Stock Code: 00991 BRAVE THE WIND AND THE BILLOWS 2016 Annual Report 2016 Annual Report Annual 2016 Brave the Wind and the Billows Datang Power will keep strengthening the leading position of its principal power generation business, adhering meaningful, high-quality and stable development, building a sustainable development model, committing to upgrading the power generation industry as a whole, and promoting the healthy development of the Company. Contents Company Profile 2 Distribution of Projects 4 Major Events in 2016 6 Financial and Operating Highlights 8 Chairman’s Statement 10 Management Discussion and Analysis 12 Fulfillment of Social Responsibilities 18 Human Resources Overview 24 Management of Investor Relations 40 Investor Q&A 41 Corporate Governance Report 43 Report of the Directors 67 Report of the Supervisory Committee 97 Taxation in the United Kingdom 103 Independent Auditor’s Report 104 Consolidated Statement of Profit or Loss and 111 Other Comprehensive Income Consolidated Statement of Financial Position 113 Consolidated Statement of Changes in Equity 115 Consolidated Statement of Cash Flows 116 Notes to the Consolidated Financial Statements 118 Differences between Financial Statements 244 Corporate Information 246 Glossary of Terms 248 Company Profile Company overview recycling economy have covered 18 provinces (including municipalities and autonomous regions) throughout the Datang International Power Generation Co., Ltd. (“Datang country. Power” or the “Company”) was registered with the State Administration for Industry and Commerce of the People’s Adherence to the philosophy of efficiency Republic of China (the “PRC”) on 13 December 1994. value Datang Power is one of the largest independent power generation companies in the PRC. As at 31 December Datang Power adheres to the guidance of core philosophy 2016, the total consolidated assets of the Company and of “Value Mindset and Efficiency-oriented Principle”, its subsidiaries amounted to approximately RMB233.465 pursuit meaningful, high-quality and stable development, billion. Total installed size under management of the builds a sustainable development model and strives to Company amounted to 44,338.015MW, and the create more economic value for stakeholders. businesses of power generation, transportation and EQUITY STRUCTURE AND SHAREHOLDING OF THE COMPANY H shares* China Datang Corporation and 21.30% its parties acting in concert 34.77% 15.09% Other A shares* Tianjin Jinneng Investment Company 9.74% 9.47% 9.63% Beijing Energy Holding Co., Ltd. Hebei Construction & Investment Group Co., Ltd. * Excluding the equity interest held by China Datang Corporation and its parties acting in concert 2 DATANG INTERNATIONAL POWER GENERATION CO., LTD. Company Profile Facilitation of continuous structure Commitment to the power generation industry optimisation upgrade Datang Power continuously adjusts and optimises its Datang Power develops non-water renewable energy regional structure, business structure, power generation vigorously, pursues clean and order development of coal- structure and shareholding structure to strengthen fired power business, develops middle-to-large scale the leading position of its principal power generation hydropower base proactively, develops high quality power business. generators. Datang Power carries out heat sales business and enters the field of electricity distribution and sales proactively. Datang Power is committed to upgrading the power generation industry as a whole. Business Segments of the Company The predominant Edge of the Power Generation Business 35,000 Installed Capacity ofThermal CombustionEngines 30,000 InstalledCapacity of Hydropower • Managed an installed capacity of Installed Capacity ofPhotovoltaic Power approximately 44,338,015 MW. Installed CapacityCoal-fired of GeneratingUnits 25,000 InstalledCapacity of WindPower • Completed power generation of approximately 172.4747 billion kWh. 20,000 15,000 10,000 5,000 0 32,940 2,809.8 6,143.615 2,063.6 300 MW MW MW MW MW ANNUAL REPORT 2016 3 Distribution of Projects Heilongjiang Harbin Changchun Jilin Urumqi Shenyang Liaoning Xinjiang Hohhot Beijing Inner Mongolia Gansu Hebei Tianjin Yinchuan Shanxi Shijiazhuang Taiyuan Shandong Qinghai Jinan Xining Lanzhou Ningxia Shaanxi Zhengzhou Jiangsu Henan Tibet Xi'an Anhui Nanjing Hefei Shanghai Sichuan Hubei Chengdu Wuhan Lhasa Hangzhou Zhejiang Chongqing Nanchang Hunan Changsha Jiangxi Fujian Guizhou Diaoyu Islands Taipei Guiyang Fuzhou Thermal power projects in operation Thermal power projects under construction Hydropower projects in operation Kunming Taiwan Hydropower projects under construction Changsha Diaoyu Island Yunnan Jiangxi Guizhou Fujian Fuzhou Wind power projects High-aluminum fly ash alumina extraction projects Guiyang Taipei Guangxi Guangdong Taiwan Guangzhou PV projects Shipment projects Guangxi Guangdong Nanning Guangzhou Nanning Hong Kong Nuclear projects (partial shareholding) Coal mining projects Hong Kong Macau Macau Dongsha Islands Haikou Hainan Paracel Islands Haikou Sand Islands Huangyan Island Hainan South China Sea Spratly Islands 4 DATANG INTERNATIONAL POWER GENERATION CO., LTD. Distribution of Projects Heilongjiang Harbin Changchun Jilin Urumqi Shenyang Liaoning Xinjiang Hohhot Beijing Inner Mongolia Gansu Hebei Tianjin Yinchuan Shanxi Shijiazhuang Taiyuan Shandong Qinghai Jinan Xining Lanzhou Ningxia Shaanxi Zhengzhou Jiangsu Henan Tibet Xi'an Anhui Nanjing Hefei Shanghai Sichuan Hubei Chengdu Wuhan Lhasa Hangzhou Zhejiang Chongqing Nanchang Hunan Changsha Jiangxi Fujian Guizhou Diaoyu Islands Taipei Guiyang Fuzhou Thermal power projects in operation Thermal power projects under construction Hydropower projects in operation Kunming Taiwan Hydropower projects under construction Changsha Diaoyu Island Yunnan Jiangxi Guizhou Fujian Fuzhou Wind power projects High-aluminum fly ash alumina extraction projects Guiyang Taipei Guangxi Guangdong Taiwan Guangzhou PV projects Shipment projects Guangxi Guangdong Nanning Guangzhou Nanning Hong Kong Nuclear projects (partial shareholding) Coal mining projects Hong Kong Macau Macau Dongsha Islands Haikou Hainan Paracel Islands Haikou Sand Islands Huangyan Island Hainan South China Sea Spratly Islands ANNUAL REPORT 2016 5 Major Events in 2016 04 1. On 27 April 2016, generating unit no. 2 of 2. On 30 June 2016, the Company and Jiangxi Datang International Fuzhou Power Zhongxin Energy and Chemical Technology Generation Co., Ltd. commenced operation Company Limited (“Zhongxin Energy and after a 168-hour full load trial operation was Chemical”), a wholly-owned subsidiary completed, symbolising the full production of China Datang Corporation (“CDC”) 06 of two 1,000MW generating units of Phase I entered into the Transfer Agreement in Relation to Coal-to-Chemical Business of Fuzhou Power Generation Company. Segment and the Related Project, pursuant to which the transaction target was transferred at a consideration of RMB1 to Zhongxin Energy and Chemical Such transfer was completed on 31 August 3. On 11 August 2016, generating unit no. 5 of 2016. Huangjinping Hydropower Station of Sichuan 08 Datang International Ganzi Hydropower Development Company Limited came into service after 72 hours of trial operation, symbolising the full production and operation of six generating units with a total installed capacity of 850MW of Huangjinping 4. On 24 December 2016, generating unit Hydropower Station. no. 9 of Phase V project of Inner Mongolia 12 Datang International Tuoketuo Power Generation Company Limited commenced operation smoothly after a 168-hour full load trial operation was successfully completed. 6 DATANG INTERNATIONAL POWER GENERATION CO., LTD. Major Events in 2016 Major Honors and Awards received by the Company 1. We were among the “Platts’ Top 250 Global 4. We won the “Listed Companies with the Best Energy Corporates” for the tenth times. Investor Relations Management” in the “China Securities Golden Bauhinia Awards”. 2. We won the “Gold Award for Best Corporate Governance, Social and Environmental 5. We were selected as the “Top 100 Creditable PRC Responsibility and Investor Relations” from “The Listed Companies for 2016” by Trustworthiness Asset” Magazine. Summit Forum of Listed Companies in the PRC. 3. We won the “2016 Top 100 Listed Companies in China” from Warton Economic Institute and China Business Top 100 Forum. ANNUAL REPORT 2016 7 Financial and Operating Highlights CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (Amounts expressed in millions of RMB) For the year ended 31 December 2012 2013 2014 2015 2016 Continuing operations Operating revenue 74,744 71,692 68,262 60,050 57,292 Profit before tax 7,308 9,446 9,563 9,939 8,441 Income tax (expense)/credit (1,334) (2,639) (3,017) (3,282) 762 Profit for the year from continuing operations attributable to: – Owners of the Company 3,896 4,107 4,796 5,289 3,272 – Non-controlling interests 2,078 2,700 1,750 1,368 5,931 CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Amounts expressed in millions of RMB) As at 31 December 2012 2013 2014 2015 2016 Total assets 276,707 299,940 307,528 308,495 233,465 Total liabilities (220,695) (236,110) (244,070) (244,911) (174,636) Non-controlling interests (14,699) (20,065) (19,293) (18,287) (18,845) Equity attributable to owners of the Company 41,314 43,765 44,165 45,297 39,984 8 DATANG INTERNATIONAL POWER GENERATION CO., LTD. Financial and Operating Highlights CONSOLIDATED PROFIT FROM CONSOLIDATED OPERATING CONTINUING OPERATIONS REVENUE FROM ATTRIBUTABLE TO