China Shenhua Energy : FIRST QUARTERLY REPORT FOR THE YEAR 2022

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

(Stock Code: 01088)

FIRST QUARTERLY REPORT FOR THE YEAR 2022

Pursuant to the rules and regulations of the China Securities Regulatory Commission and the Shanghai Stock Exchange, China Shenhua Energy Company Limited (the "Company") is required to announce this quarterly report. This announcement is made pursuant to Rule 13.09(2) and Rule 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and the Inside Information Provisions under Part XIVA of the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong).

The board of directors of the Company (the "Board") hereby presents the results of the Group for the three months ended 31 March 2022 prepared in accordance with the International Financial Reporting Standards. Such results have not been audited or reviewed by the independent auditors.

IMPORTANT NOTICE

• • The Board and the Supervisory Committee of the Company together with the directors, supervisors and the senior management of the Company warrant that the contents of the quarterly report are authentic, accurate and complete and do not contain any misrepresentation, misleading statement or material omission, and shall jointly and severally accept legal liability.

• • Wang Xiangxi, Chairman of the Board of the Company, Lv Zhiren, person-in-charge of the accounting function and Yu Yanling, person-in-charge of the accounting department of the Company, warrant the authenticity, accuracy and completeness of the financial statements contained in this report.

• • The financial statements of this report are prepared in accordance with IFRSs and are unaudited.

I. MAJOR FINANCIAL INDICATORS

(I) Major accounting data and financial indicators

January to March 2022

January to March 2021

Change

Before After restatement restatement

After restatement %

Revenue (RMB million)

Profit before income tax (RMB million) Profit for the period (RMB million)

Profit for the period attributable to equity holders of the Company (RMB million)

Basic earnings per share (RMB/share)

Net cash generated from operating activities

83,902 28,591 23,508 19,796 0.996 28,436

67,608 18,069 14,461 11,864 0.597 19,614

67,608 24.1

18,069 58.2

14,461 62.6

11,864 66.9

0.597 66.9

19,614 45.0

(RMB million )

As at 31 March

• 2022 As at 31 December 2021

Change

Before After restatement restatement

After restatement %

Total assets (RMB million) Total liabilities (RMB million) Total equity (RMB million)

Equity attributable to equity holders of the Company (RMB million)

631,988 159,051 472,937 400,124

610,597 161,376 449,221 380,038

610,372 3.5

161,376 (1.4)

448,996 5.3

379,853 5.3

Shareholders' equity per share (RMB/share)

20.14

19.13

19.12 5.3

Reasons for retrospective adjustment: in May 2020, International Accounting Standards Board issued the Amendments to IAS 16, "Property, Plant and Equipment: Proceeds before Intended Use", making amendments to the recognition and disclosure of selling items produced prior to reaching the intended use of property, plant and equipment. Such amendment should be implemented from 1 January 2022.

From 1 January 2022, the Group respectively has accounted for the proceeds and costs of sales of trial operation and recognised in profit or loss for the current period, and meanwhile in accordance with the amendments above, applied the amendments retrospectively to the sales of trial operation that occurred between the beginning of the earliest period presented of the financial statements and the effective date.

The impact of the retrospective adjustments of the above accounting policy changes on the consolidated statement of financial position at 31 December 2021, which was prepared in accordance with International Financial Reporting Standards, is as follows: Property, plant and equipment decreased by RMB225 million and total equity decreased by RMB225 million, respectively, as at 31 December 2021.

Since the Group had no sales of trial operation from January to March 2021, the retrospective adjustments of the above accounting policy changes have no impact on the consolidated statement of profit or loss and other comprehensive income and the consolidated statement of cash flows for the three months ended 31 March 2021.

For the details of the above accounting policy changes and retrospective adjustment, please refer to the Announcement on Changes in Accounting Policies simultaneously disclosed with this report.

(II) Major differences of financial statements prepared under different accounting standards

Item

Unit: RMB million
Net profit attributable	Net assets attributable
to equity holders of the	to equity holders of the
Company	Company
As at 31

January to March 2022

January to As at 31

March 2021 March 2022

December 2021 (Restated)

Under China Accounting

18,957

11,611

• 396,987 376,690

  Standards for Business

  Enterprises Adjustment:

  Simple production maintenance, production safety and other related expenditures Under International

  839

  253

• 3,137 3,163

  19,796

  11,864

• 400,124 379,853

Financial Reporting

StandardsExplanation:Pursuant to the relevant regulations of the related government authorities in the PRC, the Group accrued provisions for simple production maintenance, production safety and other related expenditures. Such expenditures are recognised as expenses and separately recorded as a specific reserve in shareholders' equity under China Accounting Standards for Business Enterprises. On utilisation of the specific reserve as fixed assets within the stipulated scope, the full amount of accumulated depreciation is recognised at the same time when the cost of the relevant assets is recorded. Under International Financial Reporting Standards, these expenses are recognized when incurred. Relevant capital expenditure is recognised as property, plant and equipment and depreciated according to the relevant depreciation method. The effect on deferred tax arising from such difference is also reflected.

(III) Details of changes in the major accounting data

Changes in major items of the consolidated financial statements and explanations are set out below:

Unit: RMB million

No.

Items of consolidated statement of profit or loss and other comprehensive income

January to March 2022

January to March 2021

Change %

Main reasons for changes

1

Revenue

2

Cost of sales

3

Research and development costs

4

Other gains and losses

5

Other income

6

Income tax expense

83,902

67,608

• 24.1 Average coal sales price increased; power output dispatch and average power output dispatch price increased

  (54,201)

  (48,435)

• 11.9 Unit production cost of self-produced coal increased; power output dispatch increased and purchase price of coal increased

  (335)

  (144)

• 132.6 Increase in R&D expenditure of smart mines and other projects

  303

  42

• 621.4 Other gains and losses during the Reporting

  Period were mainly gains from the land disposal of Watermark Project in Australia, and gains from the disposal of assets of some of the Group's coal subsidiaries

  214

  124

• 72.6 Increase in government grants related to daily activities received by the power segment of the Group

  (5,083)

  (3,608)

• 40.9 Increase in profit before income tax