• What is the company's development strategy?
• What is the company's capital injection plan for the next two years?
• What is the company's utilization hours for 2010 and the expectation for 2011?
• What is the company's current tariff level?
• What is the applicable tax rate for China Power at present?
• What is the company's dividend policy?

What is the company's development strategy?

Since the IPO, the development strategy of the Company has been consistent and distinctive. With the support of CPI Group/CPI Holding, we focus on the development of coal-fired and hydro-power plants through acquisitions and construction in economically developed coastal areas or resources-rich regions, so as to maintain sustainable, rapid and healthy growth of the Company.

In 2009, the Company acquired Wu Ling Power successfully and restructured its single coal-fired power business. The percentage of hydro-power installed capacity of the Company was the highest among overseas listed PRC powergeneration companies.

In the future, the Company will utilize the high quality platform brought by Wu Ling Power to build and acquire hydropower projects in Hunan, Sichuan and Xinjiang and expand the percentage of hydro-power capacity. For conventional coal-fired power, the Company will establish coal-fired power generation units with high-capacity and high parameter. The Company will also upgrade the old generation units so as to increase the competitiveness of its coal-fired power business. Furthermore, the Company will promote the integration of coal and electricity business and expand its business to the coal markets in Sichuan, Guizhou, Shanxi and Anhui.

What is the company's capital injection plan for the next two years?

Since the IPO in 2004, we have acquired Shentou Power Plant I in 2005 and 25% equity interest of Shanghai Power in 2006. In 2009, the Company successfully completed the acquisition of 63% equity interests in Wu Ling Power. Most of these acquisitions were completed through capital injections from the parent company, showing its strong support for the listed company.

CPI Group is a large power enterprise with a diversified and quality asset portfolio. As at the end of 2010, the controlled installed capacity of CPI Group amounted to 70GW, of which more than 20% was contributed by hydro-power. While developing large-scale and regular coal-fired and hydro-power projects, CPI Group has obtained the controlling rights to develop nuclear power, and is currently participating in several nuclear projects with equity interests. Furthermore, CPI Group also has expanded its presence in the development of coal mining, port and electrolytic aluminium.

In 2011, the Company will continue to seize investment opportunities in the areas of hydro-power and coal-fired power. Capitalised on the support of its parent company, the Company will continue to optimize its asset structure and develop into a unique listed power company with hydro-power and coal-fired power generation businesses.

What is the company's utilization hours for 2010 and the expectation for 2011?

As the PRC economy continued to improve in 2010, the demand for energy maintained rapid growth and electricity consumption recorded a year-on-year increase of 14.56%. The average utilization hours of power generation facilities in the PRC were 4,660 hours, representing a year-on-year growth of 2.5%.The average utilization hours of coal-fired power plants were 5,031hours, representing a year-on-year decrease of approximately 3.4%.

In 2010, the average utilization hours of coal-fired power plants of China Power was 5,329 hours, representing a year onyear increase of 256 hours or 5.05%. The average utilization hours of hydro-power plants of China Power was 3,190 hours.

It is expected that the PRC economy will continue to grow steadily in 2011 and the market demand in the power industry will be increasing. Energy consumption in the PRC is anticipated to amount to approximately 4.7 trillion KWh, representing a year-on-year growth of approximately 12%. The average utilization hours of power generation facilities will be approximately 4,650 hours. We expect the average utilization hours of the Company will remain at similar level in 2011.

What is the company's current tariff level?

In 2010, the average on-grid tariff of the Company was RMB311.89/MWh, representing a decrease of 1% as compared with RMB315.04/MWh of last year. The decrease was mainly attributable to the combination of hydro-power business with lower average tariff. In 2010, the average realized tariff of coal fired power plants of the Company was RMB328.25/MWh, representing an increase of 3.67% year on year, and the average realized tariff of hydro power plants was RMB258.71/MWh.

What is the applicable tax rate for China Power at present?

Among the coal-fired power plants of China Power in 2010, the preferential tax treatment ¡§First two years exemption and subsequent three years 50% reduction¡¨ of Pingwei Power Plant, Yaomeng Power Plant, Changshu Power Plant and Shentou Power Plant I has been expired. However according to the relevant PRC income tax rules and regulations, special income tax rates have been granted to them as being foreign invested enterprises which are engaged in the energy, transportation or infrastructure activities and these power plants are subject to an income tax rate of 22% for the year. Pingwei Power Plant II is still enjoying the preferential tax treatment ¡§First two years exemption and subsequent three years 50% reduction¡¨, which will end in 2011. The preferential tax treatment ¡§First two years exemption and subsequent three years 50% reduction¡¨ of Yaomeng Power Plant II and Dabieshan Power Plant will end in 2012. All hydro power plants of the Group are subject to the applicable tax rate of 25% in this year.

What is the company's dividend policy?

The dividend policy of the Company has taken into account of the cash flow, development needs and dividend payout ratio of peers. The dividend payout ratio of China Power in 2005, 2006, 2007 and 2009 were 37.5%, 41.0%,32.9% and 44.3%, respectively. In 2008, the Board did not declare dividend payment because the Company recorded a loss in annual results.

The Board recommended the dividend payment of RMB0.045 per shares in 2010.

Apart from our commitment of a dividend payout ratio of not less than 25%, we will also take the above factors into full consideration when formulating our dividend policy in the future.