tons of coal. Of our total coal purchases, 64% was purchased under annual contracting arrangements and the remainder was purchased on the open market. The coal purchase price for our Company, including transportation costs and miscellaneous expenses, averaged approximately RMB547.72 per ton in 2017, representing an increase of 29.4% compared to 2016. Our average unit fuel cost in 2017 increased by 32.41% from that in 2016.

In 2018, we purchased 196 million tons of coal and consumed 187 million tons of coal. Of our total coal purchases, 55% was purchased under annual contracting arrangements and the remainder was purchased on the open market. The coal purchase price for our Company, including transportation costs and miscellaneous expenses, averaged approximately RMB551.35 per ton in 2018, representing an increase of 0.66% compared to 2017. Our average unit fuel cost in 2018 increased by 4.85% from that in 2017.

Singapore's Tuas Power used coal as primary fuel for its TMUC's cogeneration plants. Coal is procured from coal producers in Indonesia via two long-term coal supply contracts with 10 year and 15-year terms respectively, and short-term contracts. The prices are indexed to the Global Coal Newcastle Index and HBA (Coal Reference Price which is regulated by Indonesia Government) Index. In 2018, Tuas Power purchased an incremental amount of coal in the open market.

Gas

Currently, the Company has 11 Combined Cycle Gas Turbine Power Plants ("CCGT") in China, including:

●

Huaneng Shanghai Combined Cycle Gas Turbine Power Plant ("Shanghai CCGT") with gas supply transported through the pipeline of "West-East Gas Transport Project";

●

Huaneng Jiangsu Jinling Combined Cycle Gas Turbine Power Plant ("Jinling CCGT") with gas supply transported through the pipeline of "West-East Gas Transport Project";

●

Huaneng Beijing Co-generation CCGT Power Plant ("Beijing Co-generation CCGT") with gas supply transported through Shaanxi-Beijing Pipeline;

●

Huaneng Zhejiang Tongxiang Combined Cycle Gas Turbine Power Plant ("Tongxiang CCGT"), with gas supply transported through the pipeline of "West-East Gas Transport Project";

●

Huaneng Chongqing Liangjiang Combined Cycle Gas Turbine Power Plant ("Liangjiang CCGT") with gas supply transported through the pipeline of "West-East Gas Transport Project";

●

Huaneng Tianjin Lingang Combined Cycle Gas Turbine Co-generation Power Plant ("Lingang CCGT Co-generation") with gas supply by CNOOC Tianjin Trading Branch and Petro China Tianjin Trading Branch;

●

Huaneng Shanxi Dongshan Combined Cycle Gas Turbine Power Plant ("Dongshan CCGT") with gas supply transported through Shaanxi-Beijing Pipeline II;

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Huaneng Hainan Nanshan Combined Cycle Gas Turbine Power Plant ("Nanshan CCGT") with gas supply by CNOOC Hainan Branch;

●

Huaneng Zhongyuan Combined Cycle Gas Turbine Power Plant ("Zhongyuan CCGT") with gas supply transported through the pipeline of "West-East Gas Transport Project";

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Huaneng Jiangsu Suzhou Combined Cycle Gas Turbine Co-generation Power Plant ("Suzhou CCGT Co-generation ") with gas supply transported through the pipeline of "West-East Gas Transport Project"; and

●

Huaneng Guangxi Guilin Distributed Energy Project ("Guilin Distributed Energy") with gas supply by Petro China Nanning Branch.

In addition, Tuas Power in Singapore has five gas-fired combined cycle generating units and three gas-fired backup boilers. The piped gas for Tuas Power is provided by Pavilion Gas Pte Ltd and Sembcorp Gas Pte Ltd., whereas LNG is provided by Shell Gas Marketing Pte Ltd (formally known as BG Singapore Gas Marketing Pte Ltd).

Oil

Tuas Power maintains operation of one 600 MW oil-fired steam generating unit. The oil supply for Tuas Power is purchased from the open market. With the increased competition from new gas-fired CCPs, fuel oil consumption is expected to be marginal at best and therefore future purchases, if any, will be on a spot basis. Diesel, as backup fuel for oil-fired units, is also purchased on a spot basis.

Repairs and maintenance

Each of our power plants shall conduct repairs and maintenance as per the repairs and maintenance plan issued by the regional grid company. The daily repairs and maintenance procedure of generating units shall comply with the relevant rules and technical specifications of the Company.

We arrange our annual repairs and maintenance plan based on the operating status and equivalent operating hours (“EOH”) of generating units:

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for imported units of and above 300MW, and domestically-built units of and above 600MW, we arrange an A-grade repairs and maintenance after 60,000 EOH, after which, we arrange a B-grade repairs and maintenance after 30,000 EOH each;

●

for domestically-built units below 600MW, we arrange an A-grade repairs and maintenance after 40,000 EOH, after which we arrange a B-grade repairs and maintenance after 20,000 EOH each, provided, that a C-grade repairs and maintenance shall be conducted after 10,000 EOH or 18 months, whichever is longer;

●

for all units not scheduled for any A-grade, B-grade or C-grade repairs and maintenance within a calendar year, a D-grade repairs and maintenance shall be arranged;

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for all high backpressure heating units and circulating fluidized bed boilers, we arrange a separate D-grade repairs and maintenance each calendar year;

●

in principle, we arrange no C-grade or above repairs and maintenance for units newly put into operations, but only one D-grade repairs and maintenance for every two units; and

●

for CCGT units, we arrange repairs and maintenance pursuant to the long-term servicing agreement.

C.	Organizational structure

We are 32.28% owned by HIPDC, which in turn is a subsidiary of Huaneng Group. Huaneng Group was established in 1988 with the approval of the State Council. Huaneng Group also holds a 13.39% equity interest in us in addition to HIPDC's ownership. In 2002, Huaneng Group was restructured as one of the five independent power generation group companies to take over the power generation assets originally belonging to the State Power Corporation of China. Huaneng Group has a registered capital of RMB20 billion and is controlled and managed by the central government. Huaneng Group is principally engaged in the development, investment, construction, operation and management of power plants; organizing the generation and sale of power (and heat); and the development, investment, construction, production and sale of products in relation to energy, transportation, new energy and environmental protection industries.

HIPDC was established in 1985 as a joint venture controlled by Huaneng Group. HIPDC is engaged in developing, investing, operating and constructing power plants in China. Some of the power plants currently owned and operated by us were originally built and later transferred to us by HIPDC. Both Huaneng Group and HIPDC have agreed to give us preferential rights in the power development business and power assets transfers. See "Item 7.A. Major shareholders" for details.

The following organizational chart sets forth the organizational structure of HIPDC and us as of March 31, 2019:

2019:

_____________________________

Notes:

Huaneng Group indirectly holds 100% equity interests in Pro-Power Investment Limited through its wholly owned subsidiary, China Hua Neng Hong Kong Company Limited, and Pro-Power Investment Limited in turn holds 25% equity interests in HIPDC. As a result, Huaneng Group beneficially holds 100% of equity interests in HIPDC.

Of the 13.39% equity interest, 9.91% was directly held by Huaneng Group, 3.01% was held by Huaneng Group through its wholly owned subsidiary, China Hua Neng Hong Kong Company Limited, and the remaining approximately 0.47% was held by Huaneng Group through its subsidiary, China Huaneng Finance Corporation Limited.

For a detailed discussion of the Company's subsidiaries, see Note 9 to the Financial Statements.

D.	Property, plants and equipment

The following table presents certain summary information on our power plants as of December 31, 2018.

Plant or Expansion	Actual In- service Date	Current Installed Capacity	Owner- ship	Attributable Capacity	Type of Fuel
(Names as defined below)		(MW)	%	MW

Heilongjiang Province
Xinhua Power Plant	Unit I: Sep. 1979	1 x 200	70%	140	Coal
	Unit II: Sep. 2005	1 x 330	70%	231
Hegang Power Plant	Unit I: Nov. 1998	1x 300	64%	192	Coal
	Unit II: Nov. 1999	1x 300	64%	192
	Unit III: Apr. 2007	1 x 600	64%	384
Daqing Co-generation	Unit I: Jun. 2013	1 x 350	100%	350	Coal
	Unit II: Aug. 2013	1 x 350	100%	350
Yichun Co-generation	Unit I: Sep. 2015	1 x 350	100%	350	Coal
	Unit II: Dec. 2015	1 x 350	100%	350
Sanjiangkou Wind Power	66 turbines: Feb. 2010	99	82.85%	82	Wind
Linjiang Jiangsheng Wind Power	66 turbines: Oct. 2015	99	82.85%	82	Wind
Daqing Heping Aobao Wind Power	32 turbines: Dec. 2011	96	100%	96	Wind
	32 turbines: May 2012	96	100%	96
	32 turbines: Dec. 2013	96	100%	48
Zhaodong Dechang Photovoltaic	Dec. 2017	20	100%	20	Solar
Shuangyu Photovoltaic
Shuangyu Photovoltaic	Jul. 2018	20	100%	20	Solar
Xinhua Photovoltaic	Jun. 2018	20	100%	20	Solar
Donghai Photovoltaic	Jul. 2018	20	100%	20	Solar

Jilin Province
Jiutai Power Plant	Unit I: Oct. 2009	1 x 670	100%	670	Coal
	Unit II: Dec. 2009	1 x 670	100%	670
Changchun Co-generation	Unit I: Dec. 2009	1 x 350	100%	350	Coal
	Unit II: Apr. 2010	1 x 350	100%	350
Nongan Biomass	Dec. 2011	1 x 25	100%	25	Biomass
Linjiang Jubao Hydropower	Sep. 2004	2 x 10	100%	20	Solar
Zhenlai Wind Power	33 turbines: Jun. 2009	49.5	100%	49.5	Wind
	33 turbines: Dec. 2011	49.5	100%	49.5

Plant or Expansion	Actual In- service Date	Current Installed Capacity	Owner- ship	Attributable Capacity	Type of Fuel
(Names as defined below)		(MW)	%	MW
Siping Wind Power	50 turbines: Oct. 2010	75	100%	75	Wind
	25 turbines: Nov. 2010	50	100%	50
	50 turbines: Dec. 2010	75	100%	75
Tongyu Tuanjie Wind Power	74 turbines: Dec. 2015	148	100%	148	Wind
Linjiang Jubao Photovoltaic	Jun. 2017	15	100%	15	Solar
Zhenlai Photovoltaic	Jun. 2018	20	50%	10	Solar

Liaoning Province
Dalian Power Plan
Phase I	Unit I: Sep. 1988	2 x 350	100%	700	Coal
	Unit II: Dec. 1988
Phase II	Unit III: Jan. 1999	2 x 350	100%	700	Coal
	Unit IV: Jan. 1999
Dandong Power Plant	Unit I: Jan. 1999	2 x 350	100%	700	Coal
	Unit II: Jan. 1999
Yingkou Power Plant
Phase I	Unit I: Jan. 1996	2 x 320	100%	640	Coal
	Unit II: Dec. 1996
Phase II	Unit III: Aug. 2007	2 x 600	100%	1,200	Coal
	Unit IV: Oct. 2007
Yingkou Co-generation	Unit I: Dec. 2009	2 x 330	100%	660	Coal
	Unit II: Dec. 2009
Wafangdian Wind Power	24 turbines: Jun. 2011	48	100%	48	Wind
Changtu Wind Power	33 turbines: Nov. 2012	97.5	100%	97.5	Wind
	24 turbines: Oct. 2014
Suzihe Hydropower	2012	3 x 12.5	100%	37.5	Hydro
Dandong Photovoltaic	May. 2016	10	100%	10	Solar
Yingkou Co-generation Photovoltaic	Jun. 2016	10	100%	10	Solar
Xianrendao Co-generation	Mar. 2017	1 x 50	100%	50	Coal
Yingkou Xianrendao Co-generation Power	Mar. 2017	2*50	100%	100	Coal
Jianchang Bashihan Photovoltaic
Phase I	Aug. 2017	22.03	100%	22.03	Solar
Phase II	Aug. 2017	22.03	100%	22.03	Solar
Xiao Deyingzi Photovoltaic	Aug. 2017	15.56	100%	15.56	Solar
Chaoyang Heiniuyingzi Photovoltaic	Aug. 2017	18.79	100%	18.79	Solar

Inner Mongolia Autonomous Region
Huade Wind Power
Phase I	33 turbines: Dec. 2009	49.5	100%	49.5	Wind
Phase II	33 turbines: Jun. 2011	49.5	100%	49.5	Wind

Hebei Province
Shang' an Power Plant	Unit I: Aug. 1990	2 x 350	100%	700	Coal
Phase I	Unit II: Dec. 1990
Phase II	Unit III: Oct. 1997	2 x 330	100%	660	Coal
	Unit IV: Oct. 1997
Phase III	Unit V: Jul. 2008	2 x 600	100%	1,200	Coal
	Unit VI: Aug. 2008

Plant or Expansion	Actual In- service Date	Current Installed Capacity	Owner- ship	Attributable Capacity	Type of Fuel
(Names as defined below)		(MW)	%	MW
Kangbao Wind Power
Phase I	33 turbines: Jan. 2011	49.5	100%	49.5	Wind
Kangbao Xitan Photovoltaic	Jun. 2016	20	100%	20	Solar
Zhuolu Dabao Wind Power	24 turbines: Mar. 2017	48	100%	48	Wind
Shang'an Dianchanghuichang Photovoltaic	Dec. 2017	17	100%	17	Solar

Gansu Province
Pingliang Power Plant
Phase I	Unit I: Sep. 2000	3 x 325	65%	633.75	Coal
	Unit II: Jun. 2001
	Unit III: Jun. 2003
	Unit IV: Nov. 2003	1 x 330	65%	214.5	Coal
	Unit V: Feb. 2010	2 x 600	65%	780	Coal
	Unit VI: March 2010
Jiuquan Wind Power	259 turbines: Dec. 2011	401	100%	401	Wind
Jiuquan II Wind Power	100 turbines: Dec. 2014	200	100%	200	Wind
	100 turbines: Jun. 2015	200	100%	200	Wind
Yumen Wind Power	24 turbines: Jun. 2015	48	100%	48	Wind
	67 turbines: Jun. 2015	100.5	100%	100.5	Wind
Yigang Wind Power	96 turbines: Dec. 2015	192	100%	192	Wind

Ningxia Autonomous Region
Ruyi Helan Rooftop Photovoltaic	Jun. 2017	19.8	40%	7.92	Solar

Beijing Municipality
Beijing Co-generation
Phase I	Unit I: Jan. 1998	2 x 165	41%	135.3	Coal
	Unit II: Jan. 1998
	Unit III: Dec. 1998	2 x 220	41%	180.4	Coal
	Unit IV: Jun. 1999
	Unit V: Apr. 2004	1 x 75	41%	30.75	Coal
Beijing Co-generation CCGT
Phase II	Unit VI: Dec. 2011	2 x 306.9	41%	251.66	Gas
	Unit VII: Dec. 2011
	Unit VIII: Dec. 2011	1 x 309.6	41%	126.936	Gas
Beijing Co-generation CCGT
Phase III	Unit IX: Nov. 2017	2 x 342.97	41%	281.24	Gas
	Unit X: Nov. 2017
	Unit XI: Nov. 2017	1 x 312.6	41%	128.166	Gas

Tianjin Municipality
Yangliuqing Co-generation	Unit I: Dec. 1998	4 x 300	55%	660	Coal
	Unit II: Sep. 1999
	Unit III: Dec. 2006
	Unit IV: May 2007
Lingang Co-generation CCGT	Unit I: Dec. 2014	1 x 313	55%	254.65	Gas
		1 x 150
Chenxi Photovoltaic	Jun. 2017	2.2	55%	1.21	Solar

Plant or Expansion	Actual In- service Date	Current Installed Capacity	Owner- ship	Attributable Capacity	Type of Fuel
(Names as defined below)		(MW)	%	MW
Shanxi Province
Yushe Power Plant	Unit III: Oct. 2004	2 x 300	60%	360	Coal
	Unit IV: Nov. 2004
Zuoquan Power Plant	Unit I: Dec. 2011	2 x 673	80%	1,076.8	Coal
	Unit II: Jan. 2012
Dongshan CCGT	Unit I: Oct. 2015	2 x297.7	100%	595.4	Gas
	Unit II: Oct. 2015
	Unit III: Oct. 2015	263.6	100%	263.6	Gas
Yushe Photovoltaic	Jun. 2017	50	100%	50	Solar
Yushe Fupin Photovoltaic	Aug. 2018	10.5	90%	9.45	Solar

Shandong Province
Dezhou Power Plant
Phase I	Unit I: 1992	1 x 330	100%	330	Coal
	Unit II: 1992	1 x 320	100%	320	Coal
Phase II	Unit III: Jun. 1994	1 x 330	100%	330	Coal
	Unit IV: May 1995	1 x 320	100%	320	Coal
Phase III	Unit V: Jun. 2002	2 x 700	100%	1,400	Coal
	Unit VI: Oct. 2002
Jining Power Plant
Circulating fluidized bed boiler	Unit V: Jul. 2003	2 x 135	100%	270	Coal
	Unit VI: Aug. 2003
Co-generation	Unit I: Nov. 2009	2 x 350	100%	700	Coal
	Unit II: Dec. 2009
Xindian Power Plant
Phase III	Unit V: Sep 2006	2 x 300	95%	570	Coal
	Unit VI: Nov. 2006
Weihai Power Plant
Phase II	Unit III: Mar. 1998	2 x 320	60%	384	Coal
	Unit IV: Nov. 1998
Phase III	Unit V: Dec. 2012	2 x 680	60%	816	Coal
	Unit VI: Dec. 2012
Rizhao Power Plant
Phase I	Unit I: Sep. 1999	1 x 350	88.8%	311	Coal
	Unit II: Jan. 2003	1 x 350	88.8%	311
Phase II	Dec. 2008	2 x 680	100%	1,360	Coal

Zhanhua Co-generation	Jul. 2005	2 x 165	100%	330	Coal

Baiyanghe Power Plant	Unit I: Oct. 2003	1 x 145	80%	116	Coal
	Unit II: Oct. 2003	1 x 145	80%	116
	Unit III: Dec. 2009	1 x 300	80%	240
	Unit IV: Dec. 2009	1 x 300	80%	240
Jiaxiang Power Plant	Unit I: Oct. 2006	1 x 330	40%	132	Coal
	Unit II: May. 2007	1 x 330	40%	132
Jining Co-generation	Unit I: Apr. 2004	1 x 30	40%	12	Coal
	Unit II: Jul. 2004	1 x 30	40%	12
Qufu Co-generation	Unit I: Feb. 2009	1 x 225	40%	90	Coal
	Unit II: Sep. 2009	1 x 225	40%	90
Huangtai Power Plant	Unit I: Nov. 1987	1 x 330	72%	237.6	Coal
	Unit II: Jan. 2011	1 x 350	72%	252
	Unit III: Jan. 2011	1 x 350	72%	252

Plant or Expansion	Actual In- service Date	Current Installed Capacity	Owner- ship	Attributable Capacity	Type of Fuel
(Names as defined below)		(MW)	%	MW
Yantai Power Plant	Unit I: Apr. 1996	1 x 110	80%	88	Coal
	Unit II: Oct. 2005	1 x 160	80%	128
	Unit III: Dec. 2005	1 x 160	80%	128
	Unit IV: Oct. 2006	1 x 160	80%	128
Linyi Power Plant	Unit I: Dec. 2012	1 x 350	60%	210	Coal
	Unit II: Oct. 2013	1 x 350	60%	210
	Unit III: Dec. 1997	1 x 140	60%	84
	Unit IV: Apr. 2003	1 x 140	60%	84
	Unit V: Sep. 2003	1 x 140	60%	84
	Unit VI: Apr. 2005	1 x 140	60%	84
Jining Yunhe Power Plant	Unit I: Jul. 2000	1 x 145	78.68%	114.09	Coal
	Unit II: Nov. 2000	1 x 145	78.68%	114.09
	Unit III: Sep. 2003	1 x 145	78.68%	114.09
	Unit IV: Feb. 2004	1 x 145	78.68%	114.09
	Unit V: Sep. 2006	1 x 330	78.68%	259.64
	Unit VI: Mar. 2006	1 x 330	78.68%	259.64
Liaocheng Co-generation	Unit I: Jan. 2006	1 x 330	60%	198	Coal
	Unit II: Sep. 2006	1 x 330	60%	198
Zhongtai Power Plant	Unit I: May. 2007	1 x 150	80%	120	Coal
	Unit II: Dec. 2007	1 x 150	80%	120
Laiwu Power Plant	Unit I: Dec. 2015	1 x 1000	64%	640	Coal
	Unit II: Nov. 2016	1 x 1000	64%	640
Muping Wind Power	28 turbines: Dec. 2010	42	80%	34	Wind
Penglai Wind Power	24 turbines: Sep. 2014	48	80%	38.4	Wind
	1 turbine: Sep. 2014	1.8	80%	1.44
	24 turbines: Oct. 2016	48	80%	38.4
	1 turbine: Oct. 2016	1.8	80%	1.44
Rushan Wind Power	8 turbines: Sep. 2014	12	80%	9.6	Wind
	11 turbines: Sep. 2014	16.5	80%	13.2
	2 turbines: Oct. 2016	3	80%	2.4
	5 turbines: Oct. 2016	10.5	80%	8.4
Rongcheng Wind Power	1 turbine: Jan. 2006	1.5	48%	0.72	Wind
	1 turbine: Jan. 2006	1.5	48%	0.72
	1 turbine: Jan. 2006	1.5	48%	0.72
	2 turbines: Feb. 2006	3	48%	1.44
	2 turbines: Feb. 2006	3	48%	1.44
	3 turbines: Mar. 2006	4.5	48%	2.16
Dongying Wind Power	32 turbines: Dec. 2009	48	56%	27	Wind
Boshan Photovoltaic	May. 2016	12	80%	10	Solar
Sishui Photovoltaic	Jun. 2015	20	80%	16	Solar
Gaozhuang Photovoltaic	May. 2016	20	80%	16	Solar
Jining Co-generation Photovoltaic	Feb. 2017	20	80%	16	Solar
Zhanhua Qingfenghu Wind Power	50 turbines: Dec. 2017	100	80%	80	Wind
Jining Photovoltaic	Feb. 2017	20	80%	16	Solar
Laiwu Niuquan Photovoltaic	Apr. 2017	20	80%	16	Solar
Furuite Rooftop Photovoltaic	Jun. 2017	6.3	95%	5.99	Solar
Zhanhua Qingfenghu Photovoltaic	Jun. 2017	100	46%	46	Solar
Weihai Haibu Photovoltaic	Jun. 2017	19.75	80%	15.8	Solar
Jining Weishan Zhaozhuang Photovoltaic	Dec. 2017	80	40%	64	Solar
Laizhou Wind Power	72 turbines: Apr. 2007	98.25	64%	62.88	Wind

Plant or Expansion	Actual In- service Date	Current Installed Capacity	Owner- ship	Attributable Capacity	Type of Fuel
(Names as defined below)		(MW)	%	MW
Henan Province
Qinbei Power Plant
Phase I	Unit I: Nov. 2004	2 x 600	60%	720	Coal
	Unit II: Dec. 2004
Phase II	Unit III: Nov. 2007	2 x 600	60%	720	Coal
	Unit IV: Nov. 2007
Phase III	Unit V: Mar. 2012	2 x 1000	60%	1,200	Coal
	Unit VI: Feb. 2013
Zhongyuan CCGT	Unit I: Aug. 2007	2 x 390	90%	702	Coal
	Unit II: Jan. 2008
Luoyang Co-generation Power Plant	Unit I: May. 2015	2 x 350	80%	560	Coal
	Unit II: Jun. 2015
Luoyang Yangguang Power Plant	Unit I: Jun. 2006	2 x 135	80%	216	Coal
	Unit II: Oct. 2006
Mianchi Co-generation	Unit I: Dec. 2016	2 x 350	60%	420	Coal
	Unit II: Dec. 2016
Zhumadian Wind Power	16 turbines: Dec. 2016	32	90%	28.8	Wind
Qinbei Dianchanghuichang Photovoltaic	Jun. 2017	20	60%	12	Solar
Tangyin Wind Power	69 turbines: Dec. 2018	151.8	100%	151.8	Wind

Jiangsu Province
Nantong Power Plant
Phase I	Unit I: Sep. 1989	2 x 352	100%	704	Coal
	Unit II: Mar. 1990
Phase II	Unit III: Jul. 1999	2 x 350	100%	700	Coal
	Unit IV: Oct. 1999
Nanjing Power Plant	Unit I: Mar. 1994	2 x 320	100%	640	Coal
	Unit II: Oct. 1994
Taicang Power Plant
Phase I	Unit I: Dec. 1999	2 x 320	75%	480	Coal
	Unit II: Apr. 2000
Phase II	Unit III: Jan. 2006	2 x 630	75%	945	Coal
	Unit IV: Feb. 2006
Taicang Dianchanghuichang Photovoltaic	Jun. 2018	50	75%	37.5	Solar
Huaiyin Power Plant
Phase II	Unit III: Jan. 2005	2 x 330	63.64%	420	Coal
	Unit IV: Mar. 2005
Phase III	Unit V: May 2006	2 x 330	63.64%	420	Coal
	Unit VI: Sep. 2006
Huaiyin Dianchang Photovoltaic	Jun. 2018	30	100%	30	Solar
Jinling Power Plant
CCGT	Unit I: Dec. 2006	2 x 390	60%	468	Gas
	Unit II: Mar. 2007
CCGT-Cogeneration	Unit I: April 2013	191.3	51%	97.56	Gas
	Unit II: May 2013	191.3	51%	97.56
Jinling Coal-Fired	Unit III: Dec. 2009	2 x 1,030	60%	1,236	Coal
	Unit IV: Aug. 2012
Suzhou Co-generation	Unit I: Aug. 2006	2 x 60	53.45%	64.14	Coal
	Unit II: Oct. 2006

Plant or Expansion	Actual In- service Date	Current Installed Capacity	Owner- ship	Attributable Capacity	Type of Fuel
(Names as defined below)		(MW)	%	MW
Nanjing Chemical Industry Park Co-generation	Unit I: Apr. 2016	50	70%	35	Coal
	Unit II: Dec. 2016	50	70%	35
Qidong Wind Power
Phase I	61 turbines: Mar. 2009	91.5	65%	59.5	Wind
Phase II	25 turbines: Jan. 2011	50	65%	32.5	Wind
	22 turbines: Jun. 2012	44	65%	28.6	Wind
Rudong Wind Power	24 turbines: Nov. 2013	48	90%	43.2	Wind
Tongshan Wind Power
Phase I	25 turbines: Mar. 2016	50	70%	35	Wind
Phase II	24 turbines: Dec. 2017	48	70%	33.6	Wind
Luhe Wind Power	25 turbines: Dec. 2016	50	100%	50	Wind
Rudong Offshore Wind Power	26 turbines: Mar, 2017	106.4	70%	211.68	Wind
	44 turbines: Sep. 2017	196
Guanyun Power	Unit I: Dec. 2017	2 x 25	100%	50	Coal
	Unit II: Dec. 2017
Suzhou CCGT	Unit I: Jul. 2017	178	100%	452	Gas
	Unit II: Jul. 2017	48
	Unit III: Sep. 2017	178
	Unit IV: Sep. 2017	48
Yizheng Wind Power
Phase I	21 turbines: Dec. 2017	46.2	100%	46.2	Wind
Phase II	6 turbines: Jul. 2018	13.8	100%	13.8	Wind
Guanyun Photovoltaic	Jun. 2017	14.1	100%	14.1	Solar

Shanghai Municipality
Shidongkou I	Unit I: Feb. 1988	4 x 325	100%	1,300	Coal
	Unit II: Dec. 1988
	Unit III: Sep. 1989
	Unit IV: May 1990
Shidongkou II	Unit I: Jun. 1992	2 x 600	100%	1,200	Coal
	Unit II: Dec. 1992
Shidongkou Power	Unit I: Oct. 2011	2 x 660	50%	660	Coal
	Unit II: Oct. 2011
Shanghai CCGT	Unit I: May 2006	3 x 390	70%	819	Gas
	Unit II: Jun. 2006
	Unit III: Jul. 2006

Chongqing Municipality
Luohuang Power Plant
Phase I	Unit I: Sep. 1991	2 x 360	60%	432	Coal
	Unit II: Feb. 1992
Phase II	Unit III: Dec. 1998	2 x 360	60%	432	Coal
	Unit IV: Dec. 1998
Phase III	Unit V: Dec. 2006	2 x 600	60%	720	Coal
	Unit VI: Jan. 2007
Liangjiang CCGT	Unit I: Oct. 2014	2 x 467	90%	840.6	Gas
	Unit II: Dec. 2014
Fengjie Jinfengshan Wind Power	55 turbines: Dec. 2018	110	100%	110	Wind

Zhejiang Province
Changxing Power Plant	Unit I: Dec. 2014	2 x 660	100%	1320	Coal
	Unit II: Dec. 2014

Plant or Expansion	Actual In- service Date	Current Installed Capacity	Owner- ship	Attributable Capacity	Type of Fuel
(Names as defined below)		(MW)	%	MW
Yuhuan Power Plant
Phase I	Unit I: Nov. 2006	2 x 1,000	100%	2,000	Coal
	Unit II: Dec. 2006
Phase II	Unit III: Nov. 2007	2 x 1,000	100%	2,000	Coal
	Unit IV: Nov. 2007
Tongxiang CCGT	Unit I: Sep. 2014	1 x 258.4	95%	245.48	Gas
	Unit II: Sep. 2014	1 x 200	95%	190	Gas
Changxing Photovoltaic	Dec. 2014	5	100%	5	Solar
	Mar. 2015	5	100%	5	Solar
Changxing Hongqiao Photovoltaic	Sep. 2016	30	100%	30	Solar
Huzhou Distributed Photovoltaic	Jun. 2017	16.13	100%	20	Solar
	Dec. 2017	3.87
Hunan Province
Yueyang Power Plant
Phase I	Unit I: Sep. 1991	2 x 362.5	55%	398.75	Coal
	Unit II: Dec. 1991
Phase II	Unit III: Mar. 2006	2 x 300	55%	330	Coal
	Unit IV: May 2006
Phase III	Unit V: Jan. 2011	2 x 600	55%	660	Coal
	Unit VI: Aug. 2012
Xiangqi Hydropower	Unit I: Dec. 2011	4 x 20	100%	80	Hydro
	Unit II: May 2012
	Unit III: Jul. 2012
	Unit IV: Aug. 2012
Subaoding Wind Power	40 turbines: Dec. 2014	80	100%	80	Wind
	35 turbines: May. 2015	70	100%	70	Wind
Guidong Wind Power	42 turbines: Aug. 2015	48	100%	48	Wind
	18 turbines: Sep. 2015	36	100%	36	Wind
Yueyang Xingang Photovoltaic	May. 2017	10	60%	6	Solar
Yueyang Leigutai Photovoltaic	Jun. 2017	20	55%	11	Solar

Hubei Province
Enshi Maweigou Hydropower	Dec. 2011	3 x 5	100%	15	Hydro
	Dec. 2015	2 x 20	100%	40	Hydro
Dalongtan Hydropower	Unit I: May 2006	12	97%	11.64	Hydro
	Unit II: Aug. 2005	12	97%	11.64	Hydro
	Unit III: Mar. 2006	12	97%	11.64
	Unit IV: Oct. 2008	1 x 1.6	97%	1.552	Hydro
Wuhan Power Plant
Phase I	Unit I: Jun. 1993	2 x 300	75%	450	Coal
	Unit II: Jan. 1994
Phase II	Unit III: May 1997	2 x 330	75%	495	Coal
	Unite IV: Dec. 1997
Phase III	Unit V: Oct. 2006	2 x 600	75%	900	Coal
	Unit VI: Dec. 2006
Jingmen Co-generation	Unit I: Nov. 2014	2 x 350	100%	700	Coal
	Unit II: Oct. 2014
Yingcheng Co-generation	Unit II: Jan. 2015	1 x 350	100%	350	Coal
	Unit I: Jun. 2016	1 x 50	100%	50	Coal
Jieshan Wind Power
Phase I	24 turbines: Jun. 2015	48	100%	48	Wind
Phase II	36 turbines: Aug. 2016	72	100%	72	Wind
Zhongxiang Hujiawan Wind Power	12 turbines: Dec. 2017	24	100%	24	Wind
	63 turbines: Aug. 2018	126	100%	126	Wind
Suizhou Zengdufuhe Photovoltaic	Sep. 2017	16.7	100%	20	Solar
	Oct. 2017	3.3

Plant or Expansion	Actual In- service Date	Current Installed Capacity	Owner- ship	Attributable Capacity	Type of Fuel
(Names as defined below)		(MW)	%	MW
Jiangxi Province
Jinggangshan Power Plant
Phase I	Unit I: Dec. 2000	2 x 300	100%	600	Coal
	Unit II: Aug. 2001
Phase II	Unit III: Nov. 2009	2 x 660	100%	1,320	Coal
	Unit IV: Dec. 2009
Jianggongling Wind Power	24 turbines: Dec. 2014	48	100%	48	Wind
	13 turbines: Dec. 2016	26	100%	26	Wind
Ruijin Power Plant	Unit I: May 2008	2 x 350	100%	700	Coal
	Unit II: Aug. 2008
Anyuan Power Plant	Unit I: Jun. 2015	2 x 660	100%	1,320	Coal
	Unit II: Aug. 2015
Hushazui Wind Power	13 turbines: Dec. 2016	26	100%	26	Wind
Linghuashan Wind Power	26 turbines: Jun. 2017	52	100%	100	Wind
	24 Turbines: Sep. 2017	48
Gaolongshan Wind Power	36 turbines: Nov. 2018	80	100%	80	Wind

Anhui Province
Chaohu Power Plant	Unit I: May 2008	2 x 600	60%	720	Coal
	Unit II: Aug. 2008
Hualiangting Hydropower Phase I	Unit I: Oct. 1981	2 x 10	100%	20	Hydro
	Unit II: Nov. 1981
Phase II	Unit III: Nov. 1987	2 x 10	100%	20	Hydro
	Unit IV: Nov. 1987
Huaining Wind Power	25 turbines: Jun. 2016	50	100%	50	Wind
	45 turbines: Dec. 2017	99	100%	99	Wind

Fujian Province
Fuzhou Power Plant
Phase I	Unit I: Sep. 1988	2 x 350	100%	700	Coal
	Unit II: Dec. 1988
Phase II	Unit III: Oct. 1999	2 x 350	100%	700	Coal
	Unit IV: Oct. 1999
Phase III	Unit V: Jul. 2010	2 x 660	100%	1,320	Coal
	Unit VI: Oct. 2011
Changle Photovoltaic	Jun. 2017	10	100%	10	Solar

Guangdong Province
Shantou Power Plant
Phase I	Unit VI: Oct. 2011	2 x 300	100%	600	Coal
	Unit I: Jan. 1997
	Unit II: Jan. 1997
Phase II	Unit III: Oct. 2005	1 x 600	100%	600	Coal
Haimen Power	Unit I: Jul. 2009	2 x 1,036	100%	2,072	Coal
	Unit II: Oct. 2009
	Unit III: Mar. 2013	2 x 1,036	80%	1,657.6	Coal
	Unit IV: Mar. 2013
Shantou Photovoltaic	Sep. 2016	17	100%	17	Solar
Yunnan Province
Diandong Energy
Phase I	Unit I: Feb. 2006	2 x 600	100%	1,200	Coal
	Unit II: Jul. 2006
Phase II	Unit III: Nov. 2006	2 x 600	100%	1,200	Coal
	Unit IV: May 2007
Yuwang Energy
Phase I	Unit I: Jul. 2009	2 x 600	100%	1,200	Coal
	Unit II: Feb. 2010
Fuyuan Wind Power
Wenbishan Wind Power	20 turbines: Oct. 2014	40	100%	40	Wind
Yibasan Wind Power	24 turbines: Dec. 2015	48	100%	48	Wind
Shengjing Wind Power	24 turbines: Dec. 2016	48	100%	48	Wind
Guangliangzi Wind Power	24 turbines: Oct. 2017	48	100%	48	Wind

Plant or Expansion	Actual In- service Date	Current Installed Capacity	Owner- ship	Attributable Capacity	Type of Fuel
(Names as defined below)		(MW)	%	MW
Hainan Province
Haikou Power Plant	Unit IV: May 2000	2 x 138	91.8%	253.368	Coal
	Unit V: May 1999
	Unit VIII: Apr. 2006	2 x 330	91.8%	605.88	Coal
	Unit IX: May 2007
Dongfang Power Plant
Phase I	Unit I: Jun. 2009	2 x 350	91.8%	642.6	Coal
	Unit II: Dec. 2009
Phase II	Unit III: May 2012	2 x 350	91.8%	642.6	Coal
	Unit IV: Dec. 2012
Nanshan Co-generation	Unit I: Apr. 1995	2 x 50	91.8%	91.8	Gas
	Unit II: Apr. 1995
	Unit III: Oct. 2003	2 x 16	91.8%	29.370	Gas
	Unit IV: Oct. 2003
Gezhen Hydropower	Unit I: Nov. 2009	2 x 40	91.8%	73.40	Hydro
	Unit II: Nov. 2009
	Unit III: Dec. 2009	2 x 1	91.8%	1.836	Hydro
	Unit IV: Dec. 2009
Wenchang Wind Power	34 turbines: Jan. 2009	51.5	91.8%	47.277	Wind
Dongfang Photovoltaic	Jul. 2016	12	91.8%	11.016	Solar
Chengmai Photovoltaic	Jun. 2017	12.5	91.8%	11.475	Solar
	Sep. 2017	12.5	91.8%	11.475
	Sep. 2018	40	91.8%	36.72	Solar

Guizhou Province
Panzhou Wind Power
Dapashan Wind Power	12 turbines: Dec. 2015	24	100%	24	Wind
	9 turbines: Nov. 2017	18	100%	24	Wind
	3 turbines: Dec. 2017	6
Jiaoziding Wind Power	16 turbines: Nov. 2017	32	100%	48	Wind
	8 turbines: Dec. 2017	16

Guangxi Autonomous Region
Guilin Distributed Energy	Unit I: Dec. 2017	3 x 70	80%	168	Gas
	Unit II: Dec. 2017
	Unit III: Dec. 2017
Singapore
Tuas Power	Unit I: Mar. 1999	1 x 600	100%	600	Oil
	Unit III: Nov. 2001	4 x 367.5	100%	1,470	Gas
	Unit IV: Jan. 2002
	Unit V: Feb. 2005
	Unit VI: Sep. 2005
	Unit VII: Dec. 2013	405.9	100%	405.9	Gas
TMUC
Phase I	Feb. 2013	1 x 101	100%	101	Coal & biomass
Phase IIA	Jun. 2014	1 x 32.5	100%	32.5	Coal & biomass
Pakistan
Sahiwal	2017	1320	40%	528	Coal

The following table presents the availability factors and the capacity factors of our coal-fired operating power plants in China for the years ended December 31, 2016, 2017 and 2018.

Coal-fired Power Plant	Availability factor (%)						Capacity factor (%)
	2016		2017		2018		2016		2017		2018
Heilongjiang Province
Xinhua Power Plant		—		99.83		99.98		—		54.41		50
Hegang Power Plant		—		94.18		89.14		—		42.01		43.32
Daqing Co-generation		—		92.85		95.28		—		49.9		49.58
Yichun Co-generation		—		94.08		89.91		—		43.15		46.30
Jilin Province
Jiutai Power Plant		—		99.89		95.29		—		43.63		46.42
Changchun Co-generation		—		92.98		95.24		—		49.09		53.72
Liaoning Province
Dalian		99.86		99.94		92.17		49.91		50.69		47.02
Dandong		97.4		100		93.84		47.49		46.08		46.10
Yingkou		100		95.35		93.41		48.70		47.77		45.81
Yingkou Co-generation		100		92.36		90.48		43.55		51.81		47.47
Hebei Province
Shang'an		93.18		91.72		88.82		57.50		58.56		58.53
Gansu Province
Pingliang		96.3		95.74		94.74		39.77		40.34		48.29
Beijing Municipality
Beijing Cogeneration		92.79		98.28		97.57		45.89		18.09		23.43
Tianjin Municipality
Yangliuqing		96.78		93.39		91.64		53.38		53.82		55.11
Shanxi Province
Yushe		94.77		93.97		96.13		53.01		43.76		53.31
Zuoquan		87.61		81		96.05		46.68		40.16		50.93
Shandong Province
Dezhou		93.96		96.59		91.71		57.97		55.1		58.08
Jining		91.35		96.1		94.82		59.22		59.88		53.61
Weihai		93.47		94.71		99.20		65.83		59.7		61.24
Xindian		90.10		94.73		91.24		63.07		69.97		59.20
Rizhao Power		90.12		94.87		94.13		62.89		64.60		61.15
Rizhao II		94.08		93.97		94.13		66.34		60.48		61.15
Zhanhua Co-generation		97.32		92.1		99.48		55.27		43.84		48.54
Laiwu Power Plant		—		97.41		95.71		—		60.7		61.49
Baiyanghe Power Plant		—		93.71		97.57		—		59.63		56.58
Huangtai Power Plant		—		96.41		90.87		—		59.17		60.00
Yantai Power Plant		—		97.58		97.85		—		44.14		60.60
Liaocheng Co-generation		—		94.05		93.58		—		50.01		58.63
Linyi Power Plant		—		95.78		96.90		—		54.44		57.54
Jining Yunhe Power Plant		—		96.68		91.99		—		60.99		52.72
Qufu Co-generation		—		94.43		96.36		—		60.19		63.59
Jiaxiang Power Plant		—		94.29		95.73		—		59.74		60.58
Jining Co-generation		—		91.48		92.50		—		71.87		70.23
Zhongtai Power Plant		—		93.83		92.53		—		31.46		45.39
Henan Province
Qinbei		96.69		88.99		92.80		55.06		39.29		48.44
Luoyang Cogeneration Power Plant		92.71		97.26		95.89		46.20		41.37		51.38
Luoyang Yangguang Power Plant		100.00		97.62		99.93		67.70		24.91		16.32
Mianchi Co-generation		100.00		100		91.10		59.04		40.3		50.19
Jiangsu Province
Nantong		91.37		92.78		91.64		52.99		49.91		46.89
Nanjing		96.92		92.89		93.84		57.24		49.15		48.48

Coal-fired Power Plant	Availability factor (%)						Capacity factor (%)
	2016		2017		2018		2016		2017		2018
Taicang		99.84		98.9		97.35		71.16		68.49		59.12
Huaiyin		89.66		93.76		95.13		48.04		43.51		40.73
Jinling Coal-fired		93.85		88.3		95.24		70.19		60.92		58.32
Suzhou Co-generation		96.41		94.77		98.41		74.35		73.37		71.00
Shanghai Municipality
Shidongkou I		99.86		90.97		95.94		43.53		46.51		41.94
Shidongkou II		92.81		93.77		93.23		55.07		54.74		52.31
Zhejiang Province
Changxing		96.5		97.21		97.39		49.18		56.72		55.57
Yuhuan		93.64		94.61		95.35		55.58		58.6		56.88
Chongqing Municipality
Luohuang		95.58		87.25		91.26		35.16		34.13		37.33
Hunan Province
Yueyang		99.71		98.24		95.76		33.56		42.63		47.51
Hubei Province
Wuhan Power		94.54		96.8		92.27		46.84		46.06		51.43
Jingmen Thermal Power		97.86		98.05		97.67		41.39		43.53		49.54
Yingcheng Thermal Power		90.80		99.97		98.87		44.30		52.56		60.53
Jiangxi Province
Jinggangshan		92.19		94.73		92.20		49.55		58.65		58.47
Ruijin Power		92.43		91.28		92.66		49.77		56.82		59.41
Anyuan Power Plant		88.6		83.62		94.45		55.29		60.24		62.64
Anhui Province
Chaohu Power		86.29		99.66		94.71		56.42		54.04		52.46
Fujian Province
Fuzhou		99.98		95.46		94.39		36.05		47.26		53.52
Guangdong Province
Shantou		97.91		94.32		96.25		43.39		49.98		57.03
Haimen		94.41		93.93		95.73		38.88		54.66		54.93
Yunnan Province
Diandong		98.82		98.34		98.36		15.73		15.29		17.17
Yuwang		100		99.59		99.98		2.54		0.54		2.61
Hainan Province
Haikou		91.15		95.4		95.24		60.46		57.21		59.72
Dongfang		94.33		99.53		95.14		60.23		64.6		63.10

_____________________________

The details of our operating power plants, construction projects and related projects as of December 31, 2018 are described below.

Power Plants in Heilongjiang Province

Xinhua Power Plant

Huaneng Xinhua Power Plant ("Xinhua Power Plant") is located in the city of Daqing in Heilongjiang Province. Xinhua Power Plant, including Phase I and Phase II, has an installed capacity of 530 MW and consists of one 200 MW coal-fired generating unit and one 330 MW coal-fired generating unit and which commenced operations in 1979 and 2005 respectively. We hold 70% equity interest in Xinhua Power Plant.

The coal supply for Xinhua Power Plant is mainly obtained from Inner Mongolia Autonomous Region. Xinhua Power Plant typically stores 120,000 tons of coal on site. In 2018, Xinhua Power Plant obtained 87.3% of its

total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Xinhua Power Plant in 2018 was RMB357.33 (2017: RMB326.06) per ton.

Xinhua Power Plant sells its electricity to Heilongjiang Electric Power Company.

Hegang Power Plant

Huaneng Hegang Power Plant ("Hegang Power Plant") is located in the city of Hegang in Heilongjiang Province. Hegang Power Plant, including Phases I to III, has an installed capacity of 1,200 MW and consists of two 300 MW coal-fired generating unit and one 600 MW coal-fired generating unit and which commenced operations in 1998, 1999 and 2007 respectively. We hold 64% equity interest in Hegang Power Plant.

The coal supply for Hegang Power Plant is mainly obtained from the city of Hegang. Hegang Power Plant typically stores 120,000 tons of coal on site. In 2018, Hegang Power Plant obtained 65.7% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Hegang Power Plant in 2018 was RMB428.66 (2017: RMB406.37) per ton.

Hegang Power Plant sells its electricity to Heilongjiang Electric Power Company.

Daqing Co-generation

Huaneng Daqing Co-generation Power Plant ("Daqing Co-generation") is located in the city of Daqing in Heilongjiang Province. Daqing Co-generation, including Phase I and Phase II, has an installed capacity of 700 MW and consists of two 350 MW coal-fired generating units which commenced operations in 2003. We hold 100% equity interest in Daqing Co-generation.

The coal supply for Daqing Co-generation is mainly obtained from Inner Mongolia Autonomous Region. Daqing Co-generation typically stores 80,000 tons of coal on site. In 2018, Daqing Co-generation obtained 82.6% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Daqing Co-generation in 2018 was RMB355.80 (2017: RMB323.56) per ton.

Daqing Co-generation sells its electricity to Heilongjiang Electric Power Company.

Yichun Co-generation

Huaneng Yichun Co-generation Power Plant ("Yichun Co-generation") is located in the city of Yichun in Heilongjiang Province. Yichun Co-generation, including Phase I and Phase II, has an installed capacity of 700 MW and consists of two 350 MW coal-fired generating units which commenced operations in 2015. We hold 100% equity interest in Yichun Co-generation.

The coal supply for Yichun Co-generation is mainly obtained from the city of Hegang. Yichun Co-generation typically stores 80,000 tons of coal on site. In 2018, Yichun Co-generation obtained 65.0% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Yichun Co-generation in 2018 was RMB435.56 (2017: RMB416.97) per ton.

Yichun Co-generation sells its electricity to Heilongjiang Electric Power Company.

Sanjiangkou Wind Power

Huaneng Shanjiangkou Wind Power Plant ("Sanjiangkou Jiangsheng Wind Power") is located in the city of Jiamusi in Heilongjiang Province. The installed capacity of Sanjiangkou Wind Power Plant is 99 MW and consists of 66 turbines. It commenced operation in February 2010. We hold 82.85% equity interest in Sanjiangkou Wind Power.

Sanjiangkou Wind Power sells its electricity to Heilongjiang Electric Power Company.

Linjiang Jiangsheng Wind Power

Linjiang Jiangsheng Wind Power Plant ("Linjiang Jiangsheng Wind Power") is located in the city of Jiamusi in Heilongjiang Province. The installed capacity of Linjiang Jiangsheng Wind Power Plant is 99 MW and consists of 66 turbines. It commenced operation in October 2015. We hold 82.85% equity interest in Linjiang Jiangsheng Wind Power.

Linjiang Jiangsheng Wind Power sells its electricity to Heilongjiang Electric Power Company.

Daqing Heping Aobao Wind Power

Daqing Heping Aobao Wind Power Plant ("Daqing Heping Aobao Wind Power") is located in the city of Jiamusi in Heilongjiang Province. Phase I of the Daqing Heping Aobao Wind Power commenced operation in December 2011, with an installed capacity of 96 MW, consisting of 32 wind power turbines of 3 MW each. Phase II of the Daqing Heping Aobao Wind Power commenced operation in May 2012, with an installed capacity of 96 MW, consisting of 32 wind power turbines of 3 MW each. Phase III of the Daqing Heping Aobao Wind Power commenced operation in December, with an installed capacity of 96 MW, consisting of 32 wind power turbines of 3 MW each. We hold 100% of the equity interest in Daqing Heping Aobao Wind Power.

Daqing Heping Aobao Wind Power sells its electricity to Heilongjiang Electric Power Company.

Zhaodong Dechang Photovoltaic

Zhaodong Dechang 20 MW Photovoltaic Power Plant ("Zhaodong Dechang Photovoltaic") is located in the city of Zhaodong in Heilongjiang Province. Zhaodong Dechang Photovoltaic commenced operation in December 2017, with an installed capacity of 20 MW. We hold 100% of the equity interest in Zhaodong Dechang Photovoltaic.

Zhaodong Dechang Photovoltaic sells its electricity to Heilongjiang Electric Power Company.

Shuangyu Photovoltaic

Daqing Huaneng Shuangyu Solar Power Plant (“Shuangyu Photovoltaic”), in which we hold 100% equity interest, consists of Xinhua Photovoltaic, Donghai Photovoltaic and Shuangyu Photovoltaic. Xinhua Photovoltaic with an installed capacity of 20 MW, commenced commercial operation in June 2018. Donghai Photovoltaic and Shuangyu Photovoltaic, both with an installed capacity of 20 MW, commenced commercial operation in July 2018. Daqing Huaneng Shuangyu, Donghai Photovoltaic and Shuangyu Photovoltaic are located in Daqing city, Heilongjiang.

Power Plants in Jilin Province

Jiutai Power Plant

Huaneng Jiutai Power Plant ("Jiutai Power Plant") is located in the city of Changchun in Jilin Province. Jiutai Power Plant, including Phase I and Phase II, has an installed capacity of 1,340 MW and consists of two 670 MW coal-fired generating units which commenced operations in 2009. We hold 100% equity interest in Jiutai Power Plant.

The coal supply for Jiutai Power Plant is mainly obtained from Inner Mongolia Autonomous Region. Jiutai Power Plant typically stores 120,000 tons of coal on site. In 2018, Jiutai Power Plant obtained 74.5% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Jiutai Power Plant in 2018 was RMB406.78 (2017: RMB371.93) per ton.

Jiutai Power Plant sells its electricity to Jilin Electric Power Company.

Changchun Co-generation

Huaneng Changchun Co-generation Power Plant ("Changchun Co-generation") is located in the city of Changchun in Jilin Province. Changchun Co-generation, including Phase I and Phase II, has an installed capacity of

700 MW and consists of two 350 MW coal-fired generating units which commenced operations in 2009. We hold 100% equity interest in Changchun Co-generation.

The coal supply for Changchun Co-generation is mainly obtained from Inner Mongolia Autonomous Region. Changchun Co-generation typically stores 160,000 tons of coal on site. In 2018, Changchun Co-generation obtained 81.4% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Changchun Co-generation in 2018 was RMB392.76 (2017: RMB349.00) per ton.

Changchun Co-generation sells its electricity to Jilin Electric Power Company.

Nongan Biomass

Huaneng Nongan Biomass Power Plant ("Nongan Biomass") is located in the city of Changchun in Jilin Province. The installed capacity of Nongan Biomass is 25 MW and consists of one 25 MW generating unit, which commenced operation in December 2011. We hold 100% equity interest in Nongan Biomass.

Nongan Biomass also uses coal to meet part of its fuel needs. Nongan Biomass typically stores 40,000 tons of coal on site. The average coal purchase price for Nongan Biomass in 2018 was RMB254.88 (2017: RMB303.11 ) per ton.

Nongan Biomass sells its electricity to Jilin Electric Power Company.

Linjiang Jubao Hydropower

Huaneng Linjiang Jubao Hydropower Station ("Linjiang Jubao Hydropower") is located in the city of Baishan of Jilin Province. Linjiang Jubao Hydropower consists of four 20 MW hydraulic generating units with a total installed capacity of 80 MW. In December 2011, Unit I of Linjiang Jubao Hydropower with an installed capacity of 20 MW passed a trial run. Unit I and Unit II of Linjiang Jubao Hydropower with an installed capacity of 20 MW each commenced operation in December 2011 and May 2012, respectively. Unit III and Unit IV of Linjiang Jubao Hydropower with an installed capacity of 20 MW commenced operation in May and August 2012, respectively. We hold 100% equity interest in Linjiang Jubao Hydropower.

Linjiang Jubao Hydropower sells its electricity to Jilin Electric Power Company.

Zhenlai Wind Power

Huaneng Zhenlai Mali Wind Power Plant ("Zhenlai Wind Power") is located in the city of Baicheng in Jilin Province. Phase I of the Zhenlai Wind Power commenced operation in June 2009, with an installed capacity of 49.5 MW, consisting of 33 wind power turbines of 1.5 MW each. Phase II of the Zhenlai Wind Power commenced operation in December 2011, with an installed capacity of 49.5 MW, consisting of 33 wind power turbines of 1.5 MW each. We hold 100% of the equity interest in Zhenlai Wind Power.

Zhenlai Wind Power sells its electricity to Jilin Electric Power Company.

Siping Wind Power

Huaneng Siping Wind Power Plant ("Siping Wind Power") is located in the city of Siping in Jilin Province. Phase I of the Siping Wind Power commenced operation in October 2010, with an installed capacity of 75 MW, consisting of 50 wind power turbines of 1.5 MW each. Phase II of the Siping Wind Power commenced operation in November 2010, with an installed capacity of 50 MW, consisting of 25 wind power turbines of 2 MW each. Phase III of the Siping Wind Power commenced operation in December 2010, with an installed capacity of 75 MW, consisting of 50 wind power turbines of 1.5 MW each. We hold 100% of the equity interest in Siping Wind Power.

Siping Wind Power sells its electricity to Jilin Electric Power Company.

Tongyu Tuanjie Wind Power

Huaneng Jilin Tongyu Tuanjie Wind Power Plant ("Tongyu Tuanjie Wind Power") is located in the city of Baicheng in Jilin Province. Tongyu Tuanjie Wind Power commenced operation in December 2015, with an installed capacity of 148 MW, consisting of 74 wind power turbines of 2 MW each. We hold 100% of the equity interest in Tongyu Tuanjie Wind Power.

Tongyu Tuanjie Wind Power sells its electricity to Jilin Electric Power Company.

Linjiang Jubao Photovoltaic

Linjiang Jubao 15 MW Photovoltaic Power Plant ("Linjiang Jubao Photovoltaic") is located in the city of Linjiang in Jilin Province. Linjiang Jubao Photovoltaic commenced operation in June 2017, with an installed capacity of 15 MW. We hold 100% of the equity interest in Linjiang Jubao Photovoltaic.

Linjiang Jubao Photovoltaic sells its electricity to Jilin Electric Power Company.

Zhenlai Photovoltaic

Zhenlai Wind Power Photovoltaic Power Plant (“Zhenlai Photovoltaic”) is located in Baicheng city in Jilin Province. Zhenlai Photovoltaic commenced operation in June 2018, with an installed capacity of 20 MW. We hold 50% of the equity interest in Zhenlai Photovoltaic.

Power Plants in Liaoning Province

Dalian Power Plant

Huaneng Dalian Power Plant ("Dalian Power Plant") is located on the outskirts of Dalian, on the coast of Bohai Bay. Dalian Power Plant, including Phase I and Phase II, has an installed capacity of 1,400 MW and consists of four 350 MW coal-fired generating units which commenced operations in 1988 and 1999 respectively. We hold 100% equity interest in Dalian Power Plant.

The coal supply for Dalian Power Plant is obtained from several coal producers located mostly in Northern Shanxi Province. The coal is transported by rail from the mines to Qinhuangdao port and shipped by special 27,000 ton automatic unloading ships to the wharf at the Dalian Power Plant. The wharf is owned and maintained by the Dalian Port Authority and is capable of handling 30,000 ton vessels. Dalian Power Plant typically stores 200,000 tons of coal on site.

In 2018, Dalian Power Plant obtained 42.2% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Dalian Power Plant in 2018 was RMB550.27 (2017: RMB549.27) per ton.

Dalian Power Plant sells its electricity to Liaoning Electric Power Company.

Dandong Power Plant

Huaneng Dandong Power Plant ("Dandong Power Plant") is located on the outskirts of the city of Dandong in Liaoning. Dandong Power Plant had originally been developed by HIPDC which, pursuant to the Reorganization Agreement, transferred all its rights and interests therein to us effective December 31, 1994. In March 1997, we began the construction of Dandong Power Plant, which comprises two 350 MW coal-fired generating units. We hold 100% equity interest in Dandong Power Plant.

The coal supply for Dandong Power Plant is obtained from several coal producers in Northern Shanxi Province. The coal is transported by rail from the mines to Qinhuangdao port and shipped by barge to the Dandong port in Dandong, where it is unloaded and transported to Dandong Power Plant using special coal handling facilities. The wharf is owned and maintained by Dandong Power Plant and is capable of handling 28,000 ton vessels. Dandong Power Plant typically stores 220,000 tons of coal on site.

In 2018, Dandong Power Plant obtained 27.6% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Dandong Power Plant in 2018 was RMB512.18 (2017: RMB528.38) per ton.

Dandong Power Plant sells its electricity to Liaoning Electric Power Company.

Yingkou Power Plant

Huaneng Yingkou Power Plant ("Yingkou Power Plant") is located in Yingkou City in Liaoning Province. Yingkou Power Plant Phase I has an installed capacity of 640 MW and consists of two 320 MW supercritical coal-fired generating units which commenced operations in January and December 1996, respectively. Yingkou Power Plant Phase II has an installed capacity of 1,200MW and consists of two 600 MW coal-fired generating units which commenced operations in August and October 2007, respectively. We hold 100% equity interest in Yingkou Power Plant.

The coal supply for Yingkou Power Plant is mainly obtained from Shanxi Province. Yingkou Power Plant typically stores 400,000 tons of coal on site. In 2018, Yingkou Power Plant obtained 17.5% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Yingkou Power Plant in 2018 was RMB520.61 (2017: RMB540.89) per ton.

Yingkou Power Plant sells its electricity to Liaoning Electric Power Company.

Yingkou Co-generation

Huaneng Yingkou Co-generation Power Plant ("Yingkou Co-generation") is located in Yingkou City in Liaoning Province. Yingkou Co-generation has an installed capacity of 660 MW and consists of two 330 MW generating units which commenced operation in December 2009. We hold 100% equity interest in Yingkou Co-generation.

The coal supply for Yingkou Co-generation is mainly obtained from Inner Mongolia Autonomous Region. Yingkou Co-generation typically stores 140,000 tons of coal on site. In 2018, Yingkou Co-generation obtained 96.5% of its total consumption of coal from annual contracts. The average coal purchase price for Yingkou Co-generation in 2018 was RMB431.29 (2017: RMB411.04) per ton.

Yingkou Co-generation sells its electricity to Liaoning Electric Power Company.

Wafangdian Wind Power

Dalian Wafangdian Wind Power Plant ("Wafangdian Wind Power") is located in Dalian City in Liaoning Province. The installed capacity of phase I of Wafangdian Wind Power is 48 MW and consists of 24 turbines. It commenced operation in June 2011. We hold 100% equity interest in Wafangdian Wind Power.

Wafangdian Wind Power sells its electricity to Liaoning Electric Power Company.

Suzihe Hydropower

Liaoning Suzihe Hydropower Plant ("Suzihe Hydropower") is located in Liaoning Province. The installed capacity of Suzihe Hydropower is 37.5 MW and consists of three 12.5 MW generating units. Unit I (12.5 MW) of Suzihe Hydropower commenced operation in August 2012. We hold 100% equity interest in Suzihe Hydropower.

Changtu Wind Power

Huaneng Liaoning Changtu Wind Power Plant ("Changtu Wind Power") is located in Liaoning Province. Phase I of the Changtu Wind Power commenced operation in November 2012, with an installed capacity of 49.5 MW, consisting of 33 wind power turbines of 1.5 MW each. Phase II of the Changtu Wind Power commenced operation in October 2014, with an installed capacity of 48 MW, consisting of 24 wind power turbines of 2 MW each. We hold 100% of the equity interest in Changtu Wind Power.

Dandong Photovoltaic

Dandong 10 MW Photovoltaic Power Plant ("Dandong Photovoltaic") is located in Liaoning Province. Dandong Photovoltaic commenced operation in May 2016, with an installed capacity of 10 MW. We hold 100% of the equity interest in Dandong Photovoltaic.

Dandong Photovoltaic sells its electricity to Liaoning Electric Power Company.

Yingkou Co-generation Photovoltaic

Yingkou Co-generation 10 MW Photovoltaic Power Plant ("Yingkou Co-generation Photovoltaic") is located in Liaoning Province. Yingkou Co-generation Photovoltaic commenced operation in June 2016, with an installed capacity of 10 MW. We hold 100% of the equity interest in Yingkou Co-generation Photovoltaic.

Yingkou Co-generation Photovoltaic sells its electricity to Liaoning Electric Power Company.

Yingkou Xianrendao Co-generation Power

Yingkou Xianrendao Co-generation Power Plant ("Yingkou Xianrendao Co-generation Power") is located in the city of Yingkou of Liaoning Provinces. Yingkou Xianrenao Co-generation Power commenced operation in March 2017, with two sets of generating units of 50 MW each. We hold 100% equity interest in Yingkou Xianrendao Co-generation Power. In 2018, Yingkou Xianrendao Co-generation Power obtained 65.5% of its total consumption of coal from annual contracts. The average coal purchase price for Yingkou Xianrendao Co-generation Power in 2018 was RMB459.81 (2017: RMB443.00) per ton.

Yingkou Xianrendao Co-generation Power sells its electricity to Liaoning Electric Power Company.

Jianchang Bashihan Photovoltaic

Jianchang Bashihan 20 MW Photovoltaic Power Plant ("Jianchang Bashihan Photovoltaic") is located in the city of Huludao of Liaoning Province. Jianchang Bashihan Photovoltaic commenced operation in August 2017, with an installed capacity of 22.03 MW. We hold 100% of the equity interest in Jianchang Bashihan Photovoltaic.

Jianchang Bashihan Photovoltaic sells its electricity to Liaoning Electric Power Company.

Jianchang Bashihan Photovoltaic Phase II

Jianchang Bashihan 20 MW Photovoltaic Phase II Power Plant ("Jianchang Bashihan Photovoltaic Phase II") is located in the city of Huludao of Liaoning Province. Jianchang Bashihan Photovoltaic Phase II commenced operation in August 2017, with an installed capacity of 22.03 MW. We hold 100% of the equity interest in Jianchang Bashihan Photovoltaic Phase II.

Jianchang Bashihan Photovoltaic Phase II sells its electricity to Liaoning Electric Power Company.

Xiao Deyingzi Photovoltaic

Xiao Deyingzi 15 MW Photovoltaic Power Plant ("Xiao Deyingzi Photovoltaic") is located in the city of Huludao of Liaoning Province. Xiao Deyingzi Photovoltaic commenced operation in August 2017, with an installed capacity of 15.56 MW. We hold 100% of the equity interest in Xiao Deyingzi Photovoltaic.

Xiao Deyingzi Photovoltaic sells its electricity to Liaoning Electric Power Company.

Chaoyang Heiniuyingzi Photovoltaic

Chaoyang Heiniuyingzi 17 MW Photovoltaic Power Plant ("Chaoyang Heiniuyingzi Photovoltaic") is located in the city of Chaoyang of Liaoning Province. Chaoyang Heiniuyingzi Photovoltaic commenced operation in August 2017, with an installed capacity of 18.79 MW. We hold 100% of the equity interest in Chaoyang Heiniuyingzi Photovoltaic.

Chaoyang Heiniuyingzi Photovoltaic sells its electricity to Liaoning Electric Power Company.

Power Plant in Inner Mongolia Autonomous Region

Huade Wind Power

Huaneng Huade Wind Power Plant ("Huade Wind Power") is located in Huade, Inner Mongolia Autonomous Region. Phase I of Huade Wind Power has an installed capacity of 49.5 MW and consists of 33 wind power turbines which commenced operation in 2009. Phase II of Huade Wind Power has an installed capacity of 49.5 MW and consists of 33 wind power turbines which commenced operation in June 2011. We hold 100% equity interest in Huade Wind Power.

Huade Wind Power sells its electricity to Inner Mongolia Power (Group) Co., Ltd.

Power Plants in Hebei Province

Shang'an Power Plant

Huaneng Shang'an Power Plant ("Shang'an Power Plant") is located on the outskirts of Shijiazhuang. Shang'an Power Plant has been developed in three separate expansion phases. The Shang'an Power Plant Phase I has an installed capacity of 700 MW and consists of two 350 MW coal-fired generating units which commenced operations in 1990. Shang'an Power Plant Phase II shares with the Shang'an Power Plant Phase I certain facilities, such as coal storage facilities and effluence pipes, which have been built to accommodate the requirements of plant expansions. The Shang'an Power Plant Phase II utilizes two 330 MW coal-fired generating units, which commenced operation in 1997. The Shang'an Power Plant Phase III has an installed capacity of 1,200 MW and consists of two 600 MW supercritical coal-fired generating units which commenced operations in July and August 2008, respectively. Unit 5 of Shang'an Power Plant is the first 600MW supercritical air-cooling unit which commenced operation in the PRC. We hold 100% equity interest in Shang'an Power Plant.

The coal supply for Shang'an Power Plant is obtained from numerous coal producers in Central Shanxi Province, which is approximately 64 kilometers from Shang'an Power Plant. The coal is transported by rail from the mines to the Shang'an Power Plant. We own and maintain the coal unloading facilities which are capable of unloading 10,000 tons of coal per day. Shang'an Power Plant typically stores 300,000 tons of coal on site.

In 2018, Shang'an Power Plant obtained 82.2% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Shang'an Power Plant in 2018 was RMB491.08 (2017: RMB486.86) per ton.

Shang'an Power Plant sells its electricity to Hebei Electric Power Company.

Kangbao Wind Power

Huaneng Kangbao Wind Power Plant ("Kangbao Wind Power") consists of 33 wind power turbines with a total installed capacity of 49.5 MW. In January 2011, the Phase I of Kangbao Wind Power with a total generation capacity of 49.5MW completed the trial run. We hold 100% equity interest in Kangbao Wind Power.

Kangbao Wind Power sells its electricity to Hebei Electric Power Company.

Kangbao Xitan Photovoltaic

Kangbao Xitan Photovoltaic ("Kangbao Xitan Photovoltaic") is located in Kangbao, Zhangjiakou, Hebei. Kangbao Xitan Photovoltaic commenced operation in June 2016, with an installed capacity of 20 MW. We hold 100% equity interest in Kangbao Xitan Photovoltaic.

Kangbao Xitan Photovoltaic sells its electricity to Hebei Electric Power Company.

Zhuolu Dabao Wind Power

Zhuolu Dabao Wind Power Plant ("Zhuolu Dabao Wind Power") consists of 24 wind power turbines with a total installed capacity of 48 MW, consisting of 24 wind power turbines of 2MW each. Zhuolu Dabao Wind Power commence operation in March 2017. We hold 100% equity interest in Kangbao Wind Power.

Zhuolu Dabao Wind Power sells its electricity to Hebei Electric Power Company.

Shang'an Dianchanghuichang Photovoltaic

Shang’an Dianchanhuichang 18 MW Photovoltaic Power Plant ("Shang'an Dianchanhuichang Photovoltaic") is located in the city of Shijiazhuang of Hebei Province. Shang'an Dianchanghuichang Photovoltaic commenced operation in December 2017, with an installed capacity of 17 MW. We hold 100% of the equity interest in Shang'an Dianchanhuichang Photovoltaic.

Shang'an Dianchanghuichang Photovoltaic sells its electricity to Hebei Electric Power Company.

Power Plant in Gansu Province

Pingliang Power Plant

Huaneng Pingliang Power Plant ("Pingliang Power Plant") is located in Pingliang City of Gansu Province. Pingliang Power Plant consists of three 325 MW and one 330 MW coal-fired generating units which commenced operation in 2000, 2001 and June and November 2003 respectively. The installed capacity of Unit I, Unit II and Unit III of Pingliang Power Plant were expanded from 300 MW to 325 MW in January 2010, respectively. The installed capacity of Unit IV of Pingliang Power Plant was expanded from 300 MW to 330 MW in January 2011. Pingliang Power Plant Phase II consists of two 600 MW generating units with a total installed capacity of 1200 MW, which commenced operation in February 2010 and March 2010, respectively. We hold 65% equity interest in Pingliang Power Plant.

The coal supply for Pingliang Power Plant is obtained from local coal mines. Pingliang Power Plant typically stores 230,000 tons of coal on site. In 2018, Pingliang Power Plant obtained 100.0% of its coal supplies from annual contracts and the remainder from the open market. The average coal purchase price for Pingliang Power Plant in 2018 was RMB376.95 (2017: RMB356.70) per ton.

Pingliang Power Plant sells its electricity to Gansu Electric Power Company.

Jiuquan Wind Power

Jiuquan Wind Power Plant ("Jiuquan Wind Power") consists of 234 wind power turbines of 1.5 MW each and 25 wind power turbines of 2 MW each. In December 2011, all the wind power plants completed the trial run. We hold 100% equity interest in Jiuquan Wind Power.

Jiuquan Wind Power sells its electricity to Gansu Electric Power Company.

Jiuquan II Wind Power

Jiuquan II Wind Power Plant ("Jiuquan II Wind Power") is located in Gansu Province. Zone A of this plant commenced operation in December 2014, with an installed capacity of 200 MW in operating, consisting of 100 wind power turbines of 2 MW each. Zone B of this plant commenced operation in June 2015, with an installed capacity of 200 MW in operating, consisting of 100 wind power turbines of 2 MW each. We hold 100% equity interest in Jiuquan II Wind Power.

Jiuquan II Wind Power sells its electricity to Gansu Electric Power Company.

Yumen Wind Power

Yumen Wind Power Plant ("Yumen Wind Power") is located in Gansu Province. This plant commenced operation in June 2015, with an installed capacity of 148.5 MW, consisting of 67 wind power turbines of 1.5 MW each and 24 wind power turbines of 2 MW each. We hold 100% equity interest in Yumen Wind Power.

Yumen Wind Power sells its electricity to Gansu Electric Power Company.

Yigang Wind Power

Yigang Wind Power ("Yigang Wind Power") is located in Gansu Province. This plant commenced operation in December 2015, with an installed capacity of 192 MW, consisting of 96 wind power turbines of 2 MW each. We hold 100% equity interest in Yigang Wind Power.

Yigang Wind Power sells its electricity to Gansu Electric Power Company.

Power Plant in Beijing Municipality

Beijing Co-generation

Huaneng Beijing Co-generation Power Plant ("Beijing Co-generation") is located in Beijing Municipality. Beijing Co-generation has an installed capacity of 845 MW and consists of two 165 MW generating units, two 220 MW generating units and one 75 MW generating units which commenced operation in January 1998, December 1998, June 1999 and April 2004, respectively. We hold 41% equity interest in Beijing Co-generation and believe we exercise effective control over Beijing Co-generation.

The coal supply for Beijing Co-generation is mainly obtained from Inner Mongolia Autonomous Region. Beijing Co-generation typically stores 165,000 tons of coal on site. In 2018, Beijing Co-generation obtained 83.0% of its total consumption of coal from annual contracts. The average coal purchase price for Beijing Co-generation in 2018 was RMB563.24 (2017: RMB529.61) per ton.

Beijing Co-generation sells its electricity to Beijing Electric Power Company.

Beijing Co-generation CCGT

Beijing Co-generation CCGT consists of one set of "two on one" F-grade gas and steam combined cycle generating units with a power generation capacity of 923.4 MW, heat supply capacity of 650 MW and heat supply area of approximately 13,000,000 square meters. High-standard denitrification, noise reduction, water treatment and other environmental protection facilities were constructed concurrently. In December 2011, Beijing Co-generation CCGT completed its trial run. Beijing Co-generation CCGT sells its electricity to North China Electric Company.

Being the first project commencing construction among the four major co-generation centers in Beijing, Beijing Co-generation CCGT firstly introduced the most efficient world-class F-grade gas turbine in the PRC, thus setting a new record of the maximum heat supply capacity, minimum power consumption for power generation and highest annual thermal efficiency for the same type of generating units in the PRC and attaining a leading and international class design standard in the PRC.

Beijing Co-generation Phase III

Beijing Co-generation Phase III consists of two sets of F-grade gas and steam combined cycle generating units with a power generation capacity of 998 MW. Beijing Co-generation Phase III commence operation in November 2017. We hold 41% equity interest in Beijing Co-generation Phase III.

Beijing Co-generation CCGT sells its electricity to Beijing Electric Company.

Power Plant in Tianjin Municipality

Yangliuqing Co-generation

Tianjin Huaneng Yangliuqing Co-generation Power Plant ("Yangliuqing Co-generation") is located in Tianjin Municipality. Yangliuqing Co-generation has an installed capacity of 1,200 MW and consists of four 300 MW coal-fired co-generation units which commenced operation in December 1998, September 1999, December 2006 and May 2007, respectively. We hold 55% equity interest in Yangliuqing Co-generation.

The coal supply for Yangliuqing Co-generation mainly obtained from Shanxi Province and Inner Mongolia Autonomous Region. Yangliuqing Co-generation typically stores 300,000 tons of coal on site. In 2018, Yangliuqing Co-generation obtained 67.7% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Yangliuqing Co-generation in 2018 was RMB510.49 (2017: RMB496.91) per ton.

Yangliuqing Co-generation sells its electricity to Tianjin Electric Company.

Lingang Co-generation CCGT

Lingang Co-generation CCGT is located in Tianjin Municipality. The first set of generating units of Lingang Co-generation CCGT commenced operation in December 2014, with an installed capacity of 463 KW. We hold 100% equity interest in the Lingang Co-generation CCGT. The gas supply for Lingang Co-generation CCGT is transported through the pipeline of "Shaanxi-Gansu-Ningxia Transport Project."

Lingang Co-generation CCGT sells its electricity to Tianjin Electric Company.

Chenxi Photovoltaic

Chenxi 2.2 MW Photovoltaic Power Plant ("Chenxi Photovoltaic") is located in the city of Tianjin. Chengxi Photovoltaic commenced operation in June 2017, with an installed capacity of 2.2 MW. We hold 55% of the equity interest in Chenxi Photovoltaic.

Chenxi Photovoltaic sells its electricity to Tianjin Electric Power Company.

Power Plant in Shanxi Province

Yushe Power Plant

Huaneng Yushe Power Plant ("Yushe Power Plant") is located in Yushe County of Shanxi Province. Yushe Power Plant Phase I has an installed capacity of 200 MW and consists of two 100 MW coal-fired generating units which commenced operations in August and December 1994, respectively. Two 300 MW coal-fired generating units of Yushe Power Plant Phase II commenced operations in October and November 2004, respectively. Yushe Power Plant Phase I was shut down in 2011. We hold 60% equity interest in Yushe Power Plant.

The coal supply for Yushe Power Plant is obtained from several coal producers located mostly in Shanxi Province. Yushe Power Plant typically stores 500,000 tons of coal on site. In 2018, Yushe Power Plant obtained approximately 27.7% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Yushe Power Plant in 2018 was RMB307.31 (2017: RMB316.51) per ton.

Yushe Power Plant sells its electricity to Shanxi Electric Power Company.

Zuoquan Power Plant

Shanxi Huaneng Zuoquan Power Plant ("Zuoquan Power Plant") is located in Zuoquan County of Shanxi Province. Zuoquan Power Plant has an installed capacity of 1,346 MW and consists of two 673 MW coal-fired generating units which commenced operations in December 2011 and January 2012, respectively. We hold 80% equity interest in Zuoquan Power Plant.

Zuoquan Power Plant typically stores 200,000 tons of coal on site. In 2017, Zuoquan Power Plant obtained approximately 29.8% of its total consumption of coal from annual contracts and the remainders from the open market. The average coal purchase price for Zuoquan Power Plant in 2018 was RMB316.91 (2017: RMB348.06) per ton.

Zuoquan Power Plant sells its electricity to Shanxi Electric Power Company.

Dongshan Combined Cycle Gas Turbine Power Plant

Dongshan Combined Cycle Gas Turbine Power Project ("Dongshan CCGT") is located at Taiyuan City of Shanxi Province. Dongshan CCGT commenced operation in October 2015 with an installed capacity of 859 KW, consisting of one 2×F Class gas-steam combined cycle co-generating unit. We hold 100% equity interest in the plant.

Dongshan CCGT sells its electricity to Shanxi Electric Power Company.

Yushe Photovoltaic

Yushe 50 MW Photovoltaic Power Plant ("Yushe Photovoltaic") is located in the city of Jinzhong of Shanxi Province. Yushe Photovoltaic commenced operation in June 2017, with an installed capacity of 50 MW. We hold 100% of the equity interest in Yushe Photovoltaic.

Yushe Photovoltaic sells its electricity to Shanxi Electric Power Company.

Yushe Fupin Photovoltaic

Yushe 10.5 MW Fupin Photovoltaic (“Yushe Fupin Photovoltaic”) is located in the city of Jinzhong of Shanxi Province. Yushe Fupin Photovoltaic commenced operation in August 2018, with an installed capacity of 10.5 MW. We hold 90% of the equity interest in Yushe Fupin Photovoltaic.

Power Plants in Shandong Province

Dezhou Power Plant

Huaneng Dezhou Power Plant ("Dezhou Power Plant") is located in Dezhou City, near the border between Shandong and Hebei Provinces, close to an industrial zone that is an important user of electric power for industrial and commercial purposes. Dezhou Power Plant is comprised of three phases, with Phase I consisting of one 320MW and one 330MW coal-fired generating units, Phase II consisting of one 330MW and one 320MW coal-fired generating units, and Phase III consisting of two 700 MW coal-fired generating units. The installed capacity of Unit IV was upgraded from 300 MW to 320 MW in January 2009. We hold 100% equity interest in Dezhou Power Plant.

Dezhou Power Plant is approximately 200 km from Taiyuan, Shanxi Province, the source of the plant's coal supply. The plant is located on the Taiyuan-Shijiazhuang-Dezhou rail line, giving it access to transportation facilities for coal. Dezhou Power Plant typically stores 400,000 tons of coal on site. In 2018, Dezhou Power Plant obtained approximately 66.1% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Dezhou Power Plant in 2018 was RMB530.44 (2017: RMB525.39) per ton. The plant is connected to the main trunk rail line at Dezhou by a dedicated 3.5 km spur line owned by us.

Dezhou Power Plant sells its electricity to State Grid Shandong Electric Power Company.

Jining Power Plant

Huaneng Jining Power Plant ("Jining Power Plant") is located in Jining City, near the Jining load center and near numerous coal mines. Yanzhou coal mine, which is adjacent to the plant, alone has an annual production of approximately 20 million tons. Jining Power Plant typically stores 100,000 tons of coal on site.

Jining Power Plant currently consists of two coal-fired generating units, with an aggregate installed capacity of 270 MW. In addition, Jining Power Plant (Co-generation) has an installed capacity of 700 MW and

consists of two 350 MW generating units which commenced operation in November and December 2009, respectively. We hold 100% equity interest in Jining Power Plant.

In 2018, Jining Power Plant obtained approximately 43.8% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Jining Power Plant in 2018 was RMB587.09 (2017: RMB580.38) per ton.

Jining Power Plant sells its electricity to State Grid Shandong Electric Power Company.

Xindian Power Plant

Huaneng Xindian Power Plant ("Xindian Power Plant") is located in Zibo City of Shandong Province. Xindian Power Plant has an installed capacity of 450 MW and consists of two 225 MW coal-fired generating units which commenced operations in December 2001 and January 2002, respectively, and were shut down in September 2009. Xindian Power Plant Phase III consists of two 300 MW generating units with a total installed capacity of 600 MW, which were put into operation in September and November 2006, respectively. We hold 95% equity interest in Xindian Power Plant Phase III.

The coal supply for Xindian Power Plant is obtained from several coal producers located mostly in Shanxi Province. Xindian Power Plant typically stores 250,000 tons of coal on site. In 2018, Xindian Power Plant obtained 20.6% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Xindian Power Plant in 2018 was RMB606.12 (2017: RMB608.35) per ton.

Xindian Power Plant sells its electricity to State Grid Shandong Electric Power Company.

Furuite Rooftop Photovoltaic

Furuite 6.3MW Photovoltaic Power Plant ("Furuite Photovoltaic") is located in the city of Zibo of Shandong Province. Furuite Photovoltaic commenced its operation in June 2017 and has an installed capacity of 6.3 MW. We hold 95% equity interest in Furuite Photovoltaic.

Furuite Photovoltaic sells its electricity to State Grid Shandong Electric Power Company.

Weihai Power Plant

Huaneng Weihai Power Plant ("Weihai Power Plant") is located approximately 16 km southeast of Weihai City, on the shore of the Bohai Gulf. Its location provides access to cooling water for operations and transportation of coal as well as ash and slag disposal facilities. We hold 60% equity interest in Weihai Power Plant, the remaining 40% interest of which is owned by Weihai Power Development Bureau ("WPDB").

Weihai Power Plant Phase I consists of two 125 MW generating units (Units I and II), and Phase II consists of two 320 MW generating units (Units III and IV). Unit I began commercial operation in May 1994 and was shut down in December 2008, and Unit II began commercial operation in January 1995 and was shut down in November 2008. Unit III and Unit IV commenced operation in March and November 1998, respectively. Each of the Units III and IV was upgraded from 300 MW to 320 MW in January 2009. Weihai Power Plant Phase III consists of two 680 MW generating units which commenced operations in December 2012. The coal supply for Weihai Power Plant is obtained from Shanxi Province and Inner Mongolia. Weihai Power Plant typically stores 160,000 tons of coal on site. In 2018, Weihai Power Plant obtained approximately 72.8% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Weihai Power Plant in 2018 was RMB607.62 (2017: RMB573.98) per ton.

Weihai Power Plant sells its electricity to State Grid Shandong Electric Power Company.

Rizhao Power Plant

Huaneng Rizhao Power Plant ("Rizhao Power Plant") is located in Rizhao City of Shandong Province. Rizhao Power Plant currently has an aggregate installed capacity of 2,060 MW. Rizhao Power Plant Phase I has an

installed capacity of 700 MW and consists of two 350 MW coal-fired generating units which both commenced operations in April 2000. We hold 88.8% equity interests in Phase I of Rizhao Power Plant.

We hold 100% equity interest in Phase II of Rizhao Power Plant, which commenced operation in December 2008 and consists of two 680 MW supercritical coal-fired generating units. The coal supply for Phase II of Rizhao Power Plant is obtained from Shanxi Province. Phase II of Rizhao Power Plant typically stores 217,800 tons of coal on site. In 2018, Phase II of Rizhao Power Plant obtained 39.3% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Phase II of Rizhao Power Plant in 2018 was RMB615.83 (2017: RMB601.16) per ton.

Rizhao Power Plant sells its electricity to State Grid Shandong Electric Power Company.

Zhanhua Co-generation

Shandong Zhanhua Co-generation Limited Company ("Zhanhua Co-generation") is located in Zhanhua City of Shandong Province. Zhanhua Co-generation currently has an aggregate installed capacity of 330 MW, consisting of two generating units which commenced operations in July 2005. We hold 100% equity interest in Zhanhua Co-generation.

The coal supply for Zhanhua Co-generation is mainly obtained from Inner Mongolia Autonomous Region. Zhanhua Co-generation typically stores 90,000 tons of coal on site. In 2018, Zhanhua Co-generation obtained 21.8% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Zhanhua Co-generation in 2018 was RMB579.37 (2017: RMB563.71) per ton.

Zhanhua Co-generation sells its electricity to State Grid Shandong Electric Power Company.

Baiyanghe Power Plant

Huaneng Shandong Zibo Baiyanghe Power Plant ("Baiyanghe Power Plant") is located in the city of Zibo in Shandong Province. Baiyanghe Power Plant currently has an aggregate installed capacity of 890 MW. Baiyanghe Power Plant Phase I has an installed capacity of 290 MW and consists of two 145 MW coal-fired generating units which commenced operations in October 2003. Baiyanghe Power Plant Phase II has an installed capacity of 600 MW and consists of two 300 MW coal-fired generating units which commenced operations in December 2009. We hold 80% equity interests in Baiyanghe Power Plant.

The coal supply for Baiyanghe Power Plant is obtained from several coal producers located in the provinces of Shandong, Shanxi, Shaanxi and Inner Mongolia Autonomous Region. Baiyanghe Power Plant typically stores 125,300 tons of coal on site. In 2018, Baiyanghe Power Plant obtained 29.3% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Baiyanghe Power Plant in 2018 was RMB567.90 (2017: RMB551.56) per ton.

Baiyanghe Power Plant sells its electricity to State Grid Shandong Electric Power Company.

Jiaxiang Power Plant

Huaneng Jiaxiang Power Plant ("Jiaxiang Power Plant") is located in the city of Jining in Shandong Province. Jiaxiang Power Plant currently has an aggregate installed capacity of 660 MW which consists of two 330 MW coal-fired generating units which commenced operations in September 1999 and January 2003, respectively. We hold 40% equity interests in Jiaxiang Power Plant.

The coal supply for Jiaxiang Power Plant is obtained from several coal producers located in the Shandong Province. Jiaxiang Power Plant typically stores 115,300 tons of coal on site. In 2018, Jiaxiang Power Plant obtained 96.8% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Jiaxiang Power Plant in 2018 was RMB524.55 (2017: RMB535.62) per ton.

Jiaxiang Power Plant sells its electricity to State Grid Shandong Electric Power Company.

Jining Co-generation

Huaneng Jining Co-generation Power Plant ("Jining Co-generation") is located in the city of Jining in Shandong Province. Jining Co-generation currently has an aggregate installed capacity of 60 MW which consists of two 30 MW coal-fired generating units which commenced operations in April and July 2004, respectively. We hold 40% equity interests in Jining Co-generation.

The coal supply for Jining Co-generation is obtained from several coal producers located in the Shandong Province. Jining Co-generation typically stores 10,600 tons of coal on site. In 2018, Jining Co-generation obtained 100.0% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Jining Co-generation in 2018 was RMB521.34 (2017: RMB501.70) per ton.

Jining Co-generation sells its electricity to State Grid Shandong Electric Power Company.

Qufu Co-generation

Huaneng Qufu Shengcheng Co-generation Power Plant ("Qufu Co-generation") is located in the city of Jining in Shandong Province. Qufu Co-generation currently has an aggregate installed capacity of 450 MW which consists of one 225 MW coal-fired generating unit which commenced operations in February 2009 and one 225 MW coal-fired generating unit which commenced operations in September 2009. We hold 40% equity interests in Qufu Co-generation.

The coal supply for Qufu Co-generation is obtained from several coal producers located in the Shandong Province. Qufu Co-generation typically stores 34,100 tons of coal on site. In 2018, Qufu Co-generation obtained 100.0% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Qufu Co-generation in 2018 was RMB536.94 (2016: RMB544.29) per ton.

Qufu Co-generation sells its electricity to State Grid Shandong Electric Power Company.

Huangtai Power Plant

Huaneng Jinan Huangtai Power Plant ("Huangtai Power Plant") is located in the city of Jinan in Shandong Province. Huangtai Power Plant currently has an aggregate installed capacity of 680 MW which consists of one 330 MW coal-fired generating unit which commenced operations in November 1987 and one 350 MW coal-fired generating unit which commenced operations in January 2011. We hold 72% equity interests in Huangtai Power Plant.

The coal supply for Huangtai Power Plant is obtained from several coal producers located in the provinces of Shandong, Shanxi, Shaanxi and Inner Mongolia Autonomous Region. Huangtai Power Plant typically stores 155,700 tons of coal on site. In 2018, Huangtai Power Plant obtained 35.3% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Huangtai Power Plant in 2018 was RMB611.30 (2017: RMB602.21) per ton.

Huangtai Power Plant sells its electricity to State Grid Shandong Electric Power Company.

Yantai Power Plant

Huaneng Yantai Power Plant ("Yantai Power Plant") is located in the city of Yantai in Shandong Province. Yantai Power Plant currently has an aggregate installed capacity of 590 MW which consists of one 110 MW and three 160 MW coal-fired generating units. The 110 MW unit commenced operations in April 1996, and the three 160 MW units commenced operation in October 2005, December 2005 and October 2006 respectively. We hold 80% equity interest in Yantai Power Plant.

The coal supply for Yantai Power Plant is obtained from Shanxi Province, Inner Mongolia Autonomous Region and partially imported coal. Yantai Power Plant typically stores 176,100 tons of coal on site. In 2018, Yantai Power Plant obtained 82.5% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Yantai Power Plant in 2018 was RMB603.47 (2017: RMB561.89) per ton.

Yantai Power Plant sells its electricity to State Grid Shandong Electric Power Company.

Linyi Power Plant

Huaneng Linyi Power Plant ("Linyi Power Plant") is located in the city of Linyi in Shandong Province. Linyi Power Plant currently has an aggregate installed capacity of 1,260 MW which consists of four 140 MW and two 350 MW coal-fired generating units. The 350 MW units commenced operations in December 2012 and October 2013, respectively, and the four 140 MW units commenced operation in December 1997, April 2003, September 2003 and April 2005, respectively. We hold 60% equity interest in Linyi Power Plant.

The coal supply for Linyi Power Plant is obtained from several coal producers located in the provinces of Shandong, Shanxi, Shaanxi and Inner Mongolia Autonomous Region. Linyi Power Plant typically stores 249,000 tons of coal on site. In 2018, Linyi Power Plant obtained 29.6% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Linyi Power Plant in 2018 was RMB649.38 (2017: RMB639.79) per ton.

Linyi Power Plant sells its electricity to State Grid Shandong Electric Power Company.

Jining Yunhe Power Plant

Huaneng Jining Yunhe Power Plant ("Jining Yunhe Power Plant") is located in the city of Jining in Shandong Province. Jining Yunhe Power Plant currently has an aggregate installed capacity of 1,240 MW which consists of four 145 MW and two 330 MW coal-fired generating units. The 330 MW units commenced operations in March and September 2006, respectively, and the four 145 MW units commenced operation in July 2000, November 2000, September 2003 and February 2004, respectively. We hold 78.68% equity interest in Jining Yunhe Power Plant.

The coal supply for Jining Yunhe Power Plant is obtained from several coal producers located in the Shandong Province. Jining Yunhe Power Plant typically stores 50,900 tons of coal on site. In 2017, Jining Yunhe Power Plant obtained 84.8% of its total consumption of coal from annual contracts and the remainder from the open market from the open market. The average coal purchase price for Jining Yunhe Power Plant in 2018 was RMB555.42 (2017: RMB556.80) per ton.

Jining Yunhe Power Plant sells its electricity to State Grid Shandong Electric Power Company.

Liaocheng Co-generation

Huaneng Liaocheng Co-generation Power Plant ("Liaocheng Co-generation") is located in the city of Liaocheng in Shandong Province. Liaocheng Co-generation currently has an aggregate installed capacity of 660 MW which consists of two 330 MW coal-fired generating unit which commenced operations in January and September 2006, respectively. We hold 60% equity interests in Liaocheng Co-generation.

The coal supply for Liaocheng Co-generation is obtained from several coal producers located in the provinces of Shandong, Shanxi, Shaanxi and Inner Mongolia Autonomous Region. Liaogcheng Co-generation typically stores 141,300 tons of coal on site. In 2018, Liaogcheng Co-generation obtained 21.7% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Liaogcheng Co-generation in 2018 was RMB568.97 (2017: RMB561.17) per ton.

Liaogcheng Co-generation sells its electricity to State Grid Shandong Electric Power Company.

Zhongtai Power Plant

Huaneng Taian Zhongtai Power Plant ("Zhongtai Power Plant") is located in the city of Taian in Shandong Province. Taian Power Plant currently has an aggregate installed capacity of 300 MW which consists of two 150 MW coal-fired generating units, which commenced operations in May and December 2007, respectively. We hold 80% equity interest in Taian Power Plant.

The coal supply for Zhongtai Power Plant is obtained from several coal producers located in the Shandong and Shanxi. Zhongtai Power Plant typically stores 103,600 tons of coal on site. In 2018, Zhongtai Power Plant obtained 30.3% of its total consumption of coal from annual contracts and the remainder from the open market from the open market. The average coal purchase price for Zhongtai Power Plant in 2018 was RMB454.71 (2017: RMB435.19) per ton.

Zhongtai Power Plant sells its electricity to State Grid Shandong Electric Power Company.

Laiwu Power Plant

Huaneng Laiwu Power Plant ("Laiwu Power Plant") is located in the city of Laiwu in Shandong Province. Laiwu Power Plant currently has an aggregate installed capacity of 2,000 MW which consists of two 1,000 MW coal-fired generating units, which commenced operations in December 2015 and November 2016, respectively. We hold 64% equity interest in Laiwu Power Plant.

The coal supply for Laiwu Power Plant is obtained from several coal producers located in the provinces of Shandong, Shanxi, Shaanxi and Inner Mongolia Autonomous Region. Laiwu Power Plant typically stores 246,600 tons of coal on site. In 2018, Laiwu Power Plant obtained 16.4% of its total consumption of coal from annual contracts and the remainder from the open market from the open market. The average coal purchase price for Laiwu Power Plant in 2018 was RMB636.96 (2017: RMB645.56) per ton.

Laiwu Power Plant sells its electricity to State Grid Shandong Electric Power Company.

Muping Wind Power

Muping Wind Power Plant ("Muping Wind Power") is located in the city of Yantai in Shandong Province. Muping Wind Power Plant consists of 28 wind power turbines of 1.5 MW each. We hold 80% equity interest in Muping Wind Power.

Muping Wind Power sells its electricity to State Grid Shandong Electric Power Company.

Penglai Wind Power

Huaneng Penglai Daliuhang Wind Power Plant ("Penglai Wind Power") is located in the city of Yantai in Shandong Province. Penglai Wind Power Plant consists of 48 wind power turbines of 2 MW each and 2 wind power turbines of 1.8 MW each. We hold 80% equity interest in Penglai Wind Power.

Penglai Wind Power sells its electricity to State Grid Shandong Electric Power Company.

Rushan Wind Power

Huaneng Rushan Wind Power Plant ("Rushan Wind Power") is located in the city of Weihai in Shandong Province. Rushan Wind Power Plant consists of 28 wind power turbines of 1.5 MW each. We hold 80% equity interest in Rushan Wind Power.

Rushan Wind Power sells its electricity to State Grid Shandong Electric Power Company.

Rongcheng Wind Power

Huaneng Rongcheng Wind Power Plant ("Rongcheng Wind Power") is located in the city of Weihai in Shandong Province. Rongcheng Wind Power Plant consists of 10 wind power turbines of 1.5 MW each. We hold 48% equity interest in Rongcheng Wind Power.

Rongcheng Wind Power sells its electricity to State Grid Shandong Electric Power Company.

Dongying Wind Power

Huaneng Dongying Wind Power Plant ("Dongying Wind Power") is located in the city of Dongying in Shandong Province. Dongying Wind Power Plant consists of 32 wind power turbines of 1.5 MW each. We hold 56% equity interest in Dongying Wind Power.

Dongying Wind Power sells its electricity to State Grid Shandong Electric Power Company.

Boshan Photovoltaic

Boshan Photovoltaic Power Plant ("Boshan Photovoltaic") is located in Zibo City. Boshan Photovoltaic commenced its operation in May 2016 and has an installed capacity of 12 MW. We hold 80% equity interest in Boshan Photovoltaic.

Boshan Photovoltaic sells its electricity to State Grid Shandong Electric Power Company.

Gaozhuang Photovoltaic

Gaozhuang Photovoltaic Power Plant ("Gaozhuang Photovoltaic") is located in Laiwu City. Gaozhuang Photovoltaic commenced its operation in May 2016 and has an installed capacity of 20 MW. We hold 80% equity interest in Gaozhuang Photovoltaic.

Gaozhuang Photovoltaic sells its electricity to State Grid Shandong Electric Power Company.

Jining Co-generation Photovoltaic.

Jining Co-generation Photovoltaic Project ("Jining Co-generation Photovoltaic") is located in Jining City. The project commenced its operation in February 2017 and has an installed capacity of 20 MW. We hold 80% equity interest in this project.

Jining Co-generation Photovoltaic sells its electricity to State Grid Shandong Electric Power Company.

Zhanhua Qingfenghu Wind Power

Zhanhua Qingfenghu Wind Power Plant ("Zhanhua Qingfenghu Wind Power") is located in the city of Binzhou in Shandong Province. Zhanhua Qingfenghu Wind Power Plant commenced operation in December 2017 with an installed capacity of 100 MW, including 50 wind power turbines of 2 MW each. We hold 80% equity interest in Zhanhua Qingfenghu Wind Power.

Zhanhua Qingfenghu Wind Power sells its electricity to State Grid Shandong Electric Power Company.

Jining Photovoltaic

Jining 20 MW Photovoltaic Power Plant ("Jining Photovoltaic") is located in the city of Jining of Shandong Province. Jining Photovoltaic commenced its operation in February 2017 and has an installed capacity of 20 MW. We hold 80% equity interest in Jining Photovoltaic.

Jining Photovoltaic sells its electricity to State Grid Shandong Electric Power Company.

Laiwu Niuquan Photovoltaic

Laiwu Niuquan 20 MW Photovoltaic Power Plant ("Laiwu Niuquan Photovoltaic") is located in the city of Laiwu of Shandong Province. Laiwu Niuquan Photovoltaic commenced its operation in April 2017 and has an installed capacity of 20 MW. We hold 80% equity interest in Laiwu Niuquan Photovoltaic.

Laiwu Niuquan Photovoltaic sells its electricity to State Grid Shandong Electric Power Company.

Zhanhua Qingfenghu Photovoltaic

Zhanhua Qingfenghu 100MW Photovoltaic Power Plant ("Zhanhua Qingfenghu Photovoltaic") is located in the city of Binzhou of Shandong Province. Zhanhua Qingfenghu Photovoltaic commenced its operation in June 2017 and has an installed capacity of 100 MW. We hold 46% equity interest in Zhanhua Qingfenghu Photovoltaic.

Zhanhua Qingfenghu Photovoltaic sells its electricity to State Grid Shandong Electric Power Company.

Weihai Haibu Photovoltaic

Weihai Haibu 19.8MW Photovoltaic Power Plant ("Weihai Haibu Photovoltaic") is located in the city of Weihai of Shandong Province. Weihai Haibu Photovoltaic commenced its operation in June 2017 and has an installed capacity of 19.75 MW. We hold 80% equity interest in Weihai Haibu Photovoltaic.

Weihai Haibu Photovoltaic sells its electricity to State Grid Shandong Electric Power Company.

Jining Weishan Zhaozhuang Photovoltaic

Jining Weishan Zhaozhuang 80MW Photovoltaic Power Plant ("Jining Weishan Zhaozhuang Photovoltaic") is located in the city of Jining of Shandong Province. Jining Weishan Zhaozhuang Photovoltaic commenced its operation in December 2017 and has an installed capacity of 80MW. We hold 40% equity interest in Jining Weishan Zhaozhuang Photovoltaic.

Jining Weishan Zhaozhuang Photovoltaic sells its electricity to State Grid Shandong Electric Power Company.

Power Plants and Projects in Henan Province

Qinbei Power Plant

Huaneng Qinbei Power Plant ("Qinbei Power Plant") is located in Jiyuan City of Henan Province. Its installed capacity is 2,400 MW which consists of four 600 MW supercritical coal-fired generating units. Two units commenced operations in November and December 2004, and the other two units commenced operation in November 2007. In March 2012 and February 2013, two 1,000 MW domestic ultra-supercritical coal-fired generating units of Phase III of Qinbei Power Plant commenced operation, respectively. We hold 60% equity interest in Qinbei Power Plant.

The coal supply for Qinbei Power Plant is obtained from Shanxi Province. Qinbei Power Plant typically stores 270,000 tons of coal on site. In 2018, Qinbei Power Plant obtained 37.5% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Qinbei Power Plant in 2018 was RMB546.80 (2017: RMB538.13) per ton.

Qinbei Power Plant sells its electricity to Henan Electric Power Company.

Luoyang Co-generation Power Plant

Luoyang Co-generation Power Plant ("Luoyang Co-generation") is located at Luoyang City of Henan Province. The project has an installed capacity of 700 MW, consisting of two sets of 350MW coal-fired generation units, which commenced operation in May and June 2015, respectively. We hold 80% equity interest in this plant.

The coal supply for Luoyang Co-generation is obtained from Henan and Shaanxi. Luoyang Co-generation typically stores 120,000 tons of coal on site. In 2018, Luoyang Co-generation obtained 49.7% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Luoyang Co-generation in 2018 was RMB522.17 (2017: RMB535.13) per ton.

Luoyang Co-generation sells its electricity to Henan Electric Power Company.

Luoyang Yangguang Power Plant

Luoyang Yangguang Power Plant ("Luoyang Yangguang") is located at Luoyang City of Henan Province. The project has an installed capacity of 270 MW, consisting of two sets of 135 MW coal-fired generation units, which commenced operation in June and October 2006, respectively. We hold 80% equity interest in this plant.

Luoyang Yangguang sells its electricity to Henan Electric Power Company.

Mianchi Co-generation

Mianchi Co-generation Power Plant ("Mianchi Co-generation") is located in Mianchi City of Henan Province. The project has an installed capacity of 700 MW, consisting of two sets of 350MW coal-fired generation units, which commenced operation in December 2016. We hold 60% equity interest in this plant.

The coal supply for Mianchi Co-generation is obtained from Yima Coal Group which has mining operations in Henan, Qinghai, Shanxi, Tibet and Inner Mongolia. Mianchi Co-generation typically stores 20,000 tons of coal on site. In 2018, Mianchi Co-generation obtained 85.5% of its total consumption of coal from annual contracts. The average coal purchase price for Luoyang Co-generation Power Plant in 2018 was RMB448.69 (2017: RMB413.22) per ton.

Mianchi Co-generation sells its electricity to Henan Electric Power Company.

Zhumadian Wind Power

Zhumadian Wind Power ("Zhumadian Wind Power") is located in Zhumadian City of Henan Province. The project has an installed capacity of 32 MW, consisting of sixteen 2MW wind turbines, which commenced operation in December 2016. We hold 90% equity interest in this plant.

Zhumadian Wind Power sells its electricity to Henan Electric Power Company.

Qinbei Dianchanghuichang Photovoltaic

Qinbei Dianchanghuichang 20MW Photovoltaic Power Plant ("Qinbei Dianchanghuichang Photovoltaic") is located in the city of Jiyuan of Henan Province. Qinbei Dianchanghuichang Photovoltaic commenced its operation in June 2017 and has an installed capacity of 20MW. We hold 60% equity interest in Qinbei Dianchanghuichang Photovoltaic.

Qinbei Dianchanghuichang Photovoltaic sells its electricity to Henan Electric Power Company.

Tangyin Wind Power

Tangyin Wind Power is located in Anyang City of Henan Province. The project has an installed capacity of 151.8 MW, consisting of 69 2MW wind turbines, which commenced operation in December 2018. We hold 100% equity interest in this plant.

Power Plants and Projects in Jiangsu Province

Nantong Power Plant

Huaneng Nantong Power Plant ("Nantong Power Plant") is located in Nantong City. Nantong Power Plant, including Phase I, Phase II and Phase III, has an installed capacity of 2,454 MW and consists of two 352 MW, two 350 MW and one 1,050 MW coal-fired generating units which commenced operations in 1989, 1990 1999 and 2014. We hold 100% equity interest in Phase I and Phase II of Nantong Power Plant and 35% equity interest in Phase III of Nantong Power Plant.

The coal supply for Nantong Power Plant is obtained from several coal producers located mostly in Northern Shanxi Province. The coal is transported by rail from the mines to Qinhuangdao port and then shipped to the Nantong Power Plant. Nantong Power Plant typically stores 300,000 tons of coal on site.

In 2018, Nantong Power Plant obtained 54.7% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Nantong Power Plant in 2018 was RMB516.52 (2017: RMB507.93) per ton.

Nantong Power Plant sells its electricity to Jiangsu Electric Power Company.

Nanjing Power Plant

Huaneng Nanjing Power Plant ("Nanjing Power Plant") has an installed capacity of 640 MW consisting of two 320 MW coal-fired generating units which commenced operations in March and October 1994, respectively. We hold 100% equity interest in Nanjing Power Plant.

The coal supply for the Nanjing Power Plant is obtained from several coal producers located in the Shanxi and Anhui Provinces. The coal is transported by rail from the mines to Yuxikou Port and Pukou Port and shipped to the plant's own wharf facilities. The wharf is capable of handling 6,000 ton vessels. Nanjing Power Plant typically stores 120,000 tons of coal on site and consumes 5,000 tons of coal per day when operating at maximum generating capacity.

In 2018, Nanjing Power Plant obtained approximately 80.0% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Nanjing Power Plant in 2018 was RMB623.28 (2017: RMB608.51) per ton.

Nanjing Power Plant sells its electricity to Jiangsu Electric Power Company.

Taicang Power Plant

Huaneng Taicang Power Plant ("Taicang Power Plant") is located in the vicinity of Suzhou, Wuxi and Changzhou, which is the most affluent area in Jiangsu Province. Taicang Power Plant is an ancillary facility of the China-Singapore Suzhou Industrial Park. Taicang Power Plant Phase I consists of two 300 MW coal-fired generating units, which commenced operations in December 1999 and April 2000 respectively. Taicang Phase II Expansion consists of two 600 MW coal-fired generating units, which commenced operations in January and February 2006, respectively. In April 2008, the installed capacities of the four units of Taicang Power Plant were upgraded to 320 MW, 320 MW, 630 MW and 630 MW, respectively, which increased the total installed capacity of Taicang Power Plant to 1,900 MW. We hold 75% equity interest in Taicang Power Plant.

The coal supply for Taicang Power Plant is primarily from Shenhua in Inner Mongolia and Datong in Shanxi Province. Taicang Power Plant typically stores 350,000 tons of coal on site. In 2018, Taicang Power Plant obtained approximately 47.0% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Taicang Power Plant in 2018 was RMB491.97 (2017: RMB497.05) per ton.

Taicang Power Plant sells its electricity to Jiangsu Electric Power Company.

Huaiyin Power Plant

Huaneng Huaiyin Power Plant ("Huaiyin Power Plant") is located in the Center of the Northern Jiangsu Power Grid. The plant's two 220 MW coal-fired generating units commenced operation in November 1993 and August 1994, respectively. In order to reduce energy consumption and increase capacity, one generating unit of Huaiyin Power Plant was upgraded in October 2001, which increased the maximum generating capacity of that unit to 220 MW. In 2002, upgrading of the second generating unit was completed, and the actual generating capacity of Huaiyin Power Plant is 440 MW. The other two 330 MW coal-fired generating units of Huaiyin Power Plant Phase II Expansion commenced operations in January and March 2005, respectively. Huaiyin Power Plant Phase III consists of two 330 MW coal-fired generating units, and which were put into operation in May and September 2006, respectively. We hold 100% equity interest in Phase I and 63.64% equity interest in Phase II and Phase III of Huaiyin Power Plant. Unit I and Unit II of Huaiyin Power Plant were shut down in December 2007 and January 2009, respectively.

The coal supply for the Huaiyin Power Plant is primarily from Anhui Province, Henan Province and Shanxi Province. Huaiyin Power Plant typically stores 180,000 tons of coal on site. In 2018, Huaiyin Power Plant obtained approximately 47.9% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Huaiyin Power Plant in 2018 was RMB619.22 (2017: RMB591.79) per ton.

Huaiyin Power Plant sells its electricity to Jiangsu Electric Power Company.

Jinling Power Plant

Huaneng Nanjing Jinling Power Plant ("Jinling Power Plant") is located in Nanjing, Jiangsu. Jinling Power Plant (CCGT) consists of two 390 MW gas-fired generating units, which commenced operation in December 2006 and March 2007, respectively. We hold 60% equity interest in Jinling Power Plant (CCGT). The gas supply for Jinling Power Plant (CCGT) is transported through the pipeline of "West-East Gas Transport Project."

Jinling Power Plant (Coal-fired) consists of two 1,030 MW domestic ultra-supercritical coal-fired generating units, which commenced operation in December 2009 and August 2012, respectively. We hold 60% equity interest in Phase I and Phase II of Jinling Power Plant (Coal-fired). The coal supply for Jinling Power Plant (Coal-fired) is primarily from Shanxi Province and Inner Mongolia Autonomous Region. Jinling Power Plant (Coal-fired) typically stores 300,000 tons of coal on site. In 2018, Jinling Power Plant (Coal-fired) obtained approximately 57.9% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Jinling Power Plant (Coal-fired) in 2018 was RMB538.15 (2017: RMB543.80) per ton.

Jinling Power Plant sells its electricity to Jiangsu Electric Power Company.

Qidong Wind Power

Huaneng Qidong Wind Power Plant ("Qidong Wind Power") is located in Nantong City, Jiangsu. Qidong Wind Power Phase I has an installed capacity of 91.5 MW and commenced operation in March 2009. The first stage and second stage of the Phase II Project of Qidong Wind Power with a total generation capacity of 50 MW and 44 MW respectively commenced operation in January 2011 and June 2012, respectively. We hold 65% equity interest in Qidong Wind Power.

Qidong Wind Power Plant sells its electricity to Jiangsu Electric Power Company.

Jinling CCGT Co-generation

Jinling CCGT Co-generation is located in Nanjing, Jiangsu. The plant comprises of two 191 MW class (E grade) combined cycle gas turbine cogeneration units and the corresponding support facilities. The two units commenced operation in April 2013 and May 2013, respectively. We hold 51% equity interest in Jinling CCGT Co-generation. The gas supply for this plant is transported through the pipeline of "West-East Gas Transport Project."

Jinling CCGT Co-generation sells its electricity to Jiangsu Electric Power Company.

Rudong Wind Power

Rudong Wind Power Plant ("Rudong Wind Power") is located in Rudong, Jiangsu. Phase I of the plant has a total installed generation capacity of 48MW. It commenced operations in November 2013. We hold 90% equity interest in Rudong Wind Power.

Rudong Wind Power sells its electricity to Jiangsu Electric Power Company.

Tongshan Wind Power

Tongshan Wind Power Plant ("Tongshan Wind Power") is located in Tongshan, Jiangsu Province. Phase I of the plant has an installed capacity of 50 MW. It commenced operation in March 2016. The phase II commenced operation in December 2017, and has an installed capacity of 48MW, consisting of 24 wind turbines of 2WM each. We hold 70% equity interest in Tongshan Wind Power.

Tongshan Wind Power sells its electricity to Jiangsu Electric Power Company.

Suzhou Co-generation

Huaneng Suzhou Co-generation Power Plant ("Suzhou Co-generation") is located in Suzhou City in Jiangsu Province. Suzhou Co-generation has an installed capacity of 120 MW and consists of two 60 MW coal-fired generating units which commenced operation in 2006. We hold 53.45% equity interest in Suzhou Co-generation. We acquired the power plant in January, 2015 from Huaneng Group.

The coal supply for Suzhou Co-generation is obtained from Shanxi, Inner Mongolia and partially imported coal. Suzhou Co-generation typically stores 30,000 tons of coal on site. In 2018, Suzhou Co-generation obtained 56.0% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Suzhou Co-generation in 2018 was RMB590.35 (2017: RMB551.67) per ton.

Suzhou Co-generation sells its electricity to Jiangsu Electric Power Company.

Taicang Coal Pier Project

Suzhou Port Taicang Terminal Zone Huaneng Coal Pier ("Taicang Coal Pier Project") is located in Taicang, Suzhou. The Taicang Coal Pier Project has one berth of 100,000 dead weight tonnage ("DWT") and one berth of 50,000 DWT for coal discharging, four berths of 5,000 DWT each and six berths of 1,000 DWT each for coal loading. The above facilities have commenced trial operation in 2013. We hold 100% equity interest in this project.

Nanjing Chemical Industry Park Co-generation Power Plant

Nanjing Chemical Industry Park Co-generation Power Plant ("Nanjing Chemical Industry Park Co-Generation") is located in the city of Nanjing in Jiangsu Province. It has an installed capacity of 100MW consisting of two sets of extraction back-pressure turbines of 50 MW each, which commenced operation in April and December 2016, respectively. We hold 70% equity interest in Nanjing Chemical Industry Park Co-Generation Power Plant.

Nanjing Chemical Industry Park Co-generation typically stores 60,000 tons of coal on site. In 2018, Nanjing Co-generation obtained 95.9% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Nanjing Chemical Industry Park Co-generation in 2018 was RMB613.77 (2017: RMB588.20) per ton.

Nanjing Chemical Industry Park Co-generation Power Plant sells its electricity to Jiangsu Electric Power Company.

Luhe Wind Power

Luhe Wind Power ("Luhe Wind Power") is located in Nanjing, Jiangsu. It has an installed capacity of 50 MW, consisting of 25 wind power turbines of 2 MW each, which commenced operation in December 2016. We hold 100% equity interest in Luhe Wind Power.

Luhe Wind Power sells its electricity to Jiangsu Electric Power Company.

Guanyun Co-generation Power

Guanyun Co-generation Power Plant ("Guanyun Co-generation Power") is located in the city of Lianyungang of Jiangsu Province, with an installed capacity of 50 MW consisting of two 25 MW coal-fired generating units which commenced operations in December 2017. We hold 100% equity interest in Guanyun Co-generation Power.

In 2018, Guanyun Co-generation Power obtained 100.0% of its total consumption of coal from annual contracts. The average coal purchase price for Guanyun Co-generation Power in 2018 was RMB670.30 per ton.

Guanyun Co-generation Power sells its electricity to Jiangsu Electric Power Company.

Suzhou CCGT

Suzhou Gas-fired Co-generation Power Plant ("Suzhou CCGT") is located in the city of Lianyungang of Jiangsu Province, with an installed capacity of 452 MW consisting of two (E-class) combined cycle gas turbine cogeneration units which commenced operations in July and September 2017, respectively. We hold 100% equity interest in Suzhou CCGT.

Suzhou CCGT sells its electricity to Jiangsu Electric Power Company.

Rudong Offshore Wind Power

Rudong Offshore Wind Power ("Rudong Offshore Wind Power") is located in the county of Rudong, the city of Nantong of Jiangsu Province. It has an installed capacity of 302.4 MW, consisting of 38 wind power turbines of 4 MW each, 12 wind power turbines of 4.2 MW each, and 20 wind power turbines of 5 MW each, which commenced operation in March and September 2017. We hold 70% equity interest in Rudong Offshore Wind Power.

Rudong Offshore Wind Power sells its electricity to Jiangsu Electric Power Company.

Yizheng Wind Power

Yicheng Wind Power ("Yicheng Wind Power") is located in the city of Yizheng of Jiangsu Province. It has an installed capacity of 60 MW, consisting of 21 wind power turbines of 2.2 MW each and 6 wind power turbines of 2.3 MW each, which commenced operation in December 2017 and July 2018, respectively. We hold 100% equity interest in Yizheng Wind Power.

Yizheng Wind Power sells its electricity to Jiangsu Electric Power Company.

Taicang Dianchanghuichang Photovoltaic

Taicang Dianchanghuichang 40MW Photovoltaic Power Plant ("Taicang Dianchanghuichang Photovoltaic") is located in the city of Taicang of Jiangsu Province. Taicang Dianchanghuichang Photovoltaic commenced its production of 40MW in April 2017 and commenced its production of 10 MW in June 2018, respectively. We hold 75% equity interest in Taicang Dianchanghuichang Photovoltaic.

Taicang Dianchanghuichang Photovoltaic sells its electricity to Jiangsu Electric Power Company.

Guanyun Photovoltaic

Guanyun 14.1MW Photovoltaic Power Plant ("Guanyun Photovoltaic") is located in the city of Lianyungang of Jiangsu Province. Guanyun Photovoltaic commenced its operation in June 2017 and has an installed capacity of 14.1MW. We hold 100% equity interest in Guanyun Photovoltaic.

Guanyun Photovoltaic sells its electricity to Jiangsu Electric Power Company.

Huaiyin Dianchang Photovoltaic

Huaiyin Dianchang Photovoltaic is located in Huaian City of Jiangsu Province. Huaiyin Dianchang Photovoltaic commenced its operation in June 2018 and has an installed capacity of 30 MW. We hold 100% equity interest in Huaiyin Dianchang Photovoltaic.

Power Plants in Shanghai Municipality

Shidongkou I

Huaneng Shanghai Shidongkou First Power Plant ("Shidongkou I") is located in the northern region of the Shanghai Power Grid. The plant comprises four 325 MW coal-fired generating units, which commenced operation in February and December 1988, September 1989 and May 1990 respectively, and has a total installed capacity of 1,300 MW. The installed capacities of Unit II and Unit III were expanded from 300 MW to 325 MW in September

2007 and January 2008, respectively. The installed capacities of Unit I and Unit V were expanded from 300 MW and 320 MW to 325 MW and 325 MW in January 2010, respectively. We hold 100% equity interest in Shidongkou I.

The coal supply for Shidongkou I is primarily from Shanxi Province, Anhui Province and Henan Province. Shidongkou I Power Plant typically stores 150,000 tons of coal on site. In 2018, Shidongkou I obtained 59.2% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Shidongkou I in 2018 was RMB447.03 (2017: RMB447.81) per ton.

Shidongkou I sells its electricity to State Grid Shanghai Municipal Electric Power Company.

Shidongkou II

Huaneng Shanghai Shidongkou Second Power Plant ("Shidongkou II") is located in the northern suburbs of Shanghai. Shidongkou II has an installed capacity of 1,200 MW and consists of two 600 MW coal-fired super-critical units which commenced operations in June and December 1992, respectively. We hold 100% equity interest in Phase I of Shidongkou II. Phase II of Shidongkou II has an installed capacity of 1,320 MW and consists of two 660 MW coal-fired super-critical units which commenced operations in October 2011. We hold 50% equity interest in Phase II of Shidongkou II.

The coal supply for Shidongkou II is obtained from several coal producers located mostly in Northern Shanxi Province. The coal is transported by rail from the mines to Qinhuangdao port or Tianjin port and shipped to the plant's own wharf facilities. The wharf is capable of handling 35,000 ton vessels. Shidongkou II typically stores 180,000 tons of coal on site.

In 2018, Shidongkou II obtained 61.5% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Shidongkou II in 2018 was RMB503.58 (2017: RMB471.49) per ton.

Shidongkou II sells its electricity to State Grid Shanghai Municipal Electric Power Company.

Shanghai CCGT

Shanghai CCGT is located in Baoshan District of Shanghai Municipality. Shanghai CCGT consists of three 390 MW gas-fired combined-cycle generating units with a total installed capacity of 1,170 MW, which were put into operation in May, June and July 2006, respectively. We hold 70% equity interest in Shanghai CCGT.

The gas supply for Shanghai CCGT is transported through the pipeline of "West-East Gas Transport Project." Shanghai CCGT generates electricity during the peak load periods and sells its electricity to State Grid Shanghai Municipal Electric Power Company.

Power Plant in Chongqing Municipality

Luohuang Power Plant

Huaneng Luohuang Power Plant ("Luohuang Power Plant") is located in Chongqing Municipality. Each of Phase I and Phase II of Luohuang Power Plant has an installed capacity of 720 MW and consists of two 360 MW coal-fired generating units. The two units in Phase I commenced operation in September 1991 and February 1992 respectively, and the two units in Phase II commenced operation in December 1998. Luohuang Power Plant Phase III consist of two 600 MW coal-fired generating units with an installed capacity of 1,200 MW, which were put into operation in December 2006 and January 2007, respectively. We hold 60% equity interest in Luohuang Power Plant.

The coal supply for Luohuang Power Plant is obtained from Chongqing Municipality. Luohuang Power Plant typically stores 450,000 tons of coal on site. In 2018, Luohuang Power Plant obtained 99.9% of its coal supplies from annual contracts and the remainder from the open market. The average coal purchase price for Luohuang Power Plant in 2018 was RMB550.64 (2017: RMB584.09) per ton.

Luohuang Power Plant sells its electricity to Chongqing Municipal Electric Power Company.

Liangjiang CCGT

Liangjiang CCGT is located in Chongqing Municipality. Two generating units of this plant commenced operation in October and December 2014, respectively, with an installed capacity of 934 MW. We hold 90% equity interest in Liangjiang CCGT. The gas supply for Liangjiang CCGT is transported through pipeline of "West-East Gas Transport Project."

Liangjing CCGT sells its electricity to State Grid Chongqing Municipal Electric Power Company.

Fengjie Jinfengshan Wind Power

Fengjie Jinfengshan Wind Power is located in Fengjie County of Chongqing Municipality. Fengjie Jinfengshan Wind Power commenced its operation in December 2018 and has an installed capacity of 110 MW, consisting of 55 2MW wind turbines. We hold 100% equity interest in Fengjie Jinfengshan Wind Power.

Power Plants in Zhejiang Province

Yuhuan Power Plant

Huaneng Yuhuan Power Plant ("Yuhuan Power Plant") is located in Taizhou of Zhejiang Province. Yuhuan Power Plant Phase I consists of two 1,000 MW ultra-supercritical coal-fired generating units with a total installed capacity of 2,000 MW. Unit I and Unit II were put into operation in November 2006 and December 2006, respectively. Yuhuan Power Plant Phase II consists of two 1,000 MW ultra-supercritical coal-fired generating units with a total installed capacity of 2,000 MW, which commenced operations in November 2007. We hold 100% equity interest in Yuhuan Power Plant.

The coal supply for Yuhuan Power Plant is primarily obtained from Shanxi Province and Inner Mongolia Autonomous Region. Yuhuan Power Plant typically stores 500,000 tons of coal on site. In 2018, Yuhuan Power Plant obtained 56.2% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Yuhuan Power Plant in 2018 was RMB631.29 (2017: RMB632.40) per ton.

Yuhuan Power Plant sells its electricity to State Grid Zhejiang Electric Power Company.

Changxing "Replacing Small Units with Large Ones" Project

Changxing Power Plant "Replacing Small Units with Large Ones" Project ("Changxing Power Plant") is located in Changxing County of Zhejiang Province. Changxing "Replacing Small Units with Large Ones" Project commenced operation in December 2014, with an installed capacity of 1,320 MW. This is the first project of ultra-supercritical coal-fired generating units of the Company. We hold 100% equity interest in the project.

The coal supply for Changxing Power Plant is primarily obtained from Inner Mongolia, Hebei and partially imported coal. Changxing Power Plant typically stores 150,000 tons of coal on site. In 2018, Changxing Power Plant obtained 50.4% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Changxing Power Plant in 2018 was RMB620.99 (2017: RMB602.20) per ton.

Tongxiang CCGT

Tongxiang CCGT is located in Tongxiang City of Zhejiang Province. The plant commenced operation in September 2014 with an installed capacity of 458.4 MW. We hold 95% equity interest in the Tongxiang CCGT. The gas supply for Tongxiang CCGT is transported through pipeline of "West-East Gas Transport Project."

Tongxiang CCGT sells its electricity to State Grid Zhejiang Electric Power Company.

Changxing Photovoltaic

Si'an 10MW Distributed Photovoltaic Power Project ("Changxing Photovoltaic") is located in Changxing County of Zhejiang Province. Part of the project commenced operation in December 2014, with an installed capacity

of 5 MW. In March 2015, the rest of the project commenced operation in March 2015, with an installed capacity of 5 MW. We hold 100% equity interest in Changxing Photovoltaic.

Changxing Hongqiao Photovoltaic

Changxing Hongqiao PhotovoltaicPower Project ("Changxing Hongqiao Photovoltaic") is located in Changxing Country of Zhejiang Province. It commenced operation in September 2016, with an installed capacity of 30 MW. We hold 100% equity interest in this project.

Huzhou Distributed Photovoltaic

Huzhou Distributed PhotovoltaicPower Project ("Huzhou Distributed Photovoltaic") is located in the city of Huzhou of Zhejiang Province. It commenced operation in June and December 2017, with an installed capacity of 20 MW. We hold 100% equity interest in Huzhou Distributed Photovoltaic.

Huzhou Distributed Photovoltaic sells its electricity to Zhejiang Electric Power Company.

Power Plant in Hunan Province

Yueyang Power Plant

Huaneng Yueyang Power Plant ("Yueyang Power Plant") is located in Yueyang City of Hunan Province. Yueyang Power Plant Phase I has an installed capacity of 725 MW and consists of two 362.5 MW sub-critical coal-fired generating units which commenced operation in September and December 1991 respectively. Yueyang Power Plant Phase II consists of two 300MW coal-fired generating units with installed capacity of 600 MW, which were put into operation in March and May 2006, respectively. Huaneng Yueyang Power Plant Phase III ("Yueyang Power Plant Phase III") consists of two 600 MW generating units with a total installed capacity of 1,200 MW. In January 2011 and August 2012, Unit 5 and Unit 6 of Yueyang Power Plant Phase III, two 600MW coal-fired generating units, commenced operation, respectively. We hold 55% equity interest in Yueyang Power Plant.

The coal supply for Yueyang Power Plant is obtained from Datong in Shanxi Province. Yueyang Power Plant typically stores 500,000 tons of coal on site. In 2018, Yueyang Power Plant obtained 43.0% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Yueyang Power Plant in 2018 was RMB702.09 (2017: RMB642.12) per ton.

Yueyang Power Plant sells its electricity to State Grid Hunan Electric Power Company.

Xiangqi Hydropower

Huaneng Yongzhou Xiangqi Hydropower Station ("Xiangqi Hydropower") is located in Xiangqi County of Hunan Province. Xiangqi Hydropower consists of four 20 MW hydraulic generating units with a total installed capacity of 80 MW. In December 2011, Unit I of Xiangqi Hydropower with an installed capacity of 20 MW passed a trial run. Unit I and Unit II of Yongzhou Xiangqi Hydropower with an installed capacity of 20 MW each commenced operation in December 2011 and May 2012, respectively. Unit III and Unit IV of Xiangqi Hydropower with an installed capacity of 20 MW commenced operation in May and August 2012, respectively. We hold 100% equity interest in Xiangqi Hydropower.

Xiangqi Hydropower sells its electricity to Hunan Electric Power Company.

Subaoding Wind Power

Subaoding Wind Power ("Subaoding Wind Power") is located between Hongjiang City and Dongkou County in Hunan. Part of the Subaoding Wind Power commenced operation in December 2014, with an installed capacity of 80MW, consisting of 40 wind power turbines of 2 MW. The rest of the Subaoding Wind Power commenced operation in March 2015, with an installed capacity of 70 MW, consisting of 35 wind power turbine of 2 MW each. As of the date of this report, all of the wind power turbines have commenced operation with a total installed capacity of 150 MW. We hold 100% equity interest in the Subaoding Wind Power.

Subaoding Wind Power sells its electricity to Hunan Electric Power Company.

Guidong Wind Power

Guidong Wind Power ("Guidong Wind Power") is located at Guidong County of Hunan Province. Guidong Wind Power commenced operation in 2015, with an installed capacity of 84 MW, consisting of 42 wind power turbines of 2 MW each. We hold 100% equity interest in this plant.

Guidong Wind Power sells its electricity to Hunan Electric Power Company.

Yueyang Xingang Photovoltaic

Yueyang Xingang 10MW Distributed Photovoltaic Power Project ("Yueyang Xingang Photovoltaic") is located in the city of Yueyang of Hunan Province. Yueyang Xingang Photovoltaic commenced operation in May 2017, with an installed capacity of 10 MW. We hold 60% equity interest in Yueyang Xingang Photovoltaic.

Yueyang Xingang Photovoltaic sells its electricity to Hunan Electric Power Company.

Yueyang Leigutai Photovoltaic

Yueyang Leigutai 20MW Distributed Photovoltaic Power Project ("Yueyang Leigutai Photovoltaic") is located in the city of Yueyang of Hunan Province. Yueyang Liangang Photovoltaic commenced operation in June 2017, with an installed capacity of 20 MW. We hold 55% equity interest in Yueyang Leigutai Photovoltaic.

Yueyang Leigutai Photovoltaic sells its electricity to Hunan Electric Power Company.

Power Plant in Hubei Province

Enshi Maweigou Hydropower

Hubei Enshi Maweigou Hydropower Station ("Enshi Maweigou Hydropower") is located in Enshi City of Hubei Province. We entered into an equity transfer agreement to acquire Enshi Maweigou Hydropower on September 30, 2011. Enshi Maweigou Hydropower consists of three 5 MW hydraulic generating units and two 20 MW hydraulic generating units with a total installed capacity of 55 MW. We hold 100% equity interest in Enshi Maweigou Hydropower.

Enshi Maweigou Hydropower sells its electricity to Hubei Electric Power Company.

Wuhan Power Plant

Huaneng Wuhan Power Plant ("Wuhan Power Plant") is located in Wuhan City in Hubei Province. Wuhan Power Plant has an installed capacity of 2,460 MW and consists of two 300 MW coal-fired generating units which commenced operation in 1993 and 1994, two 330 MW coal-fired generating units which commenced operation in 1997, and two 600 MW coal-fired generating units which commenced operation in 2006. We hold 75% equity interest in Wuhan Power Plant. We acquired the power plant in January, 2015 from Huaneng Group.

In 2018, Wuhan Power Plant obtained 64.3% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Wuhan Power Plant in 2018 was RMB691.71per ton.

Wuhan Power Plant sells its electricity to Hubei Electric Power Company.

Dalongtan Hydropower

Huaneng Dalongtan Hydropower Station ("Dalongtan Hydropower") is located in Enshi City of Hubei Province. Dalongtan Hydropower has an installed capacity of 37.6 MW. We hold 97% equity interest in Dalongtan Hydropower. We acquired the power plant in January, 2015 from Huaneng Group.

Dalongtan Hydropower sells its electricity to Hubei Electric Power Company.

Jingmen Co-generation

Huaneng Jingmen Co-generation Power Plant ("Jingmen Co-generation" or "Jingmen Thermal Power") is located in Jingmen City in Hubei Province. Jingmen Co-generation has an installed capacity of 700 MW and consists of two 350 MW coal-fired generating units which commenced operation in 2014. We hold 100% equity interest in Jingmen Co-generation. We acquired the power plant in January, 2015 from HIPDC.

The coal supply for Jingmen Co-generation is obtained from Shaanxi and Gansu. Jingmen Co-generation typically stores 90,000 tons of coal on site. In 2018, Jingmen Co-generation obtained 59.7% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Jingmen Co-generation in 2018 was RMB645.38 (2017: RMB615.65) per ton.

Jingmen Co-generation sells its electricity to Hubei Electric Power Company.

Yingcheng Co-generation

Huaneng Yingcheng Co-generation Power Plant ("Yingcheng Co-generation") is located in Yingcheng City in Hubei Province. Unit II of Yingcheng Co-generation has an installed capacity of 350 MW which commenced operation in January 2015. Unit I of Yingcheng Co-generation has an installed capacity of 50 MW, which commenced operation in June 2016. We hold 100% equity interest in Yingcheng Co-generation. We acquired the power plant in January, 2015 from HIPDC.

The coal supply for Yingcheng Co-generation is obtained from Shanxi and Shaanxi.Yingcheng Co-generation typically stores 50,000 tons of coal on site. In 2018, Yingcheng Co-generation obtained 74.4% of its total consumption of coal from the open market. The average coal purchase price for Yingcheng Co-generation in 2018 was RMB680.05 (2017: RMB722.85) per ton.

Yingcheng Co-generation sells its electricity to Hubei Electric Power Company.

Jieshan Wind Power

Jieshan Wind Power Plant ("Jieshan Wind Power") is located at Suixian County of Hubei Province. The Phase I of Jieshan Wind Power commenced operation in June 2015, with an installed capacity of 48 MW, consisting of 24 wind power turbines of 2 MW. Phase II of Jieshan Wind Power commenced operation in August 2016, with an installed capacity of 72 MW, consisting of 36 wind power turbines of 2 MW. We hold 100% equity interest in the Jieshan Wind Power.

Jieshan Wind Power sells its electricity to Hubei Electric Power Company.

Zhongxiang Hujiawan Wind Power

Zhongxiang Hujiawan Wind Power ("Zhongxiang Hujiawan Wind Power") is located in the city of Jingmen of Hubei Province. Zhongxiang Hujiawan Wind Power commenced operation in December 2017 and August 2018, with an installed capacity of 24 MW and 126 MW, respectively, consisting of totally 75 wind power turbines of 2 MW each. We hold 100% equity interest in this plant.

Zhongxiang Hujiawan Wind Power sells its electricity to Hubei Electric Power Company.

Suizhou Zengdufuhe Photovoltaic

Suizhou Zengdufuhe 20MW Photovoltaic Power Project ("Suizhou Zengdufuhe Photovoltaic") is located in the city of Suizhou of Hubei Province. Suizhou Zengdufuhe Photovoltaic commenced operation in September and December 2017, with an installed capacity of 20 MW. We hold 100% equity interest in Suizhou Zengdufuhe Photovoltaic.

Suizhou Zengdufuhe Photovoltaic sells its electricity to Hubei Electric Power Company.

Power Plant in Jiangxi Province

Jinggangshan Power Plant

Huaneng Jinggangshan Power Plant ("Jinggangshan Power Plant") is located in Ji'an City of Jiangxi Province. Jinggangshan Power Plant has an installed capacity of 1,920 MW and consists of two 300 MW coal-fired generating units which commenced operation in December 2000 and August 2001 respectively, and two 660 MW generating units which commenced operation in November and December 2009, respectively. We hold 100% equity interest in Jinggangshan Power Plant.

The coal supply for Jinggangshan Power Plant is obtained from Henan Province, Anhui Province and Jiangxi Province. Jinggangshan Power Plant typically stores 255,000 tons of coal on site. In 2018, Jinggangshan Power Plant obtained 49.6% of its total coal consumption from annual contracts and the remainder from the open market. The average coal purchase price for Jinggangshan Power Plant in 2018 was RMB752.45 (2017: RMB730.52) per ton.

Jinggangshan Power Plant sells its electricity to Jiangxi Electric Power Company.

Jianggongling Wind Power

Jianggongling Wind Power Plant ("Jianggongling Wind Power") is located in Jiujiang Municipality of Jiangxi Province. Jianggongling Wind Power commenced operation in December 2014 (Phase I), with an installed capacity of 48 MW, consisting of 24 wind power turbine of 2 MW, and in December 206 (Phase II), with an installed capacity of 26 MW, consisting of 13 wind power turbines of 2 MW. We hold 100% equity interest in the Jianggongling Wind Power.

Ruijin Power Plant

Huaneng Ruijin Power Plant ("Ruijin Power Plant") is located in Ruijin City in Jiangxi Province. Ruijin Power Plant has an installed capacity of 700 MW and consists of two 350 MW coal-fired generating units which commenced operation in 2008. We hold 100% equity interest in Ruijin Power Plant. We acquired the power plant in January, 2015 from HIPDC.

The coal supply for Ruijin Power Plant is obtained from Shanxi, Shaanxi, and partially imported coal. Ruijin Power Plant typically stores 110,000 tons of coal on site. In 2018, Ruijin Power Plant obtained 32.4% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Ruijin Power Plant in 2018 was RMB754.04 (2017: RMB713.93) per ton.

Ruijin Power Plant sells its electricity to Jiangxi Electric Power Company.

Anyuan Power Plant

Anyuan Power Plant "Replacing Small Units with Large Ones" Project ("Anyuan Power Plant") is located at Pingxiang City of Jiangxi Province. The plant has a total installed capacity of 1,320 MW, consisting of two ultra-supercritical units with second reheat cycle of 660 MW each. Anyuan Power Plant is the first project equipped with 660MW ultra supercritical unit with second reheat cycle. We acquired 100% equity interest in the power plant in January 2015.

The coal supply for Anyuan Power Plant is obtained from Gansu and Shanxi. Ruijin Power Plant typically stores 130,000 tons of coal on site. In 2018, Anyuan Power Plant obtained 48.9% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Ruijin Power Plant in 2018 was RMB699.12 (2017: RMB665.70) per ton.

Anyuan Power Plant sells its electricity to Jiangxi Electric Power Company.

Linghuashan Wind Power

Linghuashan Wind Power Plant ("Linghuashan Wind Power") is located in the city of Ji'an of Jiangxi Province. Linghuashan Wind Power has a total installed capacity of 100 MW, consisting of 50 turbines of 2MW each, which commenced operation in June and September 2017. We hold 100% equity interest in Linghuashan Wind Power.

Linghuashan Wind Power sells its electricity to Jiangxi Electric Power Company.

Gaolongshan Wind Power

Gaolongshan Wind Power is located in the city of Ji’an of Jiangxi Province. Gaolongshan Wind Power has a total installed capacity of 80 MW, consisting of 28 wind turbines of 2.2 MW each and 8 wind turbines of 2.3 MW each, which commenced operation in November 2018. We hold 100% equity interest in Gaolongshan Wind Power.

Power Plant in Anhui Province

Chaohu Power Plant

Huaneng Chaohu Power Plant (" Chaohu Power Plant") is located in Chaohu City in Anhui Province. Chaohu Power Plant has an installed capacity of 1,200 MW and consists of two 600 MW coal-fired generating units which commenced operation in 2008. We hold 60% equity interest in Chaohu Power Plant. We acquired the power plant in January, 2015 from HIPDC.

The coal supply for Chaohu Power Plant is obtained from Shandong and Gansu. Chaohu Power Plant typically stores 110,000 tons of coal on site. In 2018, Chaohu Power Plant obtained 59.1% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Chaohu Power Plant in 2018 was RMB645.84 (2017: RMB617.03) per ton.

Chaohu Power Plant sells its electricity to Anhui Electric Power Company.

Hualiangting Hydropower

Huaneng Hualiangting Hydropower Plant ("Hualiangting Hydropower") is located in Anqing City in Anhui Province. Hualiangting Hydropower has an installed capacity of 40 MW which commenced operation in 1981 and 1987. We hold 100% equity interest in Hualiangting Hydropower. We acquired the power plant in January, 2015 from Huaneng Group.

Hualiangting Hydropower sells its electricity to Anhui Electric Power Company.

Huaining Shijing Wind Power

Shijing Wind Power Plant in Huaining Country ("Huaining Wind Power") is located in Huaining Country, Anhui Province. Huaining Wind Power has a total installed capacity of 50 MW, consisting of 25 turbines of 2MW each, which commenced operation in June 2016. We hold 100% equity interest in the plant.

Huaining Wind Power sells its electricity to Anhui Electric Power Company.

Huaining Longchi Wind Power

Huaining Longchi Wind Power Plant ("Huaining Longchi Wind Power") is located in the city of the county of Huaining of Anhui Province. Huaining Longchi Wind Power has a total installed capacity of 99 MW, consisting of 45 turbines of 2.2MW each. We hold 100% equity interest in Huaining Longchi Wind Power.

Huaining Longchi Wind Power sells its electricity to Anhui Electric Power Company.

Power Plant in Fujian Province

Fuzhou Power Plant

Huaneng Fuzhou Power Plant ("Fuzhou Power Plant") is located on the south bank of the Min River, southeast of the city of Fuzhou. Fuzhou Power Plant has been developed in three phases. The Fuzhou Power Plant Phase I and Phase II utilize four 350 MW coal-fired generating units with an installed capacity of 1,400 MW, and commenced operations in 1988 and 1999, respectively. The Fuzhou Power Plant Phase III consists of two 600 MW generating units with a total installed capacity of 1,200 MW, and commenced operations in 2010 and 2011, respectively. The capacity of Unit V and Unit VI of the Fuzhou Power Plant Phase III was expanded to 660 MW per unit since January 2012. We hold 100% equity interest in Fuzhou Power Plant.

The coal supply for Fuzhou Power Plant is obtained from several coal producers located mostly in Northern Shanxi Province. The coal is transported by rail from the mines to Qinhuangdao port and by ship down to the east coast of China and up to the Min River to a wharf located at Fuzhou Power Plant. We own and maintain the wharf, which is capable of handling vessels of up to 20,000 tons and of unloading 10,000 tons to 15,000 tons of coal per day. Fuzhou Power Plant typically stores 180,000 tons of coal on site.

In 2018, the Fuzhou Power Plant obtained 61.0% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Fuzhou Power Plant in 2018 was RMB563.21 (2017: RMB561.28) per ton.

Fuzhou Power Plant sells its electricity to Fujian Electricity Power Company.

Changle Photovoltaic

Changle 10 MW Photovoltaic Power Plant ("Changle Photovoltaic") is located in the city of Fuzhou of Fujian Province. It has an installed capacity of 10 MW, which commenced operation in June 2017. We hold 100% equity interest in Changle Photovoltaic.

Changle Photovoltaic sells its electricity to Fujian Electric Power Company.

Power Plants in Guangdong Province

Shantou Power Plant

Huaneng Shantou Coal-Fired Power Plant ("Shantou Power Plant") had originally been developed and constructed by HIPDC which transferred all its rights and interests therein to us effective on December 31, 1994. Located on the outskirts of the city of Shantou, Shantou Power Plant was set up with the support of the Shantou municipal government and the Guangdong provincial government. Shantou Power Plant Phase I consists of two 300 MW coal-fired generating units with boilers, which commenced operation in January 1997. Shantou Power Plant Phase II consists of one 600 MW coal-fired generating unit and commenced operation in October 2005. We hold 100% equity interest in Shantou Power Plant.

The coal supply for Shantou Power Plant is obtained from several coal producers located mostly in the northern area of Shanxi Province. The coal is transported by rail from the mines to Qinhuangdao port and by ship down the east coast of China to the wharf located at Shantou Power Plant, which is maintained by the Shantou Port Authority and is capable of handling 35,000 ton vessels. The Shantou Power Plant typically stores 300,000 tons of coal on site.

In 2018, the Shantou Power Plant obtained 26.0% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Shantou Power Plant in 2018 was RMB584.24 (2017: RMB585.02) per ton.

Shantou Power Plant sells its electricity to Guangdong Electric Power Company.

Haimen Power Plant

Huaneng Haimen Power Plant is located in Shantou City, Guangdong Province. Haimen Power Plant has an installed capacity of 4,144 MW and consists of four 1,036 MW generating units. The first two generating units ("Haimen") commenced operation in July 2009 and October 2009, respectively. We hold 100% equity interest in the first two generating units. The other two generation units commenced operation at the beginning of 2013 ("Haimen Power"). We hold 80% equity interest in the other two generating units.

The coal supply for Haimen Power Plant is mainly imported from Indonesia. Haimen Power Plant typically stores 400,000 tons of coal on site. In 2018, Haimen Power Plant obtained 59.5% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Haimen Power Plant in 2018 was RMB596.47 (2017: RMB611.14) per ton.

Haimen Power Plant sells its electricity to Guangdong Electric Power Company.

Shantou Photovoltaic

Shantou Power Plant 17 MW Photovoltaic Power Plant ("Shantou Photovoltaic") is located in Shantou City, Guangdong Province. It has an installed capacity of 17 MW, which commenced operation in September 2016. We hold 100% equity interest in the Project.

Shantou Photovoltaic sells its electricity to Guangdong Electric Power Company.

Power Plants in Yunnan Province

Diandong Energy

Yunnan Diandong Energy Limited Company ("Diandong Energy") is located in Qujing City, Yunnan Province. Diandong Energy has an installed capacity of 2,400 MW and consists of four 600 MW generating units which commenced operation in February 2006, July 2006, November 2006 and May 2007, respectively. We hold 100% equity interest in Diandong Energy.

The coal supply for Diandong Energy is mainly obtained from Yunnan and Guizhou Provinces. Diandong Energy typically stores 1,200,000 tons of coal on site. In 2018, Diandong Energy obtained none of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price for Diandong Energy in 2018 was RMB540.19 (2017: RMB583.82) per ton.

Diandong Energy sells its electricity to Yunnan Electric Power Company.

Yuwang Energy

Yunnan Diandong Yuwang Energy Limited Company ("Yuwang Energy") is located in Qujing City, Yunnan Province. Yuwang Energy has an installed capacity of 1,200 MW and consists of two 600 MW generating units which commenced operation in July 2009 and February 2010, respectively. We hold 100% equity interest in Yuwang Energy.

The coal supply for Yuwang Energy is mainly obtained from Yunnan and Guizhou Provinces. Yuwang Energy typically stores 600,000 tons of coal on site. In 2018, Yuwang Energy obtained 7.5% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price of coal for Yuwang Energy in 2018 was RMB507.68 (2017: RMB455.69) per ton.

Yuwang Energy sells its electricity to Yunnan Electric Power Company.

Fuyuan Wind Power

Fuyuan Wind Power Plant ("Fuyuan Wind Power") is located in the Fuyuan County of Qujing Municipality of Yunnan Province. Fuyuan Wind Power consists of Wenbishan Wind Power, which commenced operation in November 2014 with 20 wind power turbines of 2 MW each, Yibasan Wind Power, which commenced operation in

2014 with 24 wind power turbines of 2 MW each, and Shengjing Wind Power, which commenced operation in December 2016 with 24 wind power turbines of 2 MW each. A new project with an installed capacity of 48 MW commenced operation in October and November 2017, consisting of 24 wind power turbines of 2 MW each. We hold 100% equity interest in Fuyuan Wind Power.

Fuyuan Wind Power sells its electricity to Yunnan Electric Power Company.

Power Plants in Hainan Province

Haikou Power Plant

Huaneng Haikou Power Plant ("Haikou Power Plant") is located in Haikou City in Hainan Province. Haikou Power Plant has an installed capacity of 936 MW and consists of two 138 MW coal-fired generating units which commenced operation in 1999, 2000, and two 330 MW coal-fired generating units which commenced operation in 2006. We hold 91.8% equity interest in Haikou Power Plant. We acquired the power plant in January, 2015 from Huaneng Group.

The coal supply for Haikou Power Plant is mainly obtained from Inner Mongolia, Shanxi, and partially imported coal. Haikou Power Plant typically stores 120,000 tons of coal on site. In 2018, Haikou Power Plant obtained 33.6% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price of coal for Haikou Power Plant in 2018 was RMB515.21 (2017: RMB498.76) per ton.

Haikou Power Plant sells its electricity to Hainan Electric Power Company.

Dongfang Power Plant

Huaneng Dongfang Power Plant ("Dongfang Power Plant") is located in Dongfang City in Hainan Province. Dongfang Power Plant has an installed capacity of 1,400 MW and consists of four 350 MW coal-fired generating units which commenced operation in 2009, 2012. We hold 91.8% equity interest in Dongfang Power Plant. We acquired the power plant in January, 2015 from Huaneng Group.

The coal supply for Dongfang Power Plant is mainly obtained from Shanxi and partially imported coal. Dongfang Power Plant typically stores 160,000 tons of coal on site. In 2018, Dongfang Power Plant obtained 38.2% of its total consumption of coal from annual contracts and the remainder from the open market. The average coal purchase price of coal for Dongfang Power Plant in 2018 was RMB514.48 (2017: RMB502.22) per ton.

Dongfang Power Plant sells its electricity to Hainan Electric Power Company.

Nanshan Co-generation

Huaneng Nanshan Co-generation Power Plant ("Nanshan Co-generation") is located in Sanya City in Hainan Province. Nanshan Co-generation has an installed capacity of 132 MW which commenced operation in 2003. We hold 91.8% equity interest in Nanshan Co-generation. We acquired the power plant in January 2015 from Huaneng Group.

Nanshan Co-generation sells its electricity to Hainan Electric Power Company.

Gezhen Hydropower Plant

Huaneng Gezhen Hydropower Plant ("Gezhen Hydropower Plant") is located in Dongfang City in Hainan Province. Gezhen Hydropower Plant has an installed capacity of 82 MW which commenced operation in 2009. We hold 91.8% equity interest in Gezhen Hydropower Plant. We acquired the power plant in January, 2015 from Huaneng Group.

Gezhen Hydropower Plant sells its electricity to Hainan Electric Power Company.

Wenchang Wind Power

Huaneng Wenchang Wind Power Plant ("Wenchang Wind Power") is located in Wenchang City in Hainan Province. Wenchang Wind Power has an installed capacity of 51.5 MW and consists of 33 turbines with each capacity of 1.5 MW which commenced operation in 2008, and one turbine with a capacity of 2 MW which commenced operation in 2015. We hold 91.8% equity interest in Wenchang Wind Power. We acquired the power plant in January, 2015 from Huaneng Group.

Wenchang Wind Power sells its electricity to Hainan Electric Power Company.

Dongfang Photovoltaic

Dongfang Photovoltaic Power Plant ("Dongfang Photovoltaic") is located in Dongfang City in Hainan Province. Dongfang Photovoltaic has an installed capacity of 12 MW which commenced operation in July 2016. We hold 91.8% equity interest in Dongfang Power Plant.

Dongfang Photovoltaic sells its electricity to Hainan Electric Power Company.

Chengmai Photovoltaic

Chengmai Photovoltaic Power Plant ("Chengmai Photovoltaic") is located in the county of Chengmai of Hainan Province. Chengmai Photovoltaic has an installed capacity of 25 MW and 40 MW which commenced operation in June 2017 and September 2018, respectively. We hold 91.8% equity interest in Chengmai Photovoltaic.

Chengmai Photovoltaic sells its electricity to Hainan Electric Power Company.

Power Plant in Guangxi Autonomous Region

Guilin Distributed Energy

Guilin Distributed Energy Power Plant ("Guilin Distributed Energy") is located in the city of Guilin of Guangxi Autonomous Region. Guilin Distributed Energy has an installed capacity of 210 MW which commenced operation in December 2017. We hold 80% equity interest in Guilin Distributed Energy.

Guilin Distributed Energy sells its electricity to Hainan Electric Power Company.

Power Plant in Guizhou

Panxian Wind Power

Panxian Wind Power ("Panxian Wind Power") is located at Panxian county of Guizhou Province. It commenced operation in December 2015, with an installed capacity of 24 MW, consisting of 12 wind power turbine of 2 MW each. We hold 100 % equity interest in Panxian Wind Power.

Panxian Wind Power sells its electricity to Guizhou Electric Power Company.

Panxian Dapashan Wind Power

Panxian Dapashan Wind Power Plant ("Panxian Dapashan Wind Power") is located in the county of Pan of Guizhou Province. Panxian Dapashan Wind Power has an installed capacity of 24 MW and consists of 12 turbines with each capacity of 2 MW which commenced operation in November and December 2017. We hold 100% equity interest in Panxian Dapashan Wind Power.

Panxian Dapashan Wind Power sells its electricity to Guizhou Electric Power Company.

Panxian Jiaoziding Wind Power

Panxian Jiaoziding Wind Power Plant ("Panxian Jiaoziding Wind Power") is located in the county of Pan of Guizhou Province. Panxian Jiaoziding Wind Power has an installed capacity of 48 MW and consists of 24 turbines

with each capacity of 2 MW which commenced operation in November and December 2017. We hold 100% equity interest in Panxian Jiaoziding Wind Power.

Panxian Jiaoziding Wind Power sells its electricity to Guizhou Electric Power Company.

Power Plant in Ningxia

Ruyi Helan Rooftop Photovoltaic

Ruyi Helan Rooftop Photovoltaic Power Plant ("Ruyi Helan Rooftop Photovoltaic") is located in the county of Helan of Ningxia Autonomous Region. Ruyi Helan Rooftop Photovoltaic has an installed capacity of 19.8 MW which commenced operation in June 2017. We hold 40% equity interest in Ruyi Helan Rooftop Photovoltaic.

Ruyi Helan Rooftop Photovoltaic sells its electricity to Ningxia Electric Power Company.

Power Plant in Singapore

Tuas Power

With a licensed generating capacity of 2,670MW, Tuas Power is one of the three largest power generation companies in Singapore. It currently has an installed operation generating capacity of 2,609MW, comprising of 1,876 MW gas-fired combined cycle generating units, 133 MW of coal-biomass fired steam turbine generating units and 600 MW of oil-fired steam generating unit.

Supply of coal is procured from coal producers in Indonesia via two long-term coal supply contracts with 10 years and 15 years term respectively, and short-term contracts. Supply of gas is obtained from Pavilion Gas Pte Ltd, Sembcorp Gas Pte Ltd and Shell Gas Marketing Pte Ltd (formally known as BG Singapore Gas Marketing Pte Ltd). Oil supply, if required, is obtained through the spot market.

Power Plant in Pakistan

Sahiwal Power Plant

Sahiwal Power Plant is located near the city of Sahiwal in Punjab Province. It commenced operation of two 660 MW coal-biomass fired steam turbines in 2017. We indirectly hold 40% equity interest in Sahiwal Power Plant.

Competition and Dispatch

All power plants in China are subject to dispatch conducted by various dispatch centers. A dispatch center is required to dispatch electricity pursuant to the Regulations on the Administration of Electric Power Dispatch Networks and Grids, issued by the State Council with effect from November 1, 1993, and in accordance with its agreements with power plants subject to its dispatch. Power generation companies are also required to enter into on-grid dispatch agreements with power grid companies. As a result, there is competition for favorable dispatch treatment in the PRC electric power industry, especially during the off-peak load periods. More efficient power plants usually operate at higher output than less efficient power plants. We believe that in order to increase system stability, large and efficient power plants such as ours will be preferred as base load plants to generate power for the grids to which they connect. We believe that our dispatch arrangements with the local power corporations and dispatch centers, superior quality equipment, lower coal consumption rate, higher efficiency of plant operation, lower emission levels and larger capacity represent competitive advantages in the markets in which we operate.

Since 2002, we have been facing competition from four other major power generation groups: China Datang Corporation Ltd., China Huadian Power Corporation, CHN Energy (established through the merge of China Guodian Corporation and Shenhua Group Corporation Limited) and State Power Investment Corporation (formerly known as China Power Investment Corporation), which were created following the break-up of the former State Electric Corporation in 2002.

As power generation companies were separated from power grid companies and more competitors entered into the market, the SERC issued the Interim Measures Regarding Promotion of Openness, Fairness and

Equitableness of Power Dispatch, requiring power dispatch centers to treat all competitors indiscriminately in respect of dispatch administration and information disclosure, except in cases where safe and stable operation of the electric power system requires different treatment.

In 2008, with the purpose of improving energy usage efficiency, the government implemented an electricity-optimized dispatch policy in Henan Province, Sichuan Province, Jiangsu Province, Guangdong Province and Guizhou Province on a pilot basis, and plans to roll out to others if the trial operation is successful. In addition, as of December 31, 2014, in all regions in which we operate power plants, the government's power administrative departments make power generation plan policies with the aim to improve the planned utilization hours of the environment-protecting and energy-saving units. In 2015, the NDRC and China Energy Administration jointly issued the Guidelines on Improving Electric Power Operations and Deepening Clean Energy Generation, which confirms a system that aims to ensure the full-priced acquisitions of renewable energy and ensure that the hours of usage for high-efficiency energy-saving generators be significantly higher than that for coal-fired generators. The Guidelines also demand, within a certain time period, an increase of the hours of usage for coal-fired generators, of which the emission level is close to or reaches the cap level of gas turbine.

In 2016, China National Energy Administration issued Guidelines on Improving Clean Energy Consumption and Distribution in Northern China, Notice on Issuing the Measures for the Administration of the Guaranteed Buyout of Electricity Generated by Renewable Energy Resources, Pilot Program of Local Clean Energy Consumption and Distribution inGansu, Inner Mongolia and Jilin, and Provisionary Measures for Priority Dispatch of Renewable Peaking Power Generation Units, which require an improvement on clean energy consumption and distribution.

In 2017, NDRC and NEA issued Circular on Orderly Opening Up the Electricity Generation and Consumption Plans, Interim Measures for Guaranteeing the Safe Consumption of Nuclear Power, Pilot Rules on Inter-regional Spare Renewable Energy Electricity Power Stock Trading, Circular on the Establishment of Pilot Electricity Power Stock Exchange, Circular on Promoting Hydropower Consumption in Southwest China, and Solutions to Abandoning Hydro, Wind and Solar Energy, to promote the development of the power stock exchange and renewable power consumption and emphasize the low-carbon energy scheduling.

Competition and Dispatch in Singapore

Following the introduction of LNG into Singapore, new players as well as incumbents have invested in new gas-fired generating capacities to compete in the Singapore electricity market. Tuas Power competes in the NEMS using its portfolio of gas-fired, coal-biomass fired and oil-fired generating units. It was able to maintain a market share of approximately 21.1% in the NEMS for 2018. Its major competitors include Senoko Energy (formerly Senoko Power) which is owned by a Japanese/French consortium led by Marubeni Group, YTL PowerSeraya that is owned by YTL Group of Malaysia, SembCorp Cogen and Keppel Merlimau Cogen and PacificLight Power Pte Ltd. A new entrant, Tuaspring, entered the market in 2015. In 2017, ExxonMobil and Singapore Refining Company introduced additional capacity of 158MW. Tuas Power's portfolio of generating units allows it to maintain its leadership position in Singapore's power industry.

In the NEMS, power generation companies compete to generate and sell electricity every half-hour by offering their capacity (specifying price/quantity pairs). The EMC, the operator of Singapore's wholesale electricity market, determines the least-cost dispatch quantities and the corresponding market-clearing or spot prices based on the offers made by power generation companies. The spot prices in the NEMS reflect the least-cost market solution for the dispatch of energy and provision of operating reserves. In general, this means that each power generation company that submitted an offer below the spot price will be dispatched, and a power generation company that submitted an offer above the spot price will not be dispatched. The spot price that a power generation company

receives is a nodal price, which may vary according to their location on the network to reflect the cost of transmission losses or network constraints.

Environmental Regulation

We are subject to the PRC Environmental Protection Law, and relevant laws and regulations (collectively the "National Environmental Laws") and the environmental rules promulgated by the Local Governments in whose jurisdictions our various power plants are located (the "Local Environmental Rules"). According to the National Environmental Laws, the Ministry of Ecology and Environment sets national environmental protection standards and local environmental protection bureaus may set stricter local standards. Enterprises are required to comply with the stricter of the two standards.

At present, new projects are subject to the environmental evaluation approval. The project proposal is required to be submitted to the Ministry of Ecology and Environment for approval, save for those projects can be approved by local governments.

Effective July 1, 2003, all power plants in China became subject to the pollutant discharge levy system, pursuant to which discharge fees are levied based on the actual amount of pollutants discharged. In 2016, 2017 and 2018, we paid to the local governments total discharge fees of approximately RMB372 million, RMB308 million and RMB62 million, respectively. In 2018, the Environmental Protection Tax Law of People’s Republic of China came into effect, and all of our plants have been paying the environmental protection tax since. Under the Environmental Protection Tax Law, the unit tax(fee) rates rise significantly in various regions. We took the low emission modification and other measures and actively sought tax deduction treatments, which helped us to cut our environmental protection tax liabilies in the amount of RMB50 million.

In 2011, the PRC Government promulgated a New Emission Standards of Air Pollutants for Thermal Power Plants, which implement more stringent standards on discharge of polluting substances by thermal power plants. These restrictive standards govern both the total sulfur dioxide and nitrous oxide emissions from the power plant and the emission density of each chimney.

In September 2013, the State Council issued the Air Pollution Prevention Action Plan (the "Plan"), setting forth stricter requirements for air pollution prevention and control. Local government departments have released local rules and regulations under the Plan, some of which require higher emission standards than the national ones. Carbon emission trading has been conducted in certain regions on a trial basis and could be gradually introduced to an expanded market in the future. On July 1, 2014, the new pollutants emission standards for thermal power plants and the dust emission standards in key regions will also come into effect. In September 2014, the NDRC, the Ministry of Ecology and Environment and China National Energy Administration jointly issued the 2014-2020 Action Plan for Energy Saving, Emission Reduction and Renovation of Coal-fired Generation Units, imposing more strict requirements for efficient and clean development of coal-fired generating plants. In December 2016, the State Council issued the Comprehensive Work Plan for Conserving Energy and Reducing Emissions for the 13th Five-Year, putting forward new goals and requirements for energy saving and emission reduction. All of our plants in east coastal regions have completed the renovation.

In order to meet the requirements of the New Emission Standards, we have installed flue gas desulphurization ("FGD") facilities and denitrification facilities with all of our newly constructed generating units. We have also carried out sulfur disposal reform on the existing generating units. As of the end of 2012, we have installed and operated desulphurization facilities on all our existing coal-fired generating units. By the end of 2014, all coal-fired generating units of the Company have been renovated to include denitrification facilities.

In order to reduce fly ash, we use very high-efficiency electrostatic precipitators and conduct efficiency improvement and renovations according to increasingly strict state and local emission standards. Each power plant is also equipped with a wastewater treatment facility to treat water used by the power plant before it is released into the river or the sea. We pay discharge fees on the basis of measurements made at discharge points of each plant where waste is released. All of the disposal equipment and facilities for sulfur dioxide, nitrogen oxides, smoke dust, wastewater and noise in our existing power plants completely satisfy the existing national standards.

In addition, according to the State's plan of implementing ultra-low emission of coal-fired generating units, the Company has carried out technological upgrades as planned for all coal-fired generating units in 2018, completing the task required by the State early.

We believe we have implemented systems that are adequate to control environmental pollution caused by our facilities. In addition to the measures identified above, each power plant has its own environment protection staff responsible for monitoring and operating the environmental protection equipment. The environmental protection departments of the local governments monitor the level of emissions, sometimes through online monitoring devices recognized by such local governments, and base their fee assessments on the results of their tests.

We believe our environmental protection systems and facilities for the power plants are adequate for us to comply with the currently effective national and local environmental protection regulations. It is expected that the PRC Government will impose additional and stricter regulations to implement the emission plan which would require additional expenditure in compliance with environmental regulations.

Environmental Regulation in Singapore

Tuas Power's generation operations are subject to Singapore's Environmental Protection and Management Act and Environmental Public Health Act. The former sets out requirements pertaining to control of pollution and management of hazardous substance while the latter focuses mainly on proper waste management.

Tuas Power Station

To address the environmental concerns and regulatory requirements, Tuas Power Station has put in place an environmental management system, which is certified to ISO14001 standard. All generating units are equipped with pollution control facilities. Stage I steam plant burn low sulfur content fuel oil and employ an electro-precipitator to control sulfur dioxide and particulate emissions. Stage II combined-cycle plants burn natural gas and are fitted with low-nitrogen oxide burners to control nitrogen oxide emissions. Source emission tests are conducted annually by National Environment Agency (NEA) accredited contractors and the results are submitted to NEA Pollution Control Department.

Tuas Power Station has a dedicated wastewater treatment plant to treat its oily wastewater and process wastewater prior to discharge into the sea. The treatment processes are automated to prevent accidental adverse discharge and critical parameters are monitored on a real-time basis. Trade effluent testing is performed annually and the results are shared with the Pollution Control Department.

Land contamination is prevented through well-designed storage and containment procedures. Specific areas for storage of waste and hazardous substances are designated within the power plant.

Waste generated in Tuas Power Station plants is identified and managed accordingly. Waste with residual value, such as waste oil, is resold to licensed collectors for reuse while other waste is disposed through licensed disposal contractors.

Hazardous substances which have potential to cause environmental pollution are controlled within the power plant compound. A hazardous substance permit, issued by the Pollution Control Department, is required to store the hazardous substances in the premises. Our personnel who handle these chemicals are properly trained and our storage facility for hazardous substances are specifically designed to prevent and mitigate the likelihood and impact of any abnormal releases. Regular audits are conducted to ensure these hazardous substances are managed properly and the findings and recommendations for improvements are reported to the Pollution Control Department.

TMUC

TMUC utilizes an efficient cogeneration process where up to 80% of the useful energy from the plant is used to produce steam for industrial customers and the remaining energy is converted to electricity for internal use and transmission to the national grid. In 2018, the energy split between heat and power is 48% and 52% respectively, and the overall plant efficiency averaged at 61%.

The TMUC plant is designed to comply with stringent environmental standards set by the local authority. TMUC has put in place a robust environmental management system and it is certified to ISO14001 standard. TMUC adopts the circulating fluidized bed boiler technology that enables use of high percentage of carbon neutral biomass (palm kernel shell and woodchips) co-fired with clean coal (low sulphur and low ash) to reduce carbon footprint significantly to the same level as oil-fired plant and with lower sulphur and nitrogen oxides emission. High efficiency bag filters are installed to ensure low particulates emission.

Coal, biomass and ash handling, transfer and storage systems at TMUC are fully enclosed to prevent any fugitive dust during unloading, storage and handling operation. Coal and ash are stored in silo while biomass is stored in enclosed warehouse.

Fly ash and bed ash generated from the CFB boilers are fully recycled and processed for industrial use in cement and concrete applications.

Oily wastewater, coal/ash washing wastewater and industrial wastewater received from customers are treated prior to discharge. Online monitoring of oil-in-water, suspended solids (through turbidity meter) and chemical oxygen demand (COD) are carried out for oily wastewater, coal/ash washing wastewater and industrial wastewater respectively to ensure compliance with environmental regulation. Chemical/regeneration wastewater is neutralized prior to discharge. Online monitoring of pH is conducted to prevent accidental discharge. Stop-gates are strategically installed at drain to prevent accidental discharge of poor quality effluent/water to the sea.

Insurance

We currently maintain property all-risks insurance and machinery-breakdown insurance for all of our power plants, and construction all-risks insurance or erection all-risks insurance for all of our newly built and expansion projects as well as large-scaled upgrading projects. Our current insurance coverage on our property, plant and equipment (including construction all-risk insurance) is mainly maintained with Yongcheng Property and Casualty Insurance Company, which amounted to approximately RMB571.27 billion. In 2018, we renewed the liabilities insurance for our directors and officers with coverage of US$10 million.

We do not maintain any third-party liability insurance to cover claims in respect of bodily injury or property or environment damage arising from accidents on our property or relating to our operation other than the third-party additional risk insurance included in construction all-risk insurance or erection all-risk insurance. We do not usually carry business interruption insurance either, which is not customarily carried by power companies in the PRC. We believe that our insurance coverage is adequate and is standard for the power industry in China. Please refer to the section entitled "Risk factors – Risks relating to our business and the PRC's power industry – Operation of power plants involves many risks and we may not have enough insurance to cover the economic losses if any of our power plant's ordinary operation is interrupted."

Tuas Power purchases key insurance policies, such as industrial all-risks insurance (including business interruption insurance coverage), public and products liability insurance, directors' and officers' liability insurance, pollution legal liability insurance and marine cargo insurance. Total insured value under the industrial all-risks insurance is US$3.0 billion for 2019.

ITEM 4A

UNRESOLVED STAFF COMMENTS

None.

ITEM 5

OPERATING AND FINANCIAL REVIEWS AND PROSPECTS

General

The principal activities of the Company are development in and construction, operation and management of power plants in China. The Company provides consistent and reliable electricity supply to customers through grid operators where its operating plants are located. The Company is committed to scientific development through increasing economic efficiency, enhancing returns for shareholders, conserving resources and protecting the environment. The Company

also attaches importance to social responsibilities and makes an active contribution to the building of a harmonious society.

Since its incorporation, the Company has continued to expand its operational scale. The Company has been a leader in its industry in terms of competitiveness, resource utilization efficiency and environmental protection. The Company is Asia's largest listed power producer and China's most dynamic power generator. Its power generation operations are widely located with coverage in the Northeast China Grid, the Northern China Grid, the Northwest China Grid, the Eastern China Grid, the Central China Grid, the Southern China Grid, and the overseas market in Singapore.

In 2018, the Company proactively adapted to the changes in the market and anticipated the dynamics of the reforms in national economy and power market system to promptly realign our operating strategy. Throughout the year, we maintained stable operation of safe and clean production, constantly optimised the power structure, realised increases in both quantity and price in power generation, achieved excellent marketing results, effectively controlled the fuel cost, and steadily carried out capital operation. As a result, we have satisfactorily achieved our annual business objectives and maintained our leading position in the industry.

Critical accounting policies

The Company and its subsidiaries have identified the policies below as critical to our business operations and the understanding of our results of operations. The impact of and any associated risks related to these policies on the business operations are discussed throughout the Operating and Financial Reviews and Prospects where such policies affect our reported and expected financial results. For a detailed discussion on the application of these and other accounting policies, see Note 2 to the Financial Statements in Item 18 of this Annual Report on Form 20-F. Note that our preparation of this Annual Report on Form 20-F requires us to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amount of revenue and expenses during the reported periods. There can be no assurance that actual results will not differ from those estimates.

Depreciation of property, plant and equipment

Depreciation of property, plant and equipment is provided based on book value of assets less estimated residual value over estimated useful life using straight-line method. For these impaired property, plant and equipment, depreciation is provided based on book value after deducting the impairment provision over estimated useful life of asset. The estimated useful lives are as follows:

	2018
Dam	8 – 50 years
Port facilities	20 – 40 years
Buildings	8 – 30 years
Electric utility plant in service	5 – 30 years
Transportation facilities	8 – 27 years
Others	5 – 14 years

Where parts of an item of property, plant and equipment have different useful lives, the cost of the item is allocated on a reasonable basis between the parts and each part is depreciated separately. At the end of each year, the Company and its subsidiaries review the estimated useful lives, residual values and the depreciation method of the property, plant and equipment and make an adjustment when necessary.

Useful life of power generation license

The Company and its subsidiaries acquired the power generation license as part of the business combination with Tuas Power. The power generation license is initially recognized at fair value at the acquisition date. The license has an indefinite useful life and is not amortized. The assessment that the license has an indefinite useful life is based on the expected renewal of power generation license without significant restriction and cost, together with the consideration on related future cash flows generated and the expectation of continuous operations. It is tested annually for impairment and carried at cost less accumulated impairment loss. Useful life of the power generation license is reviewed by the Company and its subsidiaries each financial period to determine whether events and circumstances continue to support the indefinite useful life assessment.

Impairment of non-financial assets

The carrying amounts of property, plant and equipment, intangible assets with definite useful lives, land use rights, mining rights and long-term equity investments not accounted for as financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated. Goodwill, indefinite-lived intangible assets and intangible assets not yet available for use are tested for impairment annually regardless of whether there are indications of impairment or more frequently if events or changes in circumstances indicate a potential impairment. An impairment loss is recognized if the carrying amount of an asset or cash-generating unit ("CGU") exceeds its recoverable amount.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less cost to sell. For impairment testing, assets are grouped together into the smallest group of assets that generate cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs.

Subject to an operating segment ceiling test, CGUs to which goodwill has been allocated are aggregated so that the level at which impairment testing is performed reflects the lowest level at which goodwill is monitored for internal reporting purposes.

Goodwill acquired in a business combination is allocated to groups of CGUs that are expected to benefit from the synergies of the combination.

Impairment losses are recognized in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the CGU (group of CGUs), and then to reduce the carrying amounts of the other assets in the CGU (group of CGUs) on a pro rata basis, except that the carrying value of an asset will not be reduced below its individual fair value less costs of disposal (if measurable) or value in use (if determinable).

An impairment loss in respect of goodwill is not reversed. Except for goodwill, all impaired non-financial assets are subject to review for possible reversal of impairment at each reporting date. A reversal of an impairment loss is limited to the asset's carrying amount that would have been determined had no impairment loss been recognized in the prior year. Reversals of impairment losses are credited to profit or loss in the year in which the reversals are recognized.

Deferred income tax

Deferred income tax assets and liabilities are recognized based on the differences between tax bases of assets and liabilities and respective book values (temporary differences). For deductible tax losses or tax credit that can be brought forward in accordance with tax law requirements for deduction of taxable income in subsequent years, it is considered as temporary differences and related deferred income tax assets are recognized. No deferred income tax liability is recognized for temporary difference arising from initial recognition of goodwill. For those temporary differences arising from initial recognition of an asset or liability in a non-business combination transaction that affects neither accounting profit nor taxable profit (or deductible loss) at the time of the transaction, no deferred income tax asset and liability is recognized. The temporary differences relating to investments in subsidiaries to the extent that, in the case of taxable differences, the Company and its subsidiaries control the timing of the reversal and it is probable that the differences will not reverse in the foreseeable future, or in the case of deductible differences, unless it is probable that they will reverse in the future.

The Company and its subsidiaries recognize deferred income tax assets to the extent that it is probable that taxable profit will be available to offset the deductible temporary difference, deductible tax loss and tax credit.

At the end of reporting period, deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or liability is settled.

The carrying amount of a deferred tax asset is reviewed at the end of each reporting period and is reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow the related tax benefit to be utilized. Any such reduction is reversed to the extent that it becomes probable that sufficient taxable profits will be available.

Deferred income tax assets and deferred income tax liabilities are offset when meeting all the conditions below:

(1)

The Company and its subsidiaries have the legally enforceable right to offset current income tax assets and current income tax liabilities;

(2)

Deferred income tax assets and deferred income tax liabilities are related to the income tax levied by the same tax authority of the Company and its subsidiaries.

Business combination

For the business combinations undertaken by the Company and its subsidiaries, the Company recognises the assets acquired and the liabilities assumed based on their estimated fair value on the date of acquisition. Any excess of purchase consideration over the estimated fair values of acquired identifiable net assets is recorded goodwill. The contingent consideration of the Company in the business combination is recognised as a financial asset at fair value through profit or loss (included in other non-current assets and other receivables and assets).

The Company makes judgements and estimates in relation to the fair value allocation of the purchase price and the contingent consideration from business combination. The fair value of acquired assets and assumed liabilities and the contingent consideration are determined using valuation techniques. Estimating the fair value assigned to each class of acquired assets and assumed liabilities and the contingent consideration are based on expectations and assumptions, in particular in relation to the future sales volumes and the related revenue growth rate, future on-grid tariffs, future capital expenditure, future fuel prices, future other operating costs and the discount rates applied.

A change in the amount allocated to identifiable net assets would have an offsetting effect on the amount of goodwill recognised from the acquisition and would change the amount of depreciation and amortisation expense recognised related to those identifiable net assets. And outcomes within the next financial period that are different from assumptions could require a material adjustment to the carrying amounts of contingent consideration.

New accounting pronouncements

For a detailed discussion of new accounting pronouncements, see Note 2(ag) to the Financial Statements.

B.	Operating results

Our financial statements are prepared under IFRS as issued by IASB. The following management's discussion and analysis is based on the financial information prepared under IFRS.

Year ended December 31, 2018 compared with year ended December 31, 2017

	For the Year Ended December 31,
							Increased/
	2018			2017 (Note)			(Decreased)
	RMB'000			RMB'000			%
Operating revenue		169,550,624			152,459,444			11.21
Tax and levies on operations		(1,788,998	)		(1,376,312	)		29.98
Operating expenses
Fuel		(105,736,173	)		(92,737,304	)		14.02
Maintenance		(4,393,335	)		(4,347,723	)		1.05
Depreciation		(20,466,423	)		(20,180,830	)		1.42

	For the Year Ended December 31,
							Increased/
	2018			2017 (Note)			(Decreased)
	RMB'000			RMB'000			%
Labor		(11,845,280	)		(10,590,084	)		11.85
Service fees on transmission and transformer facilities of HIPDC		(96,721	)		(95,894	)		0.86
Purchase of electricity		(4,678,431	)		(3,787,032	)		23.54
Others		(10,430,998	)		(10,160,875	)		2.66
Total operating expenses		(157,647,361	)		(141,899,742	)		11.10
Profit from operations		10,114,265			9,183,390			10.14
Interest income		234,604			198,906			17.95
Financial expenses, net
Interest expense		(10,486,412	)		(9,749,004	)		7.56
Exchange (loss) / gain and bank charges , net		(160,899	)		144,359			(211.46	)
Total financial expenses, net		(10,647,311	)		(9,604,645	)		10.86
Share of profits less losses of associates and joint ventures		1,823,415			425,215			328.82
Gain on fair value changes of financial assets / liabilities		726,843			856,786			(15.17	)
Other investment (loss) / income		(278,669	)		1,742,081			(116.00	)
Profit before income tax expense		1,973,147			2,801,733			(29.57	)
Income tax expense		(643,173	)		(1,217,526	)		(47.17	)
Net Profit		1,329,974			1,584,207			(16.05	)
Attributable to:
-Equity holders of the Company		734,435			1,579,836			(53.51	)
-Non-controlling interests		595,539			4,371			13,524.78

Note: The Company and its subsidiaries have initially applied IFRS 15 and IFRS 9 at January 1, 2018. Under the transition methods chosen, comparative information is not restated. See Note 2(b) to Financial Statements.

Total power generated by the Company’s domestic operating power plants for the year on consolidated basis amounted to 430.457 billion kWh, representing an increase of 9.12% year-on-year. The electricity sold amounted to 405.943 billion kWh, representing an increase of 9.30% year-on-year. The increase in the Company’s power generation for the year was mainly attributable to the following reasons: (i) the growth of the national total electricity consumption was greater than anticipated at the beginning of the year, especially the electricity consumption by the tertiary industry and urban and rural residents maintained at a double-digit growth; (ii) affected by factors such as increased demand and reduced water supply, the Company’s thermal power utilization hours rebounded significantly; and (iii) the new gas turbine, wind-power and photovoltaic units contributed to the growth of power generation.

The annual average utilization hours of the Company's domestic power plants reached 4,208 hours. In most of the areas where the Company's coal-fired power plants are located, the utilization hours of the Company were in a leading position within those areas.

The power generation of the Company's domestic power plants for the year ended December 31, 2018 is listed below (in billion kWh):

	Power Generation					Electricity Sold
Region	2018		Change			2018		Change
Heilongjiang Province		13.398		1.72	%		12.562		1.97	%
Coal-fired		12.282		0.26	%		11.466		0.47	%
Wind-power		1.039		12.74	%		1.021		12.50	%
PV		0.077		–			0.076		–
Jilin Province		10.053		16.94	%		9.504		17.18	%
Coal-fired		8.743		17.40	%		8.243		17.61	%
Wind-power		0.975		13.39	%		0.949		13.58	%
Hydro-power		0.076		21.38	%		0.074		20.91	%
PV		0.039		231.73	%		0.038		231.41	%
Biomass power		0.220		2.40	%		0.199		3.23	%

	Power Generation					Electricity Sold
Region	2018		Change			2018		Change
Liaoning Province		19.548		-0.79	%		18.168		-1.23	%
Coal-fired		18.984		-1.40	%		17.612		-1.87	%
Wind-power		0.350		5.02	%		0.348		5.07	%
Hydro-power		0.059		50.06	%		0.058		49.80	%
PV		0.155		95.97	%		0.151		93.96	%
Inner Mongolia		0.243		6.38	%		0.240		6.39	%
Wind-power		0.243		6.38	%		0.240		6.39	%
Hebei Province		13.423		0.17	%		12.601		0.13	%
Coal-fired		13.125		-0.05	%		12.315		-0.23	%
Wind-power		0.241		5.36	%		0.231		13.54	%
PV		0.057		43.20	%		0.055		46.22	%
Gansu Province		11.820		18.97	%		11.220		19.19	%
Coal-fired		9.819		17.84	%		9.273		17.90	%
Wind-power		2.000		24.88	%		1.947		25.78	%
Ningxia		0.022		111.02	%		0.021		115.47	%
PV		0.022		111.02	%		0.021		115.47	%
Beijing		8.521		37.98	%		8.086		45.39	%
Coal-fired		1.692		26.36	%		1.499		28.90	%
Combined Cycle		6.829		41.20	%		6.588		49.74	%
Tianjin		7.504		3.18	%		7.042		2.93	%
Coal-fired		5.793		2.39	%		5.380		2.09	%
Combined Cycle		1.708		5.84	%		1.659		5.64	%
PV		0.003		111.87	%		0.003		112.26	%
Shanxi Province		10.916		11.24	%		10.196		11.00	%
Coal-fired		8.807		25.19	%		8.143		25.36	%
Combined Cycle		2.033		-25.88	%		1.977		-25.89	%
PV		0.076		116.85	%		0.076		242.30	%
Shandong Province		97.700		9.20	%		91.654		9.39	%
*Coal-fired		96.481		8.59	%		90.491		8.81	%
*Wind-power		0.835		89.49	%		0.785		78.58	%
PV		0.384		105.94	%		0.378		104.27	%
Henan Province		27.074		21.89	%		25.516		21.93	%
Coal-fired		25.201		21.90	%		23.689		21.83	%
Combined Cycle		1.750		22.90	%		1.712		22.86	%
Wind-power		0.098		15.29	%		0.090		17.28	%
PV		0.025		98.97	%		0.025		98.90	%
Jiangsu Province		42.653		-0.21	%		40.445		-0.02	%
Coal-fired		34.804		-4.45	%		32.762		-4.75	%
Combined Cycle		6.009		15.59	%		5.892		17.61	%
Wind-power		1.747		62.49	%		1.701		69.37	%
PV		0.093		110.43	%		0.090		107.50	%

	Power Generation					Electricity Sold
Region	2018		Change			2018		Change
Shanghai		18.180		-1.64	%		17.185		-1.74	%
Coal-fired		16.325		-3.60	%		15.373		-3.78	%
Combined Cycle		1.855		19.69	%		1.813		19.78	%
Chongqing		9.951		16.32	%		9.224		16.31	%
Coal-fired		8.558		15.84	%		7.873		16.01	%
Combined Cycle		1.360		15.79	%		1.327		16.01	%
Wind-power		0.032		–			0.024		–
Zhejiang Province		27.090		-1.81	%		26.002		-1.83	%
Coal-fired		26.356		-2.71	%		25.281		-2.76	%
Combined Cycle		0.674		50.05	%		0.660		50.73	%
PV		0.062		24.66	%		0.061		23.79	%
Hubei Province		17.519		18.89	%		16.386		18.46	%
Coal-fired		16.736		18.31	%		15.674		18.61	%
Wind-power		0.458		75.31	%		0.396		38.24	%
Hydro-power		0.303		-9.85	%		0.294		-9.53	%
PV		0.022		271.80	%		0.022		269.60	%
Hunan Province		11.410		22.58	%		10.696		22.81	%
Coal-fired		10.509		23.98	%		9.808		24.33	%
Wind-power		0.545		2.54	%		0.539		2.52	%
Hydro-power		0.325		13.95	%		0.319		14.04	%
PV		0.032		98.30	%		0.031		93.50	%
Jiangxi Province		21.106		6.59	%		20.188		6.73	%
Coal-fired		20.720		6.10	%		19.812		6.12	%
Wind-power		0.385		41.32	%		0.376		53.35	%
Anhui Province		6.151		3.59	%		5.873		3.45	%
Coal-fired		5.776		1.09	%		5.506		0.94	%
Wind-power		0.298		136.37	%		0.290		133.56	%
Hydro-power		0.077		-22.01	%		0.077		-22.07	%
Fujian Province		12.495		20.37	%		11.800		20.52	%
Coal-fired		12.482		20.34	%		11.787		20.44	%
PV		0.012		69.23	%		0.012		199.78	%
Guangdong Province		25.648		19.58	%		24.539		19.76	%
Coal-fired		25.626		19.61	%		24.517		19.78	%
PV		0.022		-1.37	%		0.022		-1.33	%
Guangxi Province		0.339		1052.18	%		0.325		–
Combined Cycle		0.339		1052.18	%		0.325		–
Yunnan Province		4.450		20.66	%		4.146		22.00	%
Coal-fired		3.885		18.80	%		3.596		19.99	%
Wind-power		0.565		35.17	%		0.549		36.94	%
Guizhou Province		0.197		240.83	%		0.194		260.17	%
Wind-power		0.197		240.83	%		0.194		260.17	%

	Power Generation					Electricity Sold
Region	2018		Change			2018		Change
Hainan Province		13.044		11.99	%		12.129		12.21	%
Coal-fired		12.635		11.54	%		11.725		11.72	%
Combined Cycle		0.024		21.22	%		0.023		21.34	%
Wind-power		0.097		-16.50	%		0.095		-16.47	%
Hydro-power		0.228		48.80	%		0.226		49.20	%
PV		0.060		97.20	%		0.059		97.67	%
Total		430.457		9.12	%		405.943		9.30	%

Note: The statistics marked * comprise newly acquired power plants of the Company that were included in the consolidated financial statements in early August 2018. The comparison figures thereof are solely for reference purposes.

For the year ended December 31, 2018, the accumulated power generation of Tuas Power Ltd., the Company’s wholly owned subsidiary in Singapore, accounted for a market share of 21.1% in Singapore, representing a decrease of 0.8% compared to the same period last year of 21.9%.

In respect of the tariff, the Company's average tariff of domestic power plants for the year ended December 31, 2018 was RMB418.48 per MWh, up by RMB4.47 per MWh from the year ended December 31, 2017. SinoSing Power's average tariff for 2018 was RMB648.74 per MWh, representing an increase of 19.22% from the same period last year.

In respect of fuel costs, there was a huge increase in fuel costs. Compared with 2017, the Company's fuel cost per unit of power sold of domestic power plant increased by 4.85% to RMB236.89 per MWh.

Combining the foregoing factors, for the year ended December 31, 2018, the Company recorded an operating revenue of RMB169.551 billion, representing an increase of 11.21% from RMB152.459 billion of last year, and the net profit attributable to equity holders of the Company of RMB0.734 billion, representing a decrease of 53.51% from RMB1.580 billion of last year.

For the year ended December 31, 2018, the net profit attributable to equity holders of the Company from domestic operations was RMB1.429 billion, representing a decrease of RMB0.628 billion from RMB2.057 billion for the same period last year. The decrease was primarily attributable to the increase in fuel costs and financial expenses, and decrease in investment gains. The net loss attributable to equity holders of the Company from its operations in Singapore was RMB695 million, representing a loss increase of RMB218 million compared to the same period last year, which is principally attributable to Tuas Power's decreased profit by RMB320 million (about S$65 million) from the disposal of fuel oil and impairment provision for fuuel oil.

Operating revenue and tax and levies on operations

Operating revenue mainly consists of revenue from electricity sold. For the year ended December 31, 2018, the consolidated operating revenue of the Company and its subsidiaries amounted to RMB169.551 billion, representing an increase of 11.21% from RMB152.459 billion for the year ended December 31, 2017. The operating revenue from domestic operations of the Company increase by RMB15.166 billion over the same period of last year, while the operating revenue generated from newly acquired entities and newly operated generating units was RMB5.592 billion.

In 2018, the operating revenue from the operations of the Company in Singapore increased by RMB1.925 billion over the same period of last year, which was mainly attributed to the aggressive competitive strategy adopted by the Company in Singapore and the increased on-grid tariff compared to the same period of last year.

The following table sets forth the average tariff rate of the Company, as well as percentage changes from 2017 to 2018.

	Average tariff rate (VAT inclusive) (RMB/MWh)
Region/type of power generation
	2018	2017	Change
Heilongjiang Province
Coal-fired	393.28	376.88	4.35%
Wind-power	516.82	595.75	-13.25%
PV	750.90	–	N/A
Jilin Province
Coal-fired	385.18	383.75	0.37%
Wind-power	518.74	551.80	-5.99%
Hydro-power	426.74	426.63	0.03%
PV	834.14	879.95	-5.21%
Biomass power	754.58	750.02	0.61%
Liaoning Province
Coal-fired	398.85	370.25	7.73%
Wind-power	572.25	583.79	-1.98%
Hydro-power	330.00	330.00	0.00%
PV	898.76	907.54	-0.97%
Inner Mongolia
Wind-power	461.87	452.91	1.98%
Hebei Province
Coal-fired	378.05	366.23	3.23%
Wind-power	522.09	541.30	-3.55%
PV	801.90	978.48	-18.05%
Gansu Province
Coal-fired	289.85	246.89	17.40%
Wind-power	403.12	459.23	-12.22%
Ningxia
PV	805.11	800.00	0.64%
Beijing
Coal-fired	463.40	749.82	-38.20%
Combined Cycle	667.36	674.07	-1.00%
Tianjin
Coal-fired	397.46	393.82	0.92%
Combined Cycle	708.05	699.14	1.27%
PV	881.64	879.99	0.19%
Shanxi Province
Coal-fired	326.40	317.52	2.80%
Combined Cycle	684.65	678.32	0.93%
PV	908.91	1,370.19	-33.67%
Shandong Province
*Coal-fired	404.01	397.13	1.73%
*Wind-power	564.46	625.68	-9.78%
PV	862.56	881.74	-2.18%
Henan Province
Coal-fired	349.86	370.27	-5.51%
Combined Cycle	640.53	600.00	6.76%
Wind-power	551.34	610.00	-9.62%
PV	380.00	375.34	1.24%
Jiangsu Province
Coal-fired	438.53	401.57	9.21%
Combined Cycle	590.83	599.85	-1.50%
Wind-power	724.53	679.60	6.61%
PV	929.01	957.89	-3.02%

	Average tariff rate (VAT inclusive) (RMB/MWh)
Region/type of power generation
	2018	2017	Change
Shanghai
Coal-fired	411.76	398.00	3.46%
Combined Cycle	848.25	911.36	-6.93%
Chongqing
Coal-fired	412.66	392.74	5.07%
Combined Cycle	746.10	811.53	-8.06%
Wind-power	615.26	–	N/A
Zhejiang Province
Coal-fired	418.61	421.15	-0.60%
Combined Cycle	867.83	912.07	-4.85%
PV	1,054.58	1,128.38	-6.54%
Hubei Province
Coal-fired	422.40	402.46	4.96%
Wind-power	630.28	676.00	-6.76%
Hydro-power	381.98	378.04	1.04%
PV	887.76	880.00	0.88%
Hunan Province
Coal-fired	463.72	455.94	1.71%
Wind-power	610.84	606.72	0.68%
Hydro-power	376.07	376.17	-0.03%
PV	907.78	879.57	3.21%
Jiangxi Province
Coal-fired	420.96	411.82	2.22%
Wind-power	612.62	610.00	0.43%
Anhui Province
Coal-fired	380.70	371.86	2.38%
Wind-power	613.38	610.00	0.55%
Hydro-power	384.40	376.74	2.03%
Fujian Province
Coal-fired	400.15	375.59	6.54%
PV	985.72	980.00	0.58%
Guangdong Province
Coal-fired	415.14	431.23	-3.73%
PV	986.49	980.00	0.66%
Guangxi Province
Combined Cycle	547.20	–	N/A
Yunnan Province
Coal-fired	514.50	577.23	-10.87%
Wind-power	470.14	478.37	-1.72%
Guizhou Province
Wind-power	608.00	599.76	1.37%
Hainan Province
Coal-fired	441.68	431.33	2.40%
Combined Cycle	1,565.26	1,619.97	-3.38%
Wind-power	612.15	608.99	0.52%
Hydro-power	402.62	399.53	0.77%
PV	958.71	991.44	-3.30%
Domestic total	418.48	414.01	1.08%
SinoSing Power	648.74	544.15	19.22%

Note 1:

The tariff of combined-cycle power plants in Shanghai, Zhejiang, Jiangsu and Chongqing consists of on-grid settlement price and capacity subsidy income.

Note 2:

The statistics marked * comprise newly acquired power plants of the Company that were included in the consolidated financial statements in early August 2018. The comparison figures thereof are solely for reference purposes.

Tax and levies on operations mainly consist of surcharges of value added tax. According to relevant administrative regulations, these surcharges include City Construction Tax and Education Surcharges calculated at prescribed percentages on the amounts of the value-added tax paid. For the year ended December 31, 2018, the tax and levies on operations of the Company and its subsidiaries were RMB1.789 billion, representing an increase of RMB413 million from RMB1.376 billion for the same period of last year, of which the tax and levies on operations attributable to newly acquired entities and new generating units accounted for RMB18 million.

Operating expenses

For the year ended December 31, 2018, the total operating expenses of the Company and its subsidiaries was RMB157.647 billion, representing an increase of 11.10% from the same period last year. The operating expenses in domestic operations of the Company increased by RMB13.638 billion, or 10.36%, from the same period last year, of which the newly acquired entities and the new generating units accounted for RMB1.530 billion; the costs attributable to the existing entities increased by RMB12.108 billion, which was primarily attributable to the increased fuel cost for domestic operations in China.

The operating expenses from operations in Singapore operations increased by RMB2.109 billion, or 20.55%, from the same period last year, which was mainly due to increased gas price attributable to the rise of international oil price.

Fuel costs

Fuel costs account for the majority of the operating expenses for the Company and its subsidiaries. For the year ended December 31, 2018, fuel costs of the Company and its subsidiaries increased by 14.02% to RMB105.736 billion from the RMB92.737 billion for the year ended December 31, 2017. The fuel costs from domestic operations of the Company and its subsidiaries increased by RMB12.307 billion, which was primarily attributable to the increase of the fuel price. The fuel costs of the newly acquired entities and new generating units were RMB0.890 billion and the fuel costs of the existing generating units increased by RMB11.417 billion from same period last year. Fuel costs in Singapore increased by RMB0.692 billion from the same period last year, mainly due to increased fuel costs arising from increased natural gas prices. For the year ended December 31, 2018, the average price (excluding tax) of natural fuel coal consumed of the Company and its domestic subsidiaries was RMB551.35 per ton, representing a 0.61% increase from RMB548.02 per ton for the year ended December 31, 2017. The fuel cost per unit of power sold by the Company's domestic power plants increased by 4.85% to RMB236.89/MWh from RMB225.92/MWh in 2017.

Maintenance

For the year ended December 31, 2018, the maintenance expenses of the Company and its subsidiaries amounted to RMB4.393 billion, representing an increase of RMB45 million from RMB4.348 billion for the year ended December 31, 2017. The maintenance expenses of the Company's domestic operations increased by RMB54 million compared to the same period last year. The maintenance expenses of operations in Singapore decreased by RMB9 million compared to the same period last year.

Depreciation

For the year ended December 31, 2018, depreciation expenses of the Company and its subsidiaries increased by 1.41% to RMB20.466 billion, compared to RMB20.181 billion for the year ended December 31, 2017; the increase is mainly due to the newly acquired entities and new generating units put into operation. The depreciation expenses of domestic operations increased by RMB0.369 million compared to the same period last year, of which the depreciation costs incurred by the newly acquired entities and new generating units was RMB0.320 million. The depreciation expenses of the operations in Singapore increased by RMB84 million compared to the same period last year.

Labor

Labor costs consist of salaries to employees and contributions payable for employees' housing funds, medical insurance, pension and unemployment insurance, as well as training costs. For the year ended December 31, 2018, the labor costs of the Company and its subsidiaries amounted to RMB11.845 billion, representing an increase of RMB1.255 million from RMB10.590 billion for the year ended December 31, 2017. This is mainly attributable to good operating results of the Company's domestic plants and the raise of the Company's annuity contribution percentage. Labor costs for Singapore operations increased by RMB17 million compared to the same period last year.

Other operating expenses (including electricity power purchase costs and service fees paid to HIPDC)

Other operating expenses include environmental protection expenses, land fee, insurance premiums, office expenses, amortization, Tuas Power's electricity power purchase costs, impairment losses, government subsidies and net gains or losses on disposal of non-current assets. For the year ended December 31, 2018, other operating expenses (including electricity power purchase costs and service fees paid to HIPDC) of the Company and its subsidiaries was RMB15.206 billion, representing an increase of RMB1.162 billion from RMB14.044 billion for the year ended December 31, 2017. The other operating expenses from the Company's domestic operations decreased by RMB0.365 billion, mainly due to decreased exchange of tariff quota and change of environmental protection fee into the tax and levies on operations.

Other operating expenses of the operations in Singapore increased by RMB1.527 million compared to the same period last year.

Financial expenses, net

Net financial expenses consist of interest expense, bank charges and net exchange differences.

Interest expenses

For the year ended December 31, 2018, the interest expenses of the Company and its subsidiaries were RMB10.486 billion, representing an increase of 7.56% from RMB9.749 billion for the year ended December 31, 2017. The interest expenses from the Company's domestic operations increased by RMB0.723 billion. The interest expenses from the newly acquired entities and new generating units were RMB0.210 million and those incurred by the existing entities in China increased by RMB0.513 billion, which is largely attributable to increased debts scale The interest expenses of Singapore operations decreased by RMB14 million compared to the same period last year.

Net exchange differences and bank charges

For the year ended December 31, 2018, the Company and its subsidiaries recorded a net loss of RMB161 million in net exchange difference and bank charges, while a net gain of RMB144 million was recorded for the year ended December 31, 2017, mainly due to the weakened exchange rate of RMB against U.S. dollar.

The operations in Singapore recorded net loss of RMB25 million from net exchange difference and bank charges, representing an increase of RMB8 million from the net loss of RMB17 million for the year ended December 31, 2017, mainly due tothe strengthened exchange rate of U.S. dollar against Singapore dollar.

Share of profits less losses of associates and joint ventures

For the year ended December 31, 2018, the share of profits less losses of associates and joint ventures was RMB1.823 billion, representing an increase of RMB1.398 million from RMB0.425 billion from last year, mainly due to ncreased profit of associates and joint ventures.

Income tax expenses

For the year ended December 31, 2018, the Company and its subsidiaries recognized income tax expense of RMB0.643 billion, representing a decrease of RMB0.575 billion from RMB1.218 billion for the year ended December 31, 2017. The income tax expenses for the domestic operations decreased by RMB0.540 billion primarily attributable to increase in coal price from same period last year, which reduced the profitability of the Company’s coal-fired power plants.

The income tax expenses of the operations in Singapore decrease by RMB35 million.

Net profit, net profit attributable to the equity holders of the Company and non-controlling interests

For the year ended December 31, 2018, the Company and its subsidiaries achieved a net profit of RMB1.330 billion, representing a decrease of RMB0.254 billion, or 16.04% from RMB1.584 billion for the year ended December 31, 2017; the net profit attributable to equity holders of the Company was RMB0.734 billion, representing a decrease of RMB0.846 billion from RMB1.580 billion for the year ended December 31, 2017.

The net profit attributable to equity holders of the Company from its domestic operations decreased by RMB0.628 billion, mainly attributable to rising fuel prices, increased financial costs and reduced investment income. The net loss attributable to equity holders of the Company from its operations in Singapore was RMB695 million, representing an increase of RMB218 million from the same period last year. This was mainly due to Tuas Power’s loss on disposal of fuel oil of about RMB59million (S$12 million) and impairment provision of fuel oil of about RMB255 million (S$52 million).

The Company’s recorded net profit attributable to non-controlling interests increased to RMB596 million for the year ended December 31, 2018 from RMB4 million for the year ended December 31, 2017, mainly attributable to the increases of the profit of non-wholly owned subsidiaries.

Year ended December 31, 2017 compared with year ended December 31, 2016

	For the Year Ended December 31,
							Increased/
	2017			2016			(Decreased)
	RMB'000			RMB'000			%
Operating revenue		152,459,444			113,814,236			33.95
Tax and levies on operations		(1,376,312	)		(1,177,818	)		16.85
Operating expenses
Fuel		(92,737,304	)		(56,617,542	)		63.80
Maintenance		(4,347,723	)		(4,343,349	)		0.10
Depreciation		(20,180,830	)		(14,815,620	)		36.21
Labor		(10,590,084	)		(8,043,406	)		31.66
Service fees on transmission and transformer facilities of HIPDC		(95,894	)		(138,038	)		-30.53
Purchase of electricity		(3,787,032	)		(3,066,415	)		23.50
Others		(10,160,875	)		(7,234,308	)		40.45
Total operating expenses		(141,899,742	)		(94,258,678	)		50.54
Profit from operations		9,183,390			18,377,740			-50.03
Interest income		198,906			147,063			35.25
Financial expenses, net
Interest expense		(9,749,004	)		(6,817,526	)		43.00
Exchange gain / (loss) and bank charges , net		144,359			(250,076	)		-157.73
Total financial expenses, net		(9,604,645	)		(7,067,602	)		35.90
Share of profits less losses of associates and joint ventures		425,215			1,298,889			-67.26
Gain / (loss) on fair value changes of financial assets / liabilities		856,786			(12,986	)		-66.98
Other investment income		1,742,081			1,070,034			62.81
Profit before income tax expense		2,801,733			13,813,138			-79.72
Income tax expense		(1,217,526	)		(3,465,151	)		-64.86
Net Profit		1,584,207			10,347,987			-84.69
Attributable to:
-Equity holders of the Company		1,579,836			8,520,427			-81.46
-Non-controlling interests		4,371			1,827,560			-99.76

Total power generated by the Company's domestic operating power plants for the year on consolidated basis amounted to 394.481 billion kWh, representing an increase of 25.8% year-on-year. The electricity sold amounted to 371.399 billion kWh, representing an increase of 25.6% year-on-year. Newly acquired entities and newly operated generating units mainly contributed to the power generation growth of the Company, meanwhile the power generation by power plants in the regions of central China, east China and Guangdong provinces increased.

The annual average utilization hours of the Company's domestic power plants reached 3,951 hours. In most of the areas where the Company's coal-fired power plants are located, the utilization hours of the Company was in a leading position within those areas.

The power generation of the Company's domestic power plants for the year ended December 31, 2017 is listed below (in billion kWh):

	Power Generation					Electricity Sold
Region	2017		Change			2017		Change
*Heilongjiang Province		13.172		3.53	%		12.320		3.52	%
*Coal-fired		12.250		1.58	%		11.412		1.43	%
*Wind-power		0.922		38.89	%		0.907		39.75	%
Jilin Province		8.596		13.44	%		8.111		13.81	%
*Coal-fired		7.448		10.69	%		7.009		10.76	%
*Wind-power		0.860		48.17	%		0.836		51.24	%
*Hydro-power		0.062		0.75	%		0.061		0.79	%
*PV		0.0116		-			0.0115		-
*Biomass power		0.215		3.62	%		0.193		4.35	%
Liaoning Province		19.704		-0.60	%		18.395		-1.25	%
*Coal-fired		19.253		-1.15	%		17.947		-1.84	%
*Wind-power		0.333		12.13	%		0.331		12.19	%
*Hydro-power		0.039		14.43	%		0.039		14.00	%
*PV		0.0790		392.78	%		0.0778		396.67	%
Inner Mongolia		0.228		4.84	%		0.226		4.50	%
Wind-power		0.228		4.84	%		0.226		4.50	%
Hebei Province		13.400		2.58	%		12.585		2.40	%
Coal-fired		13.132		1.55	%		12.343		1.43	%
Wind-power		0.228		96.82	%		0.204		87.01	%
PV		0.0399		153.60	%		0.0375		208.25	%
Gansu Province		9.935		2.25	%		9.413		0.08	%
Coal-fired		8.333		-1.30	%		7.865		-3.91	%
Wind-power		1.602		25.80	%		1.548		26.78	%
Ningxia		0.0103		-			0.0099		-
PV		0.0103		-			0.0099		-
Beijing		6.176		-18.12	%		5.562		-20.61	%
Coal-fired		1.339		-60.68	%		1.163		-60.79	%
Combined Cycle		4.836		16.92	%		4.399		8.87	%
Tianjin		7.273		0.27	%		6.843		0.01	%
Coal-fired		5.658		7.15	%		5.271		7.18	%
Combined Cycle		1.614		-18.22	%		1.570		-18.39	%
PV		0.0015		-			0.0015		-
Shanxi Province		9.813		-8.35	%		9.185		-8.75	%
Coal-fired		7.035		-13.80	%		6.495		-14.46	%
Combined Cycle		2.743		7.75	%		2.668		7.87	%
PV		0.0350		-			0.0221		-
Shandong Province		89.487		116.39	%		83.787		115.24	%
Coal-fired		88.848		114.85	%		83.162		113.63	%
*Wind-power		0.452		8.82	%		0.440		9.13	%
*PV		0.1865		266.61	%		0.1851		276.54	%

	Power Generation					Electricity Sold
Region	2017		Change			2017		Change
Henan Province		22.210		3.53	%		20.927		7.58	%
Coal-fired		20.696		-3.44	%		19.457		0.02	%
*Combined Cycle		1.424		-8.13	%		1.393		-8.18	%
Wind-power		0.077		309.51	%		0.076		513.65	%
PV		0.0128		-			0.0126		-
Jiangsu Province		42.761		-0.61	%		40.452		-1.05	%
Coal-fired		36.441		-6.38	%		34.395		-6.70
Combined Cycle		5.199		47.79	%		5.010		45.02	%
Wind-power		1.077		86.12	%		1.004		79.52	%
PV		0.0442		-			0.0436		-
Shanghai		18.484		1.91	%		17.490		1.80	%
Coal-fired		16.934		2.70	%		15.976		2.60	%
Combined Cycle		1.550		-5.99	%		1.513		-5.94	%
Chongqing		8.563		-14.51	%		7.930		-14.86	%
Coal-fired		7.388		-9.40	%		6.787		-9.52	%
Combined Cycle		1.175		-36.90	%		1.144		-36.94	%
Zhejiang Province		27.589		11.65	%		26.487		11.74	%
Coal-fired		27.090		12.08	%		26.000		12.18	%
Combined Cycle		0.449		-13.30	%		0.438		-13.46	%
PV		0.0496		130.26	%		0.0492		128.47	%
Hubei Province		14.781		4.94	%		13.833		4.73	%
Coal-fired		14.147		4.00	%		13.215		3.64	%
Wind-power		0.292		54.86	%		0.287		64.88	%
Hydro-power		0.336		14.36	%		0.325		14.80	%
PV		0.0059		-			0.0059		-
Hunan Province		9.308		11.94	%		8.709		11.28	%
Coal-fired		8.476		13.86	%		7.889		13.23	%
Wind-power		0.531		-1.11	%		0.525		-1.16	%
Hydro-power		0.285		-14.68	%		0.280		-14.77	%
PV		0.0162		-			0.0159		-
Jiangxi Province		19.801		13.53	%		18.915		13.67	%
Coal-fired		19.529		12.66	%		18.670		12.88	%
Wind-power		0.272		153.43	%		0.245		142.93	%
Anhui Province		5.940		1.60	%		5.677		1.82	%
Coal-fired		5.714		1.73	%		5.454		1.88	%
Wind-power		0.127		42.14	%		0.124		52.18	%
Hydro-power		0.099		-29.68	%		0.098		-29.81	%
Fujian Province		10.380		35.22	%		9.791		35.45	%
Coal-fired		10.373		35.12	%		9.787		35.39	%
PV		0.0073		-			0.0041		-
Guangdong Province		21.448		22.89	%		20.491		22.75	%
Coal-fired		21.425		22.81	%		20.468		22.66	%
PV		0.0225		217.25	%		0.0225		250.68	%
Guangxi		0.029		-			-		-
Combined Cycle		0.029		-			-		-
Yunnan Province		3.688		-5.01	%		3.398		-4.89	%
Coal-fired		3.270		-8.76	%		2.997		-9.05	%
Wind-power		0.418		40.04	%		0.401		44.53	%
Guizhou Province		0.058		28.88	%		0.054		43.36	%
Wind-power		0.058		28.88	%		0.054		43.36	%
Hainan Province		11.647		-2.36	%		10.809		-2.62	%
Coal-fired		11.327		-1.74	%		10.495		-2.02	%
Combined Cycle		0.020		-84.64	%		0.019		-84.29	%
Wind-power		0.117		15.47	%		0.114		15.39	%

	Power Generation					Electricity Sold
Region	2017		Change			2017		Change
Hydro-power		0.153		-6.37	%		0.151		-6.33	%
PV		0.0305		267.36	%		0.0301		268.30	%
Total		394.481		25.76	%		371.399		25.56	%

Note: The remark * represented the regional companies or power plants involved in the new acquisition by the Company at the end of 2016. They had been incorporated in the Company's financial statements since 1 January 2017, and the year-on-year data of which is for information only.

For the year ended December 31, 2017, the accumulated power generation of Tuas Power Ltd., the Company's wholly owned subsidiary in Singapore, accounted for a market share of 21.9% in Singapore, representing an increase of 0.4% compared to the same period last year of 21.5%.

In respect of the tariff, the Company's average tariff of domestic power plants for the year ended December 31, 2017 was RMB414.01 per MWh, up by RMB17.41 per MWh from the year ended December 31, 2016. SinoSing Power's average tariff for 2017 was RMB544.15 per MWh, representing an increase of 5.86% from the same period last year.

In respect of fuel costs, there was a huge increase in fuel costs. Compared with 2016, the Company's fuel cost per unit of power sold of domestic power plant increased by 32.41% to RMB225.92 per MWh.

Combining the foregoing factors, for the year ended December 31, 2017, the Company recorded an operating revenue of RMB152.459 billion, representing an increase of 33.95% from RMB113.814 billion of last year, and the net profit attributable to equity holders of the Company of RMB1.580 billion, representing a decrease of 81.46% from RMB8.520 billion of last year.

For the year ended December 31, 2017, the net profit attributable to equity holders of the Company from domestic operations was RMB2.057 billion, representing a decrease of RMB6.703 billion from RMB8.760 billion for the same period last year. The decrease was primarily attributable to the huge increase in the coal price, which severely impacted our profitability. The net loss attributable to equity holders of the Company from its operations in Singapore was RMB477 million, representing an increase of RMB237 million compared to the same period last year.

Operating revenue and tax and levies on operations

Operating revenue mainly consists of revenue from electricity sold. For the year ended December 31, 2017, the consolidated operating revenue of the Company and its subsidiaries amounted to RMB152.459 billion, representing an increase of 33.95% from RMB113.814 billion for the year ended December 31, 2016. The operating revenue from domestic operations of the Company increase by RMB37.326 billion over the same period of last year, while the operating revenue generated from newly acquired entities and newly operated generating units was RMB33.956 billion.

In 2017, the operating revenue from the operations of the Company in Singapore increased by RMB1.319 billion over the same period of last year, which was mainly attributed to the proactive competition strategy we employed in the Singapore market and the increase in the tariff.

The following table sets forth the average tariff rate of the Company's power plants, as well as percentage changes from 2016 to 2017.

	Average tariff rate (VAT inclusive) (RMB/MWh)
Power Plant					Change
	2017		2016		(%)
Heilongjiang Province
Xinhua Power Plant		368.12		-		-
Hegang Power Plant		368.09		-		-
Daqing Co-generation		403.09		-		-

	Average tariff rate (VAT inclusive) (RMB/MWh)
Power Plant					Change
	2017		2016		(%)
Yichun Co-generation		374.75		-		-
Sanjiangkou Wind Power		596.28		-		-
Linjiang Jiangsheng Wind Power		595.34		-		-
Jilin Province
Jiutai Power Plant		385.03		-		-
Changchun Co-generation		381.50		-		-
Nongan Biomass		750.02		-		-
Linjiang Jubao Hydropower		438.53		-		-
Zhenlai Wind Power		566.31		-		-
Siping Wind Power		569.21		-		-
Tongyu Tuanjie Wind Power		535.27		-		-
Liaoning Province
Dalian		367.97		346.76		6.12
Dandong		392.97		352.52		11.47
Yingkou		365.73		344.71		6.10
Yingkou Co-generation		368.11		331.39		11.08
Wafangdian Wind Power		586.87		603.72		(2.79	)
Suzihe Hydropower		330.00		332.67		(0.80	)
Changtu Wind Power		582.51		626.09		(6.96	)
Dandong Photovoltaic		950.00		950.00		0.00
Yingkon Co-generation Photovoltaic		950.00		950.00		0.00
Yingkou Xianrendao Co-generation Power		880.00		-		-
Jianchang Bashihan Photovoltaic		880.00		-		-
Chaoyang Heiniuyingzi Photovoltaic		347.25		-		-
Inner Mongolia Autonomous Region
Huade Wind Power		452.91		471.22		(3.89	)
Hebei Province
Shang'an		366.23		358.48		2.16
Kangbao Wind Power		660.42		554.60		19.08
Kangbao Photovoltaic		982.50		784.95		25.17
Zhuolu Phase I Dabao Wind Power		519.45		-		-
Gansu Province
Pingliang		246.89		207.63		18.91
Jiuquan Wind Power		437.85		367.54		19.13
Jiuquan II Wind Power		449.50		402.36		11.72
Yumen Wind Power		430.53		390.06		10.38
Yigang Wind Power		554.72		447.65		23.92
Beijing Municipality
Beijing Co-generation (Coal-fired)		689.91		454.99		51.63
Beijing Co-generation (Combined Cycle)		674.07		687.33		(1.93	)
Tianjin Municipality
Yangliuqing Co-generation		393.95		370.82		6.24
Lingang Co-generation CCGT		699.14		726.44		(3.76	)
Chenxi Photovoltaic		879.99		-		-
Shanxi Province
Yushe		323.54		253.01		27.88
Zuoquan		314.64		252.96		24.38
Dongshan CCGT		678.32		682.40		(0.60	)
Yushe Photovoltaic		1370.19		-		-
Shandong Province
Dezhou		401.45		389.78		2.99

	Average tariff rate (VAT inclusive) (RMB/MWh)
Power Plant					Change
	2017		2016		(%)
Jining		395.54		372.57		6.17
Xindian		397.61		381.58		4.20
Weihai		404.81		382.53		5.82
Rizhao Phase II		391.43		372.08		5.20
Zhanhua Co-generation		437.74		389.33		12.43
Baiyanghe Power Plant		400.42		-		-
Rizhao Power Plant Phase I		458.82		-		-
Jiaxiang Power Plant		388.05		-		-
Jining Co-generation		395.19		-		-
QufuCo-generation		390.16		-		-
Huangtai Power Plant		390.59		-		-
Yantai Power Plant		409.84		-		-
Linyi Power Plant		402.16		-		-
Jining Yunhe Power Plant		403.84		-		-
Liaocheng Co-generation		390.49		-		-
Zhongtai Power Plant		371.67		-		-
Laiwu Power Plant		384.36		-		-
Muping Wind Power		627.56		-		-
Penglai Wind Power		569.97		-		-
Rushan Wind Power		634.98		-		-
Changdao Wind Power		635.20		-		-
Rongcheng Wind Power		622.69		-		-
Dongying Wind Power		623.54		-		-
Boshan Photovoltaic		1,000.00		-		-
Sishui Photovoltaic		1,109.60		-		-
Gaozhuang Photovoltaic		592.44		-		-
Jining Co-generation Photovoltaic		592.44		-		-
Weihai Haibu Photovoltaic		830.00		-		-
Zhanhua Qingfenghu Photovoltaic		1,080.00		-		-
Henan Province
Qinbei		374.82		354.30		5.79
Luoyang Co-generation		364.95		365.91		(0.26	)
Luoyang Yangguang		376.26		316.83		18.76
Mianchi Co-generation		349.95		328.10		6.66
Zhumadian Wind Power		610.00		610.00		0.00
Zhongyuan CCGT		600.00		-		-
Jiangsu Province
Nantong		417.42		407.55		2.42
Nanjing		428.37		400.81		6.88
Taicang I		372.74		349.31		6.71
Taicang II		372.74		349.31		6.71
Huaiyin		487.47		433.30		12.50
Jinling Coal-fired		366.53		348.86		5.07
Jinling Combined-Circle		593.09		708.41		(16.28	)
Jinling Combined-Cycle Cogeneration		604.16		617.12		(2.10	)
Suzhou Thermal Power		465.86		453.42		2.74
Qidong Wind Power		556.03		553.91		0.38
Rudong Wind Power		609.29		606.24		0.50
Nanjing Thermal Power		469.99		445.21		5.57
Tongshan Wind Power		610.00		610.00		0.00
Rudong Offshore Wind Power		850.00		-		-
Luhe Wind Power		610.00		-		-

	Average tariff rate (VAT inclusive) (RMB/MWh)
Power Plant					Change
	2017		2016		(%)
Guanyun Power		433.00		-		-
Suzhou CCGT		612.79		-		-
Shanghai Municipality
Shidongkou I		401.11		395.18		1.50
Shidongkou II		397.96		380.60		4.56
Shanghai CCGT		911.36		382.31		138.38
Shidongkou Power		395.75		899.62		(56.01	)
Chongqing Municipality
Luohuang		392.74		376.92		4.20
Liangjiang CCGT		811.53		649.74		24.90
Zhejiang Province
Yuhuan		418.58		403.82		3.66
Changxing		429.18		420.54		2.05
Tongxiang Combined-cycle		912.07		887.70		2.75
Changxing Photovoltaic		1,252.38		1,208.23		3.65
Hongqiao Photovoltaic		1,119.24		980.00		14.21
Huzhou Distributed Photovoltaic		1,009.06		-		-
Hunan Province
Yueyang		456.55		449.87		1.48
Xiangqi Hydropower		376.17		610.00		(38.33	)
Subaoding Wind Power		605.55		610.00		(0.73	)
Guidong Wind Power		605.55		404.19		49.82
Hubei Province
Enshi Maweigou Hydropower		383.42		380.43		0.79
Jingmen Thermal Power		403.50		378.97		6.47
Yingcheng Thermal Power		405.69		392.73		3.30
Wuhan Power		401.70		376.53		6.68
Dalongtan Hydropower		370.00		376.38		(1.70	)
Jieshan Wind Power		676.00		610.00		10.82
Suizhou Zengdufuhe Photovoltaic		880.00		-		-
Jiangxi Province
Jinggangshan		409.42		399.06		2.60
Jianggongling Wind Power		610.00		610.00		0.00
Ruijin Power		411.81		399.27		3.14
Anyuan Power		415.17		400.98		3.54
Anhui Province
Chaohu Power		371.86		351.24		5.87
Hualiangting Hydropower		376.74		385.60		(2.30	)
Huaining Wind Power		610.00		610.00		0.00
Fujian Province
Fuzhou		375.59		348.95		7.63
Changle Photovoltaic		980.00		-		-
Guangdong Province
Shantou Coal-fired		448.26		464.69		(3.54	)
Haimen		425.50		440.21		(3.34	)
Haimen Power		428.41		444.53		(3.63	)
Shantou Photovoltaic		980.00		980.00		0.00
Yunnan Province
Diandong Energy		358.12		513.58		(30.27	)
Yuwang Energy		329.35		1,394.49		(76.38	)
Fuyuan Wind Power		478.37		494.71		(3.30	)

	Average tariff rate (VAT inclusive) (RMB/MWh)
Power Plant					Change
	2017		2016		(%)
Guizhou Province
Panxian Wind Power		599.76		610.00		(1.68	)
Hainan Province
Haikou		429.17		420.45		2.07
Dongfang		432.70		420.90		2.80
Nanshan Combined Cycle		1,619.97		672.26		140.97
Gezhen Hydropower		399.53		400.07		(0.13	)
Wenchang Wind Power		608.99		609.78		(0.13	)
Dongfang Photovoltaic		1,010.00		1,010.00		0.00
Domestic total		414.01		396.60		4.39
Singapore
SinoSing Power		544.15		514.00		5.87

Note: The tariff of combined-cycle power plants in Shanghai and Zhejiang consists of on-grid settlement price and capacity subsidy income. Changdao Wind Power has been shut down.

Tax and levies on operations mainly consist of surcharges of value added tax. According to relevant administrative regulations, these surcharges include City Construction Tax and Education Surcharges calculated at prescribed percentages on the amounts of the value-added tax paid. For the year ended December 31, 2017, the tax and levies on operations of the Company and its subsidiaries were RMB1.376 billion, representing an increase of RMB198 million from RMB1.178 billion for the same period of last year, of which the tax and levies on operations attributable to newly acquired entities and new generating units accounted for RMB278 million.

Operating expenses

For the year ended December 31, 2017, the total operating expenses of the Company and its subsidiaries was RMB141.900 billion, representing an increase of 50.54% from the same period last year. The operating expenses in domestic operations of the Company increased by RMB46.074 billion, or 53.85%, from the same period last year, of which the newly acquired entities and the new generating units accounted for RMB32.364 billion; the costs attributable to the existing entities increased by RMB13.710 billion, which was primarily attributable to the increased fuel cost for domestic operations in China.

The operating expenses from operations in Singapore operations increased by RMB1.567 billion, or 18.02%, from the same period last year, which was mainly due to increased gas cost attributed to the rise of international oil price.

Fuel costs

Fuel costs account for the majority of the operating expenses for the Company and its subsidiaries. For the year ended December 31, 2017, fuel costs of the Company and its subsidiaries increased by 63.79% to RMB92.737 billion from the RMB56.618 billion for the year ended December 31, 2016. The fuel costs from domestic operations of the Company and its subsidiaries increased by RMB35.387 billion, which was primarily attributable to the increase of the fuel price. The fuel costs of the newly acquired entities and new generating units were RMB17.402 billion and the fuel costs of the existing generating units increased by RMB17.985 billion from same period last year. Fuel costs in Singapore increased by RMB0.732 billion from the same period last year, mainly due to the increase in the gas price. For the year ended December 31, 2017, the average price (excluding tax) of natural fuel coal consumed of the Company and its domestic subsidiaries was RMB548.02 per ton, representing a 45.63% increase from RMB376.30 per ton for the year ended December 31, 2016. The fuel cost per unit of power sold by the Company's domestic power plants increased by 32.41% to RMB225.92/MWh from RMB170.62/MWh in 2016.

Maintenance

For the year ended December 31, 2017, the maintenance expenses of the Company and its subsidiaries amounted to RMB4.348 billion, representing an increase of RMB5 million from RMB4.343 billion for the year ended December 31, 2016. The maintenance expenses of the Company's domestic operations increased by RMB21 million compared to the same period last year. The maintenance expenses of operations in Singapore decreased by RMB16.00 million compared to the same period last year.

Depreciation

For the year ended December 31, 2017, depreciation expenses of the Company and its subsidiaries increased by 36.21% to RMB20.181 billion, compared to RMB14.816 billion for the year ended December 31, 2016; the increase is mainly due to the increase in the power generation by the newly acquired entities and new generating units. The depreciation expenses of domestic operations increased by RMB5,288 million compared to the same period last year, of which the depreciation costs incurred by the newly acquired entities and new generating units was RMB5,509 million. The depreciation expenses of the operations in Singapore increased by RMB77 million compared to the same period last year.

Labor

Labor costs consist of salaries to employees and contributions payable for employees' housing funds, medical insurance, pension and unemployment insurance, as well as training costs. For the year ended December 31, 2017, the labor costs of the Company and its subsidiaries amounted to RMB10.590 billion, representing an increase of RMB2,547 million from RMB8.043 billion for the year ended December 31, 2016. This is mainly attributable to the increase in the power generation by the newly acquired entities and new generating units. Labor costs for Singapore operations increased by RMB14 million compared to the same period last year.

Other operating expenses (including electricity power purchase costs and service fees paid to HIPDC)

Other operating expenses include environmental protection expenses, land fee, insurance premiums, office expenses, amortization, Tuas Power's electricity power purchase costs, impairment losses, government subsidies and net losses on disposal of properties, plant and equipment. For the year ended December 31, 2017, other operating expenses (including electricity power purchase costs and service fees paid to HIPDC) of the Company and its subsidiaries was RMB14.044 billion, representing an increase of RMB3.605 billion from RMB10.439 billion for the year ended December 31, 2016. The other operating expenses from the Company's domestic operations increased by RMB2.845 billion, mainly due to the increase in the power generation by the newly acquired entities and new generating units.

Other operating expenses of the operations in Singapore increased by RMB760 million compared to the same period last year.

Financial expenses

Financial expenses consist of interest expense, bank charges and net exchange differences.

Interest expenses

For the year ended December 31, 2017, the interest expenses of the Company and its subsidiaries were RMB9.749 billion, representing an increase of 42.99% from RMB6.818 billion for the year ended December 31, 2016. The interest expenses from the Company's domestic operations increased by RMB2.961 billion. The interest expenses from the newly acquired entities and new generating units were RMB2,510 million and those incurred by the existing entities in China increased by RMB0.451 billion, which is largely attributable to increased interest rate and debt scale. The interest expenses of Singapore operations decreased by RMB30 million compared to the same period last year.

Net exchange differences and bank charges

For the year ended December 31, 2017, the Company and its subsidiaries recorded a net gain of RMB144 million in net exchange losses and bank charges, representing a net gain increase of RMB394 million compared with the net loss of RMB250 million for the year ended December 31, 2016, mainly due to the strengthened exchange rate of RMB against U.S. dollar.

The operations in Singapore recorded net loss of RMB17 million from net exchange difference and bank charges, representing a decrease of RMB67 million from the net gains of RMB50 million for the year ended December 31, 2016, mainly due to settlement of effective hedging instruments for cash flow hedge.

Share of profits less losses of associates and joint ventures

For the year ended December 31, 2017, the share of profits less losses of associates and joint ventures was RMB0.425 billion, representing a decrease of RMB874 million from RMB1.299 billion from last year, mainly due to a decreased profit of associates and joint ventures.

Income tax expenses

For the year ended December 31, 2017, the Company and its subsidiaries recognized income tax expense of RMB1.218 billion, representing a decrease of RMB2.247 billion from RMB3.465 billion for the year ended December 31, 2016. The income tax expenses for the domestic operations decreased by RMB2.192 billion primarily attributable to the increase of the coal price in 2017 drove down our profitability and decreased our income tax.

The income tax expenses of the operations in Singapore decrease by RMB55 million.

Net profit, net profit attributable to the equity holders of the Company and non-controlling interests

For the year ended December 31, 2017, the Company and its subsidiaries achieved a net profit of RMB1.584 billion, representing a decrease of RMB8.764 billion, or 84.69% from RMB10.348 billion for the year ended December 31, 2016; the net profit attributable to equity holders of the Company was RMB1.580 billion, representing a decrease of RMB6.940 billion from RMB8.520 billion for the year ended December 31, 2016.

The net profit attributable to equity holders of the Company from its domestic operations decreased by RMB6.703 billion, mainly attributable to the huge increase in the coal price drove down our profitability. The net loss attributable to equity holders of the Company from its operations in Singapore was RMB477 million, representing an increase of RMB237 million from the same period last year. This was mainly due to the continued oversupply in the Singapore's power market and lower than expected profit margin of power contracts, which led to a drop in the profitability of the Company's overseas power generation business.

The Company's recorded net profit attributable to non-controlling interests decreased to RMB4 million for the year ended December 31, 2017 from RMB1,828 million for the year ended December 31, 2016, mainly attributable to the huge increase of the coal price from same period last year, which significantly reduced the profitability of the Company owned coal-fired power subsidiaries.

C.	Financial position

Comparison of asset items

As of December 31, 2018, consolidated total assets of the Company and its subsidiaries were RMB419.903 billion, representing an increase of 5.88% from RMB396.590 billion as of December 31, 2017; total assets of the domestic operations increased by RMB10.230 billion to RMB378.859 billion, including a net decrease of RMB0.437 billion in non-current assets, which is mainly attributable to the newly acquired entities and the capital expenditure on construction projects.

As of December 31, 2018, for overseas operation, total assets of the operations in Singapore were RMB27.258 billion, representing a decrease of RMB703 million from the same period last year. Non-current assets increased by RMB4 million to RMB23.813 billion. Total assets of the operations in Pakistan were RMB13.786 billion, non-current assets were RMB10.485 billion.

100

Comparison of liability items

As of December 31, 2018, consolidated total liabilities of the Company and its subsidiaries were RMB303.782 billion, representing an increase of 5.12% from RMB288.975 billion as of December 31, 2017.

As of December 31, 2018, interest-bearing debts of the Company and its subsidiaries totaled RMB254.170 billion. The interest-bearing debts consist of long-term loans (including those maturing within a year), bonds payable (including those maturing within a year), short-term borrowings, short-term bonds payable and financial leases payable (including those maturing within a year). The interest-bearing debts denominated in foreign currencies amounted to RMB2.279 billion.

As of December 31, 2018, for overseas operation, the total liabilities of the operations in Singapore were RMB15.309 billion, representing an increase of 1.40% from RMB15.098 billion as of December 31, 2017. The total liabilities of the operations in Pakistan were RMB11.158 billion.

Comparison of equity items

Excluding the impact of profit and profit appropriations, total equity attributable to the equity holders of the Company increased as of December 31, 2018, including an increase impact arising from the issuance of Yingda insurance financing plan at face value of RMB5 billion in September, 2018, an increase of post-tax impact of RMB1 million arising from fair value changes of other equity instrument investment held by the Company and its subsidiaries, a decrease of post-tax impact of RMB0.260 billion arising from changes in other comprehensive income of the Company’s investees accounted for under equity method, a decrease of post- tax impact of RMB0.470 billion arising from fair value changes of cash flow hedge instruments, an increase of RMB0.335 billion from translation difference of the financial statements of foreign operations. Non-controlling interests as of 31 December 2018 increased by RMB1.713 billion.

Major financial position ratios

	2018		2017
Current ratio		0.45		0.31
Quick ratio		0.38		0.26
Ratio of liability to equity holders' equity		3.22		3.30
Multiples of interest earned		1.13		1.23

Formula of the financial ratios:

Current ratio = balance of current assets as of the year end / balance of current liabilities as of the year end

Quick ratio = (balance of current assets as of the year end – net inventories as of the year end) / balance of current liabilities as of the year end

Ratio of liabilities to equity holders' equity = balance of liabilities as of the year end / balance of equity holders' equity (excluding non-controlling interests) as of the year end

Multiples of interest earned = (profit before tax + interest expense) / interest expenditure (inclusive of capitalized interest)

The current ratio increased as of December 31, 2018 compared to that of December 31, 2017 mainly due to increase of current assets especially inventories and bank balances and cash. The ratio of liabilities to equity holders’ equity as of 31 December 2018 decreased compared to that of 31 December 2017 mainly due to the issuance of Yingda insurance financing plan at face value of RMB5 billion. The multiples of interest earned decreased mainly due to reduced pre-tax profit for the year ended 31 December 2018.

D.	Liquidity and cash resources

The primary sources of funding for the Company and its subsidiaries have been cash provided by internal funds from operating activities, short-term and long-term loans and proceeds from issuances of bonds, and the

101

primary use of funds have been for working capital, capital expenditure and repayments of short-term and long-term borrowings.

Cash flows from operating activities

	For the Year Ended December 31,
	2018			2017			2016
	RMB'000			RMB'000			RMB'000
Cash flows from operating activities
Profit before income tax expense		1,973,147			2,801,733			13,813,138
Non-cash items adjustments		30,593,272			28,980,725			21,255,080
Changes in working capital		(2,391,540	)		(718,218	)		1,050,309
Interest received		173,986			136,134			84,806
Income tax expense paid		(1,620,887	)		(2,003,011	)		(4,692,509	)
Net cash provided by operating activities		28,727,978			29,197,363			31,510,824

For the year ended 31 December 2018, net cash provided by operating activities of the Company and its subsidiaries was RMB28.728 billion, representing a decrease of 1.61% from last year, which is principally because that the Company’s revenue increase from electricity growth and rising electricity prices in the reporting period was offset by the increase in fuel purchase costs. Net cash provided by operating activities in Singapore was RMB830 million.

For the year ended December 31, 2017, net cash provided by operating activities of the Company and its subsidiaries was RMB29.198 billion, representing a decrease of 7.34% from last year, mainly attributable to the comprehensive effect of increased cash outflow for increased fuel price and increased cash inflow for raised power generation and tariff. Net cash provided by operating activities in Singapore was RMB830 million.

For the year ended December 31, 2016, net cash provided by operating activities of the Company and its subsidiaries was RMB31.511 billion, representing a decrease of 25.62% from last year, mainly attributable to reduced operating revenue as a result of a decrease of power generation and tariff. Net cash provided by operating activities in Singapore was RMB772 million.

Cash flows used in investing activities

	For the Year Ended December 31,
	2018			2017			2016
	RMB'000			RMB'000			RMB'000
Cash flows used in investing activities
Payment for the purchase of property, plant and equipment		(20,613,314	)		(25,798,009	)		(20,144,903	)
Proceeds from disposals of property, plant and equipment		127,182			286,609			144,346
Prepayments of land use rights		(94,684	)		(213,928	)		(89,430	)
Payment for the purchase of other non-current assets		30,107			(33,498	)		(50,653	)
Cash dividend received		618,592			1,419,380			1,057,642
Payment for investment in associates and joint ventures		(463,259	)		(301,916	)		(276,118	)
Cash paid for acquiring available-for-sale financial assets		—			(5,600	)		-
Cash paid for acquiring other equity instrument investments		(450	)		—			—
Cash consideration paid for acquisitions of subsidiaries, net of cash acquired		(674,845	)		(10,817,107	)		157,421
Cash received from disposal of available-for-sale financial assets		—			2,186,758			1,474,301
Cash received from disposal of a subsidiary		-			530,437			-
Others		694,789			998,049			77,748
Net cash used in investing activities		(20,375,882	)		(31,748,825	)		(17,649,646	)

Net cash used in investing activities was RMB20.376 billion, representing an decrease of 35.82% from last year, which is mainly due to less cash outflows from relatively smaller acquisitions during this year.

102

Net cash used in investing activities was RMB31.749 billion for the year ended December 31, 2017, representing an increase of 79.88% from last year, mainly due to consideration paid for newly acquired entities in 2017.

Net cash used in investing activities was RMB17.650 billion for the year ended December 31, 2016, representing a decrease of 46.54% from last year, mainly due to consideration paid for newly acquired entities in 2015.

Cash flows from financing activities

	For the Year Ended December 31,
	2018			2017			2016
	RMB'000			RMB'000			RMB'000
Cash flows from financing activities
Issuance of short-term bonds		40,000,000			30,988,679			32,982,340
Repayments of short-term bonds		(39,500,000	)		(47,000,000	)		(25,000,000	)
Proceeds from short-term loans		77,005,025			107,564,128			85,689,874
Repayments of short-term loans		(98,345,708	)		(96,378,054	)		(77,904,489	)
Proceeds from long-term loans		48,859,376			32,706,327			15,978,023
Repayments of long-term loans		(34,269,623	)		(17,390,982	)		(20,702,421	)
Issuance of long-term bonds		13,999,807			7,800,000			4,200,000
Repayment of long-term bonds		(4,000,000	)		(3,300,000	)		(11,500,000	)
Interest paid		(10,987,871	)		(10,080,102	)		(7,344,781	)
Net proceeds from the issuance of new Shares		3,245,330			-			-
Net proceeds from the issuance of other equity instruments		5,000,000			4,999,950			-
Net capital injection from non-controlling interests of the subsidiaries		725,683			838,084			285,620
Dividends paid to shareholders of the Company		(1,520,038	)		(4,352,973	)		(7,206,220	)
Dividends paid to non-controlling interests of the subsidiaries		(1,265,451	)		(2,184,145	)		(2,695,378	)
Government grants		-			590,629			233,276
Payment for finance leasing		(637,026	)		(695,019	)		(571,485	)
Others		(552,574	)		(93,342	)		(46,209	)
Net cash (used in) / generated from financing activities		(2,243,070	)		4,013,180			(13,601,850	)

Net cash used in financing activities was RMB2.243 billion, while it was net cash inflow of RMB4.013 billion in 2017. This was mainly due to repayment of more borrowings by the Company in this year compared to last year.

Net cash generated from financing activities was RMB4.013 billion for the year ended December 31, 2017, representing an increase of RMB17.615 billion to the net cash outflow, which was RMB13.602 billion, from the same period last year. This was mainly due to the increase of loans and bonds issued by the Company and its subsidiaries in this year as compared to the same period last year.

Net cash used in financing activities was RMB13.602 billion for the year ended December 31, 2016, representing a decrease of 3.81% from last year.

Cash and cash equivalents

	For the Year Ended December 31,
	2018		2017		2016
	RMB'000		RMB'000		RMB'000
Effect of exchange rate		26,266		10,171		72,923
Net increase in cash and cash equivalents		6,135,292		1,471,889		332,251
Cash and cash equivalents, beginning of the year		9,282,390		7,810,501		7,478,250
Cash and cash equivalents as of the end of the year		15,417,682		9,282,390		7,810,501

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As of December 31, 2018, the cash and cash equivalents of the Company and its subsidiaries denominated in RMB, Singapore dollar, U.S. dollar, Pakistan Rupee were RMB14.317 billion, RMB927 million, RMB141 million and RMB33 million, respectively.

As of December 31, 2017, the cash and cash equivalents of the Company and its subsidiaries denominated in Renminbi, Singapore dollar and U.S. dollar were RMB8.130 billion, RMB836 million and RMB316 million, respectively.

As of December 31, 2016, the cash and cash equivalents of the Company and its subsidiaries denominated in Renminbi, Singapore dollar and U.S. dollar were RMB6.620 billion, RMB870 million and RMB320 million, respectively.

Capital expenditure and cash resources

Capital expenditures for infrastructure construction and renovation projects

The capital expenditures for the year ended 31 December 2018 were RMB20.707 billion, mainly for construction and renovation of projects, including RMB2.931 billion for Shandong Power project, RMB1.679 billion for Yancheng Dafeng New Energy project, RMB1.114 billion for ShangAn Power Plant project, RMB789 million for Heilongjiang Power Generation project, RMB746 million for Anyang Energy project, RMB711 million for Dongguan Combined Cycle project, RMB661 million for Luoyuan Power Generation project, RMB598 million for Nanjing Xingang Integrated Energy project, RMB505 million for Kangbao Wind Power project, RMB451 million for Jiangxi Clean Energy project, RMB450 million for Rudong Baxianjiao Offshore Wind Power project, RMB435 million for Zhongxiang Wind Power project, RMB406 million for Hainan Power Generation project, RMB346 million for Fengjie Wind Power project, RMB343 million for Beijing Thermal Power project, RMB335 million for Dalian Thermal Power project, RMB303 million for Jiuquan Wind Power project, RMB278 million for Guigang Clean Energy project, RMB267 million for Huaining Wind Power project, RMB257 million for Jiangyin Combined Cycle project, RMB243 million for Mianchi Clean Energy project, RMB222 million for Diandong Energy project, RMB216 million for ilin Power Generation project, RMB207 million for Fuyuan wind power project, RMB206 million for Luoyuan Port project, RMB205 million for Luohuang Power Generation project, RMB198 million for Dezhou Power Plant, RMB194 million for Yizheng Wind Power project, RMB171 million for Dalian Power Plant project, RMB167 million for Shanxi Comprehensive Energy project, RMB165 million for Suzhou Co-generation Power project, RMB159 million for Changxing Power Plant project, RMB159 million for Fuzhou Power Plant project, RMB146 million for Panzhou Wind Power project, RMB146 million for Huaiyin Power project, RMB144 million for Diandong Yuwang Energy project, RMB141 million for Chaohu Power project, RMB139 million for Weihai Power project, RMB119 million for Luoyang Co-generation Power project and RMB119 million for Tongshan Wind Power. The capital expenditures of the Company’s operations in Singapore were RMB180 million. The expenditures on other projects were RMB3.456 billion.

The above capital expenditures are sourced mainly from internal capital, cash flows provided by operating activities, and debt and equity financing. In the next few years, the Company will maintain its leading position in clean and efficient traditional energy, make further efforts to develop new energy and promote structural adjustment. It is expected that there will still be significant capital expenditures. The Company expects to finance the above capital expenditures through internal capital, cash flows provided by operating activities, and debt and equity financing.

The Company expects to have significant capital expenditures in the next few years. During the course, the Company will make active efforts to improve project planning process on a commercially viable basis. The Company will also actively develop newly planned projects to pave the way for its long-term growth. The Company expects to finance the above capital expenditures through internal capital, cash flows provided by operating activities, and debt and equity financing.

The cash requirements, usage plans and cash resources of the Company for the next year are as following:

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Capital Expenditure Project	Capital expenditure Plan for 2019 (RMB100 million)	Cash resources arrangements	Financing costs and note on use
Thermal power projects	41.70	Including internal cash resources and bank loans	Within the floating range of benchmark lending interest rates of the PBOC
Hydropower projects	0.23	Including internal cash resources and bank loans	Within the floating range of benchmark lending interest rates of the PBOC
Wind power projects	239.54	Including internal cash resources and bank loans	Within the floating range of benchmark lending interest rates of the PBOC
Coal mining projects	7.40	Including internal cash resources and bank loans	Within the floating range of benchmark lending interest rates of the PBOC
Photovoltaic power projects	0.74	Including internal cash resources and bank loans	Within the floating range of benchmark lending interest rates of the PBOC
Port	2.04	Including internal cash resources and bank loans	Within the floating range of benchmark lending interest rates of the PBOC
Technology renovation	62.47	Including internal cash resources and bank loans	Within the floating range of benchmark lending interest rates of the PBOC

Cash resources and anticipated financing costs

The Company expects to finance its capital expenditure and acquisition costs primarily with internal capital, cash flow provided by operating activities, and debt and equity financing.

Good operating results and sound credit status provide the Company with strong financing capabilities. As of December 31, 2018, the undrawn banking facilities available to the Company and its subsidiaries amount to approximately RMB268.8 billion, which are granted by Bank of China, China Construction Bank and Agricultural Bank of China.

The Company completed issuances of unsecured super short-term bonds in 16 installments on February 24, March 2, March 21, March 23, May 2, May 2, May 18, May 30, June 1, August 24, October 19, November 16, November 22, November 23, November 28 and December 6 of 2018, at principal amount of RMB4 billion, RMB2 billion, RMB2 billion, RMB4 billion, RMB2.5 billion, RMB4 billion, RMB2 billion, RMB2 billion, RMB4 billion, RMB2 billion, RMB2.5 billion, RMB2 billion, RMB2 billion, RMB2 billion, RMB2 billion and RMB1 billion, with nominal annual interest rates of 4.35%, 4.35%, 4.40%, 4.45%, 4.25%, 4.08%, 3.98%, 3.80%, 4.05%, 2.80%, 3.20%, 2.78%, 3.10%, 3.05%, 2.78% and 3.30%, respectively. Each installment of the bonds was denominated in RMB, issued at par value, and would successively mature in 90 days, 90 days, 150 days, 180 days, 180 days, 150 days, 180 days, 90 days, 180 days, 90 days, 180 days, 90 days, 180 days, 180 days, 90 days and 270 days from the value date.

The Company issued two tranches of unsecured medium-term notes of RMB3 billion and RMB2 billion on May 2 and July11, 2018 with nominal annual interest rates of 4.80% and 4.41%, respectively. The notes were denominated in RMB and issued at par value with maturity of three years from the date of issue.

The Company issued unsecured non-public debt financing instrument of RMB2.5 billion on July 26, 2018 with a nominal annual rate of 4.68%. The instrument was denominated in RMB and issued at par value with maturity of in three years from the value date.

The Company issued two tranches of unsecured corporate bonds on April 4 and September 10, 2018, at a principal amount of RMB1.5 billion and RMB5 billion, respectively, with nominal annual interest rates of 4.90% and 5.05%, respectively. The bonds were denominated in RMB and issued at face value with maturity of three and ten years from the date of issue, respectively.

As of December 31, 2018, short-term loans of the Company and its subsidiaries were RMB61.039 billion (2017: RMB80.251 billion). Loans from banks were charged at annual interest rates ranging from 3.30% to 11.51% per annum (2017: 3.74% to 5.50%).

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As of December 31, 2018, short-term bonds payable by the Company and its subsidiaries were RMB11.541 billion (2017: RMB11.068 billion).

As of December 31 2018, long-term loans (including those maturing within a year) of the Company and its subsidiaries were RMB150.169 billion (2017: RMB125.129 billion), of which RMB loans were RMB126.844 billion (2017: RMB110.073 billion), US dollar loans were approximately US$1.548 billion (2017: US$348 million), and Euro loans were approximately €22 million (2017: €30 million), Singapore dollar loans were S$2.472 billion (2017: S$2.539 billion), Japanese yen loans were ￥2.482 billion (2017: ￥2.593 billion). Among them, US dollar loans and Singapore dollar loans are all floating rate loans, and other foreign currency loans are fixed rate loans. For the financial year ended 31 December 2018, the annual interest rates of long-term bank loans were between 0.75% to 7.29% per annum (2017: 0.75% to 6.03%).

The Company and its subsidiaries will closely monitor any change in the exchange rate and interest rate markets and cautiously assess the currency rate and interest rate risks.

Combining the current development of the power generation industry and the growth of the Company growth, the Company will make continuous efforts to not only meet cash requirements of daily operations, constructions and acquisitions, but also establish an optimal capital structure to minimize the cost of capital and manage financial risks through effective financial management activities, thus maintaining sustainable and stable returns to the equity holders.

Other financing requirements

The objective of the Company is to bring steadily growing returns to equity holders in the long run. In line with this objective, the Company follows a proactive, stable and balanced dividend policy. In accordance with the profit appropriation plan of the board of directors of the Company (subject to the approval at annual general meeting) for 2018, the Company expects to pay a cash dividend of RMB1.570 billion.

Maturity profile of loans and bonds

The following table sets forth the maturity profile of the Company's borrowings as of December 31, 2018.

Maturity Profile
(RMB 100 million)	2019		2020		2021		2022		2023

Principal amount planned for repayment		971.60		315.01		465.98		199.14		113.13
Interest amount planned for repayment		102.93		64.67		49.72		33.97		25.16
Total		1,074.53		379.68		515.70		233.11		138.29

Note: This table was prepared by the principal and interest amount actually repaid accordingly to contracts already signed. The amount of principle to be paid in 2019 is relatively large because this includes expected repayment of short- term loans and short-term bonds.

E.	Trend information

The major trend of the electricity power market

Regarding the electricity market, considering market environment at home and abroad, assuming no occurrence of far-reaching extreme climate changes in 2019, total electricity consumption nationwide will grow by 5.5%, with newly installed generation capacity of approximately 110 million kW, of which thermal generation units will represent a slight increased percentage from last year. In 2019, annual utilization hours of thermal generating units are estimated to be 4,400 hours, representing slight increase from last year. In 2019, the Company will actively participate in the reform of power market, strengthen research and study of power supply and demand and market competition, and design flexible and effective marketing strategies. The Company will also actively participate in power market transactions, attach importance to power sales business, actively participate in the building of electricity trading market and auxiliary service market, continuously explore new business opportunities, make

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focused efforts to offer value-added services so as to consolidate high-quality client base and improve client stickiness, with the view to gradually transitioning from traditional energy vendor to integrated energy supplier, further enhancing the Company’s market competitiveness, and strengthening the Company’s position in the industry and market.

The trend of the fuel supply

In the coal market, coal supply is expected to be sufficient with increased production from operation of new and expansion coal production projects which have been approved by competent Chinese government agencies, while the effect of environmental protection and safety production inspections, though continuing to weigh upon coal production, will be lessened in 2019. In spite of coal demand from large-scale infrastructure and other projects, consumption of coal by thermal power generators is expected to decrease due to the soft macro-economic conditions, uncertainty of China-U.S. trade relations, industrial transformation and upgrading, as well as increased supply of UHV-based clean energy and nuclear power. The railway capacity continues to increase as the operation of Menghua Railway is expected to ease the resources shortage in “two lakes and one river.” The general supply and demand in the electricity and coal market in 2019 will be eased compared with the tight balance in 2018, with the price moving downward and volatility further reduced. The Coal prices will gradually move to the green range.

The trend of capital market and foreign exchange

In terms of capital market, the Chinese government is expected to implement active fiscal policies and sound monetary policies. The fiscal policies would be focused on reducing taxes and other fiscal levies with the view to addressing, in collaboration with the implementation of monetary polies, funding difficulties and prohibitive funding prices encountered by business enterprises. The sound monetary policies would be implemented to underscore overall economic stability, strengthen counter-cyclical monetary administration, optimize credit structure, and maintain reasonably adequate liquidity. Accordingly, it is expected that the market would have reasonably sufficient funding in 2019 and funding costs are expected to be consistent with slight decline.

F.	Employee benefits

As of December 31, 2018, the Company and its subsidiaries had 57,970 employees within and outside the PRC. The Company and its subsidiaries provide employees with competitive remuneration and link such remuneration to operating results to provide incentives for the employees. Currently, the Company and its subsidiaries do not have any stock or option based incentive plan.

All employees of the Company have entered into labor contracts with the Company. The Company's standard contract includes description of the position, responsibilities, compensations and causes of termination. The terms of the labor contracts vary and they generally range from one to five years. The contracts are typically renewable upon expiration by mutual agreement of the Company and the relevant employee.

The Company is unionized, both at its head office and with respect to all power plants. Labor unions are intended to protect the rights of employees, while allowing the Company to achieve economic objectives. They encourage employees' participation in the Company's decision-making process, and serve as mediators in any dispute between the Company and its employees. The Company has experienced no occurrence of any strike or labor dispute which has impact upon the Company's operations. The Company believes that the Company and its employees are in a good relationship.

Compensation of our employees consists of salaries, bonuses and allowances. Compensation is linked to performance of the Company as well as the individual employees. Our employees are also entitled to certain education, healthcare and other benefits and allowances provided by the Company.

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The Company maintains social security schemes for its employees pursuant to government regulations. These social security benefits are subject to changes in the relevant law and policy.

Based on the development plans of the Company and its subsidiaries and the requirements of individual positions, together with the consideration of specific characteristics of individual employees, the Company and its subsidiaries tailored various training programs for their employees on management, technology and the skills. These programs have enhanced the comprehensive skills of the employees.

G.	Guarantees for loans and restricted assets

As of December 31, 2018, the Company provided guarantees of approximately RMB12.273 billion for the long-term bank loans of Tuas Power.

As of December 31, 2018, the details of secured loans of the Company and its subsidiaries were as follows:

As of December 31, 2018, short-term loans of RMB461 million (2017: RMB24 million) represented the notes receivable that were discounted with recourse. As these notes receivable had not yet matured, the proceeds received were recorded as short-term loans.

As of December 31, 2018, long-term loans of RMB0.986 billion (2017: RMB4.605 billion) of the Company and its subsidiaries were secured by certain property, plant and equipment with net book value of approximately RMB1.756 billion (2017: RMB5.166 billion).

As of December 31, 2018, long-term loans of approximately RMB8.938 billion (2017: RMB10.559 billion) were secured by future electricity and heating revenue of the Company and its subsidiaries.

As of December 31, 2018, the restricted bank deposits of the Company and its subsidiaries were RMB430 million (2017: RMB82 million).

As of December 31, 2018, the property, plant and equipment leased under finance lease of the Company and its subsidiaries with net book value amounted to RMB1.774 billion (2017: RMB2.565 billion).

H.	Off-balance sheet arrangements

As of December 31, 2018, there were no off-balance sheet arrangements which have or are reasonably likely to have an effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

I.	Performance of significant investments and their prospects

The Company acquired 25% equity interest in Shenzhen Energy Group for RMB2.39 billion on April 22, 2003. In 2011, Shenzhen Energy Group divided into a remainder company of the same name and a new company Shenzhen Energy Management Company (“SE Management”), and the Company holds 25% equity interests in each of the two successors. The Company acquired 200 million shares from Shenzhen Energy Corporation (“Shenzhen Energy”), a subsidiary of Shenzhen Energy Group in December 2007. Shenzhen Energy allotted shares with its capital surplus in 2011. In February 2013, Shenzhen Energy merged SE Management through the combination of directional seasoned offering and cash payment to equity holders of SE management, Shenzhen State-owned Assets Administration Commission and the Company. After the merger, the Company held 661 million shares of Shenzhen Energy, representing 25.02% of its equity interests. In 2018, Shenzhen Energy distributed RMB0.80 of cash dividend out of every 10 shares to its equity holders, and the Company held 992 million shares of Shenzhen Energy by December 31, 2018. These investments brought a net profit attributable to the equity holders of the Company of RMB148 million for the year ended December 31, 2018 under IFRS. This investment is expected to provide steady returns to the Company.

The Company held 60% direct equity interest in Sichuan Hydropower as of December 31, 2006. In January 2007, Huaneng Group increased its capital investment in Sichuan Hydropower by RMB615 million, thus reducing the Company’s equity interest in Sichuan Hydropower to 49% and making Huaneng Group the controlling

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shareholder of Sichuan Hydropower. This investment brought a net profit attributable to the equity holders of the Company of RMB111 million for the year ended 31 December 2018 under IFRS. This investment is expected to provide steady returns to the Company.

J.	Tabular disclosure of contractual obligations and commercial commitments

A summary of payments due by period of our contractual obligations and commercial commitments as of December 31, 2018 is shown in the tables below. A more complete description of these obligations and commitments is included in the Notes to Financial Statements as referenced below.

Contractual Cash Obligations
(RMB in millions)	2019		2020-2021	2022-2023	Thereafter		Total

Long-term loans from Huangeng Group and its subsidiaries(1)		610	1,866	902		1,347		4,725
Long-term bank loans and other loans(1)		20,010	61,419	25,325		38,690		145,444
Long-term bonds(2)		4,000	14,800	5,000		6,200		30,000
Interest payments		6,496	9,160	5,127		5,290		26,073
Operating Lease – Head Office(3)		72	-	-		-		72
Operating Lease – Huabei Branch(3)		9	-	-		-		9
Operating Lease – Shanghai Branch(3)		23	26	6		-		55
Operating Lease – Guangxi Branch(3)		1	1	-		-		2
Operating Lease – Guizhou Branch(3)		2	5	2		-		9
Operating Lease – Chongqing Branch(3)		-	1	-		-		1
Operating Lease – Guangxi Clean Power Branch(3)		-	1	-		-		1
Operating Lease – Nanjing Power Plant(3)		2	5	4		55		66
Operating Lease – Heinongjiang Power(3)		28	52	49		96		225
Operating Lease – Shandong Power(3)		3	7	5		34		49
Operating Lease – Suzhou Thermal Power(3)		1	1	1		-		3
Operating Lease – Zhumadian Fengdian Power(3)		24	8	-		-		32
Operating Lease – Mianchi Clean Power(3)		-	4	-		-		4
Operating Lease – Anyang Energy(3)		4	-	-		-		4
Operating Lease – Ruzhou Clean Power(3)		-	2	-		-		2
Operating Lease – Henan Puyang Clean Energy(3)		-	3	-		-		3
Operating Lease – Shanxi Comprehensive Energy(3)		2	4	4		38		48
Operating Lease – Tuas Power Generation Pte Ltd.(3)		23	48	52		939		1,062
		31,310	87,413	36,477		52,689		207,889

Other commercial commitments
(RMB in millions)		2019	2020-2021	2022-2023	Thereafter		Total

Long – term gas purchase contract(4)		14,311	28,840	24,583		47,417		115,151

______________________________

Notes:

(1)	See Note 25 to the Financial Statements, "Long-term Loans."

(2)	See Note 26 to the Financial Statements, "Long-term Bonds."

(3)	See Note 40 and 43 to the Financial Statements, "Commitments" and "Subsequent Events."

(4)	The numbers shown in the table above were calculated based on the minimum purchases stipulated in the long-term gas contracts disclosed in Note 40 to the Financial Statements.

In addition, in accordance with a 30-year operating lease agreement signed by Huaneng Dezhou Power Plant ("Dezhou Power Plant") and Shandong Land Bureau for the land occupied by Dezhou Power Plant Phases I and II in June 1994, annual rental amounted to approximately RMB30 million effective from June 1994 and is subject to revision at the end of the fifth year from the contract date. Thereafter, the annual rental is subject to

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revision once every three years. The increment for each rental revision is restricted to no more than 30% of the previous annual rental amount. For the years ended December 31, 2018, 2017 and 2016, the annual rentals were approximately RMB34 million.

The Company and its subsidiaries have various defined contribution plans in accordance with the local conditions and practices in the provinces in which they operate. The Company and its subsidiaries pay fixed contributions into separate entities (funds) and will have no further payment obligations if the funds do not hold sufficient assets to pay all employee benefits relating to employee service in the current and prior periods.

Disclosures of the pension plans, including the contribution amounts, are included in Note 38 to the Financial Statements.

K.	Impairment sensitivity analysis

Goodwill impairment

The Company and its subsidiaries conducts impairment test on each individually recognized goodwill every year. In 2018, the management recognized goodwill impairment of approximately RMB409 million based on the impairment assessment.

For goodwill allocated to CGUs in the PRC, changes of assumptions in tariff and fuel price could have affected the results of goodwill impairment assessment. As of 31 December 2018, if tariff had decreased by 1% or 5% from management’s estimates with other variables constant with the expectations, the Company and its subsidiaries would have to further recognize impairment against goodwill by approximately RMB900 million and RMB3,915 million, respectively. If fuel price had increased by 1% or 5% from the management’s estimates with other variables constant with the expectations, the Company and its subsidiaries would have to further recognize impairment against goodwill by approximately RMB421 million and RMB3,185 million, respectively.

Impairment of other non-current assets

The Company and its subsidiaries will test its property, plant and equipment, land use rights and mining rights suffered any impairment whenever an impairment indication exists.

In 2018, impairment losses for certain property, plant and equipment and mining rights of approximately RMB990 million and RMB135 million have been recognized, respectively. Factors leading to the impairment include lower than expected operating results of subsidiaries in 2018 due to oversupply and fierce competition within the electricity market. In addition, as a result of the low demand of coal-fired power in local market and site selection issues, management estimated the possibility of further development of a coal-fired power project and a wind power project was remote. Therefore the project under construction of two subsidiaries with a carrying value of RMB14 million and 8 million were fully impaired in 2018.

Changes of assumptions in tariff and fuel price will affect the result of property, plant and equipment, land use rights and mining rights impairment assessment. As at 31 December 2018, if tariff had decreased by 1% or 5% from management’s estimates with other variables constant with the expectation, the Company and its subsidiaries would have to further recognize impairment against property, plant and equipment, land use rights and mining rights by approximately RMB460 million and RMB5,599 million, respectively; if fuel price had increased by 1% or 5% from the management’s estimates with other variables constant with the expectations, the impairment against property, plant and equipment, land use rights and mining rights of the Company and its subsidiaries would increase by approximately RMB46 million and RMB1,598 million, respectively.

L.	Prospects for 2019

In 2019, the Company will thoroughly implement development strategies and proactively seize market opportunities. Based on safety and environmental protection, focusing on quality and efficiency, and driven by reform and innovation, it will further promote quality improvement, efficiency enhancement, transformation and upgrading. The Company will focus on its objective of building an internationally leading power generation listed

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company and continuously improve its business performance, so as to create more values for the nation, the society and its shareholders.

In respect of power generation, the Company will endeavor to implement the state’s plans on safe production and strengthen the accountability of all employees. It will strengthen grading-based risk management and control, hazard investigation and management, as well as anti-violation governance, so as to prevent personal injury and death. It will strengthen the maintenance of generating units and quality evaluation and assessment to maintain a sound overall excellence rate in the overhaul. It will concretely procure “no unplanned outage” of its power plants and unceasingly enhance the safe and stable operation of generating units. The Company will persistently improve the standard of smart power generation and clean power generation as well as diligently promote energy conservation reform and optimize its operation so as to reinforce its leading position in energy saving and environmental protection areas.

In respect of the power marketing, the Company will take a market-oriented approach and strengthen research on policies and trading mechanism to grasp market opportunities. It will create differentiated competitive advantages, optimize regional power generation structure, and strive to expand the scale of transactions. It will actively explore the spot market, accelerate the establishment of the decision-making process for bidding and quoting, the risk control mechanism and the information support system, and push forward the construction of integrated operation centres in pilot areas. It will centrally plan and coordinate cross-provincial and cross- regional transactions and strive to increase transaction prices. It will aim at delivering a domestic power generation of approximately 440.0 billion kWh and average utilization of around 4,200 hours for the year. In areas with low heat prices, it will make active efforts to increase the heat prices. It will further increase the recovery rate of electricity and heat fee.

In respect of fuel, the Company will reinforce policy research and market analysis, and enhance the insights and stability in fuel procurement. The Company will establish a firm and effective fuel supply chain and dynamically optimize long- term contract resources based on the structural outlay and region characteristics of resources. Leveraging on its advantages in scale procurement, the Company will strengthen strategic cooperation with large-scale coal enterprises to strive for a more reasonable pricing mechanism. The Company will further improve the fuel management system, strengthen the management of coal yards, and continuously improve the mixing capability to strictly control fuel costs.

In respect of capital, the Company will closely monitor the changes in the domestic capital market and give full play to its management advantages. In addition to ensuring the efficiency of the main financing channel (i.e. credit financing), the Company will seize the cost advantages presented by the proactive fiscal policy and prudent monetary policy to innovate new financing means and to expand the scale and channels of direct financing, so to ensure the security of funds while striving to reduce capital cost.

The Company will adhere to the new development philosophy, fully reinforce the management of market value and enhance its brand value. The Company will steadily introduce reforms and innovations to strengthen the dynamics for innovation in business development. The Company will safeguard the sound implementation of its various business plans by its solid and efficient basic management standards.

ITEM 6

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A.	Directors, members of the supervisory committee and senior management

Directors

The table below sets forth certain information concerning our directors as of March 31, 2019. The current term for all of our directors is three years commencing from the signing of the director service contracts.

Name	Age	Position with us
Shu Yinbiao	60	Chairman of the Board of Directors
Huang Jian	56	Director
Wang Yongxiang	53	Director

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Mi Dabin	50	Director
Guo Hongbo	50	Director
Cheng Heng	55	Director
Lin Chong	55	Director
Yue Heng	44	Independent Director
Xu Mengzhou	68	Independent Director
Liu Jizhen	67	Independent Director
Xu Haifeng	63	Independent Director
Zhang Xianzhi	61	Independent Director

SHU Yinbiao, aged 60, is the Chairman and Secretary of the Party Committee of the Company, the Chairman and the Secretary of the Leading Party Members’ Group of Huaneng Group. He was the Chairman of State Grid Corporation of China. He graduated from Wuhan University, majoring in Electric Power System and Its Automation. He holds a doctor degree in engineering. He is a professor-grade senior engineer.

HUANG Jian, aged 56, is a Director of the Company, a dedicated Director and Supervisor appointed by Huaneng Group, a dedicated director of HIPDC, a dedicated director of Shandong Power Generation Co., Ltd., and the Chairman of the Supervisory Committee of Huaneng Renewables Corporation Limited. He was an assistant to the President of Huaneng Group and Chairman of Huaneng Capital Services Co., Ltd. Mr. Huang graduated from the Department of Accounting of Institute of Fiscal Science of the Ministry of Finance with a postgraduate degree of master in economics. He is a senior accountant.

WANG Yongxiang, aged 53, is a Director of the Company, the Chairman and Party Secretary of HIPDC, the Chief of Power Development Business Division and the Shale Gas Exploitation and Utilization Office of Huaneng Group, and the president of GreenGen Co., Ltd. He was the Chairman of Huaneng Lancangjiang Hydropower Co., Inc. and the President of Yunnan branch of Huaneng Group. He graduated from Tsinghua University where he majored in hydraulic engineering and holds a postgraduate degree of master in engineering. He is a professor-grade senior engineer.

MI Dabin, aged 50, is a Director of the Company, the Vice President and a Standing Committee Member of the Party Committee of Hebei Construction & Investment Group Co., Ltd., the Chairman of Hebei Construction& Energy Investment Co., Ltd., the Chairman of Hebei Xingtai Power Generation Limited, the Chairman of Huihai Financing and Leasing Co., Ltd., and the Chairman of CIC Hebei Heat Cogeneration Co., Ltd.. He was the Chief Engineer, Vice President and President of Qinhuangdao Power Generation Co., Ltd., the President of Qinhuangdao Thermal Power Generation Co., Ltd., an assistant to the President and the Head of Production and Operation Department of Hebei Construction & Investment Group Co., Ltd., the President of Qinhuangdao Power Generation Co., Ltd. and Qinhuangdao Thermal Power Generation Co., Ltd. He graduated from North China Electric Power University, majoring in power engineering, and holds a master’s degree. He is a senior engineer.

GUO Hongbo, aged 50, is a Director of the Company, the Chairman and the Secretary of the Party Committee of Liaoning Energy Investment (Group) Limited Liability Company, the director of ShenyangJinshan Energy Limited, and the vice chairman of Liaoning Haitong New Energy Low-Carbon Industrial Equity Investment Fund Limited. He was the president and vice chairman of Liaoning Energy Investment (Group) Limited Liability Company. Mr. Guo graduated from Jilin University with a master’s degree in administrative management, and holds an MBA degree. He is a professor-grade senior engineer.

CHENG Heng, aged 55, is a Director of the Company, the Vice President (group department president level) of the Energy Department of Jiangsu Guoxin Investment Group Limited, the Vice Chairman of Jiangsu Changshu Electric Power Generating Company Limited, the Vice Chairman of Jiangsu Ligang Electric Power Co., Ltd., the Vice Chairman of Jiangsu Ligang Power Generating Co., Ltd., and the Vice Chairman of Yangcheng International Electric Power Co., Ltd.. He previously served as the deputy manager of the Planning Department of Jiangsu International Trust and Investment Corporation, Vice President of Changshu Power Generation Co., Ltd., President of Energy Investment Division 2 of Jiangsu Provincial Investment Management Co., Ltd., and the Vice President of Jiangsu Provincial Investment Management Co., Ltd. He is a university graduate with College education and an economist.

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LIN Chong, aged 55, is a Director of the Company, the Vice President and a Member of CPC Committee of Fujian Investment & Development Group Co., Ltd., the Chairman of Zhongmin Offshore Wind Power Co., Ltd., the Vice Chairman of Fujian Mindong Electric Power Limited Company, the Vice Chairman of Fujian Sanming Nuclear Power Co., Ltd., the Vice Chairman of Chinalco Southeast Copper Co., Ltd., the director of Fujian Motor Industry Group Co., Ltd., the director of Fujian Fuqing Nuclear Power Co., Ltd. and the director of King Long Motor Group. Mr. Lin has formerly served as the assistant to the general manager of Fujian Investment & Development Group Co., Ltd., the Director of the Preparatory Office for Fuzhou Baiyun Pumped Storage Hydropower Station, and the Chairman of Fujian Zhongmin Energy Investment Co., Ltd. He graduated from Chongqing University where he majored in electric power system and its automation and holds a master’s degree of science in engineering (postgraduate diploma). Mr. Lin is a senior engineer.

YUE Heng, aged 44, is an Independent Director of the Company, an Associate Professor of Singapore Management University. He is the winner of the first session of China National Funds for Distinguished Young Scientists, the winner of New Century Excellent Talents of the Ministry of Education 2012, the leading accounting talent of Ministry of Finance, the Councilor of Accounting Society of China and the Deputy Editor-in-Chief of CJAS magazine of Accounting Society of China. He was the Associate Professor, Professor, Dean and Doctorate Mentor of Accounting Department of Guanghua Management School of Peking University. He graduated from Tulane University in the United States with a doctor’s degree in accounting.

XU Mengzhou, aged 68, is an Independent Director of the Company, a professor of RUC Law School of Renmin University of China (RUC), an Independent Director of Shandong Hualu-Hengsheng Chemical Co., Ltd., ENN Ecological Holdings Co. Ltd., and an Independent Director of iHandy Group (non-listed company). He served as a professor of International Studies of Renmin University of China. He graduated from the RUC, with a doctor’s degree in Economic Laws.

LIU Jizhen, aged 67, is an Independent Director of the Company, a Director of the National Key Laboratory of New Energy Power System of North China Electric Power University, a chief scientist of the 973 Program, the Vice President of the China Electricity Council, the Vice President of the Chinese Society for Electrical Engineering, the Vice President of the Chinese Society of Power Engineering, a fellow of the Institution of Engineering and Technology (FIET) and an independent director of Datang International Power Generation Co., Ltd. Mr. Liu was formerly the President of Wuhan University of Hydraulic and Electrical Engineering and the President of North China Electric Power University. He is a professor, a doctoral supervisor and an academician of the Chinese Academy of Engineering.

XU Haifeng, aged 63, is an Independent Director of the Company. He successively served as the Chairman and President of China Railway Express Co., Ltd., the director and Vice President of Beijing-Shanghai High Speed Railway Co., Ltd., the Managing Commander-in-Chief of the General Headquarters for the Construction of Beijing-Shanghai High Speed Railway of the Ministry of Railways, and the Vice Chairman and President of Beijing-Shanghai High Speed Railway Co., Ltd. He graduated from Beijing Jiaotong University where he majored in transportation organization and automation. He has an EMBA degree from the Guanghua School of Management of Peking University.

ZHANG Xianzhi, aged 61, is an Independent Director of the Company, a professor and a doctoral supervisor of Dongbei University of Finance and Economics. He is serving concurrently as independent director at CGN Nuclear Technology Development Co., Ltd., Dalian Zhiyun Automation Co., Ltd., Yingkou Port Liability Co., Ltd. and Dalian Tianbao Green Foods Co., Ltd.. Mr. Zhang was formerly an accountant of Dalian City Transportation Bureau, a researcher of Dalian Economic Commission, professor and vice dean of the accounting school of Dongbei University of Finance and Economics, and director of Sino-German Management and Control Research Centre, etc. He graduated from Dongbei University of Finance and Economics with a major in industrial economics and holds a doctorate degree.

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Supervisors

The table below sets forth certain information concerning our supervisors as of March 31, 2019. The current term for all of our supervisors is three years, which will expire in 2020.

Name	Age	Position with us
Ye Xiangdong	51	Chairman of the Board of Supervisors
Mu Xuan	43	Vice Chairman of the Board of Supervisors
Zhang Mengjiao	54	Supervisor
Gu Jianguo	52	Supervisor
Zhang Xiaojun	52	Supervisor
Zhang Xiancheng	55	Supervisor

YE Xiangdong, aged 51, is the Chairman of the Supervisory Committee of the Company and the Vice President and a Member of the Leading Party Members' Group of Huaneng Group. He was the Executive Director and President of Huaneng Hulun Buir Energy Development Company Ltd. and the Chief Engineer of Huaneng Group. He graduated from Chongqing University, majoring in thermal energy, and holds a master’s degree in Engineering. He is a senior engineer.

MU Xuan, aged 43, is the Vice Chairman of the Supervisory Committee of the Company, the Vice President and a Member of CPC Committee of Dalian Construction Investment Group Co., Ltd., the Director and President of Dalian LNG Pipeline Co., Ltd. He was the assistant to the President of Dalian Construction Investment Co., Ltd. and the assistant to the President of Dalian Construction Investment Group Co., Ltd. He graduated from Dongbei University of Finance and Economics, majoring in Technical Economy and Management. He is a master degree postgraduate and a registered accountant.

ZHANG Mengjiao, aged 54, is a Supervisor of the Company and the Deputy Chief Accountant of HIPDC. She was the Deputy Manager of the Finance Department of the Company and the Manager of the Finance Department of HIPDC. She graduated from Xiamen University, majoring in accounting. She is a master’s degree postgraduate in economics and is a senior accountant.

GU Jianguo, aged 52, is a Supervisor of the Company, the Chairman of Nantong Investment & Management Limited Company, and the Vice President of Nantong City Construction Group Co., Ltd.. He was the Chief of Nantong Investment Management Centre, Director and President of Nantong Investment & Management Limited Company. He graduated from Nanjing University of Aeronautics and Astronautics with a bachelor’s degree. He is an economist. He holds a Master of Business Administration from Antai College of Economics and Management (ACEM) at Shanghai Jiao Tong University.

ZHANG Xiaojun, aged 52, is a Supervisor and Manager of the Discipline Inspection, Supervision and Audit Department of the Company. She was Deputy Manager of the Administration Department and the Vice Chairman of Labour Union of the Company. She graduated from the Central Party School of the Communist Party of China, majoring in economic management, and holds a bachelor’s degree. She is an accountant.

ZHANG Xiancheng, aged 54, is a Supervisor and the Manager of Party Building Work Department of the Company. He was the Manager of the Political Work Department of the Company. He graduated from Northeast Agriculture University, majoring in business administration, and holds a bachelor’s degree in economics. He is a senior economist.

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Other Executive Officers

ZHAO Keyu, aged 52, is the President and Deputy Party Secretary of the Company. He was the Chief of the Planning and Development Department, Chief of Office, and Director and Secretary of the Party Office of Huaneng Group. He graduated from Wuhan University, majoring in software engineering, and is postgraduate with a master’s degree in engineering. He is a senior political work specialist.

ZHAO Ping, aged 56, is the Vice President and the Deputy Party Secretary of the Company. He graduated from Tsinghua University, majoring in thermal engineering, is a postgraduate with a master’s degree in science. He is a professor-grade senior engineer. He enjoyed special government allowance of the State Council.

WU Senrong, aged 57, is currently the Vice President and a Member of Party Committee of the Company. He was a Member of the Party Committee and the Secretary of the Discipline Inspection commission of the Company. He graduated from the Economic Management School of Tsinghua University with an EMBA degree. He is a professor-grade senior engineer.

SONG Zhiyi, aged 58, is the Vice President and a Member of Party Committee of the Company. He graduated from the Guanghua Management Institute of Peking University, with an MBA degree. He is a senior engineer.

LI Jianmin, aged 57, is a Member of Party Committee and Vice President of the Company. He graduated from North China Electricity College, majoring in power plant and electricity system, with a bachelor’s degree in science. He is a professor-grade senior engineer.

LIU Ranxing, aged 56, is the Vice President, a Member of Party Committee and the Secretary of the Discipline Inspection commission of the Company. He was the President of Huaneng Energy & Communications Holdings Co., Ltd. He graduated from Harbin Institute of Technology, majoring in management engineering, with a master’s degree in science. He is a professor-grade senior engineer.

HUANG Lixin, aged 52, is currently the Chief accountant and a Member of Party Committee of the Company. He was the Manager of the Finance Department of the Company and Director of the Finance Department of Huaneng Group. He graduated from the Economic Management School of Tsinghua University with an EMBA degree. He is a senior accountant.

HUANG Chaoquan, aged 53, is currently the Secretary to the Board and Manager of the Administration Department of the Company. He was the Manager of the Corporate Management Department of the Company. He graduated from Harbin University of Science and Technology with a postgraduate degree in Management Engineering. He is a senior economist.

B.	Compensation for Directors, Supervisors and Executive Officers

The table below sets forth the compensation on individual basis for the directors, supervisors and other executive officers for the year ended December 31, 2018:

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Name	Position with the Company	Pre-tax Remuneration Paid by the Company in 2018⁽¹⁾
		(RMB in thousand)
Directors
Huang Jian	Director		-
Wang Yongxiang	Director		-
Mi Dabin	Director		-
Guo Hongbo	Director		-
Cheng Heng	Director		-
Lin Chong	Director		-
Yue Heng	Independent Director		74
Xu Mengzhou	Independent Director		74
Liu Jizhen	Independent Director		74
Xu Haifeng	Independent Director		74
Zhang Xianzhi	Independent Director		74
Cao Peixi⁽²⁾	Former Chairman of the Board of Directors		-
Liu Guoyue⁽³⁾	Former Executive Director and President		-
Fan Xiaxia⁽⁴⁾	Former Director		-

Sub-total			370

Supervisors
Ye Xiangdong	Chairman of the Board of Supervisors		-
Mu Xuan	Vice Chairman of the Board of Supervisors		-
Zhang Mengjiao	Supervisor		-
Gu Jianguo	Supervisor		-
Zhang Xiaojun	Supervisor		760
Zhang Xiancheng⁽⁵⁾	Supervisor		145
Zhu Daqing	Former Supervisor		379

Sub-total			1,284

Other Executive officers
Zhao Keyu⁽⁶⁾	President		409
Zhao Ping	Vice President		856
Wu Senrong	Head of Discipline Inspection Group		856
Song Zhiyi	Vice President		856
Li Jianmin	Vice President		856
Liu Ranxing	Vice President		856
Huang Lixin	Chief Accountant		855
Huang Chaoquan	Secretary to the Board of Directors		757
Zhou Hui⁽⁷⁾	Former Vice President		198
He Yong⁽⁸⁾	Former Chief Engineer		264

Sub-total			6,763

Total			9,027

_____________________________

Notes:

(1)	The remuneration paid by the Company in 2018 includes fees, basic salaries, performance salaries and pension. Please see Note 38 to the Item 18 Financial Statements, "Directors', supervisors' and senior management's emoluments."

(2)	Mr. Cao Peixi resigned on January 30, 2019.

(3)	Mr. Liu Guoyue resigned on May 15, 2018.

(4)	Mr. Fan Xiaxia resigned on February 28, 2018.

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(5)	Mr. Zhang Xiancheng was elected on October 30, 2018.

(6)	Mr. Zhao Keyu was appointed as the President on July 31, 2018.

(7)	Ms. Zhou Hui resigned in March 2018.

(8)	Mr. He Yong resigned in April 2018.

The total remuneration paid to our directors, supervisors and executive officers is comprised of basic salaries, performance salaries and pension. Of these, performance salaries account for approximately 50% of the total remuneration. In addition, directors and supervisors who are also officers or employees of the Company receive certain other benefits, such as subsidized or free health care services, housing and transportation, which are customarily provided by large enterprises in the PRC to their employees. Each of the Company's independent directors receives annual after-tax cash compensation of RMB60,000. We do not have any service contract with any director that provides for benefits upon termination of employment. The Company does not grant options or the stock-based incentive awards to its directors, supervisors and executive officers.

C.	Board practice

We, in accordance with the resolutions passed at a shareholders' general meeting, have set up four board committees, namely, the Audit Committee, the Strategy Committee, the Nomination Committee, and the Remuneration and Appraisal Committee, and formulated the working regulations for each committee in accordance with relevant rules and regulations. All committees operate in accordance with the working rules and utilize their members' specific backgrounds, experience and industry expertise to provide advice to the board, so as to enhance our operation efficiency and to make the decision-making process better informed.

The main duties of the Audit Committee are to assist our board in performing its statutory and fiduciary duties of supervising our accounting, financial reporting, internal control and compliance, including but not limited to, assisting our board in ensuring (i) the authenticity of our financial statements; (ii) our compliance with the applicable laws and regulations; (iii) the qualification and independence of our independent auditors; (iv) the performances of our independent auditors and internal auditing department and (v) the control and management of the related-party transactions of the Company.

The main duties of the Strategy Committee are to advise on, and conduct research in relation to, our long-term development strategies and decisions regarding significant investments.

The main duties of the Nomination Committee are to conduct research and provide advice in relation to the requirements for selection of directors and managers and the relevant procedures based on the actual need of our operation, to search for qualified candidates for the positions of director and manager, to examine the candidates for the positions of director and manager and to advise matters in relation thereto.

The main duties of the Remuneration and Appraisal Committee are to conduct research on the appraisal guidelines for directors and managers, to carry out performance appraisals and provide advice accordingly, and to conduct research on the remuneration policies and proposals regarding the directors and senior management.

The members of Audit Committee are Mr. Yue Heng (Chairman), Mr. Xu Mengzhou, Mr. Liu Jizhen, Mr. Xu Haifeng and Mr. Zhang Xianzhi.

The members of Strategy Committee are Mr. Shu Yinbiao (Ad hoc Chairman), Mr. Huang Jian, Mr. Wang Yongxiang, Mr. Liu Jizhen and Mr. Xu Haifeng.

The members of Nomination Committee are Mr. Liu Jizhen (Chairman), Mr. Mi Dabin, Mr. Lin Chong, Mr. Yue Heng, Mr. Xu Mengzhou and Mr. Zhang Xianzhi.

The members of Remuneration and Appraisal Committee are Mr. Zhang Xiangzhi (Chairman), Mr. Guo Hongbo, Mr. Cheng Heng, Mr. Yue Heng, Mr. Liu Jizhen and Mr. Xu Haifeng.

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Employees

As of December 31, 2018, we had 57,960 employees. Of these, 124 were headquarters management staff, 18,139 were management and technical staff of our subsidiaries, and the remainder was workers, ancillary service personnel and others. Approximately 77% of our work force graduated from university or technical college. As of December 31, 2016 and 2017, we had 42,210 and 53,962 employees, respectively.

We conduct continuing education programs for our employees at our head office and at each power plant. We provide training in foreign language, computer, operating and other areas to our managerial professionals and technicians in their relevant fields. Employees are trained in accordance with the different requirements for professional and managerial positions.

Our labor force is employed through individual labor contracts. Currently, all employees are employed under labor contracts, which specify the employee's position, responsibilities, remuneration and grounds for termination. Short-term labor contracts have fixed terms of typically one to five years, at the end of which they may be renewed by agreement of both the Company and the employee.

The contract system imposes discipline, provides incentives to adopt better work methods, and provides us with a greater degree of management control over our work force. We believe that, by linking remuneration to productivity, the contract system has also improved employee morale.

Each of our power plants has a trade union and the employees of our headquarters are also members of a trade union. These trade unions protect employees' rights, aim to fulfill our economic objectives, encourage employees to participate in management decisions and mediate disputes between us and union members. We have not been subject to any strikes or other labor disturbances interfering with our operations, and we believe that our relationships with our employees are good.

Total remuneration of our employees includes salaries, bonuses and allowances. The remuneration level of each employee is linked to the performance of our company as well as the individual employee himself/herself. The employees also receive certain benefits in the form of education and health services subsidized by the Company and other miscellaneous subsidies.

In compliance with the relevant regulations, we and our employees participate in the local government pension plan under which all the employees are entitled to pension payments upon retirement. See Note 38 to the Financial Statements. The Company also participates in the social insurance program administered by the social security institution, under which all employees are entitled to certain social insurance benefits, subject to adjustments in accordance with relevant PRC regulations. The Company is in compliance with all social insurance regulations and has no overdue obligations for any social insurance contribution.

E.	Share ownership

None of our directors, supervisors or senior management owns any of our shares.

ITEM 7

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A.	Major shareholders

Our outstanding ordinary shares consist of A Shares and H Shares, each with a par value of RMB1.00 per share. The following table sets forth certain information regarding our major shareholders as of March 31, 2019.

Shareholder	Number of shares		Approximate percentage in the total issued domestic share capital %		Approximate percentage in the total issued share capital %
Huaneng International Power Development Corporation		5,066,662,118		46.07		32.28
China Huaneng Group Co. Ltd.(1)		1,629,264,402		14.81		10.38

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Shareholder

Number of shares

Approximate percentage in the total issued domestic share capital %

Approximate percentage in the total issued share capital %

China Hua Neng Hong Kong Company Limited

472,000,000

⁽²⁾

10.04

⁽²⁾

3.01

_____________________________

Notes:

(1)	Of the 1,629,264,402 shares, 74,139,853 domestic shares through its controlling subsidiary, Huaneng Finance Corporation Limited.

(2)	472,000,000 shares are H Shares and represent 10.04% of the total issued H Shares of the Company and 3.01% of the total issued share capital of the Company.

In 2006, all of our shareholders of non-tradable domestic shares except HIPDC transferred a total of approximately 1.1 billion shares to Huaneng Group, representing 9.24% of our total issued shares. Among others, HPCIC transferred approximately 301 million shares to Huaneng Group, and decreased its shareholdings in the Company to 5.00%.

On April 19, 2006, we carried out our reform plan to convert all non-tradable domestic shares into tradable domestic shares. According to the plan, Huaneng Group and HIPDC transferred a total of 150 million A Shares to our shareholders. As a result, the direct shareholdings of Huaneng Group and HIPDC decreased to 8.75% and 42.03%, respectively.

In June and July of 2008, through its wholly owned subsidiary, China Hua Neng Hong Kong Company Limited, Huaneng Group acquired 20 million H Shares from the open market. As a result, the shareholding of Huaneng Group increased to 8.92%.

In 2010, we increased our share capital through non-public issuances of new shares, including A shares and H Shares. With the approval of shareholders and relevant PRC governmental authorities, we were authorized to issue (i) not exceeding 1,500 million new A shares by way of placement to not more than 10 designated investors, including Huaneng Group, which would subscribe for no more than 500 million new A shares, and (ii) no more than 500 million new H Shares to China Hua Neng Hong Kong Company Limited ("Hua Neng HK"). On December 23, 2010, we completed the non-public issuance of 1,500 million new A shares (ordinary shares with a par value of RMB1 per share) to 10 designated investors, including Huaneng Group, at the issuance price of RMB5.57 per share. The shares subscribed by Huaneng Group are subject to a lock-up period of 36 months.

On December 28, 2010, we completed the placement of 500 million H Shares (ordinary shares with a par value of RMB1 per share) to Hua Neng HK at the subscription price of HK$4.73 per share.

On November 13, 2014, we completed the placement of 365 million H Shares at the price of HK$8.60 per share.

On November 20, 2015, we completed the placement of 780 million H Shares at the price of HK$7.32 per share.

On October 15, 2018, we completed the non-public issuance of 497,709,919 A Shares at the price of RMB6.55 per share.

Before we were established in 1994, HIPDC and seven other promoters entered into the Shareholders' Agreement dated May 31, 1994 (the "Shareholders' Agreement") which, among other things, grants to HIPDC the right to vote all the shares owned by each of the other promoters so as to enable HIPDC to have majority voting rights in general meetings for so long as we are in existence. In addition, directors designated by HIPDC will have majority representation on our board of directors and each of the other promoters will have one representative designated by it appointed as a member of our board of directors. The Shareholders' Agreement also provides that for so long as we are in existence (i) HIPDC and the other signatories to the Shareholders' Agreement will maintain

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their combined shareholdings to ensure their collective majority control of the Company, (ii) HIPDC has certain priority rights to purchase the shares held by the other signatories to the Shareholders' Agreement, (iii) if HIPDC does not exercise its priority rights to purchase such shares, each of the signatories to the Shareholders' Agreement other than HIPDC shall have a priority right to purchase such shares on a pro rata basis, and (iv) no shares may be sold or transferred unless their transferees agree to abide by the terms of the Shareholders' Agreement. As a result of the Shareholders' Agreement, HIPDC holds 70.09% of the total voting rights of the outstanding shares and, subject to the Shareholders' Agreement, has the power to control the election of all of our directors and to direct our management and policies.

On May 12, 2006, HIPDC and other promoters (including the shareholders who assumed the rights and obligations of original promoters as a result of share transfer) entered into an amendment to the Shareholders' Agreement, pursuant to which each promoter shall be entitled to exercise its own voting rights at the shareholders' general meeting. Consequently, HIPDC currently holds 35.14% of our total voting rights. Since HIPDC's parent company, Huaneng Group, currently holds, directly or indirectly, 14.87% of our total voting rights, HIPDC is able to exert control over us when acting in concert with Huaneng Group.

Huaneng Group and HIPDC had previously given a non-compete undertaking to us during our initial public offering of A shares in 2001, in order to support our business development, to integrate relevant quality assets and to avoid business competition. In September 2010, we received from Huaneng Group an undertaking on relevant matters for further avoidance of business competition. While Huaneng Group will continue to perform its undertakings previously given, Huaneng Group further undertakes that: (i) it shall treat us as the only platform for ultimate integration of the conventional energy business of Huaneng Group; (ii) with respect to the conventional energy business assets of Huaneng Group located in Shandong Province, Huaneng Group undertakes that it will take approximately 5 years to improve the profitability of such assets and when the terms become appropriate, it will invest those assets into us. We have a right of first refusal to acquire from Huaneng Group the newly developed, acquired or invested projects which are engaged in the conventional energy business of Huaneng Group located in Shandong Province; (iii) with respect to the other non-listed conventional energy business assets of Huaneng Group located in other provincial administrative regions, Huaneng Group undertakes that it will take approximately 5 years, and upon such assets meeting the conditions for listing, it will invest such assets into us in order to support our sustainable and stable development; and (iv) Huaneng Group will continue to perform each of its undertakings to support the development of its subordinated listed companies.

On June 28, 2014, pursuant to Guideline No. 4 for the Supervision of Listed Companies No.4 - Commitments and Their Fulfillment by Listed Companies and Their Actual Controllers, Shareholders, Related Parties and Acquirers issued by CSRC, Huaneng Group strengthened its aforementioned non-competing undertaking in the following ways: (i) it shall treat us as the only platform for integrating the conventional energy business of Huaneng Group; (ii) with respect to the conventional energy business assets of Huaneng Group located in Shandong Province, Huaneng Group undertakes that by the end of 2016, it will inject such assets into the our Company when the profitability of such assets has been improved and meets our internal requirements for the listing of our assets, which include clear delineation of assets and shares ownership between our Company and Huaneng Group, absence of decrease in earnings per share of the Company after the injection and any unlawful events of significance, appreciation of state-owned assets, and certain waivers of shareholder rights by Huaneng Group; (iii) with respect to the other non-listed conventional energy business assets of Huaneng Group in other provincial administrative regions, Huaneng Group undertook that by the end of 2016, upon such assets meeting the our aforementioned internal requirements, the Group will inject such assets into the Company, with a view to supporting the Company's continuous and stable development; and (iv) Huaneng Group will continue to perform each of its undertakings to support the development of its subordinated listed companies. The period of such undertakings is between June 28, 2014 and December 31, 2016.

Huaneng Group has diligently examined and analyzed its performance on the 2014 undertakings, of which items (i) and (iv) are long-term undertaking and are being currently performed.

As of December 31, 2016, all coal-fired generation assets of Huaneng Group located in Shandong region under the scope of undertakings had been injected into the Company, thus performance of the undertaking item (ii) was completed within the term of the undertaking period.

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As of December 31, 2016, all other non-listed coal-fired power generation assets of Huaneng Group located in provincial administrative regions other than Shandong which met the conditions had been injected into the Company, thus performance of the undertaking item (iii) was completed.

Huaneng Group continued to perform the undertaking as made previously that it would procure relevant parties such as Huaneng Energy and Transportation (Holding) Company Limited to inject non-listed conventional energy assets located in Shandong to the Company after completion of the asset disposal transaction announced on September 30, 2017 by Shandong Xinneng Taishan Power Generation Co., Ltd. On July 31, 2018, Shandong Company (a subsidiary of the Company) and Taishan Power (a subsidiary of Huaneng Energy and Transportation (Holding) Company Limited) entered into an agreement, pursuant to which Shandong Company acquired from Taishan Power its power assets which were formerly purchased from Shandong Xinneng Taishan Power Generation Co Ltd. Huaneng Group. Therefore our abovementioned undertaking has been fulfiled.

B.	Related party transactions

Guarantees

The table below sets forth information on guarantees provided by Huaneng Group, HIPDC and the Company to the related parties in 2018 for the purposes of financing their operation, construction and renovation.

Guarantor	Guarantee	Interest Rate	Largest Amount Outstanding in 2018	Amount Outstanding as of December 31,2018
		%	(RMB)	(RMB)
Huaneng Group	Yangliuqing Power Company⁽¹⁾	2.15	172,568,290.63	142,006,568.31
	Hainan Power⁽¹⁾	4.17	250,000,000.00	125,000,000.00
	Nongan Biomass⁽¹⁾	4.41	42,578,800.00	19,354,500.00
	Shandong Power⁽¹⁾	6.03	1,210,000,000.00	605,000,000.00
	Ruyi Pakistan Energy⁽¹⁾	6.86	3,205,792,390.58	2,136,747,553.68
HIPDC	The Company	5.00	2,000,000,000.00	2,000,000,000.00
	Ruijin Power⁽¹⁾	4.41	99,600,000.00	57,200,000.00
The Company	Tuas Power Company⁽¹⁾	SIBOR+1.65	10,807,738,211.20	10,702,964,205.78
	Tuas Power Company⁽¹⁾	SIBOR+1.65	1,584,928,085.55	1,569,563,236.72

Note:

(1) These entities are subsidiaries of the Company.

Loans

The table below sets forth the loans made by Huaneng Group and subsidiaries of Huaneng Group, and the Company to the related parties in 2018 for the purposes of financing their operation, construction and renovation.

Lender	Borrower	Interest Rate	Largest Amount Outstanding in 2018	Outstanding Balance as of December 31, 2018
		%	(RMB)	(RMB)
Huaneng Finance	Weihai Power Plant	4.1325	100,000,000.00	100,000,000.00
Huaneng Finance	Huaiyin II Power	4.1325	300,000,000.00	300,000,000.00
Huaneng Finance	Suzhou Industrial Park	4.1325	70,000,000.00	70,000,000.00
Huaneng Finance	Qinbei Power Plant	4.1325	200,000,000.00	200,000,000.00
Huaneng Finance	Qinbei Power Plant	4.1325	200,000,000.00	200,000,000.00
Huaneng Finance	Yushe Power Plant	4.35	330,000,000.00	330,000,000.00

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Lender	Borrower	Interest Rate	Largest Amount Outstanding in 2018	Outstanding Balance as of December 31, 2018
		%	(RMB)	(RMB)
Huaneng Finance	Xindian Power Plant	4.35	100,000,000.00	100,000,000.00
Huaneng Finance	Xindian Power Plant	4.35	100,000,000.00	100,000,000.00
Huaneng Finance	Luohuang Power Plant	4.1325	100,000,000.00	100,000,000.00
Huaneng Finance	Luohuang Power Plant	4.1325	100,000,000.00	100,000,000.00
Huaneng Finance	Luohuang Power Plant	4.1325	200,000,000.00	200,000,000.00
Huaneng Finance	Pingliang Power Plant	4.35	100,000,000.00	100,000,000.00
Huaneng Finance	Pingliang Power Plant	4.35	100,000,000.00	100,000,000.00
Huaneng Finance	Pingliang Power Plant	4.35	100,000,000.00	100,000,000.00
Huaneng Finance	Pingliang Power Plant	4.75	100,000,000.00	100,000,000.00
Huaneng Finance	Yangliuqing Co-generation	4.1325	100,000,000.00	100,000,000.00
Huaneng Finance	Yangliuqing Co-generation	4.1325	200,000,000.00	200,000,000.00
Huaneng Finance	Yangliuqing Co-generation	4.1325	100,000,000.00	100,000,000.00
Huaneng Finance	Xiangqi Hydropower	4.1325	50,000,000.00	50,000,000.00
Huaneng Finance	Xiangqi Hydropower	4.1325	50,000,000.00	50,000,000.00
Huaneng Finance	Yingkou Co-generation	4.1325	300,000,000.00	300,000,000.00
Huaneng Finance	Qingdao Port	4.1325	60,000,000.00	60,000,000.00
Huaneng Finance	Qingdao Port	4.5125	40,000,000.00	40,000,000.00
Huaneng Finance	Taicang Port	4.1325	150,000,000.00	150,000,000.00
Huaneng Finance	Tongxiang CCGT	4.35	200,000,000.00	200,000,000.00
Huaneng Finance	Qingdao Co-generation	4.655	195,000,000.00	187,000,000.00
Huaneng Finance	Luoyang Co-generation Power Plant	4.35	100,000,000.00	100,000,000.00
Huaneng Finance	Luoyang Yangguang Power Plant	4.35	100,000,000.00	100,000,000.00
Huaneng Finance	Fuyuan Wind Power	4.1325	15,000,000.00	15,000,000.00
Huaneng Finance	Panzhou Wind Power	4.655	200,000,000.00	200,000,000.00
Huaneng Finance	Dongshan CCGT	4.1325	100,000,000.00	100,000,000.00
Huaneng Finance	Tongshan Wind Power	4.1325	142,000,000.00	142,000,000.00
Huaneng Finance	Nanjing Thermal Power	4.2195	70,000,000.00	70,000,000.00
Huaneng Finance	Nanjing Thermal Power	4.35	150,000,000.00	150,000,000.00
Huaneng Finance	Luhe Wind Power	4.5125	28,000,000.00	28,000,000.00
Huaneng Finance	Lingang Co-generation CCGT	4.1325	100,000,000.00	100,000,000.00
Huaneng Finance	Lingang Co-generation CCGT	4.1325	170,000,000.00	170,000,000.00
Huaneng Finance	Mianchi Co-generation	4.35	200,000,000.00	200,000,000.00
Huaneng Finance	Mianchi Co-generation	4.35	100,000,000.00	100,000,000.00
Huaneng Finance	Yingkou Xianrendao Co-generation Power	4.35	15,000,000.00	15,000,000.00
Huaneng Finance	Yingkou Xianrendao Co-generation Power	4.35	50,000,000.00	50,000,000.00
Huaneng Finance	Changxing Photovoltaic	4.5125	35,000,000.00	35,000,000.00
Huaneng Finance	Zhongxiang Hujiawan Wind Power	4.655	200,000,000.00	191,000,000.00
Huaneng Finance	Zhumadian Wind Power	4.1325	180,000,000.00	180,000,000.00
Huaneng Finance	Wuhan Power	4.1325	200,000,000.00	200,000,000.00

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Lender	Borrower	Interest Rate	Largest Amount Outstanding in 2018	Outstanding Balance as of December 31, 2018
		%	(RMB)	(RMB)
Huaneng Finance	Wuhan Power	4.1325	150,000,000.00	150,000,000.00
Huaneng Finance	Wuhan Power	4.1325	150,000,000.00	150,000,000.00
Huaneng Finance	Anyuan Power	4.35	200,000,000.00	200,000,000.00
Huaneng Finance	Hualiangting Hydropower	4.1325	8,000,000.00	8,000,000.00
Huaneng Finance	Chaohu Power	4.5125	150,000,000.00	150,000,000.00
Huaneng Finance	Jingmen Thermal Power	4.1325	200,000,000.00	200,000,000.00
Huaneng Finance	Jingmen Thermal Power	4.1325	200,000,000.00	200,000,000.00
Huaneng Finance	Suzhou CCGT	4.1325	100,000,000.00	100,000,000.00
Huaneng Finance	Suzhou CCGT	4.1325	100,000,000.00	100,000,000.00
Huaneng Finance	Suzhou CCGT	4.35	100,000,000.00	100,000,000.00
Huaneng Finance	Ruijin Power	4.1325	200,000,000.00	200,000,000.00
Huaneng Finance	Yingcheng Thermal Power	4.2195	150,000,000.00	150,000,000.00
Huaneng Finance	Yingcheng Thermal Power	4.2195	150,000,000.00	150,000,000.00
Huaneng Finance	Suizhou Power Plant	4.655	100,000,000.00	95,500,000.00
Huaneng Finance	Dongguan CCGT	4.655	200,000,000.00	200,000,000.00
Huaneng Finance	Yueyang Xingang Photovoltaic	4.1325	10,000,000.00	10,000,000.00
Huaneng Finance	Lvyuan Wind Power	4.35	20,000,000.00	20,000,000.00
Huaneng Finance	Lvyuan Wind Power	4.5125	30,000,000.00	30,000,000.00
Huaneng Finance	Hegang Power Plant	4.35	100,000,000.00	100,000,000.00
Huaneng Finance	Hegang Power Plant	4.35	80,000,000.00	80,000,000.00
Huaneng Finance	Tongjiang Wind Power	4.1325	50,000,000.00	50,000,000.00
Huaneng Finance	Xinhua Power Plant	4.5125	50,000,000.00	50,000,000.00
Huaneng Finance	Jilin Power	4.75	200,000,000.00	200,000,000.00
Huaneng Finance	Dongying New Energy	4.41	244,500,000.00	232,000,000.00
Huaneng Finance	Jiaxiang Power	4.35	40,000,000.00	40,000,000.00
Huaneng Finance	Jiaxiang Power	4.35	100,000,000.00	100,000,000.00
Huaneng Finance	Jiaxiang Power	4.35	50,000,000.00	50,000,000.00
Huaneng Finance	Jiaxiang Power	4.35	50,000,000.00	50,000,000.00
Huaneng Finance	Jiaxiang Power	4.35	50,000,000.00	50,000,000.00
Huaneng Finance	Jiaxiang Power	4.35	50,000,000.00	50,000,000.00
Huaneng Finance	Jiaxiang Power	4.35	50,000,000.00	50,000,000.00
Huaneng Finance	Laiwu Power	4.1325	100,000,000.00	100,000,000.00
Huaneng Finance	Laiwu New Energy	4.75	20,000,000.00	20,000,000.00
Huaneng Finance	Liaocheng Co-generation	4.35	60,000,000.00	60,000,000.00
Huaneng Finance	Liaocheng Co-generation	4.35	60,000,000.00	60,000,000.00
Huaneng Finance	Liaocheng Co-generation	4.35	100,000,000.00	100,000,000.00
Huaneng Finance	Liaocheng Co-generation	4.35	60,000,000.00	60,000,000.00
Huaneng Finance	Liaocheng Co-generation	4.5125	100,000,000.00	100,000,000.00
Huaneng Finance	Liaocheng Co-generation	4.5125	60,000,000.00	60,000,000.00
Huaneng Finance	Linyi Power	4.1325	100,000,000.00	100,000,000.00

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Lender	Borrower	Interest Rate	Largest Amount Outstanding in 2018	Outstanding Balance as of December 31, 2018
		%	(RMB)	(RMB)
Huaneng Finance	Qufu Co-generation	4.35	261,000,000.00	261,000,000.00
Huaneng Finance	Ruyi Helan Rooftop Photovoltaic	4.41	72,000,000.00	71,500,000.00
Huaneng Finance	Yantai Bajiao	4.35	200,000,000.00	200,000,000.00
Huaneng Finance	Yantai Bajiao	4.655	200,000,000.00	200,000,000.00
Huaneng Finance	Baiyanghe Power Plant	4.1325	40,000,000.00	40,000,000.00
Huaneng Finance	Baiyanghe Power Plant	4.1325	100,000,000.00	100,000,000.00
Huaneng Finance	Baiyanghe Power Plant	4.1325	110,000,000.00	110,000,000.00
Huaneng Finance	Baiyanghe Power Plant	4.1325	60,000,000.00	30,000,000.00
Huaneng Finance	Muping Wind Power	4.5125	6,000,000.00	6,000,000.00
Huaneng Finance	Penglai Wind Power	4.1325	30,000,000.00	30,000,000.00
Huaneng Finance	Penglai Wind Power	4.41	193,000,000.00	187,000,000.00
Huaneng Finance	Penglai Wind Power	4.513	50,000,000.00	50,000,000.00
Huaneng Finance	Yantai Power Plant	4.1325	450,000,000.00	433,000,000.00
Huaneng Finance	Yantai Power Plant	4.5125	100,000,000.00	100,000,000.00
Huaneng Finance	Yantai Power Plant	4.5125	50,000,000.00	50,000,000.00
Huaneng Finance	Sishui Photovoltaic	4.275	10,000,000.00	10,000,000.00
Huaneng Finance	Weishan New Energy	4.35	100,000,000.00	100,000,000.00
Huaneng Finance	Weishan New Energy	4.655	200,000,000.00	140,000,000.00
Huaneng Finance	Huaneng Information Company	4.5125	6,000,000.00	6,000,000.00
Huaneng Finance	Zhanhua Photovoltaic	4.41	447,000,000.00	346,000,000.00
Huaneng Finance	Boshan Photovoltaic	4.75	10,000,000.00	10,000,000.00
Huaneng Finance	Liaocheng Changrun	4.35	90,000,000.00	90,000,000.00
Huaneng Finance	Liaocheng Changrun	4.75	1,000,000.00	1,000,000.00
Huaneng Finance	Laiwu Thermal Power	4.1325	70,000,000.00	70,000,000.00
Huaneng Finance	Liaocheng Thermal Power	4.5125	50,000,000.00	50,000,000.00
Huaneng Finance	Liaocheng Thermal Power	4.5125	50,000,000.00	50,000,000.00
Huaneng Finance	Liaocheng Thermal Power	4.5125	50,000,000.00	50,000,000.00
Huaneng Finance	Rizhao Power Plant	4.1325	150,000,000.00	150,000,000.00
Huaneng Finance	Yantai 500	4.75	50,000,000.00	50,000,000.00
Huaneng Finance	Zhongyuan CCGT	4.5125	200,000,000.00	100,000,000.00
Huaneng Finance	Zhongyuan CCGT	4.5125	200,000,000.00	100,000,000.00
Huaneng Finance	Zhongyuan CCGT	4.75	200,000,000.00	100,000,000.00
Huaneng Group	The Company	4.75	24,530,000.00	24,530,000.00
Huaneng Group	The Company	4.75	640,694,600.00	640,694,600.00
Tiancheng Financial Leasing	Pingliang Power Plant	4.4175	65,000,000.00	45,000,000.00
Tiancheng Financial Leasing	Pingliang Power Plant	4.4175	177,894,736.82	123,157,894.70
Tiancheng Financial Leasing	Zhumadian Wind Powe	4.75	18,876,560.00	18,876,560.00
Tiancheng Financial Leasing	Anyang Energy	4.75	184,500,000.00	102,500,000.00
Tiancheng Financial Leasing	Mianchi Clean Energy	4.75	53,200,000.00	53,200,000.00
Tiancheng Financial Leasing	Shuangyu Photovoltaic	4.03	79,910,354.10	70,051,643.19
Tiancheng Financial Leasing	Zhaodong Dechang Photovoltaic	4.03	50,922,522.00	50,741,853.02
Huaneng Yuncheng Commercial Factoring (Tianjin) Co., Ltd.	Ruijin Power Plant	6.9	50,000,000.00	50,000,000.00

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Lease Agreement

On August 2, 2016, we entered into a leasing agreement and a property management agreement with Huaneng Property Co., Ltd., pursuant to which a total area of 30,465.70 square meters in Huaneng Mansion will be leased to us and the annual rent (including the property management fee) is RMB 114.54 million, effective from July 1, 2016 to June 30, 2019. On December 18, 2018, we have entered into an amendment agreement with Huaneng Property Co., Ltd., pursuant to which the lease area was amended as 19,210.00 square meters and the annual rent was amended as RMB 72.22 million.

Transactions with Huaneng Group

On December 12, 2017, we entered into the Huaneng Group Framework Agreement with Huaneng Group, for a term commencing on January 1, 2018 and expiring on December 31, 2018. Pursuant to the Huaneng Group Framework Agreement, we will conduct, among other things, the following transactions with Huaneng Group and its subsidiaries and associates: (i) purchase of ancillary equipment and parts; (ii) purchase of fuel and transportation services; (iii) leasing of facilities, land and office spaces; (iv) technical services, engineering contracting services and other services; (v) provision of entrusted sale services; (vi) sale of products; (vii) purchase of electricity; (viii) sale of electricity; and (ix) purchase of heat. Such transactions will be conducted on an on-going basis.

Entrusted Management Agreement with Huaneng Group

On January 29, 2015, we have entered into certain entrusted management agreement with Huaneng Group for a term of three years in connection with mutual management of electricity assets. Services under such entrusted management arrangements include preliminary project planning, annual budget and comprehensive planning, power marketing, production management of power plants, construction management, financial management, human resources and labor wages management, administration management, legal service management, assets operation and shareholding management, risk management and internal control management, information disclosure management, related party transaction management, general supervision, comprehensive affairs management and reporting/co-ordination management. By entering into these entrusted management arrangements, we aim to further improve the overall and management efficiency of our electricity assets in several provinces via the provincial level management system of Huaneng Group.

Coal purchases and service fee occurred for transportation

In 2017, we paid RMB18,850.31million, RMB435.43 million, RMB1,962.03 million and RMB2,377.30 million, respectively, to China Huaneng Group Fuel Co., Ltd., Huaneng Energy & Communications Holdings Co., Ltd. and its subsidiaries, Gansu Huating Coal Power Co., Ltd. and Shanghai Time Shipping for coal purchase and service fees incurred for transportation.

In 2018, we paid RMB20,777.60 million, RMB879.65 million, RMB3,210.18 million, RMB1,942.47 million and RMB2,087.60 million, respectively, to China Huaneng Group Fuel Co., Ltd., Huaneng Energy & Communications Holdings Co., Ltd. and its subsidiaries, Gansu Huating Coal Power Co., Ltd., Shanghai Time Shipping and Huaneng Hulunbuir Energy Development Company Ltd. for coal purchase and service fees incurred for transportation.

Transaction with Tiancheng Financial Leasing

On December 5, 2016, we entered into the Financial Leasing Agreement with Huaneng Tiancheng Financial Leasing Co., Ltd., or Tiancheng Financial Leasing, a subsidiary of Huaneng Group, for a term commencing on January 1, 2017 and expiring on December 31, 2019. The Financial Leasing Agreement provided the upper limit of the leasing transaction under the agreement between 2017 through 2019, and requires the internal approval and information disclosure for the proposed transactions. Pursuant to the Financial Leasing Agreement, the maximum outstanding balance of the financial lease, on a daily basis, will not exceed RMB12.000 billion, and the

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interest, on an annual basis, shall not exceed RMB800 million. As of December 31, 2018, the maximum outstanding balance we had at Tiancheng Financial Leasing was RMB 4.267 billion, and our annual interest was RMB145 million.

Transactions with Huaneng Finance

On December 31, 2016, we entered into the Huaneng Finance Framework Agreement with Huaneng Finance, a subsidiary of Huaneng Group, for a term commencing on January 1, 2017 and expiring on December 31, 2019. Pursuant to the Huaneng Finance Framework Agreement, we will enter into the following transactions with Huaneng Finance: (i) placing cash deposits by us with Huaneng Finance; (ii) provision of discounting services by Huaneng Finance to us; and (iii) provision of loan advancement by Huaneng Finance to us. Such transactions will be conducted on an on-going basis and will constitute continuing connected transactions under the Hong Kong Listing Rules. During the period from 2017 to 2019, the maximum outstanding balance of the deposits to be placed with Huaneng Finance under the Huaneng Finance Framework Agreement, on a daily basis, will not exceed RMB13.000 billion. As of December 31, 2018, we placed with Huaneng Finance current deposits of approximately RMB10,915 million, which bore interest rates ranging from 0.35% to 1.35% per annum.

Transaction with Hebei Hanfeng Power Generation Limited Liability Company

On September 12, 2017, we entered into an agreement with Hebei Hanfeng Power Generation Limited Liability Company, ("Hebei Hanfeng") for an effective period from January 1, 2018 to December 31, 2018. Pursuant to the transfer agreement, we and our subsidiaries shall purchase electricity from Hebei Hanfeng and its subsidiary and associates. The cap of the transaction amount for purchase of electricity by us and our subsidiaries from Hebei Hanfeng and its subsidiaries and associates is estimated to be RMB600 million.

Capital Increase in Tiancheng Leasing

On February 12, 2018, the Company entered into a capital increase agreement with the existing shareholders of Tiancheng Financial Leasing, pursuant to which the Company and the existing shareholders of Tiancheng Financial Leasing agreed to subscribe by way of cash for the new registered capital of Tiancheng Financial Leasing pro rata to their respective proportion of shareholding in Tiancheng Financial Leasing. The Company paid to Tiancheng Leasing an amount of not more than RMB270 million as the consideration of the capital increase, which sum was funded by the Company’s internal cash resources.

Acquisition of Equity Interests in Liaocheng Thermal Power, Laizhou Wind Power, Laiwu Thermal Power and Laiwu Power Generation

On July 31, 2018, Shandong Power (a subsidiary of the Company) and Taishan Power entered into the Transfer Agreement, pursuant to which Shandong Power shall acquire from Taishan Power (i) 75% interests in the registered capital of Shandong Huaneng Liaocheng Thermal Power Company Limited (“Liaocheng Thermal Power”), (ii) 80% interests in the registered capital of Shandong Huaneng Laizhou Wind Power Generation Company Limited (“Laizhou Wind Power”), (iii) 80% interests in the registered capital of Shandong Huaneng Laiwu Thermal Power Company Limited (“Laiwu Thermal Power”), and (iv) 15% interests in the registered capital of Huaneng Laiwu Power Generation Limited (“Laiwu Power Generation”) at the consideration of RMB1,800,020,000. Upon completion of the Transfer, Liaocheng Thermal Power, Laizhou Wind Power, and Laiwu Thermal Power will become subsidiaries of Shandong Company.

Formation of Joint Venture

On October 23, 2018, Jiangsu Company (a branch of the Company) entered into the joint venture and cooperation agreement with Hua Neng HK and CSIC Haizhuang (Beijing) Renewables Energy Investment Co., Ltd. (“Haizhuang Renewables”). Pursuant to the terms and conditions of the joint venture and cooperation agreement, the Company would jointly establish Huaneng Shengdong Rudong Offshore Wind Power Co., Ltd. (“Shengdong”) with Hua Neng HK and Haizhuang Renewables. The Company would subscribe for the registered capital of no more than RMB790 million by cash with its own fund; Hua Neng HK would subscribe for the registered capital of RMB200 million (or its equivalent) by cash; and Haizhuang Renewables would subscribe for the registered capital of RMB10 million by injecting net assets of its wholly-owned subsidiary Shengdong Rudong Offshore Wind Power Co., Ltd. with value of RMB10 million after valuation.

For a detailed discussion of related party transactions, see Note 37 to the Financial Statements.

C.	Interests of experts and counsel

Not applicable.

ITEM 8

FINANCIAL INFORMATION

A.	Consolidated statements and other financial information

See pages F-1 to F-144.

Legal proceedings

As of December 31, 2018, we are not a defendant in any material litigation or arbitration and no litigation or claim of material importance is known to us or any member of the Board of directors of us to be pending or threatened against us.

Dividend distribution policy

Our articles of association clearly define our cash dividend policy, i.e. when our earnings and accumulative undistributable profits for the current year are positive, and on the condition that our cash flow can satisfy our normal operation and sustainable development, we shall adopt a cash dividend appropriation policy on the principle that the cash dividend payout will not be less than 50% of the distributable profit realized in the then-current year's consolidated financial statement.

In addition, in order to allow all shareholders to better benefit from the development results of the Company, after considering the Company's strategic planning and development targets, industry development trends and other factors, the Company decided to further increase the proportion of cash dividends to shareholders in the next three years, and accordingly formulated the Shareholders Return Plan for the Next Three Years (2018 to 2020) of Huaneng Power International, Inc. pursuant to relevant regulations. Detailed terms and the proportion of the Company's cash dividends in the next three years are: when the profit and accumulated undistributed profits in the current year are positive, and on condition that the Company's cash flow is able to meet the need for its ordinary

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operation and sustainable development, the Company shall distribute dividends in cash and the annual cash dividend payout shall, in principle, be no less than 70% of the realized distributable profits stated in the consolidated financial statement that year and such dividend shall be no less than RMB0.1 per share.

Our Board of Directors will determine the payment of dividends, if any, with respect to our shares on a per share basis. Any final dividend for a financial year shall be subject to shareholders' approval. The Board may declare interim and special dividends at any time under general authorization by a shareholders' ordinary resolution. A decision to declare or to pay any dividends in the future, and the amount of any dividends, will depend on our results of operations, cash flows, financial condition, future prospects and other factors which our Directors may determine as important.

For holders of our H Shares, cash dividend payments, if any, shall be declared by our Board of Directors in Renminbi and paid in HK Dollars. The depositary will convert the HK Dollar dividend payments and distribute them to holders of ADSs in U.S. dollars, less expenses of conversion.

Dividends may be paid only out of our distributable profits (less allocation to the statutory funds of 10% of our net income determined in accordance with PRC GAAP) and may be subject to any applicable PRC withholding tax. Our Articles of Association limit our distributable profits to the lower of the amounts determined in accordance with PRC GAAP, and IFRS. Subject to the above, we expect to carry a positive, balanced and stable dividend distribution policy.

On March 19, 2019 the Board of Directors proposed a cash dividend of RMB0.10 per share, totaling approximately RMB1,569.81 million. This proposal is subject to the approval of the shareholders at the annual general meeting.

On May 3, 2018, upon the approval from the annual general meeting of the shareholders, we declared 2017 final dividend RMB0.10 (2016: RMB0.29) per ordinary share, totaling approximately RMB1,520 million (2016: RMB4,408 million).

B.	Significant changes

Except as disclosed elsewhere in this annual report, we have not experienced any significant changes since the date of our audited consolidated financial statements included in this annual report.

ITEM 9

THE OFFER AND LISTING

A.	Offer and listing details and markets

The Company's ADSs have been listed on the New York Stock Exchange since October 6, 1994. The table below sets forth, for the periods indicated, the high and low closing prices of the ADSs on the New York Stock Exchange. Each ADS represents 40 H Shares. As of March 31, 2019, there were 107 registered holders of American Depositary Receipts evidencing ADS.

On January 21, 1998, we listed our H Shares on the Hong Kong Stock Exchange. On February 26, 1998, we placed 250 million H Shares at the price of HK$4.40 per H Share or US$22.73 per ADS. In May 2004, we effected a two-for-one stock split by way of a stock dividend for all our outstanding shares including H Shares. As of March 31, 2019, there were 439 registered holders of H Shares.

ITEM 10

ADDITIONAL INFORMATION

A.	Share capital

Not applicable.

B.	Memorandum and articles of association

The following is a brief summary of certain provisions of our Articles of Association, as amended, the Company Law and certain other applicable laws and regulations of the PRC. Such summary does not purport to be

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complete. For further information, you and your advisors should refer to the text of our Articles of Association, as amended, and to the texts of the applicable laws and regulations.

Objects and Purposes

We are a joint stock limited company established in accordance with the Standard Opinion for Joint Stock Limited Companies (the "Standard Opinion") and certain other relevant laws and regulations of the PRC. We are registered with the PRC State Administration for Industry and Commerce with business license number Qi Gu Guo Zi No. 000496. Article 10 of our Articles of Association provides that our scope of businesses includes, among other things, investment, construction, operation and management of power plants; development, investment and operation of other export-oriented enterprises related to power plants; production and sale of thermal heat and electricity.

Directors

Our directors shall be elected at our shareholders' general meeting. Because the shares do not have cumulative voting rights, a holder of a majority of the shares is able to elect all of the directors. Our directors shall be elected for a term of three years and may serve consecutive terms upon re-election, except that independent directors may only serve a maximum of two consecutive terms of six years. Our directors are not required to hold any shares in us, and there is no age limit requirement for the retirement or non-retirement of our directors.

Where a director is materially interested, directly or indirectly, in a contract, transaction or arrangement (including any proposed contract, transaction or arrangement) with us, he or she shall declare the nature and extent of his or her interests to the board of directors at the earliest opportunity, whether or not such contract, transaction or arrangement is otherwise subject to the approval of the board. A director shall not vote, and shall not be counted in the quorum of the meeting, on any resolution concerning any contract, transaction or arrangement where the director owns material rights or interests therein. A director is deemed to be interested in a contract, transaction or arrangement in which his associate (as defined by Article 133 of the Articles of Association) is interested.

Unless the interested director discloses his interests to the board and the contract, transaction or arrangement in which the director is materially interested is approved by the board at a meeting in which the director neither votes nor is counted in the quorum, such contract, transaction or arrangement may be revoked by us except with respect to a bona fide party thereto who does not have notice of the director's interests.

We are prohibited from making loans or providing guarantees to our directors and their associates except where such loan or guarantee is made or provided under a service contract as approved by our shareholders at the shareholders' general meeting and to meet expenditure requirement incurred or to be incurred by the director for the purposes of the Company or for the purpose of enabling the director to perform his or her duties properly.

Matters relating to the remuneration of our directors shall be determined by the shareholders' general meeting.

Dividends

Distribution of dividends may be proposed by our board of directors for approval by an ordinary resolution of our shareholders at the shareholders' general meeting. The Articles of Association allows for cash dividends, stock dividends and combination of cash and stock dividends.

Dividends may only be distributed after allowance has been made for:

●

recovery of losses, if any;

●

allocations to the statutory surplus reserve fund; and

●

allocations to a discretionary surplus reserve fund.

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The allocation to the statutory surplus reserve fund is 10% of our net income determined in accordance with the PRC accounting rules. Where the accumulated statutory surplus reserve fund has reached 50% or more of our registered capital, no allocation is needed.

The Articles of Association require that cash dividends and other distribution with respect of H Shares be declared in Renminbi and paid by the Company in U.S. dollars or Hong Kong dollar in terms of the H Shares listed on the Hong Kong Stock Exchange. The Articles of Association further stipulate that for dividends and other distributions paid in currencies other than Renminbi, we shall use an exchange rate equal to the median closing exchange rate of Renminbi for such currencies announced by the PBOC for two working days in the week preceding the date on which such dividends or other distributions are declared.

We will appoint receiving agents to receive, on behalf of the holders of H Shares, any dividend distributions and all other money owing by us in respect of such shares (Receiving Agents). The Receiving Agents will comply with the laws and regulations of the applicable stock exchanges on which our shares are listed. Any Receiving Agent appointed on behalf of the holders of H Shares listed on the Hong Kong Stock Exchange will be a company registered as a trust corporation under the Trustee Ordinance of Hong Kong.

Dividends payments may be subject to PRC withholding tax.

Voting Rights and Shareholders' Meetings

Our board of directors shall convene a shareholders' annual general meeting once every year and within six months from the end of the preceding financial year. Our board shall convene an extraordinary general meeting within two months after the occurrence of any one of the following events:

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where the number of directors is less than the number required by the PRC Company Law or two-thirds of the number specified in our Articles of Association;

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where our unrecovered losses reach one-third of the total amount of our share capital;

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where shareholder(s) holding 10% or more of our issued shares so request(s);

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whenever our board deems necessary or our supervisory committee so requests; or

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other circumstances as provided in the Articles of Association.

Resolutions proposed by shareholder(s) holding 3% or more of the total number of voting shares shall be included in the agenda for the relevant annual general meeting if (i) they are submitted to the board of directors no later than 10 days before the annual general meeting is to be held and (ii) they are matters which fall within the scope of the functions and powers of shareholders' general meeting and have clear subject and concrete terms to be voted upon. The board of directors shall publish a supplementary notice of annual general meeting specifying the resolutions proposed to other shareholders. Upon publication of the supplementary notice, no alteration to the proposed resolutions or addition of other proposed resolutions will be accepted.

All shareholders' meetings must be convened by our board by written notice given to shareholders not less than 45 days before the meeting. Based on the written replies received by us 20 days before a shareholders' meeting, we shall calculate the number of voting shares represented by shareholders who have indicated that they intend to attend the meeting. When the number of voting shares represented by those shareholders amounts to more than one-half of our total voting shares, we shall convene the shareholders' general meeting. Otherwise, we shall, within five days before holding the shareholders' general meeting, inform the shareholders again of the motions to be considered and the date and venue of the meeting by way of a public announcement. After the announcement is made, the shareholders' meeting may be convened. The accidental omission by us to give notice of a meeting to, or the non-receipt of notice of a meeting by, a shareholder will not invalidate the proceedings at that shareholders' meeting.

Shareholders at meetings have the power, among other things, to examine and approve our profit distribution plans and plans to recover losses, the annual budget, an increase or reduction of registered share capital,

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the reports of our board of directors and supervisory committee, the issuance of debentures, and the plans for merger, division, dissolution or liquidation; to elect or remove our directors and supervisors who are not elected as employees' representatives; and to review and amend our Articles of Association. In addition, the rights of a class of shareholders may not be modified or abrogated, unless approved by a special resolution of shareholders at a general shareholders' meeting and by a special resolution of shareholders of that class of shares at a separate meeting. Our Articles of Association enumerate, without limitation, certain amendments which would be deemed to be a modification or abrogation of the rights of a class of shareholders, including increasing or decreasing the number of shares of such class or the number of shares of a class with voting or distribution rights or privileges equal or superior to the shares of such class, removing or reducing rights to receive dividends in a particular currency, and creating shares with voting or distribution rights or privileges equal or superior to the shares of such class.

Each share is entitled to one vote on all such matters submitted to a vote of our shareholders at the shareholders' general meetings, except for meetings of a special class of shareholders where only holders of shares of the affected class are entitled to vote on the basis of one vote per share of the affected class.

Shareholders are entitled to attend and vote at meetings either in person or by proxy. Proxies must be in writing and deposited at our legal address, or such other place as is specified in the meeting notice, not less than 24 hours before the start of the meeting at which the proxy proposes to vote or the time appointed for the passing of the relevant resolution(s). When the instrument appointing a proxy is executed by the shareholder's attorney-in-fact, such proxy when deposited must be accompanied by a notary-certified copy of the relevant power of attorney or other authority under which the proxy was executed.

Except for those actions discussed below which require supermajority votes ("special resolutions"), resolutions of the shareholders are passed by a simple majority of the voting shares held by shareholders who are present in person or by proxy. Special resolutions must be passed by more than two-thirds of the voting shares held by shareholders who are present in person or by proxy.

The following decisions must be adopted by special resolution:

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an increase or reduction of our registered share capital or the issuance of shares, including stock distributions, of any class, warrants and other similar securities;

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issuance of debentures;

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our division, merger, dissolution, liquidation and change of the legal form;

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amendments to our Articles of Association;

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acquisition or disposal of material assets or providing a guarantee in the amount exceeding 30% of our most recent audited total assets within one year;

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adjustments to our profit distribution policy; and

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any other matters our shareholders have resolved by way of an ordinary resolution at a general meeting to be of a nature which may have a material impact on us and should be adopted by special resolution.

In addition, amendments to the Articles of Association require the approval and consent of the relevant PRC authorities.

All other actions taken by the shareholders, including the appointment and removal of our directors and supervisors and the declaration of cash dividend payments, will be decided by an ordinary resolution of the shareholders.

Any shareholder resolution which is in violation of any laws or regulations of the PRC will be null and void.

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Liquidation Rights

In the event of our liquidation, the ordinary shares held by overseas shareholders will rank pari passu with the ordinary shares held by the domestic shareholders, and any of our assets remaining after payments (in order of priority) of (a) the costs of liquidation (b) wages and social insurance fees payable to or for our employees for the past three years prior to the date of liquidation; (c) overdue taxes and tax surcharges, funds and other amounts payable pursuant to the applicable administrative regulations; and (d) bank loans, corporate bonds and other debts, will be divided among our shareholders in accordance with the class of shares and their proportional shareholdings.

Further Capital Call

Shareholders are not liable to make any further contribution to the share capital other than according to the terms, which were agreed to by the subscriber of the relevant shares at the time of subscription.

Increases in Share Capital and Preemptive Rights

The Articles of Association require the approval by a special resolution of the shareholders prior to authorizing, allotting, issuing or granting shares, securities convertible into shares or options, warrants or similar rights to subscribe for any shares or such convertible securities. New issues of shares must also be approved by the relevant PRC authorities.

Shareholders do not have preemptive rights with respect to new issues of shares of the Company.

Reduction of Share Capital and Purchase by Us of Our Shares and General Mandate to Repurchase Shares

We may reduce our registered share capital only upon obtaining the approval of the shareholders by a special resolution and, in certain circumstances, of relevant PRC authorities. The number of H Shares which may be purchased is subject to the Hong Kong Takeovers and Share Repurchase Codes.

Restrictions on Large or Controlling Shareholders

Our Articles of Association provide that, in addition to any obligation imposed by laws and administration regulations or required by the listing rules of the stock exchanges on which our shares are listed, a controlling shareholder shall not exercise his voting rights in a manner prejudicial to the interests of the shareholders generally or of some part of the shareholders:

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to relieve a director or supervisor from his or her duty to act honestly in our best interests;

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to approve the expropriation by a director or supervisor (for his or her own benefit or for the benefit of another person) of our assets in any way, including, without limitation, opportunities which may benefit us; or

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to approve the expropriation by a director or supervisor (for his or her own benefit or for the benefit of another person) of the individual rights of other shareholders, including, without limitation, rights to distributions and voting rights (save according to a restructuring of our company which has been submitted for approval by the shareholders in a general meeting in accordance with our articles of association).

A controlling shareholder, however, will not be precluded by our Articles of Association or any laws and administrative regulations or the listing rules of the stock exchanges on which our shares are listed from voting on these matters.

A controlling shareholder is defined by our Articles of Association as a shareholder whose capital contribution represents 50% or more of the total capital of our Company, or a shareholder whose shares represent 50% or more of the total issued share capital of our Company, or a shareholder whose capital contribution or shares are less than 50% but obtains significant voting rights to influence the result of the shareholder's general meeting or the resolutions passed thereby.

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Disclosure

The Listing Agreement imposes a requirement on us to keep the Hong Kong Stock Exchange, our shareholders and other holders of our listed securities informed as soon as reasonably practicable of any information relating to us and our subsidiaries, including information on any major new developments which are not public knowledge, which:

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is necessary to enable them and the public to appraise the position of us and our subsidiaries;

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is necessary to avoid the establishment of a false market in its securities; and

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might be reasonably expected to materially affect market activity in and the price of its securities.

There are also requirements under the Listing Rules for us to obtain prior shareholders' approval and/or to disclose to shareholders details of certain acquisitions or disposals of assets and other transactions (including transactions with controlling shareholders).

Sources of Shareholders' Rights

The PRC's legal system is based on written statutes and is a system in which decided legal cases have little precedent value. Prior to the effectiveness of the Company Law, the PRC did not have a comprehensive body of laws governing joint stock limited companies. The rights and obligations of our shareholders are principally contained in our constitutive documents and the Standard Opinion, under which we were established. In December 1993, the Standing Committee of the 8th National People's Congress adopted the PRC Company Law, which superseded the Standard Opinion. In accordance with Article 229 of the Company Law, we must comply with the relevant requirements of the Company Law within an unspecified time period. As a result, we amended our Articles of Association pursuant to the Company Law on June 6, 1995. On October 27, 2005, the Company Law was amended by the Standing Committee of the 10th National People's Congress, and came into force on January 1, 2006.

Currently, the primary sources of shareholder's rights are our Articles of Association, as amended, the PRC Company Law and the Listing Rules of the Hong Kong Stock Exchange, which, among other things, impose certain standards of conduct, fairness and disclosure on us, our directors and our controlling shareholders. To facilitate the offering and listing of shares of PRC companies overseas, and to regulate the behavior of companies whose shares are listed overseas, the State Council Securities Committee and the State Commission for Restructuring the Economic System issued on August 27, 1994 the Mandatory Provisions for Articles of Association of Company Listing Overseas (the "Mandatory Provisions"). These Mandatory Provisions become entrenched in that, once they are incorporated into the Articles of Association of a PRC Company, any amendment to those provisions will only become effective after approval by the State-owned Assets Supervision and Administration Commission of the State Council. The Listing Rules require a number of additional provisions to the Mandatory Provisions to be included in the Articles of Association of PRC companies listing H Shares on the Hong Kong Stock Exchange (the "Additional Provisions"). The Mandatory Provisions and the Additional Provisions have been incorporated into our Articles of Association.

In addition, upon the listing of and for so long as the H Shares are listed on the Hong Kong Stock Exchange, we are subject to the relevant ordinances, rules and regulations applicable to companies listed on the Hong Kong Stock Exchange, including the Listing Rules of the Hong Kong Stock Exchange, the Securities (Disclosure of Interests) Ordinance (the "SDI Ordinance"), the Securities (Insider Dealing) Ordinance and the Hong Kong Codes on Takeovers and Mergers and Share Repurchases (the "Hong Kong Takeovers and Repurchase Codes").

Enforceability of Shareholders' Rights

There has not been any public disclosure in relation to the enforcement by holders of H Shares of their rights under constitutive documents of joint stock limited companies or the Company Law or in the application or interpretation of the PRC or Hong Kong regulatory provisions applicable to the PRC joint stock limited companies.

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The Company Law, as amended in October 2005 and effective in January 2006, has granted shareholders with the rights to bring derivative suits. Within the Company Law, shareholders holding more than 1 percent of the shares of the company for more than 180 consecutive days are entitled to request the supervisory committee (in terms of directors and senior management) or the board of directors (in terms of supervisors) to bring legal proceedings, or bring legal proceedings in their own name on behalf of the company where it is in emergency and the company will be subject to irreparable loss if not to do so, against directors, supervisors or senior management who fail to comply with the laws and regulations or the company's Articles of Association in the course of performing their duties and cause loss to the company;

Our Articles of Association provide that all differences or claims:

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between a holder of H Shares and us;

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between a holder of H Shares and any of our directors, supervisors, general managers or other senior officers; or

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between a holder of H Shares and a holder of domestic ordinary shares, arising from any provision of our Articles of Association, any right or obligation conferred or imposed by the Company Law or any other relevant law or administrative regulation which concerns our affairs must, with certain exceptions, be referred to arbitration at either the China International Economic and Trade Arbitration Commission in the PRC or the Hong Kong International Arbitration Center. Our Articles of Association provide that such arbitration will be final and conclusive. In June 1999, an arrangement was made between the People's Courts of the PRC and the courts of Hong Kong to mutually enforce arbitration rewards rendered in the PRC and Hong Kong according to their respective laws. This new arrangement was approved by the Supreme Court of the PRC and the Hong Kong Legislative Council and became effective on February 1, 2000.

The holders of H Shares will not be able to bring actions on the basis of violations of the Listing Rules and must rely on the Hong Kong Stock Exchange to enforce its rules. The SDI Ordinance establishes certain obligations in relation to disclosure of shareholder's interests in Hong Kong listed companies, the violation of which is subject to prosecution by the Securities and Futures Commission of Hong Kong. The Hong Kong Takeovers and Repurchase Codes do not have the force of law and are the only standards of commercial conduct considered acceptable for takeover and merger transactions and share repurchases in Hong Kong as established by the Securities and Futures Commission and the securities and futures industry in Hong Kong.

We have appointed CT Corporation System, New York, as our agent to receive service of process with respect to any action brought against us in certain courts in New York under the United States federal and New York State's securities laws. However, as the PRC does not have treaties providing for the reciprocal recognition and enforcement of judgments of courts within the United States, the United Kingdom, Japan or most other of the Organization for Economic Cooperation and Development countries, administrative actions brought by regulatory authorities, such as the Commission, and other actions which result in foreign court judgments, could (assuming such actions are not required by PRC law and the Articles of Association to be arbitrated) only be enforced in the PRC on a reciprocal basis or according to relevant international treaties to which China is a party if such judgments or rulings do not violate the basic principles of the law of the PRC or the sovereignty, security and public interest of the society of the PRC, as determined by a People's Court of the PRC which has the jurisdiction for recognition and enforcement of judgments. We have been advised by our PRC counsel, Haiwen & Partners, that there is uncertainty as to the enforceability in the PRC of actions to enforce judgments of United States courts arising out of or based on the ownership of H Shares or ADSs, including judgments arising out of or based on the civil liability provisions of United States federal or state securities laws.

Restrictions on Transferability and the Share Register

As provided in the Articles of Associations we may refuse to register a transfer of H Shares listed on Hong Kong Stock Exchange unless:

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a fee (for each instrument of transfer) of HK dollar 2.50, or any higher fee as agreed by the Hong Kong Stock Exchange, has been paid to us;

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the instrument of transfer only involves H Shares;

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the stamp duty chargeable on the instrument of transfer has been paid;

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the relevant share certificate and upon the reasonable request of the board of directors, any evidence in relation to the right of the transferor to transfer the shares have been submitted;

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if it is intended to transfer the shares to joint owners, then the maximum number of joint owners must not exceed four;

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we do not have any lien on the relevant shares.

We are required to maintain an original share register for holders of H Shares in Hong Kong and a copy of the register at our legal address. Shareholders have the right to inspect and, for a reasonable charge, to copy the share register. No transfers of ordinary shares shall be recorded in our share register within 20 days prior to the date of a shareholders' general meeting or within 5 days prior to the record date established for the purpose of distributing a dividend.

We have appointed Hong Kong Registrars Limited to act as the registrar of our H Shares. This registrar maintains our register of holders of H Shares in Hong Kong and enters transfers of shares in such register upon the presentation of the documents described above.

C.	Material contracts

See "Item 7. Major Shareholders and Related Party Transactions — B. Related Party Transactions" for certain arrangements we have entered into with HIPDC and Huaneng Group.

D.	Exchange controls

The existing foreign exchange regulations have significantly reduced government foreign exchange controls for transactions under the current account, including trade and service related foreign exchange transactions and payment of dividends. We may undertake current account foreign exchange transactions without prior approval from the State Administration of Foreign Exchange or its local branch offices. The PRC Government has stated publicly that it intends to make the Renminbi freely convertible in the future. However, we cannot predict whether the PRC Government will continue its existing foreign exchange policy and when the PRC Government will allow free conversion of Renminbi to foreign currency.

Foreign exchange transactions under the capital account, under most circumstances, including principal payments in respect of foreign currency-denominated obligations, continue to be subject to significant foreign exchange controls and require the approval of the State Administration of Foreign Exchange or its local branch offices. These limitations could affect our ability to obtain foreign exchange through debt or equity financing, or to obtain foreign exchange for capital expenditures.

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The conversion of Renminbi into foreign currencies, including U.S. dollars, is based on rates set by the PBOC. On July 21, 2005, the PRC government introduced a floating exchange rate system to allow the value of Renminbi to fluctuate within a regulated band based on market supply and demand and by reference to a basket of foreign currencies. Renminbi appreciated by more than 20% against the U.S. dollar between July 2005 and July 2008. Between July 2008 and June 2010, this appreciation halted and the exchange rate between the Renminbi and the U.S. dollar remained within a narrow band. On June 19, 2010, the PBOC decided to further promote the reform of the Renminbi exchange rate formation mechanism, and improve the flexibility of the Renminbi exchange rate. Since June 2010, Renminbi has regained steady appreciation against the U.S. dollar, which was reversed by slight depreciation of the Renminbi against the U.S. dollar at the turn to and early 2014. On March 15, 2014, the PBOC announced to further widen the Remninbi's daily trading band against the U.S. dollar from 1% to 2% on either side of the daily reference rate, allowing for greater fluctuations of the exchange rate. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the Renminbi and the U.S. dollar in the future. There remains significant international pressure on the PRC Government to further liberalize its currency policy, which could result in further fluctuations in the value of the Renminbi against the U.S. dollar. However, there is no assurance that there will not be a devaluation of Renminbi in the future. If there is such a devaluation, our debt servicing cost will increase and the return to our overseas investors may decrease.

Taxation

The following is a summary of (i) certain tax consequences from acquiring, owning and disposing of the H Shares and ADSs based on tax laws of the PRC, the United States and the Income Tax Treaty between the PRC and the United States (the "Tax Treaty") as in effect on the date of this annual report, and is subject to changes in PRC or United States law, including changes that could have retroactive effect, and (ii) the principal PRC taxes to which we are subject. The following summary does not take into account or discuss the tax laws of any countries or regions other than the PRC and the United States, nor does it take into account the individual circumstances of an investor. This summary does not purport to be a complete technical analysis or examination of all potential tax effects relevant to an investment in the H Shares or ADSs and current and prospective investors in all jurisdictions of the H Shares or ADSs are advised to consult their tax advisors as to PRC, United States or other tax consequences of the purchase, ownership and disposition of the H Shares or ADSs. This summary also does not purport to be a complete technical analysis or examination of all potential PRC taxes that may be levied upon us.

PRC tax considerations

Tax on dividends

Individual investors

According to the current PRC tax regulations, dividends paid by PRC companies to individual investors are ordinarily subject to a PRC withholding tax levied at a flat rate of 20%. For a foreign individual who has no domicile or does not stay in the territory of China or who has no domicile but has stayed in the territory of China for less than one year, the receipt of dividends from a company in China is normally subject to a withholding tax of 20% unless reduced or exempted by applicable laws and tax treaties.

Enterprises

In accordance with the New Enterprise Income Tax Law that became effective on January 1, 2008, dividends derived from the revenues accumulated from January 1, 2008 and as amended on February 24, 2017 and paid by PRC companies to non-resident enterprises are generally subject to a PRC withholding tax levied at a rate of 10% unless exempted or reduced pursuant to an applicable double-taxation treaty or other exemptions. Dividends paid by PRC companies to resident enterprises, including enterprises established under the laws of non-PRC jurisdictions but whose "de facto management body" is located in the PRC, are not subject to any PRC withholding tax, unless the dividends are derived from the publicly traded shares which have not been held continuously by the resident enterprises for twelve months. According to the Notice on the Issues Concerning Withholding the Enterprise Income Tax on the Dividends Paid by Chinese Resident Enterprise to H Share Holders Which Are Overseas Non-resident Enterprises issued by the State Administration of Taxation on November 6, 2008, Chinese resident enterprises are required to withhold PRC enterprise income tax at the rate of 10% on dividends paid for 2008 and later years payable to their respective H Shares holders who are non-resident enterprises.

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Capital gains tax on sales of shares

In accordance with the New Enterprise Income Tax Law, capital gains realized by foreign enterprises which are non-resident enterprises in China upon the sale of overseas shares are generally subject to a PRC withholding tax levied at a rate of 10%, unless exempted or reduced pursuant to an applicable double-taxation treaty or other exemptions. The capital gains realized by resident enterprises, including enterprises established under the laws of non-PRC jurisdictions but whose "de facto management body" is located in the PRC, upon the sales of overseas shares are subject to the PRC enterprise income tax.

Tax treaties

Non-PRC Investors residing in countries which have entered into double-taxation treaties with the PRC may be entitled to a reduction of the withholding tax imposed on the payment of dividends to such Foreign Holders of us. The PRC currently has double-taxation treaties with a number of countries, including Australia, Canada, France, Germany, Japan, Malaysia, the Netherlands, Singapore, the United Kingdom and the United States.

Stamp tax

Under the Provisional Regulations of The People's Republic of China Concerning Stamp Tax, which became effective in October 1988, PRC stamp tax should not be imposed on the transfer of H Shares or ADSs of PRC publicly traded companies.

Taxation of the Company

Income tax

Prior to January 1, 2008, according to the relevant income tax law, foreign invested enterprises were, in general, subject to a statutory income tax of 33% (30% enterprise income tax and 3% local income tax). If these enterprises are located in certain specified locations or cities, or are specifically approved by the State Administration of Taxation, a lower tax rate would be applied. Effective from January 1, 1999, in accordance with the practice notes on the PRC income tax laws applicable to foreign invested enterprises investing in energy and transportation infrastructure businesses, a reduced enterprise income tax rate of 15% (after the approval of State Administration of Taxation) was applicable across the country. We applied this rule to all of our wholly owned operating power plants after obtaining the approval of the State Administration of Taxation. In addition, certain power plants were exempted from the enterprise income tax for two years starting from the first profit-making year, after offsetting all tax losses carried forward from the previous years (at most of five years), followed by a 50% reduction of the applicable tax rate for the next three years. The statutory income tax was assessed individually based on each of their results of operations.

On March 16, 2007, the Enterprise Income Tax Law of PRC, or the New Enterprise Income Tax Law, was enacted, and became effective on January 1, 2008. The New Enterprise Income Tax Law imposes a uniform income tax rate of 25% for domestic enterprises and foreign invested enterprises. Therefore, our power plants that were subject to a 33% income tax rate prior to January 1, 2008 are subject to a lower tax rate of 25% starting on January 1, 2008. With regard to our power plants entitled to a reduced enterprise income tax rate of 15% prior to January 1, 2008, their effective tax rate is being gradually increased to 25% within a five-year transition period commencing on January 1, 2008. Accordingly, the effective tax rate of our wholly owned power plants will increase over time. In addition, although our power plants entitled to tax exemption and reduction under the income tax laws and regulations that are effective prior to the New Enterprise Income Tax Law will continue to enjoy such preferential treatments until the expiration of the same, newly established power plants will not be able to benefit from such tax incentives, unless they can satisfy specific qualifications, if any, provided by then effective laws and regulations on preferential tax treatment.

Pursuant to Measures for the Collection and Administration of Consolidated Payment of Enterprises Income Tax on Trans-Regional Operation, effective on January 1, 2013, the Company and its branches calculate and pay income tax on a combined basis according to relevant tax laws and regulations. The income tax of subsidiaries remains to be calculated individually based on their individual operating results.

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Value-added tax

Since January 1, 1994, the government has implemented a turnover tax system applicable to FIEs. Under the turnover tax provisions, we have to collect from our electricity customers and pay to the PRC tax authorities a value-added tax ("VAT") on our sales. The tax rate on sales of electricity by us is 17% of total sales. The amount of VAT payable by us is the VAT on sales reduced by the VAT paid by us on our purchases of coal, fuel and other inputs.

Effective from January 1, 2009, VAT payers are allowed to credit against output VAT in respect of input VAT on fixed assets purchased or self-manufactured based on the relevant VAT credit receipts in accordance with the revised VAT regulations and its implementation rules.

In addition, effective from August 1, 2012, according to the relevant regulations of Ministry of Finance of PRC and State Administration of Taxation, nine pilot regions including Shanghai, Beijing, Tianjin, Jiangsu Province, Anhui Province, Zhejiang Province, Fujian Province, Hubei Province and Guangdong Province have been under the pilot program for the transformation from Business Tax to VAT since January 1, 2012 and all other regions have been since August 1, 2013 for specified industry. The applicable tax rate of VAT for the Company and its subsidiaries in respect of the lease of tangible movable properties, transportation industry and other modern services industries are 17%, 11% and 6%, respectively.

On March 23, 2016, the Ministry of Finance of PRC and the State Administration of Taxation issued the Circular of Full Implementation of Business Tax to VAT Reform which confirms that business tax will be completely replaced by VAT from May 1, 2016. With effect from May 1, 2016, our income is only subject to VAT and not business tax.

United States federal income tax considerations

The following discussion is a summary of United States federal income tax considerations relating to the ownership and disposition of our H Shares or ADSs by a U.S. Holder (as defined below). This discussion is based upon existing United States federal income tax law, which is subject to differing interpretations or change, possibly with retroactive effect. This discussion does not address all aspects of United States federal income taxation which may be important to particular holders in light of their particular circumstances, such as holders subject to special tax rules including: banks or other financial institutions, insurance companies, broker-dealers, traders in securities that elect mark-to-market treatment, partnerships and their partners, regulated investment companies, real estate investment trusts, cooperatives, pension plans, tax-exempt organizations (including private foundations), holders who are not U.S. Holders, holders who own (directly, indirectly, or constructively) 10% or more of the voting power or value of our stock, holders that hold H Shares or ADSs as part of a straddle, hedge, conversion, constructive sale, or other integrated transaction for United States federal income tax purposes, holders required to accelerate the recognition of any item of gross income with respect to H Shares or ADSs as a result of such income being recognized on an applicable financial statement, holders who acquired their ADSs or H Shares pursuant to any employee share option or otherwise as compensation, or holders that have a functional currency other than the United States dollar, all of whom may be subject to tax rules that differ significantly from those summarized below. In addition, this discussion does not address any state, local, non-United States, non-income tax (such as the United States federal gift and estate tax), or alternative minimum tax considerations or the Medicare tax. This discussion only addresses holders that hold their H Shares or ADSs as "capital assets" (generally, property held for investment) under the United States Internal Revenue Code of 1986, as amended (the "Code"). U.S. Holders are urged to consult their tax advisors regarding the United States federal, state, local, and non-United States income and other tax considerations relating to the ownership and disposition of our H Shares or ADSs.

For purposes of this summary, a U.S. Holder is a beneficial owner of H Shares or ADSs that is, for United States federal income tax purposes:

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an individual who is a citizen or resident of the United States;

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a corporation (or other entity treated as a corporation for United States federal income tax purposes) created in or organized under the laws of the United States or any State thereof or the District of Columbia;

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an estate the income of which is includible in gross income for United States federal income tax purposes regardless of its source; or

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a trust (a) the administration of which is subject to the primary supervision of a United States court and which has one or more United States persons who have the authority to control all substantial decisions of the trust or (b) a trust that has otherwise elected to be treated as a United States person under the Code.

If a partnership (including any entity treated as a partnership for United States federal income tax purposes) is a beneficial owner of H Shares or ADSs, the tax treatment of a partner in such partnership will depend upon the status of the partner and the activities of the partnership. Partnerships and partners of a partnership holding our H Shares or ADSs are urged to consult their tax advisors regarding the United States federal income tax considerations relating to the ownership and disposition of our H Shares or ADSs.

For United States federal income tax purposes, it is generally expected that a U.S. Holder of ADSs will be treated as the beneficial owner of the underlying shares represented by the ADSs. The remainder of this discussion assumes that a holder of ADSs will be treated in this manner. Accordingly, deposits or withdrawals of H Shares for ADSs will generally not be subject to United States federal income tax.

Passive Foreign Investment Company Considerations

A non-United States corporation, such as our Company, will be a "passive foreign investment company" (a "PFIC"), for United States federal income tax purposes for any taxable year, if either (a) 75% or more of its gross income for such year consists of certain types of "passive" income or (b) 50% or more of its average quarterly assets as generally determined on the basis of fair market value during such year produce or are held for the production of passive income. For this purpose, cash and assets readily convertible into cash are categorized as passive assets and the Company's unbooked intangibles are taken into account for determining the value of its assets. We will be treated as owning a proportionate share of the assets and earning a proportionate share of the income of any other corporation in which we own, directly or indirectly, 25% or more (by value) of the stock.

We do not believe that we were classified as a PFIC for the taxable year ended December 31, 2018. The determination of whether we will be or become a PFIC will depend, in part, upon the composition of our income and our assets (which are subject to change from year to year) and the market price of our ADSs (of which we cannot control). Although we do not expect that our business plans will change in a manner that will affect our PFIC status, no assurance can be given in this regard. Because there are uncertainties in the application of the relevant rules and PFIC status is a fact-intensive determination made on an annual basis, no assurance may be given with respect to our PFIC status for any taxable year.

The discussion below under "Dividends" and "Sale or Other Disposition of H Shares or ADSs" assumes that we will not be classified as a PFIC for United States federal income tax purposes. See the discussion below under the heading "Passive Foreign Investment Company Rules" for a brief summary of the PFIC rules.

Dividends

The gross amount of any cash distributions (including the amount of any tax withheld) paid on our H Shares or ADSs out of our current or accumulated earnings and profits, as determined under United States federal income tax principles, will be subject to tax as dividend income on the day actually or constructively received by a U.S. Holder, in the case of H Shares, or by the depositary bank, in the case of ADSs. Because we do not intend to determine our earnings and profits on the basis of United States federal income tax principles, any distribution paid will generally be reported as a "dividend" for United States federal income tax purposes. A non-corporate recipient of dividend income will generally be subject to tax on dividend income from a "qualified foreign corporation" at a reduced capital gains rate rather than the marginal tax rates generally applicable to ordinary income provided that certain holding period requirements are met.

A non-U.S. corporation (other than a corporation that is classified as a PFIC for the taxable year in which the dividend is paid or the preceding taxable year) generally will be considered to be a qualified foreign corporation (i) if it is eligible for the benefits of a comprehensive tax treaty with the United States which the Secretary of Treasury of the United States determines is satisfactory for purposes of this provision and which includes an exchange of information program or (ii) with respect to any dividend it pays on stock which is readily tradable on an established securities market in the United States. There is currently a tax treaty in effect between the United States and the People's Republic of China (the "U.S.-PRC Treaty") which the Secretary of Treasury of the United States

138

determined is satisfactory for these purposes and we believe that we are eligible for the benefits of such treaty. Additionally, our ADSs (but not our H Shares) trade on the New York Stock Exchange, an established securities market in the United States and the ADSs are expected to be readily tradable for so long as they continue to be listed on the New York Stock Exchange. Thus, while we presently believe that we are a qualified foreign corporation for purposes of the reduced tax rate, there can be no assurance that the dividends we pay on our H Shares or ADSs will meet the conditions required for the reduced tax rate in the current taxable year or future taxable years. Dividends received on H Shares or ADSs will not be eligible for the dividends received deduction allowed to corporations. U.S. Holders are urged to consult their tax advisors regarding the rate of tax that will apply to them with respect to dividends (if any) received from U.S.

Dividends paid in non-United States currency will be includible in income in a United States dollar amount based on the exchange rate prevailing at the time of receipt of such dividends by the depositary, in the case of ADSs, or by the U.S. Holder, in the case of H Shares held directly by such U.S. Holder, regardless of whether the non-United States currency is actually converted into United States dollars at that time. Gain or loss, if any, recognized on a subsequent sale, conversion or other disposition of the non-United States currency will generally be United States source income or loss.

Dividends received on H Shares or ADSs will generally be treated, for United States foreign tax credit purposes, as foreign source income and generally will constitute passive category income. A U.S. Holder may be eligible, subject to a number of complex limitations, to claim a foreign tax credit in respect of any non-United States withholding taxes imposed on dividends received on H Shares or ADSs. U.S. Holders who do not elect to claim a foreign tax credit for foreign income tax withheld may instead claim a deduction, for United States federal income tax purposes, in respect of such withholdings, but only for a year in which the U.S. Holder elects to do so for all creditable foreign income taxes. U.S. Holders are urged to consult their tax advisors regarding the availability of the foreign tax credit under their particular circumstances.

Sale or Other Disposition of H Shares or ADSs

A U.S. Holder will generally recognize capital gain or loss upon the sale or other disposition of H Shares or ADSs in an amount equal to the difference between the amount realized upon the disposition and the U.S. Holder's adjusted tax basis in such H Shares or ADSs. Any capital gain or loss will be long-term if the H Shares or ADSs have been held for more than one year and will generally be United States source gain or loss for United States foreign tax credit purposes. If any PRC tax were to be imposed on any gain from the disposition of H Shares or ADSs, however, a U.S. Holder that is eligible for the benefits of the U.S.-PRC Treaty may elect to treat the gain as non-United States source gain or loss. The deductibility of a capital loss may be subject to limitations. The rules governing the foreign tax credit are complex and their outcome depends in large part on the U.S. Holder's individual facts and circumstances. Accordingly, U.S. Holders should to consult their tax advisors regarding the availability of the foreign tax credit under their particular circumstances.

U.S. Holders that receive currency other than the United States dollar upon the sale or other disposition of H Shares will realize an amount equal to the United States dollar value of the non-United States currency on the date of such sale or other disposition, or if the shares are traded on an established securities market, in the case of cash basis and electing accrual basis taxpayers, the settlement date. U.S. Holders will recognize currency gain or loss if the United States dollar value of the currency received on the settlement date differs from the amount realized. U.S. Holders will have a tax basis in the currency received equal to the United States dollar amount at the spot rate on the settlement date. Generally, any gain or loss realized by U.S. Holders on a subsequent conversion or disposition of such currency will be United States source ordinary income or loss.

Passive Foreign Investment Company Rules

If we were to be classified as a PFIC in any taxable year, a special tax regime will apply to both (a) any "excess distribution" by us to a U.S. Holder (generally, the U.S. Holder's ratable portion of distributions in any year which are greater than 125% of the average annual distribution received by such U.S. Holder in the shorter of the three preceding years or the U.S. Holder's holding period for our H Shares or ADSs) and (b) any gain realized on the sale or other disposition of the H Shares or ADSs. Under this regime, any excess distribution and realized gain will be treated as ordinary income and will be subject to tax as if (a) the excess distribution or gain had been realized ratably over the U.S. Holder's holding period, (b) the amount deemed realized in each year had been subject to tax in

139

each year of that holding period at the highest marginal rate for such year (other than income allocated to the current period or any taxable period before we became a PFIC, which would be subject to tax at the U.S. Holder's regular ordinary income rate for the current year and would not be subject to the interest charge discussed below), and (c) the interest charge generally applicable to underpayments of tax had been imposed on the taxes deemed to have been payable in those years. In addition, dividends made to a U.S. Holder will not qualify for the lower rates of taxation applicable to long-term capital gains discussed above under "Dividends."

The above results may be eliminated if a "mark-to-market" election is available and a U.S. Holder validly makes such an election. If the election is made, such holder generally will be required to take into account the difference, if any, between the fair market value and its adjusted tax basis in H Shares or ADSs at the end of each taxable year as ordinary income or ordinary loss (to the extent of any net mark-to-market gain previously included in income). In addition, any gain from a sale or other disposition of H Shares or ADSs will be treated as ordinary income, and any loss will be treated as ordinary loss (to the extent of any net mark-to-market gain previously included in income).

We do not intend to provide information necessary for U.S. Holders to make qualified electing fund elections, which, if available, would result in tax treatment different from (and generally less adverse than) the general tax treatment for PFICs described above.

As discussed above under "Dividends," dividends that we pay on the ADSs or our H Shares will not be eligible for the reduced tax rate that applies to qualified dividend income if we are a PFIC for the taxable year in which the dividend is paid or the preceding taxable year. In addition, if a U.S. Holder owns the ADSs or our H Shares during any taxable year that we are a PFIC, such holder would generally be required to file an annual IRS Form 8621. Each U.S. Holder is advised to consult its tax advisors regarding the potential tax consequences to such holder if we are or become a PFIC, including the possibility of making a mark-to-market election.

Information Reporting

U.S. Holders may be subject to information reporting to the United States Internal Revenue Service with respect to dividends on and proceeds from the sale or other disposition of our H Shares or ADSs. U.S. Holders are urged to consult their tax advisors regarding the application of the United States information reporting rules to their particular circumstances.

Certain U.S. Holders who hold "specified foreign financial assets," including stock of a non-U.S. corporation that is not held in an account maintained by a U.S. "financial institution," whose aggregate value exceeds $50,000 during the tax year, may be required to attach to their tax returns for the year certain specified information. An individual who fails to timely furnish the required information may be subject to a penalty. U.S. Holders are urged to consult their tax advisors regarding their reporting obligations under this legislation.

F.	Dividends and paying agents

Not applicable.

G.	Statement by experts

Not applicable.

H.	Documents on display

We are subject to the information reporting requirements of the Securities Exchange Act of 1934 (the "Exchange Act") and, in accordance with the Act, file certain reports and other information with the SEC. You may read and copy any report, statement or other information filed by us at the SEC's public reference rooms in Washington, D.C., New York and Chicago, Illinois. Please call the SEC at 1-800-0330 for further information on the public reference rooms. Our reports and other information filed with the SEC are also available to the public from commercial document retrieval services and the website maintained by the SEC at http://www.sec.gov.

140

I.	Subsidiary information

Not applicable.

ITEM 11

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our primary market risk exposures are fluctuations of fuel prices, foreign exchange rates and interest rates.

Equity price risk

The available-for-sale financial assets of the Company and its subsidiaries are exposed to equity security price risk.

Detailed information relating to the available-for-sale financial assets is disclosed in Note 10 to the financial statements.

The Company and its subsidiaries are exposed to fuel price risk on fuel purchases. In particular, SinoSing Power and its subsidiaries use fuel oil swap to hedge against such a risk and designate them as cash flow hedges. Please refer to Note 14 to the financial statements for details.

Foreign exchange rate risk

The exchange rate of Renminbi to foreign currencies may fluctuate and is affected by, among other things, changes in China's political and economic conditions. The conversion of Renminbi into foreign currencies, including U.S. dollars, is based on rates set by the PBOC. On July 21, 2005, the PRC government introduced a floating exchange rate system to allow the value of Renminbi to fluctuate within a regulated band based on market supply and demand and by reference to a basket of foreign currencies. Renminbi appreciated by more than 20% against the U.S. dollar between July 2005 and July 2008. Between July 2008 and June 2010, this appreciation halted and the exchange rate between the Renminbi and the U.S. dollar remained within a narrow band. On June 19, 2010, the PBOC decided to further promote the reform of the Renminbi exchange rate formation mechanism, and improve the flexibility of the Renminbi exchange rate. Since June 2010, the Renminbi has regained steady appreciation against the U.S. dollar, which was reversed by a slight depreciation of Renminbi against the U.S. dollar at the turn to and early 2014. On March 15, 2014, the PBOC announced to further widen the Remninbi's daily trading band against the U.S. dollar from 1% to 2% on either side of the daily reference rate, allowing for greater fluctuations of the exchange rate. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the Renminbi and the U.S. dollar in the future. There remains significant international pressure on the PRC Government to further liberalize its currency policy. We cannot assure you that any future movements in the exchange rate of the Renminbi against the U.S. dollar and other currencies will not adversely affect our results of operations and financial conditions.

SinoSing Power and its subsidiaries are exposed to foreign exchange risk on fuel purchases that is denominated primarily in U.S. dollars. They use forward exchange contracts to hedge almost all of their estimated foreign exchange exposure in respect of forecast fuel purchases over the following three months. The Company and its subsidiaries account for their forward foreign currency contracts as cash flow hedges.

The following table provides information, by maturity date, regarding our foreign currency sensitive financial instruments, which consist of bank balances and cash, short-term and long-term debt obligations, capital commitments and forward exchange contracts as of December 31, 2018 and average interest rates for the year ended December 31, 2018.

(RMB expressed in millions, except interest rate and exchange rate)

141

	As of December 31, 2018
	Expected Maturity Date												Total		Fair Value
	2019		2020		2021		2022		2023		Thereafter
On-balance sheet financial instruments
Bank balances and cash:
In U.S. Dollar		483		-		-		-		-		-		483		483
In Japanese Yen		0.197		-		-		-		-		-		0.197		0.197
In Pakistan Rupee		33		-		-		-		-		-		33		33

Debts
Japanese Yen		7		7		7		7		7		119		154		100
Average interest rate		0.750		0.750		0.750		0.750		0.750		0.750		—		—
Euro		48		36		35		33		17		2		171		159
Average interest rate		2.050		2.103		2.106		2.142		2.135		2.000		—		—

U.S. Dollar		2,149		1,037		1,066		1,099		916		5,597		11,864		11,864
Average interest rate		4.142		4.976		5.038		5.106		5.980		7.292		—		—

Pakistan Rupee		322		-		-		-		-		-		322		322
Average interest rate		11.510		-		-		-		-		-		—		—
Gas purchase commitments (U.S. Dollar)		6,602		6,718		6,699		6,727		2,439		8,148		37,333

	As of December 31, 2018
	Expected Maturity Date												Total		Fair Value
	2019		2020		2021		2022		2023		Thereafter
Forward exchange contracts
(Receive US $ / Pay S$)
Contract amount		2,596		459		91		18		-		-		3,164		(12	)
Average Contractual Exchange Rate		1.35		1.35		1.33		1.33		-		-		—		—

(Receive JPY ￥ / Pay S$)
Contract amount		45		-		-		-		-		-		45		-
Average Contractual Exchange Rate		0.01		-		-		-		-		-		—		—

	As of December 31, 2017
	Expected Maturity Date												Total		Fair Value
	2018		2019		2020		2021		2022		Thereafter
On-balance sheet financial instruments
Bank balances and cash:
In U.S. Dollar		316		-		-		-		-		-		316		316
In Japanese Yen		0.193		-		-		-		-		-		0.193		0.193

Debts
Japanese Yen		6		6		6		6		6		118		148		95
Average interest rate		0.750		0.750		0.750		0.750		0.750		0.750		—		—
Euro		66		46		35		34		33		19		233		215
Average interest rate		2.079		2.048		2.014		2.010		2.008		2.026		—		—

U.S. Dollar		418		412		412		412		412		206		2,272		2,272
Average interest rate		1.748		1.740		1.740		1.740		1.740		1.740		—		—
Gas purchase commitments (U.S. Dollar)		5,943		5,943		5,934		5,918		6,065		12,343		42,146

142

	As of December 31, 2017
	Expected Maturity Date												Total		Fair Value
	2018		2019		2020		2021		2022		Thereafter
Forward exchange contracts
(Receive US $ / Pay S$)
Contract amount		2,083		391		84		9		-		-		2,567		(68	)
Average Contractual Exchange Rate		1.38		1.38		1.32		-		-		1.37		—		—

The outstanding balance of the Company's loans denominated in foreign currencies has changed continually as a result of repayments of the loans by the Company according to agreed-upon repayment schedules. The loans denominated in U.S. dollars increased from RMB2.272 billion as of December 31, 2017 to RMB11.864 billion as of December 31, 2018. The loans denominated in Euros decreased from RMB233 million as of December 31, 2017 to RMB171 million as of December 31, 2018.

Interest rate risk

We are exposed to interest rate risk primarily resulting from fluctuations in interest rates on our debts. Upward fluctuations in interest rates increase the cost of new variable rate debts and the interest cost of outstanding floating rate borrowings.

At present, the interest rate of the Company's loans denominated in RMB is subject to the change of the benchmark interest rate published and adjusted by the PBOC. Different interest rate levels correspond to loans with different terms. New loan contracts entered into hereafter will be subject to current benchmark interest rates. A portion of the Company's loans denominated in foreign currency are fixed rate loans, which are not subject to the changes in market interest rates. Due to the loans borrowed in relation to the acquisition of SinoSing Power, the portion of the loans denominated in foreign currency with floating interest rates increased, which subjects the finance cost of the Company to the fluctuation of market interest rates. In 2009, the Company entered into a floating-to-fixed interest rate swap agreement to hedge against the cash flow interest rate risk of part of the loan. According to the interest rate swap agreement, the Company agrees with the counterparty to settle the difference between fixed contract rates and floating rate interest amounts calculated by reference to the agreed notional amounts quarterly until 2019. The notional amount of the outstanding interest rate swap at December 31, 2018 was US$144 million.

In 2009, Tuas Power completed its refinancing, through which all of its outstanding loans denominated in U.S. dollars were refinanced through loans denominated in Singapore dollars, matching the functional currency of its operation. The loans borrowed by Tuas Power were denominated in Singapore dollars, and the majority of them are with floating interest rates, which subjects the finance cost of the Company to the fluctuation of market interest rates. In 2012 and 2013, TPG also entered into a number of floating-to-fixed interest rate swap agreements to hedge against the cash flow interest rate risk of the loan. According to these interest rate swap agreements, TPG agrees with the counterparty to settle the difference between fixed contract rates and floating rate interest amounts calculated by reference to the agreed notional amount semi-annually until 2020. The notional amount of the outstanding interest rate swap at December 31, 2018 was S$992 million.

The table below provides information about the Company and its subsidiaries' derivative financial instruments and other financial instruments that are sensitive to changes in interest rates, including interest rate swaps and debt obligations. For debt obligations, the table presents principal cash flows and related weighted average interest rates by expected maturity dates. For interest rate swaps, the table presents notional amounts and weighted average interest rates by expected (contractual) maturity dates. Notional amounts are used to calculate the contractual payments to be exchanged under the contract. Weighted average variable rates are based on implied forward rates in the yield curve at the reporting date.

143

(RMB expressed in millions, except interest rates)

	As of December 31, 2018
	Expected Maturity Date												Total		Fair Value
	2019		2020		2021		2022		2023		Thereafter
Debts
Shareholder's, bank and other loans		81,660		28,701		34,583		14,914		11,313		40,037		211,208		210,800
Average interest rate		4.594		4.611		4.672		4.726		4.789		4.789		—		—

Short-term bonds		11,541		-		-		-		-		-		11,541		11,541
Average interest rate		3.855		-		-		-		-		-		—		—

Long-term bonds		3,993		2,799		11,984		5,001		-		6,200		29,978		30,218
Average interest rate		4.643		4.604		4.670		4.654		-		4.654		—		—

	As of December 31, 2018
	Notional Amount Expected Maturity Date															Total		Fair Value
	2019			2020			2021		2022		2023		Thereafter
Debts
Interest Rate Derivatives (US$)
Variable to Fixed		988			-			-		-		-		-			988		(4	)
Average receive rate		3.79	%		-			-		-		-		-			—		—
Average pay rate		4.40	%		-			-		-		-		-			—		—

Interest Rate Derivatives (S$)
Variable to Fixed		-			4,169			-		-		-		799			4,968		(145	)
Average receive rate		-			1.93	%		-		-		-		2.19	%		—		—
Average pay rate		-			2.485	%		-		-		-		3.153	%		—		—
	As of December 31, 2017
	Expected Maturity Date															Total		Fair Value
		2018			2019			2020		2021		2022	Thereafter
Debts
Shareholder's, bank and other loans		98,349			20,729			19,906		16,683		12,656		37,058			205,381		205,256
Average interest rate		3.960			3.850			3.743		3.643		3.525		3.525			—		—

Short-term bonds		11,068			-			-		-		-		-			11,068		11,068
Average interest rate		3.577			-			-		-		-		-			—		—

Long-term bonds		3,997			3,994			2,800		3,000		5,000		1,200			19,991		19,811
Average interest rate		4.629			4.381			4.204		4.553		4.553		3.982			—		—

	As of December 31, 2017
	Notional Amount Expected Maturity Date															Total		Fair Value
	2018			2019			2020			2021		2022		Thereafter
Debts
Interest Rate Derivatives (US$)
Variable to Fixed		209			941			-			-		-		-		1,150		(22	)
Average receive rate		2.92	%		3.38	%		-			-		-		-		—		—
Average pay rate		4.40	%		4.40	%		-			-		-		-		—		—

Interest Rate Derivatives (S$)
Variable to Fixed		1,003			-			4,215			-		-		-		5,218		(108	)
Average receive rate		1.08	%		-			1.35	%		-		-		-		—		—
Average pay rate		2.289	%		-			2.485	%		-		-		-		—		—

144

As of December 31, 2018, the Company's loans denominated in foreign currency amounted to RMB12,511 million, most of which were denominated in U.S. dollars. In addition, SinoSing Power's loans denominated in Singapore dollars amounted to RMB12,374 million as of December 31, 2018. Given the current market situation, it is less likely that the U.S. and other major economies would further increase interest rates due to expected slowdown of the global economy. As the debts denominated in other currencies represent a small percentage in our total debts, the change of interest rates of foreign currencies are not expected to have material effect on the Company. We will closely watch the changes in domestic and overseas capital markets, and maintain its good reputation on the capital markets, make reasonable financing arrangements, timely adjust our financing strategy, explore new financing methods, manage the exchange rate fluctuation risks, and strive to control financing costs.

Commodity price risk

We are exposed to fuel price risk on fuel purchases. SinoSing Power and its subsidiaries use fuel oil swap to hedge against such risk. The table below provides information about the fuel swap contracts that are sensitive to changes in fuel prices, including contract volumes, the weighted average contract prices, and the total contract amount by expected maturity dates.

(RMB expressed in millions, except interest rates and exchange rates)

	As of December 31, 2018
	Expected Maturity Date												Total		Fair Value
	2019		2020		2021		2022		2023		Thereafter
Fuel Swap contracts
Contract Volumes (MT)		436,220		280,610		175,040		-		-		-		891,870		—
Weighted Average Price (US$/MT)		384.88		345.70		350.38		-		-		-		—		—
Contract Amount (RMB million)		1,147		663		419		-		-		-		2,229		(335	)
Contract Volumes (BBL)		175,000		-		-		-		-		-		175,000		—
Weighted Average Price (US$/BBL)		64.62		-		-		-		-		-		—		—
Contract Amount (RMB million)		77		-		-		-		-		-		77		(14	)
	As of December 31, 2017
	Expected Maturity Date												Total		Fair Value
		2018		2019		2020		2021		2022	Thereafter
Fuel Swap contracts
Contract Volumes (MT)		423,136		340,395		141,740		20,160		-		-		925,431		—
Weighted Average Price (US$/MT)		324.95		309.04		301.04		317.48		-		-		—		—
Contract Amount (RMB million)		898		687		278		42		-		-		1,905		319
Contract Volumes (BBL)		98,000		-		-		-		-		-		98,000		—
Weighted Average Price (US$/BBL)		62.67		-		-		-		-		-		—		—
Contract Amount (RMB million)		40		-		-		-		-		-		40		3

For other detailed information of the market risk, please refer to the Note 3(a)(i) to the "Financial Statements."

145

ITEM 12

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

A.	Debt Securities

Not applicable.

B.	Warrants and Rights

Not applicable.

C.	Other Securities

Not applicable.

D.	American Depositary Shares

Depositary Fees and Charges

Under the terms of the Deposit Agreement for Huaneng Power International, Inc.'s American Depositary Shares (ADSs), an ADS holder may have to pay the following services fees to the Depositary:

Services		Fees
Issuance of ADSs		$5.00 (or less) per 100 ADSs (or portion of 100 ADSs) issued
Cancellation of ADSs		$5.00 (or less) per 100 ADSs (or portion of 100 ADSs) canceled
Distribution of cash dividends or other cash distributions		$2.00 (or less) per 100 ADSs (or portion of 100 ADSs) held
Distribution of ADSs pursuant to stock dividends, free stock distributions or exercises of rights		$5.00 (or less) per 100 ADSs (or portion of 100 ADSs) held
Distribution of securities other than ADSs or rights to purchase additional ADSs		$5.00 (or less) per 100 ADSs (or portion of 100 ADSs) held

An ADS holder will also be responsible to pay certain fees and expenses incurred by the Depositary and certain taxes and governmental charges such as:

●

taxes and other governmental charges;

●

such registration fees as may from time to time be in effect for the registration of transfers of H Shares generally on the H Share register of the Company or Foreign Registrar and applicable to transfers of H Shares to the name of the Depositary or its nominee or the Custodian or its nominee on the making of deposits or withdrawals;

●

such cable, telex and facsimile transmission expenses as are expressly provided in the Deposit Agreement;

●

such expenses as are incurred by the Depositary in the conversion of foreign currency; and

●

any other charge payable by the Depositary, any of the Depositary's agents, including the Custodian, or the agents of the Depositary's agents in connection with the servicing of H Shares or other Deposited Securities.

Depositary Payments for the Year 2018

In 2018, we received the payment of US$121,231.19 (inclusive of withholding tax) from the Bank of New York Mellon, the Depositary for our ADR program, for the reimbursement of our expenses related to investors' relation activities and training activities.

146

PART II

ITEM 13

DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

ITEM 14

MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

None.

ITEM 15

CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of December 31, 2018 (the "Evaluation Date"), the end of the fiscal year covered by this annual report. Based on this evaluation, our principal executive officer and principal financial officer have concluded that, as of the Evaluation Date, our disclosure controls and procedures were effective.

Management's Report on Internal Control over Financial Reporting

According to Sarbanes-Oxley Act Section 404, our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f). The Company conducted an evaluation of the effectiveness of the design and implementation of our internal control over financial reporting based upon the framework in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) as of the end of the period covered by this annual report. The evaluation is conducted under the supervision and with the participation of our management including principal executive officer and principal financial officer of the Company. The Company acquired Shandong Huaneng Laizhou Wind Power, Shandong Huaneng Laiwu Thermal Power Co., Ltd., Shandong Huaneng Liaocheng Thermal Power Co., Ltd. and Huaneng Shandong Ruyi (Hong Kong) Energy Co., Ltd. (the “Acquired Companies”) during 2018, and the Company excluded from the evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2018, the Acquired Companies’ internal control over financial reporting associated with total assets of RMB17,498 million and total revenues of RMB 743 million included in the consolidated financial statements of the Company as of and for the year ended December 31, 2018. Based on that evaluation, our management has concluded that our internal control over financial reporting was effective as of December 31, 2018. The effectiveness of the Company's internal control over financial reporting as of December 31, 2018 has been audited by KPMG Huazhen LLP, an independent registered public accounting firm, as stated in their report which appears herein.

Because of its inherent limitations, internal control over financial reporting may only provide reasonable assurance for preventing or detecting misstatements. In addition, projections of any evaluation of effectiveness of our internal control over financial reporting to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors
Huaneng Power International, Inc.:

Opinion on Internal Control Over Financial Reporting

We have audited Huaneng Power International, Inc. and subsidiaries’ (the “Company”) internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated statements of financial position of the Company as of December 31, 2018 and 2017, the related consolidated statements of comprehensive income, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2018, and the related notes (collectively, the consolidated financial statements), and our report dated April 16, 2019 expressed an unqualified opinion on those consolidated financial statements.

The Company acquired Shandong Huaneng Laizhou Wind Power, Shandong Huaneng Laiwu Thermal Power Co., Ltd., Shandong Huaneng Liaocheng Thermal Power Co., Ltd. and Huaneng Shandong Ruyi (Hong Kong) Energy Co., Ltd. (the “Acquired Companies”) during 2018, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2018, the Acquired Companies’ internal control over financial reporting associated with total assets of RMB17,498 million and total revenues of RMB743 million included in the consolidated financial statements of the Company as of and for the year ended December 31, 2018. Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of the Acquired Companies.

147

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ KPMG Huazhen LLP

Beijing, China
April 16, 2019

Changes in Internal Control over Financial Reporting

During the year ended December 31, 2018, no changes occurred in our internal controls over financial reporting that materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

148

ITEM 16

RESERVED

ITEM 16A

AUDIT COMMITTEE FINANCIAL EXPERT

The Board of Directors has determined that Mr. Yue Heng and Mr. Zhang Xianzhi qualify as Audit Committee Financial Experts in accordance with the terms of Item 16A of Form 20-F. See "Item 6 Directors, Senior Management and Employees – A. Directors, members of the supervisory committee and senior management."

ITEM 16B

CODE OF ETHICS

Although, as of the date of this annual report, we do not have, in form, a code of ethics that applies to the Company's principal executive officer, principal financial officer and principal accounting officer (collectively, the "Senior Corporate Officers"), we believe that, as a substantive matter, the Senior Corporate Officers are subject to a set of written requirements under the PRC law that are substantially similar to the ethical standards described under Item 16B (b) of Form 20-F. Joint stock companies that are incorporated in China and listed on both PRC and foreign stock exchanges are heavily regulated by the central government. To a large extent, these requirements, which are designed to promote honest and ethical conduct and compliance with applicable laws and regulations by the directors and senior executives of such companies, are not merely ethical requirements, but more importantly, statutory obligations that are legally binding on these individuals under the PRC Company Law, relevant rules and regulations promulgated by China Securities Regulatory Commission and the Mandatory Provisions of Articles of Association of Overseas Listed Companies.

ITEM 16C

PRINCIPAL ACCOUNTANT FEES AND SERVICES

KPMG Huazhen LLP has served as our independent registered public accounting firm for the fiscal years ended December 31, 2018 and 2017, for which audited consolidated financial statements appear in this annual report on Form 20-F.

The following table shows information about fees payable by us to KPMG Huazhen LLP in 2018 and 2017, respectively.

(RMB million)	For the Year Ended December 31,
	2018		2017
Audit fees		45.5		42.8
Audit-related fees		1.6		2.4
Tax fees		0.3		0.4
All other fees		1.9		2.4
Total		49.3		48.0

Tax Fees

Services provided primarily consist of tax compliance services.

Audit-related Fees

Audit-related services include those other assurances and related services provided by auditors, but not restricted to those that can only reasonably be provided by the external auditors signing the auditors' report, that are reasonably related to the performance of the audit or review of the Company's financial statements. The audit-related fees in 2018 were related to acquisition audits.

All Other Fees

Provision of other assurance and general training service.

Audit Committee Pre-approval Policies and Procedures

The Audit Committee of the Company's Board of Directors is responsible, among other things, for the oversight of the external auditors subject to the requirements of the PRC Law and the Company's Articles of

149

Association. The Audit Committee has adopted a policy regarding pre-approval of audit and permissible non-audit services to be provided by our independent auditors (the "Policy"). Under the Policy, proposed services either (i) may be pre-approved by the Audit Committee without consideration of specific case-by-case services ("general pre-approval"); or (ii) require the specific pre-approval of the Audit Committee ("specific pre-approval"). General pre-approval applies to services of recurring and predictable nature. These types of services, once approved by the Audit Committee in the beginning, will not require further approval in the future, except when actual fees and expenses exceed pre-approved budget levels. In such a case, the Audit Committee may authorize one of its members to approve budget increases subject to the requirement that such member provides a report on his decision to approve or deny an application for budget increases to the Audit Committee at an Audit Committee meeting held immediately after such member grants or denies the approval.

Specific pre-approval applies to all other services. These services must be approved by the Audit Committee on a case-by-case basis after an application including proposed budget and scope of services to be provided by our independent auditors is submitted to the Audit Committee.

For 2018, all of the services provided by KPMG were pre-approved by the Audit Committee.

ITEM 16D

EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.

ITEM 16E

PURCHASES OF EQUITY SECURITY BY THE ISSUER AND AFFILIATED PURCHASERS

Not applicable.

ITEM 16F

CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT

On December 11, 2018, our board of directors resolved to propose change in our independent registered public accounting firm, KPMG Huazhen LLP, after the completion of the audit of the December 31, 2018 consolidated financial statements and the audit of the effectiveness of internal control over financial reporting as of December 31, 2018, and the issuance of their reports thereon. The decision was later approved by our shareholders at 2019 first extraordinary general meeting on January 30, 2019. The proposed change of auditor was a commercial decision.

During the two most recent fiscal years and through April 16, 2019, there have been no disagreements with KPMG Huazhen LLP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements if not resolved to the satisfaction of KPMG Huazhen LLP, would have caused it to make reference thereto in their report on the consolidated financial statements for such years.

During the two most recent fiscal years and through April 16, 2019, there have been no “reportable events” (hereinafter defined) requiring disclosure pursuant to Item 16F(a)(1)(v) of Form 20-F. As used herein, the term “reportable event” means any of the items listed in paragraphs (a)(1)(v)(A)-(D) of Item 16F of Form 20-F.

The audit reports of KPMG Huazhen LLP on the consolidated financial statements of Huaneng Power International, Inc. as of and for the years ended December 31, 2017 and 2018 did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles.

We provided a copy of this disclosure to KPMG Huazhen LLP and requested that KPMG Huazhen LLP furnish a letter addressed to the SEC stating whether it agrees with the above statements, and if not, stating the respects in which it does not agree. A copy of the letter from KPMG Huazhen LLP addressed to the SEC, dated April 16, 2019, is filed as Exhibit 15.1.

On December 11, 2018, our board of directors resolved, as recommended by our audit committee, to propose to appoint Ernst & Young Hua Ming LLP as our independent registered public accounting firm, which was later approved by our shareholders at 2019 first extraordinary general meeting on January 30, 2019. During the two most recent fiscal years and through April 16, 2019, neither we nor anyone on our behalf consulted Ernst & Young Hua Ming LLP regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the registrant’s financial statements, or (ii) any matter that was either the subject of a “disagreement” (as defined in Item 16F(a)(1)(iv) of Form 20-F and related instructions to Item 16-F of Form 20-F) with Ernst & Young Hua Ming LLP or a “reportable event” (as described in Item 16F(a)(1)(v) of Form 20-F). Also, during the two most recent fiscal years and through April 16, 2019, we have not obtained any written report or oral advice that Ernst & Young Hua Ming LLP concluded was an important factor considered by us in reaching a decision as to the accounting, auditing or financial reporting issue.

ITEM 16G

CORPORATE GOVERNANCE

Comparison of New York Stock Exchange corporate governance rules and China corporate governance rules for listed companies: under the amended Corporate Governance Rules of New York Stock Exchange ("NYSE"), foreign issuers (including the Company) listed on the NYSE are required to disclose a summary of the significant differences between their domestic corporate governance rules and NYSE corporate governance rules that would apply to a U.S. domestic issuer. A summary of such differences is listed below:

NYSE corporate governance rules		Corporate governance rules applicable to the domestically listed companies in China and the Company's governance practices
Director Independence

A listed company must have a majority of independent directors on its board of directors. No director qualifies as "independent" unless the board of directors affirmatively determines that the director has no material relationship with the listed company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the company). In addition, a director must meet certain standards to be deemed independent. For example, a director is not independent if the director is, or has been within the last three years, an employee of the listed company, or an immediate family member is, or has been within the last three years, an executive officer of the listed company, or if the director has received, or has		It is required in China that any domestically listed company must establish an independent director system and set forth specific requirements for the qualification of independent directors. For example, an independent director shall not hold any other position in the listed Company other than being a member of the special committee established by the board of directors and shall not be influenced by the main shareholders or the controlling persons of the listed company, or by any other entities or persons with whom the listed company has a significant relationship. The Company has complied with the relevant Chinese corporate governance rules and has implemented internal rules governing the independence and responsibilities of independent directors. The Company determines the independence of independent directors every year.

150

NYSE corporate governance rules		Corporate governance rules applicable to the domestically listed companies in China and the Company's governance practices
an immediate family member who has received, during any twelve-month period within the last three years, more than US$120,000 in direct compensation from the listed company, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service).

To empower non-management directors to serve as a more effective check on management, the non-management directors of each listed company must meet at regularly scheduled executive sessions without management.		No similar requirements.

Nominating/Corporate Governance Committee

Listed companies must have a nominating/corporate governance committee composed entirely of independent directors.		The board of directors of a domestically listed company may establish a nominating committee composed entirely of directors, of which the independent directors shall be the majority and the convener. The Company has established a nominating committee.

The nominating/corporate governance committee must have a written charter that addresses the committee's purposes and responsibilities which, at minimum, must be to: search for eligible people for the board of directors, select and nominate directors for the next session of the shareholders' annual meeting, study and propose corporate governance guidelines, supervise the evaluation of the board of directors and management, and evaluate the performance of the committee every year.		Relevant responsibilities of the nominating/corporate governance committee are similar to those stipulated by the NYSE rules, but the main responsibilities do not include the research and recommendation of corporate governance guidelines, the supervision of the evaluation of the board of directors and management, or the annual evaluation of the committee.

Compensation Committee

Listed companies must have a compensation committee composed entirely of independent directors.		The board of directors of a listed company can have a compensation and evaluation committee composed entirely of directors, of whom the independent directors are the majority and act as the convener.

The compensation committee must have a written charter that addresses, at least, the following purposes and responsibilities:		The responsibilities are similar to those stipulated by the NYSE rules, but the committee is not required to produce a report on the executive compensation or make an annual performance evaluation of the committee. The board of directors of the Company has established a compensation and evaluation committee composed mainly of independent directors who act as the convener, and the committee has a written charter.

151

NYSE corporate governance rules		Corporate governance rules applicable to the domestically listed companies in China and the Company's governance practices
(1) review and approve the corporate goals associated with CEO's compensation, evaluate the performance of the CEO in fulfilling these goals, and, either as a committee or together with the other independent directors (as directed by the board) based on such evaluation, determine and approve the CEO's compensation level;

(2) make recommendations to the board with respect to non-CEO executive officer compensation, and incentive-compensation and equity-based plans that are subject to board approval;
(3) produce a committee report on executive compensation as required by the SEC to be included in the annual proxy statement or annual report filed with the SEC.

The charter must also include the requirement for an annual performance evaluation of the compensation committee.

The compensation committee may, in its sole discretion, retain or consult a compensation consultant, independent legal counsel or other advisor. The compensation committee shall be directly responsible for the appointment, compensation and oversight of the work of such advisor. A listed company must provide for appropriate funding for payment of reasonable compensation to such advisor. The compensation committee may select such advisor to the compensation committee only after taking into consideration all factors relevant to that person's independence from management.

Audit Committee

Listed companies must have an audit committee that satisfies the requirements of Rule 10A-3 of Exchange Act. It must have a minimum of three members, and all audit committee members must satisfy the requirements for independence set forth in Section 303A.02 of NYSE Corporate Governance Rules as well as the requirements of Rule 10A-3(b)(1) of the Exchange Act.		The board of directors of a domestically listed company shall establish an audit committee composed entirely of directors, of which the independent directors are the majority and act as the convener, and the convener shall be an accounting professional.

The audit committee must have a written charter that specifies the purpose of the audit committee is, at minimum, to assist the board oversight of the integrity of financial statements, the Company's compliance with legal and regulatory requirements, qualifications and independence of independent auditors and the performance of the listed company's internal audit function and independent auditors.		The board of directors of a domestically listed company needs to establish the audit committee and make a written rules of procedure. The domestically listed company shall disclose the audit committee's performance of the duty along with the annual report, including the disclosure of all audit committee meetings.

152

NYSE corporate governance rules		Corporate governance rules applicable to the domestically listed companies in China and the Company's governance practices
The written charter must also require the audit committee to prepare an audit committee report as required by the SEC to be included in the listed company's annual proxy statement as well as an annual performance evaluation of the audit committee.

The written charter must also specify the duties and responsibilities of the audit committee, which, at a minimum, must include those set out in Rules 10A-3(b)(2), (3), (4) and (5) of the Exchange Act, as well as other duties and responsibilities, such as to obtain and review a report by the independent auditor at least annually, meet to review and discuss the listed company's annual audited financial statements and quarterly financial statements with management and independent auditor.

Each listed company must have an internal audit department.		China has a similar regulatory provision, and the Company has an internal audit department.

Shareholder approval of equity compensation plan

Shareholders must be given the opportunity to vote on all equity-compensation plans and material revisions thereto, except for, among others, plans that are made available to shareholders generally, such as typical dividend reinvestment plan, certain awards and plans in the context of mergers and acquisitions.		The relevant regulations of China provide that the shareholders' meeting shall approve the compensation of the directors and supervisors. The compensation plan of executive officers shall be approved by the board and announced at the shareholders' meeting and disclosed to the public.

Corporate governance guidelines

Listed companies must adopt and disclose corporate governance guidelines, involving director qualification standards, director responsibilities, director compensation, director continuing education, annual performance evaluation of the board of directors, etc.		CSRC has issued the Corporate Governance Rules, providing specific rules regarding the process of director election, the duty of directors, the composition and duty of the board of directors and the rules of performance review, with which the Company has complied.

Code of ethics for directors, officers and employees

Listed companies must adopt and disclose a code of business conduct and ethics for directors, officers and employees, and promptly disclose any waivers of the code for directors or executive officers. Each code of business conduct and ethics must require that any waiver of the code for executive officers or directors may be made only by the board or a board committee.		China does not have such requirement for a code of ethics. But, the directors and officers must perform their legal responsibilities in accordance with the Company Law of PRC, relative requirements of CSRC and Mandatory Provisions to the Charter of Companies Listed Overseas.

153

NYSE corporate governance rules		Corporate governance rules applicable to the domestically listed companies in China and the Company's governance practices
Each listed company's CEO must certify to the NYSE each year that he or she is not aware of any violation by the listed company of NYSE corporate governance listing standards and he or she must promptly notify the NYSE in writing of any non-compliance with any applicable provisions of Section 303A.		No similar requirements.

ITEM 16H

MINE SAFETY DISCLOSURE

Not applicable.

ITEM 17

FINANCIAL STATEMENTS

Not applicable.

ITEM 18

FINANCIAL STATEMENTS

See page F-1 through F-144 following Item 19.

ITEM 19

EXHIBITS

1.1*	Articles of Association amended and adopted by the Shareholders' meeting in January 2019.

3.1

Shareholders' Agreement dated May 31, 1994, incorporated by reference to Exhibit 9.1 of our Registration Statement on Form F-1, filed with the SEC on August 24, 1994. Amendment to Shareholders' Agreement dated May 12, 2006, incorporated by reference to Exhibit 3.1 of our annual report on Form 20-F for the year ended December 31, 2006, filed with the SEC on April 16, 2007.

8*	A list of subsidiaries.

12.1*

Certifications of Principal Executive Officer pursuant to Rule 13a-14(a) promulgated under the U.S. Securities Exchange Act of 1934.

12.2*

Certifications of Principal Financial Officer pursuant to Rule 13a-14(a) promulgated under the U.S. Securities Exchange Act of 1934.

13.1**

Certification pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

15.1*

Letter from KPMG Huazhen LLP regarding Item 16F of this annual report.

101.INS*

XBRL Instance Document.

101.SCH*

XBRL Taxonomy Extension Schema Document.

101.CAL*

XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF*

XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB*

XBRL Taxonomy Extension Labels Linkbase Document.

101.PRE*

XBRL Taxonomy Extension Presentation Linkbase Document.

_____________________________

*	Filed herewith

**	Furnished herewith

154

THIS PAGE IS INTENTIONALLY LEFT BLANK

155

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

Huaneng Power International, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statements of financial position of Huaneng Power International, Inc. and subsidiaries (the “Company”) as of December 31, 2018 and 2017, the related consolidated statements of comprehensive income, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2018, and the related notes (collectively, the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the years in the three-year ended December 31, 2018, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company's internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated April 16, 2019, expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statement. We believe that our audits provide a reasonable basis for our opinion.

/s/ KPMG Huazhen LLP

We have served as the Company’s auditor since 2012.

Beijing, China
April 16, 2019

Huaneng Power International, Inc.

Consolidated Statements of Comprehensive Income

For the years ended 31 December 2018, 2017 and 2016

(Prepared in accordance with International Financial Reporting Standards)

(Amounts expressed in thousands of RMB, except per share data)

		For the year ended 31 December
	Note	2018			2017			2016
		RMB			RMB (Note i)			RMB (Note i)

Operating revenue	5		169,550,624			152,459,444			113,814,236
Tax and levies on operations			(1,788,998	)		(1,376,312	)		(1,177,818	)

Operating expenses
Fuel	6		(105,736,173	)		(92,737,304	)		(56,617,542	)
Maintenance			(4,393,335	)		(4,347,723	)		(4,343,349	)
Depreciation			(20,466,423	)		(20,180,830	)		(14,815,620	)
Labor			(11,845,280	)		(10,590,084	)		(8,043,406	)
Service fees on transmission and transformer facilities of HIPDC			(96,721	)		(95,894	)		(138,038	)
Purchase of electricity			(4,678,431	)		(3,787,032	)		(3,066,415	)
Others	6		(10,430,998	)		(10,160,875	)		(7,234,308	)

Total operating expenses			(157,647,361	)		(141,899,742	)		(94,258,678	)

Profit from operations			10,114,265			9,183,390			18,377,740

Interest income			234,604			198,906			147,063
Financial expenses, net
Interest expense	6		(10,486,412	)		(9,749,004	)		(6,817,526	)
Exchange (loss)/gain and bank charges, net			(160,899	)		144,359			(250,076	)

Total financial expenses, net			(10,647,311	)		(9,604,645	)		(7,067,602	)

Share of profits less losses of associate and joint ventures	8		1,823,415			425,215			1,298,889
Gain/(loss) on fair value changes of financial assets/liabilities	6		726,843			856,786			(12,986	)
Other investment (loss)/income	6		(278,669	)		1,742,081			1,070,034

Profit before income tax expense	6		1,973,147			2,801,733			13,813,138

Income tax expense	34		(643,173	)		(1,217,526	)		(3,465,151	)

Net profit			1,329,974			1,584,207			10,347,987

The accompanying notes are an integral part of these financial statements.

F-1

Huaneng Power International, Inc.

Consolidated Statements of Comprehensive Income (Continued)

For the years ended 31 December 2018, 2017and 2016

(Prepared in accordance with International Financial Reporting Standards)

(Amounts expressed in thousands of RMB, except per share data)

		For the year ended 31 December
		2018			2017			2016
	Note	RMB			RMB (Note i)			RMB (Note i)

Other comprehensive (loss)/income, net of tax

Items that will not be reclassified to profit or loss:
Fair value changes of other equity instrument investments			1,036			—			—
Share of other comprehensive loss of investees accounted for under the equity method			(18,858	)		—			—

Items that may be reclassified subsequently to profit or loss:
Fair value changes of available-for-sale financial assets (Note ii)			—			281,663			(148,041	)
Gain on disposal of available-for-sale financial assets reclassified to profit or loss			—			(1,135,356	)		(741,648	)
Share of other comprehensive (loss)/income of investees accounted for under the equity method			(241,587	)		121,208			(180,572	)
Effective portion of cash flow hedges			(503,182	)		62,853			1,015,103
Translation differences of the financial statements of foreign operations			343,702			84,418			540,442

Other comprehensive (loss)/income, net of tax			(418,889	)		(585,214	)		485,284

Total comprehensive income			911,085			998,993			10,833,271

Net profit attributable to:
- Equity holders of the Company			734,435			1,579,836			8,520,427
- Non-controlling interests			595,539			4,371			1,827,560

			1,329,974			1,584,207			10,347,987

Total comprehensive income/(loss) attributable to:
- Equity holders of the Company			340,101			1,023,118			9,005,227
- Non-controlling interests			570,984			(24,125	)		1,828,044

			911,085			998,993			10,833,271
Earnings per share attributable to the shareholders of the Company (expressed in RMB per share)
- Basic and diluted	35		0.03			0.10			0.56

Note:

(i)	The Company and its subsidiaries have initially applied IFRS 15 and IFRS 9 at 1 January 2018. Under the transition methods chosen, comparative information is not restated. See Note 2(b).

(ii)

This amount arose under the accounting policies applicable prior to 1 January 2018. As part of the opening balance adjustments as at 1 January 2018 the balance of this reserve has been reclassified to fair value reserve (non-recycling) and will not be reclassified to profit or loss in any future periods. See Note 2(b)(i).

The accompanying notes are an integral part of these financial statements.

F-2

Huaneng Power International, Inc.

Consolidated Statements of Financial Position

As at 31 December 2018 and 2017

(Prepared in accordance with International Financial Reporting Standards)

(Amounts expressed in thousands of RMB)

		As at 31 December
	Note	2018		2017
				(Note)
ASSETS

Non-current assets
Property, plant and equipment	7		282,061,272		284,328,093
Investments in associates and joint ventures	8		19,553,964		19,517,623
Investment property			232,554		217,406
Available-for-sale financial assets	10		—		1,604,993
Other equity instrument investments	10		2,083,419		—
Land use rights	11		11,450,034		11,264,785
Power generation licenses	12		4,014,972		3,916,246
Mining rights	13		1,511,186		1,646,271
Deferred income tax assets	32		2,282,585		2,300,091
Derivative financial assets	14		5,970		75,328
Goodwill	15		15,572,227		15,484,120
Other non-current assets	16		19,336,059		7,696,845

Total non-current assets			358,104,242		348,051,801

Current assets
Inventories	17		9,543,691		7,385,411
Other receivables and assets	18		6,455,911		6,081,517
Accounts receivable	19		29,278,938		25,447,595
Contract assets	5(c)		11,058		—
Derivative financial assets	14		28,735		258,364
Bank balances and cash	36		15,832,788		9,364,823
Assets held for sale	20		647,948		-

Total current assets			61,799,069		48,537,710

Total assets			419,903,311		396,589,511

The accompanying notes are an integral part of these financial statements.

F-3

Huaneng Power International, Inc.

Consolidated Statements of Financial Position (Continued)

As at 31 December 2018 and 2017

(Prepared in accordance with International Financial Reporting Standards)

(Amounts expressed in thousands of RMB)

		As at 31 December
	Note	2018			2017
					(Note)
EQUITY AND LIABILITIES

Capital and reserves attributable to equity holders of the Company
Share capital	21		15,698,093			15,200,383
Other equity instruments	22		10,077,396			5,068,550
Capital surplus			26,194,931			24,114,400
Surplus reserves	23		8,140,030			8,140,030
Currency translation differences			(340,337	)		(675,054	)
Retained earnings			34,665,305			35,793,257

			94,435,418			87,641,566

Non-controlling interests			21,686,252			19,973,038

Total equity			116,121,670			107,614,604

Non-current liabilities
Long-term loans	25		129,548,161			107,030,958
Long-term bonds	26		25,984,663			15,993,833
Deferred income tax liabilities	32		3,866,159			4,566,680
Derivative financial liabilities	14		231,308			148,486
Other non-current liabilities	27		5,945,136			5,284,462

Total non-current liabilities			165,575,427			133,024,419

The accompanying notes are an integral part of these financial statements.

F-4

Huaneng Power International, Inc.

Consolidated Statements of Financial Position (Continued)

As at 31 December 2018 and 2017

(Prepared in accordance with International Financial Reporting Standards)

(Amounts expressed in thousands of RMB)

		As at 31 December
	Note	2018		2017
				(Note)
EQUITY AND LIABILITIES (Continued)

Current liabilities
Accounts payable and other liabilities	28		35,138,680		38,900,132
Contract liabilities	5(c)		1,976,647		—
Taxes payable	29		1,474,437		1,302,210
Dividends payable			1,267,833		1,735,426
Derivative financial liabilities	14		313,984		62,178
Short-term bonds	30		11,541,454		11,068,357
Short-term loans	31		61,038,772		80,251,348
Current portion of long-term loans	25		20,620,849		18,098,458
Current portion of long-term bonds	26		3,993,479		3,997,033
Current portion of other non-current liabilities	27		475,646		535,346
Liabilities held for sale	20		364,433		-

Total current liabilities			138,206,214		155,950,488

Total liabilities			303,781,641		288,974,907

Total equity and liabilities			419,903,311		396,589,511

Note: The Company and its subsidiaries have initially applied IFRS 15 and IFRS 9 at 1 January 2018. Under the transition methods chosen, comparative information is not restated. See Note 2(b).

These financial statements were approved for issue by the Board of Directors on 19 March 2019 and were signed on its behalf.

The accompanying notes are an integral part of these financial statements.

F-5

Huaneng Power International, Inc.

Consolidated Statements of Changes in Equity

For the years ended 31 December 2018, 2017 and 2016

(Prepared in accordance with International Financial Reporting Standards)

(Amounts expressed in thousands of RMB)

	Attributable to equity holders of the Company
			Capital surplus
	Share capital		Share premium		Hedging reserve			Available- for-sale financial assets revaluation reserve			Other capital reserve		Subtotal			Surplus reserve		Currency translation differences			Retained earnings			Total			Non- controlling interests			Total equity

Balance as at 1 January 2016		15,200,383		22,226,889		(1,039,187	)		2,516,173			1,111,614		24,815,489			8,140,030		(1,327,839	)		37,313,885			84,141,948			17,551,741			101,693,689

Profit for the year ended 31 December 2016		-		-		-			-			-		-			-		-			8,520,427			8,520,427			1,827,560			10,347,987
Other comprehensive income/(loss):
Fair value changes of available-for-sale financial assets - gross		-		-		-			(197,529	)		-		(197,529	)		-		-			-			(197,529	)		-			(197,529	)
Gain on disposal of available-for-sale financial assets reclassified to profit or loss - gross		-		-		-			(988,865	)		-		(988,865	)		-		-			-			(988,865	)		-			(988,865	)
Fair value changes of and gain on disposal of available-for-sale financial assets - tax		-		-		-			296,705			-		296,705			-		-			-			296,705			-			296,705
Shares of other comprehensive income of investees- accounted for under the equity method - gross		-		-		-			(242,217	)		-		(242,217	)		-		-			-			(242,217	)		-			(242,217	)
Shares of other comprehensive income of investees-accounted for under the equity method - tax		-		-		-			61,645			-		61,645			-		-			-			61,645			-			61,645
Changes in fair value of effective portion of cash flow hedges - gross		-		-		574,455			-			-		574,455			-		-			-			574,455			-			574,455
Changes in fair value of effective portion of cash flow hedges - tax		-		-		(95,407	)		-			-		(95,407	)		-		-			-			(95,407	)		-			(95,407	)
Cash flow hedges recorded in shareholders’ equity reclassified to inventories - gross		-		-		603,527			-			-		603,527			-		-			-			603,527			-			603,527
Cash flow hedges recorded in shareholders’ equity reclassified to inventories - tax		-		-		(102,600	)		-			-		(102,600	)		-		-			-			(102,600	)		-			(102,600	)
Cash flow hedges recorded in shareholders’ equity reclassified to exchange gain and bank charges, net - gross		-		-		(55,838	)		-			-		(55,838	)		-		-			-			(55,838	)		-			(55,838	)
Cash flow hedges recorded in shareholders’ equity reclassified to exchange gain and bank charges, net - tax		-		-		9,492			-			-		9,492			-		-			-			9,492			-			9,492
Cash flow hedges recorded in shareholders’ equity reclassified to interest expense - gross		-		-		101,889			-			-		101,889			-		-			-			101,889			-			101,889
Cash flow hedges recorded in shareholders’ equity reclassified to interest expense - tax		-		-		(20,415	)		-			-		(20,415	)		-		-			-			(20,415	)		-			(20,415	)
Currency translation differences		-		-		-			-			-		-			-		539,958			-			539,958			484			540,442

Total comprehensive income/(loss) for the year ended 31 December 2016		-		-		1,015,103			(1,070,261	)		-		(55,158	)		-		539,958			8,520,427			9,005,227			1,828,044			10,833,271
Dividends relating to 2015		-		-		-			-			-		-			-		-			(7,144,180	)		(7,144,180	)		(3,481,663	)		(10,625,843	)
Net capital injection from non-controlling interests of subsidiaries		-		-		-			-			-		-			-		-			-			-			285,620			285,620

Balance as at 31 December 2016 (Note)		15,200,383		22,226,889		(24,084	)		1,445,912			1,111,614		24,760,331			8,140,030		(787,881	)		38,690,132			86,002,995			16,183,742			102,186,737

The accompanying notes are an integral part of these financial statements.

F-6

Huaneng Power International, Inc.

Consolidated Statements of Changes in Equity (Continued)

For the years ended 31 December 2018, 2017 and 2016

(Prepared in accordance with International Financial Reporting Standards)

(Amounts expressed in thousands of RMB)

	Attributable to equity holders of the Company
					Capital surplus
	Share capital		Other equity instruments		Share premium			Hedging reserve			Available-for-sale financial assets revaluation reserve			Other capital reserve		Subtotal			Surplus reserve		Currency translation differences			Retained earnings			Total			Non-controlling interests			Total equity
Balance as at 1 January 2017		15,200,383		-		22,226,889			(24,084	)		1,445,912			1,111,614		24,760,331			8,140,030		(787,881	)		38,690,132			86,002,995			16,183,742			102,186,737
Profit for the year ended 31 December 2017		-		68,600		-			-			-			-		-			-		-			1,511,236			1,579,836			4,371			1,584,207
Other comprehensive income/(loss):
Fair value changes of available-for-sale financial assets - gross		-		-		-			-			375,742			-		375,742			-		-			-			375,742			(50	)		375,692
Gain on disposal of available-for-sale financial assets reclassified to profit or loss-gross		-		-		-			-			(1,581,994	)		-		(1,581,994	)		-		-			-			(1,581,994	)		-			(1,581,994	)
Fair value changes of and gain on disposal of available-for-sale financial assets - tax		-		-		-			-			352,646			-		352,646			-		-			-			352,646			(37	)		352,609
Shares of other comprehensive income of investees – accounted for under the equity method - gross		-		-		-			-			162,858			-		162,858			-		-			-			162,858			-			162,858
Shares of other comprehensive income of investees – accounted for under the equity method - tax		-		-		-			-			(41,650	)		-		(41,650	)		-		-			-			(41,650	)		-			(41,650	)
Changes in fair value of effective portion of cash flow hedges - gross		-		-		-			85,558			-			-		85,558			-		-			-			85,558			-			85,558
Changes in fair value of effective portion of cash flow hedges - tax		-		-		-			(16,239	)		-			-		(16,239	)		-		-			-			(16,239	)		-			(16,239	)
Cash flow hedges recorded in shareholders’ equity reclassified to inventories - gross		-		-		-			(109,817	)		-			-		(109,817	)		-		-			-			(109,817	)		-			(109,817	)
Cash flow hedges recorded in shareholders’ equity reclassified to inventories - tax		-		-		-			18,669			-			-		18,669			-		-			-			18,669			-			18,669
Cash flow hedges recorded in shareholders’ equity reclassified to exchange gain and bank charges, net - gross		-		-		-			(2,657	)		-			-		(2,657	)		-		-			-			(2,657	)		-			(2,657	)
Cash flow hedges recorded in shareholders’ equity reclassified to exchange gain and bank charges, net - tax		-		-		-			452			-			-		452			-		-			-			452			-			452
Cash flow hedges recorded in shareholders’ equity reclassified to interest expense - gross		-		-		-			107,233			-			-		107,233			-		-			-			107,233			-			107,233
Cash flow hedges recorded in shareholders’ equity reclassified to interest expense - tax		-		-		-			(20,346	)		-			-		(20,346	)		-		-			-			(20,346	)		-			(20,346	)
Currency translation differences		-		-		-			-			-			-		-			-		112,827			-			112,827			(28,409	)		84,418
Total comprehensive income/(loss) for the year ended 31 December 2017		-		68,600		-			62,853			(732,398	)		-		(669,545	)		-		112,827			1,511,236			1,023,118			(24,125	)		998,993
Business combination		-		-		-			-			-			-		-			-		-			-			-			6,292,577			6,292,577
Issue of perpetual corporate bonds		-		4,999,950		-			-			-			-		-			-		-			-			4,999,950			-			4,999,950
Dividends relating to 2016		-		-		-			-			-			-		-			-		-			(4,408,111	)		(4,408,111	)		(2,344,391	)		(6,752,502	)
Net capital injection from non-controlling interests of subsidiaries		-		-		-			-			-			-		-			-		-			-			-			846,847			846,847
Disposal of non-controlling interests of a subsidiary		-		-		28,054			-			-			-		28,054			-		-			-			28,054			(28,054	)		-
Acquisition of non-controlling interests of a subsidiary		-		-		(4,440	)		-			-			-		(4,440	)		-		-			-			(4,440	)		(86,699	)		(91,139	)
Disposal of subsidiaries		-		-		-			-			-			-		-			-		-			-			-			(866,859	)		(866,859	)
Balance as at 31 December 2017 (Note)		15,200,383		5,068,550		22,250,503			38,769			713,514			1,111,614		24,114,400			8,140,030		(675,054	)		35,793,257			87,641,566			19,973,038			107,614,604

Note: The Company and its subsidiaries have initially applied IFRS 15 and IFRS 9 at 1 January 2018. Under the transition methods chosen, comparative information is not restated. See Note 2(b).

The accompanying notes are an integral part of these financial statements.

F-7

Huaneng Power International, Inc.

Consolidated Statements of Changes in Equity (Continued)

For the years ended 31 December 2018, 2017 and 2016

(Prepared in accordance with International Financial Reporting Standards)

(Amounts expressed in thousands of RMB)

			Attributable to equity holders of the Company
									Capital surplus
	Share capital		Other equity instruments			Share premium			Hedging reserve			Fair value Reserve (non-recycling)			Other reserve in other comprehensive income			Other capital reserve			Subtotal			Surplus reserve		Currency translation differences			Retained earnings			Total			Non- controlling interests			Total equity
Balance as at 31 December 2017		15,200,383		5,068,550			22,250,503			38,769			-			713,514			1,111,614			24,114,400			8,140,030		(675,054	)		35,793,257			87,641,566			19,973,038			107,614,604
Impact on initial application of IFRS 9(Note 2(b)(i))		-		-			-			-			944,603			(574,657	)		-			369,946			-		-			-			369,946			-			369,946
Balance as at 1 January 2018		15,200,383		5,068,550			22,250,503			38,769			944,603			138,857			1,111,614			24,484,346			8,140,030		(675,054	)		35,793,257			88,011,512			19,973,038			107,984,550
Profit for the year ended 31 December 2018		-		342,349			-			-			-			-			-			-			-		-			392,086			734,435			595,539			1,329,974
Other comprehensive income/(loss):
Fair value changes of other equity investment instruments - gross		-		-			-			-			1,412			-			-			1,412			-		-			-			1,412			(31	)		1,381
Fair value changes of other equity investment instruments - tax		-		-			-			-			(353	)		-			-			(353	)		-		-			-			(353	)		8			(345	)
Shares of other comprehensive income of investees – accounted for under the equity method - gross		-		-			-			-			(25,144	)		(323,220	)		-			(348,364	)		-		-			-			(348,364	)		-			(348,364	)
Shares of other comprehensive income of investees – accounted for under the equity method - tax		-		-			-			-			6,286			81,633			-			87,919			-		-			-			87,919			-			87,919
Changes in fair value of effective portion of cash flow hedges - gross		-		-			-			(127,265	)		-			-			-			(127,265	)		-		-			-			(127,265	)		(40,382	)		(167,647	)
Changes in fair value of effective portion of cash flow hedges - tax		-		-			-			21,264			-			-			-			21,264			-		-			-			21,264			6,865			28,129
Cash flow hedges recorded in shareholders’ equity reclassified to inventories - gross		-		-			-			(524,228	)		-			-			-			(524,228	)		-		-			-			(524,228	)		-			(524,228	)
Cash flow hedges recorded in shareholders’ equity reclassified to inventories - tax		-		-			-			89,119			-			-			-			89,119			-		-			-			89,119			-			89,119
Cash flow hedges recorded in shareholders’ equity reclassified to exchange gain and bank charges, net - gross		-		-			-			18,778			-			-			-			18,778			-		-			-			18,778			-			18,778
Cash flow hedges recorded in shareholders’ equity reclassified to exchange gain and bank charges, net - tax		-		-			-			(3,192	)		-			-			-			(3,192	)		-		-			-			(3,192	)		-			(3,192	)
Cash flow hedges recorded in shareholders’ equity reclassified to interest expense – gross		-		-			-			68,604			-			-			-			68,604			-		-			-			68,604			-			68,604
Cash flow hedges recorded in shareholders’ equity reclassified to interest expense – tax		-		-			-			(12,745	)		-			-			-			(12,745	)		-		-			-			(12,745	)		-			(12,745	)
Currency translation differences		-		-			-			-			-			-			-			-			-		334,717			-			334,717			8,985			343,702
Total comprehensive income/(loss) for the year ended 31 December 2018		-		342,349			-			(469,665	)		(17,799	)		(241,587	)		-			(729,051	)		-		334,717			392,086			340,101			570,984			911,085
Business combination (Note 41)		-		-			-			-			-			-			-			-			-		-			-			-			1,590,753			1,590,753
Issue of new A shares, net of issue expenses (Note 21)		497,710		-			2,747,620			-			-			-			-			2,747,620			-		-			-			3,245,330			-			3,245,330
Issue of other equity instruments (Note 22 )		-		5,000,000			-			-			-			-			-			-			-		-			-			5,000,000			-			5,000,000
Dividends relating to 2017 (Note 24)		-		-			-			-			-			-			-			-			-		-			(1,520,038	)		(1,520,038	)		(797,858	)		(2,317,896	)
Cumulative distribution of other equity instruments (Note 24)		-		(333,503	)		-			-			-			-			-			-			-		-			-			(333,503	)		-			(333,503	)
Net capital injection from non-controlling interests of subsidiaries		-		-			-			-			-			-			-			-			-		-			-			-			726,531			726,531
Acquisition of non-controlling interests of subsidiaries		-		-			(227,441	)		-			-			-			-			(227,441	)		-		-			-			(227,441	)		(377,196	)		(604,637	)
Share of other capital reserve of investees accounted for under the equity method		-		-			-			-			-			-			(80,543	)		(80,543	)		-		-			-			(80,543	)		-			(80,543	)
Balance as at 31 December 2018		15,698,093		10,077,396			24,770,682			(430,896	)		926,804			(102,730	)		1,031,071			26,194,931			8,140,030		(340,337	)		34,665,305			94,435,418			21,686,252			116,121,670

The accompanying notes are an integral part of these financial statements.

F-8

Huaneng Power International, Inc.

Consolidated Statements of Cash Flows

For the years ended 31 December 2018, 2017 and 2016

(Prepared in accordance with International Financial Reporting Standards)

(Amounts expressed in thousands of RMB)

		For the year ended 31 December
	Note	2018			2017			2016
		RMB			RMB (Note)			RMB (Note)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before income tax expense			1,973,147			2,801,733			13,813,138
Adjustments to reconcile profit before income tax expense to net cash provided by operating activities:
Depreciation			20,466,423			20,180,830			14,815,620
Provision for impairment loss on property, plant and equipment			989,778			1,046,195			1,063,735
Provision for impairment loss on goodwill			409,371			-			-
Provision for impairment loss on mining rights			135,085			-			-
Provision for impairment loss on land use rights			-			108,590			51,981
Provision for other non-current assets			8,432			5,008			-
Amortization of land use rights			344,068			341,125			225,707
Amortization of other non-current assets			105,623			113,878			121,388
Amortization of employee housing subsidies			653			653			866
Recognition of provision for loss allowance			40,967			27,682			89,498
Recognition/(reversal) of provision for inventory obsolescence			253,816			(263	)		(256	)
(Gain)/loss on fair value changes of financial assets/liabilities			(726,843	)		(856,786	)		12,986
Other investment loss/(income)			278,669			(1,742,081	)		(1,070,034	)
Net (gain)/loss on disposals of non-current assets			(47,005	)		616,456			590,049
Unrealized exchange loss/(gain), net			103,888			(157,056	)		195,055
Share of profits less losses of
associates and joint ventures			(1,823,415	)		(425,215	)		(1,298,889	)
Interest income			(234,604	)		(198,906	)		(147,063	)
Interest expense			10,486,412			9,749,004			6,817,526
Others			(198,046	)		171,611			(213,089	)
Changes in working capital, net of effects of acquisitions:
Inventories			(1,996,075	)		714,045			(1,270,582	)
Other receivables and assets			(150,782	)		(199,023	)		(20,810	)
Accounts receivable			(3,273,058	)		(6,201,149	)		(838,272	)
Contract assets			(11,058	)		—			—
Restricted cash			(347,777	)		9,670			(11,566	)
Accounts payable and other liabilities			349,703			2,414,376			1,912,034
Contract liabilities			471,721			—			—
Taxes payable			2,565,786			2,543,863			1,279,505
Interest received			173,986			136,134			84,806
Income tax expense paid			(1,620,887	)		(2,003,011	)		(4,692,509	)

Net cash provided by operating activities			28,727,978			29,197,363			31,510,824

The accompanying notes are an integral part of these financial statements.

F-9

Huaneng Power International, Inc.

Consolidated Statements of Cash Flows (Continued)

For the years ended 31 December 2018, 2017 and 2016

(Prepared in accordance with International Financial Reporting Standards)

(Amounts expressed in thousands of RMB)

		For the year ended 31 December
	Note	2018			2017			2016
		RMB			RMB (Note)			RMB (Note)
CASH FLOWS FROM INVESTING ACTIVITIES
Payment for the purchase of property, plant and equipment			(20,613,314	)		(25,798,009	)		(20,144,903	)
Proceeds from disposal of property, plant and equipment, land use rights and other non-current assets			127,182			286,609			144,346
Prepayments of land use rights			(94,684	)		(213,928	)		(89,430	)
Payment for the purchase of other non-current assets			30,107			(33,498	)		(50,653	)
Cash dividends received			618,592			1,419,380			1,057,642
Payment for investment in associates and joint ventures			(463,259	)		(301,916	)		(276,118	)
Cash paid for acquiring available-for-sale financial assets			—			(5,600	)		-
Cash paid for acquiring other equity instrument investments			(450	)		—			—
Cash consideration paid for acquisition of subsidiaries, net of cash acquired	41		(674,845	)		(10,817,107	)		157,421
Cash received from disposal of a subsidiary, net of cash of the subsidiaries			-			530,437			-
Cash received from disposal of available-for-sale financial assets			—			2,186,758			1,474,301
Others			694,789			998,049			77,748

Net cash used in investing activities			(20,375,882	)		(31,748,825	)		(17,649,646	)

The accompanying notes are an integral part of these financial statements.

F-10

Huaneng Power International, Inc.

Consolidated Statements of Cash Flows (Continued)

For the years ended 31 December 2018, 2017 and 2016

(Prepared in accordance with International Financial Reporting Standards)

(Amounts expressed in thousands of RMB)

		For the year ended 31 December
	Note	2018			2017			2016
		RMB			RMB (Note)			RMB (Note)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of short-term bonds			40,000,000			30,988,679			32,982,340
Repayments of short-term bonds			(39,500,000	)		(47,000,000	)		(25,000,000	)
Proceeds from short-term loans			77,005,025			107,564,128			85,689,874
Repayments of short-term loans			(98,345,708	)		(96,378,054	)		(77,904,489	)
Proceeds from long-term loans			48,859,376			32,706,327			15,978,023
Repayments of long-term loans			(34,269,623	)		(17,390,982	)		(20,702,421	)
Issuance of long-term bonds			13,999,807			7,800,000			4,200,000
Repayments of long-term bonds			(4,000,000	)		(3,300,000	)		(11,500,000	)
Interest paid			(10,987,871	)		(10,080,102	)		(7,344,781	)
Net proceeds from the issuance of new shares			3,245,330			-			-
Net proceeds from the issuance of other equity instruments			5,000,000			4,999,950			-
Net capital injection from non-controlling interests of subsidiaries			725,683			838,084			285,620
Dividends paid to shareholders of the Company			(1,520,038	)		(4,352,973	)		(7,206,220	)
Dividends paid to non-controlling interests of subsidiaries			(1,265,451	)		(2,184,145	)		(2,695,378	)
Government grants			-			590,629			233,276
Payment for finance leasing			(637,026	)		(695,019	)		(571,485	)
Others			(552,574	)		(93,342	)		(46,209	)

Net cash (used in)/generated from financing activities			(2,243,070	)		4,013,180			(13,601,850	)

Effect of exchange rate fluctuations on cash held			26,266			10,171			72,923

NET INCREASE IN CASH AND CASH EQUIVALENTS			6,135,292			1,471,889			332,251
Cash and cash equivalents as at beginning of the year			9,282,390			7,810,501			7,478,250
CASH AND CASH EQUIVALENTS AS AT END OF THE YEAR	36		15,417,682			9,282,390			7,810,501

Note: The Company and its subsidiaries have initially applied IFRS 15 and IFRS 9 at 1 January 2018. Under the transition methods chosen, comparative information is not restated. See Note 2(b).

The accompanying notes are an integral part of these financial statements.

F-11

HUANENG POWER INTERNATIONAL, INC.

NOTES TO THE FINANCIAL STATEMENTS

(Prepared in accordance with International Financial Reporting Standards)

(Amounts expressed in thousands of RMB unless otherwise stated)

1	Company organization and principal activities

Huaneng Power International, Inc. (the “Company”) was incorporated in the People’s Republic of China (the “PRC”) as a Sino-foreign joint stock limited company on 30 June 1994. The registered address of the Company is Huaneng Building, 6 Fuxingmennei Street, Xicheng District, Beijing, the PRC. The Company and its subsidiaries are principally engaged in the generation and sale of electric power to the respective regional or provincial grid companies in the PRC, Republic of Singapore (“Singapore”) and Islamic Republic of Pakistan ("Pakistan”). The Company conducts its business in Singapore through SinoSing Power Pte Ltd. (“SinoSing Power”) and its subsidiaries and in Pakistan through Huaneng Shandong Ruyi (Hong Kong) Energy Co., Ltd. (“Hong Kong Energy”) and its subsidiaires.

The directors consider Huaneng International Power Development Corporation (“HIPDC”) and China Huaneng Group Co., Ltd. (“Huaneng Group”) as the parent company and ultimate parent company of the Company, respectively. Both HIPDC and Huaneng Group are incorporated in the PRC. HIPDC does not produce financial statements available for public use.

2	Principal accounting policies

The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

(a)

Basis of preparation

These financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (the “IASB”) and the disclosure requirements of the Hong Kong Companies Ordinance. These financial statements also comply with the applicable disclosure provisions of the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited. These financial statements have been prepared under the historical cost convention, as modified by the revaluation of equity instrument investments designated at fair value through other comprehensive income, financial assets at fair value through profit or loss and derivative financial assets and liabilities.

Non-current assets and disposal group held for sale are stated at the lower of carrying amount and fair value less costs to sell.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company and its subsidiaries’ accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 4.

F-12

As at 31 December 2018, the Company and its subsidiaries have net current liabilities of approximately RMB 76.4 billion, and a portion of the Company and its subsidiaries’ funding requirements for capital expenditures were satisfied by short-term financing. Taking into consideration of the expected operating cash flows of the Company and its subsidiaries and the undrawn available banking facilities of approximately RMB 268.8 billion as at 31 December 2018, the Company and its subsidiaries are expected to refinance certain of its short-term loans and bonds and also to consider alternative sources of financing, where applicable and when needed.

Therefore, the directors of the Company are of the opinion that the Company and its subsidiaries will be able to meet its liabilities as and when they fall due within the next twelve months and accordingly, these consolidated financial statements are prepared on a going concern basis.

The IASB has issued certain new and revised IFRSs that are first effective or available for early adoption for the current accounting period of the Company and its subsidiaries. Note 2(b) provides information on any changes in accounting policies resulting from initial application of these developments to the extent that they are relevant to the Company and its subsidiaries for the current and prior accounting periods reflected in these financial statements.

(b)

Changes in accounting policies

The IASB has issued a number of new IFRSs and amendments to IFRSs that are first effective for the current accounting period of the Company and its subsidiaries. Of these, the following developments are relevant to the Company and its subsidiaries’ financial statements:

(i)

IFRS 9, Financial instruments

(ii)

IFRS 15, Revenue from contracts with customers

(iii)

IFRIC 22, Foreign currency transactions and advance consideration

The Company and its subsidiaries have not applied any new standard or interpretation that is not yet effective for current accounting period.

(i)

IFRS 9, Financial instruments

IFRS 9 replaces IAS 39, Financial instruments: recognition and measurement. It sets out the requirements for recognising and measuring financial assets, financial liabilities and some contracts to buy or sell non-financial items.

The Company and its subsidiaries have applied IFRS 9 retrospectively to items that existed at 1 January 2018 in accordance with the transition requirements. The Company and its subsidiaries have recognised the cumulative effect of initial application as an adjustment to the opening equity at 1 January 2018. Therefore, comparative information continues to be reported under IAS 39.

The following table summarises the impact of transition to IFRS 9 on reserves at 1 January 2018.

F-13

Other reserve in other comprehensive income
Transferred to fair value reserve (non-recycling) relating to equity instrument investments now measured at fair value through other comprehensive income		(574,657)

Fair value reserve (non-recycling)
Transferred from other reserve in other comprehensive income relating to equity instrument investments now measured at fair value through other comprehensive income and increase in fair value reserve (non-recycling) at 1 January 2018		944,603

Further details of the nature and effect of the changes to previous accounting policies and the transition approach are set out below:

Classification of financial assets and financial liabilities

IFRS 9 categorises financial assets into three principal classification categories: measured at amortised cost, at fair value through other comprehensive income (FVOCI) and at fair value through profit or loss (FVTPL). These supersede IAS 39’s categories of held-to-maturity investments, loans and receivables, available-for-sale financial assets and financial assets measured at FVTPL. The classification of financial assets under IFRS 9 is based on the business model under which the financial asset is managed and its contractual cash flow characteristics.

Under IFRS 9, derivatives embedded in contracts where the host is a financial asset in the scope of the standard are not separated from the host. Instead, the hybrid instrument as a whole is assessed for classification.

The following table shows the original measurement categories for available-for-sale financial assets of the Company and its subsidiaries under IAS 39 and reconciles the carrying amounts of those financial assets determined in accordance with IAS 39 to those determined in accordance with IFRS 9.

	IAS 39 Carrying amount at 31 December 2017		Reclassification			Remeasurement		IFRS 9 Carrying amount at 1 January 2018


Financial assets measured at FVOCI (non-recyclable)
Other equity instrument investments(i)		-		1,604,993			476,595		2,081,588

Financial assets classified as available-for-sale under IAS 39(i)		1,604,993		(1,604,993	)		-		-

F-14

Note (i): Under IAS 39, equity securities not held for trading were classified as available-for-sale financial assets. These equity securities are classified as at FVTPL under IFRS 9, unless they are eligible for and designated at FVOCI by the Company and its subsidiaries. At 1 January 2018, the Company and its subsidiaries designated its equity securities at FVOCI, as the investments are held for strategic purposes (see Note 10).

With respect to the financial assets classified as “loans and receivables” (which were measured at amortised cost) and “financial assets measured at FVTPL” under IAS 39, the Company and its subsidiaries have assessed the business model under which the financial assets are managed and its contractual cash flow characteristics, and these financial assets continue with their respective classification and measurements upon the adoption of IFRS 9, and the carrying amounts of these financial assets as at 1 January 2018 have not been impacted by the initial application of IFRS 9.

For an explanation of how the Company and its subsidiaries classify and measure financial assets and recognise related gains and losses under IFRS 9, see respective accounting policy notes in Note 2(m)A.

The measurement categories for all financial liabilities of the Company and its subsidiaries remain the same. The carrying amounts for all financial liabilities of the Company and its subsidiaries as at 1 January 2018 have not been significantly impacted by the initial application of IFRS 9.

The Company and its subsidiaries did not designate or de-designate any financial asset or financial liability at FVTPL as at 1 January 2018.

Credit losses

IFRS 9 replaces the “incurred loss” model in IAS 39 with the “expected credit loss” (“ECL”) model. The ECL model requires an ongoing measurement of credit risk associated with a financial asset and therefore recognises ECLs earlier than under the “incurred loss” accounting model in IAS 39.

The Company and its subsidiaries applies the new ECL model to the following items:

- financial assets measured at amortised cost;

- contract assets as defined in IFRS 15 (Note 2(z));

- debt investments measured at FVOCI (recycling);

- lease receivables; and

- financial guarantee contracts issued (Note 2(m)A).

The Company and its subsidiaries assessed the ECLs of financial assets measured at amortised cost and lease receivables as at 1 January 2018. There was not significant change to the loss allowance for these financial assets of the Company and its subsidiaries as at 1 January 2018.

For further details on the Company and its subsidiaries’ accounting policy for accounting for credit losses, see Note 2(m)A(vi).

F-15

Hedge accounting

The Company and its subsidiaries have elected to adopt the new general hedge accounting model in IFRS 9. Depending on the complexity of the hedge, this new accounting model allows a more qualitative approach to assessing hedge effectiveness compared to IAS 39 to be applied, and the assessment is always forward-looking. The adoption of IFRS 9 has not had a significant impact on the Company and its subsidiaries’ financial statements in this regard.

For an explanation of how the Company and its subsidiaries apply hedge accounting, see Note 2(m)A(vii).

Transition

Changes in accounting policies resulting from the adoption of IFRS 9 have been applied retrospectively, except as described below:

Information relating to comparative periods has not been restated. Differences in the carrying amounts of financial assets resulting from the adoption of IFRS 9 are recognised in reserves as at 1 January 2018. Accordingly, the information presented for 2017 continues to be reported under IAS 39 and thus may not be comparable with the current period.

The following assessments have been made on the basis of the facts and circumstances that existed as at 1 January 2018:

the determination of the business model within which a financial asset is held; and

the designation of investments in equity instruments not held for trading to be classified as at FVOCI (non-recycling).

If, at the date of initial application, the assessment of whether there has been a significant increase in credit risk since initial recognition would have involved undue cost or effort, a lifetime ECL has been recognised for that financial instrument.

All hedging relationships designated under IAS 39 as at 31 December 2017 met the criteria for hedge accounting under IFRS 9 as at 1 January 2018 and are therefore regarded as continuing hedging relationships. Changes to hedge accounting policies have been applied prospectively.

(ii)

IFRS 15, Revenue from contracts with customers

IFRS 15 establishes a comprehensive framework for recognising revenue and some costs from contracts with customers. IFRS 15 replaces IAS 18, Revenue, which covered revenue arising from sale of goods and rendering of services, and IAS 11, Construction contracts, which specified the accounting for construction contracts.

IFRS 15 also introduces additional qualitative and quantitative disclosure requirements which aim to enable users of the financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.

The Company and its subsidiaries have elected to use the cumulative effect transition method and have recognised the cumulative effect of initial application as an adjustment to the opening balance of equity as at 1 January 2018. Therefore, comparative information has not been restated and continues to be reported under IAS 18 and IAS 11. As allowed by IFRS 15, the Company and its subsidiaries have

F-16

applied the new requirements only to contracts that were not completed before 1 January 2018, referred to as open contracts.

Since more than 95% of the Company and its subsidiaries' revenue comprised of contracts with customers from rate-regulated sales of electricity and heat, where revenue continue to be recognised upon transmission to the customers. The adoption of IFRS 15 did not have a material impact on the consolidated financial statements.

Further details of the nature and effect of the changes on previous accounting policies are set out below:

Timing of revenue recognition

Previously, revenue from sale of goods was generally recognised at a point in time when the risks and rewards of ownership of the goods had passed to the customers, whereas revenue arising from construction contracts and provision of services was recognised over time.

Under IFRS 15, revenue is recognised when the customer obtains control of the promised good or service in the contract. This may be at a single point in time or over time. IFRS 15 identifies the following three situations in which control of the promised good or service is regarded as being transferred over time:

When the customer simultaneously receives and consumes the benefits provided by the entity’s performance, as the entity performs;

When the entity’s performance creates or enhances an asset (for example work in progress) that the customer controls as the asset is created or enhanced;

When the entity’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date.

If the contract terms and the entity’s activities do not fall into any of these 3 situations, then under IFRS 15 the entity recognises revenue for the sale of that good or service at a single point in time, being when control has passed. Transfer of risks and rewards of ownership is only one of the indicators that is considered in determining when the transfer of control occurs.

Since more than 95% of the Company and its subsidiaries' revenue comprised of contracts with customers from rate-regulated sales of electricity and heat, where revenue continue to be recognised upon transmission to the customers. The adoption of IFRS 15 did not have a significant impact on timing of revenue recognition.

Presentation of contract assets and liabilities

Under IFRS 15, accounts receivable is recognised only if the Company and its subsidiaries have an unconditional right to consideration. If the Company and its subsidiaries recognise the related revenue (see Note 2(z)) before being unconditionally entitled to the consideration, then the entitlement to consideration is classified as a contract asset. Similarly, a contract liability, rather than a payable, is recognised when a customer pays non-refundable consideration, or is contractually required to pay non-refundable consideration and the amount is already due, before the Company and its subsidiaries recognise the related revenue. For a single contract with the customer, either a net contract asset or a net contract liability is presented. For multiple contracts, contract assets and contract liabilities of unrelated contracts are not presented on a net basis.

F-17

Previously, contract balances relating to “amounts received in advance” and “other deferred income” were presented in the statement of financial position under “accounts payable and other liabilities” and “other non-current liabilities”, respectively.

To reflect these changes in presentation, the Company and its subsidiaries have made the following adjustments as at 1 January 2018, as a result of the adoption of IFRS 15:

“Accounts payable and other liabilities - amounts received in advance” amounting to RMB1,505 million as at 1 January 2018 is now presented as “contract liabilities”.

“Other non-current liabilities - other deferred income” amounting to RMB1,750 million as at 1 January 2018 is now presented as “Other non-current liabilities – contract liabilities”.

Disclosure of the estimated impact on the amounts reported in respect of the year ended 31 December 2018 as a result of the adoption of IFRS 15 on 1 January 2018

The following tables summarise the estimated impact of adoption of IFRS 15 on the Company and its subsidiaries’ consolidated financial statements for the year ended 31 December 2018, by comparing the amounts reported under IFRS 15 in these consolidated financial statements with estimates of the hypothetical amounts that would have been recognised under IAS 18 and IAS 11 if those superseded standards had continued to apply to 2018 instead of IFRS 15. These tables show only those line items impacted by the adoption of IFRS 15

	Amounts reported in accordance with IFRS 15 (A)		Hypothetical amounts under IASs 18 and 11 (B)		Difference Estimated impact of adoption of IFRS 15 on 2018 (A)-(B)
Line items in the consolidated statement of financial position as at 31 December 2018 impacted by the adoption of IFRS 15

Accounts receivable		29,278,938		29,289,996		(11,058	)
Contract assets		11,058		-		11,058
Total current assets		61,799,069		61,799,069		-
Total assets		419,903,311		419,903,311		-
Accounts payable and other liabilities		35,138,680		37,115,327		(1,976,647	)
Contract liabilities		1,976,647		-		1,976,647
Total current liabilities		138,206,214		138,206,214		-
Total liabilities		303,781,641		303,781,641		-

F-18

(iii)

IFRIC 22, Foreign currency transactions and advance consideration

This interpretation provides guidance on determining “the date of the transaction” for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income (or part of it) arising from a transaction in which an entity receives or pays advance consideration in a foreign currency.

The Interpretation clarifies that “the date of the transaction” is the date on initial recognition of the non-monetary asset or liability arising from the payment or receipt of advance consideration. If there are multiple payments or receipts in advance of recognising the related item, the date of the transaction for each payment or receipt should be determined in this way. The adoption of IFRIC 22 does not have any material impact on the financial position and the financial result of the Company and its subsidiaries.

(c)

Consolidation

The consolidated financial statements include the financial statements of the Company and all of its subsidiaries.

Subsidiaries are investees over which the Company and its subsidiaries have the power to exercise control. The Company and its subsidiaries control an entity when it is exposed, or have rights to variable returns from their involvement with the entity and have the ability to affect those returns through their power over the entity. In assessing whether the Company and its subsidiaries have power, only substantive rights (held by the Company and its subsidiaries and other parties) are considered.

Subsidiaries are consolidated from the date when control is transferred to the Company and its subsidiaries. They are de-consolidated from the date when control ceases. Intra-group balances, transactions and cash flows, and any unrealised income and expenses arising from intra-group transactions, are eliminated in full in preparing the consolidated financial statements. Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Company and its subsidiaries’ interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. The portion of the shareholders’ equity of the subsidiaries, which is not attributable directly or indirectly to the parent company, is separately presented as non-controlling interests in the shareholders’ equity in the consolidated financial statements.

When there is any inconsistency on the accounting policies or financial period adopted between subsidiaries and the Company, the financial statements of subsidiaries are adjusted according to the accounting policies or financial period adopted by the Company.

F-19

(i)

Business combinations

The acquisition method is used to account for the business combinations of the Company and its subsidiaries (including business combinations under common controls). The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Company and its subsidiaries. Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent consideration that meets the definition of a financial instrument is classified as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, other contingent consideration is remeasured at fair value at each reporting date and subsequent changes in the fair value of the contingent consideration are recognised in profit or loss. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the Company and its subsidiaries recognise any non-controlling interests in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the recognised amounts of acquiree’s identifiable net assets. The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired is recorded as goodwill (Note 2(k)). If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss. In a business combination achieved in stages, the acquirer shall remeasure its previously held equity interest in the acquiree at its acquisition-date fair value and recognise the resulting gain or loss, if any, in profit or loss or other comprehensive income, as appropriate. In prior reporting periods, the acquirer may have recognised changes in the value of its equity interest in the acquiree in other comprehensive income. If so, the amount that was recognised in other comprehensive income shall be recognised on the same basis as would be required if the acquirer had disposed directly of the previously held equity interest.

(ii)

Changes in ownership interests in subsidiaries

Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions – that is, as transactions with the equity owners in their capacity as owners. The difference between fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.

When the Company and its subsidiaries lose control of a subsidiary, it is accounted for as a disposal of the entire interest in that subsidiary, with a resulting gain or loss being recognised in profit or loss. Any interest retained in that former subsidiary at the date when control is lost is recognised at fair value and this amount is regarded as the fair value on initial recognition of a financial asset (Note 2(m)) or, when appropriate, the cost on initial recognition of an investment in an associate or joint venture (Note 2(c)(iii)).

F-20

(iii)

Associates and joint ventures

Associates are investees over which the Company and its subsidiaries have significant influence on the financial and operating decisions. A joint venture is an arrangement whereby the Company and its subsidiaries and other parties contractually agree to share control of the arrangement, and have rights to the net assets of the arrangement.

Investments in associates and joint ventures are initially recognised at cost and are subsequently measured using the equity method of accounting, unless it is classified as held for sale (or included in a disposal group that is classified as held for sale). The excess of the initial investment cost over the proportionate share of the fair value of identifiable net assets of investee acquired is included in the initial investment cost (Note 2(k)). Any shortfall of the initial investment cost to the proportionate share of the fair value of identifiable net assets of investee acquired is recognised in current period profit or loss and long-term investment cost is adjusted accordingly.

When applying equity method, the Company and its subsidiaries adjust net profit or loss of the investees, including the fair value adjustments on the net identifiable assets of the associates and joint ventures and the adjustments to align with the accounting policies of the Company and the Company’s financial reporting periods. Current period investment income is then recognised based on the proportionate share of the Company and its subsidiaries in the investees’ net profit or loss. Net losses of investees are recognised to the extent of the carrying value of long-term equity investments and any other constituting long-term equity investments in investees that in substance form part of the investments in the investees. The Company and its subsidiaries continue to recognise investment losses and provision if they bear additional obligations which meet the recognition criteria.

The Company and its subsidiaries adjust the carrying amount of the investment and directly recognise into related other comprehensive income based on their proportionate share on the movements of the investees’ other comprehensive income.

When the investees appropriate profit or declare dividends, the carrying value of long-term equity investments are reduced correspondingly by the proportionate share of the distribution.

The Company and its subsidiaries determine at each reporting date whether there is any objective evidence that the investment in the associate or the joint venture is impaired. If this is the case, the Company and its subsidiaries calculate the amount of impairment as the difference between the recoverable amount of the associate or the joint venture and its carrying value and recognise the amount in the consolidated statement of comprehensive income.

Profits or losses resulting from transactions between the Company and its subsidiaries and the associates and joint ventures are recognised in the Company and its subsidiaries’ financial statements only to the extent of the unrelated third party investor’s interests in the associates and joint ventures. Loss from transactions between the Company and its subsidiaries and the associates and joint ventures is fully recognised and not eliminated when there is evidence for asset impairment.

F-21

If an investment in an associate becomes an investment in a joint venture or vice versa, retained interest is not remeasured. Instead, the investment continues to be accounted for under the equity method.

Gains and losses arising from dilution of investments in associates and joint ventures are recognised in the consolidated statement of comprehensive income.

In the Company’s statement of financial position, investments in associates and joint ventures are stated at cost less provision for impairment losses (Note 2(l)) unless classified as held for sale (or included in a disposal group that is classified as held for sale). Investment income from investments in associates and joint ventures is accounted for by the Company based on dividends received and receivable.

In all other cases, when the Company and its subsidiaries cease to have significant influence over an associate or joint control over a joint venture, it is accounted for as a disposal of the entire interest in that investee, with a resulting gain or loss being recognised in profit or loss. Any interest retained in that former investee at the date when significant influence or joint control is lost is recognised at fair value and this amount is regarded as the fair value on initial recognition of a financial asset (Note 2(m)).

(d)

Separate financial statements of the Company

Investments in subsidiaries are accounted for at cost less impairment unless classified as held for sale (or included in a disposal group that is classified as held for sale). Cost also includes direct attributable costs of investment. Investment income is recognised when the subsidiaries declare dividend.

(e)

Segment reporting

The Company and its subsidiaries determine the operating segment based on the internal organization structure, management requirement and internal reporting system for purposes of presenting reportable segment information.

An operating segment represents a component of the Company and its subsidiaries that meets all the conditions below: (i) the component earns revenue and incurs expenses in its daily operating activities; (ii) chief operating decision maker of the Company and its subsidiaries regularly reviews the operating results of the component in order to make decisions on allocating resources and assessing performance; (iii) the financial position, operating results, cash flows and other related financial information of the component are available. When the two or more operating segments exhibit similar economic characteristics and meet certain conditions, the Company and its subsidiaries combine them as one reportable segment.

(f)

Foreign currency translation

(i)

Functional and presentation currency

Items included in the financial statements of each of the Company and its subsidiaries are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in Renminbi (“RMB”), which is the Company’s functional and presentation currency.

F-22

(ii)

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rate on the transaction dates. As at the end of reporting period, foreign currency monetary items are translated into functional currency at the spot exchange rate as at the end of reporting period. Exchange differences are directly expensed in current period profit or loss unless they arises from foreign currency loans borrowed for purchasing or construction of qualifying assets which is eligible for capitalization or they arise from monetary items that qualify as hedging instruments in cash flow hedges which are recorded in other comprehensive income to the extent that the hedge is effective.

(iii)

Foreign subsidiaries

The operating results and financial position of the foreign subsidiaries are translated into presentation currency as follows:

Asset and liability items in each statement of financial position of foreign operations are translated at the closing rates at the end of reporting period; equity items excluding retained earnings are translated at the spot exchange rates at the date of the transactions. Income and expense items in the statement of comprehensive income of the foreign operations are translated at average exchange rates approximating the rate on transaction dates. All resulting translation differences are recognised in other comprehensive income.

The cash flows denominated in foreign currencies and cash flows of overseas subsidiaries are translated at average exchange rates approximating the rates at the dates when cash flows incurred. The effect of the foreign currency translation on the cash and cash equivalents is presented in the statement of cash flows separately.

On the disposal of a foreign operation (that is, a disposal of the Company and its subsidiaries’ entire interest in a foreign operation, or a disposal involving loss of control over a subsidiary that includes a foreign operation, a disposal involving loss of joint control over a joint ventures that includes a foreign operation, or a disposal involving loss of significant influence over an associate that includes a foreign operation), all of the exchange differences accumulated in equity in respect of that operation attributable to the equity holders of the Company are reclassified to profit or loss.

In the case of a partial disposal that does not result in the Company and its subsidiaries losing control over a subsidiary that includes a foreign operation, the proportionate share of accumulated exchange differences are re-attributed to non-controlling interests and are not recognised in profit or loss. For all other partial disposals (that is, reductions in the Company and its subsidiaries’ ownership interest in associates or joint venture that includes a foreign operation that do not result in the Company and its subsidiaries losing significant influence or joint control), the proportionate share of the accumulated exchange difference is reclassified to profit or loss.

(g)

Property, plant and equipment

Property, plant and equipment consists of dam, port facilities, buildings, electric utility plant in service, transportation facilities, others and construction-in-progress (“CIP”). Property, plant and equipment acquired or constructed are initially recognised at cost and carried at the net value of cost less accumulated depreciation and accumulated impairment loss, unless classified as held for sale (or included in a disposal group that is classified as held for sale).

Cost of CIP comprises construction expenditures, other expenditures necessary for the purpose of preparing the CIP for its intended use, those borrowing costs incurred before the assets are ready for intended use that are eligible for capitalization. CIP is not depreciated until such time as the relevant asset is completed and ready for its intended use.

F-23

Subsequent costs about property, plant and equipment are included in the asset’s carrying amount only when it is probable that future economic benefits associated with the item will flow to the Company and its subsidiaries and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. Other subsequent expenditures not qualified for capitalization are charged in the current period profit or loss when they are incurred.

Depreciation of property, plant and equipment is provided based on book value of the asset less estimated residual value over the estimated useful life using straight-line method. For those impaired property, plant and equipment, depreciation is provided based on book value after deducting impairment provision over the estimated useful life of the asset. The estimated useful lives are as follows:

		Estimated useful lives

Dam		8 – 50 years
Port facilities		20 – 40 years
Buildings		8 – 30 years
Electric utility plant in service		5 – 30 years
Transportation facilities		8 – 27 years
Others		5 – 14 years

Property, plant and equipment is derecognised when it is disposed of, or is not expected to bring economic benefit through use or disposal. The amount of disposal proceeds arising from sale, transfer, disposal or write-off of the property, plant and equipment less book value and related tax expenses is recorded in ‘operating expenses – others’ in the statement of comprehensive income.

The carrying amount of property, plant and equipment is written down immediately to its recoverable amount when its carrying amount is greater than its recoverable amount (Note 2(l)).

F-24

(h)

Investment property

Investment properties are land and/or buildings which are owned or held under a leasehold interest (Note 2(ab)) to earn rental income and/or for capital appreciation. These include land held for a currently undetermined future use and property that is being constructed or developed for future use as investment property.

Investment properties are stated at fair value, unless they are still in the course of construction or development at the end of the reporting period and their fair value cannot be reliably measured at that time. Any gain or loss arising from a change in fair value or from the retirement or disposal of an investment property is recognised in profit or loss. Rental income from investment properties is accounted for as described in Note 2(z)(vi).

(i)

Power generation license

The Company and its subsidiaries acquired the power generation license as part of the business combination with Tuas Power Ltd. (“Tuas Power”). The power generation license is initially recognised at fair value at the acquisition date. The license has an indefinite useful life and is not amortized. The assessment that the license has an indefinite useful life is based on the expected renewal of power generation license without significant restriction and cost, together with the consideration on related future cash flows generated and the expectation of continuous operations. It is tested annually for impairment and carried at cost less accumulated impairment loss. Useful life of the power generation license is reviewed by the Company and its subsidiaries each financial period to determine whether events and circumstances continue to support the indefinite useful life assessment.

(j)

Mining rights

Mining rights are stated at cost less accumulated amortization and impairment losses (Note 2(l)) and are amortized based on the units of production method utilizing only recoverable coal reserves as the depletion base, unless the mining rights are classified as held for sale (or included in a disposal group that is classified as held for sale).

(k)

Goodwill

Goodwill arising from the acquisitions of subsidiaries, associates and joint ventures represents the excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the Company and its subsidiaries’ share of the net fair value of the net identifiable assets, liabilities and contingent liabilities of the acquiree at the date of acquisition.

Goodwill is stated at cost less accumulated impairment losses. Goodwill arising on a business combination is allocated to each cash-generating unit, or groups of cash generating units, that is expected to benefit from the synergies of the combination and is tested annually for impairment (Note 2(l)).

On disposal of a cash generating unit during the year, any attributable amount of purchased goodwill is included in the calculation of the profit or loss on disposal.

F-25

(l)

Impairment of non-financial assets

The carrying amounts of property, plant and equipment, mining rights, intangible assets with definite useful lives, land use rights and long-term equity investments not accounted for as financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill, indefinite-lived intangible assets and intangible assets not yet available for use are tested for impairment annually regardless of whether there are indications of impairment or more frequently if events or changes in circumstances indicate a potential impairment. An impairment loss is recognised if the carrying amount of an asset or cash-generating unit (“CGU”) exceeds its recoverable amount.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less cost to sell. For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs.

Goodwill acquired in a business combination is allocated to groups of CGUs that are expected to benefit from the synergies of the combination.

Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the CGU (group of CGUs), and then to reduce the carrying amounts of the other assets in the CGU (group of CGUs) on a pro rata basis, except that the carrying value of an asset will not be reduced below its individual fair value less costs of disposal (if measurable) or value in use (if determinable).

An impairment loss in respect of goodwill is not reversed. Except for goodwill, all impaired non-financial assets are subject to review for possible reversal of impairment at each reporting date. A reversal of an impairment loss is limited to the asset’s carrying amount that would have been determined had no impairment loss been recognised in prior year. Reversals of impairment losses are credited to profit or loss in the year in which the reversals are recognised.

(m)

Financial instruments

Policy applicable from 1 January 2018

(i)

Recognition and initial measurement

All financial assets and financial liabilities are initially recognised when the Company and its subsidiaries become a party to the contractual provisions of the instrument.

A financial asset (unless it is a receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition or issue. A receivable without a significant financing component is initially measured at the transaction price.

F-26

(ii)

Classification and subsequent measurement of financial assets

(1)

Classification of financial assets

On initial recognition, the Company and its subsidiaries categorise financial assets into three principal classification categories: measured at amortised cost, at fair value through other comprehensive income (FVOCI) and at fair value through profit or loss (FVTPL) based on the business model under which the financial asset is managed and its contractual cash flow characteristics.

Financial assets are not reclassified subsequent to their initial recognition unless the Company and its subsidiaries change its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:

it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A financial assets is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Company and its subsidiaries may make an irrevocable election to designate the investment at FVOCI (non-recycling) such that subsequent changes in fair value are recognised in other comprehensive income. Such elections are made on an instrument-by-instrument basis, but may only be made if the investment meets the definition of equity from the issuer’s perspective.

All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

F-27

An entity’s business model refers to how an entity manages its financial assets in order to generate cash flows. The entity’s business model determines whether cash flows will result from collecting contractual cash flows, selling financial assets or both. The Company and its subsidiaries determine the business model for managing the financial assets according to the facts and based on the specific business objective determined by the Company and its subsidiaries’ key management personnel.

The Company and its subsidiaries assess the contractual cash flow characteristics of the financial asset whether contractual cash flows are solely payments of principal and interest. Principal is defined as the fair value of the financial asset on initial recognition. Interest is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs, as well as a profit margin. The Company and its subsidiaries assess whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition.

(2)

Subsequent measurement of financial assets

Financial assets at FVTPL

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss, unless the financial assets are part of a hedging relationship.

Financial assets at amortised cost

These assets are subsequently measured at amortised cost using the effective interest method. A gain or loss on a financial asset that is measured at amortised cost and is not part of a hedging relationship shall be recognised in profit or loss when the financial asset is derecognised, through the amortisation process or in order to recognise impairment gains or losses.

Debt investments at FVOCI

These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, impairment and foreign exchange gains and losses are recognised in profit or loss. Other net gains and losses are recognised in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss.

Equity investments at FVOCI

These assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss. Other net gains and losses are recognised in OCI and are transferred to retained earnings on derecognition.

F-28

(iii)

Classification and subsequent measurement of financial liabilities

Financial liabilities are classified as measured at FVTPL, financial guarantee contracts or measured at amortised cost.

Financial liabilities at FVTPL

A financial liability is classified as at FVTPL if it is classified as held-for-trading (including derivative financial liability) or it is designated as such on initial recognition.

These liabilities are subsequently measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss, unless the financial liabilities are part of a hedging relationship.

Financial guarantee contracts

Financial guarantees are contracts that require the issuer (i.e. the guarantor) to make specified payments to reimburse the beneficiary of the guarantee (the “holder”) for a loss the holder incurs because a specified debtor fails to make payment when due in accordance with the terms of a debt instrument.

After initial recognition at fair value, an issuer of such a contract shall subsequently measure it at the higher of: (i) the amount of the loss allowance determined in accordance with Note 2(m)A(vi) and (ii) the amount initially recognised less, when appropriate, the cumulative amount of income recognised.

Financial liabilities at amortised cost

These liabilities are subsequently measured at amortised cost using the effective interest method.

(iv)

Offsetting

Financial assets and financial liabilities are separately presented in the statement of financial position without offsetting. However, financial assets and financial liabilities are offset when, and only when the Company and its subsidiaries:

currently have a legally enforceable right to set off the amounts;

intend either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

(v)

Derecognition

The Company and its subsidiaries derecognise a financial asset when one of the following conditions is met:

the contractual rights to the cash flows from the financial asset expire;

the Company and its subsidiaries transfer the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred;

the Company and its subsidiaries transfer the rights to receive the contractual cash flows in a transaction in which the the Company and its subsidiaries neither transfer nor retain substantially all of the risks and rewards of ownership and do not retain control of the financial asset.

F-29

On derecognition of a financial asset its entirety, the difference between the two amounts below is recognised in profit or loss:

the carrying amount of the financial asset transferred (measured at the date of derecognition) and

the consideration received, along with the cumulative gain or loss previously recognised in other comprehensive income, for the part derecognised.

The Company and its subsidiaries derecognise a financial liability (or part of it) when, and only when, its contractual obligation (or part of it) is discharged, cancelled or expired.

(vi)

Credit losses

The Company and its subsidiaries recognise loss allowance for ECL on the following items:

financial assets measured at amortised cost;

contract assets as defined in IFRS 15 (see Note 2(z));

debt investments measured at FVOCI;

lease receivables; and

financial guarantee contracts issued, which are not measured at FVTPL.

Financial assets measured at fair value, including debt investments or equity investments measured at FVTPL, other equity investments designated at FVOCI (non-recycling) and derivative financial assets, are not subject to the ECL assessment.

Measurement of ECLs

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all expected cash shortfalls (i.e. the difference between the cash flows due to the Company and its subsidiaries in accordance with the contract and the cash flows that the Company and its subsidiaries expect to receive).

The maximum period considered when estimating ECLs is the maximum contractual period over which the Company and its subsidiaries are exposed to credit risk.

In measuring ECLs, the Company and its subsidiaries take into account reasonable and supportable information that is available without undue cost or effort. This includes information about past events, current conditions and forecasts of future economic conditions.

ECLs are measured on either of the following bases:

12-month ECLs: these are losses that are expected to result from possible default events within the 12 months after the reporting date; and

lifetime ECLs: these are losses that are expected to result from all possible default events over the expected lives of the items to which the ECL model applies.

Loss allowances for accounts receivable, lease receivables and contract assets are always measursed at an amount equal to lifetime ECLs. ECLs on these financial assets are estimated using a provision matrix based on the Company and its subsidiaries’ historical credit loss experience, adjusted for factors that are specific to the debtors and an assessment of both the current and forecast general economic conditions at the reporting date.

F-30

For all other financial instruments, the Company and its subsidiaries recognise a loss allowance equal to 12-month ECLs unless there has been a significant increase in credit risk of the financial instrument since initial recognition or the financial instrument is not determined to have low credit risk at the reporting date, in which cases the loss allowance is measured at an amount equal to lifetime ECLs.

Low credit risk

If the financial instrument has a low risk of default, the borrower has a strong capacity to meet its contractual cash flow obligations in the near term and adverse changes in economic and business conditions in the longer term may, but will not necessarily, reduce the ability of the borrower to fulfil its contractual cash flow obligations, the credit risk on a financial instrument is considered low.

Significant increases in credit risk

In assessing whether the credit risk of a financial instrument has increased significantly since initial recognition, the Company and its subsidiaries compare the risk of default occurring on the financial instrument assessed at the reporting date with that assessed at the date of initial recognition. The Company and its subsidiaries consider both quantitative and qualitative information that is reasonable and supportable, including historical experience and forward-looking information that is available without undue cost or effort.

In particular, the following information is taken into account when assessing whether credit risk has increased significantly since initial recognition:

failure to make payments of principal or interest on their contractually due dates;

an actual or expected significant deterioration in a financial instrument’s external or internal credit rating (if available);

an actual or expected significant deterioration in the operating results of the debtor; and

existing or forecast changes in the technological, market, economic or legal environment that have a significant adverse effect on the debtor’s ability to meet its obligation to the Company and its subsidiaries.

Depending on the nature of the financial instruments, the assessment of a significant increase in credit risk is performed on either an individual basis or a collective basis. When the assessment is performed on a collective basis, the financial instruments are grouped based on shared credit risk characteristics, such as past due status and credit risk ratings.

The Company and its subsidiaries assume that the credit risk on a financial asset has increased significantly if it is more than 30 days past due, unless the Company and its subsidiaries have reasonable and supportable information that is available without undue cost or effort, that demonstrates that the credit risk has not increased significantly since initial recognition even though the contractual payments are more 30 days past due.

The Company and its subsidiaries consider a financial asset to be in default when the borrower is unlikely to pay its credit obligations to the Company and its subsidiaries in full, without recourse by the Company and its subsidiaries to actions such as realising security (if any is held).

F-31

Credit-impaired financial assets

At each reporting date, the Company and its subsidiaries assess whether financial assets carried at amortised cost and debt investments at FVOCI are credit-impaired. A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

Evidence that a financial asset is credit-impaired includes the following observable events:

significant financial difficulties of the debtor;

a breach of contract, such as a default or delinquency in interest or principal payments;

for economic or contractual reasons relating to the borrower’s financial difficulty, the Company and its subsidiaries having granted to the borrower a concession that would not otherwise consider;

it becoming probable that the borrower will enter into bankruptcy or other financial reorganisation;

the disappearance of an active market for that financial asset because of financial difficulties of the issuer.

Presentation of allowance for ECL

ECLs are remeasured at each reporting date to reflect changes in the financial instrument’s credit risk since initial recognition. Any change in the ECL amount is recognised as an impairment gain or loss in profit or loss.

The Company and its subsidiaires recognises an impairment gain or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account, except for debt investments that are measured at FVOCI (recycling), for which the loss allowance is recognised in other comprehensive income.

Write-off policy

The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. A write-off constitutes a derecognition event. This is generally the case when the Company and its subsidiaries determine that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the the Company and its subsidiaries’ procedures for recovery of amounts due.

Subsequent recoveries of an asset that was previously written off are recognised as a reversal of impairment in profit or loss in the period in which the recovery occurs.

(vii)

Cash flow hedge

Cash flow hedge is a hedge of the exposure to variability in cash flows that is attributable to a particular risk associated with all, or a component of, a recognised asset or liability or a highly probable forecast transaction, and could affect profit or loss.

F-32

The hedged items of cash flow hedge are the designated items with respect to the risks associated with future cash flow changes, and can be reliably measurable. Hedging instruments are designated financial instruments for cash flow hedge whose cash flows are expected to offset changes in the cash flows of a hedged item.

When designating a hedging relationship and on an ongoing basis, the Company and its subsidiaries shall analyse the sources of hedge ineffectiveness that are expected to affect the hedging relationship during its term. If a hedging relationship ceases to meet the hedging effectiveness requirement relating to the hedge ratio, but the risk management objective for that designated hedging relationship remains the same, the Company and its subsidiaries shall adjust the hedge ratio of the hedging relationship, so that it meets the qualifying criteria again, which is referred as rebalancing.

When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognised in other comprehensive income and accumulated in the cash flow hedge reserve. Cash flow hedge reserve is adjusted to the lower of the following:

the cumulative gain or loss on the hedging instrument from inception of the hedge; and

the present value of the cumulative change in the hedged expected future cash flows from inception of the hedge.

The portion of the gain or loss on the hedging instrument that is determined to be an effective hedge shall be recognised in other comprehensive income. Any remaining gain or loss on the hedging instrument is hedge ineffectiveness that shall be recognised in profit or loss.

On rebalancing, the hedge ineffectiveness of the hedging relationship is determined and recognised immediately before adjusting the hedging relationship. Adjusting the hedge ratio allows an entity to respond to changes in the relationship between the hedging instrument and the hedged item that arise from their underlyings or risk variables. The Company and its subsidiaries adjust the hedge ratio by increasing the volume of the hedged items or hedging instruments. Hence, increases in volumes refer to the quantities that are part of the hedging relationship, and decreases in volumes are not part of the hedging relationship.

The amount accumulated in the hedging reserve and the cost of hedging reserve is reclassified to profit or loss in the same period or periods during which the hedged expected future cash flows affect profit or loss.

When the hedged forecast transaction subsequently results in the recognition of a non-financial item, the amount accumulated in the hedging reserve and the cost of hedging reserve is included directly in the initial cost of the non-financial item when it is recognised.

If the amount that has been accumulated in the cash flow hedge reserve is a loss and the Company and its subsidiaries expect that all or a portion of that loss will not be recovered in one or more future periods, the Company and its subsidiaries immediately reclassify the amount that is not expected to be recovered into profit or loss.

F-33

When the Company and its subsidiaries discontinue hedge accounting for a cash flow hedge, the Company and its subsidiaries account for the amount that has been accumulated in the cash flow hedge reserve as follows:

if the hedged future cash flows are still expected to occur, that amount shall remain in the cash flow hedge reserve until the future cash flows occur.

if the hedged future cash flows are no longer expected to occur, that amount shall be immediately reclassified from the cash flow hedge reserve to profit or loss. A hedged future cash flow that is no longer highly probable to occur may still be expected to occur.

When the future cash flows occur, the amounts accumulated in the hedging reserve of the effective portion are reclassified to profit or loss or included directly in the initial cost of the non-financial item. If the hedged future cash flows are no longer expected to occur, then the amounts that have been accumulated in the hedging reserve and the cost of hedging reserve are immediately reclassified to profit or loss.

Policy applicable prior to 1 January 2018

Financial assets are classified in the following categories at initial recognition: at fair value through profit or loss, loans and receivables and available-for-sale. The classification depends on the intention and ability of the Company and its subsidiaries to hold the financial assets.

(i)

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets held for trading and designated upon initial recognition as at fair value through profit or loss, and contingent consideration of the acquirer in a business combination. A financial asset is classified in this category if acquired principally for the purpose of selling in the short-term. Derivatives are classified as held for trading unless they are designated as hedges.

Assets in this category are classified as current assets if expected to be settled within 12 months; otherwise, they are classified as non-current.

(ii)

Loans and receivables

Loans and receivables refer to the non-derivative financial assets for which there is no quotation in the active market with fixed or determinable amount. They are included in current assets, except for maturities greater than 12 months after the end of reporting period which are classified as non-current assets. Loans and receivables are primarily included in as ‘accounts receivable’, ‘other receivables and assets’ , ‘loans to subsidiaries’ and ‘other non-current assets’ in the statement of financial position.

(iii)

Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are either designated in this category or not classified in any of the other categories. They are included in current assets when management intends to dispose of the available-for-sale financial assets within 12 months of the end of reporting period, otherwise, they are classified as non-current assets.

F-34

(iv)

Recognition and measurement

Regular purchases and sales of financial assets are recognised at fair value initially on trade-date – the date on which the Company and its subsidiaries commit to purchase or sell the asset. Transaction costs relating to financial assets at fair value through profit or loss are directly expensed in the profit or loss as incurred. Transaction costs for other financial assets are included in the carrying amount of the asset at initial recognition. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and all risks and rewards related to the ownership of the financial assets have been transferred to the transferee.

Financial assets at fair value through profit or loss and available-for-sale are subsequently measured at fair value. When an active market exists for a financial instrument, fair value is determined based on quoted prices in the active market. When no active market exists, fair value is determined by using valuation techniques. When applying valuation techniques, the Company and its subsidiaries maximize the use of relevant observable inputs and minimize the use of unobservable inputs.

Changes in the fair value of financial assets at fair value through profit or loss are recorded in ‘gain/(loss) on fair value changes of financial assets/liabilities’.

Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost. Loans and receivables are carried at amortized cost using the effective interest method.

Except for impairment loss and translation differences on monetary financial assets, changes in the fair value of available-for-sale financial assets are recognised in other comprehensive income. When these financial assets are derecognised, the accumulated fair value adjustments recognised in equity are included in the statement of comprehensive income as ‘other investment income’. Dividends on available-for-sale financial assets are recorded in ‘other investment income’ when the right of the Company and its subsidiaries to receive payments is established.

(v)

Impairment of financial assets

Except for financial assets at fair value through profit or loss, the Company and its subsidiaries perform assessment on the book value of financial assets at the end of reporting period. Provision for impairment is made when there is objective evidence showing that a financial asset is impaired.

For investments in subsidiaries, associates and joint ventures, the impairment loss is measured by comparing the recoverable amount of the investment with its carrying amount. The impairment loss is reversed if there has been a favourable change in the estimates used to determine the recoverable amount.

In the case of equity investments classified as available for sale, a significant or prolonged decline in the fair value of the investment below its cost is evidence that the assets are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss, measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss, is removed

F-35

from equity and recognised in profit or loss. Impairment losses recognised in the profit or loss on equity instruments are not reversed through the profit or loss.

When financial assets carried at amortized cost are impaired, the carrying amount of the financial assets is reduced to the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate. The impaired amount is recognised as assets impairment loss in the current period. If there is objective evidence that the value of the financial assets has recovered as a result of objective changes in circumstances occurring after the impairment loss was originally recognised, the originally recognised impairment loss is reversed through profit or loss. For the impairment test of receivables, please refer to Note 2(n).

(vi)

Derivative financial instruments and hedging activities

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value. Gain or loss arising from subsequent change in the fair value of derivative financial instruments is recognised in profit or loss except for the effective portions of gain or loss on the derivative financial instruments designated as cash flow hedges which are recognised directly in other comprehensive income. Cash flow hedge represents a hedge against the exposure to variability in cash flows, which such cash flow is originated from a particular risk associated with highly probable forecast transactions and variable rate borrowings and which could affect the statement of comprehensive income.

The hedged items of cash flow hedge are the designated items with respect to the risks associated with future cash flow change resulting from variability in cash flows of a recognised asset or liability or a highly probable forecast transaction or the foreign currency risk of a committed future transaction. Hedging instruments are designated derivative for cash flow hedge whose cash flows are expected to offset changes in the cash flows of a hedged item.

The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining maturity of the hedge item is more than 12 months.

The Company and its subsidiaries document their assessments, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items. The Company and its subsidiaries apply ratio analysis method to evaluate the ongoing effectiveness of the cash flow hedge.

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognised in other comprehensive income. The gain or loss relating to the ineffective portion is recognised immediately in the statement of comprehensive income within ‘gain/(loss) on fair value changes of financial assets/liabilities’.

Amounts accumulated in equity are reclassified to the profit or loss in the periods when the hedged item affects profit or loss. The gain or loss relating to the effective portion of interest rate swaps hedging variable rate borrowings is recognised in the statement of comprehensive income within ‘interest

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expense’. The gain or loss relating to the effective portion of exchange forward hedging foreign currency denominated payables is recognised in the statement of comprehensive income within ‘exchange gain/(loss) and bank charges, net’. However, when the forecast transaction that is hedged results in the recognition of a non-financial asset, the gains and losses previously deferred in equity are transferred from equity and included in the initial measurement of the cost of the asset. In the case where the Company and its subsidiaries expect all or a portion of net loss previously recognised directly in other comprehensive income will not be recovered in future financial periods, the irrecoverable portion will be reclassified into profit or loss.

When a hedging instrument expires or is sold, terminated or exercised or when a hedge no longer meets the criteria for hedge accounting, the Company and its subsidiaries will discontinue hedge accounting. Any cumulative gain or loss existing in equity at that time remains in equity and is subsequently recognised when the forecast transaction is ultimately recognised in the profit or loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the statement of comprehensive income within ‘gain/(loss) on fair value changes of financial assets/liabilities’.

(n)

Loans and receivables

The Company and its subsidiaries have assessed the business model under which the loans and receivables are managed and its contractual cash flow characteristics, and these financial assets continue with their respective classification and measurements upon the adoption of IFRS 9, please refer to Note 2(m)A(ii). For the impairment test of receivables, please refer to Note 2(m)A(vi).

Policy applicable prior to 1 January 2018

Loans and receivables, which primarily include accounts receivable, other receivables, loan to subsidiaries and other non-current assets, are recognised initially at fair value. Loans and receivables are subsequently measured at amortized cost less provision for doubtful debts using the effective interest method.

The Company and its subsidiaries establish an allowance for impairment that represents its estimate of incurred losses in respect of receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified. The collective loss allowance is determined based on historical data of payment statistics for similar financial assets.

When there is objective evidence that the Company and its subsidiaries will not be able to collect all amounts due according to the original terms of the receivables, impairment test is performed and related provision for doubtful accounts is made based on the shortfall between carrying amounts and respective present value of estimated future cash flows. The carrying amounts of the receivables are reduced through the use of allowance accounts, and the amount of the provision is recognised in the statement of comprehensive income within ‘operating expenses – others’. When a receivable is uncollectible, it is written off against the allowance account for the receivable. Subsequent recoveries of amounts previously written off are credited against ‘operating expenses – others’ in the statement of comprehensive income.

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(o)

Inventories

Inventories include fuel for power generation, materials for repairs and maintenance and spare parts, and are stated at lower of cost and net realizable values.

Inventories are initially recorded at cost and are charged to fuel costs or repairs and maintenance, respectively when used, or capitalized to property, plant and equipment when installed, as appropriate, using weighted average cost basis. Cost of inventories includes costs of purchase and transportation costs.

When the forecast transaction that is hedged results in the recognition of the inventory, the gains and losses previously deferred in equity are transferred from equity and included in the initial measurement of the cost of the inventory.

Provision for inventory obsolescence is determined by the excess of cost over net realizable value. Net realizable values are determined based on the estimated selling price less estimated conversion costs during power generation, selling expenses and related taxes in the ordinary course of business.

(p)

Related parties

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or jointly control of the same third party; one party is controlled or jointly controlled by a third party and the other party is an associate or a joint venture of the same third party.

(q)

Cash and cash equivalents

Cash and cash equivalents listed in the statement of cash flows represents cash in hand, call deposits held with banks and other financial institutions, and other short-term (3 months or less), highly-liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Bank overdrafts that are repayable on demand and form an integral part of the cash management are also included as a component of cash and cash equivalents for the purpose of the consolidated statement of cash flow. Cash and cash equivalents are assessed for expected credit losses in accordance with the policy set out in Note 2(m)A(vi).

(r)

Borrowings

Borrowings are recognised initially at fair value less transaction costs and subsequently measured at amortised cost using the effective interest method. Borrowings are classified as current liabilities unless the Company and its subsidiaries have an unconditional right to defer settlement of the liability for at least 12 months after the end of reporting period.

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(s)

Borrowing costs

General and specific 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 the cost of those assets. The capitalization of borrowing costs as part of the cost of a qualifying asset commences when expenditure for the asset is being incurred, borrowing costs are being incurred and activities that are necessary to prepare the asset for its intended use or sale are in progress. Capitalization of borrowing costs is suspended or ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are interrupted or complete.

The amount of specific borrowing costs capitalized is net of the investment income on any temporary investment of the funds pending expenditure on the asset.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

(t)

Share Capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds.

(u)

Other equity instruments

Perpetual corporate bond and other equity instruments are classified as equity if they are non-redeemable, or redeemable only at the Company’s option, and any interests or dividends are discretionary. Interests or dividends on such instruments classified as equity are recognised as distributions within equity. When these equity instruments are redeemed according to the contractual terms, the redemption price is charged to equity.

(v)

Payables

Payables primarily include accounts payable and other liabilities, and are recognised initially at fair value and subsequently measured at amortized cost using the effective interest method.

(w)

Taxation

(i)

Value-added tax (“VAT”)

The domestic power, heat and goods sales of the Company and its subsidiaries are subject to VAT. VAT payable is determined by applying 17% or 16% (11% or 10% on heat) on the taxable revenue after offsetting deductible input VAT of the period.

The applicable tax rate of VAT in respect of the lease of tangible movable properties, transportation industry and other modern services industry are 17% or 16%, 11% or 10% and 6%, respectively.

According to the relevant regulations of Ministry of Finance of PRC and State Administration of Taxation, the transformation from Business Tax to VAT launched nation-wide from 1 May 2016 and all business tax taxpayers in the construction industry, real estate industry, financial industry, living services were included. The applicable tax rate of VAT in respect of sectors including

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construction services, lease of immovables, sale of immovables and transfer of land use rights is 11%, and in respect of financial and living services is 6%.

(ii)

Goods and service tax (“GST”)

The power sales of the subsidiaries in Singapore are subject to goods and service tax of the country where they operate. GST payable is determined by applying 7% on the taxable revenue after offsetting deductible GST of the period.

The subsidiaries in Pakistan are subject to goods and service tax of the country where they operate, which is 16% on the taxable revenue.

(iii)

Current and deferred income tax

The income tax expense for the period comprises current and deferred income tax. Income tax expense is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

Deferred income tax assets and liabilities are recognised based on the differences between tax bases of assets and liabilities and respective book values (temporary differences). For deductible tax losses or tax credit that can be brought forward in accordance with tax law requirements for deduction of taxable income in subsequent years, it is considered as temporary differences and related deferred income tax assets are recognised. No deferred income tax liability is recognised for temporary difference arising from initial recognition of goodwill. For those temporary differences arising from initial recognition of an asset or liability in a non-business combination transaction that affects neither accounting profit nor taxable profit (or deductible loss) at the time of the transaction, no deferred income tax asset and liability is recognised. The temporary differences relating to investments in subsidiaries to the extent that, in the case of taxable differences, the Company and its subsidiaries control the timing of the reversal and it is probable that the differences will not reverse in the foreseeable future, or in the case of deductible differences, unless it is probable that they will reverse in the future.

The Company and its subsidiaries recognise deferred income tax assets to the extent that it is probable that taxable profit will be available to offset the deductible temporary difference, deductible tax loss and tax credit.

At the end of reporting period, deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or liability is settled.

The carrying amount of a deferred tax asset is reviewed at the end of each reporting period and is reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow the related tax benefit to be utilised. Any such reduction is reversed to the extent that it becomes probable that sufficient taxable profits will be available.

Deferred income tax assets and deferred income tax liabilities are offset when meeting all the conditions below:

(1)

The Company and its subsidiaries have the legal enforceable right to offset current income tax assets and current income tax liabilities;

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(2)

Deferred income tax assets and deferred income tax liabilities are related to the income tax levied by the same tax authority of the Company and its subsidiaries.

(x)

Employee benefits

Employee benefits include all expenditures relating to the employees for their services. The Company and its subsidiaries recognise employee benefits as liabilities during the accounting period when employees render services and allocate to related cost of assets and expenses based on different beneficiaries.

In connection with pension obligations, the Company and its subsidiaries operate various defined contribution plans in accordance with the local conditions and practices in the countries and provinces in which they operate. A defined contribution plan is a pension plan under which the Company and its subsidiaries pay fixed contributions into a separate publicly administered pension insurance plan on mandatory and voluntary bases. The Company and its subsidiaries have no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. The contributions are recognised as employee benefit when incurred. Prepaid contributions are recognised as assets to the extent that a cash refund or a reduction in the future payment is available.

(y)

Government grants

Government grants are recognised when the Company and its subsidiaries fulfill the conditions attached to them and they are probable to be received. When government grants are received in the form of monetary assets, they are measured at the amount received or receivable. When the grant is in the form of non-monetary assets, it is measured at fair value. When fair value cannot be measured reliably, nominal amount is assigned.

Asset-related government grant is recognised as deferred income and is amortized evenly in profit or loss over the useful lives of related assets.

Income-related government grant that is used to compensate subsequent related expenses or losses of the Company and its subsidiaries are recognised as deferred income and recorded in the profit or loss when related expenses or losses incurred. When the grant is used to compensate expenses or losses that were already incurred, they are directly recognised in current period profit or loss.

(z)

Revenue and other income

Income is increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in an increase in equity, other than those relating to contributions from equity participants.

Revenue is recognised when (or as) the Company and its subsidiaries satisfy a performance obligation in the contract by transferring the control over promised good or service to a customer.

When two or more performance obligations identified, the Company and its subsidiaries allocate the transaction price to each performance obligation identified in the contract on a relative stand-alone selling price basis at contract inception and recognise as revenue the amount of the transaction price that is allocated to that performance obligation.

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Transaction price is the amount of consideration to which the Company and its subsidiaries expect to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties. Revenue is only recognised to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur. The Company and its subsidiaries recognise a refund liability if the entity receives consideration from a customer and expects to refund some or all of that consideration to the customer. Where the contract contains a significant financing component, The Company and its subsidiaries recognise revenue at an amount that reflects the price that a customer would have paid for the promised goods or services if the customer had paid cash for those goods or services when (or as) they transfer to the customer. The difference between the promised amount of consideration and its present value is amortised using effective interest rate. The Company and its subsidiaries will not adjust the promised amount of consideration for the effects of a significant financing component if the Company and its subsidiaries expect, at contract inception, that the period between when the Company and its subsidiaries transfer a promised good or service to a customer and when the customer pays for that good or service will be one year or less.

A performance obligation is satisfied over time if one of the following criteria is met:

When the customer simultaneously receives and consumes the benefits provided by the Company and its subsidiaries’ performance, as the Company and its subsidiaries perform;

When the Company and its subsidiaries’ performance creates or enhances an asset that the customer controls as the asset is created or enhanced;

When the Company and its subsidiaries’ performance does not create an asset with an alternative use to the entity and the Company and its subsidiaries have an enforceable right to payment for performance completed to date.

For performance obligations satisfied over time, revenue is recognised on the basis of direct measurements of the value to the customer of the goods or services transferred to date relative to the remaining goods or services promised under the contract. When the outcome of the contract cannot be reasonably measured, revenue is recognised only to the extent of contract costs incurred that are expected to be recovered.

For performance obligations satisfied at a point in time, revenue is recognised when the customer obtains control of the promised good or service in the contract. The Company and its subsidiaries consider indicators of the transfer of control, which include, but are not limited to, the following:

The Company and its subsidiaries have a present right to payment for the asset;

The Company and its subsidiaries have transferred physical possession of the asset;

The customer has legal title to the asset or the significant risks and rewards of ownership of the asset;

The customer has accepted the asset.

A contract asset is the Company and its subsidiaries’ right to consideration in exchange for goods or services that the Company and its subsidiaries have transferred to a customer when that right is conditioned on something other than the passage of time and an impairment of a contract asset is measured using ECL model (Note 2(m)A(vi)). The Company and its subsidiaries present any unconditional rights to consideration separately as a receivable. The Company and its subsidiaries’ obligation to transfer goods or services to a customer for which the Company and its subsidiaries have received consideration (or the amount is due) from the customer is present as a contract liability.

Further details of revenue and income recognition policies are as follow:

(i)

Sales of power

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Revenue is recognised upon transmission of electricity to the power grid where the control of the electricity is transferred at the same time.

(ii)

Sales of heat

Revenue is recognised upon transmission of heat to the customers where the control of the heat is transferred at the same time.

(iii)

Service revenue

Service revenue refers to amounts received from service of port loading, conveying, transportation and maintenance. The Company and its subsidiaries recognise revenue when the relevant service is provided.

(iv)

Coal and raw materials sales revenue

Revenue is recognised when the control of the fuel and materials is transferred to the customers.

(v)

Heating pipeline upfront fees

Revenue from upfront fees received from heat customers related to the heating pipeline is recognised during the period in which the heat supply service is provided.

(vi)

Rental income from operating leases

Rental income receivable under operating leases is recognised in profit or loss in equal instalments over the periods covered by the lease term, except where an alternative basis is more representative of the pattern of benefits to be derived from the use of the leased asset. Lease incentives granted are recognised in profit or loss as an integral part of the aggregate net lease payments receivable. Contingent rentals are recognised as income in the accounting period in which they are earned.

(vii)

Dividend income

Dividend income from unlisted investments is recognised when the shareholder’s right to receive payment is established. Dividend income from listed investments is recognised when the share price of the investment goes ex-dividend.

(ix)

Interest income

Interest income from deposits is recognised on a time proportion basis using effective interest method. Interest income from the finance lease is recognised on a basis that reflects a constant periodic rate of return on the net investment in the finance lease.

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(aa)

Contract cost

Contract costs are either the incremental costs of obtaining a contract with a customer or the costs to fulfil a contract with a customer.

Incremental costs of obtaining a contract are those costs that the Company and its subsidiaries incur to obtain a contract with a customer that it would not have incurred if the contract had not been obtained e.g. an incremental sales commission. Incremental costs of obtaining a contract are capitalised when incurred if the costs relate to revenue which will be recognised in a future reporting period and the costs are expected to be recovered. Other costs of obtaining a contract are expensed when incurred.

If the costs incurred in fulfilling a contract with a customer are not within the scope of another Standard such as IAS 2 Inventories, the Company and its subsidiaries recognise an asset from the costs incurred to fulfil a contract only if those costs meet all of the following criteria:

the costs relate directly to an existing contract or to a specifically identifiable anticipated contract, including direct labor, direct materials, allocations of costs, costs that are explicitly chargeable to the customer and other costs that are incurred only because the the Company and its subsidiaries entered into the contract;

the costs generate or enhance resources that will be used to provide goods or services in the future;

the costs are expected to be recovered.

Amortisation of capitalised contract costs is charged to profit or loss when the revenue to which the asset relates is recognised. The accounting policy for revenue recognition is set out in Note 2(z). Contract costs are recognised as an expense when incurred if the amortisation period of the asset that the Company and its subsidiaries otherwise would have recognised is one year or less.

Impairment losses are recognised to the extent that the carrying amount of the contract cost asset exceeds the net of:

(i)

remaining amount of consideration that the Company and its subsidiaries expect to receive in exchange for the goods or services to which the asset relates, less

(ii)

any costs that relate directly to providing those goods or services that have not yet been recognised as expenses.

(ab)

Leases

Leases where all the risks and rewards incidental to ownership of the assets are in substance transferred to the lessees are classified as finance leases. All other leases are operating leases.

(i)

Operating leases

Operating lease expenses are capitalized or expensed on a straight-line basis over the lease term.

The cost of acquiring land held under an operating lease is amortized on a straight-line basis over the period of the lease term.

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(ii)

Finance lease

The Company and its subsidiaries recognise the aggregate of the minimum lease receipts and the initial direct costs on the lease inception date as the receivable. The difference between the aggregate of the minimum lease receipts and the initial direct costs and sum of their respective present values is recognised as unrealised finance income. The Company and its subsidiaries adopt the effective interest method to allocate such unrealised finance income over the lease term. At the end of reporting period, the Company and its subsidiaries present the net amount of finance lease receivable after deducting any unrealised finance income in non-current assets and current assets, respectively.

Please refer to Note 2(m)A(vi) for impairment test on finance lease receivables.

Where the Company and its subsidiaries acquire the use of assets under finance leases, the amounts representing the fair value of the leased asset, or, if lower, the present value of the minimum lease payments, of such assets are included in fixed assets and the corresponding liabilities, net of finance charges, are recorded as obligations under finance leases. Depreciation is provided at rates which write-off the cost or valuation of the assets over the term of the relevant lease or, where it is likely the Company and its subsidiaries will obtain ownership of the asset, the life of the asset, as set out in Note 2(g). Impairment losses are accounted for in accordance with the accounting policy as set out in Note 2(l). Finance charges implicit in the lease payments are charged to profit or loss over the period of the leases so as to produce an approximately constant periodic rate of charge on the remaining balance of the obligations for each accounting period. Contingent rentals are charged to profit or loss in the accounting period in which they are incurred.

(ac)

Purchase of electricity

The overseas subsidiary of the Company recognises electricity purchase cost when it purchases the electricity and transmits to its customers.

(ad)

Non-current assets (or disposal group) held for sale

Non-current assets, or disposal groups comprising assets and liabilities, are classified as held-for-sale if it is highly probable that they will be recovered primarily through sale rather than through continuing use.

Such assets, or disposal groups, are generally measured at the lower of their carrying amount and fair value less costs to sell. Any impairment loss on a disposal group is allocated first to goodwill, and then to the remaining assets and liabilities on a pro rata basis, except that no loss is allocated to inventories, financial assets or deferred tax assets, which continue to be measured in accordance with the Company and its subsidiaries’ other accounting policies. Impairment losses on initial classification as held-for-sale and subsequent gains and losses on remeasurement are recognised in profit or loss.

Once classified as held-for-sale, intangible assets and property, plant and equipment are no longer amortized or depreciated, and any equity-accounted investee is no longer equity accounted.

(ae)

Dividend distribution

Dividend distribution to the shareholders of the Company and its subsidiaries is recognised as a liability in the period when the dividend is approved in the shareholders’ meeting.

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(af)

Contingencies

Contingent liabilities are not recognised in the financial statements. They are disclosed unless the possibility of an outflow of resources embodying economic benefits is remote. Contingent assets are not recognised in the financial statements but disclosed when an inflow of economic benefit is probable.

(ag)

Standards and amendments to published standards that are not yet effective but relevant to the Company and its subsidiaries

Up to the date of issue of these financial statements, a number of amendments, new standards and interpretations have been issued which are not yet effective for the year ended 31 December 2018 and which have not been adopted in these financial statements. These include the following which may be relevant to the Company and its subsidiaries.

•

IFRS 16, “Leases”, which will be effective for accounting periods beginning on or after 1 January 2019.

•

IFRIC 23, “Uncertainty over income tax treatments”, which will be effective for accounting periods beginning on or after 1 January 2019.

•

Annual improvements to IFRSs 2015-2017 Cycle, which will be effective for accounting periods beginning on or after 1 January 2019.

•

Amendments to IFRS 28, “Long-term interests in associates and joint ventures”, which will be effective for accounting periods beginning on or after 1 January 2019.

The Company and its subsidiaries are in the process of making an assessment of what the impact of these amendments, new standards and interpretations is expected to be in the period of initial application. So far the Company and its subsidiaries have identified some aspects of IFRS 16 which may have a significant impact on the consolidated financial statements. Further details of the expected impacts are discussed below. While the assessment has been substantially completed for IFRS 16, the actual impact upon the initial adoption of this standard may differ as the assessment completed to date is based on the information currently available to the Company and its subsidiaries, and further impacts may be identified before the standard is initially applied in the Company and its subsidiaries’ interim financial report for the six months ended 30 June 2019. The Company and its subsidiaries may also change its accounting policy elections, including the transition options, until the standard is initially applied in that financial report.

IFRS 16, Lease

As disclosed in Note 2(ab), currently the Company and its subsidiaries classify leases into finance leases and operating leases and account for the lease arrangements differently, depending on the classification of the lease. The Company and its subsidiaries enter into some leases as the lessor and others as the lessee.

IFRS 16 is not expected to impact significantly on the way that lessors account for their rights and obligations under a lease. However, once IFRS 16 is adopted, lessees will no longer distinguish between finance leases and operating leases. Instead, subject to practical expedients, lessees will account for all leases in a similar way to current finance lease accounting, i.e. at the commencement date of the lease the lessee will recognise and measure a lease liability at the present value of the minimum future lease payments and will recognise a corresponding “right-of-use” asset. After initial recognition of this asset and liability, the lessee will recognise interest expense accrued on the outstanding balance of the lease liability, and the depreciation of the right-of-use asset, instead of the current policy of recognising rental expenses incurred under operating leases on a systematic basis over the lease term. As a practical expedient, the lessee can elect not to apply this

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accounting model to short-term leases (i.e. where the lease term is 12 months or less) and to leases of low-value assets, in which case the rental expenses would continue to be recognised on a systematic basis over the lease term.

IFRS 16 will primarily affect the Company and its subsidiaries’ accounting as a lessee of leases for properties, plant and equipment which are currently classified as operating leases. The application of the new accounting model is expected to lead to an increase in both assets and liabilities and to impact on the timing of the expense recognition in the statement of comprehensive income over the period of the lease.

IFRS 16 is effective for annual periods beginning on or after 1 January 2019. As allowed by IFRS 16, the Company and its subsidiaries plan to use the practical expedient to grandfather the previous assessment of which existing arrangements are, or contain, leases. The Company and its subsidiaries will therefore apply the new definition of a lease in IFRS 16 only to contracts that are entered into on or after the date of initial application. In addition, the Company and its subsidiaries plan to elect the practical expedient for not applying the new accounting model to short-term leases and leases of low-value assets.

The Company and its subsidiaries plan to elect to use the modified retrospective approach for the adoption of IFRS 16 and will recognise the cumulative effect of initial application as an adjustment to the opening balance of equity at 1 January 2019 and will not restate the comparative information. As disclosed in Note 40(b), at 31 December 2018 the Company and its subsidiaries’ future minimum lease payments under non-cancellable operating leases amount to RMB1,647 million for property, plant and equipment and land use rights, the majority of which is payable either between 1 and 5 years after the reporting date or in more than 5 years. Upon the initial adoption of IFRS 16, the opening balances of lease liabilities and the corresponding right-of-use assets will be adjusted accordingly, after taking into account the effects of discounting, as at 1 January 2019. The Company and its subsidiaries are still in the process to determine the amounts of new assets and liabilities arising from operating lease commitments on adoption of IFRS 16.

There are no other amendments and new standards that are not yet effective that would be expected to have a material impact on the Company and its subsidiaries’ consolidated financial statements.

3	Financial and capital risks management

(a)

Financial risk management

Risk management, including the management on the financial risks, is carried out under the instructions of the Strategic Committee of Board of Directors and the Risk Management Team. The Company works out general principles for overall management as well as management policies covering specific areas. In considering the importance of risks, the Company identifies and evaluates risks at head office and individual power plant level, and requires analysis and proper communication of the information collected periodically.

SinoSing Power and its subsidiaries and Huaneng Shandong Ruyi (Pakistan) Energy (Private) Co., Ltd. (“Ruyi Pakistan Energy”), the subsidiary of Hong Kong Energy, are subject to financial risks that are different from the entities operating within the PRC. They have a series of controls in place to maintain the cost of risks occurring and the cost of managing the risks at an acceptable level. Management continually monitors the risk management process to ensure that an appropriate balance between risk and control is achieved. SinoSing Power and its subsidiaries and Ruyi Pakistan Energy have their written policies and financial authorisation limits in place which are reviewed periodically. These financial authorization limits seek to mitigate and eliminate operational risks by setting approval thresholds required for entering into contractual obligations and investments.

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(i)

Market risk

(1)

Foreign exchange risk

Foreign exchange risk of the entities operating within the PRC primarily arises from loans denominated in foreign currencies of the Company and its subsidiaries. SinoSing Power and its subsidiaries are exposed to foreign exchange risk on bank balances, accounts receivable, other receivables and assets, accounts payable and other liabilities that are denominated primarily in US$, a currency other than Singapore dollar (“S$”), their functional currency. Ruyi Pakistan Energy is exposed to foreign exchange risk on bank balances, financial lease receivables, accounts payable and other liabilities, short-term loans and long-term loans that are denominated primarily in US$, a currency other than Pakistan rupee (“PKR”), their functional currency. Please refer to Note 16, 18, 19, 25, 28, 31 and 36 for details. The Company and its subsidiaries manage exchange risk through closely monitoring interest and exchange market.

As at 31 December 2018, if RMB had weakened/strengthened by 5% (2017: 5%) against US$ and 3% (2017: 3%) against EUR (“€”) with all other variables constant, the Company and its subsidiaries would further recognise exchange loss/gain amounted RMB98 million (2017: RMB112 million) and RMB5 million (2017: RMB7 million), respectively. The ranges of such sensitivity disclosed above were based on the observation on the historical trend of related exchange rates during the previous year under analysis.

As at 31 December 2018, if S$ had weakened/strengthened by 10% (2017:10%) against US$ with all other variables constant, SinoSing Power and its subsidiaries would further recognise exchange gain/loss amounted RMB6 million (2017:RMB30 million). The ranges of such sensitivity disclosed above were based on the management’s experience and forecast.

SinoSing Power and its subsidiaries also are exposed to foreign exchange risk on fuel purchases that are denominated primarily in US$. They substantially hedge their estimated foreign currency exposure in respect of forecast fuel purchases over the following three months using primarily foreign currency contracts.

As at 31 December 2018, if PKR had weakened/strengthened by 5% (2017:Nil) against US$ with all other variables constant, Ruyi Pakistan Energy would further recognise exchange gain/loss amounted RMB47 million (2017:Nil). The ranges of such sensitivity disclosed above were based on the management’s experience and forecast.

Ruyi Pakistan Energy is exposed to foreign exchange risk on long-term loans payment that are denominated primarily in US$. Ruyi Pakistan Energy entered into an agreement on tariff adjustment mechanism with Central Power Purchasing Agency (Guarantee) Limited ( “CPPA-G” ) and the tariff adjustment mechanism was approved by National Electric Power Regulatory Authority. The mechanism mitigates foreign exchange risk by decreasing or increasing electricity tariff when the PKR strengthens or weakens against US$.

(2)

Price risk

The other equity instrument investments of the Company and its subsidiaries designated as FVTOCI are exposed to equity security price risk.

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Detailed information relating to the other equity instrument investments is disclosed in Note 10. The Company closely monitors the pricing trends in the open market in determining its long-term strategic stakeholding decisions.

(3)

Cash flow interest rate risk

The interest rate risk of the Company and its subsidiaries primarily arises from long-term loans. Loans borrowed at variable rates expose the Company and its subsidiaries to cash flow interest rate risk. The exposures of these risks are disclosed in Note 25 to the financial statements. The Company and its subsidiaries have entered into interest rate swap agreements with banks to hedge against a portion of cash flow interest rate risk.

As at 31 December 2018, if interest rates on RMB-denominated borrowings had been 50 basis points higher/lower with all other variables held constant, interest expense for the year would have been RMB786 million (2017: RMB789 million) higher/lower. If interest rates on US$-denominated borrowings had been 50 basis points higher/lower with all other variables held constant, interest expense for the year would have been RMB54 million (2017: RMB6 million) higher/lower. If interest rates on S$-denominated borrowings had been 100 basis points higher/lower with all other variables held constant, interest expense for the year would have been RMB74 million (2017: RMB72 million) higher/lower. If interest rates on PKR-denominated borrowings had been 50 basis points higher/lower with all other variables held constant, interest expense for the year would have been RMB 2 million (2017:Nil ) higher/lower. The ranges of such sensitivity disclosed above were based on the observation on the historical trend of related interest rates during the previous year under analysis.

The Company has entered into a floating-to-fixed interest rate swap agreement to hedge against cash flow interest rate risk of a loan. According to the interest rate swap agreement, the Company agrees with the counterparty to settle the difference between fixed contract rates and floating-rate interest amounts calculated by reference to the agreed notional amounts quarterly until 2019. Tuas Power Generation Pte. Ltd. (“TPG”) and TP-STM Water Resources Pte. Ltd. (“TPSTMWR”) also entered into a number of floating-to-fixed interest rate swap agreements to hedge against cash flow interest rate risk of loans.

According to the interest rate swap agreements, TPG agrees with the counterparty to settle the difference between fixed contract rates and floating-rate interest amounts calculated by reference to the agreed notional amount semi-annually until 2020. TPSTMWR agrees with the counterparty to settle the difference between fixed contract rates and floating-rate interest amounts calculated by reference to the agreed notional amount quarterly until 2044. Please refer to Note 14 for details.

F-49

(ii)

Credit risk

Credit risk arises from bank deposits, accounts receivable, contract assets, other receivables and assets and other non-current assets. The maximum exposures of contract assets, other non-current assets, other receivables and assets, accounts receivable and bank deposits are disclosed in Note 5(c), 16, 18, 19 and 36 to the financial statements, respectively.

Bank deposits are placed with reputable banks and financial institutions. In addition, a significant portion is deposited with a non-bank financial institution which is a related party of the Company. The Company has a director on the Board of this non-bank financial institution and exercises influence. Corresponding maximum exposures of these bank deposits are disclosed in Note 37 (a)(i) to the financial statements.

Most of the power plants of the Company and its subsidiaries operating within the PRC sell electricity generated to their sole customers, the power grid companies of their respective provinces or regions where the power plants operate. These power plants communicate with their individual grid companies periodically and believe that adequate provision for loss allowance of accounts receivable have been made in the financial statements.

Singapore subsidiaries derive revenue mainly from sale of electricity to the National Electricity Market of Singapore operated by Energy Market Company Pte. Ltd., which does not have high credit risk. Singapore subsidiaries also derive revenue mainly from retailing electricity to consumers with monthly consumption of more than 2,000kWh. These customers engage in a wide spectrum of manufacturing and commercial activities in a variety of industries. However, since 1 April 2018, Energy Market Authority commenced the soft launch of Open Electricity Market, where households and business can choose to buy electricity from a retailer with a price plan that meets their needs. Singapore subsidiaries hold cash deposits of RMB164.85 million (2017: RMB161.37 million) and guarantees from creditworthy financial institutions as a security from these customers.

Ruyi Pakistan Energy derives revenue from sale of electricity to CPPA-G, which does not have high credit risk.

Finance lease receivables are mainly from domestic related parties, business enterprises in Singapore and CPPA-G in Pakistan. As these related parties and local enterprises and government authority have a good track of records and no historical losses have incurred, the Company and its subsidiaries conclude these receivables have low credit risk and remote possibility of default. The ECL of the finance lease receivables are measured on the basis of lifetime ECLs.

The Company and its subsidiaries measures loss allowances for accounts receivable, other receivables and contract assets at an amount equal to lifetime ECLs, which is calculated using a provision matrix. Except for electricity sales, the Company and its subsidiaries’ historical credit loss experience does not indicate significantly different loss patterns for different customer segments, the loss allowance based on past due status is not further distinguished between the Company and its subsidiaries’ different customer bases.

F-50


Accounts receivable	Gross carrying amount		Loss allowance

Current (not past due)		28,101,923		30,616
Within 1 year past due		1,188,215		901
1 - 3 years past due		31,138		10,821
More than 3 years past due		104,575		104,575
		29,425,851		146,913


Other receivables	Gross carrying amount		Loss allowance

Current (not past due)		1,486,979		2,076
Within 1 year past due		-		-
1 - 3 years past due		2,876		2,825
More than 3 years past due		35,421		33,630
		1,525,276		38,531

Expected loss rates are based on actual loss experience over the past 5 years. These rates are adjusted to reflect differences between economic conditions during the period over which the historic data has been collected, current conditions and the Company and its subsidiaries’ view of economic conditions over the expected lives of the receivables.

F-51

(iii)

Liquidity risk

Liquidity risk management is to primarily ensure the ability of the Company and its subsidiaries to meet its liabilities as and when they are fall due. The liquidity reserve comprises the undrawn borrowing facility and cash and cash equivalents available as at each month end in meeting its liabilities.

The Company and its subsidiaries maintain flexibility in funding by cash generated by their operating activities and availability of committed credit facilities.

Financial liabilities due within 12 months are presented as current liabilities in the statement of financial position. The cash flows of derivative financial liabilities and repayment schedules of the long-term loans and long-term bonds are disclosed in Note 14, 25 and 26, respectively.

(b)

Fair value estimation

(i)

Fair value measurements

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:

•

Level 1- Quoted prices (unadjusted) in active markets for identical assets or liabilities.

•

Level 2- Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).

•

Level 3- Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).

F-52

The following table presents the assets and liabilities that are measured at fair value at 31 December 2018 on a recurring basis.

	Level 1		Level 2		Level 3		Total

Recurring fair value measurements

Assets
Financial assets at fair value through profit or loss
– Trading derivatives (Note 14)		-		14		-		14
– Contingent consideration		-		-		991,383		991,383

Derivatives used for hedging (Note 14)		-		34,691		-		34,691
Other equity instrument investments (Note 10)		8,558		-		2,074,861		2,083,419

Total assets		8,558		34,705		3,066,244		3,109,507

Liabilities
Financial liabilities at fair value through profit or loss
– Trading derivatives (Note 14)		-		17,752		-		17,752

Derivatives used for hedging (Note 14)		-		527,540		-		527,540

Total liabilities		-		545,292		-		545,292

The following table presents the assets and liabilities that are measured at fair value at 31 December 2017 on a recurring basis.

	Level 1		Level 2		Level 3		Total

Recurring fair value measurements

Assets
Financial assets at fair value through profit or loss
– Trading derivatives (Note 14)		-		2,726		-		2,726
– Contingent consideration		-		-		859,547		859,547

Derivatives used for hedging (Note 14)		-		330,966		-		330,966

Available-for-sale financial assets
– Equity securities (Note 10) (Note i)		9,223		-		-		9,223

Total assets		9,223		333,692		859,547		1,202,462

Liabilities
Financial liabilities at fair value through profit or loss
– Trading derivatives (Note 14)		-		125		-		125

Derivatives used for hedging (Note 14)		-		210,539		-		210,539

Total liabilities		-		210,664		-		210,664

Note i: Available-for-sale financial assets were reclassified to financial assets designated at FVOCI (non-recycling) upon the adoption of IFRS 9 at 1 January 2018 (see Note 2(b)(i)).

F-53

The fair value of financial instruments traded in active markets is based on quoted market prices at the end of reporting period. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The quoted market price used for financial assets held by the Company and its subsidiaries is the current bid price. These instruments are included in level 1. As at 31 December 2018, instruments included in level 1 are equity instruments in listed securities designated as financial assets measured at fair value through other comprehensive income.

The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximize the use of relevant observable inputs and minimize the use of unobservable inputs. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

Specific valuation techniques used to value financial instruments include:

•

The forward exchange contracts and fuel oil swaps are both valued using quoted market prices or dealer quotes for similar instruments.

•

The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable yield curves.

•

The contingent consideration is valued using discounted cash flow. The valuation model considers the present value of the expected future receivables discounted using a risk-adjusted discounted rate. The expected future contingent considerations are determined by considering the expected performance of acquired entities through 31 December 2019, representing the measurement period for contingent consideration.

•

The material other equity instrument investments in unlisted securities are valued using discounted cash flow or market comparable companies. The inputs of the valuation model mainly consist of the expected performance, period of the expected performance, weighted average capital cost and discount for lack of marketability. Discount rate of 12.48% was used for the calculations of discounted cash flow model.

Instruments included in level 2 comprise forward exchange contracts, fuel oil swaps and interest rate swaps.

During the year ended 31 December 2018, there are no transfers of financial instruments between level 1 and level 2, or transfers into or out of level 3.

The movements during the period in the balance of the Level 3 fair value measurements are as follows:

F-54

	As at 31 December
	2018			2017
Contingent consideration

Beginning of the year		859,547			-

Movement:
Gains on fair value changes		746,850			859,547

Profit compensation received from Huaneng Group		(615,014	)		-

End of the year		991,383			859,547

Total gains for the year included in profit or loss for assets held at the end of the reporting period		746,850			859,547

				As at 31 December 2018
Other equity instrument investments

Beginning of the year					-


Adjustment on initial application of IFRS 9 (Note 2(b)(i))					2,072,365

Adjusted balance at the beginning of the year					2,072,365

Addition					450
Fair value changes					2,046

End of the year					2,074,861

Changes in fair value recognised in other comprehensive income for the year					2,046

From 1 January 2018, any gains or losses arising from the remeasurement of the Company and its subsidiaries’ other equity instrument investments held for strategic purposes are recognised in the fair value reserve (non-recycling) in other comprehensive income. Upon disposal of the other equity instrument investments, the amount accumulated in other comprehensive income is transferred directly to retained earnings. Prior to 1 January 2018, any gains arising from the disposal of the other equity instrument investments were presented in the “Other investment income” line item in the consolidated statement of comprehensive income.

(ii)

Fair value disclosures

The carrying value less provision for loss allowance of accounts receivable, other receivables and assets, accounts payable and other liabilities, short-term bonds and short-term loans approximated their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Company and its subsidiaries for similar financial instruments.

F-55

The estimated fair value of long-term loans and long-term bonds (both including current maturities) was approximately RMB149.76 billion and RMB30.08 billion as at 31 December 2018 (2017: RMB125.00 billion and RMB19.81 billion), respectively. The aggregate book value of these liabilities was approximately RMB150.17 billion and RMB29.98 billion as at 31 December 2018 (2017: RMB125.13 billion and RMB19.99 billion), respectively.

(c)

Capital risk management

The objectives of the Company and its subsidiaries when managing capital are to safeguard the ability of the Company and its subsidiaries in continuing as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

The Company and its subsidiaries monitor capital by using debt ratio analysis. This ratio is calculated as total liabilities (sum of current liabilities and non-current liabilities) divided by total assets as shown in the consolidated statement of financial position. During 2018, the strategy of the Company and its subsidiaries remained unchanged from 2017. The debt ratio of the Company and its subsidiaries as at 31 December 2018 was 72.35% (2017: 72.86%).

4	Critical accounting estimates and judgments

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Company and its subsidiaries make estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

(a)

Accounting estimates on impairment of goodwill and power generation license

The Company and its subsidiaries perform test annually whether goodwill and power generation license have suffered any impairment in accordance with the accounting policies stated in Note 2(l), respectively. The recoverable amounts of CGU or CGUs to which goodwill and the power generation license have been allocated are determined based on value-in-use calculations. These calculations require the use of estimates (Note 12 and 15). It is reasonably possible, based on existing knowledge, that outcomes within the next financial period that are different from assumptions could require a material adjustment to the carrying amounts of goodwill and power generation license.

For goodwill allocated to CGUs in the PRC, changes of assumptions in tariff and fuel price could have affected the results of goodwill impairment assessment. As at 31 December 2018, if tariff had decreased by 1% or 5% from management’s estimates with other variables constant with the expectations, the Company and its subsidiaries would have to further recognise impairment against goodwill by approximately RMB900 million and RMB3,915 million, respectively. If fuel price had increased by 1% or 5% from the management’s estimates with other variables constant with the expectations, the Company and its subsidiaries would have to further recognise impairment against goodwill by approximately RMB421 million and RMB3,185 million, respectively.

For the sensitivity analysis of power generation license and goodwill of Tuas Power, please refer to Note 12 and 15.

F-56

(b)

Useful life of power generation license

As at year end, management of the Company and its subsidiaries assess whether the estimated useful life for its power generation license is indefinite. This assessment is based on the expected renewal of power generation license without significant restriction and cost, together with the consideration on related future cash flows generated and the expectation of continuous operations. Based on existing knowledge, outcomes within the next financial period that are different from assumptions could require a change to the carrying amount of power generation license.

(c)

Useful lives of property, plant and equipment

Management of the Company and its subsidiaries determines the estimated useful lives of property, plant and equipment and respective depreciation. The accounting estimate is based on the expected wears and tears incurred during power generation. Wears and tears can be significantly different following renovation each time. When the useful lives differ from the original estimated useful lives, management will adjust the estimated useful lives accordingly. It is possible that the estimates made based on existing experience are different to the actual outcomes within the next financial period and could cause a material adjustment to the depreciation and carrying amount of property, plant and equipment.

(d)

Estimated impairment of other non-current assets

The Company and its subsidiaries test whether property, plant and equipment, land use rights and mining rights suffered from impairment whenever an impairment indication exists. In accordance with Note 2(l), an impairment loss is recognised for the amount by which the carrying amount of the asset exceeds its recoverable amount. It is reasonably possible, based on existing knowledge, that outcomes within the next financial period that are different from assumptions could require a material adjustment to the carrying amount of property, plant and equipment, land use rights and mining rights.

Changes of assumptions in tariff and fuel price will affect the result of property, plant and equipment, land use rights and mining rights impairment assessment. For power plants assets that are subject to impairment testing, as at 31 December 2018, if tariff had decreased by 1% or 5% from management’s estimates with other variables constant with the expectations, the Company and its subsidiaries would have to further recognise impairment against property, plant and equipment, land use rights and mining rights by approximately RMB460 million and RMB5,599 million, respectively. If fuel price had increased by 1% or 5% from the management’s estimates with other variables constant with the expectations, the impairment against property, plant and equipment, land use rights and mining rights of the Company and its subsidiaries would increase totaling by approximately RMB46 million and RMB1,598 million, respectively.

(e)

Approval of construction of new power plants

The receiving of the ultimate approvals from National Development and Reform Commission (“NDRC”) on certain power plant construction projects of the Company and its subsidiaries is a critical estimate and judgment of the directors. Such estimates and judgments are based on initial approval documents received as well as their understanding of the projects. Based on historical experience, the directors believe that the Company and its subsidiaries will receive final approvals from NDRC on the related power plant projects. Deviation from the estimate and judgment could result in significant adjustment to the carrying amount of non-current assets.

F-57

(f)

Deferred tax assets

The Company and its subsidiaries recognised the deferred tax assets to the extent that it is probable that future taxable profit will be available against which the asset can be utilized, using tax rates that are expected to be applied in the period when the asset is recovered. The management assesses the deferred tax assets based on the expected amount and timing of future taxable profit, the enacted tax laws and applicable tax rates. It is reasonably possible, based on existing knowledge, the outcomes within the next financial period that are different from assumptions could require a material adjustment to the carrying amount of deferred tax assets.

(g)

Business combination

For the business combinations undertaken by the Company and its subsidiaries, the Company recognises assets acquired and the liabilities assumed based on their estimated fair value on the date of acquisition. Any excess of purchase consideration over the estimated fair values of acquired identifiable net assets is recorded goodwill (Note 2(k)). The contingent consideration of the Company in the business combination is recognised as a financial asset at fair value through profit or loss (included in other non-current assets and other receivables and assets).

F-58

5	Revenue and segment information

(a)

Disaggregation of revenue

In the following table, revenue is disaggregated by major products and/or service lines of revenue recognition. The table also includes a reconciliation of the disaggregated operating revenue with the Company and its subsidiaries’ reportable segments (Note 5(b)).

For the year ended 31 December 2018	PRC power segment		Overseas segment		All other segments		Inter-segment revenue			Total
			Note ii
-Sales of power and heat		154,816,070		11,490,601		-		-			166,306,671
-Sales of coal and raw material		649,374		214,402		-		-			863,776
-Port service		-		-		441,637		(296,639	)		144,998
-Transportation service		-		-		206,691		(153,334	)		53,357
-Others		1,860,823		297,857		45,071		(21,929	)		2,181,822

Total		157,326,267		12,002,860		693,399		(471,902	)		169,550,624

Revenue:
-From contracts with customers within the scope of IFRS15											169,467,647
-From other sources											82,977

For the year ended 31 December 2017 (Note i)	PRC power segment		Overseas segment		All other segments		Inter-segment revenue			Total

-Sales of power and heat		138,950,879		9,974,563		-		-			148,925,442
-Sales of coal and raw material		1,143,299		-		-		-			1,143,299
-Port service		-		-		470,498		(238,138	)		232,360
-Transportation service		-		-		181,117		(107,287	)		73,830
-Others		1,973,452		103,468		42,790		(35,197	)		2,084,513

Total		142,067,630		10,078,031		694,405		(380,622	)		152,459,444

Revenue:
-From contracts with customers within the scope of IFRS15											152,363,979
-From other sources											95,465

For the year ended 31 December 2016 (Note i)	PRC power segment		Overseas segment		All other segments		Inter-segment revenue			Total

-Sales of power and heat		104,131,730		8,662,806		-		-			112,794,536
-Sales of coal and raw material		2,909		-		-		-			2,909
-Port service		-		-		410,088		(172,741	)		237,347
-Transportation service		-		-		188,645		(83,140	)		105,505
-Others		612,051		96,016		36,232		(70,360	)		673,939

Total		104,746,690		8,758,822		634,965		(326,241	)		113,814,236

Revenue:
-From contracts with customers within the scope of IFRS15											113,770,006
-From other sources											44,230

F-59

Note i: The Company and its subsidiaries have initially applied IFRS 15 using the cumulative effect method. Under this method, the comparative information is not restated and was prepared in accordance with IAS 18 and IAS 11.

Note ii: Overseas segment mainly consists of the operations in Singapore and the operation in Pakistan (consolidated since December 2018, see note 41(b)).

The revenue from sales of power and heat and sales of coal and raw materials are recognised at a point in time upon the transfer of products, whereas the revenue from port service, transportation service and maintenance service are recognised over time during the provision of service. The upfront fees of heating pipeline are recognised as revenue over the period of heat supply.

(b)

Segment information

Directors and certain senior management of the Company perform the function as the chief operating decision maker (collectively referred to as the “senior management”). The senior management reviews the internal reporting of the Company and its subsidiaries in order to assess performance and allocate resources. The Company has determined the operating segments based on these reports. The reportable segments of the Company are the PRC power segment, overseas segment and all other segments (mainly including port and transportation operations). No operating segments have been aggregated to form a reportable segment.

Senior management assesses the performance of the operating segments based on a measure of profit before income tax expense under China Accounting Standard for Business Enterprises (“PRC GAAP”) excluding dividend income received from other equity instrument investment, gains on disposal of other equity instrument investment and operating results of the centrally managed and resource allocation functions of headquarters (“Segment results”). Other information provided, except as noted below, to the senior management of the Company is measured under PRC GAAP.

Segment assets exclude prepaid income tax, deferred income tax assets, other equity instrument investments and assets related to the centrally managed and resource allocation functions of headquarters that are not attributable to any operating segment (“corporate assets”). Segment liabilities exclude current income tax liabilities, deferred income tax liabilities and liabilities related to the centrally managed and resource allocation functions of headquarters that are not attributable to any operating segment (“corporate liabilities”). These are part of the reconciliation to total assets and liabilities of consolidated statement of financial position.

All sales among the operating segments have been eliminated as internal transactions when preparing consolidated financial statements.

F-60

							(Under PRC GAAP)

	PRC power segment			Overseas segment			All other segments			Total

For the year ended 31 December 2018
Total revenue		157,636,808			12,002,860			693,399			170,333,067
Inter-segment revenue		-			-			(471,902	)		(471,902	)

External revenue		157,636,808			12,002,860			221,497			169,861,165

Segment results		3,596,245			(363,636	)		389,876			3,622,485

Interest income		163,699			69,841			2,198			235,738
Interest expense		(9,879,911	)		(465,099	)		(101,694	)		(10,446,704	)
Impairment loss		(895,121	)		(251,031	)		-			(1,146,152	)
Credit loss		(38,368	)		(4,210	)		-			(42,578	)
Depreciation and amortization		(18,909,485	)		(774,625	)		(142,179	)		(19,826,289	)
Net gain/ (loss) on disposal of non-current assets		70,186			(1,052	)		(11	)		69,123
Share of profits less losses of associates and joint ventures		640,057			737,185			307,417			1,684,659
Income tax expense		(1,146,997	)		134,573			(16,523	)		(1,028,947	)


	PRC power segment			Overseas segment			All other segments			Total

For the year ended 31 December 2017 (Restated*)

Total revenue		142,578,381			10,078,031			694,405			153,350,817
Inter-segment revenue		-			-			(380,622	)		(380,622	)

External revenue		142,578,381			10,078,031			313,783			152,970,195

Segment results		2,307,505			(613,572	)		302,191			1,996,124

Interest income		128,564			70,756			1,223			200,543
Interest expense		(9,128,621	)		(450,928	)		(145,112	)		(9,724,661	)
Impairment loss		(1,202,064	)		(994	)		(19,742	)		(1,222,800	)
Depreciation and amortization		(18,361,594	)		(856,979	)		(189,764	)		(19,408,337	)

Net loss on disposal of non-current assets		(580,325	)		(995	)		(3	)		(581,323	)
Share of profits less losses of associates and joint ventures		28,796			(36,114	)		307,923			300,605
Income tax expense		(1,675,083	)		99,150			(5,386	)		(1,581,319	)

F-61

							(Under PRC GAAP)

	PRC power segment			Overseas segment			All other segments			Total

For the year ended 31 December 2016 (Restated*)
Total revenue		129,821,191			8,758,822			634,965			139,214,978
Inter-segment revenue		-			-			(344,866	)		(344,866	)

External revenue		129,821,191			8,758,822			290,099			138,870,112

Segment results		17,702,235			(282,703	)		(38,433	)		17,381,099

Interest income		103,817			69,672			623			174,112
Interest expense		(8,036,243	)		(481,263	)		(137,825	)		(8,655,331	)
Impairment (loss)/reversal		(1,427,452	)		899			(8,475	)		(1,435,028	)
Depreciation and amortization		(17,542,985	)		(778,426	)		(203,493	)		(18,524,904	)
Net loss on disposal of non-current assets		(693,097	)		(172	)		(14,303	)		(707,572	)
Share of profits less losses of associates and joint ventures		973,982			-			73,415			1,047,397
Income tax expense		(4,645,990	)		44,135			57,489			(4,544,366	)

	PRC power segment			Overseas segment			All other segments			Total

31 December 2018
Segment assets		345,057,426			40,886,478			10,406,648			396,350,552
Including:
Additions to non-current assets (excluding financial assets and deferred income tax assets)		18,467,651			581,225			492,585			19,541,461
Investments in associates		12,351,738			-			3,275,398			15,627,136
Investments in joint ventures		1,111,854			-			1,239,876			2,351,730
Segment liabilities		(269,224,115	)		(25,600,861	)		(2,683,920	)		(297,508,896	)

31 December 2017(Restated*)
Segment assets		337,297,224			28,526,428			9,978,885			375,802,537
Including:
Additions to non-current assets (excluding financial assets and deferred income tax assets)		25,930,607			260,240			328,061			26,518,908
Investments in associates		12,577,836			-			2,919,860			15,497,696
Investments in joint ventures		748,499			708,748			1,025,534			2,482,781
Segment liabilities		(266,816,265	)		(14,000,442	)		(3,026,229	)		(283,842,936	)

A reconciliation of external revenue to operating revenue is provided as follows:

	For the year ended 31 December
	2018			2017 (Restated*)			2016 (Restated*)
External revenue (PRC GAAP)		169,861,165			152,970,195			138,870,112
Reconciling item:
Impact of restatement under PRC GAAP in relation to business combination under common control*(Note 41)		(310,541	)		(510,751	)		(25,055,876	)
Operating revenue per IFRS consolidated statement of comprehensive income		169,550,624			152,459,444			113,814,236

F-62

A reconciliation of segment result to profit before income tax expense is provided as follows:

	For the year ended 31 December
	2018			2017 (Restated*)			2016 (Restated*)

Segment results (PRC GAAP)		3,622,485			1,996,124			17,381,099
Reconciling items:
Loss related to the headquarter		(354,162	)		(170,210	)		(699,054	)
Investment income from China Huaneng Finance Co., Ltd. (“Huaneng Finance”)		166,864			143,794			132,018
Dividend income of available-for-sale financial assets		—			124,918			105,337
Dividend income of other equity instruments investments		1,168			—			—
Gains on disposal of available-for-sale financial asset		—			1,479,732			932,738
Impact of restatement under PRC GAAP in relation to business combination under common control*(Note 41)		7,121			145,682			(3,485,801	)
Impact of other IFRS adjustments**		(1,470,329	)		(918,307	)		(553,199	)

Profit before income tax expense per IFRS consolidated statement of comprehensive income		1,973,147			2,801,733			13,813,138

Reportable segments’ assets are reconciled to total assets as follows:

	As at 31 December
	2018		2017 (Restated*)

Total segment assets (PRC GAAP)		396,350,552		375,802,537
Reconciling items:
Investment in Huaneng Finance		1,391,431		1,336,777
Deferred income tax assets		3,143,465		3,010,787
Prepaid income tax		134,477		150,838
Available-for-sale financial assets		—		1,654,993
Other equity instruments investments		2,083,419		—
Corporate assets		338,113		395,148
Impact of restatement under PRC GAAP in relation to business combination under common control * (Note 41)		-		(3,657,352	)
Impact of other IFRS adjustments**		16,461,854		17,895,783

Total assets per IFRS consolidated statement of financial position		419,903,311		396,589,511

F-63

Reportable segments’ liabilities are reconciled to total liabilities as follows:

	As at 31 December
	2018			2017 (Restated*)

Total segment liabilities (PRC GAAP)		(297,508,896	)		(283,842,936	)
Reconciling items:
Current income tax liabilities		(231,299	)		(441,225	)
Deferred income tax liabilities		(1,050,326	)		(1,288,167	)
Corporate liabilities		(2,864,737	)		(3,632,847	)
Impact of restatement under PRC GAAP in relation to business combination under common control * (Note 41)		-			2,715,117
Impact of other IFRS adjustments**		(2,126,383	)		(2,484,849	)

Total liabilities per IFRS consolidated statement of financial position		(303,781,641	)		(288,974,907	)

Other material items:

	Reportable segment total			Headquarters			Investment income from Huaneng Finance		Impact of restatement under PRC GAAP in relation to business combination under common control* (Note 41)			Impact of other IFRS adjustments**			Total
For the year ended 31 December 2018
Total revenue		169,861,165			-			-		(310,541	)		-			169,550,624
Interest expense		(10,446,704	)		(98,398	)		-		58,690			-			(10,486,412	)
Depreciation and amortization		(19,826,289	)		(26,122	)		-		167,910			(1,231,613	)		(20,916,114	)
Impairment loss		(1,146,152	)		-			-		(8	)		(650,322	)		(1,796,482	)
Credit loss		(42,578	)		-			-		1,611			-			(40,967	)
Share of profits less losses of associates and joint ventures		1,684,659			-			166,864		-			(28,108	)		1,823,415
Net gain/(loss) on disposal of non-current assets		69,123			(5	)		-		-			(26,612	)		42,506
Income tax expense		(1,028,947	)		-			-		3,936			381,838			(643,173	)

For the year ended 31 December 2017 (Restated*)
Total revenue		152,970,195			-			-		(510,751	)		-			152,459,444
Interest expense		(9,724,661	)		(126,900	)		-		102,557			-			(9,749,004	)
Depreciation and amortization		(19,408,337	)		(38,819	)		-		280,295			(1,468,972	)		(20,635,833	)
Impairment loss		(1,222,800	)		-			-		34,313			1,275			(1,187,212	)
Share of profits less losses of associates and joint ventures		300,605			-			143,794		-			(19,184	)		425,215
Net (loss)/gain on disposal of non-current assets		(581,323	)		3,174			-		(20	)		(38,287	)		(616,456	)
Income tax expense		(1,581,319	)		-			-		7,851			355,942			(1,217,526	)

For the year ended 31 December 2016 (Restated*)
Total revenue		138,870,112			-			-		(25,055,876	)		-			113,814,236
Interest expense		(8,655,331	)		(131,244	)		-		1,969,049			-			(6,817,526	)
Depreciation and amortization		(18,524,904	)		(48,934	)		-		3,756,052			(344,929	)		(15,162,715	)
Impairment loss		(1,435,028	)		-			-		230,070			-			(1,204,958	)
Share of profits less losses of associates and joint ventures		1,047,397			-			132,018		133,694			(14,220	)		1,298,889
Net loss on disposal of non-current assets		(707,572	)		(14	)		-		115,775			1,762			(590,049	)
Income tax expense		(4,544,366	)		-			-		964,253			114,962			(3,465,151	)

F-64

Huaneng Shandong Power Generation Co., Ltd. (“Shandong Power”) completed the acquisition of equity interests of certain companies from Taishan Power Limited Company (“Taishan Power”), see Note 41 for details. As the acquisition is a business combination under common control, the transaction is accounted for under merger accounting method under PRC GAAP. The assets and liabilities acquired in business combinations are measured at the carrying amounts of the acquirees in the consolidated financial statements of the ultimate controlling party on the acquisition date. The operating results for all periods presented are retrospectively restated as if the current structure and operations resulting from the acquisition had been in existence from the date when the acquirees first became under the control of the same ultimate controlling party. Therefore the relevant comparative figures in the segment information were restated under PRC GAAP while the acquisition is accounted for using acquisition method under IFRS.

Other GAAP adjustments above primarily represented the classification adjustments and other adjustments of the prior year transactions. Other than the classification adjustments, the differences will be gradually eliminated following subsequent depreciation and amortization of related assets or the extinguishment of liabilities.

Geographical information (Under IFRS):

(i) External revenue generated from the following countries:

	For the year ended 31 December
	2018		2017		2016

PRC		157,547,764		142,381,413		105,055,414
Overseas		12,002,860		10,078,031		8,758,822

Total		169,550,624		152,459,444		113,814,236

The geographical location of customers is based on the location at which the electricity was transferred, goods were delivered and services provided.

(ii)

Non-current assets (excluding financial assets and deferred income tax assets) are located in the following countries:

	As at 31 December
	2018		2017

PRC		317,850,476		319,534,533
Overseas		23,302,942		23,035,758

Total		341,153,418		342,570,291

The information on sales to major customers of the Company and its subsidiaries at amount equal to or more than 10% of external revenue is as follows:

In 2018, the revenue from grid companies under common control of State Grid Corporation of China in total accounted for 76% of external revenue (2017: 76%, 2016: 74%). The sales from a subsidiary of State Grid Corporation of China at amount more than 10% of external revenue is as follows:

	For the year ended 31 December
	2018					2017					2016
	Amount		Proportion			Amount		Proportion			Amount		Proportion

State Grid Shandong Electric Power Company		31,156,948		18	%		28,659,891		19	%		12,649,224		11	%

F-65

(c)

Contract balances

The contract assets primarily relate to the Company and its subsidiaries’ rights to consideration for service completed but not billed at the reporting date. There was no impact on contract assets as a result of the acquisition of the subsidiaries (see Note 41). The contract assets are transferred to receivables when the rights become unconditional according to the contract.

The contract liabilities primarily relate to the advance consideration received from customers for heat sales and heating pipeline upfront fees. As at 31 December 2018, the carrying amount of contract liabilities is RMB4,225 million. The contract liabilities of RMB1,375 million at the beginning of the year has been recognised as revenue of heat in 2018 and RMB187 million heat pipeline upfront fees recognised as revenue in year 2018.

No information is provided about remaining performance obligations at 31 December 2018 that have an original expected duration of one year or less, as allowed by IFRS 15.

6	Profit before income tax expense

Profit before income tax expense was determined after charging/(crediting) the following:

	For the year ended 31 December
	2018			2017			2016

Total interest expense on borrowing		10,982,230			10,225,069			7,267,490

Less: amounts capitalized in property, plant and equipment		495,818			476,065			449,964


Interest expenses charged in consolidated statement of comprehensive income		10,486,412			9,749,004			6,817,526

Auditors’ remuneration-audit services		68,750			64,160			43,610
Operating leases charge		377,162			364,756			331,496
Fuel		105,736,173			92,737,304			56,617,542
Depreciation of property, plant and equipment		20,466,423			20,180,830			14,815,620
Amortization of land use rights		344,068			341,125			225,707
Amortization of other non-current assets		105,623			113,878			121,388

Impairment loss of property, plant and equipment (Note 7)		989,778			1,046,195			1,063,735
Impairment loss of land use rights (Note 11)		-			108,590			51,981
Impairment loss of mining rights (Note 13)		135,085			-			-
Impairment loss of goodwill (Note 15)		409,371			-			-
Impairment loss of other non-current assets		8,432			5,008			-
Recognition of loss allowance for receivables		40,967			27,682			89,498
Recognition/(reversal) of provision for inventory obsolescence (Note 17)		253,816			(263	)		(256	)

Net (gain)/ loss on disposals of non-current assets		(42,506	)		616,456			590,049
Government grants		(521,380	)		(421,912	)		(396,467	)
Gain on a bargain purchase		-			-			(129,921	)

F-66

	For the year ended 31 December
	2018			2017			2016

Included in other investment income
-Gains on disposal of available-for-sale financial assets		–			(1,479,732	)		(932,738	)

-Dividends on available-for-sale financial assets		–			(124,918	)		(103,037	)
-Dividends on other equity instrument investments		(1,168	)		–			–
-Gains on disposal of subsidiaries		-			(52,330	)		-
-Loss on disposal of a joint venture (Note 41(b))		270,741			-			-


Included in (gain)/loss on fair value changes of financial assets/liabilities
-Contingent consideration of the business combination		(746,850	)		(859,547	)		-
-Loss on fair value changes of trading derivatives		20,007			2,761			12,986

Other operating expenses consist of impairment loss of property, plant and equipment, goodwill, mining rights and impairment loss of other non-current assets, loss on disposal of a joint venture, substituted power arrangement expenses, insurance, government grants and other miscellaneous expenses.

7	Property, plant and equipment

	Dam			Port facilities			Buildings			Electic utility plant in service			Transportation facilities			Others			CIP			Total
Year ended 31 December 2017
Beginning of the year		1,379,598			3,560,237			6,236,324			181,700,877			554,659			2,357,009			27,273,105			223,061,809
Reclassification		49,386			(404	)		52,047			(157,759	)		(4,357	)		61,087			-			-
Business combination (Note 41)		279,169			-			1,944,531			58,379,270			17,243			443,052			2,717,544			63,780,809
Additions		-			-			184			840,991			-			88,160			21,225,980			22,155,315
Transfer from CIP		15,355			114,688			342,285			20,283,508			288,554			145,705			(21,190,095	)		-
Disposals/write-off		-			(14,731	)		(30,837	)		(1,252,829	)		(3,907	)		(28,562	)		-			(1,330,866	)
Disposal of subsidiaries		-			(632,709	)		(101,169	)		(114,542	)		-			(153,096	)		(1,242,210	)		(2,243,726	)
Depreciation charge		(40,200	)		(111,529	)		(339,630	)		(19,155,852	)		(59,022	)		(494,932	)		-			(20,201,165	)
Impairment charge		(45,619	)		-			(1,651	)		(754,753	)		-			(2,503	)		(241,669	)		(1,046,195	)
Currency translation differences		-			-			-			151,249			-			263			600			152,112

End of the year		1,637,689			2,915,552			8,102,084			239,920,160			793,170			2,416,183			28,543,255			284,328,093

As at 31 December 2017
Cost		2,220,224			3,358,811			11,173,669			418,360,698			1,155,392			5,972,688			29,534,677			471,776,159
Accumulated depreciation		(226,512	)		(443,259	)		(3,019,198	)		(170,525,898	)		(362,222	)		(3,523,292	)		-			(178,100,381	)
Accumulated impairment loss		(356,023	)		-			(52,387	)		(7,914,640	)		-			(33,213	)		(991,422	)		(9,347,685	)

Net book value		1,637,689			2,915,552			8,102,084			239,920,160			793,170			2,416,183			28,543,255			284,328,093

Year ended 31 December 2018
Beginning of the year		1,637,689			2,915,552			8,102,084			239,920,160			793,170			2,416,183			28,543,255			284,328,093
Reclassification		-			-			90,791			(108,874	)		-			18,083			-			-
Business combination (Note 41)		-			-			38,845			3,128,388			1,683			294,628			5,120			3,468,664
Additions		-			195			18,996			543,660			-			71,414			15,981,274			16,615,539
Transfer from CIP		5,867			50,824			514,167			17,726,156			460			108,477			(18,405,951	)		-

Reclassification to assets held for sale (Note 20)		-			-			-			(547,720	)		-			(3,668	)		(2,645	)		(554,033	)
Disposals/write-off		-			-			(41,618	)		(449,894	)		-			(16,568	)		-			(508,080	)
Depreciation charge		(38,832	)		(117,025	)		(405,045	)		(19,446,539	)		(62,771	)		(423,050	)		-			(20,493,262	)
Impairment charge		-			-			(20,002	)		(947,520	)		-			(112	)		(22,144	)		(989,778	)
Currency translation differences		-			-			-			193,872			-			191			66			194,129

End of the year		1,604,724			2,849,546			8,298,218			240,011,689			732,542			2,465,578			26,098,975			282,061,272

As at 31 December 2018
Cost		2,308,072			3,409,830			12,566,461			472,814,967			1,219,218			7,226,391			27,112,542			526,657,481
Accumulated depreciation		(301,125	)		(560,284	)		(4,147,947	)		(221,703,642	)		(486,676	)		(4,722,608	)		-			(231,922,282	)
Accumulated impairment loss		(402,223	)		-			(120,296	)		(11,099,636	)		-			(38,205	)		(1,013,567	)		(12,673,927	)

Net book value		1,604,724			2,849,546			8,298,218			240,011,689			732,542			2,465,578			26,098,975			282,061,272

F-67

Interest capitalization

Interest expense of approximately RMB496 million (2017: RMB476 million) arising on borrowings for the construction of property, plant and equipment was capitalized during the year and was included in ‘Additions’ in property, plant and equipment. The weighted average capitalization rate was approximately 4.57% (2017: 4.54%) per annum.

Impairment

In 2018, impairment losses for property, plant and equipment of certain power projects amounting to approximately RMB990 million have been recognised. Factors leading to the impairment include lower than expected operating results of subsidiaries in 2018 due to oversupply and fierce competition within the electricity market. Discount rates of 7.74%, 7.80%, 8.26%, 8.63%, 9.25%, 9.79%, and 12.84% were adopted in the value in use model in the determination of the recoverable amounts for the power plants respectively. In addition, as a result of the low demand of coal-fired power in local market and site selection issues, management estimated the possibility of further development of a coal-fired power project and a wind power project was remote; Therefore the projects under construction with a carrying value of RMB 14 million and 8 million were fully impaired in 2018.

In 2017, impairment losses for certain property, plant and equipment and land use rights of approximately RMB1,046 million and RMB109 million have been recognised, respectively. Factors leading to the impairment include lower than expected utilization hours of a subsidiary due to long idle hours of its power generating units and the coal-fire projects in progress was aborted; lower than expected operating results of three subsidiaries in 2017 due to oversupply and fierce competition within the electricity market in the provinces, as well as low profitability of a hydropower plant, a coal-fire project in progress of a subsidiary was aborted as a result of relevant regulation. Discount rates of 9.50%, 9.98%, 9.89%, 14.74% and 9.14% were adopted in the value in use model in the determination of the recoverable amounts for the four coal-fired power plants and the hydropower plant respectively. In addition, as a result of the low demand of coal-fired power in local market, management estimated the possibility of further development of a coal-fired power project was remote, therefore the project under construction with a carrying value of RMB242 million was fully impaired in 2017.

Property, plant and equipment held under finance leases

As at 31 December 2018, certain property, plant and equipment with original cost of RMB2,376 million (2017: RMB3,312 million) were held under finance leases, which mainly included power generation assets, ships and pipeline assets.

Security

As at 31 December 2018, certain property, plant and equipment were secured to a bank as collateral against a long-term loan (Note 25).

Buildings without ownership certificate

At 31 December 2018, the Company and its subsidiaries were in the process of applying for the ownership certificate for certain buildings (buildings for power generation process were included in electric utility plant in service) with an aggregate net book value of RMB8,386 million (2017: RMB10,800 million). The management are of the opinion that the Company and its subsidiaries are entitled to lawfully and validly occupy and use of the above mentioned buildings.

F-68

8	Investments in associates and joint ventures

	2018			2017

Beginning of the year		19,517,623			19,632,113
Capital injections in associates and joint ventures		463,258			301,916
Business combination		-			1,021,566
Transfer from available-for-sale		—			91,800
Transfer to subsidiaries(Note 41(b))		(1,314,040	)		(736,725	)
Share of net profit less loss		1,823,415			425,215
Share of other comprehensive (loss)/income		(531,186	)		121,208
Currency translation differences		45,762			(142,226	)
Share of other capital reserve of equity-method investees		(80,543	)		-
Dividends		(370,325	)		(835,279	)
Elimination of unrealised profits on transactions with equity-method investees		-			(361,965	)

End of the year		19,553,964			19,517,623

As at 31 December 2018, investments in associates and joint ventures of the Company and its subsidiaries are unlisted except for Shenzhen Energy Corporation Limited (“SECL”) which is listed on the Shenzhen Stock Exchange. The following list contains only the particulars of material associates and joint ventures:

Percentage of equity interest held

Name

Country of incorporation

Registered capital

Business nature and scope of operation

Direct

Indirect¹

Associates:

SECL*

PRC

RMB3,964,491,597

Energy and investment in related industries

25.02

Hebei Hanfeng Power Generation Limited Liability Company (“Hanfeng Power”)

PRC

RMB1,975,000,000

Power generation

Huaneng Finance

PRC

RMB5,000,000,000

Provision for financial service including fund deposit services, lending, finance lease arrangements, notes discounting and entrusted loans and investment arrangement within Huaneng Group

Huaneng Sichuan Hydropower Co., Ltd. (“Sichuan Hydropower”)

PRC

RMB1,469,800,000

Development, investment, construction, operation and management of hydropower

China Huaneng Group Fuel Co., Ltd. (“Huaneng Group Fuel Company”) **

PRC

RMB3,000,000,000

Wholesale of coal, import and export of coal

Hainan Nuclear Power Limited Liability Company (“Hainan Nuclear”)

PRC

RMB4,831,460,000

Construction and operation of nuclear power plants; production and sales of electricity and related products

Joint ventures:

Shanghai Time Shipping Co., Ltd. (“Shanghai Time Shipping”)

PRC

RMB1,200,000,000

International and domestic sea transportation

Jiangsu Nantong Power Generation Co., Ltd. (“Jiangsu Nantong Power”)

PRC

RMB1,596,000,000

Operation and Management of power generation plants and transportation related projects

F-69

¹	The indirect percentage of equity interest held represents the effective ownership interest of the Company and its subsidiaries.

*	As at 31 December 2018, the fair value of the Company’s shares in SECL was RMB5,207 million (2017: RMB6,010 million).

**	In accordance with the articles of the association of the investee, the Company could only exercise significant influence on the investee and therefore accounts for the investment under the equity method.

All the above associates and joint ventures are accounted for under the equity method in the consolidated financial statements.

F-70

Summarized financial information of the material associates, adjusted for any differences in accounting policies and acquisition adjustments, and reconciliation to the carrying amounts in the consolidated financial statements, are disclosed below:

	Sichuan Hydropower						SECL						Huaneng Finance						Hanfeng Power						Huaneng Group Fuel Company						Hainan Nuclear
	2018			2017			2018			2017			2018			2017			2018			2017			2018			2017			2018			2017

Gross amounts of the associates’
Current assets		1,064,837			1,113,579			24,066,320			16,444,934			31,484,547			25,535,504			934,257			650,055			5,157,038			4,327,146			2,520,515			2,497,765
Non-current assets		14,472,981			14,590,921			62,798,620			56,079,321			20,106,246			20,786,497			1,810,145			2,246,412			3,928,269			4,102,426			22,091,197			22,490,989
Current liabilities		(3,903,679	)		(2,477,362	)		(24,141,930	)		(20,447,190	)		(44,560,156	)		(39,588,213	)		(642,355	)		(795,815	)		(2,900,223	)		(1,778,075	)		(2,490,271	)		(3,409,360	)
Non-current liabilities		(7,060,740	)		(8,661,852	)		(35,193,400	)		(28,491,540	)		(73,483	)		(49,904	)		(35,503	)		(27,443	)		(2,464,580	)		(3,119,462	)		(17,908,511	)		(17,252,794	)
Equity		4,573,399			4,565,286			27,529,610			23,585,525			6,957,154			6,683,884			2,066,544			2,073,209			3,720,504			3,532,035			4,212,930			4,326,600
-Equity attributable to shareholders		3,409,111			3,400,953			21,118,225			22,285,077			6,957,154			6,683,884			2,066,544			2,073,209			3,477,211			3,400,344			4,212,930			4,326,600
-Non-controlling interests		1,164,288			1,164,333			6,411,385			1,300,448			-			-			-			-			243,293			131,691			-			-

Revenue		2,242,269			2,247,781			18,518,430			13,908,949			1,610,768			1,393,211			2,232,700			2,073,209			20,568,107			17,166,036			2,626,882			2,504,379
Profit/(loss) from continuing operations attributable to shareholders		225,705			222,403			589,821			747,657			834,318			718,970			(6,665	)		52,361			70,766			48,876			(392,000	)		(535,361	)
Other comprehensive (loss)/income attributable to shareholders		-			-			(1,117,524	)		521,965			78,951			(28,099	)		-			-			6,101			(6,654	)		-			-
Total comprehensive income/(loss) attributable to shareholders		225,705			222,403			(527,703	)		1,269,622			913,269			690,871			(6,665	)		52,361			76,867			42,222			(392,000	)		(535,361	)
Dividend received from the associates		106,598			132,923			79,339			148,761			128,000			116,000			-			127,698			-			10,000			-			-

Reconciled to the interests in the associates
Gross amounts of net assets attributable to shareholders of the associate		3,409,111			3,400,953			21,118,225			22,285,077			6,957,154			6,683,884			2,066,544			2,073,209			3,477,211			3,400,344			4,212,930			4,326,600
The Company’s effective interest		49	%		49	%		25.02	%		25.02	%		20	%		20	%		40	%		40	%		50	%		50	%		30	%		30	%
The Company’s share of net assets attributable to shareholders of the associate		1,670,464			1,666,467			5,282,723			5,574,612			1,391,431			1,336,777			826,618			829,284			1,738,606			1,700,172			1,263,879			1,297,980
Impact of adjustments		207,586			207,586			1,161,810			1,161,810			-			-			293,082			293,082			16,521			16,521			14,076			14,076
Carrying amount in the consolidated financial statements		1,878,050			1,874,053			6,444,533			6,736,422			1,391,431			1,336,777			1,119,700			1,122,366			1,755,127			1,716,693			1,277,955			1,312,056

F-71

Summarized financial information of material joint ventures adjusted for any differences in accounting policies and acquisition adjustment, and reconciliation to the carrying amount in the consolidated financial statements, are disclosed below:

	Shanghai Time Shipping						Jiangsu Nantong Power
	2018			2017			2018			2017

Gross amounts of joint ventures’
Current assets		345,658			665,410			763,572			656,720
Non-current assets		4,335,923			4,663,530			5,399,783			5,739,860
Current liabilities		(2,151,722	)		(3,316,709	)		(2,826,652	)		(2,939,371	)
Non-current liabilities		(709,165	)		(617,437	)		(1,128,274	)		(1,374,656	)
Equity		1,820,694			1,394,794			2,208,429			2,082,553

Included in the above assets and liabilities:
Cash and cash equivalents		137,444			96,528			312,783			362,214
Current financial liabilities (excluding trade and other payables and provisions)		(1,953,156	)		(2,987,937	)		(2,158,919	)		(2,404,331	)
Non-current financial liabilities (excluding trade and other payables and provisions)		(709,164	)		(617,437	)		(1,128,274	)		(1,352,000	)

Revenue		2,423,130			3,532,065			3,287,872			3,451,983
Profit /(loss) from continuing operations		425,900			(139,780	)		174,652			271,364
Other comprehensive income		-			-			-			-
Total comprehensive income/(loss)		425,900			(139,780	)		174,652			271,364

Dividend received in cash from the joint ventures		-			-			24,387			724,453
Included in the above profit/(loss):
Depreciation and amortization		269,438			317,133			374,683			396,500
Interest income		1,456			1,406			1,485			1,810
Interest expense		139,180			157,851			163,914			130,028
Income tax expense		141,667			(45,741	)		60,379			92,294

Reconciled to the interest in the joint ventures:
Gross amounts of net assets		1,820,694			1,394,794			2,208,429			2,082,553
The Company and its subsidiaries’ effective interest		50	%		50	%		50	%		50	%
The Company and its subsidiaries’ share of net assets		910,347			697,397			1,104,215			1,041,277
Impact of adjustments		18,324			18,324			-			-
Carrying amount in the consolidated financial statements		928,671			715,721			1,104,215			1,041,277

Aggregate information of associates and joint ventures that are not individually material:

	2018		2017

Aggregate carrying amount of individually immaterial associates and joint ventures in the consolidated financial statements		3,654,282		2,948,510

Aggregate amounts of the Company and its subsidiaries’ share of those associates and joint ventures
Profit from continuing operations		52,935		70,965
Total comprehensive income		53,197		70,965

As at 31 December 2018, the Company’s share of losses of an associates and a joint venture exceeded its interest in the associate and the joint venture and the unrecognised further losses amounted to RMB505 million (2017: RMB185 million).

F-72

9	Investments in subsidiaries

As at 31 December 2018, the investments in subsidiaries of the Company and its subsidiaries, all of which are unlisted, are as follows:

(i)

Subsidiaries acquired through establishment or investment

Name of subsidiary	Country of incorporation	Type of interest held	Registered capital	Business nature and scope of operations	Percentage of equity interest held
Name of subsidiary	Country of incorporation	Type of interest held	Registered capital	Business nature and scope of operations	Interest			Voting

Huaneng International Power Fuel Limited Liability Company	PRC	held directly	RMB 200,000,000	Wholesale of coal		100	%		100	%

Huaneng Shanghai Shidongkou Power Generation Limited Liability Company (“Shidongkou Power”)(i)	PRC	held directly	RMB 1,179,000,000	Power generation		50	%		100	%

Huaneng Nantong Power Generation Limited Liability Company	PRC	held directly	RMB 798,000,000	Power generation		70	%		70	%

Huaneng Yingkou Co-generation Limited Liability Company	PRC	held directly	RMB 844,030,000	Production and sales of electricity and heat sale of coal ash and lime		100	%		100	%

Huaneng Hunan Xiangqi Hydropower Co.Ltd.	PRC	held directly	RMB 328,000,000	Construction, operation and management of hydropower plants and related projects		100	%		100	%

Huaneng Zuoquan Coal-fired Power Generation Limited Liability Company	PRC	held directly	RMB 960,000,000	Construction, operation and management of electricity projects; development and utilization of clean energy resources		80	%		80	%

Huaneng Kangbao Wind Power Utilization Limited Liability Company	PRC	held directly	RMB 407,200,000	Construction, operation and management of wind power plants and related projects; solar power generation		100	%		100	%

Huaneng Jiuquan Wind Power Generation Co., Ltd. (“Jiuquan Wind Power”)	PRC	held directly	RMB 2,610,000,000	Construction, operation and management of wind power generation and related projects		100	%		100	%

Huaneng Rudong Wind Power Generation Co., Ltd.	PRC	held directly	RMB 90,380,000	Operation, management of wind power generation projects		90	%		90	%

Huaneng Guangdong Haimen Port Limited Liability Company	PRC	held directly	RMB 331,400,000	Loading, warehousing and conveying services, providing facility services and water transportation services		100	%		100	%

Huaneng Taicang Port Limited Liability Company	PRC	held directly	RMB 600,000,000	Port provision, cargo loading and storage		85	%		85	%

Huaneng Taicang Power Generation Co., Ltd.	PRC	held directly	RMB 867,996,200	Power generation		75	%		75	%

Huaneng Huaiyin II Power Generation Limited Company	PRC	held directly	RMB 930,870,000	Power generation		63.64	%		63.64	%

Huaneng Xindian Power Generation Co., Ltd.	PRC	held directly	RMB 465,600,000	Power generation		95	%		95	%

Huaneng Shanghai Combined Cycle Power Limited Liability Company	PRC	held directly	RMB 699,700,000	Power generation		70	%		70	%

F-73

					Percentage of equity interest held
Name of subsidiary	Country of incorporation	Type of interest held	Registered capital	Business nature and scope of operations	Interest			Voting

Huaneng Yumen Wind Power Generation Co., Ltd.	PRC	held directly	RMB 719,170,000	Construction, operation and management of wind power generation and related projects		100	%		100	%

Huaneng Qingdao Co-generation Limited Company	PRC	held directly	RMB 214,879,000	Construction, operation and management of co-generation power plants and related projects		100	%		100	%

Huaneng Tongxiang Combined Cycle Co-generation Co., Ltd.	PRC	held directly	RMB 300,000,000	Production and sales of electricity and heat; investment in combined cycle co-generation industries		95	%		95	%

Huaneng Shantou Haimen Power Generation Limited Liability Company	PRC	held directly	RMB 1,508,000,000	Construction, operation and management of power plants and related projects		80	%		80	%

Huaneng Chongqing Liangjiang Power Generation Limited Liability Company (“Liangjiang Power”)	PRC	held directly	RMB 726,600,000	Construction, operation and management of natural gas power plants and related projects		90	%		90	%

Chongqing Huaqing Energy Co., Ltd. (“Huaqing Energy”) (ii)	PRC	held indirectly	RMB 44,420,000	Providing thermal energy and cold energy services; supplying electricity		54	%		60	%

Huaneng Yunnan Fuyuan Wind Power Generation Co., Ltd.	PRC	held directly	RMB 157,290,000	Wind power project investment, management and sales		100	%		100	%

Huaneng Guizhou Panzhou State City Wind Power Co., Ltd.	PRC	held directly	RMB 188,180,000	Construction and management of wind power plants and related projects		100	%		100	%

Huaneng Jiangxi Clean Energy Limited Liability Company	PRC	held directly	RMB 5,000,000	Power generation and supply, development, management and construction of clean		100	%		100	%

Huaneng Nanjing Combined Cycle Co-generation Co., Ltd. (“Nanjing Combined Cycle Co-generation”) (iii)	PRC	held directly	RMB 938,350,000	Construction, operation and management of power plants and energy projects		57.39	%		93.90	%

Huaneng Hunan Subaoding Wind Power Generation Co., Ltd.	PRC	held directly	RMB 266,000,000	Construction, operation and management of and related projects		100	%		100	%

Huaneng Suixian Jieshan Wind Power Generation Co., Ltd.	PRC	held directly	RMB 182,500,000	Construction, operation and management of wind power plants and related projects		100	%		100	%

Huaneng Taiyuan Dongshan Combined Cycle Co-generation Co., Ltd.	PRC	held directly	RMB 600,000,000	Construction and operation of thermal heating network, development and utilization of clean energy resources		100	%		100	%

Huaneng Xuzhou Tongshan Wind Power Generation Co., Ltd. (“Tongshan Wind Power”)	PRC	held directly	RMB 287,951,400	Wind power generation, electricity engineering design services, maintenance of power supply and control facilities, solar energy power generation		70	%		70	%

F-74

					Percentage of equity interest held
Name of subsidiary	Country of incorporation	Type of interest held	Registered capital	Business nature and scope of operations	Interest			Voting

Huaneng Nanjing Co-generation Co., Ltd.	PRC	held directly	RMB 300,000,000	Construction and operation of power plants, thermal heating services		70	%		70	%

Huaneng Hunan Guidong Wind Power Generation Co., Ltd.	PRC	held directly	RMB 140,000,000	Investment, construction, operation and management of electricity projects; development and utilization of clean energy resources		100	%		100	%

Huaneng Nanjing Luhe Wind Power Generation Co., Ltd.	PRC	held directly	RMB 63,800,000	Investment, construction, operation, management of electricity projects of electricity projects		100	%		100	%

Huaneng Luoyuan Power Generation Limited Liability Company	PRC	held directly	RMB 1,000,000,000	Construction, operation and management of power plants and related projects		100	%		100	%

Huaneng Lingang (Tianjin) Gas Co-generation Co., Ltd.	PRC	held directly	RMB 332,000,000	Power generation and supply		100	%		100	%

Huaneng Lingang (Tianjin) Heat Co-generation Co., Ltd.	PRC	held indirectly	RMB 5,000,000	Providing thermal energy and cold energy services, supplying steam and hot water (except portable water), plumbing pipe installation and repair, energy engineering construction		66	%		66	%

Huaneng Anhui Huaining Wind Power Generation Co., Ltd.	PRC	held directly	RMB 122,000,000	Investment, construction and operation of electricity projects, development and utilization of clean energy resources		100	%		100	%

Huaneng Mianchi Co-generation Limited Liability Company	PRC	held directly	RMB 570,000,000	Construction, operation and management of coal-fired plants and related projects		60	%		60	%

Huaneng Yingkou Xianrendao Co-generation Co., Ltd.	PRC	held directly	RMB 352,020,000	Power generation and supply, development and utilization of clean energy resources		100	%		100	%

Huaneng Nanjing Xingang Comprehensive Energy Co., Ltd.	PRC	held directly	RMB 10,000,000	Thermal generation and supply, power distribution and sales		65	%		65	%

Huaneng Changxing Photovoltaic Power Generation Limited Liability Company (“Changxing Photovoltaic Power”)	PRC	held directly	RMB 26,000,000	Construction and operation of distributed photovoltaic power generation plants and related projects		100	%		100	%

Huaneng Rudong Baxianjiao Offshore Wind Power Generation Co., Ltd.	PRC	held directly	RMB 1,629,338,700	Infrastructure construction of wind power plants		70	%		70	%

Huaneng Guilin Gas Distributed Energy Co., Ltd.	PRC	held directly	RMB 267,450,000	Construction, operation and management of power plants thermal management		80	%		80	%

Huaneng (Dalian) Co-generation Co., Ltd.	PRC	held directly	RMB 575,291,769	Construction, operation and management of co-generation power plants and related projects		100	%		100	%

F-75

						Percentage of equity interest held
Name of subsidiary	Country of incorporation	Type of interest held	Registered capital		Business nature and scope of operations	Interest			Voting

Huaneng Zhongxiang Wind Power Generation Co., Ltd.	PRC	held directly	RMB 240,000,000		Construction, operation and management of wind power plants and related projects		100	%		100	%

Huaneng Guanyun Co-generation Co., Ltd.	PRC	held directly	RMB 15,000,000		Construction, operation and management of co-generation power plants, heating network and expansion engineering		100	%		100	%

Huaneng International Power Hong Kong Limited Company	Hong Kong	held directly	100,000 Shares		Development, construction management and operation of power supply, coal projects; related investment and financing businesses		100	%		100	%

Tuas Power Generation Pte. Ltd. (“TPG”)	Singapore	held indirectly	S$	1,183,000,001	Power generation and related by-products, derivatives, developing power supply resources, operating electricity and power sales		100	%		100	%

TP Utilities Pte. Ltd. (“TPU”)	Singapore	held indirectly	S$	255,500,001	Provision of energy, power supply, thermal supply, management of industrial water and waste		100	%		100	%

TP-STM Water Resources Pte. Ltd.	Singapore	held indirectly	S$	4,500,000	Providing desalinated water		60	%		60	%

TP-STM Water Services Pte. Ltd.*	Singapore	held indirectly	S$	21,000	Providing desalinated water		60	%		60	%

Huaneng Shanxi Taihang Power Generation Limited Liability Company	PRC	held directly	RMB 1,086,440,000		Pre-services related to coal-fired generation		60	%		60	%

Huaneng Mianchi Clean Energy Limited Liability Company	PRC	held directly	RMB 10,000,000		Wind Power generation, new energy development and utilization		100	%		100	%

Huaneng Zhuolu Clean Energy Limited Liability Company	PRC	held directly	RMB 78,878,100		Construction, operation and management of power plants		100	%		100	%

Huaneng Tongwei Wind Power Generation Limited Liability Company	PRC	held directly	RMB 248,000,000		Construction, operation and management of wind power plants and related projects		100	%		100	%

Huaneng Yizheng Wind Power Generation Limited Liability Company	PRC	held directly	RMB 200,000,000		Wind power plants design, construction, management and maintenance		100	%		100	%

Huaneng Yancheng Dafeng New Energy Power Generation Limited Liability Company	PRC	held directly	RMB 5,000,000		Construction, operation and management of wind power, photovoltaic power plant		100	%		100	%

Huaneng Shanyin Power Generation Limited Liability Company	PRC	held directly	RMB 1,573,000,000		Construction, operation and management of power plants and related projects		51	%		51	%

Huaneng Wafangdian Wind Power Generation Co., Ltd.	PRC	held directly	RMB 50,000,000		Construction, operation and management of wind power generation and related projects		100	%		100	%

F-76

					Percentage of equity interest held
Name of subsidiary	Country of incorporation	Type of interest held	Registered capital	Business nature and scope of operations	Interest			Voting

Huaneng Jiangsu Energy Sales Limited Liability Company	PRC	held directly	RMB 200,000,000	Purchase and sales of electricity and thermal energy, water supply services, construction and operation of electricity distribution network and heating pipe network		100	%		100	%

Huaneng Liaoning Energy Sales Limited Liability Company	PRC	held directly	RMB 200,000,000	Sales of electricity, thermal energy and circulating hot water		100	%		100	%

Huaneng Guangdong Energy Sales Limited Liability Company	PRC	held directly	RMB 200,000,000	Power and thermal energy supply, energy conservation technology service, transmission and substation projects contracting		100	%		100	%

Huaneng Suizhou Power Generation Limited Liability Company	PRC	held directly	RMB 96,020,000	Construction, operation and management of power plants, production and sales of electricity and heating		100	%		100	%

Huaneng Changle Photovoltaic Power Generation Limited Liability Company	PRC	held directly	RMB 10,000,000	Construction, operation and management of photovoltaic power plants and related projects		100	%		100	%

Huaneng Longyan Wind Power Generation Limited Liability Company	PRC	held directly	RMB 10,000,000	Construction, operation and management of wind power plants and related projects		100	%		100	%

Huaneng Dandong Photovoltaic Power Generation Limited Liability Company	PRC	held directly	RMB 17,720,000	Investment, construction operation and management of electricity projects, development and utilization of clean energy resources		100	%		100	%

Huaneng Dongguan Combined Cycle Co-generation Limited Liability Company	PRC	held directly	RMB 50,000,000	Investment of electricity projects, thermal power generation and supply, investment in heating pipe network, development and utilization of clean energy resources		100	%		100	%

Huaneng Chongqing Fengjie Wind Power Generation Limited Liability Company	PRC	held directly	RMB 183,900,000	Electricity production and supply; development and utilization of clean energy resources		100	%		100	%

Huaneng Jingxing Photovoltaic Power Generation Limited Liability Company	PRC	held directly	RMB 100,000	Investment, construction and management of photovoltaic power plants		100	%		100	%

Huaneng Shanxi Energy Sales Limited Liability Company	PRC	held directly	RMB 210,000,000	Electricity supply and sales, investment, construction, operation and repair of regional transmission and distribution network		100	%		100	%

Huaneng Chongqing Energy Sales Limited Liability Company	PRC	held directly	RMB 210,000,000	Operation of natural gas, electric energy and thermal energy products sales		100	%		100	%

Huaneng Chongqing Luohuang Energy Sales Limited Liability Company	PRC	held indirectly	RMB 210,000,000	Sales and supply of electricity, sales of thermal products		90	%		90	%

F-77

					Percentage of equity interest held
Name of subsidiary	Country of incorporation	Type of interest held	Registered capital	Business nature and scope of operations	Interest			Voting

Huaneng Chongqing Tongliang Energy Sales Limited Liability Company	PRC	held indirectly	RMB 210,000,000	Operation of natural gas, sales of electricity supply, sales of thermal products		51	%		51	%

Huaneng Hunan Energy Sales Limited Liability Company	PRC	held directly	RMB 210,000,000	Electricity and thermal energy products sales		100	%		100	%

Huaneng Jiangxi Energy Sales Limited Liability Company	PRC	held directly	RMB 210,000,000	Construction, operation and management of heating and power supply facilities		100	%		100	%

Huaneng Hebei Energy Sales Limited Liability Company	PRC	held directly	RMB 210,000,000	Construction, installation, maintenance and repair of heating and power supply facilities		100	%		100	%

Huaneng Henan Energy Sales Limited Liability Company	PRC	held directly	RMB 210,000,000	Sales of electricity, heating, gas and other energy products		100	%		100	%

Huaneng Handan Heating Limited Liability Company	PRC	held directly	RMB 100,000,000	Construction, operation and maintenance of heating sources and pipe network		100	%		100	%

Huaneng (Huzhou Development Zone) Photovoltaic Power Generation Limited Liability Company	PRC	held directly	RMB 10,000,000	Photovoltaic power generation; power supply, purchase and sales		100	%		100	%

Huaneng Fujian Energy Sales Limited Liability Company	PRC	held directly	RMB 210,000,000	Sales of electricity, heating, gas and other energy products		100	%		100	%

Huaneng Hubei Energy Sales Limited Liability Company	PRC	held directly	RMB 210,000,000	Sales of electricity, heating, gas and other energy products		100	%		100	%

Huaneng (Sanming) Clean Energy Limited Liability Company	PRC	held directly	RMB 500,000	Construction, operation and management of wind power, photovoltaic power station and related projects		100	%		100	%

Huaneng Yueyang Xingang Photovoltaic Power Generation Limited Liability Company	PRC	held directly	RMB 16,000,000	Construction, operation and management of electricity projects, development and utilization of clean energy		60	%		60	%

Huaneng Shanghai Energy Sales Limited Liability Company	PRC	held directly	RMB 210,000,000	Power supply (except construction and operation of electricity network), technology services in energy conservation and environmental protection		100	%		100	%

Huaneng Anhui Energy Sales Limited Liability Company	PRC	held directly	RMB 210,000,000	Sales of electricity, heating gas and other energy products		100	%		100	%

Huaneng (Shanghai) Power Maintenance Limited Liability Company	PRC	held directly	RMB 200,000,000	Contracting installation and repair of electricity facilities		100	%		100	%

F-78

					Percentage of equity interest held
Name of subsidiary	Country of incorporation	Type of interest held	Registered capital	Business nature and scope of operations	Interest			Voting

Huaneng Guanyun Clean Energy Power Limited Liability Company	PRC	held directly	RMB 26,000,000	Sales of electricity		100	%		100	%

Huaneng Jianchang Photovoltaic Power Generation Limited Liability Company	PRC	held directly	RMB 10,000,000	Production and supply of electricity, development and utilization of clean energy resources		100	%		100	%

Huaneng Chaoyang Photovoltaic Power Generation Limited Liability Company	PRC	held directly	RMB 10,000,000	Production and supply of electricity, development and utilization of clean energy resources		100	%		100	%

Huaneng (Luoyuan) Port Limited Company	PRC	held directly	RMB 169,710,000	Port management, investment and development		100	%		100	%

Huaneng Shijiazhuang Energy Limited Liability Company	PRC	held directly	RMB 60,000,000	Production and supply of heating, purchase and sales of electricity		66.60	%		66.60	%

Huaneng Jiangyin Combined Cycle Co-generation Limited Liability Company	PRC	held directly	RMB 600,000,000	Production and supply of electricity, production and supply of heating		51	%		51	%

Huaneng Anyang Energy Limited Liability Company	PRC	held directly	RMB 10,000,000	Production and supply of electricity, production and supply of heating		100	%		100	%

Huaneng Shanxi Comprehensive Energy Limited Liability Company (“Shanxi Comprehensive Energy”)	PRC	held directly	RMB 120,000,000	Production and supply of electricity, production and supply of heating		100	%		100	%

Huaneng Zhanhua Photovoltaic Power Generation Limited Company (“Zhanhua Photovoltaic Company”) (iv)	PRC	held indirectly	RMB 145,790,000	Photovoltaic power generation		46.40	%		58	%

Huaneng Weishan New Energy Limited Company (“Weishan New Energy”) (iv)	PRC	held indirectly	RMB 167,000,000	Investment, production and sales of new energy power generation projects		40	%		100	%

Huaneng Ruyi (Helan) New Energy Limited Company (“Helan New Energy”) (iv)	PRC	held indirectly	RMB 19,000,000	Photovoltaic power generation		40	%		100	%

Huaneng Dezhou New Energy Limited Company (iv)	PRC	held indirectly	RMB 3,100,000	Photovoltaic power generation, wind power generation, biomass power generation		80	%		100	%

Zhaodong Huaneng Dechang Solar Power Generation Limited Company	PRC	held indirectly	RMB 30,810,000	Solar energy generation and technology promotion, repair electricity facilities		100	%		100	%

Daqing Huaneng Shuangyu Solar Power Generation Limited Company	PRC	held indirectly	RMB 80,796,000	Solar energy generation		100	%		100	%

Huaneng Mingguang Wind Power Generation Limited Liability Company	PRC	held directly	RMB 10,000,000	Production and supply of electricity; investment, construction, operation and management of electricity projects		100	%		100	%

F-79

					Percentage of equity interest held
Name of subsidiary	Country of incorporation	Type of interest held	Registered capital	Business nature and scope of operations	Interest			Voting

Huaneng Guangxi Energy Sales Limited Liability Company	PRC	held directly	RMB 210,000,000	Power supply, contracting installation and repair of electricity facilities		100	%		100	%

Huaneng Ruzhou Clean Energy Limited Liability Company (“Ruzhou Clean Energy”) (v)	PRC	held directly	RMB 80,000,000	Production and supply of electricity projects, investment, construction and operation of electricity projects		95	%		100	%

Huaneng Hunan Lianping Wind Power Generation Limited Liability Company	PRC	held directly	RMB 173,920,000	Production and supply of electricity		80	%		80	%

Huaneng Abagaqi Clean Energy Limited Liability Company	PRC	held directly	RMB 100,000	Production, supply and sales of electricity and thermal energy		100	%		100	%

Huaneng Jiashan Photovoltaic Power Generation Limited Liability Company	PRC	held directly	RMB 10,000,000	Production and supply of electricity		100	%		100	%

Huaneng Zhejiang Energy Sales Limited Liability Company	PRC	held directly	RMB 210,000,000	New energy technology development, technology consulting, transferring of results		100	%		100	%

Huaneng Guangdong Shantou Power Generation Limited Liability Company	PRC	held directly	RMB 10,000,000	Production and supply of electricity and thermal energy		100	%		100	%

Huaneng Shantou Photovoltaic Power Generation Limited Liability Company	PRC	held directly	RMB 100,000	Production and supply of electricity		100	%		100	%

Huaneng Guigang Clean Energy Limited Liability Company	PRC	held directly	RMB 10,000,000	Production and supply of electricity, investment, construction and operation of electricity projects		100	%		100	%

Huaneng Changxing Jiapu Photovoltaic Power Generation Limited Liability Company	PRC	held directly	RMB 10,000,000	Production and supply of electricity, investment in electricity projects		100	%		100	%

Huaneng Hainan Energy Sales Limited Liability Company	PRC	held indirectly	RMB 210,000,000	Construction and operation of heat and power supply facilities,operation of heat resources, heat network and power supply facilities		91.80	%		91.80	%

Huaneng Yangpu Co-generation Limited Company	PRC	held indirectly	RMB 802,222,000	Investment, construction, operation and management of electricity projects and heat pipe network		82.62	%		82.62	%

Huaneng Zhejiang Pinghu Offshore Wind Power Generation Co., Ltd.*	PRC	held directly	RMB 2,200,000,000	Production and supply of electricity, investment, construction		100	%		100	%

Huaneng Liaoning Clean Energy Limited Liability Company* (“Liaoning Clean Energy”)	PRC	held directly	RMB 170,000,000	Technology development technical advice services for clean energy		100	%		100	%

F-80

					Percentage of equity interest held
Name of subsidiary	Country of incorporation	Type of interest held	Registered capital	Business nature and scope of operations	Interest			Voting

Jiangsu Huaneng Zhongyang New Energy Power Generation Co., Ltd.*	PRC	held directly	RMB 28,000,000	Production and supply of electricity, investment, construction and operation of electricity projects		75	%		75	%

Huaneng Henan Puyang Clean Energy Limited Liability Company*	PRC	held directly	RMB 10,000,000	Production and supply of electricity, investment, construction and operation of electricity projects		100	%		100	%

Huaneng Guizhou Energy Sales Co., Ltd.*	PRC	held directly	RMB 210,000,000	Sales of electricity, heat and gas		100	%		100	%

Huaneng Guangdong Shantou Offshore Wind Power Generation Co., Ltd.*	PRC	held directly	RMB 10,000,000	Investment and development of wind energy and new energy		100	%		100	%

Jiyuan Huaneng Energy Sales Co., Ltd.*	PRC	held indirectly	RMB 20,000,000	Sales of electricity, heat and gas		51	%		51	%

Huaneng Zhenlai Photovoltaic Power Generation Co., Ltd.* (“Zhenlai Photovoltaic Power”) (vi)	PRC	held indirectly	RMB 29,958,660	Investment, construction, production, operation and overhaul of photovoltaic power generation projects		50	%		100	%

Huaneng Yushe Poverty Relief Energy Co., Ltd.*	PRC	held indirectly	RMB 14,760,000	Construction, operation and management of photovoltaic power generation and new energy projects		90	%		90	%

Huaneng Anhui Mengcheng Wind Power Co., Ltd.*	PRC	held directly	RMB 1,000,000	Production and supply of electricity, investment, construction and operation of electricity projects		100	%		100	%

Huaneng Anshun Comprehensive Energy Co., Ltd.*	PRC	held directly	RMB 100,000	Production and supply of electricity, investment, construction and operation of electricity projects		100	%		100	%

Huaneng Shengdong Rudong Offshore Wind Power Co., Ltd.* (“Huaneng Shengdong Rudong”)	PRC	held directly	RMB 1,000,000,000	Production and sales of electric power; investment in wind power generation		79	%		79	%

Huaneng Zhejiang Cangnan Offshore Wind Power Co., Ltd.*	PRC	held directly	RMB 10,000,000	Production and sales of electric power; investment in wind power generation		100	%		100	%

Huaneng Zhejiang Ruian Offshore Wind Power Co., Ltd.*	PRC	held directly	RMB 10,000,000	Production and sales of electric power; investment in wind power generation		100	%		100	%

Shengdong Rudong Offshore Wind Power Co., Ltd.* (“Shengdong Rudong Offshore Wind Power”)	PRC	held indirectly	RMB 5,000,000	Ancillary project construction of wind farm, wind farm maintenance		79	%		100	%

* These companies were newly established in 2018.

F-81

(ii)

Subsidiaries acquired from business combinations under common control

					Percentage of equity interest held
Name of subsidiary	Country of incorporation	Type of interest held	Registered capital	Business nature and scope of operations	Interest			Voting

Huaneng (Suzhou Industrial Park) Power Generation Co., Ltd.	PRC	held directly	RMB 632,840,000	Power generation		75	%		75	%

Huaneng Qinbei Power Generation Co., Ltd. (“Qinbei Power”)	PRC	held directly	RMB 1,540,000,000	Power generation		60	%		60	%

Huaneng Yushe Power Generation Co., Ltd.	PRC	held directly	RMB 615,760,000	Power generation, power distribution, sales of power		60	%		60	%

Huaneng Hunan Yueyang Power Generation Limited Liability Company	PRC	held directly	RMB 1,935,000,000	Power generation		55	%		55	%

Huaneng Chongqing Luohuang Power Generation Limited Liability Company (“Luohuang Power”)	PRC	held directly	RMB 1,748,310,000	Power generation		60	%		60	%

Huaneng Pingliang Power Generation Co., Ltd.	PRC	held directly	RMB 924,050,000	Power generation		65	%		65	%

Huaneng Nanjing Jinling Power Generation Co., Ltd.	PRC	held directly	RMB 1,513,136,000	Power generation		60	%		60	%

Huaneng Qidong Wind Power Generation Co., Ltd.	PRC	held directly	RMB 391,738,500	Development of wind power projects, production and sales of electricity		65	%		65	%

Tianjin Huaneng Yangliuqing Co-generation Limited Liability Company (“Yangliuqing Co-generation”)	PRC	held directly	RMB 1,537,130,909	Power generation, heat supply, facilities installation, maintenance and related services		55	%		55	%

Huaneng Beijing Co-generation Limited Liability Company (“Beijing Co-generation”) (vii)	PRC	held directly	RMB 3,702,090,000	Construction and operation of power plants and related construction projects		41	%		66	%

Huaneng Wuhan Power Generation Co., Ltd. (“Wuhan Power”)	PRC	held directly	RMB 1,478,461,500	Investment, construction, operation and management of electricity projects, development and utilization of clean energy resources		75	%		75	%

Huaneng Anyuan Power Generation Co., Ltd. (“Anyuan Power”)	PRC	held directly	RMB 1,175,117,300	Construction and operation of power plants and related construction projects, production of electricity		100	%		100	%

Huaneng Hualiangting Hydropower Co., Ltd. (“Hualiangting Hydropower”)	PRC	held directly	RMB 50,000,000	Generation and transfer of power supply, water supply (irrigation)		100	%		100	%

Huaneng Chaohu Power Generation Co., Ltd. (“Chaohu Power”) (viii)	PRC	held directly	RMB 840,000,000	Construction, operation, management of electricity projects, development and utilization of clean energy resources		60	%		70	%

Huaneng Jingmen Thermal Power Co., Ltd. (“Jingmen Thermal Power”)	PRC	held directly	RMB 780,000,000	Thermal power, power development and other service		100	%		100	%

F-82

					Percentage of equity interest held
Name of subsidiary	Country of incorporation	Type of interest held	Registered capital	Business nature and scope of operations	Interest			Voting

Enshi Qingjiang Dalongtan Hydropwer Development Co., Ltd. (“Dalongtan Hydropower”)	PRC	held directly	RMB 177,080,000	Hydropower development, production and management of electric power, urban water supply		98.01	%		98.01	%

Huaneng Suzhou Thermal Power Co., Ltd. (“Suzhou Thermal Power”) (ix)	PRC	held directly	RMB 600,000,000	Construction, operation and management of electricity projects, development and utilization of clean energy		53.45	%		100	%

Huaneng Hainan Power Generation Limited Company (“Hainan Power”)	PRC	held directly	RMB 1,326,419,587	Investment, construction, operation of various power plants, regular energy and new energy development		91.80	%		91.80	%

Huaneng Ruijin Power Generation Co., Ltd. (“Ruijin Power Generation”)	PRC	held directly	RMB 606,923,299	Construction, operation, management of electricity projects, development and utilization of clean energy		100	%		100	%

Huaneng Yingcheng Thermal Power Co., Ltd. (“Yingcheng Thermal Power”)	PRC	held directly	RMB 650,000,000	Construction and operation of power plants and production, sales of power and heat		100	%		100	%

Huaneng Heilongjiang Power Generation Limited Company (“Heilongjiang Power”)	PRC	held directly	RMB 945,350,000	Development, investment, construction, production and management of power (thermal) projects		100	%		100	%

Huaneng Hegang Power Generation Limited Company (“Hegang Power”)	PRC	held indirectly	RMB 1,092,550,000	The electricity power construction, energy conservation and, development projects, heat production and supply		64	%		64	%

Huaneng Xinhua Power Generation Limited Liability Company (“Xinhua Power”)	PRC	held indirectly	RMB 284,880,000	Power generation, power equipment repair, coal sales		70	%		70	%

Huaneng Tongjiang Wind Power Generation Limited Company (“Tongjiang Wind Power”)	PRC	held indirectly	RMB 330,000,000	Wind power generation, wind power plants operation, planning and design		82.85	%		82.85	%

Huaneng Daqing Thermal Power Limited Company (“Daqing Thermal Power”)	PRC	held indirectly	RMB 630,000,000	Power generation, thermal production and supply		100	%		100	%

Daqing Lvyuan Wind Power Generation Limited Company (“Lvyuan Wind Power”)	PRC	held indirectly	RMB 497,000,000	Wind power generation		100	%		100	%

Huaneng Yichun Thermal Power Limited Company (“Yichun Thermal Power”)	PRC	held indirectly	RMB 581,000,000	Power construction, production and sales, thermal production and sales		100	%		100	%

Huaneng Heilongjiang Energy Sales Limited Company (“Heilongjiang Energy Sales”)	PRC	held indirectly	RMB 210,000,000	Power supply, the production of heat and hot water		100	%		100	%

F-83

					Percentage of equity interest held
Name of subsidiary	Country of incorporation	Type of interest held	Registered capital	Business nature and scope of operations	Interest			Voting

Zhaodong Huaneng Thermal Power Limited Company (“Zhaodong Thermal Power”)	PRC	held indirectly	RMB 10,000,000	Heating production and supply		100	%		100	%

Huaneng Jilin Power Generation Limited Company (“Jilin Power”)	PRC	held directly	RMB 2,879,340,000	Power (thermal) projects, development of new energy projects investment, construction, production, operation and sales		100	%		100	%

Huaneng Linjiang Jubao Hydropower Limited Company (“Jubao Hydropower”)	PRC	held indirectly	RMB 45,624,000	Hydropower development and operation, construction and operation of photovoltaic power generation		100	%		100	%

Huaneng Jilin Energy Sales Limited Company (“Jilin Energy Sales”)	PRC	held indirectly	RMB 210,000,000	Thermal (cold) production and supply, power supply		100	%		100	%

Shandong Power	PRC	held directly	RMB 4,241,460,000	Power (thermal) project development, investment, construction and management		80	%		80	%

Huaneng Jining New Energy Limited Company (“Jining New Energy”) (iv)	PRC	held indirectly	RMB 38,000,000	Investment, construction and management of photovoltaic and wind power projects		80	%		100	%

Huaneng Zibo Boshan Photovoltaic Power Limited Company (“Zibo Photovoltaic”) (iv)	PRC	held indirectly	RMB 22,000,000	Solar power generation, sales		80	%		100	%

Huaneng Rizhao Thermal Power Limited Company (“Rizhao Thermal Power”) (iv)	PRC	held indirectly	RMB 52,000,000	Urban heat construction, maintenance and operation, design and construction of heat engineering		80	%		100	%

Huaneng Laiwu New Energy Limited Company (“Laiwu New Energy”) (iv)	PRC	held indirectly	RMB 68,000,000	Photovoltaic power and wind power generation		80	%		100	%

Huaneng Shandong Sishui New Energy Limited Company (“Sishui New Energy”) (iv)	PRC	held indirectly	RMB 36,000,000	Solar energy grid connected generation		80	%		100	%

Huaneng Shandong Electric And Thermal Power Marketing Limited Company (“Shandong Power Marketing”) (iv)	PRC	held indirectly	RMB 200,000,000	Sales and service of power and heating products, investment in power industry		80	%		100	%

Huaneng Shandong Information Technology Limited Company (“Shandong Power Information Company”) (iv)	PRC	held indirectly	RMB 80,000,000	Information technology and management consulting services		80	%		100	%

Huaneng Zhanhua New Energy Limited Company (“Zhanhua New Energy”) (iv)	PRC	held indirectly	RMB 235,298,200	Wind power, photovoltaic power generation		80	%		100	%

F-84

					Percentage of equity interest held
Name of subsidiary	Country of incorporation	Type of interest held	Registered capital	Business nature and scope of operations	Interest			Voting

Huaneng Weihai Port Photovoltaic Power Generation Limited Company (“Port Photovoltaic”) (iv)	PRC	held indirectly	RMB 30,760,000	Photovoltaic power generation projects development and construction, electricity sales		80	%		100	%

Huaneng Jinan Huangtai Power Limited Company (“Huangtai Power”) (iv)	PRC	held indirectly	RMB 1,391,878,400	Electricity power production, heat management		72	%		90	%

Huaneng Dezhou Thermal Power Limited Company (“Dezhou Thermal Power”) (iv)	PRC	held indirectly	RMB 40,000,000	Urban heat construction, maintenance and operation, design and construction of heat engineering		68	%		85	%

Huaneng Dongying New Energy Limited Company (“Dongying New Energy”) (iv)	PRC	held indirectly	RMB 92,601,483	Wind power projects development, wind power generation and sales of electricity		56	%		70	%

Huaneng Shandong Power Generation Maintenance Technology Limited Company (“Shandong Maintenance Company”) (iv)	PRC	held indirectly	RMB 50,000,000	Power engineering design, construction		76.55	%		100	%

Huaneng Shandong Electric Power Fuel Limited Company (“Shandong Fuel Company”) (iv)	PRC	held indirectly	RMB 100,000,000	Wholesale operation of coal		76.55	%		100	%

Shandong Rizhao Power Generation Limited Company (“Rizhao Power”) (iv)	PRC	held indirectly	RMB 1,245,587,900	Heat, engaged in power business		88.80	%		100	%

Huaneng Laiwu Power Generation Limited Company (“Laiwu Power”) (iv)	PRC	held indirectly	RMB 1,800,000,000	Power production		76	%		100	%

Huaneng Shandong Ruyi Coal Power Limited Company (“Ruyi Coal Power”) (iv)	PRC	held indirectly	RMB 1,294,680,000	Development, investment, construction, operation and management of electricity power and coal		40	%		100	%

Huaneng Jiaxiang Power Generation Limited Company (“Jiaxiang Power”) (iv)	PRC	held indirectly	RMB 646,680,000	Power generation, electrical equipment maintenance		40	%		100	%

Huaneng Qufu Co-generation Limited Company (“Qufu Co-generation”) (iv)	PRC	held indirectly	RMB 300,932,990	Sales and production of electric power, thermal power		40	%		100	%

Huaneng Jining Hi-Tech Zone Co-generation Limited Company (“Jining Co-generation”) (iv)	PRC	held indirectly	RMB 118,699,760	Heat supply and power generation		40	%		100	%

Huaneng Shandong (Hong Kong) Investment Limited Company (“Hong Kong Investment”) (iv)	Hong Kong	held indirectly	10,000 Shares	Investment		80	%		100	%

F-85

					Percentage of equity interest held
Name of subsidiary	Country of incorporation	Type of interest held	Registered capital	Business nature and scope of operations	Interest			Voting

Shandong Silk Road International Power Limited Company (“Shandong Silk Road”) (iv)	PRC	held indirectly	RMB 35,000,000	Contracting overseas projects and domestic international bidding projects, construction and operation of power projects		80	%		100	%

Shandong Changdao Wind Power Generation Limited Liability Company (“Changdao Wind Power”) (iv)	PRC	held indirectly	RMB 33,500,000	Wind power, on-grid sales		48	%		60	%

Huaneng Rongcheng New Energy Co., Ltd. (“Rongcheng New Energy”) (iv)	PRC	held indirectly	RMB 36,540,000	Wind power generation		48	%		100	%

Huaneng Jining Yunhe Power Generation Co., Ltd. (“Yunhe Power”) (iv)	PRC	held indirectly	RMB 696,355,300	Electrical (thermal) production and on-grid sales, technology consulting and services		78.68	%		98.35	%

Huaneng Linyi Power Generation Limited Company (“Linyi Power”) (iv)	PRC	held indirectly	RMB 1,093,313,400	Power generation		60	%		75	%

Liaocheng Changrun National Electric Heating Limited Company (“Liaocheng Changrun”) (iv)	PRC	held indirectly	RMB 130,000,000	Heat operation, installation and repair of water, electricity, heating		60	%		75	%

Linyi Lantian Thermal Power Limited Company (“Lantian Thermal Power”) (iv)	PRC	held indirectly	RMB 36,000,000	Heat supply, maintenance of thermal power network, power sales, installation and maintenance of distribution facilities		54.40	%		68	%

Yantai 500 Heating Limited Company (“Yantai 500”) (iv)	PRC	held indirectly	RMB 20,500,000	Central heat services, plumbing and pipe installation services		64	%		80	%

Huaneng Liaocheng Co-generation Limited Company (“Liaocheng Co-generation) (iv)	PRC	held indirectly	RMB 610,670,000	Power, heat production and sales		60	%		100	%

Huaneng Henan Zhongyuan Gas Power Generation Co., Ltd. (“Zhongyuan Gas”)	PRC	held directly	RMB 400,000,000	Investment, construction, operation and management of power projects, thermal supply, development and utilization of clean energy resources		90	%		90	%

Shandong Huaneng Liaocheng Thermal Power Co., Ltd. (“Shandong Liaocheng Thermal Power”) (iv)	PRC	held indirectly	RMB 427,740,000	Electric power, thermal production and sales		60	%		75	%

Shandong Huaneng Laiwu Thermal Power Co., Ltd. (“Shandong Laiwu Thermal Power”) (iv)	PRC	held indirectly	RMB 540,000,000	Electric power, thermal production and sales		64	%		80	%

Shandong Huaneng Laizhou Wind Power Generation Co., Ltd. (“Laizhou Wind Power”) (iv)	PRC	held indirectly	RMB 90,000,000	Wind power generation		64	%		80	%

The subsidiaries above and the Company are all controlled by Huaneng Group before and after the acquisitions.

F-86

(iii)

Subsidiaries acquired from business combinations not under common control

						Percentage of equity interest held
Name of subsidiary	Country of incorporation	Type of interest held	Registered capital		Business nature and scope of operations	Interest			Voting

Huaneng Weihai Power Generation Limited Liability Company (“Weihai Power”)	PRC	held directly	RMB 1,822,176,621		Power generation		60	%		60	%

Huaneng Huaiyin Power Generation Limited Company	PRC	held directly	RMB 265,000,000		Power generation		100	%		100	%

Huade County Daditaihong Wind Power Utilization Limited Liability Company	PRC	held directly	RMB 196,400,000		Wind power development and utilization		100	%		100	%

Huaneng Zhanhua Co-generation Limited Company	PRC	held directly	RMB 190,000,000		Production and sales of electricity and thermal energy		100	%		100	%

Shandong Hualu Sea Transportation Limited Company	PRC	held directly	RMB 100,000,000		Cargo transportation along domestic coastal areas, goods storage		53	%		53	%

Huaneng Qingdao Port Limited Company	PRC	held directly	RMB 219,845,000		Loading and conveying warehousing, conveying, water carriage materials supply		51	%		51	%

Huaneng Yunnan Diandong Energy Limited Liability Company (“Diandong Energy”)	PRC	held directly	RMB 3,769,140,000		Electricity projects investment, power generation and sales, coal exploitation and investment		100	%		100	%

Yunnan Diandong Yuwang Energy Limited Company (“Diandong Yuwang”)	PRC	held directly	RMB 1,700,740,000		Electricity projects investment, power generation and sales, coal exploitation and investment		100	%		100	%

Huaneng Luoyang Co-generation Limited Liability Company	PRC	held directly	RMB 600,000,000		Production and sales of electricity and heating		80	%		80	%

Huaneng Zhumadian Wind Power Generation Co., Ltd.	PRC	held directly	RMB 30,000,000		Wind power generation, new energy development and utilization		90	%		90	%

SinoSing Power	Singapore	held directly	US$1,476,420,585		Investment holding		100	%		100	%

Tuas Power	Singapore	held indirectly	S$	1,433,550,000	Investment holding		100	%		100	%

Tuas Power Supply Pte. Ltd.	Singapore	held indirectly	S$	500,000	Power sales		100	%		100	%

TP Asset Management Pte. Ltd.	Singapore	held indirectly	S$	2	Render of environment engineering services		100	%		100	%

TPGS Green Energy Pte. Ltd.	Singapore	held indirectly	S$	1,000,000	Provision of utility services		75	%		75	%

Luoyang Yangguang Co-generation Limited Liability Company (“Yangguang Co-generation”)	PRC	held indirectly	RMB 250,000,000		Production and supply of electricity and heat power		100	%		100	%

Shanxi Xiaoyi Economic Development Zone Huaneng Energy Service Co., Ltd. (“Shanxi Xiaoyi Energy”) (x)	PRC	held indirectly	RMB 100,000,000		Electricity sales, sales of raw coal and processed coal		51	%		100	%

F-87

Percentage of equity interest held

Name of subsidiary

Country of incorporation

Type of interest held

Registered capital

Business nature and scope of operations

Interest

Voting

Ruzhou Xuji Wind Power Generation Co., Ltd.

PRC

held indirectly

RMB 4,000,000

Wind power and photovoltaic power generation

100

Hong Kong Energy (iv) (Note 41)

Hong Kong

held indirectly

US$360,000,000

Investment

100

Ruyi Pakistan Energy (iv) (Note 41)

Pakistan

held indirectly

US$360,000,000

Electric power production and sales

100

Shandong Huatai Electric Power Operation & Maintenance (Private) Co., Ltd. (“Huatai Power”) (iv) (Note 41)

Pakistan

held indirectly

100,000 shares

Power generation operation and maintenance

100

Note:

(i)

According to its article of association, the other shareholder who holds the remaining equity interests of Shidongkou Power entrusts the Company to exercise all its voting rights in relation to the operation and financial policies of Shidongkou Power. Accordingly, the Company has control over Shidongkou Power.

(ii)

The Company holds 90% interests in Liangjiang Power, and Liangjiang Power holds 60% interests in Huaqing Energy. Therefore, the Company indirectly holds 54% equity interests in Huaqing Energy.

(iii)

According to the voting in concert agreement entered into between the Company and another shareholder with 27.39% equity interests in Nanjing Combined Cycle Cogeneration, the shareholder agreed to vote the same in respect of profit distribution decisions made by the Company. According to the voting in concert agreement entered into between the Company and another shareholder with 9.13% equity interests in Nanjing Combined Cycle Cogeneration, the shareholder agreed to vote the same in respect of significant financial and operating decisions made by the Company under the circumstances that their legitimate entitlements are guaranteed. As a result the Company has control over Nanjing Combined Cycle Co-generation.

(iv)

These companies are subsidiaries of Shandong Power. The Company holds 80% interests in Shandong Power. Thus, the Company indirectly holds 80% interests in these companies through their parent company.

Zhanhua New Energy, a wholly-owned subsidiary of Shandong Power, holds 58% equity interests in Zhanhua Photovoltaic Company. Thus, the Company indirectly holds 46.4% equity interests in Zhanhua Photovoltaic Company.

Weishan New Energy and Helan New Energy are wholly-owned subsidiaries of Ruyi Coal Power, a 50% owned subsidiary of Shandong Power. As a result, the Company indirectly holds 40% interests in Weishan New Energy and Helan New Energy.

Shandong Power directly holds 72% interests in Shandong Fuel Company and Shandong Maintenance Company; meanwhile, Shandong Power indirectly holds a total of 23.68% equity interests in Shandong Fuel Company and Shandong Maintenance Company respectively through its own subsidiaries: Huangtai Power, Linyi Power, Liaocheng Co-generation and Yunhe Power. Thus, the Company indirectly holds 76.55% interests in Shandong Maintenance Company and Shandong Fuel Company respectively.

The Company directly holds 44% equity interests in Rizhao Power and Shandong Power directly holds 56% interests in Rizhao Power; Thus, the Company holds 88.8% interests in Rizhao Power.

Jiaxiang Power, Qufu Co-generation, Jining Co-generation are wholly-owned subsidiaries of Ruyi Coal Power. Thus, the Company indirectly holds 40% interests in Ruyi Coal Power, Jiaxiang Power, Qufu Co-generation and Jining Co-generation.

Shandong Power acquired 15% equity from another shareholder of Laiwu power. As a result, the Company indirectly holds 76% interests in Laiwu power.

F-88

In according to the voting in concert agreement entered into among the Shandong Power and other equity holders of Laiwu Power, Ruyi Coal Power, Rongcheng New Energy, Liaocheng Co-generation, the other equity holders agreed to vote the same in respect of significant financial and operating decisions made by the Shandong Power. As a result, the Company has control over these companies.

According to the voting in concert agreement entered into between Hong Kong Investment and the other shareholder in December 2018, the other shareholder agreed to vote the same in respect of significant financial and operating decisions made by Hong Kong Investment. As a result, the Company has control over Hong Kong Energy and its subsidiaries including Huatai Power and Ruyi Pakistan Energy since 31 December 2018. See Note 41.

(v)

According to the investment cooperation agreement between the Company and another shareholder, Ruzhou Clean Energy has an executive director appointed by the Company. At the same time, the shareholder agreed to withdraw from Ruzhou Clean Energy in compliance with the law within 3 months upon the completion of the project. Therefore, the Company has control over Ruzhou Clean Energy.

(vi)

According to the investment cooperation agreement and articles of association signed by Jilin Power and another shareholder, the shareholder enjoys fixed operating income and waives all management rights within a certain operating period. Therefore, the Company has control over Zhenlai Photovoltaic Power.

(vii)

Pursuant to an agreement entered into between the Company and another shareholder, the Company is entrusted to vote the 25% voting rights held by the other shareholder as long as the Company remains as the largest shareholder of Beijing Co-generation. Thus, the Company has majority voting rights required by the article of association to control the operation and financial policies of Beijing Co-generation. Accordingly, the Company has control over Beijing Co-generation.

(viii)

According to the voting in concert agreement entered into between the Company and one shareholder with 10% equity interests in Chaohu Power, the shareholder agreed to vote the same in respect of significant financial and operating decisions made by the Company. As a result, the Company has control over Chaohu Power.

(ix)

According to the voting in concert agreement entered into between the Company and the other two shareholders in Suzhou Thermal Power, the shareholders agreed to vote the same in respect of significant financial and operating decisions made by the Company. As a result, the Company has control over Suzhou Thermal Power.

(x)

In 2016, the Company accounted for the investment in Shanxi Xiaoyi Energy as a joint venture. On 15 February 2017, the Company entered into an agreement with other shareholder with 49% equity interests in Shanxi Xiaoyi Energy who agreed to vote the same in respect of significant financial and operating decisions made by the Company. As a result, the Company has control over Shanxi Xiaoyi Energy since February 2017.

For the information of material non-controlling interests (“NCI”), please refer to Note 42.

F-89

10	Other equity instrument investments

	Note	31 December 2018		1 January 2018		31 December 2017
Equity securities designated at FVOCI (non-recycling)	(i)
Listed security			8,558		9,223		-

Unlisted securities
10% of Shanxi Xishan Jinxing Energy Co.,Ltd.			1,085,462		1,004,860		-
9.09% of Ganlong Double-track Railway Co., Ltd.			924,453		1,003,009		-
Others			64,946		64,496		-

Subtotal			2,074,861		2,072,365		-

Total			2,083,419		2,081,588		-

Available-for-sale financial assets	(i)
Listed security (Fair value measurement)			-		-		9,223

Unlisted securities (Cost measurement)
10% of Shanxi Xishan Jinxing Energy Co., Ltd.			-		-		531,274
9.09% of Ganlong Double-track Railway Co., Ltd.			-		-		1,000,000
Others			-		-		64,496

Subtotal			-		-		1,595,770

Total			-		-		1,604,993

Note:

(i)

Available-for-sale financial assets were reclassified to equity securities designated at FVOCI (non-recycling) upon the initial application of IFRS 9 at 1 January 2018 as the investment is held for strategic purposes.

There was no impairment provision provided on available-for-sale financial assets in 2017.

F-90

11	Land use rights

The movements in the carrying amount of land use rights during the years are as follows:

	2018			2017
Beginning of the year
Cost		13,775,976			10,525,537
Accumulated amortization		(2,128,752	)		(1,792,367	)
Accumulated impairment losses		(382,439	)		(276,823	)

Net book value		11,264,785			8,456,347

Movement:
Business combination (Note 41)		398,591			3,182,914
Addition		260,971			331,683
Amortization charge for the year		(368,025	)		(368,898	)
Impairment charge for the year		-			(108,590	)
Reclassification to assets held for sale (Note 20)		(29,924	)		-
Disposals		(81,788	)		(86,631	)
Disposal of subsidiaries		-			(146,922	)
Currency translation differences		5,424			4,882


End of the year		11,450,034			11,264,785

Cost		14,324,288			13,775,976
Accumulated amortization		(2,486,181	)		(2,128,752	)
Accumulated impairment losses		(388,073	)		(382,439	)

Net book value		11,450,034			11,264,785

All the lands located in the PRC and Singapore are leased from respective governments according to corresponding regulations applied across the countries. The Company and its subsidiaries will renew the leases according to the operation requirements of the Company and its subsidiaries and the related regulations of respective countries.

Land use rights without ownership certificate

As at 31 December 2018, the Company and its subsidiaries were in the process of applying for the ownership certificate for certain land use right with an aggregate net book value of RMB543 million (2017: RMB1,246 million). The management are of the opinion that the Company and its subsidiaries are entitled to the lawful and valid occupation and use of the above mentioned land.

F-91

12	Power generation licenses

The movements in the carrying amount of power generation license during the years are as follows:

	2018		2017
Beginning of the year		3,916,246		3,849,199

Movement:
Currency translation differences		98,726		67,047

End of the year		4,014,972		3,916,246

The Company and its subsidiaries acquired the power generation license in connection with the acquisition of Tuas Power. The power generation license was initially recognised at fair value at the acquisition date. Tuas Power operates power plants in Singapore pursuant to the license granted by the Energy Market Authority for a period of 30 years from 2003 until 2032. The license was extended to 2044 during 2011 with minimal costs and is subject to further renewal. The Company and its subsidiaries expect that the applicable rules and regulations surrounding the renewal can be complied with based on the current market framework. The Company and its subsidiaries assessed the useful life of the power generation license at 31 December 2018 as indefinite and therefore the license is not amortized.

Impairment test of power generation license

Power generation license belongs to and has been assigned to Tuas Power, a CGU. The recoverable amount of the CGU is determined based on value-in-use calculation. Management prepared the impairment model based on budget approved by the Board and various factors, such as inflation, power demand and other factors as well as the terminal value.

Key assumptions used for value-in-use calculation:

Management has assessed that one of the most sensitive key assumptions is the discount rate which was arrived at based on weighted average cost of capital. The discount rate applied in determining the recoverable amounts of the CGU was 8.02% (31 December 2017: 7.30%). An absolute increase in the discount rate of 0.5% (31 December 2017: 0.5%) would result in approximately RMB1,715 million (31 December 2017: RMB2,043 million) decrease in the recoverable amount of the CGU.

Other key assumptions include projection of its business performance based on estimation of gross margin from electricity sold, volume of electricity sold and other operating expenses, which are largely based on a combination of past performance of the CGU, its expectation of market developments and consistency with forecasts included in industry reports. On average, the growth rates of 3.5% was used in consideration of future expansion plans and new development projects as part of the long-term strategy. Cash flows beyond the terminal year was extrapolated using a growth rate of 2.0%.

Based on the assessments, no impairment was provided for the power generation license.

F-92

13	Mining rights

The movements in the carrying amount of mining rights during the years are as follow:

	2018			2017
Beginning of the year
Cost		2,406,567			2,406,567
Accumulated impairment losses		(760,296	)		(760,296	)

Net book value		1,646,271			1,646,271

Movement:
Addition		-			-
Impairment charge for the year		(135,085	)		-

End of the year		1,511,186			1,646,271
Cost		2,406,567			2,406,567
Accumulated impairment losses		(895,381	)		(760,296	)

Net book value		1,511,186			1,646,271

In 2018, due to the slow construction progress and anticipated increasing construction cost input for the coal mine , impairment losses for mining rights of approximately RMB135 million have been recognised. The discount rate applied in determining the recoverable amounts of the mining rights in the value in use model was 9.55%.

F-93

14	Derivative financial instruments

Details of derivative financial instruments are as follows:

	As at 31 December
	2018		2017
Derivative financial assets
－Hedging instruments for cash flow hedge (fuel swap contracts)		25,629		330,966
－Hedging instruments for cash flow hedge (exchange forward contracts)		9,062		-
－Financial instruments at fair value through profit or loss (fuel swap contracts)		-		2,726
－Financial instruments at fair value through profit or loss (exchange forward swap contracts)		14		-

Total		34,705		333,692

Less: non-current portion
－Hedging instruments for cash flow hedge (fuel swap contracts)		2,543		75,328
－Hedging instruments for cash flow hedge (exchange forward contracts)		3,427		-

Total non-current portion		5,970		75,328

Current portion		28,735		258,364

Derivative financial liabilities
－Hedging instruments for cash flow hedge (fuel swap contracts)		357,088		11,794
－Hedging instruments for cash flow hedge (exchange forward contracts)		21,335		68,102
－Hedging instruments for cash flow hedge (interest rate swap contracts)		149,117		130,643
－Financial instruments at fair value through profit or loss (fuel swap contracts)		17,705		125
－Financial instruments at fair value through profit or loss (exchange forward swap contracts)		47		-

Total		545,292		210,664

Less: non-current portion
－Hedging instruments for cash flow hedge (fuel swap contracts)		78,587		2,026
－Hedging instruments for cash flow hedge (exchange forward contracts)		4,384		21,745
－Hedging instruments for cash flow hedge (interest rate swap contracts)		144,999		124,715
－Financial instruments at fair value through profit or loss (fuel swap contracts)		3,338		-

Total non-current portion		231,308		148,486

Total current portion		313,984		62,178

F-94

For the years ended 31 December 2017 and 2018, no material ineffective portion was recognised in the profit or loss arising from cash flow hedges.

The Company uses an interest rate swap contract to hedge its interest rate risk against one of its variable rate loans. The notional principal amount of the outstanding interest rate swap contract at 31 December 2018 was US$144 million (RMB equivalents of RMB988 million) (2017: US$176 million (RMB equivalents of RMB1,150 million)). Through this arrangement, the Company pays an annual fixed interest of 4.40% while the original annual floating interest expense (6-month LIBOR+1%) attached in the loan is offset by the receivable leg of the interest rate swap. Such a swap is settled on a quarterly basis from September 2009 to September 2019.

TPG uses exchange forward contracts to hedge its foreign exchange risk arising from highly probable forecast purchase transactions. It also uses fuel oil swap contracts to hedge its fuel price risk arising from highly probable forecast purchases of fuel purchases.

TPG uses various interest rate swap contracts to hedge floating semi-annual interest payments on borrowings with maturity dates up to 2020. TPSTMWR also uses various interest rate swap contracts to hedge floating quarterly interest payments on borrowings with maturity dates up to 2044. The notional principal amount of these outstanding interest rate swap contracts at 31 December 2018 was S$992 million (RMB equivalents of RMB4,968 million) (2017: S$1,069 million (RMB equivalents of RMB5,220 million)). Through these arrangements, TPG swaps original floating interest (6-month SOR) to annual fixed interest determined by individual swap contracts. Such swap contracts are settled semi-annually from September 2011 to March 2020. TPSTMWR swaps original floating interest (3-month SOR) to annual fixed interest determined by individual swap contracts. Such swap contracts are settled quarterly from September 2018 to June 2044. As at 31 December 2018, these interest rate swap contracts are carried on the consolidated statements of financial position as financial liability of RMB145 million (2017: financial liability of RMB108 million).

F-95

The analysis of contractual cash inflows/(outflows) of major derivative financial instruments are as follows:

	Cash flows
	Carrying amounts		Contractual cash flows			Within 1 year			Between 1 and 5 years			After 5 years

As at 31 December 2018
Derivative financial assets
Fuel derivatives used for hedging (net settlement)		25,629		25,629			23,086			2,543			-

Forward exchange contracts used for hedging
- inflows				744,936			534,355			210,581			-
- outflows				(730,691	)		(526,988	)		(203,703	)		-
		9,062		14,245			7,367			6,878			-

Forward exchange contracts that do not qualify as hedges (net settlement)		14		12			12			-			-

Derivative financial liabilities
Fuel derivatives used for hedging (net settlement)		357,088		(357,088	)		(278,501	)		(78,587	)		-

Forward exchange contracts used for hedging
- inflows				2,425,238			2,059,061			366,177			-
- outflows				(2,433,994	)		(2,069,218	)		(364,776	)		-
		21,335		(8,756	)		(10,157	)		1,401			-
Net-settled interest rate swaps used for hedging
- net cash inflows/(outflows)		149,117		(151,975	)		(37,769	)		(47,562	)		(66,644	)

Fuel derivatives that do not qualify as hedges (net settlement)		17,705		(17,705	)		(14,366	)		(3,339	)		-

Forward exchange contracts that do not qualify as hedges (net settlement)		47		(32	)		(32	)		-			-

	Cash flows
	Carrying amounts		Contractual cash flows			Within 1 year			Between 1 and 5 years			After 5 years

As at 31 December 2017
Derivative financial assets
Fuel derivatives used for hedging (net settlement)		330,966		330,966			255,638			75,328			-

Fuel derivatives that do not qualify as hedges (net settlement)		2,726		2,726			2,726			-			-

Derivative financial liabilities
Fuel derivatives used for hedging (net settlement)		11,794		(11,794	)		(9,768	)		(2,026	)		-

Forward exchange contracts used for hedging
- inflows				2,509,363			2,041,812			467,551			-
- outflows				(2,568,034	)		(2,083,441	)		(484,593	)		-
		68,102		(58,671	)		(41,629	)		(17,042	)		-
Net-settled interest rate swaps used for hedging
- net cash inflows/(outflows)		130,643		(154,367	)		(82,533	)		(71,834	)		-

Fuel derivatives that do not qualify as hedges (net settlement)		125		(125	)		(125	)		-			-

F-96

Goodwill

The movements of goodwill during the years are as follows:

	2018			2017

Beginning of the year

Cost		18,435,954			15,391,642
Accumulated impairment losses		(2,951,834	)		(3,255,913	)

Net book value		15,484,120			12,135,729

Movement:
Business combination (Note 41)		231,218			3,167,566
Impairment charge for the year		(409,371	)		-
Disposal of subsidiary-cost		-			(309,269	)
Disposal of subsidiary-impairment		-			309,269
Currency translation differences-cost		273,906			186,015
Currency translation differences- impairment		(7,646	)		(5,190	)

End of the year		15,572,227			15,484,120

Cost		18,941,078			18,435,954
Accumulated impairment losses		(3,368,851	)		(2,951,834	)

Net book value		15,572,227			15,484,120

Impairment tests for goodwill

Goodwill is allocated to the CGUs of the Company and its subsidiaries.

The carrying amounts of major goodwill allocated to individual CGUs are as follows:

	2018		2017

PRC Power segment:
Shandong Power		2,643,990		2,739,818
Wuhan Power		518,484		518,484
Hainan Power		506,336		506,336
Heilongjiang Power		182,994		265,319
Yangliuqing Cogeneration		151,459		151,459
Qinbei Power		109,913		109,913
Jilin Power		109,826		109,826
Yueyang Power Company		100,907		100,907
Beijing Cogeneration		95,088		95,088

Singapore segment:
Tuas Power		10,828,216		10,561,956

F-97

The recoverable amount of a CGU is determined based on value-in-use calculations. For domestic CGUs, these calculations use cash flow projections based on management’s financial budgets covering periods of no more than five years. The Company expects cash flows beyond such periods will be similar to that of the respective final forecast years on existing production capacity.

For the goodwill allocated to Tuas Power, management has based their assessment of recoverable amount on value-in-use calculations. Management prepared the impairment model based on budget approved and various factors, such as inflation, power demand and other factors as well as the terminal value. On average, the growth rates of 3.5% was used in consideration of future expansion plans and new development projects as part of the long-term strategy. Cash flows beyond the terminal year was extrapolated using a growth rate of 2.0%.

Discount rates used for value-in-use calculations:

PRC Power segment		7.35%-9.63%
Singapore segment		8.02%

Key assumptions used for value-in-use calculations:

Key assumptions applied in the impairment tests include the expected tariff rates, demands of electricity in specific regions where these power plants are located and fuel cost. Management determined these key assumptions based on past performance and its expectations on market development. The discount rates used reflect specific risks relating to individual CGUs. Management believes that any reasonably possible change in any of these key assumptions on which recoverable amounts of individual CGUs are based may cause carrying amounts of individual CGUs to exceed their recoverable amounts. Please refer to Note 4 and 12 for details of respective sensitivity analysis on domestic and oversea CGU impairment testing.

In 2018, due to lower performance of 3 coal-fired plant assets, which did not reach the anticipation of the management as a result of oversupply of local power market and intense competition which led to lower utilization hours and tariff. Impairment losses for goodwill approximately amounting to RMB409 million in total have been recognised.

In 2018 and 2017, the increase of goodwill in respect of Tuas Power was due to currency translation differences.

16	Other non-current assets

Details of other non-current assets are as follows:

	As at 31 December
	2018		2017
Finance lease receivables*		10,811,603		617,187
VAT recoverable		3,282,075		2,741,604
Prepayments for pre-construction cost		987,469		937,161
Intangible assets **		698,541		697,884
Profit compensation from Huaneng Group***		440,551		244,533
Prepaid territorial water use right ****		370,307		374,743
Prepayments for capacity quota		303,399		303,399
Prepaid connection fees		113,587		120,486
Others		2,328,527		1,659,848

Total		19,336,059		7,696,845

F-98

Ruyi Pakistan Energy entered into a power purchase agreement with CPPA-G to sell all of the electricity produced with regulated tariff mechanism approved by National Electric Power Regulatory Authority. In accordance with the power purchase agreement and tariff mechanism, almost all the risks and rewards in relation to the power assets were in substance transferred to CPPA-G and therefore were accounted for as a finance lease to CPPA-G.

The intangible assets primarily consist of software, patented technologies and etc. In 2018, there is no impairment provided for the intangible assets (2017: RMB Nil).

***

The Company acquired several subsidiaries including Shandong Power from Huaneng Group which was completed on 1 January 2017. According to the profit compensation agreement associated with the acquisition, Huaneng Group should compensate the Company in cash based on the shortfall of accumulated actual net profit compared with the accumulated forecast net profit of certain subsidiaries of Shandong Power during the compensation period from year 2017 to 2019. As at 31 December 2018, the fair value of above mentioned contingent consideration from Huaneng Group amounted to RMB991 million was recognised (31 December 2017: RMB860 million), which was recorded in other receivables and assets of RMB551 million, and other non-current assets of RMB440 million, respectively. The profit compensation related to year 2018 of RMB551 million was recorded in “other receivables and assets”.

****

The prepaid territorial water use right are amortized over the contractual period of 50 years.

17	Inventories

Inventories comprised:

	As at 31 December
	2018			2017

Fuel (coal and oil) for power generation		8,150,398			5,684,824
Material and supplies		1,824,000			1,869,462

		9,974,398			7,554,286
Less: provision for inventory obsolescence		430,707			168,875

Total		9,543,691			7,385,411

Movements of provision for inventory obsolescence during the years are analyzed as follows:

		2018			2017

Beginning of the year		(168,875	)		(167,282	)
Provision*		(255,181	)		(1,520	)
Reversal		1,365			1,782
Disposal of subsidiaries		-			162
Currency translation differences		(8,016	)		(2,017	)

End of the year		(430,707	)		(168,875	)

In 2018, approximately RMB255 million provision was provided for the fuel oil, which was recognised based on the net realisable value.

F-99

18	Other receivables and assets

Other receivables and assets comprised the following:

	As at 31 December
	2018		2017

Prepayments for inventories		990,742		387,335
Prepaid income tax		134,477		150,838
Others		270,330		181,913

Total prepayments		1,395,549		720,086

Less: loss allowance		4,638		4,638

Total prepayments, net		1,390,911		715,448

Dividends receivable		30,000		273,897
Receivables from sales of fuel		74,578		290,040
Others		1,569,181		1,483,331
Subtotal other receivables		1,673,759		2,047,268

Less: loss allowance		38,531		29,241

Total other receivables, net		1,635,228		2,018,027

Profit compensation from
Huaneng Group (Note 16)		550,832		615,013
VAT recoverable		1,927,638		2,607,505
Financial lease receivables		871,302		45,524
Designated loan to a joint venture		80,000		80,000


Gross total		6,499,080		6,115,396

Net total		6,455,911		6,081,517

Please refer to Note 37 for details of other receivables and assets due from the related parties.

F-100

The gross amounts of other receivables are denominated in the following currencies:

	As at 31 December
	2018		2017

RMB		1,572,651		1,944,570
S$ (RMB equivalent)		68,390		53,406
US$ (RMB equivalent)		7,401		49,292
PKR (RMB equivalent)		25,317		-

Total		1,673,759		2,047,268

Movements of loss allowance during the years are analyzed as follows:

	2018			2017

Beginning of the year		(33,879	)		(28,961	)
Provision		(24,924	)		(5,890	)
Reversal/write-off		15,634			972

End of the year		(43,169	)		(33,879	)

19	Accounts receivable

Accounts receivable comprised the following:

	As at 31 December
	2018		2017

Accounts receivable		24,804,671		21,948,753
Notes receivable		4,621,180		3,610,928

		29,425,851		25,559,681

Less: loss allowance		146,913		112,086

Total		29,278,938		25,447,595

The gross amounts of accounts receivable are denominated in the following currencies:

	As at 31 December
	2018		2017

RMB		26,879,470		24,633,465
S$ (RMB equivalent)		1,016,299		922,993
US$ (RMB equivalent)		6,673		3,223
PKR (RMB equivalent)		1,523,409		-

Total		29,425,851		25,559,681

F-101

The Company and its subsidiaries usually grant about one month’s credit period to domestic local power grid customers from the end of the month in which the sales are made. SinoSing Power provides credit period that ranges from 5 to 60 days from the dates of billings. Certain accounts receivable of Singapore subsidiaries are backed by bankers’ guarantees and/or deposits from customers. Ruyi Pakistan Energy entered into the agreement with CPPA-G with one month’s credit period. It is not practicable to determine the fair value of the collaterals that correspond to these accounts receivable. Ruyi Pakistan Energy entered into the power purchase agreement with CPPA-G with one month’s credit period.

As at 31 December 2018, no accounts receivable were secured to banks as collateral against loans (2017: nil).

For the collateral of notes receivable, please refer to Note 28 for details.

Movements of loss allowance during the years are analyzed as follows:

	2018			2017
Beginning of the year		(112,086	)		(88,889	)
Provision		(40,064	)		(23,363	)
Reversal		4,728			-
Write-off		607			167
Currency translation differences		(98	)		(1	)

End of the year		(146,913	)		(112,086	)

Ageing analysis of accounts receivable was as follows:

	As at 31 December
	2018		2017
Within 1 year		28,379,742		24,787,284
Between 1 to 2 years		833,358		576,564
Between 2 to 3 years		29,517		155,360
Over 3 years		183,234		40,473

Total		29,425,851		25,559,681

As at 31 December 2018, the maturity period of the notes receivable ranged from 1 to 12 months (2017: from 1 to 12 months).

F-102

20	Disposal group held for sale

On 31 July 2018, Shandong Power entered into an acquisition agreement with Taishan Power, a subsidiary of Huaneng Group, to acquire certain equity interest of Laizhou Wind Power (Note 41). According to the acquisition agreement, part or all of the wind power generators of Laizhou Wind Power could be dismantled upon the requirement of local government after the completion of the acquisition. In that case, Shandong Power is entitled to request Taishan Power or another third party designated by Taishan Power to repurchase 80% equity interests of Laizhou Wind Power in cash at fair value (no less than the fair value of equity interest of Laizhou Wind Power in the acquisition agreement).

In December 2018, as part of the wind power generators of Laizhou Wind Power have been dismantled, which is the case in the acquisition agreement, Shandong Power intends to sell 80% equity interests of Laizhou Wind Power back to Taishan Power. The assets and liabilities of Laizhou Wind Power are presented as disposal group held for sale in the consolidated financial statements.

As at 31 December 2018, the disposal group comprised the following assets and liabilities.

	As at 31
	December 2018

Property, plant and equipment
and other non-current assets		554,033
Land use rights		29,924
Other non-current assets		1,932
Inventories		4
Other receivables and assets		1,655
Accounts receivable		45,296
Bank balances and cash		15,104

Assets held for sale		647,948

Long-term loans		100,000
Accounts payable and other liabilities		66,827
Taxes payable		206
Short-term loans		466,000
Current portion of long-term loans		31,400

Liabilities held for sale		664,433

Less: short-term loans from Shandong Power		300,000

Liabilities held for sale		364,433

The non-recurring fair value measurement for the disposal group was based on the consideration in the equity transfer agreement, which has been categorised as Level 3 fair value.

There is no cumulative income or expenses included in other comprehensive income relating to the disposal group.

F-103

21	Share capital

	2018				2017
	Number of shares		Share capital		Number of shares		Share capital
			RMB ’000				RMB ’000

As at 1 January
A shares		10,500,000,000		10,500,000		10,500,000,000		10,500,000
Overseas listed foreign shares		4,700,383,440		4,700,383		4,700,383,440		4,700,383

Subtotal		15,200,383,440		15,200,383		15,200,383,440		15,200,383

Issuance of new A shares		497,709,919		497,710		-		-

As at 31 December
A shares		10,997,709,919		10,997,710		10,500,000,000		10,500,000
Overseas listed foreign shares		4,700,383,440		4,700,383		4,700,383,440		4,700,383

Total		15,698,093,359		15,698,093		15,200,383,440		15,200,383

In October 2018, the Company issued 497,709,919 A shares with a par value of RMB 1.00, at a price of RMB 6.55 per A share. Net proceeds from the issuance amounted to RMB 3.25 billion after deducting issuance costs. The difference between the net proceeds and the addition to share capital is recorded in capital surplus.

22	Other equity instruments

(a)

Other equity instruments as at 31 December 2018

Type of Instruments

Issuance Date

	As at 1 January 2018				issuance				Cumulative distributions					As at 31 December 2018
Type of Instruments	Number		Amount		Number		Amount		Accrual distribution		Distribution payment			Number		Amount
			RMB ’000				RMB ’000		RMB ’000		RMB ’000					RMB ’000
Bond A		25,000,000		2,533,872		-		-		126,250		(126,250	)		25,000,000		2,533,872
Bond B		25,000,000		2,534,678		-		-		129,250		(129,250	)		25,000,000		2,534,678
Yingda Insurance Financing Plan (1st)		—		-		—		3,283,000		58,609		(52,801	)		—		3,288,808
Yingda Insurance Financing Plan (2nd)		—		-		—		827,000		14,498		(13,035	)		—		828,463
Yingda Insurance Financing Plan (3rd)		—		-		—		890,000		13,742		(12,167	)		—		891,575
Total				5,068,550				5,000,000		342,349		(333,503	)				10,077,396

	As at
	1 January 2018 and
	31 December 2018

Surplus reserves		8,140,030

	As at 31 December 2018
	Original currency		RMB equivalent		Less: Current portion		Non-current portion		Annual interest rate
		’000

Loans from Huaneng Group
Unsecured
RMB
- Variable rate		665,225		665,225		-		665,225		4.75	%

Loans from Huaneng Finance
Unsecured
RMB
- Variable rate		3,596,000		3,596,000		469,200		3,126,800		4.28%-4.75	%

Loans from Huaneng Tiancheng Financial Leasing Co., Ltd. (“Tiancheng Financial Leasing”)
Secured
RMB
- Variable rate		463,528		463,528		141,265		322,263		4.42%-4.75	%

Total				4,724,753		610,465		4,114,288

	Loans from Huaneng Group and its subsidiaries				Bank loans and other loans
	As at 31 December				As at 31 December
	2018		2017		2018		2017

1 year or less		610,465		2,123,494		20,010,384		15,974,964
More than 1 year but no more than 2 years		760,580		1,689,582		27,940,579		19,039,483
More than 2 years but no more than 3 years		1,104,684		1,281,082		33,477,976		18,624,576
More than 3 years but no more than 4 years		805,024		294,020		14,109,277		16,388,976
More than 4 years but no more than 5 years		97,000		728,225		11,216,306		11,927,930
More than 5 years		1,347,000		1,310,780		38,689,735		35,746,304

		4,724,753		7,427,183		145,444,257		117,702,233
Less: amount due within 1 year included under current liabilities		610,465		2,123,494		20,010,384		15,974,964

Total		4,114,288		5,303,689		125,433,873		101,727,269

	As at 31 December 2018							As at 31 December 2017
	Original currency		RMB equivalent		Annual interest rate			Original currency		RMB equivalent		Annual interest rate
		’000							’000

Secured
RMB
- Fixed rate		435,856		435,856		3.41%-6.90	%		24,000		24,000		4.71%-5.50	%
- Variable rate		75,000		75,000		3.60%-3.85	%		-		-		-

Unsecured
RMB
- Fixed rate		11,740,658		11,740,658		3.30%-4.90	%		10,450,248		10,450,248		3.92%-4.35	%
- Variable rate		47,227,150		47,227,150		3.92%-4.65	%		69,777,100		69,777,100		3.74%-4.35	%
US$
- Variable rate		180,401		1,238,131		3.79	%		-		-		-
PKR
- Variable rate		6,500,000		321,977		11.51	%		-		-		-

Total				61,038,772							80,251,348

	Hedging reserve			Amortization of land use rights			Provision for impairment loss			Depreciation			Accrued expenses		VAT refunds on purchases of domestically manufactured equipment			Unused tax losses			Others			Total
As at 1 January 2017		17,476			13,915			607,154			538,204			42,123		205,009			230,988			777,683			2,432,552

Business combination		-			-			-			574,600			5,052		-			139,387			414,891			1,133,930
Disposal of subsidiaries		-			-			(10,686	)		(9,962	)		-		-			(5,566	)		(52,270	)		(78,484	)
(Charged)/credited to profit or loss		-			(493	)		(2,593	)		(70,209	)		7,076		(25,433	)		196,613			20,026			124,987
Charged to other comprehensive income		(11,905	)		-			-			-			-		-			-			-			(11,905	)
Currency translation differences		-			-			82			-			-		-			-			3,415			3,497

As at 31 December 2017		5,571			13,422			593,957			1,032,633			54,251		179,576			561,422			1,163,745			3,604,577

Business combination (Note 41)		-			-			-			-			-		-			2,919			27,616			30,535
(Charged)/credited to profit or loss		-			(493	)		43,640			(106,076	)		1,766		(25,433	)		210,336			61,317			185,057
Credited to other comprehensive income		77,050			-			-			-			-		-			-			-			77,050
Currency translation differences		1,493			-			992			-			-		-			-			3,627			6,112

As at 31 December 2018		84,114			12,929			638,589			926,557			56,017		154,143			774,677			1,256,305			3,903,331

	Hedging Reserve			Fair value gains			Amortization of land use rights			Depreciation			Power generation license			Mining rights			Territorial water use right			Other			Total
As at 1 January 2017		(18,399	)		(348,537	)		(891,155	)		(1,149,054	)		(654,363	)		(129,383	)		(72,432	)		(168,024	)		(3,431,347	)

Business combination		-			(1,736	)		(148,129	)		(3,209,672	)		-			-			-			(96,906	)		(3,456,443	)
Disposal of subsidiaries		-			-			1,761			22,162			-			-			68,696			3,272			95,891
Credited to profit or loss		-			-			27,457			525,780			-			-			1,327			45,161			599,725

(Charged)/credited to other comprehensive income		(5,558	)		348,297			-			-			-			-			-			-			342,739

Currency translation differences		(304	)		-			(540	)		(9,490	)		(11,397	)		-			-			-			(21,731	)

As at 31 December 2017		(24,261	)		(1,976	)		(1,010,606	)		(3,820,274	)		(665,760	)		(129,383	)		(2,409	)		(216,497	)		(5,871,166	)

Adjustment on initial application of IFRS9		-			(106,649	)		-			-			-			-			-			-			(106,649	)

As at 1 January 2018		(24,261	)		(108,625	)		(1,010,606	)		(3,820,274	)		(665,760	)		(129,383	)		(2,409	)		(216,497	)		(5,977,815	)

Business combination(Note 41)		-			-			-			(98,618	)		-			-			-			-			(98,618	)
Credited to profit or loss		-			-			28,760			518,843			-			-			-			43,160			590,763

Credited /(charged) to other comprehensive income		24,261			(345	)		-			-			-			-			-			-			23,916

Currency translation differences		-			-			(599	)		(7,769	)		(16,783	)		-			-			-			(25,151	)

As at 31 December 2018		-			(108,970	)		(982,445	)		(3,407,818	)		(682,543	)		(129,383	)		(2,409	)		(173,337	)		(5,486,905	)

Items	Loans (Note 25,31)			Bonds (Note 26,30)			Accrued interests (Note 28)			Cumulative distribution of other equity instruments (Note 24)			Finance leases payables (Note 27)			Interest rate swaps contracts (liabilities) (Note 14)

As at 1 January 2018		205,380,764			31,059,223			947,302			-			1,600,106			130,643

(a) Business combination		11,983,707			-			16,798			-			249,161			-

(b) Changes from financing cash flows:
Proceeds from new bank loans		126,001,427			-			-			-			-			-
Repayment of bank loans		(132,293,601	)		-			-			-			-			-
Proceeds from new bonds		-			54,000,000			-			-			-			-
Repayment of bonds		-			(43,500,000	)		-			-			-			-
Capital element of finance lease rentals paid		-			-			-			-			(549,169	)		-
Interest element of finance lease rentals paid		-			-			-			-			(87,857	)		-
Interest paid		-			(643,356	)		(10,011,011	)		(333,504	)		-			-
Others		(20,466	)		(73,562	)		-			-			-			-

(c) Exchange adjustments		415,219			-			2,959			-			(242	)		-

(d) Changes in fair value		-			-			-			-			-			18,474

(e) Other changes:
New finance leases		-			-			-			-			34,911			-
Interest expenses		-			686,017			9,701,316			-			99,079			-
Accrued cumulative distribution of other equity instrument investments		-			-			-			342,350			-			-
Capitalised borrowing costs		-			-			495,818			-			-			-
Transfer to group held for sale		(297,400	)		-			(415	)		-			-			-
Others		38,122			(8,726	)		-			-			96,185			-

As at 31 December 2018		211,207,782			41,519,596			1,152,767			8,846			1,442,174			149,117

Names of related parties		Nature of relationship

Huaneng Group		Ultimate parent company
HIPDC		Parent company
Sichuan Hydropower		An associate of the Company and also a subsidiary of Huaneng Group*
Hanfeng Power		An associate of the Company and also a subsidiary of Huaneng Group
Huaneng (Tianjing) Coal Gasification Power Generation Co., Ltd.		An associate of the Company and also a subsidiary of Huaneng Group
Tiancheng Financial Leasing		An associate of the Company and also a subsidiary of Huaneng Group
Huaneng Shidao Bay Nuclear Power Development Co., Ltd.		An associate of the Company and also a subsidiary of Huaneng Group
Huaneng Xiapu Nuclear Power Co., Ltd.		An associate of the Company and also a subsidiary of Huaneng Group
Huaneng Finance		An associate of the Company and also a subsidiary of Huaneng Group
Huaneng Group Fuel Company and its subsidiaries		Associates of the Company and also subsidiaries of Huaneng Group
Jilin Zhanyu Wind Power Asset Management Co., Ltd.		An associate of the Company
Chongqing Huaneng Lime Company Limited		An associate of the Company
Liaocheng Luxi Fuel Co., Ltd. Company		An associate of the Company
Shanxi Transition and Comprehensive Reform District.Electricity Distribution Co., Ltd.		An associate of the Company
Gucheng Yingdong Electricity Sales Co., Ltd.		An associate of the Company
Chongqing Changyao Electricity Sales Co., Ltd.		An associate of the Company
Zhengzhou Airport Xinggang Power Co., Ltd.		An associate of the Company
Hainan Nuclear		An associate of the Company
Shanghai Time Shipping		A joint venture of the Company
Jiangsu Nantong Power		A joint venture of the Company
Suzhou Sugao Renewables Service Co. Ltd.		A joint venture of the Company
Huaneng Yingkou Port Limited Liability Company		A joint venture of the Company
Luyi Power		A joint venture of the Company
Hong Kong Energy and its subsidiaries**		Joint ventures of the Company
Huaneng Group Clean Energy Technology Research Institute Co., Ltd.		A subsidiary of Huaneng Group
Huaneng Group Hong Kong Limited Company		A subsidiary of Huaneng Group
Beijing Changping Huaneng Training Center		A subsidiary of Huaneng Group
North United Power Co., Ltd. and its subsidiaries		Subsidiaries of Huaneng Group
Huaneng Hulunbuir Energy Development Company Ltd.and its subsidiaries		Subsidiaries of Huaneng Group
Huaneng Tendering Co., Ltd.		A subsidiary of Huaneng Group
Huaneng Ningxia Energy Company Ltd.		A subsidiary of Huaneng Group
Huaneng Renewables Corporation Limited and its subsidiaries		Subsidiaries of Huaneng Group
Huaneng Songyuan Power Co., Ltd.		A subsidiary of Huaneng Group
Huaneng Nuclear Power Development Company Ltd.		A subsidiary of Huaneng Group
Huaneng Lancangjiang Hydropower Co., Inc.and its subsidiaries		Subsidiaries of Huaneng Group
Huaneng Coal Business Sector Co., Ltd. and its subsidiaries		Subsidiaries of Huaneng Group
Huaneng Gansu Energy Development Company Ltd.and its subsidiaries		Subsidiaries of Huaneng Group
Huaneng Baishan Coal Gangue Power Generation Co., Ltd.		A subsidiary of Huaneng Group

Names of related parties		Nature of relationship

Huaneng Carbon Assets Management Company Limited		A subsidiary of Huaneng Group
Huaneng Property Co., Ltd. and its subsidiaries		Subsidiaries of Huaneng Group
Huaneng Energy & Communications Holdings Co., Ltd. and its subsidiaries		Subsidiaries of Huaneng Group
Huaneng Tibet Yarlung Zangbo River Hydropower Development & Investment Company Ltd. and its subsidiaries		Subsidiaries of Huaneng Group
Huaneng Xining Power Co., Ltd.		A subsidiary of Huaneng Group
Huaneng Xinjiang Energy Development Company Ltd. and its subsidiaries		Subsidiaries of Huaneng Group
Huaneng Capital Services and its subsidiaries		Subsidiaries of Huaneng Group
Huaneng Shaanxi Power Generation Limited and its subsidiaries		Subsidiaries of Huaneng Group
Huaneng Group Technology Innovation Center		A subsidiary of Huaneng Group
Alltrust Insurance Co., Ltd.		A subsidiary of Huaneng Group
Xi’an Thermal and its subsidiaries		Subsidiaries of Huaneng Group
Great Wall Securities Co., Ltd. (Great Wall Securities)		A subsidiary of Huaneng Group
Huaneng Hainan Industry Co.,Ltd.		A subsidiary of Huaneng Group
Huaneng Integrated Industries Management Co., Ltd.		A subsidiary of Huaneng Group
Huaneng Shandong Shidao Bay Nuclear Power Co., Ltd.		A subsidiary of Huaneng Group
Huangtai #8 Power Plant		An investee with significant influence
Other government-related enterprises***		Related parties of the Company

	Fees		Basic salaries		Performance salaries		Pension		Total

Name of director
Mr. Shu Yinbiao¹		-		-		-		-		-
Mr. Cao Peixi²		-		-		-		-		-
Mr. Liu Guoyue³		-		-		-		-		-
Mr. Fan Xiaxia⁴		-		-		-		-		-
Mr. Huang Jian		-		-		-		-		-
Mr. Wang Yongxiang		-		-		-		-		-
Mr. Mi Dabin		-		-		-		-		-
Mr. Guo Hongbo		-		-		-		-		-
Mr. Cheng Heng		-		-		-		-		-
Mr. Lin Chong		-		-		-		-		-
Mr. Yue Heng		74		-		-		-		74
Mr. Xu Mengzhou		74		-		-		-		74
Mr. Liu Jizhen		74		-		-		-		74
Mr. Xu Haifeng		74		-		-		-		74
Mr. Zhang Xianzhi		74		-		-		-		74
Sub-total		370		-		-		-		370

Name of supervisor
Mr. Ye Xiangdong		-		-		-		-		-
Mr. Mu Xuan		-		-		-		-		-
Ms. Zhang Mengjiao		-		-		-		-		-
Mr. Gu Jianguo		-		-		-		-		-
Ms. Zhang Xiaojun		-		154		476		130		760
Mr. Zhu Daqing⁵		-		66		250		63		379
Mr. Zhang Xiancheng⁶		-		36		87		22		145
Sub-total		-		256		813		215		1,284
Total		370		256		813		215		1,654

	Fees		Basic salaries		Performance salaries		Pension		Total

Name of director
Mr. Cao Peixi		-		-		-		-		-
Mr. Guo Junming		-		-		-		-		-
Mr. Liu Guoyue		-		-		-		-		-
Mr. Li Shiqi		-		-		-		-		-
Mr. Huang Jian		-		-		-		-		-
Mr. Fan Xiaxia		-		327		396		122		845
Mr. Mi Dabin		48		-		-		-		48
Mr. Guo Hongbo		-		-		-		-		-
Mr. Zhu Yousheng		48		-		-		-		48
Ms. Li Song		48		-		-		-		48
Mr. Li Zhensheng		74		-		-		-		74
Mr. Zhang Shouwen		37		-		-		-		37
Mr. Yue Heng		74		-		-		-		74
Mr. Geng Jianxin		74		-		-		-		74
Mr. Xia Qing		74		-		-		-		74
Mr. Xu Mengzhou		37		-		-		-		37

Sub-total		514		327		396		122		1,359

Name of supervisor
Mr. Ye Xiangdong		-		-		-		-		-
Mr. Mu Xuan		48		-		-		-		48
Ms. Zhang Mengjiao		-		-		-		-		-
Mr. Gu Jianguo		48		-		-		-		48
Mr. Wang Zhaobin		-		51		-		-		51
Ms. Zhang Ling		-		69		-		-		69
Ms. Zhang Xiaojun		-		92		314		89		495
Mr. Zhu Daqing		-		90		313		88		491

Sub-total		96		302		627		177		1,202

Total		610		629		1,023		299		2,561

			As at 31 December 2018
	Periods		Purchase quantities	Estimated unit costs (RMB)

A government-related enterprise		2019-2039	2.8 million m³/day*		2.31 / m³
A government-related enterprise		2019-2023	991 million m³/year*		2.50 / m³
		2019-2023	541 million m³/year*		2.32 / m³
		2019-2023	450 million m³/year*		2.50 / m³
A government-related enterprise		2019-2026	200 million m³/year*		2.45 / m³
Other suppliers		2019	238 BBtu**/day	approximately 76,000/BBtu
		2020-2021	241.5-242 BBtu**/day	approximately 76,000/BBtu
		2022	242.5 BBtu**/day	approximately 76,000/BBtu
		2023	81.5-247.5 BBtu**/day	approximately 82,000/BBtu
		2024-2028	42.4-81.5 BBtu**/day	approximately 89,000/BBtu
		2029	42.4 BBtu**/day	approximately 81,000/Bbtu

	Acquisition Date

Total consideration		1,172,508
Non-controlling interests		276,713
Less: Fair value of total identifiable net assets		1,218,003

Goodwill		231,218

Total consideration		1,172,508
Less: Bank balances and cash of acquirees		122,699

Cash consideration paid for acquisition of subsidiaries, net of cash acquired		1,049,809

	Laizhou wind power			Shandong Laiwu Thermal Power			Shandong Liaocheng Thermal Power
	Fair value			Fair value			Fair value

Property, plant and equipment		568,177			1,888,021			736,577
Land use rights		30,232			67,245			301,114
Other non-current assets		2,007			5,124			836
Inventories		131			2,354			22,225
Other receivables and assets		4,461			12,277			8,622
Accounts receivable		47,274			137,573			55,246
Bank balances and cash		10,486			57,558			54,655
Long-term loans		(115,800	)		(379,254	)		(200,000	)
Deferred income tax liabilities		-			(31,588	)		(39,414	)
Other non-current liabilities		-			(26,235	)		(118,628	)
Accounts payable and other liabilities		(62,059	)		(162,237	)		(122,774	)
Taxes payables		(905	)		(1,686	)		(2,215	)
Short-term loans		(150,000	)		(550,000	)		(34,000	)
Current portion of long-term loans		(334,791	)		(462,606	)		-
Total identifiable net assets		(787	)		556,546			662,244

	Acquisition Date
Non-controlling interests		1,314,040
Fair value of pre-existing interest in Hong Kong Energy		1,314,040
Less: Fair value of total identifiable net assets		2,628,080
Goodwill		-

	Fair Value

Property, plant and equipment		275,889
Deferred income tax assets		2,919
Other non-current assets		10,205,870
Inventories		372,248
Other receivables and assets		1,030,858
Accounts receivable		1,523,409
Bank balances and cash		374,964
Long-term loans		(8,200,739	)
Other non-current liabilities		(210,142	)
Accounts payable and other liabilities		(675,009	)
Taxes payable		(1,330	)
Short-term loans		(1,560,108	)
Current portion of long-term loans		(510,749	)

Total identifiable net assets		2,628,080

	Qinbei Power			Beijing Co-generation			Luohuang Power			Weihai Power			Jinling Power			Yueyang Power			Shidongkou Power			Yangliuqing Co-generation			Shandong Power			Other individually immaterial subsidiaries			Total

NCI percentage		40	%		59	%		40	%		40	%		40	%		45	%		50	%		45	%		20	%
31 December 2018
Non-current assets		9,660,834			6,623,915			3,901,928			4,343,946			4,729,663			4,556,823			3,467,694			2,465,505			59,979,594
Current assets		1,645,248			1,147,225			1,187,551			695,125			525,725			1,038,193			404,508			759,703			12,294,264
Non-current liabilities		(3,831,883	)		(334,910	)		(611,767	)		(59,651	)		(1,559,581	)		(662,863	)		(409,762	)		(178,511	)		(30,380,001	)
Current liabilities		(4,255,529	)		(1,665,921	)		(1,824,010	)		(2,263,301	)		(1,591,228	)		(2,579,578	)		(1,879,696	)		(1,012,252	)		(24,530,691	)
Net assets		3,218,670			5,770,309			2,653,702			2,716,119			2,104,579			2,352,575			1,582,744			2,034,445			17,363,166
Carrying amount of NCI		1,301,384			3,404,517			1,040,463			1,086,448			841,854			1,074,060			791,372			914,604			5,879,057			5,352,493			21,686,252

Revenue		5,293,403			5,704,966			2,819,106			3,587,416			3,346,779			4,003,821			2,109,785			2,077,570			24,202,739
Net (loss)/profit		(198,026	)		757,268			18,811			253,552			200,269			118,342			131,129			69,477			282,198
Total comprehensive (loss)/ income		(198,026	)		757,268			18,811			253,552			200,269			118,342			131,129			69,477			327,958
(Loss)/ profit allocated to NCI		(79,210	)		446,788			7,524			101,421			80,108			53,254			65,564			31,265			(10,780	)		(100,395	)		595,539
Other comprehensive income/ (loss) allocated to NCI		-			-			-			-			-			-			-			-			9,152			(33,707	)		(24,555	)

Cash flow from operating activities		954,820			1,321,867			192,608			473,349			711,800			412,413			527,783			210,558			4,469,849
Cash flow from investment activities		(503	)		(316,754	)		(201,012	)		(98,420	)		(52,701	)		(106,596	)		(45,045	)		(258,605	)		(3,628,406	)
Cash flow from financing activities		(843,094	)		(904,822	)		(5,288	)		(306,054	)		(570,838	)		(305,872	)		(472,543	)		63,762			(162,007	)
Net increase/ (decrease) in cash and cash equivalents		111,223			101,482			(13,692	)		68,875			88,261			(55	)		10,195			15,719			679,471
Dividends paid to NCI		165,965			460,262			-			140,000			95,979			46,790			51,870			-			42,506

Date: April 16, 2019	Huaneng Power International, Inc.


	By:	/s/Huang Chaoquan
	Name:	Huang Chaoquan
	Title:	Secretary to the Board