CHINA ENERGY LIMITED 
By
The Board of Directors of China Energy Limited (the "Company"
or "Group") refers to the Annual Report for the financial
year ended 31 December 2011 ("Annual Report") and the
corporate governance report therein.
In response to an email query from the Singapore Exchange
Securities Trading Limited, the Board of Directors of the
Company wishes to highlight the following paragraphs (with
changes underline) of Principle 12 of the corporate
governance report on Page 21 of the Annual Report:
The Board is responsible for the overall internal control
framework and risk management policies. It has put in place a
management structure with defined roles and responsibilities,
reporting lines of business and support functions, and
delegation of functions to safeguard shareholders' interest
and the Group's assets, and to manage risks.
The Company will ensure that a review of the adequacy and the
effectiveness of the Group's system of internal controls
established by the Management, which includes financial,
operational and compliance controls, and risk management, is
conducted by the Board and the AC in consultation with the
internal and external auditors at least annually.
Based on the internal controls established and maintained by
the Group, work performed by the internal and external
auditors (to the extent as required by them to form an audit
opinion on the statutory financial statements), and the
review performed by Management and the AC, the Board, with
the concurrence of the AC, is of the opinion and confident
that the Group's framework of internal controls is adequate
in addressing financial, operational andcompliance risks and
to provide reasonable assurance of the integrity and
effectiveness of the Group in safeguarding its assets and
shareholders' value. Nevertheless, the AC and the Board
recognise that no cost effective internal control system will
preclude all errors and irregularities, as a system is
designed to manage rather than eliminate the risk of failure
to achieve business objectives, and can provide only
reasonable but not absolute assurance against material
misstatement or loss.
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