China Shenhua Energy Company Limited announced that its board, at the 19th meeting of the sixth session held on 26 June 2026, approved a resolution to replace KPMG with Ernst & Young Hua Ming LLP (domestic) and Ernst & Young (international) as external auditors for the 2026 fiscal year. The proposal will be submitted to an upcoming extraordinary general meeting for shareholder approval.
Key terms of the engagement: • Fee structure — RMB11.54 million for domestic services (RMB10.16 million for the annual financial statements and RMB1.38 million for internal control) and RMB4.94 million for international services, totaling RMB16.48 million. The aggregate amount is roughly 29% higher than the 2025 audit fee, mainly reflecting an expanded consolidation scope following the company’s acquisition of 12 entities from China Energy Investment Corporation. • Tenure — The new mandate will run until the conclusion of the 2026 annual general meeting, with a director panel authorised to fine-tune the remuneration within a reasonable range.
Background on the incoming auditor: • Ernst & Young Hua Ming LLP, established in 1992 and headquartered in Beijing, reported 2025 audited revenue of RMB6.50 billion, of which audit business contributed RMB6.28 billion. Securities-related revenue reached RMB3.40 billion, covering 158 A-share listed companies. • The firm counts 249 partners and more than 1,500 CPAs experienced in securities work; over 550 have signed securities-service audit reports. • Investor-protection capacity includes occupational risk funds and insurance exceeding RMB200 million; no civil liabilities arising from professional conduct were recorded in the past three years. • Integrity record shows no criminal or disciplinary penalties in the past three years, aside from limited supervisory or regulatory measures that do not affect eligibility.
Engagement team: • Lead partner Zhang Siwei (CPA since 2007), signing CPA Cui Naiwen (CPA since 2014) and quality-control reviewer Li Xiaodong (CPA since 2010) will oversee the audit. All meet independence and ethical requirements.
Reasons for change: • KPMG’s seven-year term ended with the conclusion of the 2025 AGM on 26 June 2026. • A competitive selection process evaluated fee quotes, qualifications, quality management, manpower, information security and risk-bearing capabilities, resulting in EY’s nomination. • KPMG has issued an unqualified opinion for FY 2025 and expressed no objection to the handover; the two firms will coordinate in line with PRC Auditing Standard No. 1153.
Corporate governance review: • The Audit and Risk Committee assessed EY’s governance system, professional competence and independence, deeming the firm suitable and the fee reasonable relative to the company’s scale and complexity. • The board unanimously endorsed the proposal and will seek shareholder approval to formalise the appointment.
The change, once ratified by shareholders, will take effect immediately, positioning Ernst & Young as China Shenhua’s auditor for the 2026 reporting cycle.
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