CStone Pharmaceuticals — Interim / Quarterly Report 2012

Aug 24, 2012

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

兗州煤業股份有限公司 YANZHOU COAL MINING COMPANY LIMITED

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

(Stock Code: 1171)

INTERIM RESULTS ANNOUNCEMENT FOR THE PERIOD AS AT 30 JUNE 2012

The Board of Directors (the “Board”) of the Company is pleased to announce the unaudited interim results of the Company and its subsidiaries for 2012. The interim results have been reviewed and approved by the audit committee of the Board of the Company. This announcement, containing the full text of the Interim Report of the Company for 2012, complies with the relevant requirements of the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited in relation to information accompanied in the preliminary announcements of interim results. The interim results announcement is available for viewing on the websites of the Stock Exchange of Hong Kong at www.hkexnews.hk and of the Company at www.yanzhoucoal.com.cn.

1

DEFINITIONS

In this Interim Report, unless the context requires otherwise, the following expressions have the following meanings:

• “Yanzhou Coal”, “Company” or Yanzhou Coal Mining Company Limited, a joint stock limited company incorporated “the Company” under the laws of the PRC in 1997 and the H Shares, the ADSs and A Shares of which are listed on the Hong Kong Stock Exchange, New York Stock Exchange Inc. and the Shanghai Stock Exchange, respectively;

• “Group” or “the Group” the Company and its subsidiaries; “Yankuang Group” or Yankuang Group Corporation Limited, a company with limited liability reformed and “the Controlling Shareholder” established in accordance with PRC laws in 1996, being the controlling shareholder of the Company holding 52.86% of the total share capital of the Company as at the end of this reporting period;

• “Yulin Neng Hua” Yanzhou Coal Yulin Neng Hua Company Limited, a company with limited liability incorporated under the laws of the PRC in 2004 and a wholly-owned subsidiary of the Company, mainly engages in the operation of the 0.6 million tonnes of methanol project in Shaanxi province;

• “Heze Neng Hua” Yanmei Heze Neng Hua Company Limited, a company with limited liability incorporated under the laws of the PRC in 2004 and a 98.33% owned subsidiary of the Company, mainly engages in the development of Juye coal fi eld in Heze city, Shandong province;

• “Shanxi Neng Hua” Yanzhou Coal Shanxi Neng Hua Company Limited, a company with limited liability incorporated under the laws of the PRC in 2002 and a wholly-owned subsidiary of the Company, mainly engages in the management of the projects invested in Shanxi province by the Company;

• “Hua Ju Energy” Shandong Hua Ju Energy Co., Limited, a company with limited liability incorporated under the laws of the PRC in 2002 and a 95.14% owned subsidiary of the Company, mainly engages in the thermal power generation by gangue and slurry, and heating supply;

• “Ordos Neng Hua” Yanzhou Coal Mining Ordos Neng Hua Company Limited, a company incorporated under the laws of the PRC in 2009 and a wholly-owned subsidiary of the Company, mainly engages in the development of coal resources and chemical projects of the Company in the Inner Mongolia Autonomous Region;

• “Haosheng Company” Inner Mongolia Haosheng Coal Mining Company Limited, a limited company incorporated under the laws of the PRC in 2010 and a 74.82% owned subsidiary of the Company, mainly engages in the project development of Shilawusu coal fi eld in the Inner Mongolia Autonomous Region;

• “Yancoal Australia” Yancoal Australia Pty Limited, a company with limited liability incorporated under the laws of Australia in 2004 and a 78% owned subsidiary of the Company. The shares of Yancoal Australia are listed on the Australian Securities Exchange;

2 Yanzhou Coal Mining Company Limited Interim Report 2012

DEFINITIONS – CONTINUED

“Yancoal International”	Yancoal International (Holding) Co., Limited, a company with limited liability
	incorporated under the laws of Hong Kong in 2011 and a wholly-owned subsidiary of
	the Company;
“Yancoal Resources”	Yancoal Resources Limited (previously known as Felix Resources Limited), a limited
	company incorporated under the laws of Australia and a wholly-owned subsidiary of
	Yancoal Australia, mainly engages in coal mining, sales and exploration;
Gloucester	Gloucester Coal Ltd, a limited company incorporated under the laws of Australia,
	completed the merger with Yancoal Australia in June, 2012, and became a wholly-
	owned subsidiary of Yancoal Australia;
“Railway Assets”	The railway assets specif cally used for transportation of coal for the Company, which
	are located in Jining City, Shandong province;
“H Shares”	Overseas listed foreign invested shares in the ordinary share capital of the Company,
	with nominal value of RMB1.00 each, which are listed on the Hong Kong Stock
	Exchange;
“A Shares”	Domestic shares in the ordinary share capital of the Company, with nominal value of
	RMB1.00 each, which are listed on the Shanghai Stock Exchange;
“ADSs”	American depositary shares, each representing ownership of 10 H Shares, which are
	listed on New York Stock Exchange Inc.;
“PRC”	The People’s Republic of China;
“CASs” or “ASBEs”	Accounting Standard for Business Enterprises (2006) and the relevant explanations
	issued by the Ministry of Finance of PRC;
“CSRC”	China Securities Regulatory Commission;
“Hong Kong Stock Exchange”	The Stock Exchange of Hong Kong Limited;
“Hong Kong Listing Rules”	Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong
	Limited;
“Shanghai Stock Exchange”	The Shanghai Stock Exchange;
“Articles”	the articles of association of the Company
“Shareholders”	the shareholders of the Company;
“Directors”	the directors of the Company;
“Board”	the board of directors of the Company;
“Supervisors”	the supervisors of the Company;
“RMB”	Renminbi, the lawful currency of the PRC.

3

Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 1 GROUP PROFILE AND GENERAL INFORMATION

• (1) Statutory Chinese Name: 兖州煤业股份有限公司 Abbreviation of Chinese Name: 兖州煤业

Statutory English Name: Yanzhou Coal Mining Company Limited

• (2) Legal Representative: Li Weimin

• (3) Authorized Representatives with the Hong Kong Stock Exchange: Wu Yuxiang, Zhang Baocai Secretary to the Board/Company Secretary: Zhang Baocai

• Address: Offi ce of the Secretary to the Board, 298 Fushan South Road, Zoucheng City, Shandong Province, PRC

Tel: (86537) 5382319 Fax: (86537) 5383311

E-mail Address: yzc@yanzhoucoal.com.cn

Representative with the Shanghai Stock Exchange: Huang Xiaolong Address: Offi ce of the Secretary to the Board, 298 Fushan South Road, Zoucheng City， Shandong Province, PRC Tel: (86537) 5385343 Fax: (86537) 5383311 E-mail Address: hxl2003@sohu.com

• (4) Registered Address : 298 Fushan South Road, Zoucheng City, Shandong Province, PRC Offi ce Address: 298 Fushan South Road, Zoucheng City, Shandong Province, PRC Postal Code: 273500

Offi cial Website: http: //www.yanzhoucoal.com.cn

E-mail: yzc@yanzhoucoal.com.cn

• (5) Newspapers for corporate information disclosure in PRC: China Securities Journal, Shanghai Securities News Website for publishing the Company’s Interim Report in PRC: http: //www.sse.com.cn Website for publishing the Company’s Interim Report overseas: http: //www.hkexnews.hk

http: //www.sec.gov

Interim Reports of the Company are available at: Offi ce of the Secretary to the Board, Yanzhou Coal Mining Company Limited

4 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 1 GROUP PROFILE AND GENERAL INFORMATION – CONTINUED

• (6) Places of Listing, Stock Abbreviation and Stock Code A Shares — Place of listing: The Shanghai Stock Exchange

Stock Abbreviation: Yanzhou Mei Ye Stock Code: 600188

H Shares — Place of listing: The Stock Exchange of Hong Kong Limited Stock Code: 1171 ADR — Place of listing: The New York Stock Exchange, Inc. Ticker Symbol: YZC

• (7) Other relevant information Date of Initial Business Registration : 25 September, 1997 Place of Initial Business Registration: 40 Fushan South Road, Zoucheng City, Shandong Province, 273500, PRC Date of Change in Registration: 17 January, 2011

Place of Change in Registration：298 Fushan South Road, Zoucheng City, Shandong Province 273500, PRC Registration number of Corporate Business Licence of the Enterprise Legal Person：370000400001016 Tax Registration Certifi cate Number：Jiguoshuizi 370883166122374 Organization Code：16612237-4

Certifi ed Public Accountants (Domestic) ： Name: Shine Wing Certifi ed Public Accountants Offi ce Address：9/F, Block A, Fuhua Mansion, 8 Chaoyangmen Beidajie, Dongcheng District, Beijing 100027, PRC Certifi ed Public Accountants (International) ：

Name: Grant Thornton Hong Kong Limited

Offi ce Address：20th Floor, Sunning Plaza 10 Hysan Avenue Causeway Bay,Hong Kong

Name: Grant Thornton

Offi ce Address：5th Floor, Scitech Place 22 Jianguomen Wai Avenue Chaoyang District Beijing, China

Yanzhou Coal Mining Company Limited Interim Report 2012 5

CHAPTER 2 BUSINESS HIGHLIGHTS

I. REVIEW OF OPERATIONS

				For the	For the
				six months	six months		Percentage
				ended 30	ended 30	Increase/	increase/
			Unit	June 2012	June 2011	Decrease	decrease (%)
1.	Coal business
	Raw coal production		kilotonne	31,566	25,728	5,838	22.69
	Salable coal production		kilotonne	29,484	23,587	5,897	25.00
	Salable coal sales volume		kilotonne	42,472	26,661	15,811	59.30
2.	Railway transportation	business
	Transportation volume		kilotonne	8,837	9,088	–251	–2.76
3.	Coal chemicals business
	Methanol production		kilotonne	285	248	37	14.92
	Methanol sales volume		kilotonne	288	246	42	17.07
4.	Electric power business
	Power generation		10,000kWh	62,298	69,440	–7,142	–10.29
	Electricity sold		10,000kWh	43,466	46,944	–3,478	–7.41
5.	Heat business
	Heat generation	10,000 steam tonnes		91	91	0	0
	Heat sales volume	10,000 steam tonnes		21	15	6	40.00

II. FINANCIAL HIGHLIGHTS

(Prepared in accordance with the IFRS)

(1) OPERATING RESULTS

For the six months ended 30 June

			Changes as	For the
			compared with the	year ended
			corresponding	31 December
	2012	2011	period of last year	2011
	(RMB’000)	(RMB’000)	(%)	(RMB’000)
	(unaudited)	(unaudited)		(audited)
Sales income	28,286,385	20,224,012	39.87	47,065,840
Gross prof t	7,611,491	9,037,848	–15.78	18,785,790
Interest expenses	(775,394)	(426,106)	81.97	(839,305)
Income before income tax	5,382,285	7,235,926	–25.62	12,520,986
Net income attributable to equity
holders of the Company for
the reporting period	5,255,811	5,183,335	1.40	8,928,102
Earnings per share	RMB1.07	RMB1.05	1.40	RMB1.82

6 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 2 BUSINESS HIGHLIGHTS – CONTINUED

(1) OPERATING RESULTS – CONTINUED

The impact of exchange gains or losses on net income attributable to equity holders of the Company：

			Percentage of
	the f rst half	the f rst half	increase and
	of 2012	of 2011	decrease
	(RMB’000)	(RMB’000)	(%)
The exchange gains or losses	181,318	1,242,793	–85.41
The impact of exchange gains or losses on net
income attributable to equity holders of the Company	130,240	870,490	–85.04

(2) ASSETS AND LIABILITIES

			As at
	As at 30 June		31 December
	2012	2011	2011
	(RMB’000)	(RMB’000)	(RMB’000)
	(unaudited)	(unaudited)	(audited)
Current Assets	33,145,857	31,682,102	30,431,106
Current Liabilities	36,607,124	24,065,256	34,721,471
Total Assets	119,242,084	89,613,919	97,151,591
Equity attributable to shareholders of the Company	44,221,885	39,845,365	42,634,490
Net assets per share	RMB8.99	RMB8.10	RMB8.67
Return on Net Assets (%)	11.89	13.01	20.94

(3) SUMMARY STATEMENT OF CASH FLOWS

	For the six months	For the six months	ended 30 June
			Changes as	For the
			compared with	year ended
			the corresponding	31 December
	2012	2011	period of last year	2011
	(RMB’000)	(RMB’000)	(%)	(RMB’000)
	(unaudited)	(unaudited)		(audited)
Net Cash from Operating Activities	6,692,453	13,136,797	–49.06	17,977,276
Net increase in Cash and
Cash Equivalents	10,437,025	5,379,199	94.03	1,807,278
Net Cash Flow per Share from
Operating Activities	RMB1.36	RMB2.67	–49.06	RMB3.66

Yanzhou Coal Mining Company Limited Interim Report 2012 7

CHAPTER 3 BOARD OF DIRECTORS’ REPORT

I. MANAGEMENT DISCUSSION AND ANALYSIS

(1) Management Analysis of the Operating Results by Business segment

1. Coal business

2. Railway transportation business

3. Coal chemicals business

4. Electric power business

5. Heat business

(2) Management Analysis of Major Financial Condition of the Group

1. Summary of changes in consolidated balance sheet items

2. Summary of changes in consolidated income statement items

3. Summary of changes in consolidated cash fl ow statement items

4. Others

(3) Capital Expenditure Plan

(4) Investments made by the Group during the Reporting Period

(5) Outlook

• (1) Market outlook for the second half 2012

• (2) Operational strategies

• (3) Major Risks faced by the Company, Impacts and Measures

• II. ACCOUNTING POLICIES, CHANGES IN ACCOUNTING ESTIMATES OR AMENDMENTS ON SIGNIFICANT ACCOUNTING ERRORS

• III. OTHERS

8 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

I. MANAGEMENT DISCUSSION AND ANALYSIS

(I) Management Analysis of Operating Results by Business Segment

The main business operations of the Group include mining, washing, processing, sales and railway transportation of coal, coal chemicals and electric power business.

The main business operation results of the Group for this reporting period were set out in the following table:

				Increase/		Increase/
				decrease	Increase/	decrease in
				in sales	decrease in	gross prof t as
				income as	cost of sales as	compared with
				compared with	compared with	the same
				the same	the same	period of 2011
	Sales income	Cost of Sales	Gross Prof t	period of 2011	period of 2011	(percentage
	(RMB’000)	(RMB’000)	(%)	(%)	(%)	point)
1. Coal business	27,291,104	19,240,805	29.50	41.21	96.40	Decrease 19.81
2. Railway Transportation business	226,551	175,802	22.40	–6.72	12.20	Decrease 13.09
3. Coal Chemicals business	568,397	467,508	17.75	19.08	6.42	Increase 9.78
4. Electric power business	164,842	161,164	2.23	1.93	–0.23	Increase 2.11
5. Heat business	35,491	21,338	39.88	130.37	154.81	Decrease 5.77

Yanzhou Coal Mining Company Limited Interim Report 2012 9

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

1. Coal business

(1) Coal Production

In the fi rst half of 2012, the raw coal production of the Group was 31.57 million tonnes, representing an increase of 5.84 million tonnes or 22.7% as compared with that of the fi rst half of 2011. Salable coal production of the Group for the reporting period was 29.48 million tonnes, representing an increase of 5.9 million tonnes or 25.0% as compared with that of the fi rst half of 2011. The increase of coal production was mainly due to: (1) the coal production increase of Ordos Neng Hua from the acquisition of Wenyu coal mine in July 2011; and (2) the coal production increase of Yancoal Australia from the acquisition of Syntech coal mine and Premier coal mine in August 2011 and December 2011, respectively.

The following table sets out the coal production of the Group for the fi rst half of 2012:

		For the six	For the six
		months ended	months ended	Increase/	Increase/
		30 June 2012	30 June 2011	decrease	decrease
		kilotonne	kilotonne	kilotonne	(%)
I.	Raw coal production	31,566	25,728	5,838	22.69
	1. The Company	17,167	16,703	464	2.78
	2. Shanxi Neng Hua	662	577	85	14.73
	3. Heze Neng Hua	1,461	1,371	90	6.56
	4. Ordos Neng Hua	3,452	1,308	2,144	163.91
	5. Yancoal Australia	8,595	5,769	2,826	48.99
	6. Yancoal International	229	–	229	—
II.	Salable coal production	29,484	23,587	5,897	25.00
	1. The Company	17,129	16,604	525	3.16
	2. Shanxi Neng Hua	652	566	86	15.19
	3. Heze Neng Hua	1,229	717	512	71.41
	4. Ordos Neng Hua	3,452	1,308	2,144	163.91
	5. Yancoal Australia	6,811	4,392	2,419	55.08
	6. Yancoal International	211	–	211	—

• Note: On 22 June 2012, according to the merger agreement between Yancoal Australia and Gloucester, the equity interests in Syntech Resources Pty Ltd and Premier Coal Limited held by Yancoal Australia have been transferred to Yancoal International, a wholly-owned subsidiary of the Company.

(2) Coal Prices and Sales

In the fi rst half of 2012, the sluggish global economy has led to the weak demand for coal in the domestic and overseas markets and the average coal price of the Group decreased as compared with that of last year.

10 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

The Group sold 42.47 million tonnes of coal in the fi rst half of 2012, representing an increase of 15.81 million tonnes or 59.3% as compared with that of the fi rst half of 2011. The sales volume comprises of 0.62 million tonnes of internal sales and 41.85 million tonnes of external sales. The increase of sales volume is mainly due to: (1) the sales volume of externally purchased coal increased by 10.45 million tonnes as compared with that of the fi rst half of 2011; (2) coal sales volume of Yancoal Australia increased by 2.38 million tonnes as compared with that of the fi rst half of 2011; (3) coal sales volume of Ordos Neng Hua increased by 1.93 million tonnes as compared with that of the fi rst half of 2011.

In the fi rst half of 2012, the Group realized a sales income of RMB27.4164 billion for its coal business, representing an increase, as compared with that of the fi rst half of 2011, of RMB7.9823 billion or 41.1%. The sales income comprises of RMB125.3 million of internal sales and RMB27.2911 billion of external sales.

The following table sets out the Group’s sales of coal for the fi rst half of 2012:

	For the six	For the six	months ended 30	June 2012	For the six	months ended 30	June 2011
	Sales volume		Sales Price	Sales income	Sales volume	Sales Price	Sales income
		(kilotonne)	(RMB/tonne)	(RMB’000)	(kilotonne)	(RMB/tonne)	(RMB’000)
1.	The Company
	No. 1 Clean Coal	130	1,097.60	142,643	250	1,091.00	272,746
	No. 2 Clean Coal	4,236	1,016.78	4,307,433	4,705	1,018.75	4,793,537
	No. 3 Clean Coal	1,179	795.60	937,868	1,053	841.62	885,858
	Domestic Sales	1,179	795.60	937,868	1,045	841.40	879,126
	Export	–	—	—	8	871.08	6,732
	Lump Coal	683	995.10	679,764	859	1,023.10	878,851
	Subtotal for Clean Coal	6,228	974.23	6,067,707	6,867	994.77	6,830,992
	Domestic Sales	6,228	974.23	6,067,707	6,859	994.91	6,824,260
	Export	–	—	—	8	871.08	6,732
	Screened Raw Coal	6,926	521.67	3,613,368	6,600	486.60	3,211,712
	Mixed Coal & Others	3,350	371.85	1,245,569	2,734	341.21	932,882
	Total for the Company	16,504	662.04	10,926,645	16,201	677.45	10,975,586
	Domestic Sales	16,504	662.04	10,926,645	16,193	677.36	10,968,854
2.	Shanxi Neng Hua	551	421.73	232,286	544	454.44	247,163
	Screened Raw Coal	551	421.73	232,286	544	454.44	247,163
3.	Heze Neng Hua	1,227	813.32	997,946	722	869.37	627,709
	No. 2 Clean Coal	629	1,153.65	725,956	434	1,174.19	509,503
	Screened Raw Coal	–	—	—	22	521.79	11,551
	Mixed Coal & Others	598	455.04	271,990	266	401.01	106,655
4.	Ordos Neng Hua	3,228	269.16	868,767	1,303	299.78	390,562
	Screened Raw Coal	3,228	269.16	868,767	1,303	299.78	390,562
5.	Yancoal Australia	7,111	648.70	4,613,083	4,730	1,006.14	4,759,351
	Semi-hard coking coal	131	981.86	128,874	825	1,125.42	928,259
	Semi-soft coking coal	484	1,059.61	512,546	548	1,243.98	681,623
	PCI	1,187	1,000.27	1,187,557	1,240	1,397.00	1,732,027
	Steam coal	5,309	524.41	2,784,105	2,117	669.32	1,417,442
6.	Yancoal International	240	407.08	97,756	—	—	—
	Steam coal	240	407.08	97,756	—	—	—
7.	Sales of externally	13,611	711.20	9,679,895	3,161	769.99	2,433,690
	purchased coal
8.	Total for the Group	42,472	645.52	27,416,378	26,661	728.93	19,434,061

Yanzhou Coal Mining Company Limited Interim Report 2012 11

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

Factors affecting the change of the sales income of coal are analyzed in the following table:

	Impact of	Impact of
	change in	change in
	coal sales	the sales
	volume	price of coal
	RMB’000	RMB’000
The Company	205,386	–254,327
Shanxi Neng Hua	3,146	–18,023
Heze Neng Hua	439,010	–68,773
Ordos Neng Hua	577,046	–98,841
Yancoal Australia	2,395,488	–2,541,756
Yancoal International	97,756	—
Externally purchased coal	8,046,396	–800,191
Total for the Group	11,764,228	–3,781,911

The Group’s coal products are mainly sold in markets such as China, Japan, South Korea and Australia.

The following table sets out the Company’s sales in terms of geographical regions for the fi rst half of 2012:

		For the six months ended	For the six months ended	For the six months ended	For the six months ended
		30 June 2012		30 June 2011
		Sales volume	Sales income	Sales volume	Sales income
		(Kiloton)	(RMB’000)	(Kiloton)	(RMB’000)
1.	China	35,724	23,179,370	22,414	15,113,781
	Eastern China	29,805	19,861,594	18,693	12,652,793
	Southern China	603	473,831	88	81,048
	Northern China	4,427	2,358,812	1,701	664,186
	Other regions	889	485,133	1,932	1,715,754
2.	Japan	974	938,935	1,002	1,192,846
3.	South Korea	1,550	1,146,137	2,644	2,475,999
4.	Australia	2,754	1,030,354	105	128,396
5.	Others	1,470	1,121,582	496	523,039
6.	Total for the Group	42,472	27,416,378	26,661	19,434,061

Most of the Group’s coal products are sold to the electricity, metallurgy and chemical industries.

12 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

The following table sets out the Group’s sales volume and sales income of coal in terms of industries for the fi rst half of 2012:

		For the six months ended	For the six months ended	For the six months ended	For the six months ended
		30 June 2012		30 June 2011
		Sales volume	Sales income	Sales volume	Sales income
		(Kiloton)	(RMB’000)	(Kiloton)	(RMB’000)
1.	Electricity	15,392	7,155,068	8,920	4,441,126
2.	Metallurgy	3,006	2,953,126	3,343	3,349,870
3.	Chemical	5,373	4,334,901	1,188	1,167,310
4.	Others	18,701	12,973,283	13,210	10,475,755
5.	Total for the Group	42,472	27,416,378	26,661	19,434,061

(3) Cost of Sales of Coal

The Group’s cost of coal sales in the fi rst half of 2012 was RMB19.2408 billion, representing an increase of RMB9.4442 billion, or 96.40% as compared with that of the fi rst half of 2011. This was mainly due to the increase of sales volume of Yancoal Australia and externally purchased coal.

The following table sets out the main cost of coal sales according to the business entities:

			For the	For the
			six months	six months		Percentage of
			ended 30	ended 30	Increase/	increase/
		Unit	June 2012	June 2011	decrease	decrease
						(%)
The Company	Total cost of sales	RMB’000	5,256,305	4,636,844	619,461	13.36
	Cost of sales per tonne	RMB	318.48	286.20	32.28	11.28
Shanxi Neng Hua	Total cost of sales	RMB’000	147,983	170,050	–22,067	–12.98
	Cost of sales per tonne	RMB	268.67	312.66	–43.99	–14.07
Heze Neng Hua	Total cost of sales	RMB’000	630,649	516,583	114,066	22.08
	Cost of sales per tonne	RMB	513.98	715.47	–201.49	–28.16
Ordos Neng Hua	Total cost of sales	RMB’000	511,617	195,999	315,618	161.03
	Cost of sales per tonne	RMB	158.51	150.44	8.07	5.36
Yancoal Australia	Total cost of sales	RMB’000	3,186,639	2,146,874	1,039,765	48.43
	Cost of sales per tonne	RMB	448.11	453.85	–5.74	–1.26
Yancoal International	Total cost of sales	RMB’000	65,159	—	—	—
	Cost of sales per tonne	RMB	271.33	—	—	—
Externally purchased coal	Total cost of sales	RMB’000	9,650,366	2,395,130	7,255,236	302.92
	Cost of salesper tonne	RMB	709.03	757.71	–48.68	–6.42

In the fi rst half of 2012, the cost of coal sales of the Company was RMB5.2563 billion, representing an increase of RMB619.5 million or 13.4% as compared with that of the fi rst half of 2011. The cost of coal sales per tonne was RMB318.48, representing an increase of RMB32.28 or 11.3% as compared with that of the fi rst half of 2011. This was mainly due to: (1) the increase of policy expenditure by RMB5.63 in the cost of coal sales per tonne, including: ① the increase of mining

Yanzhou Coal Mining Company Limited Interim Report 2012 13

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

rights fees of coal mines in the headquarters since 1 January 2012, which led to the increase of cost of coal sales per tonne by RMB2.80; ② the newly increased security deposit for environment management resulted in an increase in the cost of coal sales per tonne by RMB2.83; (2) the increase in employees’ wages resulted in an increase in the cost of coal sales per tonne by RMB26.24. Deducting the policy expenditure increase, the cost of coal sales per tonne of the Company was RMB312.85 in the fi rst half of 2012, representing an increase of RMB26.65 or 9.3% as compared with that of the fi rst half of 2011.

In the fi rst half of 2012, the cost of coal sales of Heze Neng Hua was RMB630.6 million, representing an increase of RMB114.1 million or 22.1% as compared with that of the fi rst half of 2011; the cost of coal sales per tonne was RMB513.98, representing a decrease of RMB201.49 or 28.2% as compared with that of the fi rst half of 2011. This was mainly due to the increase in sales volume of product coal by 0.51 million tonnes or 69.9% as compared with that of the fi rst half of 2011, which led to the decrease of unit fi xed cost.

2. Railway Transportation Business

In the fi rst half of 2012, the transportation volume of the Railway Assets for the fi nished products was 8.84 million tonnes, representing a decrease of 0.25 million tonnes or 2.8% as compared with that of the fi rst half of 2011. Income from railway transportation services of the Company (income from transported volume settled on the basis of off-mine prices and special purpose railway transportation fees borne by customers) was RMB226.6 million in the fi rst half of 2012, representing a decrease of RMB16.326 million or 6.7% as compared with that of the fi rst half of 2011. The cost of sales of railway transportation services was RMB175.8 million, representing an increase of RMB19.119 million or 12.2% as compared with that of the fi rst half of 2011.

3. Coal Chemicals Business

The following table sets out the state of operation of the Group’s methanol business for the fi rst half of 2012:

	Production volume	Production volume	(Kilotonne)		Sales volume (Kilotonne)	Sales volume (Kilotonne)
	For the	For the		For the	For the
	six months	six months	Percentage of	six months	six months	Percentage of
	ended 30	ended 30	increase/	ended 30	ended 30	increase/
	June 2012	June 2011	decrease	June 2012	June 2011	decrease
			(%)			(%)
1. Yulin Neng Hua	265	214	23.83	266	213	24.88
2. Shanxi NengHua	20	34	–41.18	22	33	–33.33

Note: Due to the shortage of raw material supply, the methanol project of Shanxi Neng Hua has stopped production since April 2012.

14 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

		Sales income (RMB’000)	Sales income (RMB’000)		Cost of Sales (RMB’000)	Cost of Sales (RMB’000)
	For the	For the		For the	For the
	six months	six months	Percentage of	six months	six months	Percentage of
	ended 30	ended 30	increase/	ended 30	ended 30	increase/
	June 2012	June 2011	decrease	June 2012	June 2011	decrease
			(%)			(%)
1. Yulin Neng Hua	524,496	410,710	27.70	449,814	399,115	12.70
2. Shanxi NengHua	43,901	66,624	–34.11	41,866	64,346	–34.94

4. Electric Power Business

The following table sets out the state of operation of the Group’s electric power business for the fi rst half of 2012:

		Generation (10,000	kW/h)	Electricity sold (10,000 kW/h)	Electricity sold (10,000 kW/h)	Electricity sold (10,000 kW/h)
	For the	For the		For the	For the
	six months	six months	Percentage of	six months	six months	Percentage of
	ended 30	ended 30	increase/	ended 30	ended 30	increase/
	June 2012	June 2011	decrease	June 2012	June 2011	decrease
			(%)			(%)
1. Hua Ju Energy	49,760	51,657	–3.67	42,446	44,790	–5.23
2. Yulin Neng Hua	12,538	14,032	–10.65	1,020	1,952	–47.75
3. Shanxi NengHua	—	3,751	—	—	202	—

Note: Since 1 January 2012, the power plant of Shanxi Neng Hua has stopped generating electricity due to the excessively high cost of fuel.

		Sales income (RMB’000)	Sales income (RMB’000)		Cost of sales (RMB’000)	Cost of sales (RMB’000)
	For the	For the		For the	For the
	six months	six months	Percentage of	six months	six months	Percentage of
	ended 30	ended 30	increase/	ended 30	ended 30	increase/
	June 2012	June 2011	decrease	June 2012	June 2011	decrease
			(%)			(%)
1. Hua Ju Energy	162,296	156,679	3.59	157,419	151,988	3.57
2. Yulin Neng Hua	2,547	4,573	–44.30	3,745	7,675	–51.21
3. Shanxi NengHua	—	475	—	—	1,874	—

5. Heat Business

Hua Ju Energy generated heat energy of 0.91 million steam tonnes and sold 0.21 million steam tonnes in the fi rst half of 2012, generating a sales income of RMB35.491 million, with the cost of sales at RMB21.338 million.

Yanzhou Coal Mining Company Limited Interim Report 2012 15

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

(II). Analysis of Major Financial Conditions by the Management

1. Summary of changes in Consolidated Balance Sheet Items

(1) Asset items

==> picture [365 x 419] intentionally omitted <==

----- Start of picture text -----

As at 30 As at 31 Increase and
June 2012 December 2011 decrease Main reasons for the change
(RMB’000) (RMB’000) (%)
Bank balances and cash 18,574,296 8,145,297 128.04 Issuance of US$1billion corporate
bonds; the bills discounted
Bank guarantee deposits 3,318,715 9,543,214 –65.22 A decrease of domestic bank guarantee
deposit of RMB6.26 billion for the
overseas bank loan of the Company.
Bills receivable and accounts 3,325,757 7,312,074 –54.52 A decrease of coal sales volume settled
receivable by acceptance bills and the increase
of bill cashed and discounted of the
Company
Inventory 1,826,028 1,391,247 31.25 An increase of the coal inventory
Prepayments and other 4,799,265 3,624,879 32.40 The prepayment for goods increased by
receivables RMB1.1921 billion.
Overburden in advance 410,376 261,441 56.97 An increase of RMB148.9 million in the
paid but not amortized overburden cost
by Yancoal Australia, compared to that
of the beginning of the year.
Intangible assets 34,981,527 26,205,619 33.49 An increase of RMB8.8688 billion in the
intangible assets caused by the merger
with Gloucester.
Long-term receivable 1,411,789 300,083 370.47 An increase of RMB1.1133 billion of
mining royalties receivable over 1 year
from Middlemount coal mine caused by
the merger with Gloucester.
----- End of picture text -----

16 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

==> picture [388 x 636] intentionally omitted <==

----- Start of picture text -----

As at 30 As at 31 Increase and
June 2012 December 2011 decrease Main reasons for the change
(RMB’000) (RMB’000) (%)
Deferred tax asset 4,552,769 1,335,165 240.99 1. An increase of RMB327.5 million
of deferred tax assets caused by
the increase of the unpaid land
subsidence fees, safety fees and
salaries and wages payable to
the employees which have been
withdrawn by the Company and its
domestic subsidiaries.
2. An increase of RMB2.9985 billion of
deferred tax assets caused by the
increase of coal resource lease tax
of Yancoal Australia.
Total assets 119,242,084 97,151,591 22.74 —
(2) Liabilities items
As at 30 As at 31 Increase and
June 2012 December 2011 decrease Main reasons for the change
(RMB’000) (RMB’000) (%)
Bills payable and accounts 6,484,771 2,240,844 189.39 An increase of RMB3.7208 billion in
payable bills payable caused by the merger with
Gloucester.
Other payables and accrued 10,899,375 7,344,815 48.40 The payable but not paid cash dividend
expenses for the year 2011 of RMB2.8035 billion
Borrowings due after 24,208,512 14,869,324 62.81 1. An increase of bank loans of
one year RMB2.9807 billion;
2. A subsidiary of the Company made
an issuance of corporate bonds,
amounting to USD1 billion during
the reporting period
Deferred tax liability 8,064,162 3,895,304 107.02 An increase of RMB4.2803 billion in
deferred tax liability caused by the
valuation of Gloucester’s mineral rights,
such as the increase in value of the
mineral rights.
Long term payable due after 1,035,647 15,028 6,791.45 An increase of expected liability of
one year RMB1.0656 billion of Gloucester
Total liabilities 71,734,238 53,826,541 33.27 —
----- End of picture text -----

17

Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

1. Summary of changes in Consolidated Income Statement Items

	For the six months	For the six months
	ended 30 June		Increase and
	2012	2011	decrease	Main reasons for change
	(RMB’000)	(RMB’000)	(%)
Sales income	28,286,385	20,224,012	39.87	1. The sales income of self-produced coal
				increased by RMB718.2 million compared
				to the corresponding period of last year,
				including: the sales income of coal business
				increased by RMB3.5721 billion compared to
				the corresponding period of last year caused
				by the increase of sales volume of coal; the
				sales income of coal business decreased
				by RMB2.8539 billion compared to the
				corresponding period of last year caused by
				the decrease of sales price of coal.
				2. The sales income of coal sales increased
				by RMB7.2462 billion compared to the
				corresponding period of last year caused
				by the increase of sales volume of externally
				purchased coal.
Cost of sales	19,416,607	9,953,247	95.08	An increase of sales volume of coal compared to
and railway transportation services Other incomes	2,032,550	1,509,646	34.64	the corresponding period of last year 1. The merger with Gloucester brings income of
				RMB1.4272 billion; 2. The foreign exchange gains decreased by
				RMB1.0615 billion and interest income of bank deposits increased by RMB230.1 million
				as compared to the corresponding period of
Interests expenses	775,394	426,106	81.97	last year. 1. Interest expenses of bank loan increased by RMB343.7 million as compared to the corresponding period of last year. 2. An increase of bond interest expenses of RMB40.787 million during the reporting
				period; 3. Since the unpaid balance for the acquisition
				of mining rights of Zhuan Longwan coal mine f eld decreased, the payment for the use of funds by Ordos Neng Hua decreased by RMB19.185 million as compared to the corresponding period of last year.

18 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

	For the six months	For the six months
	ended 30 June		Increase and
	2012	2011	decrease	Main reasons for change
	(RMB’000)	(RMB’000)	(%)
Income tax	99,821	2,040,953	–95.11	A decrease of income tax for Yancoal Australia as
				compared with the corresponding period of last
				year, including:
				1.	the decrease of the mineral resource lease tax
					by RMB1.0832 billion as compared with the
					corresponding period of last year;
				2.	the decrease of the taxable income by
					RMB732.4 million as compared with the
					corresponding period of last year.
Net income attributable to the shareholders of the Company	5,255,811	5,183,335	1.40	—

Yanzhou Coal Mining Company Limited Interim Report 2012 19

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

1. Summary of changes in Consolidated Cash Flow Statement Items

	For the six months	For the six months
	ended 30 June		Increase and
	2012	2011	decrease	Main reasons for change
	(RMB’000)	(RMB’000)	(%)
Net cash	6,692,453	13,136,797	–49.06	1.	A decrease of bills discounted by RMB3.1379
generated					billion as compared with the corresponding
from operating					period of last year;
activities
				2.	An increase of salaries and wages payable
					to the employees by RMB1.147 billion as
					compared with the corresponding period of
					last year;
				3.	An increase of taxes payments by 1.5772
					billion as compared with the corresponding
					period of last year.
Net cash for investing activities	2,622,024	–13,748,249	—	1. 2. 3.	The cash outflow from payment for the acquisition of assets and equity interests decreased by RMB4.4021 billion; The net cash inf ow amounting to RMB638.6 million from receiving and paying deposits made on investments; There is RMB13.7907billion of the cash inf ow
Net cash from f nancing activities	1,122,548	5,990,651	–81.26	1. 2.	from investing activities, due to the change in the balance of bank guarantee deposit. There are RMB6.3129 billion of proceeds from issuance of bonds during the reporting period; There is RMB5.19 billion of net cash outf ow
					from repayment and obtaining of bank
					loans during the reporting period, with RMB7.3609 billion of net cash inf ow during
Net increase (decrease) in cash and cash equivalents	10,437,025	5,379,199	94.03	3. —	the corresponding period of last year; Distribution of cash dividend of RMB1.3679 billion during the corresponding period of last year.

20 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

4. Others

• (1) Debt to Equity Ratio

As at 30 June 2012, the equity attributable to the equity holders of the Company and the interest bearing debt amounted to RMB44.2219 billion and RMB38.5758 billion, respectively, with a debt to equity ratio of 87.2%.

For detailed information on the interest bearing debt, please refer to note 21 of the fi nancial statements prepared under IFRS or the note VIII. 19, 28, 29 and 30, of the fi nancial statement prepared under CASs.

• (2) Capital Sources and Use

In the fi rst half of 2012, the Group’s principal source of capital was the cash fl ow from operations, issuance of corporate bonds and bank loans. The Group has utilized its capital mainly for payment of operating expenses, purchase of property, machinery and equipment, payment of the acquisition of assets and equity interests.

The Group’s capital expenditure for the purchase of property, machinery and equipment for the fi rst half of 2012 was RMB1.6521 billion, representing a decrease of RMB7.2143 billion or 81.4% as compared with RMB8.8664 billion in the fi rst half of 2011. This was mainly due to: the capital expenditure for the purchase of property, machinery and equipment for the fi rst half of 2011 of Ordos Neng Hua was RMB7.9991billion, as compared with RMB253.6 million in the fi rst half of 2012.

• (3) The Impacts of Exchange Rate Changes on the Company

China implements a regulated and managed fl oating exchange rate system based on market supply and demand by reference to a basket of currencies.

The impacts of exchange rate fl uctuations on the Group were mainly refl ected in:

• (1) the impact on the overseas coal sales of the Group of which the income is calculated in U.S. dollars or Australian dollars;

• (2) the exchange gains and losses of the foreign currency deposits and borrowings of the Group;

• (3) the cost of imported equipment and accessories of the Group.

Yanzhou Coal Mining Company Limited Interim Report 2012 21

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

Affected by the change of exchange rate, the Group had book exchange gains of RMB181.3million in the fi rst half of 2012. It was mainly due to: 1) Yancoal Australia had the exchange gains of RMB88.81 million from its US-denominated loan contract; 2) To manage the foreign currency risk arising from the expected revenue, Yancoal Australia has entered into foreign exchange hedging contracts with a bank and had the exchange gains of RMB87.210 million during the reporting period. For details of the foreign exchange hedging measures, please refer to note VIII.7 and note VIII.44 of the fi nancial statement prepared under CASs.

Save as disclosed above, the Group did not take foreign exchange hedging measures on other foreign currencies and did not plan to further hedge the exchange rate between RMB and foreign currencies.

(4) Contingent liabilities

For details of the contingent liabilities, please see note 32 of the fi nancial statements prepared under the IFRS.

• (5) Pledge of assets

The Company has not pledged any of its assets in the current reporting period.

(6) Taxation

In the current reporting period, the Company and all of its subsidiaries incorporated in the PRC (excluding Hong Kong) are subject to an income tax rate of 25%; Yancoal Australia is subject to a tax rate of 30% on its taxable profi ts and Yancoal International is subject to a tax rate of 16.5% on its taxable profi ts.

22 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

(III) Capital Expenditure Plan

The capital expenditure for the fi rst half of 2012 and the estimated capital expenditure for the second half of 2012 of the Group are set out in the following table:

		Second
		half of 2012	2012
	First half of 2012	(Estimated)	(Estimated)
	(RMB100 million)	(RMB100 million)	(RMB100 million)
The Company	2.533	15.059	17.592
Shanxi Neng Hua	0.016	0.469	0.485
Yulin Neng Hua	0.026	0.485	0.511
Heze Neng Hua	1.009	16.590	17.599
Hua Ju Energy	0.006	0.505	0.511
Ordos Neng Hua	2.536	32.551	35.087
Haosheng Company	—	2.019	2.019
Yancoal Australia	6.215	27.300	33.515
Yancoal International	4.179	1.240	5.419
Total	16.521	96.217	112.738

The Group is currently in possession of relatively suffi cient cash and fi nancial facilities, which are expected to be able to meet its operation and development expenditure needs.

(IV) Investments Made by the Group during the Reporting Period

1. Use of proceeds in investments

As considered and approved at the 2012 second extraordinary general meeting of the Company held on 23 April 2012, Yancoal International Resources Development Co., Ltd, a wholly owned subsidiary of the Company made an overseas issuance of US dollar-denominated bonds with an aggregate principal amount of USD1.0 billion and received net proceeds of USD991.24 million on 17 May 2012. As at the reporting date and in accordance with the provisions in the offering document, all net proceeds have been used for general corporate purpose.

As approved at the 2012 fi rst extraordinary general meeting of the Company held on 8 February 2012 and ratifi ed by CSRC (Zheng Jian Xuke [2012] No.592), the Company was approved to issue corporate bonds in the PRC, with an aggregate principal amount not exceeding RMB10 billion. The Company issued the fi rst trench of the corporate bonds amounting to RMB5 billion and received net proceeds of RMB4.95 billion on 25 July 2012. As at the reporting date and in accordance with the provisions in the offering document, all net proceeds have been used for replenishing the working capital of the Company. The issue of the remaining RMB5 billion corporate bonds will be completed within 24 months from the date of approval of the CSRC.

Save as disclosed above, there were no fund raising activities during the reporting period and no previously raised funds were used in the reporting period.

Yanzhou Coal Mining Company Limited Interim Report 2012 23

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

1. Investments of the Group with its own funds

Investments of the Group with its own funds during the reporting period are as follows:

			Interest in
	Major Operating		Investee		Income from the
Project Name	activity	Project Amount	Company	Progress of the Project	Project
			(%)
Acquisition of	Development of	Total consideration for the	74.82 note	Relevant equity interests	–
9.45% equity	Shilawusu coal mine	acquisition was RMB863.8		transfer procedures
interests in	f eld project in Inner	million. By the end of		completed on 22 May
Haosheng	Mongolia Autonomous	the reporting period,		2012.
Company	Region	RMB266.1 million has
		been paid.
Acquisition of the	Production and sales	Total consideration for the	–	The acquisition	During the
entire assets of	of coal	acquisition was RMB824.1		completed on 31 May	reporting period,
Beisu coal mine		million. All consideration		2012.	the accumulated
and Yangcun		has been paid in full during			raw coal
coal mine		the current reporting			production of
		period.			Beisu coal mine
					and Yangcun coal
					mine was 0.18
					million tonnes.

• Note: Haosheng Company reduced its registered capital during the reporting period. For details, please refer to paragraph headed “IV. Signifi cant Assets Acquisition and Sales, Reorganization” under Chapter 6 “Signifi cant Events” of this report.

(V) Outlook

1. Market outlook of the second half of 2012

Outlook for coal market

China macro-economic growth has slowed down, coupled with broadly sluggish demand and supply relationship of coal market. With the emerging impact of a series of policies and measures promoted by the government to sustain growth, it is expected that demand for coal is likely to increase. As China is self-suffi cient in coal production capacity, it is challenging to restrain the coal production volume in a short time. With the price difference between domestic and overseas coal narrowing, the growth in coal import has slowed down. The continuous concentration of the domestic coal industry and the central government’s promotion on consolidating coal resources to enhance the safety management level of coal mining, increasing the entry threshold to the coal mining business, providing guiding instruction to cut down production volume and implementing measures such as the total production volume control will be positive to the stabilization of the coal market. It is expected that the domestic coal price will withhold from falling and become stabilized in the near future.

24 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

The global economy continues to be sluggish, coupled with abundant supply relative to the demand in the international coal markets. Demand for coal in Asian region has increased. Affected by the European debt crisis and due to the change of consumption structure of traditional energy, coal demand in European markets has decreased. Major coal exporting countries such as Australia, Indonesia, Mongolia and Russia continue to increase coal production while the export of coal has signifi cantly increased in the United States due to the enhanced exploration and utilization of gas shale. With the combining infl uences caused by the changes in demand and supply, as well as the fl uctuation of the international crude oil price and freight fees, the international price of thermal coal has shown signs of stabilizing. It is expected that the international coal prices will continue to fl uctuate at the current low price range.

Outlook for the methanol market in China

Affected by the demand and supply situation, it is expected that the domestic methanol price will consolidate at its current bottom range in the second half of 2012. The gradual utilization of existing and newly constructed methanol production capacity, as well as the steady import volume of methanol from overseas will further increase the domestic supply of methanol. The demand for methanol will remain weak due to subdued utilization of excessive production capacity of downstream products such as formaldehyde, dimethylether and acetic acid. Several measures have been promoted by the government, including the accelerated elimination of outdated methanol production capacity, higher threshold for new methanol projects and promotion of methanol fuel for vehicles. These will help to stabilize the domestic methanol sector. However, with low international price of methanol, declining price of domestic coal, and reduced methanol cost, the price of domestic methanol is unlikely to rise. It is expected that the price of domestic methanol will not dramatically change from its current state.

2. Operating Strategies

For the second half of 2012, facing unfavorable conditions including the likely subdued global economy, slowing domestic economic growth and supply broadly exceeding demand in both international and domestic coal markets, the Company will continue to implement operating strategies through both external expansion and internal improvement, sustainably enhancing its profi tability and shareholders’ return. The Company will primarily focus on the implementation of following operating strategies:

Strengthening production and operation management of the Company and ensuring to deliver maximum economic benefi ts. Firstly, the Company will enhance its fundamental safety management and precautionary measures to ensure a sustainable and stable development environment. Secondly, the Company will continue to implement the production management strategy of “sustaining production within Shandong Province, increasing production outside Shandong Province, and expanding production overseas” to achieve a stable increase in total coal production volume. Thirdly, the Company will devote its energy on sales and marketing to achieve profi t maximization. The Company will fully leverage on the synergic advantages with presence in both international and domestic markets, accelerate its integration of the domestic and international sales and marketing system, and keep optimizing marketing strategy through advanced judgment of market conditions and adjustment of coal products and sales and marketing coverage based on changing demand situation. With improved sales and marketing function, the production level of the Company can be sustained. The Company will continue to enhance product

Yanzhou Coal Mining Company Limited Interim Report 2012 25

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

quality control, and establish brand reputation and expand its market through product quality. Fourthly, the Company will enhance its fi nancial management. By focusing on cost control, the Company will strive to reduce costs and material consumption and to identify cost synergies and improve effi ciency. The Company will also further enhance the management of its capital spending budget, establish an early warning system in relation to its cash management, ensure proper safeguard for its cash fl ow, and optimize the effi ciency of its development capital allocation.

The Company will enhance the capital management capability and deliver effi cient and substantial growth. Firstly, the Company will broaden its fi nancing sources by fully utilizing its listing status in four domestic and overseas capital markets to raise development funds at low costs. Secondly, supported by the four major domestic and overseas operating bases, the Company will adopt various capital management measures with prudence and caution, to identify new development opportunities. Thirdly, by strengthening the promotion and the capitalization of longwall top coal caving technique, the Company aims to achieve targeted production through the use of technology and intellectual properties and to realize increased overall production and economic effi ciency. Fourthly, through capital management, the Company aims to improve the standard of its resources allocations so that its capital, technology and personnel resources are devoted to high quality projects.

Project development and construction will be expedited to enhance the Company’s sustainable growth. With proper accountability, project investment, construction and operations management will be strengthened to eliminate and mitigate investment risks. We will speed up the application and approvals process for projects of Ordos Neng Hua Zhuan Longwan, Shilawusu and Ying Panhao coal fi eld and the 0.6 million tonnes methanol project. The construction of Wanfu coal mine of Heze Neng Hua and the comprehensive power plant project of Zhaolou will be expedited. The application and approvals for the second stage expansion of Moolarben coal mine of Yancoal Australia as well as the southeastern surface mine project of Ashton Coal Mine will be procured. Exploration of the Potash assets in Canada will be expedited.

The Company will strengthen the development of its management and control system, improve its operation standard, the corporate governance system and operational mechanism to continuously improve the internal control process and system, as well as the internal risk control and management system of domestic and overseas subsidiaries so as to improve the operating capability and profi tability. Upon completion of the merger of Yancoal Australia and Gloucester and its listing in Australia, the management system and business system will be consolidated to build a control system in compliance with the requirements of listing regulations in the four listing jurisdictions and the requirements stipulated by the State-owned Assets Supervision and Administration Commission. The Company will make efforts to avoid foreign operation risk by focusing on offshore account management. The Company will adopt scientifi c approach to assess international exchange rate trends, and utilize adequate hedging, foreign exchange future and optimized settlement method to mitigate foreign exchange risks. The Company will also strengthen its management of signifi cant risks by focusing on the risk prevention and control of investment, fi nancing, project constructing, operation of overseas assets and product trade in order to increase its risk prevention capability.

26 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

The Company will continuously perform its corporate social responsibilities, create a harmonious and stable development environment and conduct business in compliance with the laws and protect the interests of investors’ with honesty and integrity. By strengthening efforts in resource conservation and environmental protection and by enhanced efforts in the development of low-carbon economy, the Company aims to achieve clean production and improved resource utilization effi ciency. Investments in research and development have been increased to enhance our innovative capability. We care for our employees and their legitimate rights and interests will be safeguarded. Employees will also be provided with safe, healthy, and hygienic working conditions and living environments. We will actively participate in public welfare affairs and community development and promote harmonious development of the regional economy and society.

1. Major Risks faced by the Company, Impact and Measures

2. Risks arising from product price volatility

Affected by factors such as the slowdown of global economy growth, the centralized releases of new capacity, the slowdown of downstream demand growth, the product price of the Group is subject to relatively high risks of downward volatility.

Counter-measures: The Company will establish and optimize its market information analysis mechanism; fully and thoroughly implement the plan of increasing profi t by marketing, proactive analysis and study of the market; optimize the structure of products; fl exibly adjust marketing strategies; strengthen controls on coal quality and improve the service quality to ensure maximum benefi t.

1. Risks arising from increase of cost

As the mining conditions of the Group’s coal mines become more and more complicated, the unit cost of coal mining may increase gradually. Affected by the continuous increase of material prices and labor cost as well as the increasing policy expenditure such as expenditure on resources, environment and safety aspects, the Group is subject to the risk of year-on-year increase on costs.

Counter-measures: The Company will strictly strengthen cost control and reduce all factors leading to increasing expenditure; adhere to developing mining areas with great potentials in the light of various standards while optimizing indexes and upgrading targets; deeply carry out all kinds of activities such as promoting effectiveness in management and decreasing cost to increase profi ts; strictly control expenditures and improve the effi ciency of fund using.

1. Risks arising from safety management

Coal mining, coal chemical and power generation are the three business sectors of the Group. As all of them are of high hazardous nature and of complex uncertainties in production, the Group faces the high risk of production safety.

Yanzhou Coal Mining Company Limited Interim Report 2012 27

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

Counter-measures: The Company will adhere to the sound safety policies; deepen the prevention and pre-control of safety risks; strengthen basic management of safety; solidly carry out the special improvement of safety management; increase output for safety production; reinforce safety supervision and examination, safety culture development and safety techniques training to continuously improve the ability to manage and control safety issues across all business sectors.

1. Risks arising from exchange rate fl uctuation

Exchange fl uctuation risks that the Group faces are mainly about fl uctuation of RMB exchange rate, as well as the fl uctuation of US dollar and Australian dollar exchange rates. With the increasingly fl uctuation of international exchange rates, the impacts and risk concerning the exchange gains and losses may gradually increase.

Counter-measures: The Company will strengthen scientifi c and effective monitoring; build the early warning mechanism for exchange rate fl uctuation risk; make market-oriented research and utilize fi nancial instruments such as hedging, and other relevant means to manage such risk.

1. Risks arising from effi ciency and effectiveness of management and control

With business expansion across domestic and overseas markets as well as industry sectors, it has become increasingly challenging for the Group to make operating decisions, manage its operations and control risks. The effi ciency and effectiveness of management and control will directly affect our business operation quality and impact the Group’s business performance.

Counter-measures: In the principle of executing appropriate management and control, separating rights and liabilities, standardized as well as fl exible and effi cient operation, the Company will improve its overall management and control ability to meet the requirements of the internationalized operation of the Group. The Company will establish a scientifi c and effi cient management mode that is compliant with the real situation and resources distribution capabilities as well as the development level and development strategies of the Group.

28 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

II. ACCOUNTING POLICIES, CHANGES IN ACCOUNTING ESTIMATES OR/ AND AMENDMENTS OF SIGNIFICANT ACCOUNTING ERRORS

1. During the current reporting period, the Company made no changes in accounting policies and amendments of signifi cant accounting errors.

2. Changes in Accounting Estimates

Pursuant to the rules and regulations of “the Provision and Usage Measures of Production Safety Expenses of the Enterprises” (Caiqi [2012] No.16), jointly issued by the Ministry of Finance and the State Administration of Work Safety on 14 February 2012, since 1 February 2012, the coal mines of the Group both located in Shandong and Inner Mongolia Autonomous Region should increase the amount of provision for production safety expenses to RMB15 per ton ROM from RMB8 and RMB10 per ton ROM respectively as approved at the tenth meeting of the fi fth session of the Board of the Company held on 24 August 2012.

Calculated on the basis of CASs, it is estimated that this change in accounting estimates will increase the cost expense of the Group by approximately RMB270.6 million and reduce the total profi t and net profi t by RMB270.6 million and RMB203 million, respectively. This change in accounting estimation will not affect the profi ts of the Company calculated based on the International Financial Reporting Standards.

III. OTHERS

(Prepared in accordance with the relevant laws, regulations and listing rules in PRC)

1. During the current reporting period, there were no signifi cant changes in the composition of profi ts, principal businesses and their structures, and profi tability of principal businesses of the Group.

2. During the current reporting period, other operations had no signifi cant impact on the net profi t of the Group attributable to the Controlling Shareholder.

3. During the current reporting period, there was no joint-stock company from whose investment income exceeded 10% of the net profi t of the Group attributable to the Controlling Shareholder.

Yanzhou Coal Mining Company Limited Interim Report 2012 29

CHAPTER 4 CHANGES IN SHARE CAPITAL AND SHAREHOLDINGS

I. CHANGES IN SHARE CAPITAL

During the current reporting period, the total number of shares and the capital structure of the Company remained the same.

As at 30 June 2012, the share capital structure of the Company was as follows:

			Unit: share
		Shares	Percentage
			(%)
1.	Listed shares with restricted trading moratorium	2,600,021,800	52.8632
	Shares held by state-owned legal person	2,600,000,000	52.8627
	Natural person shareholding in A Shares	21,800	0.0005
2.	Shares without trading moratorium	2,318,378,200	47.1368
	A Shares	359,978,200	7.3190
	H Shares	1,958,400,000	39.8178
3.	Total share capital	4,918,400,000	100.0000

II. SHAREHOLDERS

(1) Total Number of the Shareholders as at the end of the reporting period

As of 30 June 2012, the Company had a total of 111,110 Shareholders, of which three were holders of A Shares subject to a trading moratorium, 110,902 were holders of A Shares without a trading moratorium and 205 were holders of H Shares.

30 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 4 CHANGES IN SHARE CAPITAL AND SHAREHOLDINGS – CONTINUED

(2) Top Ten Shareholders and Top Ten Shareholders Holding Tradable Shares not Subject to Trading Moratorium

Based on the Register of Members provided by the China Securities Depository and Clearing Corporation Limited Shanghai Branch and Hong Kong Registrars Limited as at 30 June 2012, the top ten Shareholders and the top ten holders holding tradable shares not subject to a trading moratorium were as follows:

Total number of Shareholders

Unit: share 111,110

Shareholdings of the Top Ten Shareholders

				Increase/	Number of
		Percentage		decrease	shares with	Number of
		holding of		during the	selling	pledged or
	Nature of	the total	Number of	current	restrictions	locked
Name of Shareholder	Shareholders	capital	shares held	reporting period	held	shares
		(%)		(shares)
Yankuang Group	State-owned legal person	52.86	2,600,000,000	0	2,600,000,000	0
Corporation Limited
HKSCC Nominees Limited	Overseas legal person	39.72	1,953,489,945	4,484,000	0	Unknown
Dongwu Industries	Others	0.12	6,074,647	0	0	0
Alternative Stock
Securities Investment Fund
Shanghai Stock 50	Others	0.11	5,635,132	–368,777	0	0
Transitional Open-end
Index Securities
Investment Fund
Fuguo Tianbo Innovation	Others	0.09	4,212,890	0	0	0
Theme Stock
Investment Fund
銀華中證等權重90指數	Others	0.08	4,129,512	3,080,233	0	0
分級證券投資基金
Yinhuazhongzheng Equal
Weight 90 Index
Classif ed Securities
Investment Fund
Yifangda 50 Index Securities	Others	0.07	3,224,454	–156,600	0	0
Investment Fund
Jiashi CSI 300 Index	Others	0.06	3,123,830	–115,473	0	0
Securities Investment Fund
華泰柏瑞滬深300交易型	Others	0.06	2,867,575	2,867,575	0	0
開放式指數證券投資基金
Huatai Borui CSI 300 Index
Transactional Open-end
Index Securities
Investment Fund
Xinhua Life Insurance	Unknown	0.05	2,397,603	400,000	0	0
Company Limited

Yanzhou Coal Mining Company Limited Interim Report 2012 31

CHAPTER 4 CHANGES IN SHARE CAPITAL AND SHAREHOLDINGS – CONTINUED

Top Ten Shareholders Holding Tradable Shares not subject to Trading Moratorium

Name of Shareholder	Number of tradable shares held	Class of shares held
HKSCC Nominees Limited	1,953,489,945	Overseas listed
		foreign shares
Dongwu Industries Alternative Stock Securities	6,074,647	A-Shares
Investment Fund
Shanghai Stock 50 Transitional Open-end	5,635,132	A-Shares
Index Securities Investment Fund
Fuguo Tianbo Innovation Theme Stock	4,212,890	A-Shares
Investment Fund
銀華中證等權重90指數分級證券	4,129,512	A-Shares
投資基金
Yinhuazhongzheng Equal
Weight 90 Index Classif ed Securities
Investment Fund
Yifangda 50 Index Securities Investment Fund	3,224,454	A-Shares
Jiashi CSI 300 Index Securities Investment Fund	3,123,830	A-Shares
華泰柏瑞滬深300交易型開放式指數證券	2,867,575	A-Shares
投資基金
Huatai Borui CSI 300 Index
Transactional Open-end Index Securities
Investment Fund
Xinhua Life Insurance Company Limited	2,397,603	A-Shares
Shandong International Trust Corporation	2,200,000	A-Shares
Connected relationship or concerted-party	There is no connected relationship or concert party
relationship among the above shareholders	relationship among the above shareholders.

As the clearing and settlement agent for the Company’s H Shares, HKSCC Nominees Limited holds the Company’s H Shares in the capacity of a nominee.

32 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 4 CHANGES IN SHARE CAPITAL AND SHAREHOLDINGS – CONTINUED

• (3) Shareholdings of Top Ten Shareholders Holding Tradable Shares subject to Trading Moratorium and the Undertakings

At 30 June, 2012, the table sets out the shareholdings of the top ten Shareholders holding tradable shares subject to trading moratorium and the undertakings:

Unit: shares

Name of Shareholders Number of shares subject to trading subject to trading Number of additional No moratorium moratorium held Date on which trading is permitted tradable shares Undertakings 1 Yankuang Group 2,600,000,000 – 0 Undertakings made by Yankuang Group in Yanzhou Coal’s share split have been performed, Yankuang Group may proceed with the transaction after fi ling its application and obtaining the relevant approval from the relevant authorities. 2 Wu Yuxiang 20,000 In accordance with the relevant laws, Directors, Supervisors and senior management staff can only transfer 3 Song Guo 1,800 up to 25% of the total number of shares held by them during each year of their employment. If the above persons sell any shares held by them within six months after purchasing, or make any purchase within six months after disposal, any gain from such transactions will be attributable to the Company.

(4) Substantial Shareholders’ interests and short positions in the shares and underlying shares of the Company

As far as the Directors are aware, save as disclosed below, as at 30 June 2012, other than the directors, supervisors or chief executive of the Company, there were no other persons which were substantial shareholders of the Company or had interest or short position in the Shares or underlying Shares of the Company, which should be disclosed pursuant to Sections 2 and 3 under Part XV of the Securities and Futures Ordinance (the “SFO”), or recorded in the register to be kept pursuant to Section 336 of the SFO, or notify the Company and the Hong Kong Stock Exchange in other way.

Yanzhou Coal Mining Company Limited Interim Report 2012 33

CHAPTER 4 CHANGES IN SHARE CAPITAL AND SHAREHOLDINGS – CONTINUED

				Percentage in the	Percentage
Name of		Number of		relevant class of	in total
substantial		shares held		share capital	share capital
shareholders	Class of shares	(shares) (note 1)	Capacity	of the Company	of the Company
Yankuang Group	A Shares (state-owned legal	2,600,000,000(L)	Benef cial owner	87.84%(L)	52.86%(L)
	person shares)
JP Morgan Chase & Co.	H Shares	214,222,220(L)	Benef cial owner, investment manager	10.94%(L)	4.36%(L)
		4,573,290(S)	and custodian corporation/approved	0.23%(S)	0.09%(S)
		114,008,541(P)	lending agent	5.82%(P)	2.32%(P)
		(note 2)
Templeton Asset	H Shares	272,453,000(L)	Investment manager	13.91%(L)	5.54%(L)
Management Ltd.
BlackRock, Inc.	H Shares	136,992,018(L)	Interest of controlled corporations	6.99%(L)	2.79%(L)
		8,395,916(S)		0.42%(S)	0.17%(S)
		(note 3)
BNP Paribas Investment	H Shares	117,641,207(L)	Investment manager	6.00%(L)	2.39%(L)
Partners SA

Notes:

1. The letter “L” denotes a long position. The letter “S” denotes a short position. The letter “P” denotes interests in a lending pool.

2. The long positions in 214,222,220 H Shares included 21,560,211 H Shares, which were held in the capacity as benefi cial owner, 78,653,468 H Shares were held in the capacity as investment manager and 114,008,541 H Shares were held in the capacity as interests of controlled custodian corporation/approved lending agent. Of the long positions, a total of 4,516,000 were held as derivative interests.

3. The aggregate interests of short positions in H Shares were held in the capacity of benefi cial owner. Among the aggregate interests of short position in H Shares, a total of 1,241,891 H Shares were held as derivative interests.

4. Among the aggregate interests of short position in H Shares, 38,111 H Shares were held as derivative interests.

5. Information disclosed hereby is based on the information available on the website of Hong Kong Stock Exchange at www.hkex.com.hk.

Pursuant to the PRC Securities Law, save as disclosed above, there were no other Shareholders recorded in the register of the Company as at 30 June 2012 had an interest of 5% or more of the Company’s issued Shares.

During the reporting period, the Company’s controlling Shareholder or its actual controller remain unchanged.

34 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 5 DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEES

I. CHANGES IN SHARES HELD BY DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT

As at 30 June 2012, the Directors, Supervisors and senior management together held 21,800 of the Company’s shares, representing 0.0005% of the total issued share capital of the Company.

As at 30 June 2012, save as disclosed below, none of the Directors, Supervisors and senior management had any interests or short positions in the shares, underlying shares or debentures of the Company or its associated corporations (as defi ned in Part XV of the SFO), nor had any of them been granted any rights to subscribe for any interest or short positions in the shares, underlying shares or debentures of the Company or any of its associated corporations (as defi ned in Part XV of the SFO) which (i) was required to be recorded in the register established and maintained in accordance with Section 352 of the SFO; or (ii) required to be notifi ed to the Company and the Hong Kong Stock Exchange in accordance with the Model Code for Securities Transactions by Directors of the Listed Issuers (the “Model Code”) (which shall be deemed to apply to the Supervisors to the same extent as it applies to the Directors).

					Number of
		Number of	Increase	Decrease	shares held
	shares hold at		during the	during the	at the end of
		the beginning	reporting	reporting	the reporting	Reasons for
Name	Title	of the period	period	period	period	the change
		(shares)	(shares)	(shares)	(shares)
Wu Yuxiang	Director, Chief	20,000	0	0	20,000	unchanged
	Financial Off cer
Song Guo	Chairman of Supervisory	1,800	0	0	1,800	unchanged
	Committee

All of the above disclosed interests represent long positions in the Company’s shares.

Save as disclosed above, none of the Directors, Supervisors or senior management of the Company held any Company’s shares, share options or granted restricted stocks. During the six months ended 30 June 2012, none of the Directors, Supervisors, senior management nor their respective spouses or children under the age of 18 were granted any rights by the Company to subscribe for any interests in the shares, underlying shares or debentures of the Company or its associated corporations.

Yanzhou Coal Mining Company Limited Interim Report 2012 35

CHAPTER 5 DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEES

II. APPOINTMENT OR RESIGNATION OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT DURING THE REPORTING PERIOD

There was no new appointment or resignation of Directors, Supervisors and senior management during the current reporting period.

1. Changes in Titles of Directors, Supervisors and Senior Management in the Subsidiaries of the Company

(Prepared under the regulatory rules of Hong Kong)

			New title in Yancoal Australia
Title in the Company	Name	Before change	After change	New employment
Chairman	Li Weimin	vice-chairman	Chairman
Vice-chairman	Wang Xin	Chairman	–
Director, board secretary and	Zhang Baocai	–	Director
deputy general manager
Deputy general manager	Lai Cunliang	Executive director	Vice-chairman and	Since 26 June 2012
			c h a i r m a n o f t h e
			executive committee
Chief engineer	Ni Xinghua	–	Director

III. EMPLOYEES

As at 30 June 2012, the Group had a total of 69,403 employees, of whom 5,678 were administrative personnel, 4,669 were technicians, 46,988 were involved in production and 12,068 were other supporting staff.

As at June 30 2012, the total wages and allowances of the staff of the Group for the reporting period amounted to RMB3.2431 billion.

36 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 6 SIGNIFICANT EVENTS

I. CORPORATE GOVERNANCE

(1) Corporate Governance Status

Since the listing of the Company, in accordance with PRC Company Law, PRC Securities Law, foreign and domestic laws and regulations in places where the Company’s shares are listed, the Group has set up a relatively regulated, stable and established corporate governance system and has abided by the corporate governance principles of transparency, accountability and protection of the rights and interests of all Shareholders. There is no signifi cant difference between the corporate governance system of the Company and the requirements in relevant documents issued by the CSRC.

The Company has closely monitored the securities market standards and rule of law, and has actively improved its corporate governance during the current reporting period as follows:

As approved at the seventh meeting of the fi fth session of the Board held on 5 March 2012, the Company amended the terms of references for the Audit Committee, the Remuneration Committee, and the Nomination Committee of the Board in accordance with the corporate governance requirements of the Hong Kong Listing Rules, so as to refi ne the responsibility of the committees of the Board. The revised terms of references of such committees of the Board can be found on the websites of the Shanghai Stock Exchange, the Hong Kong Stock Exchange and the Company.

As approved at the 2012 second extraordinary general meeting held on 23 April 2012, the Company amended the Articles and the Rules of Procedures for the Board of Yanzhou Coal Mining Company Limited, so as to refi ne the responsibility of the Board in relation to the corporate governance and relevant provisions of guarantees by the Company. For more details, please refer to the notice of 2012 second extraordinary general meeting of the Company dated 7 March 2012 and the announcement in relation to the resolutions passed at the 2012 second extraordinary general meeting of the Company dated 23 April 2012. Such disclosed information was posted on the Shanghai Stock Exchange’ website, Hong Kong Stock Exchange’ website, the Company’s website, and/or China Securities and Shanghai Securities News in China.

(2) Compliance with the Code on Corporate Governance Practices

(Prepared under the regulatory rules of Hong Kong)

The Group has set up a relatively regulated, stable and established corporate governance system and has abided by the corporate governance principles of transparency, accountability and protection of the rights and interests of all Shareholders.

The Board believes that good corporate governance is very important to the operation and development of the Group. The Board is dedicated to the improvement of our corporate governance standard and regularly reviews corporate governance practices to ensure that the Company’s operation is in compliance with the laws, regulations and regulatory requirements of the places where the shares of the Company are listed.

Yanzhou Coal Mining Company Limited Interim Report 2012 37

CHAPTER 6 SIGNIFICANT EVENTS

The corporate governance rules implemented by the Group include, among others, the following: the Articles, the Rules of Procedure for Shareholders’ Meetings, the Rules of Procedure for Board Meetings, the Rules of Procedure for Supervisory Committee Meetings, the System of Work of the Independent Directors, the Rules for Disclosure of Information, the Rules for the Approval and the Disclosure of Connected Transactions of the Company, the Rules for the Management of Relationships with Investors, the Code for Securities Transactions of the Management, the Standard of Conduct and Professional Ethics for Senior Employees, the Measures on the Establishment of Internal Control System and the Measures on Overall Risk Management. For the fi rst half of 2012 ended 30 June 2012 and as of the date of this Interim Report, the corporate governance rules and practices of the Group are in compliance with the principles and the code provisions set out in the Code on Corporate Governance Practices (for the period from 1 January 2012 to 31 March 2012) and Corporate Governance Code (for the period from 1 April 2012 to 30 June 2012) (the “Corporate Governance Code”) contained in Hong Kong Listing Rules. Some of the corporate governance practices adopted by the Group are more stringent than the Corporate Governance Code.

During the reporting period, there was no signifi cant difference between the Company’s compliance with the code provisions during the reporting period with that disclosed in the Company’s 2011 annual report.

(3) Compliance with the Model Code

(Prepared under the regulatory rules of Hong Kong)

Having made specifi c enquiries to all Directors and Supervisors of the Company, during the reporting period, the Directors and Supervisors have strictly complied with the Model Code for Securities Transactions by Directors of Listing Issuers (the “Model Code”) set out in Appendix 10 to the Hong Kong Listing Rules. The Company has adopted a code of conduct regarding securities transactions of the Directors and Supervisors on terms no less stringent than the required standard set out in the Model Code.

II. PROFIT DISTRIBUTION

(1) Implementation of cash dividend plan during the reporting period

The 2011 annual general meeting of the Company held on 22 June 2012 approved the Company’s dividend distribution plan, which allowed the Company to distribute 2011 cash dividends of RMB2.8035 billion (tax inclusive) to the Shareholders, i.e., RMB0.57 per share (tax inclusive).

The decision making process and the standards and percentage of cash dividend paid pursuant to the profi t distribution plan for 2011 is in compliance with the relevant provisions of the Articles. As at the date of this Interim Report, the 2011 cash dividends have been distributed to the Shareholders.

The cash dividend policy was specifi ed in the Articles as follows: The Company’s profi t distribution policy shall remain consistent and stable. Final dividends shall be paid once a year. The shareholders shall by way of an ordinary resolution authorize the board of directors to declare and pay fi nal dividends of the Company. The Company may distribute interim cash dividends upon obtaining approval from the board of directors and the shareholders at general meeting. Dividends of the Company to be distributed in the form of cash shall account for approximately 35% of the Company’s net profi t after statutory reserve for the corresponding accounting year.

38 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 6 SIGNIFICANT EVENTS

(2) Improvement of cash dividend policy

As approved at the tenth meeting of the fi fth session of the Board held on 24 August 2012, the Company proposed to amend the Articles and will submit the proposal for consideration and approval at a general meeting. According to the relevant requirements of CSRC and Shandong Securities Regulatory Bureau of CSRC, the Company shall improve the process and mechanism of decision making related to profi ts distribution, the independent Directors and the measures to be adopted for receiving opinions from minority Shareholders and protecting their legal interests in the Articles.

(3) Mid-term profi t distribution for 2012

The Company will not distribute any mid-term profi t, nor will the Company increase its capital from capital reserve.

III. LITIGATION AND ARBITRATION

The Company was not involved in any signifi cant litigation or arbitration during the reporting period.

IV. SIGNIFICANT ASSET ACQUISITIONS AND SALES, REORGANIZATION

1. Registered capital and equity interests in Inner Mongolia Haosheng Coal Mining Company Limited

At the general meeting held on 6 March 2012, the shareholders of Haosheng Company approved a reduction of the registered capital of the company. As a result, the amount of capital contribution from the Company and Ordos Jinchengtai Chemical Co., Ltd (“Jinchengtai Chemical”) decreased by RMB23.27 million and RMB22.35 million, respectively, and the registered capital of Haosheng Company decreased from RMB150 million to RMB104.38 million.

On 6 March 2012, the Company entered into the “Supplementary Agreement in relation to the Equity Transfer of Inner Mongolia Haosheng Coal Mining Company Limited” for an acquisition of 9.45% equity interests held by Jinchengtai Chemical in Haosheng Company. The above registered capital decrease and transfer procedures on equity interests of Haosheng Company were completed on 22 May 2012. The Company’s equity interest in Haosheng Company has increased to 74.82%.

2. The Merger of Yancoal Australia and Gloucester

Upon approval at the sixth meeting of the fi fth session of the Board and the seventh meeting of the fi fth session of the Board held on 22 December 2011 and 5 March 2012 respectively, the Company, Yancoal Australia and Gloucester entered into a Merger Proposal Deed and an amending deed to the Merger Proposal Deed, respectively.

Yanzhou Coal Mining Company Limited Interim Report 2012 39

CHAPTER 6 SIGNIFICANT EVENTS

The merger of Yancoal Australia and Gloucester became effective on 27 June 2012. The shares of Yancoal Australia, which were to replace those of Gloucester, have been listed on the Australian Securities Exchange since 28 June 2012. The Company held approximately 78% equity interest in Yancoal Australia. Gloucester became a wholly-owned subsidiary of Yancoal Australia.

Yancoal Australia has became the largest independent listed coal company in Australia with coal resources of 3.476 billion tonnes and recoverable reserves of 697 million tonnes based on JORC Code.

For details, please refer to the “Announcements of Yanzhou Coal Mining Company Limited in relation to Proposal Regarding the Merger of Yancoal Australia Limited and Gloucester Coal Ltd.” dated 22 December 2011 and the updating announcements in relation to the merger. The above announcements were also posted on the websites of the Shanghai Stock Exchange and the Hong Kong Stock Exchange, the Company’s website and/or PRC newspapers, China Securities Journal and Shanghai Securities News.

V. CONNECTED TRANSACTIONS

The Group’s connected transactions were mainly continuing connected transactions entered into with its Controlling Shareholder (together with its subsidiaries) for the provision of materials and services, as well as some other one-off asset purchase transactions.

(1) Continuing connected transactions

At the 2011 annual general meeting held on 22 June 2012, the fi ve continuing connected transaction agreements, namely, the “Provision of Material Agreement”, “Provision of Labor and Services Agreement”, “Provision of Pension Fund Management Service”, “Provision of Products, Materials and equipment lease Agreement” and “Provision of Electricity and Heat Energy Supply Agreement”, together with the annual caps for such transactions for the years of 2012 to 2014 had been approved. The main ways of determination of transaction price include state price, market price and actual cost price. Firstly state price is applied if it is available; secondly fair market price is applied if the state price is not available; lastly actual cost price is applied if neither state price nor fair market price is available. The charge for supplies can be settled in one lump sum or by installments. The continuing connected transactions made in a calendar month shall be settled in the following month, except for incomplete transactions or where the transaction amounts are in dispute.

As approved at the third meeting of the fi fth session of the Board on 19 August 2011, the Company and Yankuang Group Finance Company Limited entered into the “Financial Services Agreement”. The parties agreed on the terms of the continuing connected transactions including the deposits, borrowings, settlement and the proposed annual caps for the transactions for the years of 2011 to 2012. It has been agreed that the rates for the fees to be charged by Yankuang Group Finance for the fi nancial services to be provided to the Group shall equal to or more favorable than those charged by the major commercial banks in the PRC for the same kind of fi nancial services provided to the Group. Fund risk control measures were also established to safeguard the security of the fund from system’s perspective.

40 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 6 SIGNIFICANT EVENTS

1. Continuing connected transaction of the supply of materials and services

The sales of goods and rendering of services by the Group to its Controlling Shareholder amounted to RMB2.1005 billion in the fi rst half of 2012. The goods and services provided by the Controlling Shareholder to the Group amounted to RMB1.1146 billion.

The following table sets out the connected transactions of the supply of materials and services between the Group and the Controlling Shareholder in the fi rst half of 2012:

					Increase/
					decrease of
	the f rst	half of 2012	the f rst half of 2011		connected
		Percentage of		Percentage of
	Amount	Sales income	Amount	Sales income	transactions
	(RMB’000)	(%)	(RMB’000)	(%)	(%)
Sales of goods and rendering of
services by the Group to its
Controlling Shareholder	2,100,530	7.43	1,158,722	5.73	81.28
Sales of goods and rendering of
services by the Controlling
Shareholder to the Group	1,114,646	3.94	959,277	4.74	16.20

The table below shows the effect on profi ts from sales of coal by the Group to the Controlling Shareholder in the fi rst half of 2012:

	Sales income	Operation cost	Gross Prof ts
	(RMB’000)	(RMB’000)	(RMB’000)
Coal sold to the Controlling Shareholder	1,756,377	936,503	819,874

1. Continuing connected transaction of pension fund

According to the Pension Fund Management Agreement, as approved at the 2011 annual general meeting and the annual transaction caps for the years of 2012 to 2014, the Controlling Shareholder shall provide free management and submission services of endowment insurance fund, medical insurance fund, supplementary medical insurance fund, unemployment insurance fund and maturity insurance fund (the “Insurance Fund”). The amount of the Insurance Fund paid by the Group in the fi rst half of 2012 was RMB795.1 million.

Yanzhou Coal Mining Company Limited Interim Report 2012 41

CHAPTER 6 SIGNIFICANT EVENTS

The following table sets out in the details of the annual transaction caps for 2012 and actual transaction amounts in the fi rst half of 2012 for the above continuing transactions.

				Value of
			Annual	transaction for
	Type of connected		transaction cap	the f rst half
No	transaction	Agreement	for the year 2012	of 2012
			(RMB’000)	(RMB’000)
1	Material and facilities provided by Yankuang Group	Provision of Materials Agreement	2,467,930	364,463
2	Labor and services provided by Yankuang Group	Provision of Labor and Services Agreement	2,351,420	750,183
3	Pension fund management and payment services	Provision of Pension Fund Management	1,442,100	795,136
	provided by Yankuang Group for the Group’s staff	Service Agreement
4	Products, material and equipment lease provided to	Provision of Products, Material and equipment	4,163,900	1,985,203
	Yankuang Group	lease Agreement
5	Electricity and heat provided to Yankuang Group	Provision of Electricity and Heat Agreement	268,800	115,327
6	Financial services provided by Yankuang Group:	Financial Services Agreement
	– deposit balances		1,820,000	1,810,000
	– comprehensive credit facility service		1,600,000	0
	– f nancial services fees		28,540	1,410

(2) One-off Asset Purchase Transactions

Acquisition of the entire assets of Beisu Coal Mine and Yangcun Coal Mine

As approved at the ninth meeting of the fi fth session of the Board held on 23 April 2012, the Company entered into the Asset Transfer Agreement with Yankuang Group and Yankuang Group Beisu Coal Mine Co., Ltd. to acquire the whole assets of Beisu Coal Mine and Yangcun Coal Mine for a consideration of RMB824.1 million. The acquisition was completed on 31 May 2012.

For details, please refer to the “Announcement of Connected Transactions of Yanzhou Coal Mining Company Limited” dated on 23 April 2012. The announcement was also posted on the websites of the Shanghai Stock Exchange and the Hong Kong Stock Exchange, the Company’s website and/or PRC newspapers, China Securities Journal and Shanghai Securities news.

42 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 6 SIGNIFICANT EVENTS

(3) Debt and debt obligations due between the Group and the Controlling Shareholder are mainly due to the mutual provisions of materials and services.

Balance due from/to the Controlling Shareholder between the Group and the Controlling Shareholder in the fi rst half of 2012 are listed as follows:

	Payable to related parties	Payable to related parties	Receivable from related parties	Receivable from related parties
Related parties	Amount involved	Remaining	Amount involved	Remaining
	(RMB’000)	(RMB’000)	(RMB’000)	(RMB’000)
Yankuang Group	2,238,702	2,554,279	2,501,668	800,683

As at 30 June 2012, the Controlling Shareholder or its subsidiaries have not impropriated the Group’s funds for non-operational matters in any circumstances.

Other than the material connected transactions disclosed in this Chapter, the Group was not a party to any other material connected transactions during the current reporting period.

VI. MATERIAL CONTRACTS AND PERFORMANCE

• (1) During the current reporting period, the Company was not involved in any trust arrangement, contract or lease of other’s assets or other’s trust arrangement, contract or lease involving the Company’s assets, nor such transactions that occurred in the previous period but were extended to this period.

• (2) Guarantee contracts arising during the current reporting period or occurred in the previous period but were extended to the current period:

• Information on the outstanding guarantee contracts that occurred in the previous period but were extended to the current reporting period is as follows:

According to the fi nancing requirements for the acquisition of equity interest in Yancoal Resources in 2009, the Company provided guarantees to its wholly-owned subsidiary, Yancoal Australia, for the obtaining of USD2.9 billion and USD140 million overseas loans, which were counter-guaranteed by Yankuang Group.

A total of AUD189.5 million performance deposits and performance guarantees, which were necessary for operation of Yancoal Australia, had been extended to the reporting period.

Yanzhou Coal Mining Company Limited Interim Report 2012 43

CHAPTER 6 SIGNIFICANT EVENTS

1. Information on guarantees arising during the current reporting period are as follows:

As approved at the 2012 second extraordinary general meeting held on 23 April 2012, the Company provided guarantees to its wholly-owned subsidiary, Yancoal International Resources Development Co. Ltd. for issuing USD1.0 billion overseas corporate bonds.

During the current reporting period, there were AUD64.2147 million performance deposits and performance guarantees in total for necessary operation of Yancoal Australia.

Save as disclosed above, there were no other material guarantee contracts of the Company arising during the current reporting period or occurred in the previous period but were extended to the current period.

Save as disclosed in this chapter, the Company has not been a party to any material contracts during the current reporting period.

VII. INVESTOR RELATIONS

The Company has been constantly improving the Rules for the Management of Investors’ Relationship and has been carrying out investor relationship work through effective information collection, compilation, examination, disclosure and feedback control procedures. In the fi rst half of 2012, the Company has achieved the two-way communication with capital market through conducting international and domestic road-shows, attending investment strategy meetings organized by brokers at home and abroad, welcoming the investors for site investigation and making full use of consulting telephone, fax and e-mail. The Company had meetings with more than 600 analysts, fund managers and investors in total.

VIII. OTHER SIGNIFICANT EVENTS DISCLOSURES

(1) Internal Management Organization

As approved at the ninth meeting of the fi fth session of the Board held on 23 April 2012, the Company established the Jidong Property Service Center. As approved at the tenth meeting of the fi fth session of the Board held on 24 August 2012, the Company established the Environmental Protection and Energy Saving Department and Resource Development Department.

44 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 6 SIGNIFICANT EVENTS

(2) Other Events

(Prepared under the regulatory rules of Hong Kong)

Repurchase, sale or redemption of listed shares of the Company

The 2011 annual general meeting was convened by the Company on 22 June 2012, pursuant to which a general mandate was granted to the Board to issue additional H shares of the Company during the relevant authorized period. Depending on the needs and market conditions, upon obtaining approvals from the relevant PRC regulatory authorities and complying with the relevant laws, regulations and the Articles of the Company, the issuance amount shall not exceed 20% of the total outstanding number of H shares of the Company as at the date of passing the resolution.

The 2011 annual general meeting, the 2012 fi rst class meeting of the holders of A shares and the 2012 fi rst class meeting of the holders of H shares were convened by the Company on 22 June 2012, pursuant to which a general mandate was granted to the Board to repurchase H Shares of the Company not exceeding 10% of the aggregate nominal value of H Shares of the Company in issue as at the date of passing the resolution. Under the general mandate, the Board is authorized to repurchase H Shares of the Company during the relevant authorized period and to determine the relevant matters in relation to the repurchase of H Shares of the Company according to the needs and market conditions upon obtaining approvals from the relevant PRC regulatory authorities and complying with the relevant laws, regulations and the Articles of the Company.

As at the date of this interim report, the Company has not exercised the above mentioned general mandates.

Remuneration policy

The remuneration for the Directors, Supervisors and senior management is proposed to the Board by the Remuneration Committee of the Board. Upon review and approval by the Board, any remuneration proposal for the Directors and Supervisors will be proposed to the Shareholders’ general meeting for approval. The remuneration for senior management is reviewed and approved by the Board.

The Company adopts a combined annual remuneration and risk control system as the principal means for assessing and rewarding the Directors and senior management. The annual remuneration consists of basic salary and performance salary. The basic salary is determined according to the operational scale of the Company with reference to the market wages and the income of employees, whereas performance salary is determined by the actual operational achievement of the Company. The basic salary for the Directors and senior management of the Company are pre-paid on a monthly basis and the performance salary is paid after the performance assessment is carried out in the following year.

The remuneration policy for other employees of the Group is principally a position and performance remuneration system, which determines the remuneration of the employees on the basis of their positions and responsibilities and their quantifi ed assessment results. Performance payment is linked to the Company’s overall economic effi ciency and individual performance.

Yanzhou Coal Mining Company Limited Interim Report 2012 45

CHAPTER 6 SIGNIFICANT EVENTS

Auditors

During the reporting period, the Company engaged Shine Wing Certifi ed Public Accountants Ltd. in the PRC (excluding Hong Kong) and Grant Thornton (including Grant Thornton and Grant Thornton Hong Kong Limited) as its domestic and international auditors, respectively.

As approved at the 2011 annual general meeting of the Company held on 22 June 2012, Shine Wing Certifi ed Public Accountants (the “Shine Wing”) and Grant Thornton (including Grant Thornton and Grant Thornton Hong Kong Limited) were appointed as the Company’s domestic and international auditors, respectively, for the year ending 31 December 2012.

• IX. DURING THE REPORTING PERIOD, NEITHER THE COMPANY NOR ITS DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT, SHAREHOLDERS, ACTUAL CONTROLLING PERSONS HAVE BEEN INVESTIGATED BY THE RELEVANT AUTHORITIES, IMPOSED ANY COMPULSORY MEASURES BY JUDICIAL DEPARTMENTS, TRANSFERRED TO JUDICIAL ORGANISATION OR PROSECUTED FOR CRIMINAL LIABILITY, AUDITED BY THE CSRC, BANNED FROM ENTERING INTO THE SECURITIES MARKET, PUBLICLY CRITICIZED OR CONFIRMED AS NON-FIT AND PROPER PERSONS, OR PUBLICLY REPRIMANDED BY OTHER ADMINISTRATIVE DEPARTMENTS OR THE STOCK EXCHANGES.

46 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 6 SIGNIFICANT EVENTS

X. THE INDEX OF OTHER SIGNIFICANT DISCLOSED INFORMATION

Item	Date	Printed papers and areas
Announcement in Relation to the 2012	1 February 2012	A020 Page,China Securities Journal
Provincial Thermal Coal Sales Contract by		B19 Page,Shanghai Securities News
Yanzhou Coal Mining Company Limited
Materials on the 2012 First Extraordinary	2 February 2012	—
General Meeting of Yanzhou Coal Mining
Company Limited
Announcement in Relation to the	9 February 2012	B006 Page,China Securities Journal
Resolutions Passed at the 2012 First		B23 Page,Shanghai Securities News
Extraordinary General Meeting of
Yanzhou Coal Mining Company Limited
Legal Opinions of the 2012 First	9 February 2012	—
Extraordinary General Meeting of
Yanzhou Coal Mining Company Limited
Announcements of Yanzhou Coal Mining	6 March 2012	B012 Page,China Securities Journal
Company Limited in relation to Update		B46 Page,Shanghai Securities News
Regarding the Merger of Yancoal
Australia Limited and Gloucester Coal
Ltd.
Announcement in Relation to the	6 March 2012	B012 Page,China Securities Journal
Resolutions Passed at the Seventh		B46 Page,Shanghai Securities News
Meeting of the Fifth Session of the Board
of Yanzhou Coal Mining Company Limited
Yanzhou Coal Mining Company Limited	6 March 2012	—
Terms of Reference for the Nomination
Committee of the Board
Yanzhou Coal Mining Company Limited	6 March 2012	—
Terms of Reference for the Audit
Committee of the Board
Yanzhou Coal Mining Company Limited	6 March 2012	—
Terms of Reference for the Remuneration
Committee of the Board

47

Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 6 SIGNIFICANT EVENTS

Item	Date	Printed papers and areas
Notice of the 2012 Second Extraordinary	8 March 2012	B007 Page,China Securities Journal
General Meeting of Yanzhou Coal Mining		B29 Page,Shanghai Securities News
Company Limited
Announcements of Yanzhou Coal Mining	12 March 2012	A015 Page,China Securities Journal
Company Limited in relation to Update		14 Page,Shanghai Securities News
Regarding the Merger of Yancoal
Australia Limited and Gloucester Coal
Ltd.
Announcement in Relation to the	26 March 2012	B015 Page,China Securities Journal
Resolutions Passed at the Fourth Meeting		222 Page,Shanghai Securities News
of the Fifth Session of the Supervisory
Committee of Yanzhou Coal Mining
Company Limited
Announcement of Yanzhou Coal Mining	26 March 2012	B015 Page,China Securities Journal
Company in relation to Application for		222 Page,Shanghai Securities News
Issuing Corporate Bond approved by the
Insurance Examination Commission of
China Securities Regulatory Commission
Announcement in Relation to the	26 March 2012	B015 Page,China Securities Journal
Resolutions Passed at the Eighth Meeting		222 Page,Shanghai Securities News
of the Fifth Session of the Board of
Yanzhou Coal Mining Company Limited
Annual Report of Yanzhou Coal Mining	26 March 2012	—
Company Limited
Summary of the Annual Report of Yanzhou	26 March 2012	B015 Page,China Securities Journal
Coal Mining Company Limited		222 Page,Shanghai Securities News
Special Clarification for the Appropriation	26 March 2012	—
of Non-operational Funds and other
Fund Transfer of Yanzhou Coal Mining
Company in 2011
2011 Annual Social Responsibility Report of	26 March 2012	—
Yanzhou Coal Mining Company Limited
2011 Annual Report for H Shares of	26 March 2012	—
Yanzhou Coal Mining Company Limited

48 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 6 SIGNIFICANT EVENTS

Item	Date	Printed papers and areas
2011 Annual Report of the Internal Control	26 March 2012	—
Evaluation of Yanzhou Coal Mining
Company Limited
2011 Working Report of the Independent	26 March 2012	—
Directors of Yanzhou Coal Mining
Company Limited
Audit Report of the Internal Control of	26 March 2012	—
Yanzhou Coal Mining Company Limited
Announcement of Ordinary Connected	6 April 2012	A039 Page,China Securities Journal
Transactions of Yanzhou Coal Mining		B4 Page,Shanghai Securities News
Company Limited
Materials on the 2012 Second Extraordinary	17 April 2012	—
General Meeting of Yanzhou Coal Mining
Company Limited
Announcement of Connected Transactions	24 April 2012	B108 Page,China Securities Journal
of Yanzhou Coal Mining Company Limited		B195 Page,Shanghai Securities News
Announcement in relation to Providing	24 April 2012	B108 Page,China Securities Journal
Guarantee to Subsidiaries by Yanzhou		B195 Page,Shanghai Securities News
Coal Mining Company
Legal Opinions of the 2012 Second	24 April 2012	—
Extraordinary General Meeting of
Yanzhou Coal Mining Company Limited
Announcement in Relation to the	24 April 2012	B108 Page,China Securities Journal
Resolutions Passed at the 2012 Second		B195 Page,Shanghai Securities News
Extraordinary General Meeting of
Yanzhou Coal Mining Company Limited
First Quarterly Report for the Year 2012 of	24 April 2012	B108 Page,China Securities Journal
Yanzhou Coal Mining Company Limited		B195 Page,Shanghai Securities News
Announcement on Resolutions Passed at	24 April 2012	B108 Page,China Securities Journal
the Fifth Meeting of the Fifth Session of		B195 Page,Shanghai Securities News
the Supervisory Committee of Yanzhou
Coal Mining Company Limited

Yanzhou Coal Mining Company Limited Interim Report 2012 49

CHAPTER 6 SIGNIFICANT EVENTS

Item	Date	Printed papers and areas
Announcement on Resolutions Passed at	24 April 2012	B108 Page,China Securities Journal
the Ninth Meeting of the Fifth Session		B195 Page,Shanghai Securities News
of the Board of Yanzhou Coal Mining
Company Limited
Announcement of H Shares of Yanzhou	2 May 2012	—
Coal Mining Company Limited
Notice of the 2012 First Class Meeting of	8 May 2012	B020 Page,China Securities Journal
the Holders of A Shares and the 2012		B20 Page,Shanghai Securities News
First Class Meeting of the Holders of H
Shares of Yanzhou Coal Mining Company
Limited
Notice of the 2011 Annual General Meeting	8 May 2012	B020 Page,China Securities Journal
of Yanzhou Coal Mining Company Limited		B20 Page,Shanghai Securities News
Circular letter for H Shares of Yanzhou Coal	8 May 2012	—
Mining Company Limited
Announcement of Yanzhou Coal Mining	8 May 2012	B020 Page,China Securities Journal
Company in relation to Application for		B20 Page,Shanghai Securities News
Issuing Corporate Bond approved by the
China Securities Regulatory Commission
Announcement of H Shares of Yanzhou	11 May 2012	—
Coal Mining Company Limited
Announcement of H Shares of Yanzhou	12 May 2012	—
Coal Mining Company Limited
Announcement of H Shares of Yanzhou	17 May 2012	—
Coal Mining Company Limited
Announcement of H Shares of Yanzhou	25 May 2012	—
Coal Mining Company Limited
Announcements of Yanzhou Coal Mining	14 June 2012	B010 Page,China Securities Journal
Company Limited in relation to Update		B32 Page,Shanghai Securities News
Regarding the Merger of Yancoal
Australia Limited and Gloucester Coal
Ltd.
Materials on the 2011 Annual General	16 June 2012	—
Meeting of Yanzhou Coal Mining
Company Limited

50 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 6 SIGNIFICANT EVENTS

Item	Date	Printed papers and areas
Materials on the 2012 First Class Meeting of	16 June 2012	—
the Holders of A Shares and H Shares of
Yanzhou Coal Mining Company Limited
Announcement in Relation to the	26 June 2012	B010 Page,China Securities Journal
Resolutions Passed at the 2012 First		B18 Page,Shanghai Securities News
Class Meeting of the Holders of A Shares
and the 2012 First Class Meeting of the
Holders of H Shares of Yanzhou Coal
Mining Company Limited
Announcement on Resolutions Passed	26 June 2012	B010 Page,China Securities Journal
at the 2011 Annual General Meeting of		B18 Page,Shanghai Securities News
Yanzhou Coal Mining Company Limited
Announcement to Creditors of the Company	26 June 2012	B010 Page,China Securities Journal
in Relation to General Mandate to the		B18 Page,Shanghai Securities News
Board to Repurchase H Shares of the
Company
Legal Opinions of the 2012 First Class	26 June 2012	—
Meeting of the Holders of A Shares
and the 2012 First Class Meeting of the
Holders of H Shares of Yanzhou Coal
Mining Company Limited
Legal Opinions of 2011 General Meeting of	26 June 2012	—
Yanzhou Coal Mining Company Limited
Second Announcement to Creditors of the	30 June 2012	B022 Page,China Securities Journal
Company in Relation to General Mandate		42 Page,Shanghai Securities News
to the Board to Repurchase H Shares of
the Company
Third Announcement to Creditors of the	3 July 2012	B011 Pages,China Securities Journal
Company in Relation to General Mandate		B25 Pages,Shanghai Securities News
to the Board to Repurchase H Shares of
the Company
Announcement of Distribution of the 2011	6 July 2012	A030 Page,China Securities Journal
Final Dividend for A Shares of Yanzhou		B21 Page,Shanghai Securities News
Coal Mining Company Limited
Announcement of Issuance of 2012	19 July 2012	A026, A027 Page,China Securities Journal
Corporate Bonds by Yanzhou Coal		A20 Page,Shanghai Securities News
Mining Company Limited (First Issue)

51

Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 6 SIGNIFICANT EVENTS

Item	Date	Printed papers and areas
Prospectus of Public Issuance of Corporate	19 July 2012	—
Bonds by Yanzhou Coal Mining Company
Limited (First Issue)
Summary of the Prospectus of Public	19 July 2012	A026 Page,China Securities Journal
Issuance of Corporate Bonds by Yanzhou		A20, A21 Page,Shanghai Securities News
Coal Mining Company Limited (First Issue)
Publication of the Second Quarterly Report	20 July 2012	A029 Page,China Securities Journal
of an Overseas Subsidiary Controlled by		A142 Page,Shanghai Securities News
Yanzhou Coal Mining Company Limited
Announcement of Interest Rate of 2012	23 July 2012	A016 Page,China Securities Journal
Corporate Bonds by Yanzhou Coal		9 Page,Shanghai Securities News
Mining Company Limited (First Issue)
Announcement regarding the Issuance	26 July 2012	A030 Page,China Securities Journal
Results of 2012 Corporate Bonds by		A13 Page,Shanghai Securities News
Yanzhou Coal Mining Company Limited
(First Issue)

Note: The information disclosed in the table is in accordance with the regulatory rules of PRC (excluding Hong Kong) and has been posted on Shanghai Stock Exchange’s website (http://www.sse.com.cn), Hong Kong Stock Exchange’s website (http://www. hkexnews.hk) and the Company’s website (http://www.yanzhoucoal.com.cn).

52 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS

I. THE INTERIM FINANCIAL STATEMENT AND THE NOTES UNDER THE IFRS

CONDENSED CONSOLIDATED INCOME STATEMENT

FOR THE SIX MONTHS ENDED 30 JUNE 2012

Notes	Six months ended 30 June 2012 2011 RMB’000 RMB’000 (unaudited) (unaudited)
Gross sales of coal 5 Railway transportation service income Gross sales of electricity power Gross sales of methanol Gross sales of heat supply Total revenue Transportation costs of coal 5 Cost of sales and service provided 6 Cost of electricity power Cost of methanol Cost of heat supply Gross prof t Selling, general and administrative expenses Share of income of associates Other income 7 Interest expenses 8 Prof t before income taxes 9 Income taxes 10 Prof t for the period Attributable to: Equity holders of the Company Non-controlling interests Earnings per share, basic 12 Earnings per ADS, basic 12	27,291,104 19,326,668 226,551 242,877 164,842 161,727 568,397 477,334 35,491 15,406
	28,286,385 20,224,012 (608,277) (623,718) (19,416,607) (9,953,247) (161,164) (161,536) (467,508) (439,289) (21,338) (8,374)
	7,611,491 9,037,848 (3,552,979) (2,899,599) 66,617 14,137 2,032,550 1,509,646 (775,394) (426,106)
	5,382,285 7,235,926 (99,821) (2,040,953)
	5,282,464 5,194,973
	5,255,811 5,183,335 26,653 11,638
	5,282,464 5,194,973
	RMB1.07 RMB1.05
	RMB10.69 RMB10.54

Yanzhou Coal Mining Company Limited Interim Report 2012 53

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 30 JUNE 2012

	Six months ended 30 June 2012 2011 RMB’000 RMB’000 (unaudited) (unaudited)
Prof t for the period Other comprehensive income (after income tax): Available-for-sale investments: Change in fair value Deferred taxes Cash f ow hedges: Cash f ow hedge reserve recognized in other comprehensive income Reclassif cation adjustments for amounts transferred to income statement (Included in selling, general and administrative expenses) Deferred taxes Exchange difference arising on translation of foreign operations Other comprehensive (loss) income for the period Total comprehensive income for the period Attributable to: Equity holders of the Company Non-controlling interests	5,282,464 5,194,973 253 4,594 2 (1,148)
	255 3,446 23,079 138,404 (3,076) 3,725 (6,219) (43,522)
	13,784 98,607 (447,996) 129,947
	(433,957) 232,000
	4,848,507 5,426,973
	4,821,854 5,415,335 26,653 11,638
	4,848,507 5,426,973

54 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONDENSED CONSOLIDATED BALANCE SHEET

AT 30 JUNE 2012

Notes	At 30 June At 31 December 2012 2011 RMB’000 RMB’000 (unaudited) (audited)
ASSETS CURRENT ASSETS Bank balances and cash Term deposits Restricted cash 13 Bills and accounts receivable 14 Inventories Prepayments and other receivables 15 Prepaid lease payments Prepayment for resources compensation fees Amounts due from Parent Company and its subsidiaries companies Derivative f nancial instruments Tax recoverable Overburden in advance TOTAL CURRENT ASSETS NON-CURRENT ASSETS Intangible assets 17 Prepaid lease payments Prepayment for resources compensation fees Property, plant and equipment 18 Goodwill Investments in securities 19 Interests in associates Interests in jointly controlled entities Restricted cash 13 Long term receivables Deposits made on investments Deferred tax assets 22 TOTAL NON-CURRENT ASSETS TOTAL ASSETS	18,574,296 8,145,297 3,318,715 9,543,214 413,642 21,076 3,325,757 7,312,074 1,826,028 1,391,247 4,799,265 3,624,879 18,472 18,975 – 3,356 318,883 – 137,423 104,910 3,000 4,637 410,376 261,441
	33,145,857 30,431,106 34,981,527 26,205,619 704,991 713,425 – 5,309 37,295,900 31,273,824 2,351,749 1,866,037 321,090 372,800 2,143,816 1,683,897 19,265 19,453 – 387,066 1,411,789 300,083 2,313,331 2,557,807 4,552,769 1,335,165
	86,096,227 66,720,485
	119,242,084 97,151,591

Yanzhou Coal Mining Company Limited Interim Report 2012 55

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONDENSED CONSOLIDATED BALANCE SHEET — CONTINUED

AT 30 JUNE 2012

Notes	At 30 June At 31 December 2012 2011 RMB’000 RMB’000 (unaudited) (audited)
LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Bills and accounts payable 20 Other payables and accrued expenses Provision for land subsidence, restoration, rehabilitation and environmental costs 16 Amounts due to Parent Company and its subsidiary companies Borrowings-due within one year 21 Current portion of long term payable-due within one year Derivative f nancial instruments Tax payable TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Borrowings-due after one year 21 Deferred tax liability 22 Provision for land subsidence, restoration, rehabilitation and environmental costs 16 Contingent value rights shares liabilities 27 Non-current portion of long term payable-due after one year TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES Capital and reserves 23 Share capital Reserves Equity attributable to equity holders of the Company Non-controlling interests TOTAL EQUITY TOTAL LIABILITIES AND EQUITY	6,484,771 2,240,844 10,899,375 7,344,815 3,301,940 2,856,229 – 352,625 14,367,241 19,588,496 3,174 3,205 236,323 222,089 1,314,300 2,113,168
	36,607,124 34,721,471 24,208,512 14,869,324 8,064,162 3,895,304 505,880 325,414 1,312,913 – 1,035,647 15,028
	35,127,114 19,105,070
	71,734,238 53,826,541
	4,918,400 4,918,400 39,303,485 37,716,090
	44,221,885 42,634,490 3,285,961 690,560
	47,507,846 43,325,050
	119,242,084 97,151,591

56 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2012

				Statutory					Attributable to
			Future	common		Investment	Cash f ow		equity holders	Non-
	Share	Share	development	reserve	Translation	revaluation	hedge	Retained	of the	controlling
	capital	premium	fund	fund	reserve	reserve	reserve	earnings	Company	interests	Total
	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000
	(note 23)		(note 23)	(note 23)
Balance at 1 January 2011	4,918,400	2,981,002	3,660,624	3,870,420	192,478	87,523	30,488	21,590,951	37,331,886	106,565	37,438,451
Prof t for the period (unaudited)	–	–	–	–	–	–	–	5,183,335	5,183,335	11,638	5,194,973
Other comprehensive income (unaudited):
– Fair value change of
available-for-sale investments	–	–	–	–	–	3,446	–	–	3,446	–	3,446
– Cash f ow hedge reserve
recognized	–	–	–	–	–	–	98,607	–	98,607	–	98,607
– Exchange difference arising on
translation of foreign operations	–	–	–	–	129,947	–	–	–	129,947	–	129,947
Total comprehensive income
for the period (unaudited)	–	–	–	–	129,947	3,446	98,607	5,183,335	5,415,335	11,638	5,426,973
Transactions with owners (unaudited)
– Appropriations to reserves	–	–	294,870	–	–	–	–	(294,870)	–	–	–
– Dividends	–	–	–	–	–	–	–	(2,901,856)	(2,901,856)	(440)	(2,902,296)
Total transactions with owners
(unaudited)	–	–	294,870	–	–	–	–	(3,196,726)	(2,901,856)	(440)	(2,902,296)
Balance at 30 June 2011	4,918,400	2,981,002	3,955,494	3,870,420	322,425	90,969	129,095	23,577,560	39,845,365	117,763	39,963,128

Yanzhou Coal Mining Company Limited Interim Report 2012 57

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY — CONTINUED

FOR THE SIX MONTHS ENDED 30 JUNE 2012

Statutory Attributable to Future common Investment Cash f ow equity holders Non- Share Share development reserve Translation revaluation hedge Retained of the controlling capital premium fund fund reserve reserve reserve earnings Company interests Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (note 23) (note 23) (note 23)

Balance at 1 January 2012 Prof t for the period (unaudited) Other comprehensive income (unaudited): – Fair value change of available-for-sale investments – Cash f ow hedge reserve recognized – Exchange difference arising on translation of foreign operations Total comprehensive income for the period (unaudited) Transactions with owners (unaudited) – Appropriations to reserves – Dividends – Disposal of equity interest in Yancoal Australia Total transactions with owners (unaudited) Balance at 30 June 2012

4,918,400 2,981,002 4,150,785 4,551,760 (376,832) 71,950 (108,271) 26,445,696 42,634,490 690,560 43,325,050 – – – – – – – 5,255,811 5,255,811 26,653 5,282,464 – – – – – 255 – – 255 – 255 – – – – – – 13,784 – 13,784 – 13,784 – – – – (447,996) – – – (447,996) – (447,996) – – – – (447,996) 255 13,784 5,255,811 4,821,854 26,653 4,848,507 – – 477,426 – – – – (477,426) – – – – – – – – – – (2,803,488) (2,803,488) (352) (2,803,840) – – – – – – – (430,971) (430,971) 2,569,100 2,138,129 – – 477,426 – – – – (3,711,885) (3,234,459) 2,568,748 (665,711) 4,918,400 2,981,002 4,628,211 4,551,760 (824,828) 72,205 (94,487) 27,989,622 44,221,885 3,285,961 47,507,846

58 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 30 JUNE 2012

Notes	Six months ended 30 June 2012 2011 RMB’000 RMB’000 (unaudited) (unaudited)
NET CASH FROM OPERATING ACTIVITIES NET CASH FROM (USED IN) INVESTING ACTIVITIES Purchase of property, plant and equipment Purchase of intangible assets Purchase of land use rights Decrease (increase) in term deposits Increase in long term receivables Acquisition of An Yuan Coal Mine 24 Acquisition of Yangcun Coal Mine and Beisu Coal Mine 26 Acquisition of Gloucester 27 Establishment of an associate Increase in investment in interest in an associate Acquisition of additional interests in joint venture Decrease in restricted cash Decrease (increase) in deposits made on investments Proceeds on disposal of property, plant and equipment NET CASH FROM FINANCING ACTIVITIES Dividend paid Proceeds from bank loans Proceeds from issuance of guaranteed notes Repayments of bank borrowings Dividend paid to non-controlling interests of subsidiaries Net increase in cash and cash equivalents CASH AND CASH EQUIVALENTS, AT 1 JANUARY Effect of foreign exchange rate changes CASH AND CASH EQUIVALENTS, AT 30 JUNE REPRESENTED BY BANK BALANCES AND CASH	6,692,481 13,136,797
	(1,426,027) (4,709,415) (397,871) (33,948) – (876) 6,224,499 (7,566,224) (1,114,604) – – (355,000) (816,011) – 280,092 – – (540,000) (405,000) – – (1,527,708) 3,831 1,366,964 244,476 (394,128) 28,611 12,086
	2,621,996 (13,748,249)
	– (1,367,856) 6,313,000 11,182,894 6,312,900 – (11,503,000) (3,821,979) (352) (2,408)
	1,122,548 5,990,651
	10,437,025 5,379,199
	8,145,297 6,771,314 (8,026) 43,700
	18,574,296 12,194,213

Yanzhou Coal Mining Company Limited Interim Report 2012 59

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2012

1. GENERAL

Organization and principal activities

The Group represents Yanzhou Coal Mining Company Limited (the “Company”) and its consolidated subsidiaries.

The Company is established as a joint stock company with limited liability in the People’s Republic of China (the “PRC”) and operates six coal mines, namely the Xinglongzhuang coal mine, Baodian coal mine, Nantun coal mine, Dongtan coal mine, Jining II coal mine (“Jining II”) and Jining III coal mine (“Jining III”) as well as a regional railway network that links these mines with the national railway grid. These six coal mines and the railway were originally divisions of the Company’s ultimate holding company, Yankuang Group Corporation Limited (the “Parent Company”), a state-owned enterprise in the PRC. The Parent Company contributed the assets and liabilities of the Xinglongzhuang coal mine, Baodian coal mine, Nantun coal mine and Dongtan coal mine into the Company upon its formation.

The Company acquired from the Parent Company Jining II, Jining III and the assets of the special purpose coal railway transportation business (“Railway Assets”) in 1998, 2001 and 2002, respectively. During the period, the Company acquired Beisu Coal Mine and Yangcun Coal Mine from the Parent Company with a consideration of RMB824,142,000.

In April 2001, the status of the Company was changed to that of a sino-foreign joint stock limited company.

The Company’s A shares are listed on the Shanghai Securities Exchange (“SSE”), its H shares are listed on The Stock Exchange of Hong Kong Limited (the “SEHK”), and its American Depositary Shares (“ADS”, one ADS represents 10 H shares) are listed on the New York Stock Exchange, Inc.

The Company holds a 52.38% interest in the registered capital of Qingdao Free Trade Zone Zhongyan Trade Co., Ltd. (“Zhongyan”), a limited liability company established and operated in the PRC. Zhongyan is engaged in the trading and processing of mining machinery.

The Company holds a 92% interest in the registered capital of Shandong Yanmei Shipping Co., Ltd. (“Yanmei Shipping”), a limited liability company established and operated in the PRC which is principally engaged in the transportation business via rivers and lakes and sale of coal and construction materials.

In 2004, the Company established Yanzhou Coal Yulin Neng Hua Co., Ltd. (“Yulin”), a 97% owned subsidiary, for the future development of the methanol projects of the Group in the Shaanxi Province in the PRC. In 2008, the Company acquired the remaining 3% equity in Yulin, and then the Company made further investment of RMB600,000,000 in Yulin in the same year.

In 2004, the Company acquired the entire interest in the Southland coal mine located in New South Wales, Australia (“Southland”) from independent third parties in 2004 for aggregate cash consideration of AUD29,377,000 (equivalent to RMB187,312,000 then). The Company has also established two wholly-owned subsidiaries in Australia, namely Yancoal Australia Pty Limited (“Yancoal Australia”) and Austar Coal Mine Pty Limited (“Austar”), in 2004 for the Group’s future operations in Southland.

60 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

1. GENERAL – CONTINUED

Organization and principal activities – continued

In 2004, the Company acquired a 95.67% equity interest in Yanmei Heze Company Limited (“Heze”) from the Parent Company at cash consideration of RMB584,008,000. The principal activities of Heze are to conduct the initial preparation of the coal mines at the Juye coalfi eld which includes obtaining the approvals for the coal mine projects, applying rights to explore for coal and preparing the construction work of the coal mines. The equity interests held by the Company increased to 96.67% after the increase of the registered capital of Heze in 2007. The equity interests held by the Company increased to 98.33% after the increase of the registered capital of RMB 1.5 billion in 2010.

In 2006, the Company acquired a 98% equity interest in Yankuang Shanxi Neng Hua Company Limited (“Shanxi Neng Hua”) and its subsidiaries (collectively referred as the “Shanxi Group”) from the Parent Company at cash consideration of RMB733,346,000. The principal activities of Shanxi Group are to invest in heat and electricity, manufacture and sale of mining machinery and engine products, coal mining and the development of integrated coal technology.

Shanxi Neng Hua is an investment holding company, which holds 81.31% equity interest in Shanxi Heshun Tianchi Energy Company Limited (“Shanxi Tianchi”) and approximately 99.85% equity interest in Shanxi Tianhao Chemical Company Limited (“Shanxi Tianhao”). Shanxi Neng Hua acquired approximate 0.04% equity interest of Shanxi Tianhao at cash consideration of RMB14,000. The principal activities of Shanxi Tianchi are to exploit and sale of coal from Tianchi Coal Mine, the principal asset of Shanxi Tianchi. Shanxi Tianchi has completed the construction of Tianchi Coal Mine and commenced production by the end of 2006. Shanxi Tianhao is established to engage in the production of methanol and other chemical products, coke production, exploration and sales. The construction of the methanol facilities by Shanxi Tianhao commenced in March 2006 and commenced production in 2008. In 2007, the Company further acquired the remaining 2% equity interest in Shanxi Neng Hua at cash consideration of RMB14,965,000.

In 2009, the Company acquired 74% equity interest in Shandong Hua Ju Energy Company Limited (“Hua Ju Energy”) with a consideration of RMB593,243,000. Hua Ju Energy is a joint stock limited company established in the PRC, the principal business is the supply of electricity and heat by utilizing coal gangue and coal slurry produced from coal mining process. In July 2009, the Company entered into acquisition agreements with three shareholders of Hua Ju Energy, pursuant to which, the Company agrees to acquire 21.14% equity interest in Hua Ju Energy with the consideration of RMB173,007,000.

In 2009, the Company entered into a binding scheme implementation agreement with Felix Resource Limited (“Felix”), a corporation incorporated in Australia with shares listed on the Australian Securities Exchange (the “ASX”), to acquire all the shares of Felix in cash of approximately AUD3,333 million. The principle activities of Felix are exploring and extracting coal resources, operating, identifying, acquiring and developing resource related projects that primarily focus on coal in Australia. The acquisition was completed in 2009. In 2011, Felix Resources Limited was renamed as Yancoal Resources Limited (“Yancoal Resources”).

In 2009, the Company invested RMB500 million to set up a wholly owned subsidiary located in Inner Mongolia, Yanzhou Coal Ordos Company Limited (“Ordos”). Ordos is a limited liability company incorporated in the PRC with the objectives of production and sale of methanol and other chemical products. The Company invested additional equity in the registered capital of Ordos by RMB2.6 billion. In 2011, the Company also acquired Yiginhuoluo Qi Nalin Tao Hai Town An Yuan Coal Mine (“An Yuan Coal Mine”) at a consideration of RMB1,435,000,000.

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CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

1. GENERAL – CONTINUED

Organization and principal activities – continued

In 2010, the Company acquired 100% equity interest of Inner Mongolia Yize Mining Investment Co., Ltd (“Yize”) and other two companies with consideration of RMB190,095,000. The main purpose of this acquisition is to facilitate the business of methanol and other chemical products in Inner Mongolia Autonomous Region.

In 2011, Ordos acquired 80% equity interest of Inner Mongolia Xintai Coal Mining Company Limited (“Xintai”) at a consideration of RMB2,801,557,000 from an independent third party. Xintai owns and operates Wenyu Coal Mine in Inner Mongolia. The principal activities of Xintai are coal production and coal sales.

In 2011, the Company acquired 100% equity interests in Syntech Holdings Pty Ltd and Syntech Holdings II Pty Ltd (collectively “Syntech”) at a cash consideration of AUD208,480,000. The principal activities of Syntech include exploration, production, sorting and processing of coal. The acquisition was completed on 1 August 2011.

The Company entered into a sales and purchases agreement on 27 September 2011 to acquire 100% equity interests in both Wesfarmers Premier Coal Limited (“Premier Coal”) and Wesfarmers Char Pty Ltd (“Wesfarmers Char”) at a consideration of AUD313,533,000. The acquisition was completed on 30 December 2011. Premier Coal is mainly engaged in the exploration, production and processing of coal. Wesfarmers Char is mainly engaged in the research and development of the technology and procedures in relation to processing coal char from low rank coals.

In 2011, the Company invested USD2.8 million to set up a wholly owned subsidiary, Yancoal International (Holding) Co., Limited (“Yancoal International”). Yancoal International was established in Hong Kong to act as a platform for overseas assets and business management. Subsidiaries of Yancoal International are, namely Yancoal International Trading Co., Limited, Yancoal International Technology Development Co., Limited, Yancoal International Resources Development Co., Limited and Yancoal Luxembourg Energy Holding Co., Limited (“Yancoal Luxembourg”). Yancoal Luxembourg established a wholly owned subsidiary, Yancoal Canada Resources Co., Ltd (“Yancoal Canada”) with USD290 million as investment. The Company acquired, at a total consideration of USD260 million, 19 potash mineral exploration permits in the Province of Saskatchewan, Canada through Yancoal Canada. The permit transfer registrations were completed on 30 September 2011.

On 22 December 2011 and 5 March 2012, the Company, Yancoal Australia and Gloucester Coal Limited (“Gloucester”), a corporation incorporated in Australia whose shares are listed on the ASX, entered into the Merger Proposal Deed in respect of a proposal for the Merger of Yancoal Australia and Gloucester. Yancoal Australia acquired the entire issued share capital of Gloucester at a consideration of a combination of 218,727,665 ordinary shares of Yancoal Australia and 87,645,184 Contingent Value Right shares (“CVR shares”). Following the completion of the Merger, Yancoal Australia is separately listed on the ASX, replacing the listing position of Gloucester. The Merger was completed on 27 June 2012. The ordinary shares and CVR shares of Yancoal Australia was listed on the ASX on 28 June 2012. On 22 June 2012, according to the merger agreement, the equity interest in Syntech and Premier Coal held by Yancoal Australia has been transferred to Yancoal International.

62 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

2. BASIS OF PREPARATION

The condensed consolidated fi nancial statements have been prepared in accordance with International Accounting Standard (“IAS”) 34 “Interim Financial Reporting” and with the applicable disclosure requirements of Appendix 16 of the Rules Governing the Listing of Securities on the SEHK.

3. SIGNIFICANT ACCOUNTING POLICIES

The condensed consolidated fi nancial statements have been prepared on the historical cost basis except for certain fi nancial instruments, which are measured at fair value, as appropriate.

The accounting policies adopted are consistent with those followed in the preparation of the Group’s annual fi nancial statements for the year ended 31 December 2011, except a number of accounting policies that are adopted by the Company and effective for annual periods beginning on or after 1 January 2012.

In the current period, the Group had applied, for the fi rst time, the new standards and interpretations and revised/ amended standards and interpretations (the new “IFRSs”) issued by the International Accounting Standards Board (the “IASB”) and the International Financial Reporting Interpretations Committee (the “IFRIC”) of the IASB, which are effective for the Group’s fi nancial year beginning on 1 January 2012. The new IFRSs relevant to these interim fi nancial statements are as follows:

• IFRS 7 – Disclosures – Transfers of fi nancial assets (Amendment) enhances disclosures for fi nancial assets. These disclosures relate to assets transferred (as defi ned under IAS 39). If the assets transferred are not derecognised entirely in the fi nancial statements, an entity has to disclose information that enables users of fi nancial statements to understand the relationship between those assets which are not derecognised and their associated liabilities. If those assets are derecognised entirely, but the entity retains a continuing involvement, disclosures have to be provided that enable users of fi nancial statements to evaluate the nature of, and risks associated with, the entity’s continuing involvement in those derecognised assets.

The adoption of the new IFRSs had no material effect on the results or fi nancial position of the Group for the current or prior accounting periods. Accordingly, no prior period adjustment has been recognized.

The Group has not early applied the new standards or interpretations that have been issued but are not yet effective. The directors of the Company anticipate that the application of these standards or interpretations will have no material impact on the results and the fi nancial position of the Group.

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CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

4. SEGMENT INFORMATION

The Group is engaged primarily in the coal mining business and the coal railway transportation business. The Company does not currently have direct export rights in the PRC and all of its export sales must be made through China National Coal Industry Import and Export Corporation (“National Coal Corporation”) or Minmetals Trading Co., Ltd. (“Minmetals Trading”) or Shanxi Coal Imp. & Exp Group Corp. (“Shanxi Coal Corporation”). The fi nal customer destination of the Company’s export sales is determined by the Company, National Coal Corporation, Minmetals Trading or Shanxi Coal Corporation. Certain of the Company’s subsidiaries and associates are engaged in trading and processing of mining machinery and the transportation business via rivers and lakes and fi nance services in the PRC. No separate segment information about these businesses is presented in these fi nancial statements as the underlying gross sales, results and assets of these businesses, which are currently included in the coal mining business segment, are insignifi cant to the Group. Certain of the Company’s subsidiaries are engaged in production of methanol and other chemical products, and invest in heat and electricity.

For management purposes, the Group is currently organized into three operating divisions-coal mining, coal railway transportation and methanol, electricity and heat supply. These divisions are the basis on which the Group reports its primary segment information.

Principal activities are as follows:

Mining	–	Underground and open-cut mining, preparation and sales of coal and
		potash mineral exploration
Coal railway transportation	–	Provision of railway transportation services
Methanol, electricity and	–	Production and sales of methanol and electricity and related heat
heat supply		supply services

Segment profi t represents the profi t earned by each segment without allocation of corporate expenses and directors’ emoluments, results of associates, interest income, interest expenses and income tax expenses. This is the measure reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance.

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CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

4. SEGMENT INFORMATION – CONTINUED

Segment information about these businesses is presented below:

INCOME STATEMENT

	For the six months ended 30 June 2012 Methanol, Coal railway electricity and Mining transportation heat supply Eliminations Consolidated RMB’000 RMB’000 RMB’000 RMB’000 RMB’000	For the six months ended 30 June 2012 Methanol, Coal railway electricity and Mining transportation heat supply Eliminations Consolidated RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
GROSS REVENUE External sales 27,291,104 226,551 768,730 – Inter-segment sales 125,274 25,069 173,458 (323,801) Total 27,416,378 251,620 942,188 (323,801) Inter-segment revenue is charged at prices pre-determined by the relevant governmental authority. RESULT Segment results 5,963,181 (16,258) 968 – Unallocated corporate expenses Unallocated corporate income Share of prof ts of associates 19,264 – 47,353 – Interest income Interest expenses Prof t before income taxes Income taxes Prof t for the period	27,291,104 226,551 768,730 – 125,274 25,069 173,458 (323,801)	28,286,385 – 28,286,385
	27,416,378 251,620 942,188 (323,801)
	5,963,181 (16,258) 968 –	5,947,891 (263,007) 4,865 66,617 401,313 (775,394) 5,382,285 (99,821) 5,282,464

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CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

4. SEGMENT INFORMATION – CONTINUED

INCOME STATEMENT – CONTINUED

	For the six months ended 30 June 2011 Methanol, Coal railway electricity and Mining transportation heat supply Eliminations Consolidated RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
GROSS REVENUE External sales Inter-segment sales Total	19,326,668 242,877 654,467 – 20,224,012 107,394 25,695 176,272 (309,361) –
	19,434,062 268,572 830,739 (309,361) 20,224,012

Inter-segment revenue is charged at prices pre-determined by the relevant governmental authority.

RESULT

RESULT
Segment results 6,505,567 31,230 (68,823) – Unallocated corporate expenses Unallocated corporate income Share of prof ts of associates 7,059 – 7,078 – Interest income Interest expenses Prof t before income taxes Income taxes Prof t for the period	6,505,567 31,230 (68,823) –	6,467,974
		(239,648) 1,248,394 14,137 171,175 (426,106)
		7,235,926 (2,040,953)
		5,194,973

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CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

5. SALES OF COAL AND TRANSPORTATION COSTS OF COAL

	For the six months ended 30 June 2012 2011 RMB’000 RMB’000
Coal sold in the PRC, gross Less: Transportation costs Coal sold in the PRC, net Coal sold outside the PRC, gross Less: Transportation costs Coal sold outside the PRC, net Net sales of coal	22,870,960 15,006,388 142,480 175,909
	22,728,480 14,830,479
	4,420,144 4,320,280 465,797 447,809
	3,954,347 3,872,471
	26,682,827 18,702,950

Net sales of coal represent the invoiced value of coal sold and is net of returns, discounts and transportation costs if the invoiced value includes transportation costs to the customers.

6. COST OF SALES AND SERVICE PROVIDED

	For the six months ended 30 June 2012 2011 RMB’000 RMB’000
Materials Wages and employee benef ts Electricity Depreciation Land subsidence, restoration, rehabilitation and environmental costs Environmental protection Annual fee and amortization of mining rights (note 17) Other transportation cost Costs of traded coal Business tax and surcharges Others	1,248,132 1,211,129 3,514,422 2,774,468 339,677 83,675 891,468 778,195 1,137,826 766,815 64,407 – 604,431 332,996 34,228 34,294 9,650,366 2,395,130 326,198 282,307 1,605,452 1,294,238
	19,416,607 9,953,247

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CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

7. OTHER INCOME

	For the six months ended 30 June 2012 2011 RMB’000 RMB’000
Interest income from bank deposits Exchange gain, net Gain on acquisition of Gloucester (note 27) Others	401,313 171,175 181,319 1,242,793 1,427,166 – 22,752 95,678
	2,032,550 1,509,646

8. INTEREST EXPENSES

	For the six months ended 30 June 2012 2011 RMB’000 RMB’000
Interest expenses on: – borrowings wholly repayable within 5 years – borrowings not wholly repayable within 5 years – bills receivable discounted without recourse	657,961 405,756 115,066 1,960 2,367 18,390
	775,394 426,106

No interest was capitalized during the periods.

9. PROFIT BEFORE INCOME TAXES

	For the six months ended 30 June 2012 2011 RMB’000 RMB’000
Prof t before income taxes has been arrived at after charging (crediting): Depreciation of property, plant and equipment Amortization of intangible assets – Included in cost of sales and service provided – Included in selling, general and administrative expenses Total depreciation and amortization Amortization of prepaid lease payments (Gain) loss on disposal of property, plant and equipment Exchange gain, net	1,267,866 1,124,873 485,505 264,048 2,218 7,857
	1,755,589 1,396,778
	8,912 5,352 (4,203) 7,777 (183,319) (1,242,793)

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CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

10. INCOME TAXES

	For the six months ended 30 June 2012 2011 RMB’000 RMB’000
Income tax: Current taxes Under provision in prior years Deferred tax (income) expense (note 22): Australian Minerals Resources Rent Tax (note) Others Total deferred tax (income) expense	1,347,455 1,395,889 – 4,821
	1,347,455 1,400,710
	(1,083,225) – (164,409) 640,243
	(1,247,634) 640,243
	99,821 2,040,953

The Company and its subsidiaries incorporated in the PRC are subject to an income tax rate of 25% and subsidiaries established in Australia are subject to a tax rate of 30%. The effective income tax rate of the Group for the current period is 1.85% (six months ended 30 June 2011: 28%).

• Note: During the period, the Australia Minerals Resources Rent Tax (“MRRT”) legislation was substantially enacted on 19 March 2012 and will be effective from 1 July 2012. According to the relevant provisions of the MRRT tax laws, subsidiaries in Australia are required to determine the starting base allowance on 30 June 2012. Book value or market value approach can be selected in calculating the starting base and subsequently amortise within the prescribed useful life. Market value approach was selected for mines in Australia such as Austar, Yarrabee, Ashton and Moolarben. Under the market value approach, base value is determined based on market value of the coal mines on 1 May 2010 and amortise base on the shorter of the life of mining project, mining rights and mining production. During the period, additional deferred tax has been recognised.

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CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

11. DIVIDENDS

	For the six months ended 30 June 2012 2011 RMB’000 RMB’000
Final dividend approved, RMB0.57 per share (2011: RMB0.59)	2,803,488 2,901,856

Pursuant to the annual general meeting held on 22 June 2012, a fi nal dividend in respect of the year ended 31 December 2011 was approved.

12. EARNINGS PER SHARE AND PER ADS

The calculation of the earnings per share attributable to equity holders of the Company for the six months ended 30 June 2012 and 30 June 2011 is based on the profi t for the period of RMB5,255,811,000 and RMB5,183,335,000 and on 4,918,400,000 shares in issue during both periods.

The earnings per ADS have been calculated based on the profi t for the relevant periods and on one ADS, being equivalent to 10 H shares.

No diluted earning per share has been presented as there are no dilutive potential shares in issue during the periods ended 30 June 2012 and 2011.

13. RESTRICTED CASH

At the balance sheet date, the short-term restricted cash represents the bank deposits pledged to certain banks to secure banking facilities granted to the Group. The long-term amount represents the bank deposits placed as guarantee for the future payments of rehabilitation costs of Southland as required by the Australian government and as guarantee for borrowings.

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CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

14. BILLS AND ACCOUNTS RECEIVABLE

	At 30 June At 31 December 2012 2011 RMB’000 RMB’000
Accounts receivable – From third parties – From a jointly controlled entity Less: Impairment loss Total bills receivable Total bills and accounts receivable, net	713,643 636,788 – 181,164
	713,643 817,952 (5,140) (4,143)
	708,503 813,809 2,617,254 6,498,265
	3,325,757 7,312,074

Bills receivable represent unconditional orders in writing issued by or negotiated with customers of the Group for completed sale orders which entitle the Group to collect a sum of money from banks or other parties.

According to the credit rating of different customers, the Group allows a range of credit periods to its trade customers not exceeding 180 days.

The following is an aged analysis of bills and accounts receivable based on the invoice dates at the balance sheet date:

	At 30 June At 31 December 2012 2011 RMB’000 RMB’000
1-90 days 91-180 days	3,299,922 4,037,903 25,835 3,274,171
	3,325,757 7,312,074

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CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

15. PREPAYMENTS AND OTHER RECEIVABLES

	At 30 June At 31 December 2012 2011 RMB’000 RMB’000
Advances to suppliers Due from a jointly controlled entity (note) Deposit for environment protection Prepaid relocation costs of inhabitants Others	1,930,540 738,395 179,025 198,780 705,402 651,699 1,961,350 1,714,506 22,948 321,499
	4,799,265 3,624,879

Note: The amount due from a jointly controlled entity is unsecured, interest-free and has no fi xed repayment term.

16. PROVISION FOR LAND SUBSIDENCE, RESTORATION, REHABILITATION AND ENVIRONMENTAL COSTS

	At 30 June 2012 RMB’000
At the beginning of period Exchange re-alignment Acquisition of Yangcun Coal Mine and Beisu Coal Mine Acquisition of Gloucester Additional provision in the period Utilization of provision At the end of period Presented as: Current portion Non-current portion	3,181,643 (10,325) 20 139,494 852,108 (355,120) 3,807,820 3,301,940 505,880 3,807,820

The provision for land subsidence, restoration, rehabilitation and environmental costs has been determined by the directors based on their best estimates. However, in so far as the effect on the land and the environment from current mining activities becomes apparent in future periods, the estimate of the associated costs may be subject to change in the near term.

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CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

17. INTANGIBLE ASSETS

	Potash mineral Coal Coal exploration Water reserves resources permit Technology licenses Others Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Cost At 1 January 2012 Exchange re-alignment Acquisition of Yangcun Coal Mine and Beisu Coal Mine Acquisition of Gloucester Additions for the period Disposal for the period Reclassif cation At 30 June 2012 Amortization At 1 January 2012 Exchange re-alignment Provided for the period At 30 June 2012 Carrying values At 30 June 2012 At 31 December 2011	21,133,216 4,241,228 1,645,227 160,233 132,254 22,830 27,334,988 (133,408) (44,760) – (773) (74) (232) (179,247) 464,600 – – – – – 464,600 6,510,656 2,340,235 – – – 17,860 8,868,751 397,743 – – – – 128 397,871 (9,580) (285,457) – – – – (295,037) 14,669 (14,669) – – – – –
	28,377,896 6,236,577 1,645,227 159,460 132,180 40,586 36,591,926
	1,115,339 – – – – 14,030 1,129,369 (6,583) – – – – (110) (6,693) 485,505 – – – – 2,218 487,723
	1,594,261 – – – – 16,138 1,610,399
	26,783,635 6,236,577 1,645,227 159,460 132,180 24,448 34,981,527
	20,017,877 4,241,228 1,645,227 160,233 132,254 8,800 26,205,619

The Company and the Parent Company have entered into a mining rights agreement pursuant to which the Company has agreed to pay the Parent Company, effective from 25 September 1997, an annual fee of RMB12,980,000 as compensation for the Parent Company’s agreement to give up the mining rights associated with the Xinglongzhuang coal mine, Baodian coal mine, Nantun coal mine, Dongtan coal mine and Jining II. The annual fee is subject to change after a ten-year period. Up to the date of this interim report, compensation fee of RMB7 per tonne for raw coal mined (2011: RMB5 per tonne of raw coal mined) amounting to RMB118,926,000 for the period has been preliminary agreed. The revised compensation is to be settled with the relevant governmental authority directly. The actual amount of compensation fee payable each year is still to be confi rmed by the governmental authority.

At 30 June 2012, intangible assets with a carrying amount of approximately RMB2,172,793,000 (31 December 2011: RMB2,095,988,000) have been pledged to secure the bank facilities of the Australian subsidiaries (note 21).

Yanzhou Coal Mining Company Limited Interim Report 2012 73

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

18. PROPERTY, PLANT AND EQUIPMENT

	Freehold		Harbor			Plant,	Tran-
	land		works	Railway	Mining	machinery	sportation	Construction
	in Australia	Buildings	and crafts	structures	structures and equipment		equipment	in progress	Total
	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000
Cost
At 1 January 2012	381,358	4,288,563	253,678	1,548,963	6,379,487	22,430,957	426,061	9,827,161	45,536,228
Exchange re-
alignment	(3,860)	(3,945)	–	–	(17,293)	(68,547)	–	(18,813)	(112,458)
Acquisition of
Gloucester	677,533	12,695	–	–	2,079,311	2,189,837	–	365,487	5,324,863
Acquisition of
Yangcun Coal Mine
and Beisu Coal Mine	–	105,347	–	80,105	150,457	233,738	6,443	5,394	581,484
Additions for the
period	–	–	–	965	79,364	31,187	231	1,393,276	1,505,023
Transfer	30,652	43,444	–	–	73,642	170,083	499	(318,320)	–
Disposals for the
period	–	–	–	–	–	(57,485)	(1,160)	–	(58,645)
At 30 June 2012	1,085,683	4,446,104	253,678	1,630,033	8,744,968	24,929,770	432,074	11,254,185	52,776,495
Accumulated depreciation
At 1 January 2012	–	1,805,096	88,988	880,562	2,271,577	8,930,550	285,631	–	14,262,404
Exchange re-
alignment	–	(295)	–	–	(2,243)	(12,928)	–	–	(15,466)
Provided for the
period	–	63,214	–	78,941	106,393	997,669	21,649	–	1,267,866
Eliminated on
disposals	–	–	–	–	–	(33,049)	(1,160)	–	(34,209)
At 30 June 2012	–	1,868,015	88,988	959,503	2,375,727	9,882,242	306,120	–	15,480,595
Carrying values
At 30 June 2012	1,085,683	2,578,089	164,690	670,530	6,369,241	15,047,528	125,954	11,254,185	37,295,900
At 31 December 2011	381,358	2,483,467	164,690	668,401	4,107,910	13,500,407	140,430	9,827,161	31,273,824

At 30 June 2012, property, plant and equipment with a carrying amount of approximately RMB6,278,188,000 (31 December 2011: RMB3,325,937,000) have been pledged to secure bank facilities of the Australian subsidiaries (note 21).

74 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

19. INVESTMENTS IN SECURITIES

The investment in securities represents available-for-sale investments:

	At 30 June At 31 December 2012 2011 RMB’000 RMB’000
Investment in equity securities listed on the SSE – Stated at fair value Unlisted securities	175,062 173,495 146,028 199,305
	321,090 372,800

The unlisted securities are stated at cost less impairment at each balance sheet date because the range of reasonable fair value estimates is so signifi cant that the directors of the Company are of the opinion that their fair value cannot be measured reliably.

20. BILLS AND ACCOUNTS PAYABLE

	At 30 June At 31 December 2012 2011 RMB’000 RMB’000
Accounts payable – To the third parties – To a jointly controlled entity Bills payable	2,604,133 2,003,462 – 181
	2,604,133 2,003,643 3,880,638 237,201
	6,484,771 2,240,844

The following is an aged analysis of bills and accounts payable based on the invoice dates at the reporting date:

	At 30 June At 31 December 2012 2011 RMB’000 RMB’000
1-90 days 91-180 days 181-365 days Over 1 year	6,025,103 1,790,743 178,834 257,392 64,949 60,865 215,885 131,844
	6,484,771 2,240,844

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CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

21. BORROWINGS

		At 30 June At 31 December 2012 2011 RMB’000 RMB’000
Current liabilities Bank borrowings – Unsecured borrowings (i) – Secured borrowings (ii) Loan pledged by machineries (iii) Non-current liabilities Bank borrowings – Unsecured borrowings (i) – Secured borrowings (ii) Loan pledged by machineries (iii) Guaranteed notes (iv) Loan from a related party (v) Total borrowings (i) Unsecured borrowings are repayable as follows: Within one year More than one year, but not exceeding two years More than two years, but not more than f ve years More than f ve years Total		5,205,955 13,193,083 7,158,123 6,395,413 2,003,163 –
		14,367,241 19,588,496 2,809,000 2,110,000 12,858,398 12,759,324 33,603 – 6,324,900 – 2,182,611 –
		24,208,512 14,869,324
		38,575,753 34,457,820
		At 30 June At 31 December 2012 2011 RMB’000 RMB’000
	Within one year More than one year, but not exceeding two years More than two years, but not more than f ve years More than f ve years Total	5,205,955 13,193,083 32,000 22,000 2,766,000 2,066,000 11,000 22,000
		8,014,955 15,303,083

The balance as of 30 June 2012 represented a borrowing obtained by Shanxi Tianchi before the Company acquired it and new short term borrowings obtained by the Company during the period. The loan of Shanxi Tianchi is repayable by 20 instalments over a period of 12 years, with the fi rst instalment due in May 2008 and carried interest at 5.94% (2011: 5.94%) per annum. The amount is also guaranteed by the Parent Company.

The total unsecured short term borrowings of the Company amounting to RMB3,900,000 (31 December 2011: RMB11,892,000,000) carried interest at 6.56% per annum (31 December 2011: 6.06%-6.56% per annum). The unsecured long term borrowing amounting to RMB2,700,000,000 (31 December 2011: RMB2,000,000,000) carried interest at 6.9% per annum (31 December 2011: 6.9%) and is subject to adjustment based on the interest stipulated by the PBOC. The long term loan is guaranteed by the Parent Company.

76 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

21. BORROWINGS – CONTINUED

(ii) Secured borrowings are repayable as follows:

	At 30 June At 31 December 2012 2011 RMB’000 RMB’000
Within one year More than one year, but not exceeding two years More than two years, but not more than f ve years Total	7,158,123 6,395,413 6,349,045 6,395,413 6,509,353 6,363,911
	20,016,521 19,154,737

Included in the balance as of 30 June 2012 are loans amounting to RMB18,934,448,000 (equivalent to USD3,040,000,000) (31 December 2011: RMB19,154,737,000) obtained by the Group for the purpose of settling the consideration in respect of acquisition of Yancoal Resources. The borrowings of RMB17,688,761,000 (USD2,840,000,000) (31 December 2011: RMB17,894,557,000) and of RMB1,245,687,000 (USD200,000,000) (31 December 2011: RMB1,260,180,000) carried interest at threemonth LIBOR plus a margin of 0.75% (approximately 1.22%) and at three-month LIBOR plus a margin of 0.8% (approximately 1.27%) respectively. The borrowings are guaranteed by the Company, counter-guaranteed by the Parent Company and secured by the Group's term deposit. The borrowings and the loan pledged by machineries are secured on property, plant and equipment (note 18), intangible assets (note 17) and other assets in Yancoal Resources.

(iii) Loan pledged by machineries are repayable as follows:

	At 30 June At 31 December 2012 2011 RMB’000 RMB’000
Minimum payments Within one year More than one year, but not exceeding two years More than two years, but not more than f ve years More than f ve years Less: Future f nance charges Present value of payments	2,117,856 – 5,976 – 29,778 – 18,414 –
	2,172,024 – (135,258) –
	2,036,766 –

Yanzhou Coal Mining Company Limited Interim Report 2012 77

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

21. BORROWINGS – CONTINUED

(iii) Loan pledged by machineries are repayable as follows: – continued

(iv)		At 30 June 2012 RMB’000	At 31 December 2011 RMB’000 – – – – – – – At 30 June 2012 RMB’000
	Present value of minimum payments Within one year More than one year, but not exceeding two years More than two years, but not more than f ve years More than f ve years Less: amounts due within one year and included in current liabilities Amounts due after one year and included in non-current liabilities Guaranteed notes are detailed as follows:	2,003,163 4,800 19,202 9,601
		2,036,766 (2,003,163)
		33,603
	Guaranteed notes denominated in US$ repayable in 2017 and 2022		6,349,000

The above notes were issued by a subsidiary of the Company on 17 May 2012. The notes are repayable in 2017 (US$450,000,000) and 2022 (US$550,000,000) and the interest rate are 4.461% and 5.730% per annum respectively. The notes are guaranteed by the Company. During the period, the notes were listed on the HKEX and were issued as debt security to professional investors only. During the period ended 30 June 2012, no redemption was made.

(v) Loan from a related party is detailed as follows:

	At 30 June 2012 RMB’000
Loan from a related party repayable on 30 June 2015	2,182,611

The loan from Gloucester’s original shareholder (Yancoal Australia’s current shareholder) was made for funding general operations. The loan is for up to AUD400,000,000. As at 30 June 2012, interest is charged at BBSY plus a margin of 3%. The full amount is repayable at 30 June 2015. At 30 June 2012 AUD343,859,000 had been drawn down. No security is held on this loan. The loan contains certain fi nancial covenants. A waiver of the fi nancial covenants has been granted by the lender and the next measurement date is 30 June 2013.

78 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

22. DEFERRED TAXATION

	Fair value Temporary adjustment differences Available- Accelerated on mining on Cash f ow for-sale tax rights (coal expenses hedge investment depreciation reserves) recognized Tax losses reserve Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2011 Exchange re-alignment Acquisition of additional interests in joint venture Acquisition of Syntech Acquisition of Premier Coal and Wesfarmers Char Acquisition of Xintai Credit to other comprehensive income Credit (charge) to the consolidated income statement At 31 December 2011 and 1 January 2012 Exchange re-alignment Acquisition of Yangcun Coal Mine and Beisu Coal Mine Acquisition of Gloucester Credit (charge) to other comprehensive income Credit (charge) to the consolidated income statement (note 10) At 30 June 2012	(28,805) (305,353) (703,582) (774,162) 363,478 (28,617) (1,477,041) – 3,846 87,322 25,090 (8,008) – 108,250 – – (49,246) – – – (49,246) – – (81,370) 55,728 – – (25,642) – – (69,154) 51,305 – – (17,849) – – (817,296) – – – (817,296) 5,190 – – – – 62,073 67,263 – 70,100 (550,430) 487,222 (355,470) – (348,578)
	(23,615) (231,407) (2,183,756) (154,817) – 33,456 (2,560,139) – 928 41,040 (5,928) – – 36,040 – (47,376) (73,991) 4,109 – – (117,258) – 8,379 (3,533,241) 1,155,406 258,003 – (2,111,453) 2 – – – – (6,219) (6,217) – 61,539 (486,272) 1,672,367 – – 1,247,634
	(23,613) (207,937) (6,236,220) 2,671,137 258,003 27,237 (3,511,393)

The analysis of deferred tax balances in the fi nancial statements is as follows:

	At 30 June At 31 December 2012 2011 RMB’000 RMB’000
Deferred tax assets Deferred tax liabilities	4,552,769 1,335,165 (8,064,162) (3,895,304)
	(3,511,393) (2,560,139)

There was no material unprovided deferred tax for the period or at the balance sheet date.

Yanzhou Coal Mining Company Limited Interim Report 2012 79

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

23. SHAREHOLDERS’ EQUITY

Share capital

The Company’s share capital structure at the balance sheet date is as follows:

		Domestic invested shares State legal person shares (held by the Parent Company) A shares	Foreign invested shares H shares (including H shares represented by ADS) Total
Number of shares At 31 December 2011 and 30 June 2012 Registered, issued and fully paid At 31 December 2011 and 30 June 2012		2,600,000,000 360,000,000	1,958,400,000 4,918,400,000
		RMB’000 RMB’000 2,600,000 360,000	RMB’000 RMB’000 1,958,400 4,918,400

Each share has a par value of RMB1.

There is no movement in share capital during the period.

Reserves

Future Development Fund

Pursuant to regulation in the PRC, the Company, Shanxi Tianchi and Heze are required to transfer an annual amount to a future development fund at RMB6 per tonne of raw coal mined (Xintai and Ordos: RMB6.5 per tonne of raw coal mined). The fund can only be used for the future development of the coal mining business and is not available for distribution to shareholders.

Shanxi Tianchi is required to transfer an additional amount at RMB5 per tonne of raw coal mined from 2008 onwards as coal mine transformation fund.

Pursuant to the regulations of the Shandong Province Finance Bureau, State-owned Assets Supervision and Administration Commission of Shandong Province and the Shandong Province Coal Mining Industrial Bureau, the Company is required to transfer an additional amount at RMB5 per tonne of raw coal mined from 1 July 2004 to the reform specifi c development fund for the future improvement of the mining facilities and is not distributable to shareholders. No further transfer to the reform specifi c development fund is required from 1 January 2008.

80 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

23. SHAREHOLDERS’ EQUITY – CONTINUED

Reserves – continued

Future Development Fund – continued

In accordance with the regulations of the State Administration of Work Safety, the Company has a commitment to incur RMB8 (Shanxi Tianchi: RMB50, Xintai and Ordos: increased from RMB7 to RMB15 from 1 February 2012 onwards) for each tonne of raw coal mined from 1 May 2004 which will be used for enhancement of safety production environment and improvement of facilities (“Work Safety Cost”). From 1 February 2012 onwards, the amount for each tonne of raw coal mined increased to RMB15. The Company, Heze and Shanxi Tianchi make appropriation to the future development fund in respect of unutilized Work Safety Cost. In accordance with the regulations of the State Administration of Work Safety, the Company’s subsidiaries, Hua Ju Energy, Yulin and Shanxi Tianhao, have a commitment to incur Work Safety Cost at the rate of: 4% of the sales income for the year below RMB10 million; 2% of the actual sales income for the year between RMB10 million and RMB100 million (included); 0.5% of the actual sales income for the year between RMB100 million and RMB1 billion (included); 0.2% of the actual sales income for the year above RMB1 billion. The unutilized Work Safety Cost at 30 June 2012 was RMB996,333,000.

Statutory Common Reserves Fund

The Company and its subsidiaries in the PRC has to set aside 10% of its profi t for the statutory common reserve fund (except where the fund has reached 50% of its registered capital). The statutory common reserve fund can be used for the following purposes:

• to make good losses in previous years; or

• to convert into capital, provided such conversion is approved by a resolution at a shareholders’ general meeting and the balance of the statutory common reserve fund does not fall below 25% of the registered capital.

Retained earnings

In accordance with the Company’s Articles of Association, the profi t for the purpose of appropriation will be deemed to be the lesser of the amounts determined in accordance with (i) PRC accounting standards and regulations and (ii) IFRS or the accounting standards of the places in which its shares are listed.

The Company can also create a discretionary reserve in accordance with its Articles of Association or pursuant to resolutions which may be adopted at a meeting of shareholders.

The Company’s distributable reserve as at 30 June 2012 is the retained earnings computed under PRC GAAP which amounted to approximately RMB22,668,365,000 (31 December 2011: RMB22,913,403,000).

Yanzhou Coal Mining Company Limited Interim Report 2012 81

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

24. ACQUISITION OF AN YUAN COAL MINE

In 2010, the Group signed a co-operation agreement with an independent third party for the acquisition of Yijinhuoluo Qi Nalin Tao Hai Town An Yuan Coal Mine (“An Yuan Coal Mine”) at a consideration of RMB1,435 million. The acquisition was completed in 2011.

The acquisition of An Yuan Coal Mine was classifi ed as purchase of assets and liabilities of which no goodwill was recognized.

Net book values of the acquired net assets at acquisition date is as follow:

	Carrying amounts RMB’000
Property, plant and equipment, net Intangible assets Other current assets Net assets acquired Considerations: Cash paid on acquisition Investment deposit paid for acquisition in prior year Net cash outf ow arising on acquisition	176,067 1,258,433 500
	1,435,000
	355,000 1,080,000
	1,435,000
	355,000

25. ACQUISITION OF ADDITIONAL INTERESTS IN JOINT VENTURE

The Australia subsidiaries of the Group originally held 60% equity interests in Ashton joint venture. In 2011, the Group acquired additional 30% equity interests in Ashton joint venture from another venturer at a consideration of USD250 million. This included the acquisition of 30% equity interests in the jointly controlled entities, Ashton Coal Mines Limited and Australian Coal Processing Holdings Pty Ltd. Upon completion of the acquisition, the Group held 90% equity interest in Ashton joint venture. Under the shareholders agreement, the 90% equity interest held in Ashton remained classifi ed as a joint venture.

82 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

26. ACQUISITION OF YANGCUN COAL MINE AND BEISU COAL MINE

On 23 April 2012, the Company entered into the Assets Transfer Agreement with the Parent Company to purchase the target assets from the Parent Company at a consideration of RMB824,142,000 to acquire all the assets and liabilities of Beisu Coal Mine and Yangcun Coal Mine and their equity investments in Beisheng Industry and Trade, Shengyang Wood and Jiemei Wall Materials. Beisu Coal Mine and Yangcun Coal Mine mainly engaged in the production and exploration of PCI coal and thermal coal. The net assets acquired were included in the mining segment.

This acquisition has been accounted for using the purchase method.

The net assets of Yangcun Coal Mine and Beisu Coal Mine acquired, and the goodwill arising, are as follows:

	Carrying Fair value amounts Adjustments Fair values RMB’000 RMB’000 RMB’000	Carrying Fair value amounts Adjustments Fair values RMB’000 RMB’000 RMB’000
Bank balances and cash Accounts receivable and other receivables Inventories Interests in associates Property, plant and equipment, net Intangible assets Accounts payable and other payables Deferred taxation Provision for land subsidence, restoration, rehabilitation and environmental costs Net assets acquired Goodwill arising on acquisition Considerations: Cash paid on acquisition Net cash outf ow arising on acquisition: Cash outf ow arising on acquisition Bank balance and cash acquired	8,131 – 8,131 96,626 – 96,626 2,731 286 3,017 3,927 – 3,927 285,515 295,969 581,484 275,097 189,503 464,600 (708,584) – (708,584) 4,181 (121,439) (117,258) (20) – (20)
		331,923 492,219
		824,142
		824,142
		(824,142) 8,131
		(816,011)

During the period from the acquisition date/the beginning period date to 30 June 2012, Beisu Coal Mine and Yangcun Coal Mine did not contribute any signifi cant revenue or profi t to the Group. Goodwill arose because the Group can increase its production capacity in coal and the coverage of exploration from this acquisition.

Yanzhou Coal Mining Company Limited Interim Report 2012 83

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

27. ACQUISITION OF GLOUCESTER

During the period, a wholly owned subsidiary of the Company, Yancoal Australia, merged with Gloucester. The merger was completed on 27 June 2012. Yancoal Australia acquired Gloucester at a consideration of a combination of 218,727,665 ordinary shares of Yancoal Australia and 87,645,184 CVR shares. Gloucester is a listed company in Australia. Following the completion of the Merger, Yancoal Australia is separately listed on the ASX, replacing the listing position of Gloucester. The ordinary shares and CVR shares of Yancoal Australia were listed on the ASX on 28 June 2012. Gloucester mainly engaged in production of coking coal and thermal coal. The net assets acquired were included in the mining segment.

The accounting for the Gloucester acquisition has been determined on a provisional basis at 30 June 2012 as the fair values assigned to the acquiree’s identifi able assets and liabilities have only been determined provisionally. The fair values of assets and liabilities acquired will be fi nalised within 12 months of the acquisition date. The Company will adjust these provisional values accordingly.

The acquisition has been accounted for using the purchase method.

The provisional amounts of the net assets acquired on the acquisition date are as follows:

	Carrying Fair value amounts Adjustments Fair values RMB’000 RMB’000 RMB’000	Carrying Fair value amounts Adjustments Fair values RMB’000 RMB’000 RMB’000
Bank balances and cash 280,892 – 280,092 Restricted cash 13,067 – 13,067 Accounts receivable and other receivables 1,694,094 (190,599) 1,503,495 Inventories 288,584 (5,078) 283,506 Investment in securities 47,026 – 47,026 Property, plant and equipment, net 4,141,715 817,661 4,959,376 Construction in progress 365,487 – 365,487 Intangible assets 8,053,397 815,354 8,868,751 Accounts payable and other payables (5,737,560) 196,758 (5,540,802) Provision for land subsidence, restoration, rehabilitation and environmental costs (139,494) – (139,494) Long term payables (653,086) 181,526 (471,560) Deferred taxation (1,993,522) (117,931) (2,111,453) Borrowings (3,179,283) – (3,179,283) Net assets acquired 4,878,208 Bargain purchase gain on acquisition (1,427,166) 3,451,042 Considerations: Fair value of the ordinary shares issued by Yancoal Australia 2,138,129 Fair value of the CVR shares issued 1,312,913 3,451,042 Net cash inf ow arising on acquisition: Bank balance and cash acquired 280,092	280,892 – 280,092 13,067 – 13,067 1,694,094 (190,599) 1,503,495 288,584 (5,078) 283,506 47,026 – 47,026 4,141,715 817,661 4,959,376 365,487 – 365,487 8,053,397 815,354 8,868,751 (5,737,560) 196,758 (5,540,802) (139,494) – (139,494) (653,086) 181,526 (471,560) (1,993,522) (117,931) (2,111,453) (3,179,283) – (3,179,283)
		4,878,208 (1,427,166)
		3,451,042
		2,138,129 1,312,913
		3,451,042
		280,092

84 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

27. ACQUISITION OF GLOUCESTER – CONTINUED

The bargain purchase arises because the consideration (number of shares to be issued) was fi xed when the merger proposal was announced. Upon the date of completion, the market capitalization and the market price of shares dropped and hence the total consideration paid were less than the fair value of net identifi able assets acquired because there is no mechanism to adjust the number of shares to be issued.

During the period from the acquisition date to 30 June 2012, Gloucester did not have signifi cant impact on the revenue and operating results of the Group.

If the acquisition had occurred on 1 January 2012, consolidated revenue and net profi t of the Group for the period ended 30 June 2012 would have been RMB34,233,379,000 and RMB6,738,313,000 respectively. These amounts have been calculated using the Group’s accounting policies and by adjusting the results of the subsidiary to refl ect the additional depreciation and amortisation that would have been charged assuming the fair value adjustments to property, plant and equipment and mining tenements had applied from 1 January 2012, together with the consequential tax effects.

The CVR shares will be redeemed by cash (or shares of Yancoal Australia held by the Company at the discretion of Yancoal Australia) if the weighted average price of the shares are lower than AUD6.96 per share for continuous three months in next 18 months after the transaction and the redemption price will not exceed AUD3 per share. The holders of the CVR shares do not have the power to vote at the shareholders’ meeting, except in the condition that is required by the ASX. Also, the holders of the CVR shares are not entitled to any dividend, right to enrol the new securities and bonus shares that are distributed or issued by Yancoal Australia. The Company are committed to the obligations related to the issuance of the CVR shares by Yancoal Australia.

The valuation of the shares issued by Yancoal Australia and the CVR shares are stated at market value.

Yanzhou Coal Mining Company Limited Interim Report 2012 85

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

28. RELATED PARTY TRANSACTIONS

The amounts due from/to Parent Company and its subsidiary companies are non-interest bearing and unsecured.

The amounts due from/to Parent Company and its subsidiary companies have no specifi c terms of repayment but are expected to be repaid within one year.

During the periods, the Group had the following signifi cant transactions with the Parent Company and its subsidiary companies:

	Six months ended 30 June 2012 2011 RMB’000 RMB’000
Income Sales of coal Sales of heat and electricity Sales of auxiliary materials Sales of methanol Expenditure Utilities and facilities Purchases of supply materials and equipment Repair and maintenance services Social welfare and support services Technical support and training Road transportation services Construction services	1,756,371 826,567 115,327 96,035 205,034 236,120 23,792 –
	19,018 14,258 364,463 343,589 71,169 131,546 107,681 125,912 – 13,000 27,786 27,099 181,233 48,813

Certain expenditures for social welfare and support services (excluding medical and child care expenses) of RMB90,492,000 and RMB113,900,000 for each of the six months ended 30 June 2012 and 2011 respectively, and there was no technical support and training expenses for the six months ended 30 June 2012 (2011: RMB13,000,000). These expenses have been charged by the Parent Company at a negotiated amount per annum, subject to changes every year.

In addition to the above, the Company participates in a retirement benefi t scheme of the Parent Company in respect of retirement benefi ts (note 30).

During the current period, the sale of coal from subsidiaries of the Group in Australia to the Group’s jointly controlled entity amounted to RMB512,545,817 (2011: RMB726,957,049).

As at 30 June 2012, the Company has deposited RMB1,810,000,000 (31 December 2011: RMB1,820,000,000) in the company’s associate, YanKuang Group Finance Company Limited. The interest income received and fi nance cost paid during the current period amounted to RMB4,830,000 (2011: RMB3,070,000) and RMB1,410,000 (2011: RMB3,580,000) respectively.

86 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

28. RELATED PARTY TRANSACTIONS – CONTINUED

Transactions/balances with other state-controlled entities in the PRC

The Group operates in an economic environment currently predominated by entities directly or indirectly owned or controlled by the PRC government (“state-controlled entities”). In addition, the Group itself is part of a larger group of companies under the Parent Company which is controlled by the PRC government. Apart from the transactions with the Parent Company and its subsidiaries and other related parties disclosed above, the Group also conducts business with other state-controlled entities. The directors consider those state-controlled entities are independent third parties so far as the Group’s business transactions with them are concerned.

Material transactions with other state-controlled entities are as follows:

	Six months ended 30 June 2012 2011 RMB’000 RMB’000
Trade sales Trade purchases Material balances with other state-controlled entities are as follows:	5,934,799 3,005,282
	1,229,195 1,062,581
	At 30 June At 31 December 2012 2011 RMB’000 RMB’000
Amounts due to other state-controlled entities Amounts due from other state-controlled entities	524,651 580,726
	730,895 681,413

In addition, the Group has entered into various transactions, including deposits placements, borrowings and other general banking facilities, with certain banks and fi nancial institutions which are state-controlled entities in its ordinary course of business. In view of the nature of those banking transactions, the directors are of the opinion that separate disclosure would not be meaningful.

Except as disclosed above, the directors are of the opinion that transactions with other state-controlled entities are not signifi cant to the Group’s operations.

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CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

28. RELATED PARTY TRANSACTIONS – CONTINUED

Compensation of key management personnel

The remuneration of directors and other members of key management were as follows:

	Six months ended 30 June 2012 2011 RMB’000 RMB’000
Directors’ fee Salaries, allowance and other benef ts in kind Retirement benef t scheme contributions	789 197 1,111 3,606 290 638
	2,190 4,441

The remuneration of directors and key executives is determined by the remuneration committee having regard to the performance of individuals and market trends.

29. COMMITMENTS

	At 30 June At 31 December 2012 2011 RMB’000 RMB’000
Capital expenditure contracted for but not provided in the f nancial statements Acquisition of property, plant and equipment – the Group – share of joint ventures Acquisition of intangible asset – the Group – share of joint ventures Exploration and evaluation expenditure – the Group – share of joint ventures	1,523,287 2,022,362 5,069,857 179,166 – 1,947 – 158 5,462 – 81,044 –
	6,679,650 2,203,633

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CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

29. COMMITMENTS – CONTINUED

The Company entered into a co-operative agreement with two independent third parties to establish a company for acquiring a coal mine in Shanxi province for operations. In addition to the deposit on investment, the Company is committed to invest a further RMB78.8 million.

Pursuant to the regulations issued by the Shandong Province Finance Bureau, the Group has to pay a deposit to the relevant government authority, which secured for the environmental protection work done. As at 30 June 2012, the Group is committed to further make security deposit of RMB1,804 million.

In 2010, the Company entered into a co-operative agreement with three independent companies to acquire 51% equity interest of Inner Mongolia Haosheng Coal Mining Limited (“Hao Sheng”) at a consideration of RMB6,649 million and to obtain the mining rights of the Shilawusu Coal Field in name of Hao Sheng. In 2011, the Company entered into a co-operative agreement with two independent companies to acquire additional 10% equity interest of Hao Sheng at a consideration of RMB1,313,760,000. The Company also agreed to increase the registered capital of Hao Sheng by RMB51 million. During the period, the government of Inner Mongolia reclaimed the mining resources from one of the entities under Hao Sheng. The Company and the other shareholders of Hao Sheng agreed to lower the amount of register capital to RMB45,615,000. Also, a new agreement has been signed and the Company agreed to purchase additional interest of 9.45% of Hao Sheng. Also, it was agreed that the total consideration was decreased from RMB3,009 million to RMB1,858 million. Upon the completion of the aforesaid transaction, all the shareholders of Hao Sheng agreed to contribute additional capital of RMB145 million to Hao Sheng. The investment project was still in progress. Up to the date of these fi nancial statements, the Company has invested RMB2,195,405,000 in relation to this acquisition.

On 24 January 2011, the Company, the Parent Company, and Shaanxi Yanchang Petroleum (Group) Corp. Ltd (“Yanchang Petroleum”) entered into an agreement for the formation of Shaanxi Future Energy Chemical Corp. Ltd. Upon completion of the agreement, the Parent Company, the Company and Yanchang Petroleum will contribute RMB2.7 billion, RMB1.35 billion and RMB1.35 billion as capital contribution and will hold 50%, 25% and 25% equity interest in the investee company respectively. Under the aforesaid agreement, the Company paid RMB405 million during the period as the second capital injection instalment. Up to the date of these fi nancial statements, Shaanxi Future Energy Chemical Corp. Ltd. has been incorporated and the Company has invested RMB945,000,000 as capital contribution.

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CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

30. RETIREMENT BENEFITS

Qualifying employees of the Company are entitled to a pension, medical and other welfare benefi ts. The Company participates in a scheme of the Parent Company and pays a monthly contribution to the Parent Company in respect of retirement benefi ts at an agreed contribution rate based on the monthly basic salaries and wages of the qualifi ed employees. The Parent Company is responsible for the payment of all retirement benefi ts to the retired employees of the Company.

Pursuant to the Provision of Insurance Fund Administrative Services Agreement entered into by the Company and the Parent Company on 7 November 2008, the monthly contribution rate is set at 20% of the total monthly basic salaries and wages of the Company’s employees for the period from 1 January 2009 to 31 December 2011. Retirement pension and other welfare benefi ts will be provided by the Parent Company on the actual cost basis, which will be reimbursed by the Company after the actual payment made by the Parent Company.

The Company’s subsidiaries are participants in a state-managed retirement scheme pursuant to which the subsidiaries pay a fi xed percentage of its qualifying staff’s wages as a contribution to the scheme. The subsidiaries’ fi nancial obligations under this scheme are limited to the payment of the employer’s contribution. The Group’s overseas subsidiaries pay fi xed contribution pension under the law and regulation of the corresponding country.

At the balance sheet date, there were no forfeited contributions which arose upon employees leaving the above schemes available to reduce the contributions payable in future years.

31. HOUSING SCHEME

The Parent Company is responsible for providing accommodation to its employees and the domestic employees of the Company. The Company and the Parent Company share the incidental expenses relating to the accommodation at a negotiated amount for each of the six months ended 30 June 2012 and 2011. Such expenses, amounting to RMB70,000,000 and RMB70,000,000 for each of the six months ended 30 June 2012 and 2011, have been included as part of the social welfare and support services expenses summarized in note 28.

The Company currently makes a fi xed monthly contribution for each of its qualifying employees to a housing fund which is equally matched by a contribution from the employees. The contributions are paid to the Parent Company which utilizes the funds, along with the proceeds from the sales of accommodation and, if the need arises, from loans arranged by the Parent Company, to construct new accommodation.

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CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

32. CONTINGENT LIABILITIES

	At 30 June At 31 December 2012 2011 RMB’000 RMB’000
Guarantees (a) the Group Performance guarantees provided to daily operations Guarantees provided in respect of the cost of restoration of certain mining leases, given to government departments as required by statute (b) Joint ventures Performance guarantees provided to daily operations Guarantees provided in respect of the cost of restoration of certain mining leases, given to government departments as required by statute	1,654,016 1,099,755 371,556 263,603 – 731 28,201 28,477
	2,053,773 1,392,566

According to the government policy issued by Ministry of Shandong Province and the Ministry of Land and Resources, the Company has accrued RMB7 per tonne as a compensation for the mining activities (note 17). Additional provision may be provided subject to the guidelines that will be issued by the Chinese Government in the future.

33. OPERATING LEASE COMMITMENTS

	At 30 June At 31 December 2012 2011 RMB’000 RMB’000
Within one year More than one year, but not more than f ve years	7,627 7,178 71,602 3,210
	79,229 10,388

Operating leases have average remaining lease terms of 2 years. Items that are subject to operating leases include mining equipment, offi ce space and small items of offi ce equipment.

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CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

SUPPLEMENTAL INFORMATION

• I. SUMMARY OF DIFFERENCES BETWEEN CONSOLIDATED FINANCIAL STATEMENTS PREPARED UNDER INTERNATIONAL FINANCIAL REPORTING STANDARDS (“IFRS) AND THOSE UNDER THE PRC ACCOUNTING RULES AND REGULATIONS (“PRC GAAP”)

The Group has also prepared a set of consolidated fi nancial statements in accordance with relevant accounting principles and regulations applicable to PRC enterprises.

The consolidated fi nancial statements prepared under IFRS and those prepared under PRC GAAP have the following major differences:

• (1) Future development fund and safety work expense

• (1a) Appropriation of future development fund is charged to income before income taxes under PRC GAAP. Depreciation is not provided for plant and equipment acquired by utilizing the future development fund under PRC GAAP but charge to expenses when acquired;

• (1b) Appropriation of the work safety cost is charged to income before taxes under PRC GAAP. Depreciation is not provided for plant and equipment acquired by utilizing the provision of work safety cost under PRC GAAP but charge to expenses when acquired.

• (2) Consolidation using purchase method under IFRS and using common control method under PRC GAAP Under IFRS, the acquisitions of Jining II, Railway Assets, Heze, Shanxi Group, Hua Ju Energy, Yangcun Coal Mine and Beisu Coal Mine have been accounted for using the acquisition method which accounts for the assets and liabilities of the aforesaid acquisitions at their fair value at the date of acquisition. Any excess of the purchase consideration over the fair value of the net assets acquired is capitalized as goodwill.

Under PRC GAAP, as the Group and the aforesaid acquisitions are entities under the common control of the Parent Company, the assets and liabilities of the aforesaid acquisitions are required to be included in the consolidated balance sheet of the Group at historical cost. The difference between the historical cost of the assets and liabilities of the aforesaid acquisitions and the purchase price paid is recorded as an adjustment to shareholders’ equity.

• (3) Deferred taxation due to differences between the fi nancial statements prepared under IFRS and PRC GAAP.

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CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

I. SUMMARY OF DIFFERENCES BETWEEN CONSOLIDATED FINANCIAL STATEMENTS PREPARED UNDER INTERNATIONAL FINANCIAL REPORTING STANDARDS (“IFRS) AND THOSE UNDER THE PRC ACCOUNTING RULES AND REGULATIONS (“PRC GAAP”) – CONTINUED

The following table summarizes the differences between consolidated fi nancial statements prepared under IFRS and those under PRC GAAP:

	Net income attributable to Net assets equity holders attributable to of the Company equity holders For six months of the Company ended 30 June As at 30 June 2012 2012 RMB’000 RMB’000
As per condensed f nancial statements prepared under IFRS Impact of IFRS adjustments in respect of: – transfer to future development fund which is charged to income before income taxes – reversal of work safety cost – fair value adjustment and related amortization – goodwill arising from acquisition of Jining II, Railway Assets, Heze, Shanxi Group and Hua Ju Energy, Yangcun Coal Mine and Beisu Coal Mine – deferred tax – others As per f nancial statements prepared under PRC GAAP	5,255,811 44,221,885 (156,306) – (217,701) (426,296) 3,594 (481,709) – (1,020,709) 69,681 928,164 (48,890) 19,864
	4,906,189 43,241,199

Note: There are also differences in other items in the condensed fi nancial statements due to differences in classifi cation between IFRS and PRC GAAP

Yanzhou Coal Mining Company Limited Interim Report 2012 93

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONSOLIDATED BALANCE SHEET

1 January – 30 June 2012

Prepared by: Yanzhou Coal Mining Company Limited ASSET NOTES	Unit: RMB June 30, 2012December 31, 2011
CURRENT ASSET: Cash at bank and on hand VIII.1 Excess reserves settlement Lending to banks and other f nancial institutions Tradable f nancial assets Notes receivable VIII.2 Accounts receivable VIII.3 Prepayments VIII.4 Premiums receivable Accounts receivable reinsurance Reserve for reinsurance contract receivable Interest receivable Dividends receivable Other receveiables VIII.5 Purchase of resold f nancial assets Inventories VIII.6 Non-current assets due within one year Other current assets VIII.7 TOTAL CURRENT ASSETS NON-CURRENT ASSETS: Offering loan and advance Available-for-sale f nancial assets VIII.8 Held-to-maturity investments Long-term accounts receivable VIII.9 Long-term equity investments VIII.10 Investment property Fixed assets VIII.11 Construction in progress VIII.12 Construction materials VIII.13 Disposal of f xed assets Productive biological assets Oil gas assets Intangible assets VIII.14 Development expenditure Goodwill VIII.15 Long-term deferred assets Deferred tax assets VIII.16 Other non-current assets VIII.17 TOTAL NON-CURRENT ASSETS TOTAL ASSETS	22,306,652,973 18,105,579,319 3,094,123,144 7,152,620,511 708,503,359 815,157,475 1,633,120,317 824,411,964 22,947,609 17,265,975 2,821,253,250 3,069,166,771 1,826,028,101 1,394,679,193 3,386,642,945 2,857,949,797
	35,799,271,698 34,236,831,005
	281,907,120 333,617,636 297,184,390 300,082,542 2,202,263,951 1,747,778,937 25,322,235,361 21,185,930,552 14,049,812,721 12,082,244,675 47,072,646 31,561,191 32,670,664,427 24,657,104,675 1,331,047,330 1,337,553,543 3,098,975 12,779,427 5,489,010,327 2,046,011,436 1,232,530,178 117,925,900
	82,926,827,426 63,852,590,514
	118,726,099,124 98,089,421,519

The accompanying notes disclosure is the composing part of the fi nancial statements.

The fi nancial statements from page 94 to page 106 are signed by the following persons-in charge.

Head of the Company: Li Weimin

Chief Financial Offi cer: Wu Yuxiang

Head of Accounting Department: Zhao Qingchun

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CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONSOLIDATED BALANCE SHEET – CONTINUED

CONSOLIDATED BALANCE SHEET – CONTINUED
1 January- 30 June 2012 Prepared by: Yanzhou Coal Mining Company Limited LIABILITIES AND SHAREHOLDERS’ EQUITY NOTES	Unit: RMB June 30,2012December 31,2011
CURRENT LIABILITIES: Short-term borrowings VIII.19 Borrowings from central bank Deposits absorption and deposits between companies Borrowings from banks or other f nancial institutions Tradable f nancial liabilities Notes payable VIII.20 Accounts payable VIII.21 Advances from customers VIII.22 Amounts from sale of repurchased f nancial assets Service charge and commissions payable Salaries and wages payable VIII.23 Taxes payable VIII.24 Interest payable VIII.25 Dividends payable VIII.26 Other payables VIII.27 Accounts receivable reinsurance Reserve for insurance contract Acting trading securities Acting underwriting securities Non-current liabilities due within one year VIII.28 Other current liabilities VIII.7 TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES: Long-term borrowings VIII.29 Bonds payables VIII.30 Long-term payables VIII.31 Special accounts payable Provisions VIII.32 Deferred tax liabilities VIII.16 Other non-current liabilities VIII.33 TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES SHAREHOLDERS’ EQUITY: Share capital VIII.34 Capital reserves VIII.35 Less: treasury stock Special reserves VIII.36 Surplus reserves VIII.37 Provision for general risk Retained earnings VIII.38 Translation reserve Equity attributable to shareholders of the Company Minority interest VIII.39 TOTAL SHAREHOLDERS’ EQUITY TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	5,881,539,628 13,171,082,700 3,880,937,727 240,824,185 2,657,999,827 2,054,240,242 1,196,538,674 1,740,484,646 1,420,592,687 1,150,954,174 1,290,053,316 2,530,477,731 292,586,035 252,468,903 2,803,488,000 2,788,120,622 3,181,363,668 11,080,422,717 8,766,204,849 3,779,701,874 3,199,224,715
	37,071,981,107 36,287,325,813
	17,883,611,543 14,869,322,500 6,324,900,000 69,611,570 8,158,667 1,477,220,918 325,413,915 8,072,239,726 3,859,784,843 1,319,221,287 6,868,994
	35,146,805,044 19,069,548,919
	72,218,786,151 55,356,874,732
	4,918,400,000 4,918,400,000 3,505,369,837 4,474,780,903 2,904,295,890 2,414,752,299 4,580,888,473 4,580,888,473 28,157,069,701 26,054,369,382 -824,823,973 -376,828,595
	43,241,199,928 42,066,362,462
	3,266,113,045 666,184,325
	46,507,312,973 42,732,546,787
	118,726,099,124 98,089,421,519

The accompanying notes disclosured is the composing part of the fi nancial statements.

Yanzhou Coal Mining Company Limited Interim Report 2012 95

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

BALANCE SHEET OF THE PARENT COMPANY

1 January- 30 June 2012

Prepared by: Yanzhou Coal Mining Company Limited ASSET NOTES	Unit: RMB June 30, 2012December 31, 2011
CURRENT ASSET: Cash at bank and on hand Tradable f nancial assets Notes receivable Accounts receivable XV.1 Prepayments Interests receivable Dividends receivable Other receivables XV.2 Inventories Non-current assets due within one year Other current assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS: Available-for-sale f nancial assets Hold-to-maturity investment Long-term accounts receivable Long-term equity investments XV.3 Investment property Fixed assets Construction in progress Construction materials Disposal of f xed assets Productive biological assets Oil gas assets Intangible assets Development expenditure Goodwill Long-term deferred assets Deferred tax assets Other non-current assets TOTAL NON-CURRENT ASSETS TOTAL ASSETS	12,633,536,287 15,569,932,397 2,876,106,968 7,145,440,261 130,232,475 20,793,193 493,131,593 58,345,878 260,228,586 74,595,870 9,549,540,055 4,998,305,747 797,593,937 448,994,470 2,205,028,426 1,901,128,410
	28,945,398,327 30,217,536,226
	175,062,310 173,494,658 8,558,000,000 8,223,000,000 14,500,096,134 16,919,454,979 6,359,718,792 6,581,907,548 334,246,779 111,477,324 17,559,358 1,395,921 839,621,075 573,802,704 63,125 66,875 1,898,102,135 1,645,270,657 117,925,900 117,925,900
	32,800,395,608 34,347,796,566
	61,745,793,935 64,565,332,792

The accompanying notes disclosured is the composing part of the fi nancial statements.

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CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

BALANCE SHEET OF THE PARENT COMPANY – CONTINUED

1 January- 30 June 2012

Prepared by: Yanzhou Coal Mining Company Limited

Prepared by: Yanzhou Coal Mining Company Limited LIABILITIES AND SHAREHOLDERS’ EQUITY NOTES	Unit: RMB June 30, 2012December 31, 2011
CURRENT LIABILITIES: Short-term borrowings Tradable f nancial liabilities Notes payable Accounts payable Advances from customers Salaries and wages payable Taxes payable Interest payable Dividends payable Other payables Non-current liabilities due within one year Other current liabilities TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES: Long-term borrowings Bonds payable Long-term payable Special accounts payable Provisions Deferred tax liabilities Other non-current liabilities TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES SHAREHOLDERS’ EQUITY: Share capital Capital reserves Less: Treasury stock Special reserves Surplus reserves Provision for general risk Retained earnings TOTAL SHAREHOLDERS’ EQUITY TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	3,900,000,000 11,892,000,000 167,251,463 179,617,737 160,154,420 240,824,185 636,335,196 878,689,806 1,019,033,521 1,462,269,341 848,741,969 630,939,956 1,194,340,229 2,302,909,102 2,803,488,000 – 3,223,575,073 2,971,038,728 2,000,000,000 – 3,202,569,372 2,807,948,200
	19,155,489,243 23,366,237,055
	2,700,000,000 2,000,000,000 24,006,210 23,614,297 1,315,221,267 2,868,974
	4,039,227,477 2,026,483,271
	23,194,716,720 25,392,720,326
	4,918,400,000 4,918,400,000 3,830,880,618 4,587,845,667 2,597,652,900 2,217,185,097 4,535,778,435 4,535,778,435 22,668,365,262 22,913,403,267
	38,551,077,215 39,172,612,466
	61,745,793,935 64,565,332,792

The accompanying notes disclosured is the composing part of the fi nancial statements.

Yanzhou Coal Mining Company Limited Interim Report 2012 97

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONSOLIDATED INCOME STATEMENT

1 January- 30 June 2012

Prepared by: Yanzhou Coal Mining Company Limited ITEM NOTES	Unit: RMB January-June 2012 January-June 2011
1. TOTAL OPERATING REVENUE Including: operating revenue VIII.40 Interest income Premiums income Income from service charges and commissions 2. TOTAL OPERATING COST Including: Operating cost VIII.40 Interests expenditure Service charges and commissions expenditure Cash surrender value Net amount of compensation payout Net amount of provisions for insurance contract guarantee fund Insurance policy dividend expense Reinsurance expenses Operating taxes and surcharges VIII.41 Selling expense VIII.42 General and administrative expenses VIII.43 Finance costs VIII.44 Impairment loss of assets VIII.45 Add: Gain or loss on fair value change (The loss is listed beginning with “-”) Investment income (The loss is listed beginning with “-”) VIII.46 Including: Investment income of associates and joint ventures Foreign exchange gain or loss (The loss is listed beginning with “-”) 3. Operating prof t (The loss is listed beginning with “-”) Add: Non-operating income VIII.47 Less: Non-operating expenses VIII.48 Including: Losses on disposal of non-current assets 4. Total prof t (The total loss is listed beginning with “-”) Less: Income tax expenses VIII.49 5. Net prof t (The net loss is listed beginning with “-”) Net prof t attributable to shareholders of the Company Minority interest 6. Earnings per share (1) Earnings per share, basis VIII.50 (2) Earnings per share, diluted VIII.50 7. Other comprehensive income VIII.51 8. Total comprehensive income Total comprehensive income attributable to shareholders of the parent company Total comprehensive income attributable to minority shareholders	29,208,210,443 21,288,678,993 29,208,210,443 21,288,678,993
	25,731,661,267 14,257,285,681 21,252,225,417 11,573,556,926 352,827,576 307,474,928 1,118,775,189 1,176,433,699 2,632,232,285 2,025,477,427 375,976,324 -826,645,907 -375,524 988,608 69,000,264 15,239,068
	3,545,549,440 7,046,632,380 1,420,474,532 29,377,800 9,930,606 37,242,721
	4,956,093,366 7,038,767,459 35,280,586 1,999,910,583
	4,920,812,780 5,038,856,876 4,906,188,319 5,029,577,151 14,624,461 9,279,725
	0.9975 1.0226 0.9975 1.0226
	-433,036,615 232,001,512
	4,487,776,165 5,270,858,388 4,473,151,705 5,261,578,663 14,624,460 9,279,725

The accompanying notes disclosured is the composing part of the fi nancial statements.

98 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

INCOME STATEMENT OF THE PARENT COMPANY

1 January- 30 June 2012

Prepared by: Yanzhou Coal Mining Company Limited

Prepared by: Yanzhou Coal Mining Company Limited ITEM NOTES	Unit: RMB January -June 2012 January -June 2011
1. TOTAL OPERATING REVENUE XV.4 Less: Operating cost XV.4 Operating taxes and surcharges Selling expense General and administrative expense Finance costs Impairment loss of assets Add: Gain or loss on fair value changes (The loss is listed beginning with “-”) Investment income (The loss is listed beginning with “-”) XV.5 Including: Investment income of associates and joint ventures 2. Operating prof t (The loss is listed beginning with “-”) Add: Non-operating income Less: Non-operating expense Including: Loss on disposal of non-current assets 3. Total prof t (The total loss is listed beginning with “-”) Less: Income tax 4. Net prof t (The net loss is listed beginning with “-”) 5. Earnings per share (1) Earnings per share, basis (2) Earnings per share, diluted 6. Other comprehensive income 7. Total comprehensive income	21,397,173,167 14,304,921,177 15,830,698,663 7,910,162,298 287,727,332 261,561,221 176,958,359 171,887,180 1,724,670,632 1,516,903,975 257,615,862 69,620,253 12,366,274 -34,479,350 370,362,069 84,554,267 14,137,463
	3,502,230,662 4,424,861,167 5,621,269 2,435,202 1,005,987 10,857,219
	3,506,845,944 4,416,439,150 948,395,949 1,190,233,642
	2,558,449,995 3,226,205,508
	0.5202 0.6559 0.5202 0.6559
	1,175,739 3,445,707
	2,559,625,734 3,229,651,215

The accompanying notes disclosured is the composing part of the fi nancial statements.

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CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONSOLIDATED CASH FLOW STATEMENT

1 January- 30 June 2012

Prepared by: Yanzhou Coal Mining Company Limited ITEM NOTES	Unit: RMB January-June 2012 January-June 2011
1. CASH FLOW FROM OPERATING ACTIVITIES: Cash received from sales of goods or rendering of services Net increase in customer’s deposits and f nancial institution deposits Net increase in borrowings from central bank Net increase in borrowings from other f nancial institutions Cash received from former-insurance premiums Net cash received from reinsurance business Net increase of insured savings and investment Net increase from disposal of transactional f nancial assets Cash received from interests, service charge and commissions Net increase in borrowings from other companies Net amount from repurchasing businesses Tax refunding Cash received relating to other operating activities VIII.52 Sub-total of cash inf ows Cash paid for goods and services purchased Net increase in loans and advance from customers Net increase in deposits in central bank and other f nance institutions Cash paid for former insurance contracts claims Cash paid for interests, service charge and commissions Cash paid for insurance policy dividends Cash paid to employees and on behalf of employees Taxes payments Cash paid relating to other operating activities Sub-total of cash outf ows NET CASH FLOW FROM OPERATING ACTIVITIES 2. CASH FLOW FROM INVESTING ACTIVITIES: Cash received from recovery of investments Cash received from return of investments income Net cash received from disposal of f xed assets, intangible assets and other long-term assets Net cash received from disposal of sub companies and business units Cash received relating to other investing activities VIII.52 Sub-total of cash inf ows Cash paid to acquire f xed assets, intangible assets and other long-term assets Cash paid for investments Net increase of pledge loans Net cash paid for acquisition of subsidiaries and other business units Cash paid relating to other investing activities VIII.52 Sub-total of cash outf ows NET CASH FLOW FROM INVESTING ACTIVITIES	36,287,870,703 30,374,664,252 255,169,254 324,731,450 1,129,607,916 794,570,910
	37,672,647,873 31,493,966,612
	17,119,169,845 7,272,085,216 5,068,602,804 3,921,631,350 5,664,157,543 4,086,956,137 2,099,625,692 2,697,945,869
	29,951,555,884 17,978,618,572
	7,721,091,989 13,515,348,040
	397,193,766 – 20,590,469 – 3,907,469 3,418,124 5,658,731,828 1,347,076,105
	6,080,423,532 1,350,494,229
	1,576,403,447 4,867,710,655 563,484,777 954,052,548 1,153,257,715 1,507,783,264 946,436,405 7,678,047,221
	4,239,582,344 15,007,593,688
	1,840,841,188 -13,657,099,459

100

Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONSOLIDATED CASH FLOW STATEMENT – CONTINUED

1 January- 30 June 2012

Prepared by: Yanzhou Coal Mining Company Limited ITEM NOTES	Unit: RMB January-June 2012 January-June 2011
3. CASH FLOW FROM FINANCING ACTIVITIES: Cash received from investors Including: Cash received from minority shareholders of subsidiaries Cash received from borrowings Cash received from issuing bonds Cash received relating to other f nancing activities Sub–total of cash inf ows Repayments of borrowings and debts Cash paid for distribution of dividends or prof ts, or cash paid for interest expenses Including: Cash paid for distribution of dividends or prof ts by subsidiaries to minority shareholders Cash paid relating to other f nancing activities VIII.52 Sub-total of cash outf ows NET CASH FLOW FROM FINANCING ACTIVITIES 4. EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 5. NET INCREASE (DECREASE) ON CASH AND CASH EQUIVALENTS VIII.52 Add: Cash and cash equivalent, opening VIII.52 6. Cash and cash equivalents, closing VIII.52	6,940,861,312 11,182,893,600 6,312,900,000 –
	13,253,761,312 11,182,893,600
	11,503,000,000 2,962,585,760 829,836,110 1,836,097,529 352,000 – 54,798,250 837,898,189 12,387,634,360 5,636,581,478
	866,126,952 5,546,312,122
	-8,025,821 43,700,289
	10,420,034,308 5,448,260,992 8,154,223,808 6,778,388,923
	18,574,258,116 12,226,649,915

The accompanying notes disclosure is the composing part of the fi nancial statements.

Yanzhou Coal Mining Company Limited Interim Report 2012 101

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CASH FLOW STATEMENT OF THE PARENT COMPANY

1 January- 30 June 2012

Prepared by: Yanzhou Coal Mining Company Limited ITEM NOTES	Unit: RMB January-June 2012 January-June 2011
1. CASH FLOW FROM OPERATING ACTIVITIES: Cash received from sales of goods and rendering of services Tax refunding Cash received relating to other operating activities Sub-total of cash inf ows Cash paid for goods and services Cash paid to employees and on behalf of employees Taxes payments Cash paid relating to other operating activities Sub-total of cash outf ows NET CASH FLOW FROM OPERATING ACTIVITIES 2. CASH FLOW FROM INVESTING ACTIVITIES: Cash received from recovery of investments Cash received from return of investment income Net cash received from disposal of f xed assets, intangible assets and other long-term assets Net cash amount received from the disposal of subsidiaries and other business units Cash received relating to other investing activities Sub-total of cash inf ows Cash paid to acquire f xed assets, intangible assets and other long-term assets Cash paid for investments Net cash amounts paid by subsidiaries and other business units Cash paid relating to other investing activities Sub-total of cash outf ows NET CASH FLOW FROM INVESTING ACTIVITIES 3. CASH FLOW FROM FINANCING ACTIVITIES: Cash received from investors Cash received from borrowings cash received from issuing bonds Cash received relating to other f nancing activities Sub–total of cash inf ows Repayments of borrowings Cash paid for distribution of dividends or prof ts, or cash paid for interest expenses Cash payment relating to f nancing activities Sub-total of cash outf ows NET CASH FLOW FROM FINANCING ACTIVITIES 4. EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 5. NET INCREASE (DECREASE) ON CASH AND CASH EQUIVALENTS Add: Cash and cash equivalent, opening 6. Cash and cash equivalents, closing	28,364,533,661 23,507,963,419 455,092,042 143,490,896
	28,819,625,703 23,651,454,315
	15,140,992,801 5,913,047,279 3,494,500,224 2,701,664,256 4,544,164,633 3,487,382,625 1,572,627,023 1,227,289,608
	24,752,284,681 13,329,383,768
	4,067,341,022 10,322,070,547
	562,193,766 453,786,850 115,100,666 63,453,265 1,467,559 2,865,563 6,219,902,182 –
	6,898,664,173 520,105,678
	257,213,629 262,691,982 563,484,777 4,957,128,000 817,030,418 – 500,000,000 7,547,063,209
	2,137,728,824 12,766,883,191
	4,760,935,349 -12,246,777,513
	6,200,000,000 4,882,000,000 242,501,652 590,353,582
	6,442,501,652 5,472,353,582
	11,492,000,000 1,000,000,000 495,271,951 1,403,883,653 – 1,067,949
	11,987,271,951 2,404,951,602
	-5,544,770,299 3,067,401,980
	– 5,099,750
	3,283,506,072 1,147,794,764 6,014,805,639 5,336,180,576
	9,298,311,711 6,483,975,340

The accompanying notes disclosured is the composing part of the fi nancial statements. Yanzhou Coal Mining Company Limited Interim Report 2012

102

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

1 January-30 June 2012

Prepared by: Yanzhou Coal Mining Company Limited

Unit: RMB

ITEM	Amount for 1 Januaryto 30 June 2012
	Attribute to shareholders of the Parent Company Provision Total of shareholders’ Share capital Capital reserves Less: treasury stock Special reserves Surplus reserves for General Risk Retained earnings Translation reserve Minority interest equity
I. Balance at December 31, 2011 4,918,400,000 4,474,780,903 – 2,414,752,299 4,580,888,473 – 26,054,369,382 -376,828,595 666,184,325 42,732,546,787 Add: Change in accounting policies – Correction of errors in the early stage – Others – II. Balance at January 1, 2012 4,918,400,000 4,474,780,903 – 2,414,752,299 4,580,888,473 – 26,054,369,382 -376,828,595 666,184,325 42,732,546,787 III. Changes for the year (The decrease is listed beginning with “-“) – -969,411,066 – 489,543,591 – – 2,102,700,319 -447,995,378 2,599,928,720 3,774,766,186 (I) Net prof t 4,906,188,319 14,624,461 4,920,812,780 (II) Other comprehensive income 14,958,763 -447,995,378 -433,036,615 Sub-total of (I) and (II) – 14,958,763 – – – – 4,906,188,319 -447,995,378 14,624,461 4,487,776,165 (III) Owner’s contributions and reduction in capital – -984,369,829 – – – – – – 2,569,099,976 1,584,730,147 1. Capital from shareholders – 2. Combination under common control -553,399,271 -553,399,271 3. Merger with Gloucester -430,970,558 2,569,099,976 2,138,129,418 (IV) Prof t distribution – – – – – – -2,803,488,000 – -352,000 -2,803,840,000 1. Transfer to surplus reserve – – 2. Provision for general risks – 3. Distribution to shareholders -2,803,488,000 -352,000 -2,803,840,000 4. Others – (V) Internal settlement and transfer of owners’ equities – – – – – – – – – – 1. Capital reserve transferred share capital – 2. Surplus reserve transferred share capital – 3. Provision of surplus reserve for loss – 4. Others – (VI) Special reserves – – – 489,543,591 – – – – 16,556,283 506,099,874 1. Provision of the year 499,807,562 16,556,283 516,363,845 2. Usage of the year -10,263,971 -10,263,971 (VII) Others – IV. Balance at June 30, 2012 4,918,400,000 3,505,369,837 – 2,904,295,890 4,580,888,473 – 28,157,069,701 -824,823,973 3,266,113,045 46,507,312,973	4,918,400,000 4,474,780,903 – 2,414,752,299 4,580,888,473 – 26,054,369,382 -376,828,595 666,184,325 42,732,546,787 – – –
	4,918,400,000 4,474,780,903 – 2,414,752,299 4,580,888,473 – 26,054,369,382 -376,828,595 666,184,325 42,732,546,787
	4,918,400,000 3,505,369,837 – 2,904,295,890 4,580,888,473 – 28,157,069,701 -824,823,973 3,266,113,045 46,507,312,973

The accompanying notes disclosure is the composing part of the fi nancial statements.

Yanzhou Coal Mining Company Limited Interim Report 2012 103

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY – CONTINUED

1 January-30 June 2012

Prepared by: Yanzhou Coal Mining Company Limited

Unit: RMB

ITEM	Amount for theyear of 2011
	Attribute to shareholders of the Parent Company Provision Total of shareholders’ Share capital Capital reserves Less: treasury stock Special reserves Surplus reserves for General Risk Retained earnings Translation reserve Minority interest equity
I. Balance at December 31, 2010 4,918,400,000 4,641,594,327 – 1,920,408,416 3,904,423,421 – 21,102,534,193 192,476,489 85,892,305 36,765,729,151 Add: Change in accounting policies – Correction of errors in the early stage – Others – II. Balance at January 1, 2011 4,918,400,000 4,641,594,327 – 1,920,408,416 3,904,423,421 – 21,102,534,193 192,476,489 85,892,305 36,765,729,151 III. Changes for the year (The decrease is listed beginning with “-“) – -166,813,424 – 494,343,883 676,465,052 – 4,951,835,189 -569,305,084 580,292,020 5,966,817,636 (I) Net prof t 8,530,156,241 21,346,866 8,551,503,107 (II) Other comprehensive income -154,333,424 -569,305,084 723,638,508 Sub-total of (I) and (II) – -154,333,424 – – – – 8,530,156,241 -569,305,084 21,346,866 7,827,864,599 (III) Owner’s contributions and reduction in capital – -12,480,000 – – – – – – 536,930,035 524,450,035 1. Capital from shareholders 536,930,035 536,930,035 2. The amount listed in shareholders equity from share payment – 3. Others -12,480,000 -12,480,000 (IV) Prof t distribution – – – – 676,465,052 – -3,578,321,052 – -440,000 -2,902,296,000 1. Transfer to surplus reserve 676,465,052 -676,465,052 – 2. Provision for general risks – 3. Distribution to shareholders -2,901,856,000 -440,000 -2,902,296,000 4. Others – (V) Internal settlement and transfer of owners’ equities – – – – – – – – – – 1. Capital reserve transferred share capital – 2. Surplus reserve transferred share capital – 3. Provision of surplus reserve for loss – 4. Others – (VI) Special reserves – – – 494,343,883 – – – – 22,455,119 516,799,002 1. Provision of the year 663,598,166 22,455,119 686,053,285 2. Usage of the year -169,254,283 -169,254,283 (VII) Others – IV. Balance at Dec 31, 2011 4,918,400,000 4,474,780,903 – 2,414,752,299 4,580,888,473 – 26,054,369,382 -376,828,595 666,184,325 42,732,546,787	4,918,400,000 4,641,594,327 – 1,920,408,416 3,904,423,421 – 21,102,534,193 192,476,489 85,892,305 36,765,729,151 – – –
	4,918,400,000 4,641,594,327 – 1,920,408,416 3,904,423,421 – 21,102,534,193 192,476,489 85,892,305 36,765,729,151
	4,918,400,000 4,474,780,903 – 2,414,752,299 4,580,888,473 – 26,054,369,382 -376,828,595 666,184,325 42,732,546,787

The accompanying notes disclosure is the composing part of the fi nancial statements.

104 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

STATEMENT OF CHANGES IN EQUITY OF THE PARENT COMPANY

1 January-30 June, 2012

Prepared by: Yanzhou Coal Mining Company Limited

Unit: RMB

ITEM	Amount for 1 Januaryto 30 June 2012
	Provision Total of shareholders’ Share capital Capital reserves Less: treasury stock Special reserves Surplus reserves for General Risks Retained earnings equity
I. Balance at December 31, 2011 Add: Change in accounting policies Correction of errors in the early stage Others II. Balance at January 1, 2012 III. Changes for the year (The loss is listed beginning with “-“) (I) Net prof t (II) Other comprehensive income Sub-total of (I) and (II) (III) Owner’s contributions and reduction in capital 1. Capital from shareholders 2. Combination under common control 3. Others (IV) Prof t distribution 1. Transfer to surplus reserve 2. Provision for general risks 3. Distribution to shareholders 4. Others (V) Internal settlement and transfer of owners’ equities 1. Capital reserve transferred share capital 2. Surplus reserve transferred share capital 3. Provision of surplus reserve for loss 4. Others (VI) Special reserves 1. Provision of the year 2. Usage of the year (VII) Others IV. Balance at Dec 31, 2012	4,918,400,000 4,587,845,667 – 2,217,185,097 4,535,778,435 – 22,913,403,267 39,172,612,466 – – –
	4,918,400,000 4,587,845,667 – 2,217,185,097 4,535,778,435 – 22,913,403,267 39,172,612,466
	– -756,965,049 – 380,467,803 – – -245,038,005 -621,535,251 2,558,449,995 2,558,449,995 1,175,739 1,175,739 – 1,175,739 – – – – 2,558,449,995 2,559,625,734 – -758,140,788 – – – – – -758,140,788 – -758,140,788 -758,140,788 – – – – – – – -2,803,488,000 -2,803,488,000 – – – -2,803,488,000 -2,803,488,000 – – – – – – – – – – – – – – – – 380,467,803 – – – 380,467,803 380,467,803 380,467,803 – –
	4,918,400,000 3,830,880,618 – 2,597,652,900 4,535,778,435 – 22,668,365,262 38,551,077,215

The accompanying notes disclosure is the composing part of the fi nancial statements.

Yanzhou Coal Mining Company Limited Interim Report 2012 105

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

STATEMENT OF CHANGES IN EQUITY OF THE PARENT COMPANY – CONTINUED

1 January-30 June 2012

Prepared by: Yanzhou Coal Mining Company Limited

Unit: RMB

ITEM	Amount for theyear of 2011
	Provision Total of shareholders’ Share capital Capital reserves Less: treasury stock Special reserves Surplus reserves for General Risks Retained earnings equity
I. Balance at December 31, 2010 Add: Change in accounting policies Correction of errors in the early stage Others II. Balance at January 1, 2011 III. Changes for the year (The loss is listed beginning with “-“) (I) Net prof t (II) Other comprehensive income Sub-total of (I) and (II) (III) Owner’s contributions and reduction in capital 1. Capital from shareholders 2. combination under common control 3. Others (IV) Prof t distribution 1.Transfer to surplus reserve 2.Provision for general risks 3.Distribution to shareholders 4. Others (V) Internal settlement and transfer of owners’ equities 1.Capital reserve transferred share capital 2.Surplus reserve transferred share capital 3.Provision of surplus reserve for loss 4.Others (VI) Special reserves 1.Provision of the year 2.Usage of the year (VII)Others IV. Balance at Dec 31, 2011	4,918,400,000 4,603,418,608 – 1,830,584,098 3,859,313,383 – 19,727,073,799 34,938,789,888 – – –
	4,918,400,000 4,603,418,608 – 1,830,584,098 3,859,313,383 – 19,727,073,799 34,938,789,888
	– -15,572,941 – 386,600,999 676,465,052 – 3,186,329,468 4,233,822,578 6,764,650,520 6,764,650,520 -15,572,941 -15,572,941 – -15,572,941 – – – – 6,764,650,520 6,749,077,579 – – – – – – – – – – – – – – – 676,465,052 – -3,578,321,052 -2,901,856,000 676,465,052 -676,465,052 – – -2,901,856,000 -2,901,856,000 – – – – – – – – – – – – – – – – 386,600,999 – – – 386,600,999 480,676,375 480,676,375 -94,075,376 -94,075,376 –
	4,918,400,000 4,587,845,667 – 2,217,185,097 4,535,778,435 – 22,913,403,267 39,172,612,466

The accompanying notes disclosure is the composing part of the fi nancial statements.

106 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

I. GENERAL

Yanzhou Coal Mining Company Limited (the “Company”) is a stock company with limited liability established in the People’s Republic of China (the “PRC”). The Company was established in September, 1997 by Yankuang Group Corporation Limited (the “Yankuang Group”) in accordance with the Tigaisheng (1997) No. 154 document issued by “National Economic System Reform Commission of People’s Republic of China. The address of the registered offi ce is Zoucheng City, Shandong Province. The total share capital was RMB1,670 million with Par value per share of RMB1.00 when the Company was set up.

As approved by Zhengweifa (1997) No.12 document issued by Securities Committee of State Council, the Company issued H shares with face value of RMB820 million to Hong Kong and international investors in March 1998. The American underwriters exercised the excessive issue option and the Company issued additional H Shares of RMB30 million. The above shares were listed and traded on Stock Exchange of Hong Kong Limited on April 1, 1998, and the American Depository Shares was listed in the New York Stock Exchange on March 31, 1998. The total share capital has changed to RMB2,520 million after these issues. The company issued 80 million new A shares in June 1998. The above shares went public and were traded on Shanghai Stock Exchange since July 1, 1998. After many issues and bonus shares, the share capital of the Company increased to RMB4,918.40 million by December 31, 2010.

The Company and its subsidiary companies (hereinafter collectively referred to as the “Group”) are mainly engaged in the coal mining and preparation, coal sales, cargo transportation by self-operated railways, road transportation, port operation, comprehensive scientifi c and technical service for coal mines, methanol production and sales etc.

II. THE PREPARATION FOUNDATION OF FINANCIAL STATEMENTS

The Group takes going concern as the basis of fi nancial statements. The fi nancial statements are prepared in according with the Accounting Standards for Business Enterprises (hereinafter referred to as “new CASs” or “ASBEs”) and No.38 specifi c accounting standard issued by the Ministry of Finance (MOF) on February 15, 2006, and later issued application guide to the ASBE, the interpretation of ASBE and relevant regulations, and Information Disclosure and Presentation Rules for Companies Making Public Offering No. 15 – General Provisions on Financial Reporting (Revised 2010) issued by China Securities Regulatory Commission.

III. DECLARATION OF COMPLIANCE WITH ASBES

The fi nancial statements of the Group have been prepared in accordance with the new ASBEs and have been presented completely and genuinely with the fi nancial information of the Group such as its fi nancial position, operating results and cash fl ows and so on.

Yanzhou Coal Mining Company Limited Interim Report 2012 107

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

IV. SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING ESTIMATES AND PREPARATION METHODS FOR CONSOLIDATED FINANCIAL STATEMENTS

1. Accounting period

st st The accounting period is from the Calendar year January 1 to December 31 .

2. Functional currency

The functional currency of the Company except overseas subsidies is Renminbi (RMB). As the primary economic environment for overseas subsidiaries of the Company, Yancoal Australia Pty Limited and its subsidiaries are in Australia, the functional currency of the two Companies is AUD. On the conversion method from AUD to RMB, please refers to Note “IV.5”.

1. Basis of accounting and principle of measurement The Company has adopted the accrual basis of accounting and used the historical cost convention as the principle of measurements for assets and liabilities except for tradable fi nancial assets, available-for-sale fi nancial assets and hedging instruments, which are measured at their fair values.

4. Cash and cash equivalents

Cash in cash fl ow are cash on hand and deposits available for payment at any time. Cash equivalents in cash fl ow are investments which are short-term (normally become due within 3 months after purchasing date), highly liquid, readily convertible to known amounts of cash, and subject to an insignifi cant risk of changes in value.

5. Foreign currency and the translation of fi nancial statements denominated in foreign currency

(1) Foreign currency translation

Foreign currency transactions are converted to the functional currency at the spot exchange rate of the day when the transaction occurs. At the balance sheet date, foreign currency monetary items are translated to the functional currency using the spot exchange rate of the day. Exchange differences arising are recognized in profi t or loss for the current period, except for the exchange differences arising on the borrowing costs eligible for acquisition, construction or production of assets which are qualifi ed for capitalization. Foreign currency non-monetary items measured at fair value are translated using the exchange rates at the date when the recognized fair value is determined. The differences between the amount of the functional currency before and after conversion are recognized in profi t or loss or interests of shareholders as changes of fair value. Foreign currency non-monetary items measured at historical cost are translated at the spot exchange rates at the date of the transactions, and do not change the functional currency amount.

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CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

IV. SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING ESTIMATES AND PREPARATION METHODS FOR CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

5. Foreign currency and the translation of fi nancial statements denominated in foreign currency

• (2) Translation of fi nancial statements denominated in foreign currency – continued

The asset and liability items on the balance sheet of foreign currency are converted to RMB at the spot exchange rate of the balance sheet date; other items are converted at the sport exchange rate of the day when the transaction occurs, except undistributed profi ts on shareholders’ equity. The revenue and expense items on the income statement of overseas subsidiaries are converted to RMB at the approximate rate of the spot exchange rate of the day when the transaction occurs. Exchange differences arising from the above issues are presented separately under the shareholders’ equity items. When overseas operating units are disposed, then the relevant exchange differences will be transferred from shareholders’ equity to current disposal income or expense.

Cash fl ows denominated in foreign currency or from a foreign subsidiary are translated at the approximate rate of the spot exchange rate of the day when the transaction occurs. The effect of fl uctuations of exchange rates on cash and cash equivalents is presented separately as a reconciling item in the cash fl ow statement.

6. Financial assets and fi nancial liabilities

• (1) Financial assets

Upon initial recognition, fi nancial assets are classifi ed into the following categories: fi nancial assets at ‘fair value through profi t or loss’ (FVTPL), ‘held-to-maturity’ investments, ‘available-for-sale’ (AFS) fi nancial assets and ‘loans and receivables’.

1) Financial assets at FVTPL:

A fi nancial asset is held for trading if it has been acquired principally for the purpose of selling in the short term and presented as the tradable fi nancial assets in the balance sheet. Except for the purpose of hedging, derivative fi nancial instruments are classifi ed into fi nancial assets or liabilities at FVTPL.

2) Held-to-maturity investment

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fi xed maturity date that the enterprise has the clear intention and ability to hold to maturity.

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CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

IV. SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING ESTIMATES AND PREPARATION METHODS FOR CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

6. Financial assets and fi nancial liabilities – continued

• (1) Financial assets – continued

• 3) Receivables: Non-derivative fi nancial assets with fi xed or determinable payments are not quoted in an active market.

4) AFS fi nancial assets

AFS fi nancial assets are those non-derivative fi nancial assets that are designated as available for sale or are not classifi ed as (1) fi nancial assets at FVTPL, (2) loans and receivables, or (3) held-tomaturity investments.

Financial assets are recognized in fare value in the balance sheet when the Group becomes a part of the contractual provisions of the instrument. Transaction costs that are directly attributable to the acquisition or issue of fi nancial assets and fi nancial liabilities (other than fi nancial assets at fair value through profi t or loss) are added to or deducted from the fair value of the fi nancial assets, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of fi nancial assets at fair value through profi t or loss are recognized directly in profi t or loss. Financial assets are no longer recognised when the rights to receive cash fl ows from the assets expire or, the fi nancial assets are transferred and the Group has transferred substantially all the risks and rewards of ownership of the fi nancial assets.

Financial assets and AFS fi nancial assets at FVTPL are subsequently measured at fair value. The receivables and held-to-maturity investments are carried at the amortized cost using the effective interest rate method.

Changes in fair value of fi nancial assets at FVTPL are included in profi t or loss for the period at fair value. The received interest during the period holding assets shall be recognized as investment income. On disposing of it, the difference between fair value and initial accounting value shall be recognized as in profi t or loss statements on investment, and the profi t or loss at the fair value is also adjusted accordingly.

Other than impairment loss and exchange gains and losses arising from foreign currency monetary fi nancial assets, the changes in fair value of AFS fi nancial assets are recorded in the shareholder’s equity. When the fi nancial assets are derecognized, the calculated amount of changes in fair value of AFS fi nancial assets should be recorded into current profi ts or losses. The interest of AFS liability instruments calculated by actual interest rate during the holding period and the cash dividends declared and issued by the investee on available-for-sale equity instruments should be included in current profi t or loss as investment income.

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CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

IV. SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING ESTIMATES AND PREPARATION METHODS FOR CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

6. Financial assets and fi nancial liabilities – continued

(1) Financial assets – continued

The Company estimates the carrying amount of a fi nancial asset at the balance sheet date (other than those at FVTPL). If there is objective evidence that the fi nancial asset is impaired, the Company shall determine to accrue the amount of any impairment loss. When the fi nancial assets carried at amortized cost impaired, they should be accrued impairment provisions at the amount of the difference that the estimated future cash fl ow (exclusive not yet occurred credit loss) lower than the present value. If the amount of impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognized, the previously recognized impairment loss should be reversed through current profi t and loss. If the fair value of an AFS fi nancial asset declines substantially or non-temporarily, the accumulated loss arising from this decline that had been recognized directly in shareholders’ equity shall be recognized in the profi t or loss statement. For the AFS liability instrument investment which has been recognized impairment loss, if the fair value increases in the subsequent period and the increase can be related objectively to an event occurring after the impairment loss was recognized, the previously recognized impairment loss should be reversed through current profi t and loss. For the AFS equity instrument investment which has been recognized impairment loss, the fair value increase in the subsequent period should be directly included in shareholders’ equity.

Financial assets should be derecognized when: (1) the rights to receive cash fl ows from the assets expired; or (2) the fi nancial assets have been transferred and the Group has substantially transferred all the risks and rewards of ownership of the assets; (3) the fi nancial assets have been transferred, the Group has neither transferred nor keep almost all the risks and rewards of ownership of the assets but gave up the control of the fi nancial assets.

If the enterprise neither transferred all the risks and rewards of ownership of the assets nor gave up the control of the fi nancial assets, the related fi nancial assets should be recognized based on the degree of involvement into the transferred fi nancial assets by the enterprise, the related liabilities should be recognized as well. The degree of involvement into the transferred fi nancial assets means the risk level faced by the enterprise, which was caused by the value change of such fi nancial assets.

If the holistic transfer of fi nancial assets meets the conditions of derecognition, the difference between the carrying value of transferred fi nancial assets and the sum of consideration from the transfer and the accumulated amount of fair value change originally included in other comprehensive income should be included into the current loss and profi t.

It the partial transfer of fi nancial assets meets the conditions of derecognition, the entire carrying value of transferred fi nancial assets should be apportioned between the portion whose recognition has been stopped and the portion whose recognition has not been stopped according to the respective fair value. The difference between the sum of consideration from the transfer and the accumulated amount of fair value change of the derecognized portion which has been originally included in other comprehensive income and the carrying value of the derecognized portion before apportionment should be included into the current loss and profi t.

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CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

IV. SIGNIFICANT ACCOUNTING POLICIES, ACCOUNTING ESTIMATES AND PREPARATION METHODS FOR CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

6. Financial assets and fi nancial liabilities – continued

(2) Financial liabilities

Upon initial recognition, fi nancial liabilities are classifi ed as either fi nancial liabilities ‘at fair value through profi t or loss’ (FVTPL) or ‘other fi nancial liabilities’.

Financial liabilities are classifi ed as at FVTPL where the fi nancial liability is either held for trading or it is designated as at FVTPL. Financial liabilities at FVTPL are subsequently measured at fair value, with gains or losses arising from changes in fair value as well as dividends and interest income related to such fi nancial liabilities recognized in profi t or loss for the period.

Other fi nancial liabilities are subsequently measured at unamortized cost using the effective interest method.

When the present obligation of fi nancial liability entirely or partly discharged, the whole fi nancial liability or the part of the fi nancial liability of which present obligation has been partly discharged should be derecognized. The difference between the carrying amount of the fi nancial liability derecognized and the consideration paid shall be included in current profi t and loss.

(3) Method of fair values recognition of fi nancial assets and fi nancial liabilities

If there is an active market for fi nancial instrument, the quoted market price in an active market is used to determine the fair value of the fi nancial instrument. In the active market, fi nancial assets held or fi nancial liabilities intending to bear by the Group take the current quoted price as the fair value of the relevant assets and liabilities. Financial assets intending to buy or fi nancial liabilities borne by the Group take the current offer price as the fair value of the relevant assets and liabilities. If there are no quoted price and offer price for fi nancial assets and liabilities, and the economic conditions do not change signifi cantly after the latest transaction, the latest quotation is used to determine the fair value of such fi nancial assets or liabilities. If the economic conditions changed signifi cantly after the latest transaction, the fair value of such fi nancial assets or fi nancial liabilities should be determined by adjusting the quoted price of the latest transaction through preferring to the current price or interest of the similar fi nancial assets or fi nancial liabilities. If the Group has suffi cient evidence to prove that the quoted price of the latest transaction did not based on fair value, the fair value of such fi nancial assets or fi nancial liabilities should be determined through appropriate adjustment on the quoted price of the latest transaction.

If there no active market for fi nancial instrument, the fair values are determined by evaluation method, including to consult the latest prices in the marketing transaction by the parties who are familiar with the market and make the transaction Voluntarily, the current fair values of the other identifi ed fi nancial assets, discounted method of cash fl ow and options pricing modes.

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6. Financial assets and fi nancial liabilities – continued

• (3) Method of fair values recognition of fi nancial assets and fi nancial liabilities – continued The fair values of forward foreign exchange contracts of the Company and its overseas subsidiaries Yanzhou Coal Mining Company Limited Australia and the belonging subsidiaries (the Australian subsidiaries) are subject to the discounted cash fl ow between the contracted exchange rate and present value of forward exchange rate. Fair values of interest swap contracts are subject to the discounted cash fl ow between the fl oating interest rate and fi xed interest rate.

• Accounting method for bad debt provisions of the receivables The following situations are considered as criterion of recognizing bad debt as loss of receivables: revocation, bankruptcy, insolvency, seriously shortage of cash fl ows, out of business caused by serious natural disaster and unable to pay off the debt within the foreseeable time of the debtors, other solid evidence indicating that debt can’t be recovered or be of a slim chance.

The allowance method is applied to the possible loss of bad debt, the impairment shall be assessed separately or in combination, the Company shall be determined to accrue the bad debt provisions which shall be calculated into the current profi ts and losses. If there is defi ned evidence for the receivables not to or not likely to be received, which shall be classifi ed into the loss of bad debt and write off the accrued bad debts provisions after going through the approval procedure of the Company.

• (1) The receivables with individual signifi cant amount accruing bad debts provisions

Judgment basis or amount standards of The receivables with more than RMB8 million individual signifi cant amount individual amount shall be classified into the signifi cant receivables; The accruing method of the receivables with The bad debt provisions shall be accrued based on individual signifi cant amount the difference between current value of future cash fl ow and the carrying amount.

• (2) Accruing the bad debt provision according to the portfolio

The basis of portfolio Accounting aging Use the accounting aging of the receivables as the credit risk characteristics to classify the portfolio Risk-free Use the amount characteristics of the receivables, the relation with transaction party and its credit as characteristics to classify the portfolio

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1. Accounting method for bad debt provisions of the receivables – continued (2) Accruing the bad debt provision according to the portfolio – continued

The accrual method

Accounting aging

Accrue the bad debt provision by accounting aging analysis method

Risk-free

Not accrue the bad debt provision

The percentage of bad debt provision is as followings according to accounting aging:

	Accrual percentage Accrual percentage	Accrual percentage Accrual percentage
Accounting aging	of the receivables of other receivables
within 1 year	4%	4%
1-2 years	30%	30%
2-3 years	50%	50%
over 3 years	100%	100%

• (3) The individually insignifi cant receivables accruing the bad debt provision

Accrual reason Accrual method

The individual amount is not significant, but the accrued bad debt provision on the basis of portfolio can not refl ect its risk.

The bad debt provisions shall be accrued based on the difference between current value of future cash fl ow and the carrying amount.

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8. Inventories

• (1) the classification of inventories: The inventories include the raw materials, coal stock, low value consumables and so on.

• (2) the pricing method of receiving and issuing inventories: The Company adopts a perpetual inventory system to calculate its inventory, using the actual cost pricing for procurement and inventories, and weighted average approach for consumptions and delivery of inventories.

• (3) The end-of-period inventories are measured at the lower one between the cost and the convertible net value. If the inventories are damaged, become partially or completely obsolete or sold at price lower than cost, unrecoverable cost shall be estimated and recognized as a provision for decline in value. The excess of cost over the convertible net value is generally recognized as provision for decline in value of inventories on a separate inventory item.

• (4) Net realisable value of inventories directly for sale, such as commodity stocks and materials for sale, is the estimated selling price less the estimated costs necessary to make the sale and other related taxes; Net realisable value of material stocks for product is the estimated selling price less the estimated costs, the estimated marketing cost and other related taxes of the fi nished production occurred

9. Long-term equity investments

Long-term equity investments mainly includes equity investments held by the Group which exercise control, joint control or signifi cant infl uence on the investee, which has no control, joint control or signifi cant infl uence on the investee, and which has no offer in active market and whose fair values cannot be reliable measured.

Joint control means mutual control over certain economic activities under contract. The main basis to defi ne joint control is that any party of the joint venture cannot control the production and business operations of the venture individually, and the decisions involving the basic production and business operations need the unanimous consent from all parties.

Joint control represents a contractual agreed common control over an economic activity. Joint control exists when neither party has independent power to control the operating activities and the decision making relating to the operating activities of the jointly controlled entity require unanimous consent of the parties.

Signifi cant infl uence means that the investor has the right to participate decision-making for the fi nance and operating policies of investee and has no control or joint control with other parties on policies-making. The main basis to defi ne signifi cant infl uence is that the Group holds directly or indirectly through subsidiaries above 20% (included) but less than 50% voting shares of investee. Signifi cant infl uence cannot be recognized if there is solid evidence indicating that the investor cannot participate in the decision-making of investee.

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9. Long-term equity investments – continued

For a business combination involving enterprise under common control, the initial investment cost of the long-term equity investment is the carrying amount of the owner’s equity of the party being absorbed at the combination date. For a business combination not involving enterprises under common control, the initial investment cost of the long-term equity investment acquired is the aggregate of the fair value, at the acquisition date, of the acquiree’s identifi able assets, liabilities and contingent liabilities acquired.

For a long-term equity investment acquired by cash payment, the initial investment cost shall be the actual purchase price that has been paid. Initial investment cost also includes those costs, taxes and other necessary expenditures directly attributable to the acquisition of the long-term equity investment. For a long-term equity investment acquired by the issue of equity securities, the initial investment cost shall be the fair value of the securities issued. A long-term equity investment invested by investors, the initial investment cost use the values described in investment contract or agreement. For a long-term equity investment acquired by debts reorganization or non-currency assets transaction, the initial investment cost shall be recognized in accordance with relevant accounting standards.

The cost method is applied in calculating the subsidiaries investment, equity method used in adjusting the consolidated fi nancial statements. If the Company does not have joint control or signifi cant infl uence over the investee, the investment is not quoted in an active market and its fair value cannot be reliably measured, a longterm equity investment shall be calculated using the cost method. If the Company does not have control, joint control or signifi cant infl uence over the investee and the fair value of the long-term equity investment can be reliably measured, the investment shall be calculated as an available-for-sale fi nancial asset.

Under the cost method, long-term equity investments are measured at initial investment cost, and the investment cost shall be adjusted when the investments are added and recovered. Under the equity method, the current investment profi t and loss are the net profi ts and losses created by the investee and shared by the Company. The share of net profi ts or losses from the investee should be confi rmed, based on the fair values of identifi able assets on the acquisition date, according to the accounting policies and accounting period of the Group, offsetting inter-segment transactions profi t and loss created by joint venture and associated enterprises which belong to the investor in terms of shares proportion, and after adjusting the net profi t from investee. The Group shall, if there is debt balance relating to the long-term equity investment on the joint venture and associates hold before the executing date, deduct the debt balance which should amortize within remaining term, and recognize the investment profi ts and losses.

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9. Long-term equity investments – continued

For the reason of decreasing investment, the Group no longer has any joint control or signifi cant infl uence on the investee, and in active market the long-term equity investment, which has no offer and fair values and cannot be reliably measured, shall be measured by cost method. For the reason of increasing investment, the Group is able to exercise control over the investee, the measurement shall be changed into cost method. For the reason of increasing investment, the Group is able to exercise joint control or signifi cant infl uence but unable to exercise control on the investee, or for the reason of disposal of investment, the Group is unable to exercise control but able to exercise joint control or signifi cant infl uence over the investee, the measurement shall be changed into cost method.

When long-term equity investment is disposed, the difference between the carrying value and the actual consideration is recognized as investment return of the period; under equity method, the long-term equity investments, which is recognized as shareholder’s equity of the investor arising on the change of investee’s shareholder equity (other than net loss and profi t), is included in investment return of the period according to the relevant proportion.

10. Fixed assets

• (1) Recognition of fi xed assets: Fixed assets are tangible assets that are held for production or operation, and have a service life more than one accounting year.

• (2) Category of fi xed assets: Buildings, coal mine buildings, ground buildings, railway structure, harbour works and craft, plant, machinery and equipment, transportation equipment, land etc.

• (3) Measurement of fi xed assets: The fi xed assets shall be initially measured at actual cost of acquisition considering the effect of any expected costs of disposing the asset. Among these, the costs of outsourcing fi xed assets include duties and expenses such as purchasing cost, VAT, import tariff, other expenses incurred to ensure estimated usage of the fi xed assets that can be directly included in the assets. The costs to build the fi xed assets include necessary expenses incurred to ensure the usage status of the assets. The accounting value of the fi xed assets invested by the investors shall be accordance with the values specifi ed in the investment contract or agreement, while for not fair value specifi ed in the contract or agreement, shall be regarded as fair value in accounting value. Fixed assets by fi nancial lease are recognized at the lower of fair value of such assets at leasing date and the present value of minimum lease payment.

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10. Fixed assets – continued

• (4) Subsequent expenditure of fi xed assets: the subsequent expenditure includes expenses for repair, renovation and improvement, which shall be recognized as fixed asset cost provided that the expenditures confi rm to the conditions of fi xed assets recognition. With regard to the replaced parts, the carrying value shall not be recognized and other subsequent costs incurred shall be recognized in the gain and loss in the period.

• (5) Depreciation approach of fi xed assets: The depreciation is provided to all fi xed assets except those that have already accrued depreciation and lands category. The mining structures are depreciated using the estimated production capacity method, and other fi xed assets using the average service life method, calculating depreciation rate by month and record it into the current cost or expenses of relevant assets according to their various purposes. The Group’s estimated residual value for fi xed assets is 0-3%, the estimated residual rate; useful life and annual depreciation rate of each category of fi xed assets using the composite life method are as follows:

			Estimated	Annual
			residual	depreciation
No.	Category	Useful life	value rate	rate
		(years)	(%)	(%)
1	House Buildings	10-30	0-3	3.23-10.00
2	Ground buildings	10-25	0-3	3.88-10.00
3	Port works and vessels	40	0	2.50
4	Plant, machinery and equipment	2.5-25	0-3	3.88-40.00
5	Transportation equipment	6-18	0-3	5.39-16.67

The vessels of Shandong Yancoal Shipping Co., Ltd. are depreciated over 18 years. All the other transportation equipments are depreciated over 6 to 9 years.

Land category refers to that of overseas subsidiaries and no depreciation is provided for as the subsidiaries enjoy the permanent ownership.

• (6) The Company shall review the useful life and estimated net residual value of a fi xed asset and the depreciation method applied at least at each fi nancial year-end. A change in the useful life or estimated net residual value of a fi xed asset or depreciation method used shall be treated as a change in an accounting estimate.

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10. Fixed assets – continued

• (7) Fixed assets that cannot bring economic returns after treatment or are not expected to bring economic returns after use or treatment shall be no longer recognized. When a fi xed asset is sold, transferred, scraped or damaged, the enterprise shall recognize the amount of any proceeds on disposal of the asset net of the carrying value and related taxes in profi t or loss for the current period.

• (8) Recognition basis and measurement method of fi xed assets by fi nancial lease: Finance lease is a lease that substantially transfers all risks and rewards relating to ownership of an asset. Fixed assets by fi nancial lease are recognized at the lower of fair value of the assets and the present value of minimum lease payment. The leased assets shall be depreciated at a straight-line basis over the shorter of service life and leasing term. The net income, from sales and leaseback transaction which has been recognized as fi nancial lease, shall be recorded as deferred revenue on balance sheet, be amortized at a straight-line basis over the leasing term and recognized in the income statements.

11. Fixed assets under construction

• (1) the pricing approach of the fi xed assets under construction: To be measured at the actual costs incurred for the construction. The self-operated construction is recorded at all cost of direct materials, direct salary, and direct construction expenditures etc. And the contracting construction is recorded at the payable construction cost and so on. The equipment installation cost is measured at value of the installed equipment, installation cost, all expenses incurred for project test-run. The cost of fi xed assets under construction includes capitalized borrowing costs, gain and loss from currency exchange.

• (2) Standard and time of transfer from the fi xed assets under construction to the fi xed assets: The fi xed assets under construction shall be transferred to the fi xed assets from the date of starting its estimated usable condition based on their construction budget, construction pricing or project actual cost and so on, and its depreciation will begin from the next month. The difference of the fi xed assets original values shall be adjusted upon the resolution procedures of the project completion.

12. Borrowing costs

Borrowing costs include loan interests, amortization of premiums or discounts, auxiliary expenses and exchange differences arising on foreign currency borrowing. When expenditures for the asset and borrowing costs are being incurred, activities relating to the acquisition, construction or production of the asset that are necessary to prepare the asset for its intended use or sale have commenced, borrowing costs, which are directly attributable to the acquisition, construction or production of a qualifying asset, shall be capitalized. Capitalization of borrowing costs shall be discontinued when acquired and constructed production is available for use or sale. Other borrowing costs shall be recognized as costs for the current period.

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12. Borrowing costs – continued

The amount of interest of specifi c borrowings occurred for the period shall be capitalized after deducting bank interest earned from depositing the unused borrowings or any investment income on the temporary investment. The capitalized amount of general borrowings shall to be determined at the basis that the weighted average (of the excess amounts of cumulative assets expenditures above the specifi c borrowings) times capitalization rate (of used general borrowings). The capitalization rate shall be determined according to the weighted average interest rates of general borrowings.

Assets eligible for capitalization represent fi xed assets, investment property, inventories, etc, which shall take a long time (generally above one year) for acquisition, construction or production to be ready for the specifi c use or sale.

If an asset eligible for capitalization is interrupted abnormally and continuously more than 3 months during the purchase, construction or production, capitalization of borrowing costs shall be suspended until the above interrupted activities restart.

13. Intangible assets

The pricing method of intangible assets: The intangible assets of the Group include mainly mining rights, unproved mining interests, expenditure for the exploration and evaluation, the land use rights, patents and techniques etc. For purchased intangible assets, actual paid cost and other relevant expenses are used as the actual cost. For intangible assets invested by investors, the actual cost is determined according to the values specifi ed in the investment contract or agreement, while for the unfair agreed value in contract or agreement, the actual cost is determined at the fair value. Intangible assets acquired in a business combination and recognized separately from goodwill are initially recognized at their fair value at the acquisition date (which is regarded as their cost).

• (1) Mining rights. Coal reserves are amortized over the life of the mine on a unit of production basis of the estimated total proven and probable reserves or the Australia Joint Ore Reserves Committee (JORC) reserves for the Groups subsidiaries in Australia.

• (2) Coal resources. Coal resources represent the fair value of economically recoverable reserves (excluding the portion of total proven and probable reserves of coal mines of a mining right i.e. does not include the above coal reserves) of coal mines of a mining right (Details are set out in the accounting policy of exploration and evaluation expenditure).

• (3) Land use rights. The land use rights are evenly amortized over the transferred term since the rights are obtained.

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13. Intangible assets – continued

• (4) Talent, technology and other intangible assets. The patent and technology with limited life shall be amortized under composite life method. The patent and technology with unsure life shall not be amortized. The amortized amounts shall be included in the cost of related assets or profi t or loss for the period in which they are incurred based on the benefi ciary objects. For an intangible asset with a fi nite useful life, the Company shall review the useful life and the amortization method applied at each fi nancial year-end. A change in the useful life or amortization method used shall be accounted for as a change in an accounting estimate. For an intangible asset with an indefi nite useful life, the Company shall reassess the useful life of the asset in each accounting period. If there is evidence indicating that the useful life of that intangible asset is fi nite, the Company shall estimate the useful life of that asset and apply the accounting requirements of the Standard accordingly.

14. Exploration and evaluation expenditures

Exploration and evaluation activities include the search for mineral resources, identifi cation of the technical feasibility and evaluation of the commercial feasibility of the distinguished resource. Exploration and evaluation expenditures includes the direct costs of the following activities: research and analysis of historical exploration data; data collection from the topography, geochemical and geophysical exploration and research; exploration drilling, trenching and sampling; identifying and reviewing the amount and level of resources; measuring transport and infrastructure requirements; and conducting market and fi nancial research.

In the early stages of projects exploration, exploration and evaluation expenditures occurred is credited to profi t or loss are incurred. When the project has the technical feasibility and commercial viability, the exploration and evaluation expenditure (including the costs incurred for purchase of exploration permit) are capitalised into exploration and evaluation assets by a single item.

Exploration and evaluation assets are collected into construction in progress. These assets are converted into fi xed assets or intangible assets when getting ready for their intended use, and accrued depreciation or amortization within operating life. The related unrecoverable cost shall be immediately written off and credited as profi t or loss when projects are abandoned.

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15. Impairment of non-fi nancial assets

The Company assesses at each balance sheet date whether there is any indication that the long-term equity investments measured by equity method, investment property, fi xed assets, and construction in progress and intangible assets with fi nite useful life may be impaired. If there is objective evidence that one or more events that occurred after the initial recognition of the asset and that event has an impact on the estimated future cash fl ows of the fi nancial asset which can be reliably estimated, a fi nancial asset is impaired. Goodwill arising in a business combination and an intangible asset with an indefi nite useful life shall be tested for impairment annually, irrespective of whether there is any indication that the asset may be impaired. For the purpose of impairment assessment, goodwill shall be considered together with the related asset groups or sets of asset group allocated with goodwill should be assessed for impairment at each fi nancial year-end.

If the recoverable amount of the asset groups or set of asset groups is less than the book value, the difference will be recognized as impairment loss and once an impairment loss is recognized, it shall not be reversed in a subsequent period. The recoverable amount of an asset is the higher of its fair value cost of disposal and the present value of the future cash fl ows expected to be derived from the asset costs of disposal.

The signs of impairment are as follows:

• (1) The current market price of an asset substantially declines, exceeding obviously the expected decline caused by time changes or normal application.

• (2) The current or future signifi cant changes in the economic, technical or legal environment of the enterprise and in the market of an asset shall have adverse impacts on the enterprise.

• (3) The improved market rate or other return on investment in the period shall have an effect on the discount rate used by enterprise to calculate estimated cash fl ow present value, leading to substantial decline in recoverable amount of assets.

• (4) There is evidence to demonstrate that the assets have already gone absolute or its entity has already been damaged.

• (5) the assets have already been or will be left unused, or will stop using, or are under the plan to be disposed in advance.

• (6) the evidences of internal reports demonstrate that economic returns of assets have already been lower or will be lower than expectations, for example, net cash fl ow created by assets or operating profi t (or loss) realized by assets are much lower (or higher) than expected amounts.

• (7) Other signs to indicate that assets value have already been impaired.

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16. Goodwill

Goodwill means equity investment cost or the differences between the merger costs and the shareholder’s equity book value of the combined party under the corporate merger not under the same control.

Goodwill related to subsidiaries shall be presented alone in consolidated fi nancial statements, to joint ventures or associated companies shall be included in the book value of long-term equity investment.

17. Long-term deferred expenses

The Group’s long-term deferred expenses means mining rights compensations, but which should be undertaken in more than 1 year of amortization period (not including 1 year) of the current and future periods, the expenses shall be amortized averagely in the benefi t period. If the project of long-term deferred expenses cannot make benefi t in the future accounting periods, the unamortized value of the project will be transferred to the profi ts or losses for the period.

18. Employee benefi ts

In the accounting period in which an employee has rendered service to the company, the company shall recognize the employee benefi ts payable for that service as a liability, and recorded into related assets or current profi t or loss in accordance with the objects that benefi ted from the service rendered by employees. Any compensation liability arising from the termination of employment relationship with employees should be charged to the profi t or loss for the current period.

Mainly include salary, bonus, allowance and subsidy, employee welfare expenses, social insurance cost, public accumulation fund for housing construction, labour union expenditures, employee education funds, annual leave, sick leave, long service leave and other expenses associated with service rendered by employees.

Employee benefi ts expected to be settled within 12 months are measured using the remuneration rate expected to apply at the time of settlement. Provisions made in respect of employee benefi ts which are not expected to be settled within 12 months are measured as the present value of the estimated future cash outfl ows to be made by the Group in respect of services provided by employees up to the reporting date.

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19. Estimated liability

• (1) The recognition principles of the estimated liability: the Company recognizes it as a provision when an obligation related to an contingency such as reclamation, disposal and environment restoring caused by mining, external guarantee, pending litigation or arbitration, product quality warranty, downsizing scheme, loss contract, restructuring obligation and so on satisfy all of the following conditions:

• 1) The obligation is a present obligation of the Company;

• 2) It is probable that an outfl ow of economic benefi ts from the Company will be required to settle the obligation;

• 3) The amount of the obligation can be measured reliably.

• (2) The measurement approaches of the estimated liability: the estimated liability is primarily measured according to the estimated optimal value paid to implement the relevant present obligations considering the factors such as the risks, uncertainties and currency time values related to the contingencies. If the currency time value has major effects, the estimated optimal value is determined after the discounting of the relevant future cash fl ow. If any change happens to the estimated optimal value during reviewing the carrying amount of the estimated liabilities on the balance sheet date, the adjustment will be made to the carrying amount to refl ect the current estimated optimal value.

20. Overburden in advance

Overburden in advance comprises the accumulation of expenses incurred to enable access to the coal seams, and includes direct removal costs, machinery and plant running costs. The deferred costs are then charged to the consolidated income statement in subsequent periods on the basis of run-of-mine (ROM coal tonnes mined. This is calculated by multiplying the ROM coal tonnes mined during the period by the weighted average cost to remove a bank cubic metre (BCM of waste by the stripping ratio (ratio of waste removed in BCMs to ROM coal tonnes mined). The stripping ratio of the Company’s Australian subsidiaries is based on the JORC reserves of each mine

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21. Land subsidence, restoration, rehabilitation and environmental costs

The mining activities of the Group and the domestic subsidiaries may cause land subsidence of the underground mining sites. Usually, the Group may relocate inhabitants from the land above the underground mining sites prior to mining those sites and compensate the inhabitants for losses or damages from land subsidence. Depending on the experience, the management estimate and accrue an amount of payments for restoration, rehabilitation and environmental protection of the land, which may arise in the future after the underground sites have been mined.

In consideration of the time difference between the payments of the fees for relocation, restoration, rehabilitation and environmental protection of the land and the mining of underground mines, the Group charges the prepayment of such fees regarding to future mining as a current asset. Caused by the paid amount less than the accrued amount, the fees regarding to future payment for relocation, restoration, rehabilitation and environmental protection of the land are accounted for as a current liability.

22. Special reserves

• (1) Provision for production maintenance and production safety expenses

Pursuant to the rules and regulations jointly issued by Ministry of Finance, State Administration of Coal Mine Safety and related government authorities in PRC, the Company has to accrue for production maintenance expenses (Wei Jian Fei) at RMB6 per ton of raw coal mined, which is used to maintain production and technical improvement of coal mines. The Company also accrues for production safety expenses at RMB15 per ton raw coal mined (standards for the Company’s subsidiary Shanxi Heshun Tianchi Energy Company Limited is RMB50 per ton raw coal mined) and is used for purchase of coal production equipment and safety expense of coal mining structure.

In accordance with the regulations of “the Interim Measures of fi nancial management of costs of safety in the high-risk industries and enterprises” (Caiqi [2012] No. 16) of the Ministry of Finance and the State Administration of Work Safety, as the subsidiaries of the Group, Hua Ju Energy has a commitment to incur Work Safety Cost at the rate of: 4% of the sales income for the year below RMB10 million; 2% of the actual sales income for the year between RMB10 million and RMB100 million (included); 0.5% of the actual sales income for the year between RMB100 million and RMB1 billion (included); 0.2% of the actual sales income for the year above RMB1 billion.

The above accrued amounts, which have been charged in cost and unused, shall be presented separately in special reserves of shareholder’s equity. Production safety expenses, which belong to cost of expenses, directly offset the special reserves. The accrued production safety expenses, which is used by enterprises and formed into fi xed assets, shall be charged in “construction in progress”, and recognised as fixed asset when safety project is completed and reaches the expected operation condition; meanwhile, offset the special reserves according to the cost forming into fi xed asset, and recognise the same amount of accumulated depreciation. This fi xed asset shall no longer accrue depreciation in the following period.

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22. Special reserves – continued

• (2) Shanxi coal mines switching to other business development fund

• Pursuant to Shanxi Coal Mine Switching to Other Business Development Fund Provision and Use Management Methods (Pilot) (Jinzhengfa [2007] No.40), since May 1, 2008, the subsidiary Shanxi Heshun Tianchi Energy Co., Ltd. accrues RMB5 per ton ROM for Coal Mine Switching to Other Business Development Fund.

• (3) Shanxi environment management guarantee deposit

• Pursuant to Notice of Provision and Use Management Method of Shanxi Coal Mine Environment Rehabilitation Management Guarantee Deposit (Pilot) (Jinzhengfa [2007] No.41) issued by Shanxi Provincial People’s Government, the subsidiary Shanxi Heshun Tianchi Energy Co., Ltd. Accrues RMB10 per ton ROM for the Environment Rehabilitation Management Guarantee Deposit since May 1, 2008. The provision and use of the deposit will abide by the following principals of “owned enterprises, used only for special purpose, saved in special account and supervised by government”.

23. The Principles of Revenue recognition

The business revenues are generated mainly from sales of goods, rendering of services and alienating the right to use assets. The principles of revenue recognition are as follows :

• (1) Revenue from sales of goods:

• Revenue is recognized when the Company has transferred to the buyer the main risks and rewards of ownership of the goods, neither retains continuing management usually associated with ownership nor effectively controls over the goods sold, and the amount of revenue can reliably measured, the associated economic benefi ts are likely to fl ow into the enterprise, and the related to costs incurred can be reliably measured.

• (2) Revenue from rendering of services:

When the provision of services is started and completed within the same accounting year, revenue is recognized at the time of completion of the services. When the provision of services is started and completed in different accounting years and the outcome of a transaction involving the rendering of services can be estimated reliably, revenue is recognized at the balance sheet date by the use of the percentage of completion method.

(3) Revenue from alienating the right to use assets

The revenue is recognized when the Company has received the economic benefi ts associated with the transaction, and can reliably measure the relevant amount of revenue.

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24. Government grants

Government grants are recognized when there is reasonable assurance that the grants will be received and the Group is able to comply with the conditions attaching to them. Government grants in the form of monetary assets are recorded based on as the amount received, whereas quota subsidies are measured as the amount receivable. Government grants in the form of non-monetary assets are measured at fair value or nominal amount (RMB1) if the fair value cannot be reliably obtained.

Government grants received in relation to assets are recorded as deferred income, and recognised evenly in the income statement over the assets’ useful lives. Government grants received in relation to revenue are recorded as deferred income, and recognised as income in future periods as compensation when the associated future expenses or losses arise; or directly recognised as income in the current period as compensation for past expenses or losses.

25. Deferred income tax assets and liabilities

The deferred income tax assets and liabilities are recognized based on the differences arising from the difference between the carrying amount of an asset or liability and its tax base (temporary differences). For any deductible loss or tax deduction that can be deducted the amount of the taxable income the next year according to the taxation regulations, the corresponding deferred income tax asset shall be determined considering the temporary difference. On the balance sheet date, the deferred income assets and deferred income tax liabilities shall be measured at the tax rate applicable to the period during which the assets are expected to be recovered or the liabilities are expected to be settled.

An enterprise shall recognize the deferred income tax liability arising from a deductible temporary difference to the extent of the amount of the taxable income which it is most likely to obtain and which can be deducted from the deductible temporary difference. For the recognized deferred income tax asset, if it is unlikely to obtain suffi cient taxable income to offset against the benefi t of the deferred income tax asset, the carrying amount of the deferred income tax assets shall be written down. Any such write-down should be subsequently reversed where it becomes probable that suffi cient taxable income will be available.

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26. Leases

The Company classifi es the leases into fi nance lease and operating lease on the lease beginning date.

Finance lease is a lease that substantially transfers all the risks and rewards incident to ownership of an assets. On the lease beginning date, as the leaseholder, the Company recognizes the lower of fair value of lease assets and the present value of minimum lease payment as fi nancial leased fi xed assets; recognizes the minimum lease payment as long-term payable, and recognizes the difference between the above two as unverifi ed fi nancing costs.

Operating lease is the other lease except fi nance lease. As the leaseholder, the Company records lease payments into the related assets cost or the profi t or loss for the period on a straight-line basis over the lease term and; records lease income into revenue in the income statement on a straight-line basis over the lease term.

27. Accounting calculation of the income tax

The accounting calculation of the income tax adopts the balance sheet liabilities approach. The income taxes include the current and deferred income tax. The current income tax and deferred income tax expenses and earnings are recorded into the current profi t and loss, except those related to the transactions and events are recorded directly into the shareholder’s equity and the deferred income tax is adjusted into the carrying amount of goodwill arising from the business combination.

The current income tax expense is the income tax payable, that is, the amount of the current transactions and events calculated according to the taxation regulations paid to the taxation authorities by the enterprises. The deferred income tax is the difference between the due amounts of the deferred income tax assets and liabilities to be recognized according to the balance sheet liabilities approach in the period end and the amount recognized originally.

28. Minerals Resource Rent Tax

Minerals Resource Rent Tax (MRRT) is levied by Australian government for all Australian mineral enterprises on the base of net mining profi t after deductible items, therefore the recognition, measurement and disclosure of relevant expenses, deferred assets and liabilities of MRRT are consistent with income tax, refer to Note IV.25 and IV.27 for details.

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29. Segment reporting

Reportable segments are identifi ed based on operating segments which are determined based on the structure of the Group’s internal organization, management requirements and internal reporting system. An operating segment is a component of the Group that meets the following respective conditions:

• (1) Engage in business activities from which it may earn revenues and incur expenses;

• (2) Whose operating results are regularly reviewed by the Group’s management to make decisions about resource to be allocated to the segment and assess its performance; and

• (3) For which fi nancial information regarding fi nancial position, results of operations and cash fl ows are available.

30. Operation Method of Hedges Business

The Group’s overseas subsidiaries use derivative fi nancial instruments such as forward foreign exchange contracts, coal swap contracts, interest rate swaps contracts to hedge cash fl ow for foreign exchange risks, fl uctuations in coal prices and interest rate risk.

The relationship between hedging instrument and hedged item is recorded by the Group on hedging transaction date, including the target of risk management and various hedging transaction strategies. The Group will regularly assess whether the derivatives can continuously and effectively hedge cash fl ows of the hedged item during the period of hedging transactions. The Group uses the comparative method of the principle terms of the contract to do the expected evaluation on the effectiveness of hedging, and uses ratio analysis method to do the retrospective evaluation on the effectiveness of hedging at the end of the reporting period.

Net amounts receivable or payable of hedging transactions is recorded into the balance sheet as assets or liabilities from hedging transaction date. The unrealized gain or loss shall be recorded into hedging reserve under equity. The change of fair values of forward foreign currency contract, coal swap contract or interest swap contract shall be recognized through hedging reserve until the expected transactions occur. Accumulated balance in equity shall be included in the income statement or be recognized as part of the cost in relation of its assets.

When a hedging instrument expires or is sold, terminated or exercised, or the hedge no longer meets the criteria for hedge accounting, the hedge accounting shall not be applicable. Accumulated gain or loss of hedging instruments is recorded in the equity and recognized when transaction happens. Accumulated gain or loss, which is recorded in shareholder’s equity, shall be transferred in the profi t or loss for the period if transaction is not expected to make.

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31. Business combinations

A business combination is a transaction or event that brings together of separate enterprises into one reporting entity. The Company recognizes the assets and liabilities arising from the business combinations at the combinations date or acquisition date. Combinations date or acquisition date is the date on which the absorbing party effectively obtains control of the party being absorbed.

• (1) Business combinations involving enterprises under common control: Assets and liabilities that are obtained by the absorbing party in a business combination are measured at their carrying amounts at the combination date as recorded by the party being absorbed. The difference between the carrying amount of the net assets obtained and the carrying amount of the consideration paid for the combination is adjustment to capital reserve. If the capital reserve is not suffi cient to absorb the difference, any excess shall be adjusted against retained earnings.

• (2) Business combinations not Involving enterprises under common control: The cost of combination for a business combination not involving enterprises under common control is the aggregate of the fair values, at the acquisition date, of the assets given, liabilities incurred or assumed, and equity securities issued by the acquirer. Where the cost of a business combination exceeds the acquirer’s interest in the fair value of the acquiree’s identifi able assets, liabilities and contingent liabilities acquired, the difference shall be recognized as goodwill. Where the cost of combination is less than the acquiree’s interest in the fair value of the acquiree’s identifi ed assets, liabilities and contingent liabilities acquired, after the reviewing, the acquirer shall recognize the remaining difference immediately in profi t or loss for the current period.

32. Preparation methods for consolidated fi nancial statements

• (1) The consolidated scope recognition principles: the Company takes the subsidiaries owning the actual controlling power and the main bodies for the special purpose into the scope of the consolidated fi nancial statements.

• (2) The accounting methods introduced in the consolidated fi nancial statements: The consolidated fi nancial statements are prepared pursuant to Enterprises accounting criteria No.33-consolidated financial statements and relevant provisions. All major inter-segment transactions, balances, income and expenses in the consolidation scope are eliminated in full on consolidation. Unrealized loss from inter-segment transactions shall, if there is evidence that the loss is part of the related impairment, be recognized in full. Shareholder’s equity in the net assets of consolidated subsidiaries is identifi ed separately from the Group’s equity therein.

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32. Preparation methods for consolidated fi nancial statements – continued

If the losses to the minority shareholders exceed their shares in the subsidiary’s equity, in addition to the part that minority shareholders have an obligation to bear according to the articles of association or agreement and the minority shareholders have the ability to bear, the remaining part shall offset the shareholders’ equity attributable to the parent company. If the subsidiary subsequently reports profi ts, all profi ts are attributable to shareholders’ equity of the parent company before compensating the losses to the minority shareholders which were borne by the shareholders’ equity of the parent company.

If any confl icts between the accounting policies or the accounting period introduced in the subsidiaries and those of the Company, the necessary adjustment shall be made to the fi nancial statements of the subsidiaries according to the accounting policies or the accounting period in the Company during the preparation of the consolidated fi nancial statements.

For those subsidiaries acquired not under common control, some few fi nancial statements are adjusted based on the fair values of the identifi able net assets after the acquisition date in preparing consolidated fi nancial statements. For those subsidiaries acquired under common control, which are considered to be existed at the opening of the consolidation period, the assets, liabilities, the operating results and cash fl ows from the opening of the consolidation period are presented in the consolidated fi nancial statement according to the original carrying amounts.

33. Common control operation

There is common control operation in overseas subsidiaries of the Company. Common control operation means that a company uses its assets or other economic resources with other cooperative parties to jointly do coal exploration, development, operation, or other economic activities, and jointly control these economic activities in accordance with contracts or agreements.

The overseas subsidiaries are entitled to the profi ts created by joint controlled assets as per the shares controlled by them, and they shall recognize revenue and costs in relation to common control operation in light of contracts or agreements.

34. Signifi cant accounting policies and accounting estimates

When use the above mentioned accounting policies and accounting estimate, because of the uncertainty of operation, the Group needs to apply the judgments, estimates and assumptions to book value of inaccurate measured items, which was made on the basis of experiences of the management and consideration of other related factors. However, the actual conditions are possibly different from the estimates.

The Group makes regulatory check on above mentioned judgments, estimates and assumptions. The Company confi rms the infl uences of the accounting modifi cations in the current and future of the modifi cation time, dependently.

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34. Signifi cant accounting policies and accounting estimates – continued

On balance sheet date, the key assumptions and the uncertainties leading to the possible major adjustments for the carrying amounts of the assets, liabilities in the future are as follows:

(1) Depreciation and amortization

Fixed assets and intangible assets are depreciated and amortized on the straight-line or production basis over their useful lives. The Group shall regularly review the useful lives and economically recoverable coal reserves to determine the total amount of depreciation and amortization which will be included in each period. Useful lives are calculated on the basis of the experience from similar assets and expected change of technology. Economically recoverable coal reserves are calculated by the economically recoverable coal resources based on actual measurement. If the past estimates change signifi cantly, the depreciation and amortization shall be adjusted during future periods.

Estimates of coal reserves are involved in subjective judgment, because the estimating technology is inaccurate, so the coal reserves are only approximate value. The recent production and technology documents shall be considered for the estimates of economically recoverable coal reserves which will be updated regularly, the inherent inaccuracy of technical estimating exists.

(2) Land subsidence, restoration, rehabilitation and environmental obligations

The Company needs to relocate the villages on the surface due to the underground coal mining, and bear the cost of relocation of villages, ground crops (or attachments) compensation, land rehabilitation, restructuring and environmental management and other obligations. The performance of obligation is likely to lead to outfl ow of resources, when the amount of the obligation can be measured reliably, it is recognized as an environmental reclamation obligations. Depending on the relevance with the future production activities and the reliability of the estimated determination, the fl ow and non-fl ow reclamation provision should be recognized as the profi t and loss for the period or credited to the relevant assets.

After taking into account existing laws and regulations and according to the past experience and the best estimate of future expenditures, management determines Land subsidence, restoration, rehabilitation and environmental obligations. If the time value of money is material, the expected future cash outfl ows will be discounted to its net present value. Following the current coal mining activities and under the condition that the future impact on land and the environment has become evident, Land subsidence, restoration, rehabilitation and environmental costs may be amended from time to time. Discount rate used by the Group may change due to assessment on the time value of money market and debt specifi c risks, when the estimate of the expected costs changed, it will be adjusted accordingly by the appropriate discount rate.

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34. Signifi cant accounting policies and accounting estimates – continued

(3) Impairment of non-fi nancial long-term assets

As described in note 4 (16), at the date of the balance sheet the Group assesses impairment of nonfi nancial assets to determine whether the recoverable amount of assets fell less than its carrying value. If the carrying value of the asset exceeds its recoverable amount, the difference is recognized as impairment loss.

The recoverable amount is the higher between the net amounts of fair value of the assets (or assets group) less disposal costs and the estimated present value of future cash fl ow of the assets (or assets group). As the Group cannot reliably access the open market price of the assets (or asset group), it is not reliable and accurate to estimate the fair value of assets. When estimating the present value of future cash fl ows, the company needs to make signifi cant judgments on the future useful life, the product yield, price, the related operating costs of the assets (or assets group) and the discount rate used for calculating the present value. When estimating the recoverable amount, the Group will use all possibly available information, including the product yield, price from the reasonable and supportable assumption and the forecast related to operating costs.

(4) Impairment of goodwill

Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which goodwill has been allocated. The value in use calculation requires the Group to estimate the future cash fl ows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate the present value. Expectation has been determined based on past performance and management’s expectations for the market development.

V. CHANGE OF ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES AND CORRECTION OF EARLY ERRORS

1. Changes of accounting policies and the impact

During the reporting period, the Group made no changes in accounting policies.

2. Changes in accounting estimates

Pursuant to “Notice of Provision and Use Management Method of Production Safety Expense” jointly issued by Ministry of Finance and the State Administration of Work Safety (Caiqi 2012] No. 16), and upon approval at the Tenth Meeting of the Fifth Session of the Board, since February 2012, the provision basis for accruing the Production Safety Expense for the Parent Company, Heze Nenghua, and Anyuan as well as Wenyu Coal Mine which belong to Ordos Nenghua has been amended to be RMB15 per ton of ROM. This amendment of accounting estimate will lead to an increase of cost of sales amounting to RMB121.11million for the reporting period (January-June, 2012). Meanwhile, it will lead to a decrease of total profi t and income tax expense of RMB121.11 million and RMB30.28 million, respectively; and will eventually result in a decrease of net profi t amounting to RMB90.83 million.

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3. Amendments of signifi cant errors and the impact

During the reporting period, the Group made no amendments of signifi cant accounting errors.

VI. TAXES

1. The major tax categories and tax rate applicable to the Group and domestic subsidiaries are as follows:

(1) Income tax

Income tax is calculated at 25% of the total assessable income of the subsidiaries of the Group that registered in the PRC.

(2) Value added tax

The value added tax is applicable to the product sales income of the Company and domestic subsidiaries. The value added tax is paid at 17% of the corresponding revenue on coal and other commodities sales, except for the value added tax on revenue from heating supply is calculated at 13%. The value added tax payable on purchase of raw materials and so on can off sets the tax payable on sales at the tax rate of 17%, 13%, 7%, 3%. The value added tax payable is the balance between current tax payable on purchase and current tax payable on sales.

Pursuant to State Council Regulation No.538 “PRC Value Added Tax Temporary Statute” (Revised), value added tax paid for the purchase of machinery and equipments can offset the tax payable on sales from January 1, 2009.

Pursuant to the Document (Caishui [2006] No.139) which was jointly issued by the Ministry of Finance and the State Administration of Taxation, the coal product export refund tax preferential was cancelled and the value added tax export refund rate was 0%.

According to the approval of “Ji Guo Shui Liu Pi Zi (2011) Document No.1 of State Administration of Taxation in Jining City”, as the subsidiary of the Company, Hua Ju Energy adopts the taxation policy of levy and refund 50% on VAT of electricity power and heating.

(3) Business tax

Business tax is applicable to coal transportation service income of the Group and domestic subsidiaries. Business tax is paid at the 5% of the corresponding revenue, except the business tax on revenue from coal transportation service is calculated at 3%.

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VI. TAXES – CONTINUED

1. The major tax categories and tax rate applicable to the Group and domestic subsidiaries are as follows – continued:

(4) City construction tax & education fee

Subject to all taxes applicable to domestic enterprise according to the “Reply Letter to Yanzhou Coal Mining Co., Ltd.” issued by State Administration of Taxation (Guoshuihan [2001] No.673), city construction tax and education fee are still calculated and paid at 7% and 3%, respectively, on the total amount of VAT payable and business tax payable.

(5) Resource tax

Pursuant to the “Notice of the adjustment of resource tax amount of Shandong province” (Caishui [2005] No.86), which was jointly issued by the Ministry of Finance and the State Administration of Taxation, resource tax in Shandong province is calculated and paid at the amount of RMB3.60 per tonne.

Meanwhile, pursuant to the “Notice of the adjustment of resource tax amount of Shanxi province” (Caishui [2004] No.187), which was jointly issued by the Ministry of Finance and the State Administration of Taxation, resource tax of Shanxi province is calculated and paid at the amount of RMB3.20 per tonne of raw coal.

Resource taxes of the Group and domestic subsidiaries thereof are paid as the total of sold raw coal tonnes plus received raw coal multiplying applicable tax rate.

(6) Real estate tax

The tax calculation is based on the 70% of original value of real estate of the Group and domestic subsidiaries thereof with the applicable tax rate of 1.2%.

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VI. TAXES – CONTINUED

1. Main taxes and rates applicable to the company and subsidiaries thereof as following:

Taxes	Taxation basis	Rate
Income tax (note)	Taxable income	30%
Goods and services tax	Taxable added value	10%
Fringe benef ts tax	Salary and wages	4.75%-9%
Resource tax	Sales revenue of coal	7%-8.2%
Minerals Resource Rent Tax (MRRT)	Taxable prof t	22.5%

• Note: Income tax for overseas subsidiaries of the Company is calculated at 30% of the total income. Yancoal Australia Pty Limited (as referred to “Yancoal Australia Pty) and its 100% owned Australian subsidiaries are a taxation consolidated group pursuant to the rules of taxation consolidation in Australia. Yancoal Australia Pty is responsible for recognizing the current taxation assets and liabilities for the taxation consolidated group (including deductible loss and deferred taxation assets of subsidiaries in the taxation consolidated group). Each entity in the tax consolidated group recognizes its own deferred tax assets and liabilities.

Minerals Resource Rent Tax (MRRT) is levied on the extraction of certain taxable resources of coal and iron ore in respect of a mining project interest, and before any extensive processing and value-added activities. MRRT is levied on the economic rental that generated from taxable volume of resources mined by mining enterprises, without any extensive treatment or appreciation, Tthe tax base is the mining profi t generated from mining project interest less mining allowances, and the applied tax rate is 22.5%.

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VII. BUSINESS COMBINATIONS AND CONSOLIDATED FINANCIAL STATEMENTS

i. Subsidiaries

Name of	Place of	Registered	Business	Investment	Shareholding	Ratio of
subsidiaries	registration	capital	scope	capital	proportion	voting right
I. Subsidiaries established by investment
Qingdao Free Trade Zone	Qingdao, Shandong	RMB2,100,000	Trade and storage	RMB2,710,000	52.38%	52.38%
Zhongyan Trade Co., Ltd			in free trade zone
Yanzhou Coal Mining Yulin Neng	Yulin, Shaanxi	RMB1,400,000,000	Production and	RMB1,400,000,000	100.00%	100.00%
Hua Co., Ltd			sales of methanol
			and acetic acid
Yancoal Australia Pty Limited	Australia	AUD 656,700,000	Investment and	RMB2,468,690,000	78.00%	78.00%
			shareholding
Austar Coal Mine Pty Limited.	Australia	AUD 64,000,000	Coal mining and sales	RMB403,280,000	100.00%	100.00%
Yanmei Heze Neng Hua Co., Ltd	Heze, Shandong	RMB3,000,000,000	Coal mining and sales	RMB2,924,340,000	98.33%	98.33%
Yanzhou Coal Ordos Neng	Inner Mongolia	RMB3,100,000,000	Production and	RMB3,100,000,000	100.00%	100.00%
Hua Co., Ltd			sales of methanol
			(600,000 tons)
Yancoal International	Hong Kong	USD2,800,000	Investment and	USD17,920,000	100.00%	100.00%
(Holding) Co., Limited			shareholding
Yancoal International Technology	Hong Kong	USD1,000,000	Development of mining	USD1,000,000	100.00%	100.00%
Development Co., Limited			technology
Yancoal International Trading	Hong Kong	USD1,000,000	Transit trade of coal	USD1,000,000	100.00%	100.00%
Co., Limited
Yancoal International Resources	Hong Kong	USD600,000	Exploration and	USD600,000	100.00%	100.00%
Development Co., Limited			development of
			mineral resources
Yancoal Luxembourg Energy	Luxembourg	USD500,000	Investment and	USD500,000	100.00%	100.00%
Holding Co., Limited			shareholding
Yancoal Canada Resource	Canada	USD290,000,000	Development and	USD290,000,000	100.00%	100.00%
Holding Co., Ltd			sales of mineral resources
Yancoal Technology Development	Australia	AUD75,410,000	Shareholding company	AUD75,410,000	100.00%	100.00%
Holdings Pty Ltd
Premier Coal Holdings Ltd	Australia	AUD321,610,000	Shareholding company	AUD321,610,000	100.00%	100.00%
Athena Holdings Ltd	Australia	AUD24,450,000	Shareholding company	AUD24,450,000	100.00%	100.00%
Tonford Holdings Ltd	Australia	AUD46,410,000	Shareholding company	AUD46,410,000	100.00%	100.00%
Wilpeena Holdings Ltd	Australia	AUD3,460,000	Shareholding company	AUD3,460,000	100.00%	100.00%
Yancoal Energy Pty Ltd	Australia	AUD202,980,000	Shareholding company	AUD202,980,000	100.00%	100.00%

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VII. BUSINESS COMBINATIONS AND CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

i. Subsidiaries – continued

Name of	Place of	Registered	Business	Investment	Shareholding	Ratio of
subsidiaries	registration	capital	scope	capital	proportion	voting right
II. Subsidiaries under common control
Yankuang Shanxi Neng Hua Co., Ltd	Jinzhong, Shanxi	RMB600,000,000	Thermoelectricity investment,	RMB508,210,000	100.00%	100.00%
			coal technology service
Shanxi Heshun Tianchi Energy Co., Ltd	Jinzhong, Shanxi	RMB90,000,000	Intensive process of	RMB73,180,000	81.31%	81.31%
			coal product
Shanxi Tianhao Chemicals Co., Ltd	Xiaoyi, Shanxi	RMB150,000,000	Production and sales of	RMB149,790,000	99.89%	99.89%
			methanol and coals
Shandong Hua Ju Energy Co., Ltd	Zoucheng, Shandong	RMB288,590,000	Production and sales of	RMB766,250,000	95.14%	95.14%
			thermal power and
			comprehensive utilization
			of waste heat
Zoucheng Yankuang Beisheng	Zoucheng, Shandong	RMB2,400,000	Gangue selecting and	RMB2,400,000	100.00%	100.00%
Industry & Trading Co., Ltd			processing, cargo
			transportation
III. Subsidiaries not under common control
Shandong Yanmei Shipping Co., Ltd.	Jining, Shandong	RMB5,500,000	Freight transportation	RMB10,570,000	92.00%	92.00%
			and coal sales
Yancoal Resources Ltd	Australia	AUD446,410,000	Exploring and extracting	AUD3,354,180,000	100.00%	100.00%
			coal resources
Inner Mongolia Yize Mining	Ordos	RMB136,260,000	Investment	RMB179,690,000	100.00%	100.00%
Investment Co., Ltd
Inner Mongolia Rongxin	Ordos	RMB3,000,000	Methanol production	RMB4,400,000	100.00%	100.00%
Chemicals Co., Ltd
Inner Mongolia Daxin Industrial	Ordos	RMB4,110,000	Industrial gas production	RMB6,000,000	100.00%	100.00%
Gas Co., Ltd
Inner Mongolia Xintai Coal Mining	Ordos	RMB5,000,000	Coal mining and sales	RMB2,801,560,000	80%	80%
Company Limited
Syntech Holdings Pty Ltd	Australia	AUD223,470,000	Holding company and	AUD186,170,000	100.00%	100.00%
			mining management
Syntech Holdings II Pty Ltd	Australia	AUD6,320,000	Holding company	AUD22,310,000	100.00%	100.00%
Premier Coal Mine Ltd	Australia	AUD8,780,000	Coal mining and sales	AUD312,730,000	100.00%	100.00%
Premier Char Pty Ltd	Australia	AUD1,000,000	Research and development	AUD800,000	100.00%	100.00%
			of the technology
			and procedures
			in relation to coal char
Gloucester Coal Ltd	Australia	AUD719,720,000	Development and	AUD550,450,000	100.00%	100.00%
			operating of coal and
			relevant resources

138

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i. Subsidiaries – continued

1. Qingdao Free Trade Zone Zhongyan Trade Co., Ltd Qingdao Free Trade Zone Zhongyan Trade Co., Ltd. (as referred to “Zhongyan Trade’), established in the end of 1997 with the registration capital of RMB2, 100,000, was fi nanced RMB700,000 respectively by the Zhongyan Trade, Qingdao Free Trade Huamei Industrial Trade Company (as referred to “Huamei Industrial Trade”), China Coal Mine Equipment & Mineral Imports and Exports Corporation (hereinafter referred to as “Zhongmei Company”). In the year 2000, Huamei Industrial Trade withdrew his investment and Zhongyan Trade and Zhongmei Company hold respectively 52.38% and 47.62% of the total fund after purchasing the investment of Huamei Industrial Trade. The corporation business licence code is 370220018000118, and the legal representative is Mr. Fan Qingqi. The company is mainly engaged in the international trade in free trade zone of Qingdao, product machining, commodity exhibition and storage, and so on.

2. Yanzhou Coal Mining Yulin Neng Hua Co., Ltd Yanzhou Coal Mining Yulin Neng Hua Co., Ltd (as referred to “Yulin Neng Hua”) was fi nanced and established by Yulin Neng Hua, Shandong Chuangye Investment Development Co. Ltd, China Hualu Engineering Co., Ltd in Feb. 2004. Yulin Neng Hua occupied 97% of the total capital of RMB800 million. In April 2008, Yulin Neng Hua held 100% of equity after assignment of equity from Shandong Chuangye Investment Development Co., Ltd, China Hualu Engineering Co., Ltd. In May 2008, the Company injected RMB600 million into Yulin Neng Hua and the registered capital of Yulin Neng Hua reached RMB1.4 billion. The corporation business license code is 612700100003307, and the legal representative is Mr. Li Weimin. The company is mainly engaged in the methanol production with the capacity of 600 thousand tons per year, acetic acid production with the capacity of 200 thousand tons per year and its compatible coal mine, and the power plant and so on.

3. Yancoal Australia Pty Limited

Yancoal Australia Pty Limited (as referred to “Yancoal Australia Pty”), a wholly owned subsidiary of the Company, was established in Nov. 2004 with paid up capital of AUD64 million. In September 2011, the Company increased capital investment to Yancoal Australia of AUD909 million and the registered capital of Yancoal Australia increased to AUD973 million. In June 2012, the registered capital of Yancoal Australia decreased by AUD653.14 million due to carve-out of excluded assets to Yancoal International (Holding) Co. Ltd. For the acquisition of the subsidiary, Yancoal Australia issued new shares and increased the registered capital by AUD336.84 million. After the above mentioned changes, the registered capital of Yancoal Australia is AUD656.7 million and 78% the equity interest of Yancoal Australia is held by the Company. ACN (Australian Company Number) of Yancoal Australia is 111859119 and it mainly takes responsibility of the activities such as operations, budget, investment and fi nance of the Company in Australia.

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4. Austar Coal Mine Pty Limited

Austar Coal Mine Pty Limited (as referred to “Austar Company”), a wholly owned subsidiary of Yancoal Australia Pty, was established in December 2004 with paid up capital of AUD 64 million. ACN (Australian Company Number) of Austar is 111910822, and it is mainly engaged in the production, processing, washing and sales of coal in Southland Coal Mine in Australia.

5. Yancoal Resources Limited

Yancoal Resources Limited (as referred to “Yancoal Resources”), a limited liability incorporated company, was established in January 1970 in Brisbane, Queensland, Australia, and its ACN is 000 754 174. Yancoal Resources is mainly engaged in businesses such as coal mining and exploration.

Austar, the subsidiary of the Company, holds 196.46 million shares representing 100% of the issued shares of Yancoal Resources.

(1) As at the reporting period, subsidiaries owned by Yancoal Resources are as follows:

	Place of	Registered	Business	Shareholding
Subsidiaries	registration	capital(AUD)	scope	proportion (%)
White Mining Limited	Australia	3,300,200	Holding company &	100
			Coal business
			management
Yarrabee Coal Company Pty Ltd	Australia	92,080	Coal mining and sales	100
Auriada Limited	Northern Ireland	5	No business, to be liquidated	100
Ballymoney Power Limited	Northern Ireland	5	No business, to be liquidated	100
SASE Pty Ltd	Australia	9,650,564	No business, to be liquidated	90
Proserpina Coal Pty Ltd	Australia	1	Coal mining and sales	100
White Mining Services Pty Limited	Australia	2	No business, to be liquidated	100
Moolarben Coal Operations Pty Ltd	Australia	2	Coal business management	100
Moolarben Coal Mines Pty Limited	Australia	1	Coal business development	100
Ashton Coal Operations Pty Limited	Australia	5	Coal business management	100
White Mining (NSW) Pty Limited	Australia	10	Coal mining and sales	100
Felix NSW Pty Limited	Australia	2	Holding company	100
Moolarben Coal Sales Pty Ltd	Australia	2	Coal sales	100

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5. Yancoal Resources Limited – continued

• (2) Joint venture company that Yancoal Resources holds more than 50% shares but is not included in consolidation:

Subsidiary of Yancoal Resources, White Mining Limited, holds 90% shares of Australian Coal Processing Holding Pty Ltd. Pursuant to the shareholders agreement of this company, all signifi cant fi nance and operating decisions shall be approved by all shareholders. So the Group does not have control over it and it is not included in the consolidation.

Subsidiary of Yancoal Resources, White Mining Limited, holds 90% shares of Ashton Coal Mines Limited. Pursuant to the shareholders agreement of this company, all signifi cant fi nance and operating decisions shall be approved by all shareholders. So the Group does not have control over it and it is not included in the consolidation.

• (3) Jointly controlled entities of Yancoal Resources

			Interests
Entities	Address	Main business	proportion (%)
Boonal Joint Venture	Australia	Coal transportation and	50
		equipments
Athena Joint Venture	Australia	Coal exploration	51
Ashton Joint Venture	Australia	Coal mine development	90
		and operation
Moolarben Joint Venture	Australia	Coal mine development	80
		and operation

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6. Gloucester Coal Ltd

Gloucester Coal Ltd (as referred to “Gloucester”), a corporation with limited liability incorporated in Sydney, Australia, whose shares started to be listed in Australian Securities Exchange (as referred to “ASX”) in 1985, mainly engages in the production and operation of coal and coal related resources. The ACN (Australian Company Number) of Gloucester is 008881712.

Upon approval at the Sixth Meeting of the Fifth Session of the Board and the Seventh Meeting of the Fifth Session of the Board held on 22 December 2011 and 5 March 2012, the Company, Yancoal Australia and Gloucester entered into a Merger Proposal Deed and an amending deed to the Merger Deed. In accordance with the Merger Deed and amending deed, Gloucester will make cash distribution to its shareholders and Yancoal Australia will acquire the entire issued share capital of Gloucester (deducting cash distribution); the shareholders of Gloucester may choose to be given a value guarantee provided by the Company who holds shares of Yancoal Australia after merger. Upon the completion of the Merger, the Company and Gloucester Shareholders will hold 78% and 22% of the share capital of Yancoal Australia respectively. Yancoal Australia will be listed on ASX instead of Gloucester.

The merger has been approved by the following departments in the PRC: the State-owned Assets Supervision and Administration Commission of the State Council of Shandong province issued the notice of “Approval of the Merger between Yancoal Australia Pty Ltd and Gloucester Coal Ltd” (Luguozi Shouyihan [2012] No. 11) on 20 March 2012; The Ministry of Commerce checked and issued the notice of “Approval of Yancoal Australia Adding Foreign Investor and Amending its Ownership Ratio by Ministry of Commerce” (Shanghepi [2012] No.703) on 4 June 2012. The National Development and Reform Commission checked and issued the notice of “Approval of the Merger between Yancoal Australia Pty Ltd and Gloucester Coal Ltd by NDRC ” (Fagai Nengyuan [2012] No.1626) on 11 June 2012.

Meanwhile, the merger has been approved by the following authorities in Australia: On 8 March 2012, Mr. Wayne Swan, the vice Prime Minister and Secretary of Treasury of Australia agreed the acquisition of Gloucester by Yancoal Australia; On 13 June 2012, the Supreme Court of Victoria, Australia made orders approving the Merger.

As at 27 June 2012, all shares of Gloucester have been transferred to Yancoal Australia, a subsidiary of the Company and the shares of Gloucester ceased trading on ASX before this trading date ended.

On 28 June 2012, Yancoal Australia issued ordinary shares and CVR shares and thus started trading on ASX instead of Gloucester.

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6. Gloucester Coal Ltd – continued

• (1) As at 30 June 2012, the controlled subsidiaries of Gloucester include:

(2)	Name of Registration Registered Shareholding subsidiaries place capital (AUD) Scope of business proportion (%)
	Westralian Prospectors NL Australia 93,001 idle 100 Eucla Mining NL Australia 707,500 idle 100 CIM Duralie Pty Ltd Australia 665 idle 100 Duralie Coal Marketing Pty Ltd Australia – idle 100 Duralie Coal Pty Ltd Australia 2 Coal mining 100 Gloucester (SPV) Pty Ltd Australia – Holding company 100 Gloucester (Sub Holdings 1) Pty Ltd Australia – holding company 100 Gloucester (Sub Holdings 2) Pty Ltd Australia – Holding company 100 CIM Mining Pty Ltd Australia 30,180,720 Idle 100 Donaldson Coal Holdings Limited Australia 204,945,942 Holding company 100 Monash Coal Holdings Pty Ltd Australia – Idle 100 CIM Stratford Pty Ltd Australia 21,558,606 Idle 100 CIM Services Pty Ltd Australia 8,400,002 Idle 100 Donaldson Coal Pty Ltd Australia 6,688,782 Coal mining and sales 100 Donaldson Coal Finance Pty Ltd Australia – Finance company 100 Monash Coal Pty Ltd Australia 200 Coal mining and sales 100 Stradford Coal Pty Ltd Australia – Coal mining 100 Stradford Coal Marketing Pty Ltd Australia – Coal sales 100 Abakk Pty Ltd Australia – Idle 100 Newcastle Coal Company Pty Ltd Australia 2,300,999 Coal mining 100 Primecoal International Pty Ltd Australia – Idle 100 Joint venture of Gloucester Name Place Main business Control Ratio (%)
	Middlemount Coal Pty Ltd Australia Coal mining and sales 50

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7. Yanmei Heze Neng Hua Co., Ltd

• Yanmei Heze Neng Hua Co., Ltd (as referred to “Heze Neng Hua”) was established and fi nanced jointly by the Company, Coal Industry Jinan Design &Research Co., Ltd (as referred to “design institute”) and Shandong Provincial Bureau for Coal Geology in October, 2002 with the registration capital of RMB600 million, of which, the Company held 95.67%. In July, 2007, Heze Neng Hua increased the registration capital to RMB1.5 billion, in which, this company held 96.67%. The corporation business license code is 370000018086629, and the legal representative is Mr. Wang Xin. The company is mainly engaged in the preparation work and the coal sales in Juye Coal fi eld. In May 2010, the Company unilaterally increased the registration capital of RMB1.5 billion and the registration capital was increased to RMB3 billion, in which the Company held 98.33%. The corporation business license code is 370000018086629, and the legal representative is Mr. Wang Yongjie. The company is mainly engaged in the coal mining and coal sales in Juye Coal Field.

8. Yanzhou Coal Mining Shanxi Neng Hua Co., Ltd

• The former of Yanzhou Coal Mining Shanxi Neng Hua Co., Ltd (as referred to “Shanxi Neng Hua”) was Yankuang Jinzhong Neng Hua Co., Ltd established jointly by Yankuang Group, Yankuang Lunan Fertilizer Plant in 2002. In Nov. 2006, Yankuang Group and Yankuang Lunan Fertilizer Plant transferred the equities of Shanxi Neng Hua to this company and thus this company held 100% in the total registration capital of RMB600 million. The corporation business license code is 140700100002399, and the legal representative is Mr. Shi Chengzhong. The company is mainly engaged in thermoelectricity investment, mining machinery and equipment and electronic products sales and the comprehensive development in coal technology service, and so on.

9. Shanxi Heshun Tianchi Energy Co., Ltd

The former of Shanxi Heshun Tianchi Energy Co., Ltd (as referred to “Heshun Tianchi’) was Guyao Coal Mine found in Heshun County in 1956. In July 2003, Heshun Tianchi was fi nanced and established jointly by Shanxi Neng Hua, Heshun County State-Owned Assets Managing Co., Ltd and Jinzhong City StateOwned Assets Managing Co., Ltd with the registration capital of RMB90 million, of which, Shanxi Neng Hua held equity of 81.31%. Tianchi Coal Field in Heshun has an area of 17.91 km2, the design capacity of 1.20 million tons per year. The Coal Mine was put into operation in Nov. 2006. The corporation business license code is 40000105861137, and the legal representative is Mr. Zhang Hua. The company is mainly engaged in raw coal exploitation, extensive coal process and other mining products production and sales and so on.

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10. Shanxi Tianhao Chemicals Co., Ltd

• Shanxi Tianhao Chemicals Co., Ltd (as referred to “Tianhao Chemicals”) was established jointly by six shareholders of Xiaoyi City Township Enterprise Supplying & Marketing Company, Shanxi Jinhui Coke Chemical Co., Ltd, Xiaoyi City Jinda Coke Co., Ltd and 3 local natural persons in Jan. 2002 with the registration capital of RMB10.01 million. In Feb. 2004, Shanxi Neng Hua increased investment to Tianhao Chemical by RMB60 million, holding 60% equity. In Oct. 2005, the registration capital was raised to RMB150 million but the equity held by Shanxi Neng Hua was raised to 99.85% because of the withdrawal of other shareholders. On March 2010, Shanxi Neng Hua acquired 0.04% equity interest held by minorities of Tianhao Chemicals, now 99.89% equity interest of Tianhao Chemicals was held by Shanxi Neng Hua. The corporation business license code is 140000100095998, and the legal representative is Mr. Jin Fangyu. The company is mainly engaged in methanol, coke production, development and sales, and inland transportation service.

11. Shandong Hua Ju Energy Co., Ltd

• Shandong Hua Ju Energy Co., Ltd. (Hua Ju Energy) was approved by Shandong Economic System Reform Offi ce in 2002, and established by fi ve share holders, i.e. Yankuang Group, Shandong Chuangye Investment Development Company, Shandong Honghe Mining Group Co., Limited and Shandong Jining Luneng Shengdi Electricity Group. Yankuang Group transferred its operational net assets RMB235.94 million, including Nantun Power Plant, Xinglongzhuang Power Plant, Baodian Power Plant, Dongtan Power Plant, Xincun Power Plant, Jier Power Plant and Electricity Company, into 174.98 million shares, i.e. 65.80% of the total shares number in Hua Ju Energy. The other share holders invested currency following the above ration, and the general capital was 250 million shares. In 2005, Shandong Jining Luneng Shengdi Electricity Group transferred its equity interest in Hua Ju Energy to Jining Shengdi Investment Management Co., Ltd. In 2008, Yankuang Group increased 38.59 million shares in Hua Ju Energy with assessed value of land use right of 12 pieces of land. After the increase of capital, the total capital was 288.59 shares, and Yankuang Group held 74% of the total equity interest. In 2009, Yankuang Group transferred all its equity interest in Hua Ju Energy to the Company, and the other share holders’ capital did not change. In July 2009, the total shares held by Shandong Chuangye Investment Development Company, Jining Shengdi Investment Management Co., Ltd and Wu Zenghua were transferred to the Company, and then the shares held by the Company increased to 95.14%. The Business License for Legal Person registered No. of Hua Ju Energy, mainly engaged in thermal power generation by coal slurry and gangue, sales of electricity on the grid and comprehensive use of waste heat, is 370000018085042; legal person representative is Hao Jingwu.

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12. Shandong Yanmei Shipping Co., Ltd.

• The former of Shandong Yanmei Shipping Co., Ltd. (as referred to “Yanmei Shipping“) was Zoucheng Nanmei Shipping Co., Ltd established in May 1994 with the registered capital of RMB5.5 Million. The company name was changed into after “Yanmei Shipping” spent RMB105.7 million purchasing 92% of the registered capital in 2003, and Shandong Chuangye Investment and Development Co., Ltd. attained the other 8%. The corporation business license code is 370811018006234, and the legal representative is Mr. Wang Xinkun. The company is mainly engaged in provincial cargo transportation along the middle and down streams, branches of Yangtze River.

13. Yanzhou Coal Ordos Neng Hua Company Limited

• Yanzhou Coal Ordos Neng Hua Company Limited (as referred to Ordos Neng Hua) was established on December 18, 2009 with registration capital of RMB500 million. In January 2011, the Company increased capital investment to Ordos Neng Hua of RMB2.6 billion and the registered capital of Ordos Neng Hua increased to RMB3.1 billion. The corporation business license code is 152700000024075 (1-1), and the legal representative is Mr. Wang Xin. The company is mainly engaged in production and sales of 600,000 tons methanol. The project is under preparation stage.

14. Inner Mongolia Yize Mining Investment Company Limited

• Inner Mongolia Yize Mining Investment Company Limited (as referred to Yize Company) is invested by Guangjing Investment Company Limited (a subsidiary of Hong Kong Jiantao Chemicals Group) which was established in November 2004 with registered capital of RMB136.2605 million. In April 2010, the Ordos Neng Hua, a subsidiary of the Company, purchased Yize Company, after which, Yize Company has become a wholly-owned subsidiary of the Ordos Neng Hua. The corporation business license code is 150000400000390, and the legal representative is Mr. Wang Xin. The company is mainly engaged in investment on mining and chemicals projects, public projects, water and electricity supply, waste water treatment and so on.

15. Inner Mongolia Rongxin Chemicals Company Limited

• Inner Mongolia Rongxin Chemicals Company Limited (as referred to Rongxin Company) is invested by Inner Mongolia Qisheng Mining Company Limited (a subsidiary of Hong Kong Jiantao Chemicals Group) which was established on July 2008 with registration capital of RMB3 million. In April 2010, Ordos Neng Hua, a subsidiary of the Company, purchased Rongxin Company, after which, Rongxin Company has become a wholly-owned subsidiary of Ordos Neng Hua. The corporation business license code is 152722000005151, and the legal representative is Mr. Yin Mingde. The company is mainly engaged in methanol production and sales.

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16. Inner Mongolia Daxin Industrial Gas Company Limited

• Inner Mongolia Daxin Industrial Gas Company Limited (as referred to Daxin Company) is jointly invested by Mingsheng Investment Company and Inner Mongolia Qisheng Mining Company Limited which are all the subsidiaries of Hong Kong Jiantao Chemicals Group in August 2008, with registered capital of RMB4.11 million. In April 2010, Ordos Neng Hua, a subsidiary of the Company, purchased Daxin Company, after which, Daxin Company has become a wholly-owned subsidiary of Ordos Neng Hua. The corporation business license code is 150000400002131, and the legal representative is Mr. Yin Mingde. The company is mainly engaged in industrial gas supplies.

17. Inner Mongolia Xintai Coal Mining Company Limited

• Inner Mongolia Xintai Coal Mining Company Limited (as referred to “Xintai Company”) was established jointly by two natural persons, Wang Jun and He Ning, with the registered capital of RMB5.0 million. Xintai Company takes the responsibility of the operating of Wenyu coal mine. In July 2011, Ordos Neng Hua, the subsidiary of the Company, acquired 80% equity interests in Xintai Company which became the subsidiary of Ordos Neng Hua after the acquisition. The corporation business licence code is 150000000009769, and the legal representative is Mr. Yin Mingde. The company mainly engaged in coal mining and sales.

18. Yancoal International (Holding) Co., Limited

• Yancoal International (Holding) Co., Limited (as referred to “Hong Kong Company”), a wholly-owned subsidiary of the Company, was established on 13 July, 2011, with the registered capital of USD 2.8 million. The corporation business licence code is 1631570 and it is mainly engaged in investment, mine technology development, transference and consulting services, and international trade, etc.

19. Yancoal International Technology Development Co., Limited

• Yancoal International Technology Development Co., Limited (as referred to “Technology Development Company”), a wholly owned subsidiary of Hong Kong Company, was established on 20 July, 2011, with the registered capital of USD1.00 million. The corporation business licence code is 1637495 and it mainly takes responsibility of mine technology development, transference and consulting services, etc.

20. Yancoal Technology Development Holdings Pty Ltd

• Yancoal Technology Development Holdings Pty Ltd (as referred to “Yancoal Technology”), a whollyowned subsidiary of Yancoal International Technology Development Co., Limited, was established in June 2012, with the registered capital of AUD75.41 million. Its ACN is 158561052 and it mainly engages in the management of the shareholding company.

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i. Subsidiaries – continued

20. Yancoal Technology Development Holdings Pty Ltd – continued

As at the end of the reporting period, subsidiaries owned by Yancoal Technology are as follows:

	Place of	Registered	Business	Shareholding
Subsidiaries	registration	capital (AUD)	scope	proportion (%)
Yancoal Technology Development Pty Limited	Australia	–	The development of	100
			long-wall coal surface
			layer mining technology
UCC Energy Pty Limited	Australia	2	UCC technology	100
Wesfarmers Char Pty Ltd	Australia	1 million	Research and
			development of the
			technology and
			procedures in relation
			to coal char	100

21. Premier Char Pty Ltd

Premier Char Pty Ltd (as referred to “Premier Char”) was established by Wesfarmers Chemicals, Energy & Fertilizers Limited, the wholly owned subsidiary of Wesfarmers Limited in Australia. In December 2011, Austar, the subsidiary of the Company, acquired 100% equity interests in Wesfarmers Char which became the wholly owned subsidiary of Austar after the acquisition. In June 2012, the subsidiary of the Company, Hong Kong Company, acquired 100% equity of Premier Char and injected the equity into newly established Yancoal Technology. The registered capital of Premier Char is AUD1.00 million and its ACN is 009379597. The company mainly engages in the research and development of the technology and procedures in relation to processing coal char from low rank coals.

22. Yancoal International Trading Co., Limited

Yancoal International Trading Co., Limited (as referred to “International Trading Company”), a wholly owned subsidiary of Hong Kong Company, was established on 20 July, 2011, with the registered capital of USD1.00 million. The corporation business licence code is 1636851 and it mainly takes responsibility of transit trade of coal and other products.

23. Yancoal International Resources Development Co., Limited Yancoal International Resources Development Co., Limited (as referred to “Resources Development Company”), a wholly owned subsidiary of Hong Kong Company, was established on 20 July, 2011, with the registered capital of USD600,000. The corporation business licence code is 1637036 and it mainly engages in exploration and development of mineral resources.

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24. Yancoal Luxembourg Energy Holding Co., Limited Yancoal Luxembourg Energy Holding Co., Limited (as referred to “Luxembourg Company”), a wholly owned subsidiary of Hong Kong Company, was established on 16 September, 2011, with the registered capital of USD0.5 million. The corporation business licence code is B163726 and it mainly engages in foreign investment.

25. Yancoal Canada Resources Holding Co., Ltd Yancoal Canada Resources Holding Co., Ltd (as referred to “Canada Company”), a wholly owned subsidiary of Luxembourg Company, was established on 18 August, 2011, with the registered capital of USD290 million. The corporation business licence code is 101189865 and it mainly engages in mining and sales in mineral resources.

26. Yancoal Energy Pty Ltd

Yancoal Energy Pty Ltd (as referred to “Yancoal Energy”), a wholly-owned subsidiary of Hong Kong Company, was established in June, 2012, with the registered capital of AUD202.98 million. ACN (Australian Company Number) of Yancoal Energy is 158560975 and it mainly engages in the management of the holding companies.

As at the end of the reporting period, subsidiaries owned by Yancoal Energy are as follows:

	Place of	Registered	Business	Shareholding
Subsidiaries	registration	capital (AUD)	scope	proportion (%)
Syntech Holdings Pty Ltd	Australia	223.47 million	Shareholding company	100
			and mining
			management
Syntech Holdings II Pty Ltd	Australia	6.32 million	Shareholding company	100

27. Syntech Holdings Pty Ltd

Syntech Holdings Pty Ltd (as referred to “Syntech”) was set up jointly by GS Holdings, Australian Mining Finance 1 GmbH & Co. and AMH Syntech Holdings Pty Ltd. Syntech engages in the operation of Cameby Downs coal mine’s fi rst stage project. In August 2011, Austar, the subsidiary of the Company, acquired 100% equity interests in Syntech which became the wholly owned subsidiary of Austar after the acquisition. In June 2012, the subsidiary of the Company, Hong Kong Company, acquired 100% equity of Syntech and injected the equity into newly established Yancoal Energy Ltd. The registered capital of Syntech is AUD223.47 million and its ACN is 123782445. The company mainly engages in shareholding and mining management.

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27. Syntech Holdings Pty Ltd – continued

As at the end of the reporting period, subsidiaries owned by Syntech are as follows:

	Place of	Registered	Business	Shareholding
Subsidiary	registration	capital (AUD)	scope	proportion (%)
Syntech Resources Pty Ltd	Australia	1,251,431	Coal mining and sales	100
Mountf eld Properties Pty Ltd	Australia	100	Holding real estate	100

28. Syntech Holdings II Pty Ltd

Syntech Holdings II Pty Ltd (as referred to “Syntech II”) was set up jointly by GS Holdings and AMH Syntech Holdings II Pty Ltd. In August 2011, Austar, the subsidiary of the Company, acquired 100% equity interests in Syntech II which became the wholly owned subsidiary of Austar after the acquisition. In June 2012, the subsidiary of the Company, Hong Kong Company, acquired 100% equity of Syntech II and injected the equity into newly established Yancoal Energy Ltd. The registered capital of Syntech II is AUD6.32 million and its ACN is 126174847. The company mainly engages in holding company management.

As at the end of the reporting period, subsidiary owned by Syntech II is as follows:

	Place of	Registered	Business	Shareholding
Subsidiary	registration	capital (AUD)	scope	proportion (%)
AMH (Chinchilla Coal) Pty Ltd	Australia	2	Exploration	100

29. Athena Holdings Ltd

Athena Holdings Ltd (as referred to “Athena Holding”), a wholly-owned subsidiary of Hong Kong Company, was established in June 2012, with the registered capital of AUD24.45 million. Its ACN is 158561043 and it mainly engages in the management of the shareholding company.

As at the end of the reporting period, subsidiary owned by Athena Holding is as follows:

	Place of	Registered	Business	Shareholding
Subsidiary	registration	capital (AUD)	scope	proportion (%)
Athena Coal Limited	Australia	2	Coal exploration	100

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30. Tonford Holdings Ltd

Tonford Holdings Ltd (as referred to “Tonford Holding”), a wholly-owned subsidiary of Hong Kong Company, was established in June 2012, with the registered capital of AUD46.41 million. Its ACN is 158561016 and it mainly engages in the management of the shareholding company.

As at the end of the reporting period, subsidiary owned by Tonford Holding is as follows:

	Place of	Registered	Business	Shareholding
Subsidiary	registration	capital (AUD)	scope	proportion (%)
Tonford Pty Ltd	Australia	2	Coal exploration	100

31. Wilpeena Holdings Ltd

Wilpeena Holding Ltd (as referred to “Wilpeena Holding”), a wholly-owned subsidiary of Hong Kong Company, was established in June 2012, with the registered capital of AUD3.46 million. Its ACN is 158560993 and it mainly engages in the management of the shareholding company.

32. Premier (Holding) Ltd

Premier (Holding) Ltd (as referred to “Premier Holding”), a wholly-owned subsidiary of Hong Kong Company, was established in June 2012, with the registered capital of AUD321.61 million. ACN of Premier Holding is 158560911 and it mainly engages in the management of the shareholding company.

As at the end of the reporting period, subsidiaries owned by Premier Holding are as follows:

	Place of	Registered	Business	Shareholding
Subsidiary	registration	capital (AUD)	scope	proportion (%)
Premier Coal Limited	Australia	8.78 million	Exploration, production
			and processing of coal	100

33. Premier Coal Limited

Premier Coal Limited (as referred to “Premier Coal”) was established by Wesfarmers Coal Resources Pty Ltd, the wholly owned subsidiary of Wesfarmers Limited in Australia. In December 2011, Austar, the subsidiary of the Company, acquired 100% equity interests in Premier Coal which became the wholly owned subsidiary of Austar after the acquisition. The registered capital of Premier Coal is AUD8.78 million and its ACN is 008672599. The company mainly engages in exploration, production and processing of coal.

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VII. BUSINESS COMBINATIONS AND CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

i. Subsidiaries – continued

34. Zoucheng Yankuang Beisheng Industry & Trading Co., Limited Zoucheng Yankuang Beisheng Industry & Trading Co., Limited (as referred to “Beisheng Industry & Trading”) was established by Yankuang Group Beisu Coal Mine (as referred to “Beisu Coal Mine”) with the registered capital of RMB2.404 million. In May, 2012, the Company acquired the whole assets and liabilities of Beisu Coal Mine and Yankuang Group Yangcun Coal Mine (as referred to “Yangcun Coal Mine”). The whole assets and liabilities of Beisu Coal Mine was incorporated into the Company after the acquisition, accordingly, Beisheng Industry & Trading became a subsidiary of the Company. The business licence code is 370883018000107 and the legal representative is Mr. Zhang Chuanwu. The company is mainly engaged in gangue selecting and processing, cargo transportation and plastic making.

ii. The changes of consolidation scope for the period

1. Companies newly included in the consolidation

			Net assets	Net prof ts
	Reason for	Shares	at the end of the	for the reporting
Companies	consolidation	proportion (%)	reporting period	period
Beisu coal mine of Yankuang Group	acquisition	–	–	–
Corporation Ltd.
Yangcun coal mine of Yankuang Group	acquisition	–	–	–
Corporation Ltd.
Zoucheng Yankuang Beisheng Industry	acquisition	100	RMB0.1million	RMB-0.1million
and Trade Co., Ltd.
Gloucester Coal Ltd.	acquisition	100	AUD768.54 million	–

• Note: As approved at the ninth meeting of the fi fth session of the board of the Company, the Company acquired the entire assets of Beisu coal mine and Yangcun coal mine owned by Yankuang Group, with transfer consideration of RMB824.14 million of assessed consolidated net assets of these two mines. The assets include:

• (1) All assets and liabilities of Beisu coal mine and Yangcun coal mine

• (2) the relevant interests and rights of Beisu coal mine and Yangcun coal mine as an actual investor: the Company will get the 100% equity interest of Zoucheng Yankuang Beisheng Industry and Trade Co., Ltd previously wholly controlled by Beisu coal mine, get 39.77% and 20% equity interests of Shandong Shengyang Wood Co., Ltd and Jining Jiemei New Wall Materials Co., Ltd, respectively, previously held by Yangcun coal mine.

Upon completion of the acquisition on 31 May, 2012, entire assets of Beisu coal mine and Yangcun coal mine were incorporated into the Company, with Beisheng Industry and Trade as the wholly owned subsidiary of the Company and Shandong Shengyang Wood Co., Ltd and Jining Jiemei New Wall Materials Co., Ltd as associated companies of the Company.

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ii. The changes of consolidation scope for the period – continued

1. Combination in current period

Subsidiaries acquired in business combination under common control

Name of	Place of	Registered	Investment	Shares	Business
subsidiaries	Registration	capital	capital	proportion	scope
		(RMB10,000)	(RMB10,000)	(%)
Beisu coal Mine of Yankuang	Zoucheng City,	—	—	—	Coal mining,
Group Corporation Ltd.	Shandong Province				processing
					and sales
Yangcun coal mine of Yankuang	Jining City, Shandong	—	—	—	Coal mining,
Group Corporation Ltd.	province				processing and
					sales
Zoucheng Yankuang Beisheng	Zoucheng City,	240	240	100	refuse selecting
Industry and Trade Co., Ltd.	Shandong Province				and processing,
					general shipping

• (1) As described in Note “VII, 2,(1)”, the Company acquired the entire assets of Beisu coal mine and Yangcun coal mine owned by Yankuang Group, the combination is under common control as Yankuang Group is the controlling shareholder of the Company.

• (2) The payment of consideration and the procedures for the delivery of equity interests have completed on 31 May, 2012. The acquisition of Beisu coal mine and Yangcun coal mine by the Group was on 31 May, 2012.

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ii. The changes of consolidation scope for the period – continued

1. Combination in current period – continued

2. (3) Basic fi nancial positions of the acquirees:

Yangcun coal mine		Unit: RMB10,000
Items	31 May 2012	31 December 2011
Total assets	44,836	43,230
Total liabilities	19,879	21,207
Owner’s equity	24,957	22,023
1 Jan 2012 to 31 May 2012		1 Jan 2011 to 30 June 2012
Operating revenue	30,744	33,985
Net prof t	1,872	1,495
Net cash f ow from operating activities	-60	868
Net cash f ow	-60	710
Beisu coal mine		Unit: RMB10, 000
Items	31 May 2012	31 December 2011
Total assets	32,415	15,368
Total liabilities	60,387	50,449
Owner’s equity	-27,972	-35,081
1 Jan 2012 to 31 May 2012		1 Jan 2011 to 30 June 2012
Operating revenue	23,365	29,866
Net prof t	-7,867	-1,906
Net cash f ow from operating activities	34	2,156
Net cash f ow	8	1,949
Beisheng Industry and Trade Co Ltd.		Unit: RMB10,000
Items	31 May 2012	31 December 2011
Total assets	229	334
Total liabilities	213	314
Owner’s equity	16	20
1 Jan 2012 to 31 May 2012		1 Jan 2011 to 30 June 2012
Operating income	206	227
Net prof t	-4	-5
Net cash f ow from operating activities	-29	-123
Net cash f ow	-29	-123

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ii. The changes of consolidation scope for the period – continued

1. Combination in current period – continued

(4) Items incorporated by absorption merger

	Main assets incorporated	Main assets incorporated	Main liabilities	incorporated
		Amount		Amount
Merged parties	Item	(RMB10,000)	Item	(RMB10,000)
Beisu coal	Bank balance
mine and	and cash	769	—	—
Yangcun	Notes receivable	3,458	—	—
coal mine	Other receivable	15,722	—	—
	inventory	261	—	—
	Long-term equity
	investment	633	—	—
	Fixed asset	27,940	—	—
	Construction in progress	539	—	—
	Intangible asset	27,510	—	—
	Deferred tax assets	418	—	—
	—	—	Accounts payable	224
	—	—	Advance from customers	9,217
	—	—	Salaries and wages payable	12,470
	—	—	Tax payable	198
	—	—	Other payable	58,066
	—	—	Other current liabilities	90
Total	—	77,250	—	80,265

Subsidiaries acquired in business combination not under common control

Name of	Place of	Registered	Investment	Shares
subsidiaries	Registration	capital	capital	proportion (%)	Business scope
Gloucester Coal Ltd.	Australia	AUD719.72	AUD 550.45	100	Development and
		million	million		operation of coal and
					coal related business

(1) The information related to the acquisition is described in Note “VII, 1, (6)”. The acquisition of Gloucester by the Group was on 27 June 2012. As the fi nancial data of Gloucester from 27 June 2012 till 30 June 2012 had no signifi cant changes, the fi nancial information of this acquisition is subject to that of dated 30 June 2012.

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VII. BUSINESS COMBINATIONS AND CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

ii. The changes of consolidation scope for the period – continued

1. Combination in current period – continued

2. (2) The identifi able assets and liabilities at the acquisition date:

AUD

				AUD
			27 June 2012
Items	Carrying amount			Fair value
Bank balance and cash		46,185,722		46,185,722
Account receivable and other receivable		25,774,198		25,540,173
Prepayment		10,248,237		10,248,237
Inventory		45,464,900		44,664,900
Other current asset		100,674,390		16,500,000
Available for sale f nancial asset		7,408,702		7,408,702
Fixed assets		652,505,762		781,324,055
Construction in progress		262,669,099		463,317,831
Intangible assets		1,006,101,911		991,488,511
Deferred tax assets		151,326,490		218,080,585
Other non-current assets		178,800,115		175,600,132
Short borrowings		-113,000,000		-113,000,000
Notes payable		-586,190,142		-586,190,142
Account payable		-116,376,693		-116,376,693
Tax payable		8,979,357		8,979,357
Salaries and wages payable		-15,281,139		-15,281,139
Interests payable		-4,802,697		-4,802,697
Other payable		-19,607,265		-3,969,404
Non-current liabilities within one year		-97,595,966		-68,997,516
Long term borrowings		-387,879,590		-387,879,590
Long term payable		-5,294,320		-5,294,320
Deferred tax liabilities		-465,395,513		-550,729,057
Provisions		-183,641,513		-168,281,119
Net assets attributable to the
shareholders of the parent company		501,074,045		768,536,528

Note 1: Fair value of the identifi able assets, liabilities is determined on the basis of the evaluation report issued by Australian appraisal-Pricewaterhouse Coopers Australia.

Note 2: The total acquisition consideration AUD550.45 million is determined by the price of Yancoal Ordinary Shares and Yancoal CVRs on Yancoal Australia’s fi rst trading date on ASX, and based on the number of shares the original Gloucester shareholders obtained from Yancoal Australia. The difference between the total acquisition cost and fair value of the identifi able assets, liabilities is the gains from the acquisition of a total amount of AUD218.08 million.

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iii. Translation of fi nancial statements denominated in foreign currency Translation exchange rates of overseas subsidiaries’ fi nancial statements

Items	Foreign currency	Translation exchange rates
Assets and liabilities	AUD	spot exchange rate on balance sheet date 6.3474
The income statement and	AUD	approximate spot exchange rate on transaction date,
cash f ow statement		average of the year 6.3784
The equity	AUD	spot exchange rate on arising, except for retained earnings
Assets and liabilities	HKD	spot exchange rate on balance sheet date 0.8152
The income statement and	HKD	approximate spot exchange rate on transaction date,
cash f ow statement		average of the year 0.8130
The equity	HKD	spot exchange rate on arising, except for retained earnings

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VIII. NOTES TO CONSOLIDATION FINANCIAL STATEMENTS

1. Cash at bank and on hand

Items	At June 30, 2012 At January 1, 2012 Original Exchange RMB Original Exchange RMB currency rate equivalent currency rate equivalent
Cash on hand Including: RMB 1,238,481 1.0000 1,238,481 478,675 1.0000 478,675 USD 20,264 6.3249 128,168 20,264 6.3009 127,681 AUD 9,838 6.3474 62,446 8,935 6.4093 57,267 Subtotal 1,429,095 663,623 Cash at bank Including: RMB 12,638,883,413 1.0000 12,638,883,41315,091,401,886 1.0000 15,091,401,886 USD 1,058,328,249 6.3249 6,693,820,342 56,562,057 6.3009 356,391,865 AUD 402,372,693 6.3474 2,554,020,432 265,742,783 6.4093 1,703,225,219 HKD 11,301 0.8152 9,213 557,694 0.8107 452,123 EUR 16,892 7.8710 132,957 25,151 8.1625 205,295 GBP 894 9.8169 8,776 881 9.7116 8,556 Subtotal 21,886,875,133 17,151,684,944 Other monetary assets Including: RMB 24,807,612 1.0000 24,807,612 560,024,710 1.0000 560,024,710 USD 1,674,989 6.3249 10,594,138 974,521 6.3009 6,140,359 AUD 60,331,316 6.3474 382,946,995 60,391,257 6.4093 387,065,683 Subtotal 418,348,745 953,230,752 Total 22,306,652,973 18,105,579,319	1,238,481 1.0000 1,238,481 478,675 1.0000 478,675 20,264 6.3249 128,168 20,264 6.3009 127,681 9,838 6.3474 62,446 8,935 6.4093 57,267
	1,429,095 663,623
	12,638,883,413 1.0000 12,638,883,41315,091,401,886 1.0000 15,091,401,886 1,058,328,249 6.3249 6,693,820,342 56,562,057 6.3009 356,391,865 402,372,693 6.3474 2,554,020,432 265,742,783 6.4093 1,703,225,219 11,301 0.8152 9,213 557,694 0.8107 452,123 16,892 7.8710 132,957 25,151 8.1625 205,295 894 9.8169 8,776 881 9.7116 8,556
	21,886,875,133 17,151,684,944
	418,348,745 953,230,752
	22,306,652,973 18,105,579,319

• (1) As at the end of the reporting period, the balance of cash at bank and on hand increased by 23% as compared with the balance at the beginning of the year, mainly due to the business accumulation, issuance of corporate bonds, increase of fund recovery and decrease of bills settlement.

• (2) As at the end of the reporting period, the Group held RMB3,330 million of term deposits; RMB10.51 million of letter of credit deposit; RMB339.42 million of guarantee contract with priority to transfer money; RMB28.72 million of environmental guarantee deposit; RMB 53.75 million of other guarantee deposit; totalling RMB3,732.4 million.

(3) At the end of the current period, overseas cash and cash equivalent of the Group is RMB9,628.66 million, owned by the overseas subsidiaries of the Company.

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2. Notes receivable

• (1) Notes receivable by category

Notes category	At June 30, At January 1, 2012 2012
Bank promissory notes Commercial acceptance bills Total	2,887,623,144 7,132,620,511 206,500,000 20,000,000
	3,094,123,144 7,152,620,511

Note: For the current period, notes receivable decreased by 57%, mainly due to decrease of sales settled by notes and increase of discounted notes.

(2) Bills endorsed to other parties by June 30, 2012 but still be immature (top fi ve)

Items Drawer Drawing date Expiry date	Amount(RMB)
Bank promissory notes South Cement Co., Ltd 13March, 2012 13 September, 2012 Bank promissory notes Zhongxin Daxie Trade Co., Ltd 31May 2012 30 November, 2012 Bank promissory notes Jiangsu Hantang International 27 June 2012 27 December, 2012 Trade Group Corporation Bank promissory notes Shanghai Sha-steel Material 30 March 2012 30 September, 2012 Trade Co., Ltd Bank promissory notes Hubei Hengxingli Commercial 3 May 2012 3 November, 2012 and Trade Co., Ltd Total	77,000,000 33,279,413 30,000,000 25,000,000 20,000,000
	185,279,413

• (3) As at the end of the reporting period, the amount of discounted immature bills of the Group was RMB33.5 million.

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3. Accounts receivable

• (1) Accounts receivable by category

Items	At June 30, 2012 At January 1, 2012 Carrying amount Bad debt Provision Carrying amount Bad debt Provision Bad debt Bad debt Amount Provision Amount Provision RMB % RMB % RMB % RMB %
Accounts receivables accrued bad debt provision as per portfolio Accounting aging portfolio Risk-free portfolio The subtotal of portfolio Total	– – – – – – – – 6,990,245 1 5,139,905 100 7,170,093 1 5,147,099 100 706,653,019 99 – – 813,134,481 99 – – 713,643,264 100 5,139,905 100 820,304,574 100 5,147,099 100
	713,643,264 100 5,139,905 100 820,304,574 100 5,147,099 100

• 1) There was no the individually signifi cant amount of accounts receivables accrued the bad debt provision separately for the period.

• 2) Accounts receivables in the portfolio accrued the bad debt provisions as per accounting aging analysis method.

Items	At June 30, 2012 At January 1, 2012 Amount Bad debt Amount Bad debt RMB % provision RMB % provision
Within 1 year 1 to 2 years 2 to 3 years Over 3 years Total	1,246,928 4 49,877 1,426,776 4 57,071 30 – 30 – 1,306,579 50 653,290 1,306,579 50 653,290 4,436,738 100 4,436,738 4,436,738 100 4,436,738
	6,990,245 – 5,139,905 7,170,093 – 5,147,099

• 3) Account receivables in the portfolio accruing the bad debt provision in other methods

Items	Carrying Bad debt amount amount
Risk-free portfolio Total	706,653,019 –
	706,653,019 –

Note: As at June 30, 2012, accounts receivable in risk-free portfolio included RMB 572.2 million from overseas subsidiaries of the Company-Yancoal Australia which did not accrue bad debt provision because of claims still in the normal credit period and RMB 20 million of letter of credit issued by the bank.

160

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3. Accounts receivable – continued

• (2) There is no bad debt provision to recover during the reporting period.

• (3) There is no write-off of accounts receivables during the reporting period.

• (4) Accounts receivables arising on shareholders of the Company holding more than 5% (including 5%) shares are excluded as at the end of the reporting period; and there were no accounts receivables arising on related parties.

• (5) The fi ve largest accounts receivables

Relationship with Items the Company	Proportion of total accounts Amounts Age receivables (%)	Proportion of total accounts Amounts Age receivables (%)
Baoshan Iron and Steel Co., Ltd Third party POSCO Third party Korean Western Power Company Third party Mercuria Energy Group Third party TEPCO Third party Total	81,811,452 Within 1 year 68,764,977 Within 1 year 60,583,318 Within 1 year 46,922,843 Within 1 year 43,763,495 Within 1 year 301,846,085	11 10 8 7 6
		42

• (6) Balance of foreign currency in accounts receivables

Foreign currency	At June 30, 2012 At January 1, 2012 Foreign Exchange RMB Foreign Exchange RMB currency rate equivalent currency rate equivalent
USD Total	91,900,541 6.3249 581,261,732101,484,196 6.3009 639,441,771
	581,261,732 639,441,771

• (7) There were no accounts receivables to derecognize for the reporting period.

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4. Prepayments

• (1) The aging analysis of prepayments

Items	At June 30, 2012 At January 1, 2012 RMB % RMB %
Within 1 year 1 to 2 years 2 to 3 years Over 3 years Total	1,044,704,396 64 724,285,025 88 489,045,112 30 99,689,145 12 99,129,209 6 196,194 – 241,600 – 241,600 –
	1,633,120,317 100 824,411,964 100

Note: By the end of the reporting period, prepayment of the Group increased by 98% comparing with the beginning of the reporting period, mainly because of the increased prepayment for externally purchased coal, and prepayments for methanol construction and equipments by Ordos Neng Hua.

Prepayments with aging over 1 year are for equipments, of which the Group has not made the settlement.

(2) Information of the top fi ve prepayments

Items Relationship with the Company Amounts Age Reasons	Items Relationship with the Company Amounts Age Reasons
Yankuang Group Boyang Under common control International Trade Co., Ltd Jining Liaoyuan Trade Co., Ltd Third party Dongfang Boiler (Group), Inc Third party Wuxi Zhongmai Trade Co., Ltd Third party China Coal Industry Qinhuangdao Third party Import and Export Co., Ltd. Total	179,753,784 Within 1 year Goods to arrival, under executing 110,688,120 Within 1 year Goods to arrival, under executing 95,952,000 1 to 2 years Goods to arrival, under executing 86,937,914 Within 1 year Goods to arrival, under executing 81,371,313 Within 1 year Goods to arrival, under executing 554,703,131

(3) Prepayments due from shareholders of the Group holding more than (including 5%) of the total shares are not included by the end of the reporting period; accounts receivables arising on related parties was RMB214.27 million, accounting for 13% of the total prepayments. See Note “IX, 3, (4)”.

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4. Prepayments – continued

• (4) Balance of foreign currency in prepayments

Items	At June 30, 2012 At January 1, 2012 Foreign Exchange RMB Foreign Exchange RMB currency rate equivalent currency rate equivalent
USD Total	1,370,657 6.3249 8,669,268 1,331,899 6.3009 8,392,162
	8,669,268 8,392,162

5. Other receivables

• (1) Other receivables by category

Items	At June 30, 2012 At January 1, 2012 Carrying amount Bad debt Provision Carrying amount Bad debt Provision RMB % RMB % RMB % RMB %
Accounts receivables accrued bad debt provision as per portfolio Accounting aging portfolio Risk-free portfolio The subtotal of portfolio Total	– – – – – – – – 47,283,954 2 30,542,404 100 35,066,442 1 30,910,735 100 2,804,511,700 98 – –3,065,011,064 99 – – 2,851,795,654 100 30,542,404 1003,100,077,506 100 30,910,735 100
	2,851,795,654 100 30,542,404 1003,100,077,506 100 30,910,735 100

• 1) There was no individually signifi cant amount of other receivables that accrued the bad debt provision separately for the reporting period.

• 2) Other receivables in the portfolio that accrued the bad debt provisions as per accounting aging analysis method.

Items	At June 30, 2012 At January 1, 2012 Amount Bad debt Bad debt RMB % provision Amount % provision
Within 1 year 1 to 2 year 2 to 3 years Over3 years Total	14,948,634 4 597,945 1,231,339 4 49,254 22,659 30 6,798 28,180 30 8,454 4,750,000 50 2,375,000 5,907,792 50 2,953,896 27,562,661 100 27,562,661 27,899,131 100 27,899,131
	47,283,954 – 30,542,404 35,066,442 – 30,910,735

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5. Other receivables – continued

• (1) Other receivables by category – continued

• 3) Other receivables in the portfolio accruing the bad debt provision in other methods

Items	Carrying Bad debt amount provision
Risk-free portfolio Total	2,804,511,700 –
	2,804,511,700 –

Note: As at the end of the period, risk-free portfolio included RMB2,195.41 million of investment prepayment. See note “XI, 1, (2)”.

• (2) There is no bad debt provision to recover during the reporting period.

• (3) As at the end of the reporting period, accounts receivable due from the controlling shareholder of the Company is RMB17.69million (at December 31, 2011: RMB57.57 million); accounts receivable due from related parties is RMB327.44million, accounting for 11% of the total other receivables. See note “IX, 3, (3)”.

• (4) The fi ve largest other receivables

Relationship with Items the Company	Proportion of other receivables Amounts Age (%) Nature or contents	Proportion of other receivables Amounts Age (%) Nature or contents
Prepayment for investment Third party Ashton Coal Mines Limited Joint venture Shandong Shengyang Wood associates Co., Ltd The Coal Industry Long Service Third party Leave Trust Fund Yankuang Guohong Chemical under common control Co., Ltd Total	2,195,405,200 1to 2years 179,025,091 Within 1 year 95,085,917 Within 1 year 40,743,910 Within 1 year 19,588,308 Within 1 year 2,529,848,426	77 Prepayment for investment 6 Dealing amounts 3 Dealing amounts paid on behalf 1 Trust fund 1 Payment for materials 88

• (5) There are no other receivables to derecognise for the reporting period.

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6. Inventory and provision for inventory impairment

• (1) Inventory by category

Items	At June 30, At January 1, 2012 2012
Raw materials Coal stock Methanol stock Low value consumables Total	252,224,595 229,031,040 1,336,297,624 968,024,792 12,306,865 11,785,991 225,199,017 185,837,370
	1,826,028,101 1,394,679,193

Note: As at 30 June 2012, the inventory of the Group increased by 31% compared with the balance at the beginning of the year, mainly due to the increase of inventory of externally purchased coal and the Group’s self-produced coal.

• (2) No provision for inventory impairment.

• (3) Inventory excludes the amount of capitalized interest.

7. Other current assets and other current liabilities

• (1) Other current assets

Items	At June 30, At January 1, 2012 2012
Land subsidence, restoration, rehabilitation and environment costs (note IV, 21) Environment management guarantee deposit (note XIV, 4) Removal costs (note 1) Hedging instrument-forward exchange contract (note 2) Mining royalty receivable (note 3) Total	1,961,349,766 1,714,505,750 877,493,497 777,093,497 305,644,214 261,440,878 137,423,368 104,909,672 104,732,100 –
	3,386,642,945 2,857,949,797

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1. Other current assets and other current liabilities – continued (2) Other current liabilities

Items	At June 30, At January 1, 2012 2012
Land subsidence, restoration, rehabilitation and environment costs (note IV, 21) Hedging instrument-interest rate swap (note 4) Hedging instrument-forward exchange contract (note 2) Deferred income (note 5) Total	3,460,616,662 2,976,014,409 167,251,463 179,617,737 69,071,266 42,471,284 82,762,483 1,121,285
	3,779,701,874 3,199,224,715

• Note 1: The overburden on the coal seam of open-pits owned by overseas subsidiaries of the Company-Yancoal Australia shall be removed, which will result in removal costs. Removal costs shall be recorded as profi ts or losses when respective coal seam is mined.

• Note 2: To avoid the risk of foreign currency exchange rate fl uctuation, overseas subsidiaries of the Company-Yancoal Australia entered into forward foreign currency contracts to hedge foreign currency risks: to exchange USD into AUD on the agreed date in the future at the agreed exchange rate range, or the spot rate. On the balance sheet date, derivative fi nancial assets or liabilities refl ect the fair value of related outstanding contracts. The fair value will be calculated on the difference between the forward foreign currency contract exchange rate on the balance sheet date and on the contracts signing date.

• Note 3: It is the right of the subsidiary of the Company-Gloucester to collect the mining royalty of 4% of Free on Board Trimmed Sales (FOBT sales) from Middlemount Coal Pty Ltd. The royalty receivable is measured based on management’s expectations of the future cash fl ows with gains and losses recognized in the statements of comprehensive income at each reporting date.

As at June 30, 2012, the royalty receivable to be obtained during the next 12 months, amounting to AUD16.5 million, will be disclosed as other current asset; the royalty receivable obtained after one year amounting to AUD 175.4 million, will be disclosed as other non-current asset.

• Note 4: To meet the requirement of the acquisition of Yancoal Resources, Yancoal Australia borrowed a bank loan of USD3 billion. In July 2010, the Company entered into interest rate swap contracts amounting to USD1.5 billion with Bank of China (BOC), China Construction Bank (CCB) and China Development Bank (CDB). Pursuant to the contracts, the Company should pay interest expenses to BOC, CCB and CDB at the annual rate of 2.755%, 2.42% and 2.41% respectively; BOC, CCB and CDB should quarterly pay interest expenses to the Company at the annual rate of LIBOR plus 0.75% on the agreed date. All the contracts terms are within four years. At the end of June 2012, the fair value of the Contracts was RMB167.25 million. Through the retrospective review, the Company considers that the hedge is effective and there is no invalid hedge had been recognized in the income statement.

• Note 5: It is the deferred income recognized by Ashton Joint Venture, a company jointly controlled by the Company, amounting to AUD12.86 million, which is the government subsidy granted by Australian Energy and Tourism Department to the coal mines with signifi cant carbon emissions before the execution of the carbon emission price. This subsidy will be used to recover the expense which may occur before June 30, 2013.

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8. Available-for-sales fi nancial assets

• (1) Available-for-sale fi nancial assets by category

Items	Fair value at Fair value at June 30, 2012 January 1, 2012
Available-for-sale security Available-for-sale equity instruments (Note 1) Total	106,843,905 160,122,061 175,063,215 173,495,575
	281,907,120 333,617,636

Note: Available-for-sale equity instrument, mainly are shares of Shanghai Shenergy Co., Ltd and Jiangsu Lianyungang Port Co., Ltd listed in Shanghai Stock Exchange, which are held by the Company from the past years. The above fair value was recognized based on the closing price listed in Shanghai Stock Exchange on the balance sheet date.

• (2) Long-term securities investment included in available-for-sale fi nancial assets

Securities project Category	balance Interest Accumulated Balance Initial at Jan 1, Incurred for interest at June 30, Face value capital-at cost Maturity date 2012 this period received 2012
NCIG long-term Corporate securities securities Total –	106,843,905 209,445,360 26 August, 2031 160,122,061 7,765,179 13,012,372 106,843,905 106,843,905 209,445,360 – 160,122,061 7,765,179 13,012,372 106,843,905

Note: NCIG (Newcastle Coal Infrastructure Group) long term securities are the long term securities issued by NCIG Holdings Pty Ltd with the annual interest rate of 12.50%.

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9. Long-term accounts receivable

Items	At June 30, At January 1, 2012 2012
Gladstone long-term securities E class Wiggins Island Preference Securities Total	199,943,100 201,892,950 97,241,290 98,189,592
	297,184,390 300,082,542

Note: In 2011, Yancoal Australia Pty invested in the following securities issued by Wiggins Island Coal Export Terminal Pty Ltd.

• 1) The purchasing price and face value of WIPS (E class Wiggins Island Preference Securities) are AUD15.32 million and AUD30.60 million, respectively.

• 2) The purchasing price of GiLTS (Gladstone Long Term Securities) is AUD31.5 million.

• 3) As WIPS and GiLTS have no active market and can not be traded, Yancoal Australia can only recognize them as long-term accounts receivable.

10. Long-term equity investments

(1) Long-term equity investments

Items	At June 30, At January 1, 2012 2012
Equity investments under cost method Equity investments under equity method Long-term equity investments – Total Less: provision for impairment Long-term equity investments – Net	39,182,550 39,182,550 2,163,081,401 1,708,596,387
	2,202,263,951 1,747,778,937 – –
	2,202,263,951 1,747,778,937

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10. Long-term equity investments – continued

(2) Long-term equity investments under cost method and equity method

Shares Ratio of Investment Opening Closing Cash Name of investees proportion (%) voting (%) at cost balance Addition Reduction balance dividends	Shares Ratio of Investment Opening Closing Cash Name of investees proportion (%) voting (%) at cost balance Addition Reduction balance dividends
Under cost method Yankuang Group Zoucheng Ziyuan Construction Co., Ltd 8.33 8.33 Yankuang Group Zoucheng Hua Ming company. 8.00 8.00 Yankuang Group Zoucheng Fuhui Company. 16.00 16.00 Shenzhen Weiersen Loriculture Co., Ltd – – Yankuang Group Guohong Chemical Co., Ltd 5.00 5.00 Zoucheng Jianxincunzhen Bank of Shandong 9.00 9.00 Subtotal Under equity method China HD Zouxian Co., Ltd. 30.00 30.00 Yankuang Group Finance Co., Ltd 25.00 25.00 Shaanxi Future Energy Chemical Corp. Ltd 25.00 25.00 Shandong Shengyang Wood Co., Ltd 39.77 39.77 Jining Jiemei New Wall Materials Co., Ltd 20.00 20.00 Australian Coal Processing Holding Pty Ltd 90.00 50.00 Ashton Coal Mines Limited 90.00 50.00 Subtotal Total	500,000 500,000 – – 500,000 – 100,000 100,000 – – 100,000 – 80,000 80,000 – – 80,000 – 100,000 100,000 – – 100,000 – 29,402,550 29,402,550 – – 29,402,550 – 9,000,000 9,000,000 – – 9,000,000
	39,182,550 39,182,550 – – 39,182,550 –
	900,000,000 973,670,742 47,352,843 – 1,021,023,585 – 125,000,000 170,226,491 19,436,470 15,625,000 174,037,961 15,625,000 540,000,000 540,000,000 405,000,000 – 945,000,000 – 6,000,000 4,886,462 – 1,487,495 3,398,967 – 720,000 359,859 – 3,933 355,926 – 570 – – 18,736,595 19,452,833 – 187,871 19,264,962 –
	1,590,457,165 1,708,596,387 471,789,313 17,304,299 2,163,081,401 15,625,000
	1,629,639,715 1,747,778,937 471,789,313 17,304,299 2,202,263,951 15,625,000

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10. Long-term equity investments – continued

(3) Investment in joint venture and associates

Name of investees	Type of Registered Shares Ratio of company location Business nature Registered capital proportion (%) voting share (%)
Associates China HD Zouxian Co., Ltd. Yankuang Group Finance Co., Ltd Shaanxi Future Energy Chemical Corp. Ltd Shandong Shengyang Wood Co., Ltd Jining Jiemei New Wall Materials Co., Ltd Joint venture enterprises Australian Coal Processing Holding Pty Ltd (Note) Ashton Coal Mines Limited (Note) Name of investees	Limited liability Shandong Electricity energy and RMB3 billion 30 30 related development Limited liability Shandong Finance RMB500 million 25 25 Limited liability Shaanxi Coal exploration and RMB 5.4 billion 25 25 liquefaction of coal Limited liability Shandong Artif cial board, CCF RMB15.09 million 39.77 39.77 processing Limited liability Shandong Coal refuse baked brick RMB3.6 million 20 20 Limited liability Australia No operating company – 90 50 in Australia Limited liability Australia Holding and sales of AUD100 90 50 real-estate Operating Total assets by Total liabilities Net assets revenue for Net prof t for the end of by the end of by the end of the reporting the reporting the period the period the period period period
Associates China HD Zouxian Co., Ltd. Yankuang Group Finance Co., Ltd Shaanxi Future Energy Chemical Corp. Ltd Shandong Shengyang Wood Co., Ltd Jining Jimei New Wall Materials Co., Ltd Joint venture enterprises Australian Coal Processing Holding Pty Ltd (Note) Ashton Coal Mines Limited(Note) Total	6,231,852,589 2,828,440,638 3,403,411,951 2,167,675,364 157,842,811 7,343,440,627 6,647,288,787 696,151,840 155,946,030 77,745,878 3,911,270,486 131,270,486 3,780,000,000 – – 110,600,366 102,053,806 8,546,560 24,916,406 -3,740,245 8,380,602 6,600,972 1,779,630 3,421,099 -19,663 – – – – – 64,072,173 63,076,475 995,698 567,252,456 –
	17,669,616,843 9,778,731,164 7,890,885,679 2,919,211,355 231,828,781

Note: There is difference between shares proportion and voting proportion of joint venture enterprises caused by the items as described in note “VII, 1,(5),2”. The Group can not exercise control over the joint venture enterprises, they shall be recognized under equity method, and the fi nancial data of the joint venture is not included in the consolidated fi nancial statements of the group.

(4) There is no indication that the Company’s long-term equity investments may be impaired, so that no provision for impairment of long-term equity investments was accrued.

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11. Fixed assets

• (1) Fixed assets by category

Items	Foreign exchange translation At January 1, 2012 Addition Reduction differenceAt June 30, 2012
Cost Land Buildings Mining structure Ground structure Harbour works and craft Plant, machinery and equipments Transportation equipment Others	37,663,444,160 7,414,423,411 3,837,901,434 -119,680,986 41,120,285,151 348,490,132 711,571,366 – -6,929,272 1,053,132,226 4,644,801,863 45,635,997 425,498 -4,468,583 4,685,543,779 6,315,924,302 2,228,800,289 3,417,228 -26,694,223 8,514,613,140 1,927,559,100 – – – 1,927,559,100 253,677,455 – – – 253,677,455 23,100,834,914 4,424,507,921 3,830,703,762 -81,588,908 23,613,050,165 488,510,305 645,989 1,213,676 – 487,942,618 583,646,089 3,261,849 2,141,270 – 584,766,668
	Addition Accrued
Accumulated depreciation Land Buildings Mining structure Ground structure Harbour works and craft Plant, machinery and equipments Transportation equipment Others Provision for impairment Land Buildings Mining structure Ground structure Harbour works and craft Plant, machinery and equipments Transportation equipment Others	16,097,960,886 – 1,146,293,775 1,810,942,669 -14,814,924 15,418,497,068 – – – – – – 2,160,718,884 – 49,639,168 284,641 -242,412 2,209,830,999 2,375,655,105 – 89,204,396 – -2,196,934 2,462,662,567 1,074,615,413 – 78,942,479 – – 1,153,557,892 88,870,364 – – – – 88,870,364 9,869,989,731 – 880,708,090 1,807,477,786 -12,375,578 8,930,844,457 357,195,021 – 15,248,875 1,213,676 – 371,230,220 170,916,368 – 32,550,767 1,966,566 – 201,500,569 379,552,722 – – – 379,552,722 – – – – – 65,182,308 – – – 65,182,308 – – – – – 24,397,613 – – – 24,397,613 – – – – – 289,674,257 – – – 289,674,257 214,678 – – – 214,678 83,866 – – – 83,866

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11. Fixed assets – continued

• (1) Fixed assets by category – continued

Items	Foreign exchange translation At January 1, 2012 Addition Reduction difference At June 30, 2012
Net book Value Land Buildings Mining structure Ground structure Harbour works and craft Plant, machinery and equipments Transportation equipment Others	21,185,930,552 – – – 25,322,235,361 348,490,132 – – – 1,053,132,226 2,418,900,671 – – – 2,410,530,472 3,940,269,197 – – – 6,051,950,573 828,546,074 – – – 749,603,595 164,807,091 – – – 164,807,091 12,941,170,926 – – – 14,392,531,451 131,100,606 – – – 116,497,720 412,645,855 – – – 383,182,233

Note: During the reporting period, the Company and Agricultural Bank of China Financial Lease Company Ltd. entered into a leaseback agreement. It is stipulated that the machine and equipment, with its cost of RMB3,662.44 million and net book value of RMB2,000million were sold to Agricultural Bank of China Financial Lease Company Ltd. for a consideration of RMB2,000million. Meanwhile, leaseback deadline of the machine and equipment is in one year and will be repurchased by the Company as RMB400 after the expiration date. As at 30 June 2012, the total fi nancing lease payable is RMB2,118.08 million; fi nancing expense amounting to RMB118.08million is not yet recognized.

(2) Fixed assets under fi nancing lease

Items	Accumulated Book value depreciation Net book value
Machinery and Equipments Total	2,032,371,740 13,484,444 2,018,887,296
	2,032,371,740 13,484,444 2,018,887,296

(3) Among the increased amount of fi xed assets during the reporting period, RMB 302.29 million is transferred from construction in process; RMB 4,983.6 million is through the acquisition of Gloucester. Among the increased amount of accumulated depreciation, RMB1,146.3 million is accrued in the reporting period.

(4) There is no provision and depreciation of lands, as overseas subsidiaries of the Company-Yancoal Australia enjoy the permanent ownership of the land.

(5) As at the end of the reporting period, the cost of the fully depreciated fi xed assets still in use is RMB 7,114.28 million in the Group.

(6) By the end of this reporting period, RMB3,852.36 million included in fi xed assets is pledged as collateral.

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12. Construction in progress

(1) Construction in progress by category

Items	At June 30, 2012 At January 1, 2012 Provision for Provision for Book value impairment Net book value Book value impairment Net book value
1. Weijan construction 2. Technical revamping 3. Infrastructure construction 4. Safety construction 5. Exploration construction TOTAL	431,012,387 – 431,012,387 334,966,685 – 334,966,685 633,893,109 – 633,893,109 295,836,690 – 295,836,690 11,334,391,164 2,037,427 11,332,353,737 10,820,670,046 2,037,427 10,818,632,619 455,084,211 – 455,084,211 6,314,187 – 6,314,187 1,197,469,277 – 1,197,469,277 626,494,494 – 626,494,494
	14,051,850,148 2,037,427 14,049,812,721 12,084,282,102 2,037,427 12,082,244,675

Note: By the end of this reporting period, RMB425.83 million included in construction in progress is pledged as collateral.

• (2) Changes of signifi cant construction in progress

Items	Reduction Transferred into At January 1, 2012 Addition Fixed assets Others At June 30, 2012
Zhuan Longwan coal project Canada potash project Ordos methanol project Wanfu coal mine project Zhaolou power plant project Total	7,907,917,815 27,349,858 – – 7,935,267,673 1,645,226,939 24,240,085 – – 1,669,467,024 535,890,882 158,785,079 4,103 – 694,671,858 104,427,586 29,280,910 – – 133,708,496 126,888,109 71,722,774 4,543,321 – 194,067,562 10,320,351,331 311,378,706 4,547,424 – 10,627,182,613

Items	Including: Ratio of amount of interests Accumulated capitalized capitalization Investment/ amount of interests of this Budgeted budgeted capitalized during this reporting Capital amount amount (%) interests reporting period period (%) sources
Zhuan Longwan coal project Canada potash project Ordos methanol project Wanfu coal mine project Zhaolou power plant project Total	10,082,224,900 79 – – – Self-raised 1,888,319,434 88 – – – Self-raised 5,114,900,000 14 – – – Self-raised 3,309,000,000 4 – – – Self-raised 1,767,000,000 11 – – – Self-raised
	22,161,444,334 – –

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13. Construction materials

Items	At January 1, At June 30, 2012 Addition Reduction 2012
Construction materials Construction equipments Total	14,842,702 54,339,278 54,317,676 14,864,304 16,718,489 19,680,623 4,190,770 32,208,342 31,561,191 74,019,901 58,508,446 47,072,646

14. Intangible assets

• (1) Intangible assets

Items

Foreign exchange Reduction translation At January 1, 2012 Addition and transfer difference At June 30, 2012

Cost Mining rights Unproved mining equity interests Land use rights Patents and know-how Water access right Software Accumulated amortization Mining rights Unproved mining equity interests Land use rights Patents and know-how Water access right Software Book value Mining rights Unproved mining equity interests Land use rights Patents and know-how Water access right Software

25,941,401,473 9,017,734,499 295,037,434 -227,631,847 34,436,466,691 21,119,339,619 6,659,307,538 9,580,357 -180,674,310 27,588,392,490 3,601,738,572 2,340,373,357 285,457,077 -44,909,988 5,611,744,864 912,501,130 – – -32,873 912,468,257 160,232,500 160,000 – -1,707,500 158,685,000 132,253,991 – – -74,280 132,179,711 15,335,661 17,893,604 – -232,896 32,996,369 1,284,296,798 488,212,417 -6,706,951 1,765,802,264 1,093,546,460 477,685,914 -6,592,988 1,564,639,386 – – – – – 180,100,530 9,413,941 -6,244 189,508,227 – – – – – – – – – – 10,649,808 1,112,562 -107,719 11,654,651 24,657,104,675 – – – 32,670,664,427 20,025,793,159 – – – 26,023,753,104 3,601,738,572 – – – 5,611,744,864 732,400,600 – – – 722,960,030 160,232,500 – – – 158,685,000 132,253,991 – – – 132,179,711 4,685,853 – – – 21,341,718

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14. Intangible assets – continued

• (1) Intangible assets – continued

• Note 1: The ending balance of intangible asset increased by 33% as compared with the beginning of the reporting period, which was mainly due to the acquisition of Gloucester by Yancoal Australia, making the mining rights increase by RMB6,306.25million and the unproved mining equity interested increase by RMB 2,340.23 million.

• Note 2: By the end of this reporting period, RMB2,172.79 million included in intangible assets was pledged as collateral.

15. Goodwill

Items	At June 30, At January 1, 2012 2012
Acquisition of Xintai Acquisition of Yancoal Resources Acquisition of Syntech II Acquisition of Premier Acquisition of Yanmei Shipping Total	653,836,286 653,836,286 622,134,942 628,202,015 27,764,376 28,035,135 17,266,365 17,434,746 10,045,361 10,045,361
	1,331,047,330 1,337,553,543

• Note 1: Xintai, Yancoal Resources, Syntech II and Yanmei Shipping are the subsidiaries acquired by business combinations not under common control. The goodwill is the difference between the total acquisition cost and the fair value of net identifi able assets and liabilities of Xintai, Yancoal Resources, Syntech II and Yanmei Shipping on the acquisition date. The decrease of goodwill during the reporting period was mainly due to the foreign exchange rate fl uctuation.

• Note 2: By the end of the reporting period, the Group confi rms that after testing, there is no indication of impairment on cash generating units which include the goodwill.

16. Deferred tax assets and deferred tax liabilities

• (1) Confi rmed deferred tax assets and deferred tax liabilities

Items	At June 30, At January 1, 2012 2012
1. Deferred tax assets Deferred tax assets of the Company and its domestic subsidiaries Deferred tax assets of Yancoal Australia 2. Deferred tax liabilities Deferred tax liabilities of the Company and its domestic subsidiaries Deferred tax liabilities of Yancoal Australia	5,489,010,327 2,046,011,436 1,992,609,068 1,665,095,745 3,496,401,259 380,915,691 8,072,239,726 3,859,784,843 793,201,457 840,909,653 7,279,038,269 3,018,875,190

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16. Deferred tax assets and deferred tax liabilities – continued

• (2) Temporary differences

• 1) Temporary differences of the Company and its domestic subsidiaries

Items	At June 30, At January 1, 2012 2012
1. Deductible temporary differences items Land subsidence, restoration, rehabilitation and environmental costs Wei Jian fees Accrued and unpaid salaries and social insurance Safety fees Development funds Mining royalties Hedging instrument liability Differences of the depreciation of f xed assets Provision for impairment of assets Others Total 2. Taxable temporary differences items Assets amortization and recognition Adjustment to fair value of available for sale f nancial asset Total	3,269,049,450 2,790,537,981 1,214,326,940 1,033,399,099 910,752,119 698,192,135 959,722,875 618,856,781 611,512,916 611,512,916 671,611,409 552,685,175 180,552,462 194,640,758 107,126,823 114,776,857 34,639,405 34,639,405 11,141,873 11,141,873 7,970,436,272 6,660,382,980 3,076,780,987 3,269,181,423 96,024,840 94,457,188
	3,172,805,827 3,363,638,611

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16. Deferred tax assets and deferred tax liabilities – continued

• (2) Temporary differences – continued

• 2) Temporary differences of Yancoal Australia

Items	At June 30, At January 1, 2012 2012
1. Deductible temporary differences items Amortization of assets MRRT MRRT effect Accrued and unpaid salary expenses Take or pay provision Rehabilitation costs Accrued expenses Un-recouped loss Others Total 2. Taxable temporary differences items Asset amortization and recognition Unrealized foreign currency prof t and loss MRRT MRRT effect Hedging instruments assets Others Total	27,928,560 500,251,112 6,158,822,893 – 1,450,865,017 – 435,139,913 307,409,063 1,058,746,320 – 328,268,360 331,000,607 93,251,283 58,501,507 860,010,177 – 1,241,638,339 72,556,681 11,654,670,862 1,269,718,970 14,629,608,706 7,592,378,926 2,410,109,117 2,346,959,547 5,222,890,088 – 1,847,646,872 – 68,352,104 47,122,540 84,854,011 76,456,287
	24,263,460,898 10,062,917,300

Pursuant to relative laws and regulations, MRRT and its effect on income tax under deductible temporary differences are expenditures that can be deducted from taxable income in future years, and MRRT and its effect on income tax under taxable temporary differences are the amount that will be added to the taxable income in future years.

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17. Other non-current assets

Items	At June 30, At January 1, 2012 2012 1,113,333,960 – 117,925,900 117,925,900 1,270,318 – 1,232,530,178 117,925,900
Mining royalties receivable (note 1) Prepayment for investment (note 2) Security deposit of Gloucester Total Note 1: For details, please refer to Note “VIII, 7”. Note 2: For prepayment for investment, please refer to Note “XI, 1, (1)”.

18. Provision for impairment of assets

Items	Provision of At January 1, the reporting Reduction At June 30, 2012 period Reversal Others 2012
Bad debt provision Provision for impairment of f xed assets Provision for impairment of construction in progress Total	36,057,833 103,388 478,912 – 35,682,309 379,552,722 – – – 379,552,722 2,037,427 – – – 2,037,427 417,647,982 103,388 478,912 – 417,272,458

19. Short-term loans

Items	At June 30, At January 1, 2012 2012 4,097,584,928 11,892,000,000 1,783,954,700 1,279,082,700 5,881,539,628 13,171,082,700
Debt of honour Guaranteed loan (note 2) Total

Note 1: During the reporting period, the short-term loans decreased by 55%, mainly due to the repayment of loans of the Company.

Note 2: It was guaranteed by Yankuang Group, the controlling shareholder of the Company.

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20. Notes payable

Items	At June 30, At January 1, 2012 2012
Independent trustee promissory notes Commercial acceptance bills Total	3,720,783,307 – 160,154,420 240,824,185
	3,880,937,727 240,824,185

• Note 1: As described in “Note VII,1, (6)”, Gloucester will make a cash distribution to its shareholders, of which, AUD586.19 million will be distributed by the way of capital return within 6 months after merger. In June 2012, total amount of AUD586.19 million promissory notes were issued by Gloucester to appointed trustees, who will hold the promissory notes and pay the original shareholders of Gloucester on 7 January, 2013. Therefore, there is signifi cant increase of notes payable as at the end of reporting date.

Note 2: All the commercial acceptance bills will be due within 6 months.

21. Accounts payable

• (1) Accounts payable

Items	At June 30, At January 1, 2012 2012
Total Including: over 1 year	2,657,999,827 2,054,240,242
	40,783,090 110,709,433

Note: During the reporting period, the accounts payable increased by 29%, mainly due to the payment of goods not in a timely manner.

• (2) Large amount accounts payable with the age over 1 year mainly is payable for equipments and materials, and there is no large amount of subsequent payment after the period.

• (3) Accounts payable at the end of the current period due to the controlling shareholder of the Company is RMB0.34 million.

• (4) Foreign currency balance in accounts payable

Items	At June 30,2012 At January 1, 2012 Foreign currency Exchange rate Equivalent RMBForeign currency Exchange rate Equivalent RMB
USD Total	882,538 6.3249 5,581,965 20,134,728 6.3009 126,866,908
	5,581,965 126,866,908

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22. Advances from customers

• (1) Advances from customers

Items	At June 30, At January 1, 2012 2012 1,196,538,674 1,740,484,646 79,571,933 41,586,854
Total Including: over 1 year

Note: During the reporting period, the advances from customers decreased by 31%, mainly due to the decrease of the advances from customers of sales of coal.

• (2) Advances aging over 1 year are RMB79.57million, mainly due to the unrealized sales, caused by the decline of demand by the costumers or disagreement on the price after receiving the advances from customers.

• (3) Advances from shareholders of the Company holding more than 5% (including 5%) shares are excluded for the reporting period.

23. Salaries and wages payable

Items

Foreign exchange At January 1, Addition for Payment for translation At June 30, 2012 this period the period difference 2012

Salary (including bonus, allowance and subsidies) Staff welfare Social insurance including: 1. Medical insurance 2. Basic pension insurance 3. Unemployment insurance 4. Injury insurance 5. Maternity insurance Housing fund Union fund and Staff education fund Compensation for severing labour relations Others Total

737,987,757 3,439,191,224 3,360,261,864 -353,208 816,563,909 – 452,568,862 452,568,862 – – 48,002,461 932,418,635 842,865,637 – 137,555,459 5,131,983 263,011,379 228,129,177 – 40,014,185 24,978,082 533,240,141 516,939,653 – 41,278,570 11,603,830 53,606,859 50,888,521 – 14,322,168 – 56,831,476 24,298,960 – 32,532,516 6,288,566 25,728,780 22,609,326 – 9,408,020 10,634,298 151,244,394 150,150,784 – 11,727,908 34,668,236 103,115,804 58,968,126 – 78,815,914 24,472,390 311,536 24,748,253 -35,673 – 295,189,032 336,116,316 251,997,788 -3,378,063 375,929,497 1,150,954,174 5,414,966,771 5,141,561,314 -3,766,944 1,420,592,687

Note: During the reporting period, salary and wages payables increased by 23%, mainly due to that wages and salaries accrued in June are unpaid; there is no payment in arrears of the balance at the end of the reporting period.

“Others” are employees benefi ts accrued for Yancoal Australia, such as annual leave, sick leave, etc.

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24. Taxes payable

Items	At June 30, At January 1, 2012 2012
Value added tax Business tax Income tax Price reconciliation fund Goods and services tax Others Total	59,858,744 308,371,696 4,119,311 16,277,030 1,311,300,346 2,108,531,248 43,242,663 47,072,184 -90,011,337 -43,574,068 -38,456,411 93,799,641
	1,290,053,316 2,530,477,731

Note: During the reporting period, tax payables decreased by 49%, mainly due to the decrease of accrued and unpaid enterprise income tax by the end of the reporting period.

25. Interest payable

Item	At June 30, At January 1, 2012 2012
Interest for corporate bonds Interest of long-term borrowing with instalment payment of interest and principal due at maturity Interest for fund occupancy Total	40,787,304 – 47,126,731 9,420,903 204,672,000 243,048,000
	292,586,035 252,468,903

26. Dividend payable

Names	At June 30, At January 1, 2012 2012
Yankuang Group H shares A shares Total	1,482,000,000 – 1,116,288,000 – 205,200,000 –
	2,803,488,000 –

Note: For details, please refer to “Note VIII, 38”.

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27. Other payable

(1) Other payable

Items	At June 30, At January 1, 2012 2012
Total Including: aging over 1 year	2,788,120,623 3,181,363,668
	1,028,595,766 775,483,981

• (2) As at June 30, 2012, other payable due to the controlling shareholder of the Company is totalling up to RMB443.61 million.

• (3) Other payables with large amount by the end of the reporting period

Item	Payable RMB Age Nature
Mining right Yankuang Group Co., Ltd Wang Jun Shaanxi Ruike Construction Co., Ltd The Ministry of Railways fund settlement centre Total	671,611,409 1 to 4 years Mining royalties fees 443,613,122 Within 1 year Material and project funds 50,000,000 Within 1 year Payment for stock equity transfer 40,116,667 Within 1 year Labour expenses 36,589,199 Within 1 year Freight 1,241,930,397

28. Non-current liabilities due within one year

(1) Non-current liabilities due within one year

Items	At June 30, At January 1, 2012 2012
Long-term borrowing due within one year Long-term payable due within one year Provisions due within one year (note 1) Deferred income due within one year Total	6,482,538,015 6,417,413,500 4,343,163,036 2,340,000,000 251,547,966 5,586,699 3,173,700 3,204,650
	11,080,422,717 8,766,204,849

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28. Non-current liabilities due within one year – continued

(2) Long-term payable due within a year

Names	At June 30, At January 1, 2012 2012
The Department of Land and Resources of the Inner Mongolia Autonomous (note 2) Agricultural Bank of China Financial Leasing Co., Ltd. (note 3) Freight f nancing lease (note 4) Total Long-term borrowing due within one year Loan by category	2,340,000,000 2,340,000,000 2,000,000,000 – 3,163,036 –
	4,343,163,036 2,340,000,000
	At June 30, At January 1, 2012 2012
Guaranteed loan (note 5) Debt of honour Mortgaged loan Total	6,343,863,410 6,417,413,500 113,423,366 – 25,251,239 –
	6,482,538,015 6,417,413,500

(3) Long-term borrowing due within one year

Note 1: The provisions due within one year are mainly composed of AUD18.3 million of onerous contracts and AUD16.1million of take-or-pay provisions. The information related to the onerous liabilities and take-or-pay provisions are described in Note “VIII,32”.

Note 2: It is the payment for the third installment of the mining rights of Zhuan Longwan, which is up to be paid by November 30, 2012. See Note “XI, 1, (4)”.

Note 3: It is the fi nancing lease payable as described in “Note VIII, 11”, which was guaranteed by Yankuang Group, the controlling shareholder of the Company.

Note 4: It is the fi nancing lease of subsidiaries of Gloucester, of which AUD0.5 million of fi nancing lease payable due within 1 year was recognized as other non-current liabilities due within one year; AUD5.29 million due over one year was recognized as long-term payable.

• Note 5: Yancoal Australia Pty Ltd borrowed USD3.04 billion from the bank syndicate of banks taken the lead by Sydney branch of BOC, which was guaranteed by the Company, at the same time, the Company was counter guaranteed by Yankuang Group, the controlling shareholder of the Company. As at 30 June 2012, USD1,015 million of borrowing due within the next year was recognized as other non-current liabilities due within one year; USD2,025 million due over 1 year was recognized as long-term loan.

Heshun Tianchi, a subsidiary of the Company borrowed RMB121 million from Taiyuan branch, China Development Bank, which was guaranteed by Yankuang Group, the parent company of the Company. As at 30 June 2012, RMB22 million of borrowing due the next year was recognized as other non-current liabilities due within 1 year; RMB99 million due over 1 year was recognized as long-term loan.

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29. Long-term loan

• (1) Long-term loan by category

Loan category	At June 30, At January 1, 2012 2012
Debt of honour Guaranteed loan Mortgaged loan Total	2,182,610,661 – 15,592,275,880 14,869,322,500 108,725,002 –
	17,883,611,543 14,869,322,500

• (2) Five largest long-term borrowings

				At June	30, 2012	At January	1, 2012
Lender	beginning day	Expiration date	Interest rate (%)	USD	RMB	USD	RMB
Sydney branch of BOC (note1)	2009-12-16	2014-12-16	Libor+0.75%	1,597,241,380	10,102,392,004	1,597,241,380	10,064,058,211
Tiexi branch of ICBC (note 2)	2011-9-29	2016-9-29	6.9	–	2,700,000,000	–	2,000,000,000
Noble Group (note 3)	2011-7-14	2015-7-1	BBSY + 3%	AUD343,859,007	2,182,610,661	–	–
Hong Kong branch of CDB (note1)	2009-12-16	2014-12-16	Libor+0.75%	199,655,172	1,262,798,997	199,655,172	1,258,007,273
Hongkong branch of CCB (note1)	2009-12-16	2014-12-16	Libor+0.75%	133,103,448	841,865,998	133,103,448	838,671,516

• Note 1: See Note “VIII, 28”.

• Note 2: In 2011, to fulfi ll the acquisition payment of Zhuan Longwan coal mine fi eld, the Company borrowed RMB3,900 million from Tiexi branch of ICBC. As at June 30, 2012, the total amount of borrowing received is RMB2,700 million. This borrowing was guaranteed by Yankuang Group, the controlling shareholder of the Company before acquiring the mining right of Zhuan Longwan. Once upon getting the mining rights, mining rights of Zhuan Longwan will be pledged as collateral.

• Note 3: Gloucester, a subsidiary of the Company, received borrowings of AUD343.86million from Noble Group, the former shareholder of Gloucester.

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30. Bonds payable

Category	Interest Interest Payable for Interests Interest Balance Total face Issuing Initial payable at the reporting paid during payable at at June 30, value date Maturity capital Jan 1, 2012 period the period June 30, 2012 2012
Corporate bond Corporate bond Total	2,846,205,000 2012-5-16 5 years 2,846,205,000 – 15,871,151 – 15,871,151 2,846,205,000 3,478,695,000 2012-5-16 10 years 3,478,695,000 – 24,916,153 – 24,916,153 3,478,695,000 6,324,900,000 6,324,900,000 – 40,787,304 – 40,787,304 6,324,900,000

Note: As approved at the seventh meeting of the fi fth session of the Board of the Company held on 5 March 2012, Yancoal International Resources Development Co., Ltd, the subsidiary of the Company, made an overseas issuance of US dollar-dominated bonds with an aggregate principal amount of US$1.0 billion in Hong Kong in May 2012, of which, the annual interest rate for the fi ve-year corporate bonds of USD 450million and ten-year corporate bonds of USD550 million are 4.461% and 5.730%, respectively.

31. Long-term payables

• (1) The breakdown of long-term payables

Lender	Amount Amount Expiration at 1 January Accrued at June 30, (Year) 2012 Interest rate (%) Interest 2012 Loan condition
Total Including: Defered payment for acquisition of Minerva Market service fees to Noble Group Freight f nancing lease	– 8,158,667 – 2,423,120 69,611,570 – Till 2016 8,158,667 – – 8,079,874 unsecured and interest-free – – – – 27,928,560 unsecured and interest-free 8 years – 12.24 2,423,120 33,603,136 unsecured

(2) The breakdown of fi nancial lease payables included in long-term payables

Items	At June 30, 2012 At January 1, 2012 Foreign Foreign currency RMB currency RMB
Freight f nancing lease (note 2)	5,294,000 33,603,136 – –

Note 1: The fi nancing lease activities of the Group were not guaranteed by an independent third party.

Note 2: See Note “VIII, 28”.

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32. Provisions

Items	At January 1, At June 30, 2012 Additions Carry forward 2012
Reclamation, restoration and environment rehabilitation expenses (note 1) Customer contracts (note 2) Long-term service leave (note 3) Take-or-pay provisions (note 4) Total	325,413,915 180,465,817 – 505,879,732 – 3,173,700 – 3,173,700 – 11,614,306 – 11,614,306 – 956,553,180 – 956,553,180 325,413,915 1,151,807,003 – 1,477,220,918

Note 1: Reclamation, restoration and environment rehabilitation expenses accrued for the restoring of coal mines based on the accounting policy as stated in Note “IV,19”. The obligation of restoring will be exercised when mining areas are out of use or coal resource dried up.

Note 2: Customer contract provisions are recognised at the time the Company determines that the contract will be loss making.

Note 3: It is calculated on the basis of relevant laws and regulations and duration of services the employees provided, and is the amount of future benefi t that employees have earned in return for their service to the reporting date, of which, long-term service leave liability payable due within one year is recognised in the salaries and wages payable, longterm service leave liability payable due over 1 year is recognized as provisions.

Note 4: As stipulated in the take-or-pay port and rail contracts entered into by Gloucester, a subsidiary of the Company, a liability was recognised for the estimated excess capacity contracted in the port and rail contacts.

33. Other non-current liabilities

Items	At June 30, At January 1, 2012 2012 1,312,912,935 – 6,308,352 6,868,994 1,319,221,287 6,868,994
Contingent value right Deferred income – government grant Total

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33. Other non-current liabilities – continued

• (1) Contingent Value Right (CVR) is a guarantee that protects the value of the merged Yancoal Australia’s shares held by Gloucester’s shareholders. Eighteen months after the merger, if the value of Yancoal’s shares (the last 3 months volume weighted average trading price) is below AUD6.96 per share, Gloucester shareholders will be entitled to recoup the share value of up to AUD6.96 per share, and the recoupment is up to AUD3 per share. However, shares held by Noble Group, the former major shareholder of Gloucester is not entitled to enjoy this right.

This price guarantee mechanism also gives guarantee to the Company: if the value of Yancoal’s shares is at or above AUD6.96 per share in the 20 trading days out of 25 consecutive trading days after merger, the Company nearly won’t give any payment to Gloucester shareholders. However, the Company shall give notice to the shareholders if the share price is above AUD6.96 per share in the 10 trading days out of 15 consecutive trading days.

• (2) At 30 June 2012, government grant is the infrastructure construction subsidies and mining emergency rescue equipment subsidies to the Group received last years.

Government grant category	Balance at June 30, 2012 Amount Amounts Amount charged included included to prof t or in other in other loss at the Amount of non-current current reporting return for Reason of liability liability period the year return
Infrastructure construction subsidies Mining emergency rescue equipment subsidies Total	4,000,020 – – – – 2,308,332 1,121,285 560,642 – –
	6,308,352 1,121,285 560,642 – –

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34. Share capital

Shareholders names/category	At January 1, 2012 At June 30, 2012 Amount % Amount %
Listed shares with restricted trading conditions Shares held by state-owned legal person Shares held by management Subtotal Shares without trading conditions A shares H shares Subtotal Total share capital	2,600,000,000 53 2,600,000,000 53 21,800 – 21,800 – 2,600,021,800 53 2,600,021,800 53 359,978,200 7 359,978,200 7 1,958,400,000 40 1,958,400,000 40 2,318,378,200 47 2,318,378,200 47 4,918,400,000 100 4,918,400,000 100

Note: The share reform plan has been implemented by April 3, 2006. On the fi rst trading day after the completion of the share reform, the shares owned by Yankuang Group, the sole unlisted share holder of the Company, became tradable. However, Yankuang Group committed that it will not sell these shares in 48 months after the implementation of the reform. Since Yankuang has fi nished the commitment on the reform of share equity split, once the application of trading is made by Yankuang Group and approved by relevant regulatory authorities, its holding shares in the Company can be immediately traded in the market. By the end of the reporting period, since Yankuang Group has not submitted such application, its holding shares cannot yet be traded in the market.

35. Capital reserves

Items	At January 1, At June 30, 2012 Addition Reduction 2012
Share premium Other capital reserves Total	2,689,773,629 133,850,000 1,118,219,829 1,705,403,800 1,785,007,274 14,958,763 – 1,799,966,037 4,474,780,903 148,808,763 1,118,219,829 3,505,369,837

Note: During the reporting period, share premium increased by RMB133.85 million is due to appropriation of the mining rights payment of Heshun Tianchi by Yankuang Group; share premium increased by RMB687.25 million is due to the acquisition of Beisu Coal Mine and Yangcun Coal Mine; share premium decreased by 430.97 million is due to the acquisition of Gloucester. The increase in other capital reserves was caused by the change of fair value of available-forsale fi nancial assets and cash fl ow hedging contract held by the Group.

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36. Special reserves

Items	At January 1, At June 30, 2012 Addition Reversals 2012	At January 1, At June 30, 2012 Addition Reversals 2012
Wei jian fee Safety fee Specif c fund for reform and development Environmental guarantee deposit Production transforming fund Total Surplus reserves Items	1,088,200,111 180,090,564 9,321,878 1,258,968,797 661,411,766 311,644,257 246,892 972,809,131 611,512,916 – – 611,512,916 35,681,202 5,381,827 695,201 40,367,828 17,946,304 2,690,914 – 20,637,218 2,414,752,299 499,807,562 10,263,971 2,904,295,890
	At January 1, At June 30, 2012 Addition Reduction 2012
Statutory surplus reserve Total Retained earnings Items	4,580,888,473	– – 4,580,888,473 4,580,888,473
	4,580,888,473
		Proportion of accrue or Amount distribution (%) 26,054,369,382 – 26,054,369,382 5,003,382,173 – 10% 2,803,488,000 28,254,263,555
Closing balance of last period Add: adjustment from opening balance of retained earnings Opening balance Add: net prof t attributable to shareholders of the parent company Less: Appropriations to statutory surplus reserve Distribution of dividend of common shares Closing balance

37. Surplus reserves

38. Retained earnings

Note: On 22 June 2012, as approved at the 2011 annual general meeting of the Company, the Company made a cash dividend payment at RMB5.7 per ten shares (tax included), i.e. the sum of RMB2,803.49 million, on the basis of total capital on December 31, 2011.

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39. Minority interest

Proportion of Subsidiary minority interest (%)	At June 30, At January 1, 2012 2012
Heze Neng Hua 1.67 Hua Ju Energy 4.86 Zhongyan Company 47.62 Yanmei Shipping 8.00 Shanxi Tianchi 18.69 Shanxi Tianhao 0.11 Xintai Company 20.00 Yancoal Australia 22.00 Total Operation revenue and operation cost Items	53,294,097 50,173,324 40,212,136 38,172,787 3,405,872 3,661,224 1,233,892 1,361,663 23,230,358 13,335,122 – – 575,636,714 559,480,205 2,569,099,976 –
	3,266,113,045 666,184,325
	Jan. 1, 2012- Jan. 1, 2011- June 30, 2012 June 30, 2011
Principal operations revenue Other operations revenue Total Principal operations cost Other operations cost Total	28,785,090,969 20,844,411,001 423,119,474 444,267,992
	29,208,210,443 21,288,678,993
	20,694,223,094 11,055,010,159 558,002,323 518,546,767
	21,252,225,417 11,573,556,926

40. Operation revenue and operation cost

Note: During the reporting period, the operating revenue increased by 37% compared with that of last year, mainly due to that coal sales volume increased by 58% and unit sales price decreased by 12%.

(1) Principal operations – Classifi cation by sector

Items	Jan. 1, 2012-Jun. 30, 2012 Jan. 1, 2011-Jun. 30, 2011 Operation revenue Operation cost Operation revenue Operation cost
Coal mining Coal chemical Railway transportation Electricity power Heating supply Total	27,789,809,969 19,875,487,414 19,947,066,557 10,291,403,015 568,397,381 466,074,234 477,334,280 442,359,871 226,550,748 170,455,067 242,876,785 150,951,583 164,842,202 160,868,745 161,726,711 161,921,015 35,490,669 21,337,634 15,406,668 8,374,675
	28,785,090,969 20,694,223,094 20,844,411,001 11,055,010,159

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40. Operation revenue and operation cost

(2) Principal operations – Classifi cation by product

Items	Jan. 1, 2012-Jun. 30, 2012 Jan. 1, 2011-Jun. 30, 2011 Operation revenue Operation cost Operation revenue Operation cost
Sales of coal produced by the Group Sales of coal produced from other companies Sales of methanol Revenue from railway transportation services Sales of electricity power Sales of heat Total	18,109,915,226 10,225,121,100 17,513,376,167 7,896,273,293 9,679,894,743 9,650,366,314 2,433,690,390 2,395,129,722 568,397,381 466,074,234 477,334,280 442,359,871 226,550,748 170,455,067 242,876,785 150,951,583 164,842,202 160,868,745 161,726,711 161,921,015 35,490,669 21,337,634 15,406,668 8,374,675
	28,785,090,969 20,694,223,094 20,844,411,001 11,055,010,159

• (3) Principal operations – Classifi cation by area

Area	Jan. 1, 2012-Jun. 30, 2012 Jan. 1, 2011-Jun. 30, 2011 Operation revenue Operation cost Operation revenue Operation cost
Domestic International Total	24,364,946,996 17,643,232,748 16,524,130,606 9,105,026,246 4,420,143,973 3,050,990,346 4,320,280,395 1,949,983,913
	28,785,090,969 20,694,223,094 20,844,411,001 11,055,010,159

• (4) Total sales amount of the 5 largest customers from 1 January to June 30, 2012 is RMB5,362.13 million, which accounts for 18% in total revenue.

41. Operating taxes and surcharges

Items Proportion	Jan. 1, 2012- Jan. 1, 2011- June 30, 2012 June 30, 2011
Business tax 3%, 5% City construction tax 7% Education fee 3% Local education fee 1%, 2% Resource tax Water conservancy construction fund Total	11,274,444 12,100,094 145,803,831 125,266,237 106,296,322 93,262,539 8,587,518 2,488,802 80,604,833 74,357,256 260,628 –
	352,827,576 307,474,928

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42. Selling expenses

Items	Jan. 1, 2012- Jan. 1, 2011- Jun. 30, 2012 Jun. 30, 2011
Freight charge Mining royalty (Note) Coal port dues, loading and transportation cost Benef ts, social insurance and welfare of employees Others Total	509,423,105 601,150,590 323,364,040 355,972,920 112,068,994 121,344,901 28,702,119 27,723,341 145,216,931 70,241,947
	1,118,775,189 1,176,433,699

Note: Royalties are expenses incurred during the sales process, which are levied by Australian Government to the Australian subsidiaries of the Company.

43. Administrative expenses

Item	Jan. 1, 2012- Jan. 1, 2011- Jun. 30, 2012 Jun. 30, 2011
Benef ts, social insurance and welfare of employees Materials and repairs expenses Agency cost on acquiring Gloucester Taxes Mineral resources compensation fees Depreciation expense Property management fees Research and Development Costs Business travel, off ce, conference and hospitality fees Commission, consulting and service charges Amortization, leasing fees, etc Others Total	1,048,675,567 849,215,140 404,902,578 316,468,034 325,855,164 – 168,555,327 197,986,528 134,175,260 124,045,424 139,095,827 114,633,555 68,610,001 70,001,397 72,595,134 74,661,677 50,975,295 41,111,431 50,137,622 34,436,915 30,573,709 35,201,975 138,080,801 167,715,351
	2,632,232,285 2,025,477,427

Note: For the reporting period, administrative expenses increased by 30% as compared with the same period of last year, mainly due to the relevant expenses of RMB325.86 million for acquisition of Gloucester by Yancoal Australia.

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44. Finance costs

Items	Jan. 1, 2012- Jan. 1, 2011- Jun. 30, 2012 Jun. 30, 2011
Interest expenses Less: interest income Add: exchange gain or losses Add: other expenses (Note 2) Total	827,662,011 407,716,161 400,680,446 171,217,864 -181,317,652 -1,242,793,428 130,312,411 179,649,224
	375,976,324 -826,645,907

Note 1: During the reporting period, fi nance expenses increased by 145% over the same period of previous year, mainly due to the decrease of unrealized foreign exchange gains of USD claims and liabilities accounted in AUD arising from signifi cant exchange rates fl uctuation.

Note 2: “Other expenses” primarily include bank guarantee fees, handling fees for notes discounts, etc.

45. Impairment loss

46.	Items	Items	Jan. 1, 2012- Jan. 1, 2011- June 30, 2012 June 30, 2011
	Bad debt provision Total Investment income (1) Sources of investment income Items Long-term equity investment income under equity method Investment income from available-for-sale f nancial assets Total		375,524 988,608
			375,524 988,608
			Jan. 1, 2012- Jan. 1, 2011- Jun. 30, 2012 Jun. 30, 2011
		Long-term equity investment income under equity method Investment income from available-for-sale f nancial assets Total	65,297,885 12,805,763 3,702,379 2,433,305
			69,000,264 15,239,068

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46. Investment income – continued

(2) Long-term equity investment income under equity method

	Jan. 1, 2012-	Jan. 1, 2011-
Items	June 30, 2012	June 30, 2011	Reasons for change
Total	65,297,885	12,805,763
Including:
China HD Zouxian Co., Ltd.	47,352,843	7,078,491	Prof t increase for
			the period
Yankuang Group Finance Co., Ltd.	19,436,470	7,058,972	Prof t increase for
			the period
Shandong Shengyang Wood Co., Ltd.	-1,487,495	-1,464,500
Jining Jiemei New Wall Materials Co., Ltd.	-3,933	132,800

47. Non-operating income

(1) Non-operating income

Items	Jan. 1, 2012- Jan. 1, 2011- Jun. 30, 2012 Jun. 30, 2011
Gain on disposal of non-current assets Including: Gain on disposal of f xed assets Government grants (2) Acquisition gains (Note “VII,2,(2)”) Resources compensation income Deferred income Other Total	4,893,705 2,549,239 4,893,705 2,549,239 4,639,016 5,600,675 1,391,019,268 – – 7,600,000 – 7,946,089 19,922,543 5,681,797
	1,420,474,532 29,377,800

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47. Non-operating income – continued

(2) Breakdown of government grants

Items	Jan. 1, 2012- Jan. 1, 2011- Jun. 30, 2012 Jun. 30, 2011 basis and sources
Taxation reduction on product from comprehensive use of resources Mining emergency rescue equipment subsidy Central f nancial subsidies on purchasing Jiamusi High Eff ciency Motors Others Total	3,783,451 5,241,806 Jiguoshui Liupizi (2011) NO.1 560,641 – State Administration of Work Safety (f nance correspondence (2010) No. 159) 234,000 – Ministry of Finance DRC Financial Supervision (2011) No. 62 60,924 358,869 4,639,016 5,600,675

48. Non-operating expenses

Items	Jan. 1, 2012- Jan. 1, 2011- June 30, 2012 June 30, 2011
Loss on disposal of non-current assets Including: Loss on disposal of f xed assets Donation expenditure Penalty, supplementary payment and overdue payment Other Total	799,044 9,849,858 799,044 9,849,858 6,656,333 11,664,605 2,139,465 11,225,384 335,764 4,502,874
	9,930,606 37,242,721

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49. Income taxes

(1) Income taxes

Items	Jan. 1, 2012- Jan. 1, 2011- June 30, 2012 June 30, 2011
Current tax expense Deferred tax expense Minerals Resource Rent Tax (Note) Total Note:	1,456,056,822 1,400,709,664 -337,552,864 599,200,919 -1,083,223,372 –
	35,280,586 1,999,910,583

Minerals Resource Rent Tax (MRRT) is levied on the extraction of certain taxable resources of coal and iron ore in respect of a mining project interest, and before any extensive processing and value-added activities. MRRT started to be effective from 1 July 2012 in Australia. According to related MRRT law and regulations, Yancoal Australia is required to recognise starting base allowances from 30 June 2012. Either the market value or book value method can be used to calculate starting base allowances, which will be amortised over a period of time. Yancoal Australia’s subsidiaries Austar, Yarrabee, Ashton and Moolarben adopted the market value method, which requires the starting base allowances to be based on the value of the mining assets as at 1 May 2012 and the market value to be amortised over the lower of life of project, life of mining rights and life of the mine, The valuation results in the MRRT deferred assets of AUD 264.38 million, and total effect to current tax expense is AUD (185.07) million after deducting the effect of income tax AUD 79.31 million.

(2) Current tax expense (the Company and the domestic subsidiaries)

Items	Amount
Total prof t of the period	3,599,295,290
Add: increase of tax adjustment	2,525,443,874
Less: decrease of tax adjustment	764,997,960
Less: recovering of past losses	–
Taxable income of the period	5,359,741,204
Statutory income tax rate	25%
Income tax payable of the period	1,339,935,301
Add: other adjustments	107,441,957
Current tax expense	1,447,377,258

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49. Income taxes – continued

• (3) Current tax expense (Overseas subsidiaries)

Items	Amount
Total prof t of the period	1,487,369,543
Add: increase of tax adjustment	–
Less: decrease of tax adjustment	1,458,437,664
Less: recovering of past losses	–
Taxable income of the period	28,931,879
Statutory income tax rate	30%
Income tax payable of the period	8,679,564
Add: other adjustments	–
Current tax expense	8,679,564

50. Computation process of basic and diluted earnings per share

Items No.

Jan. 1, 2012- Jan. 1, 2011- June 30, 2012 June 30, 2011

Net prof t attributable to shareholders of the parent company 1 Extraordinary gain attributable to parent company 2 Net prof t attributable to shareholders of the parent company, excluding extraordinary gain 3=1-2 Total shares at the beginning of the period 4 Shares added through reserves fund addition and shares dividend distribution addition (I) 5 Shares added by issuing and debt-to-equity (II) 6 Shares added (II) months from next month to the end of the period 7 Shares decreased by buy-back and shares shrink 8 Month from the next month to the end of the month 9 Duration the period 10 Weighted average of common shares issued 11=4+5+6×7÷10-8×9÷10 Basic earnings per share (I) 12=1÷11 Basic earnings per share (II) 13=3÷11 Common shares interest with diluted potential which is recognized as expenses 14 Converting fee 15 income tax rate 16 Shares added through stock warrant and option exertion 17 Diluted earnings per share (I) 18=[1+(14-15)×(1-16)]÷(11+17) Diluted earnings per share (II) 19=[3+(14-15)×(1-16)]÷(11+17)

4,906,188,319 5,029,577,151 2,074,134,717 -4,212,101 2,832,053,602 5,033,789,252 4,918,400,000 4,918,400,000 – – – – – – – – – – 6.00 6.00 4,918,400,000 4,918,400,000 0.9975 1.0226 0.5758 1.0235 – – – – 25% 25% – – 0.9975 1.0226 0.5758 1.0235

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51. Other comprehensive income

Items	Jan. 1, 2012- Jan. 1, 2011- June 30, 2012 June 30, 2011
1. Gains (losses) generated by available-for-sale f nancial assets Less: income tax inf uence generated by available-for-sale f nancial assets Net amount presented in other comprehensive income in past periods and transferred in prof ts and losses at current period Subtotal 2. Gains (losses) generated by cash f ow hedging instruments Less: income tax inf uence generated by cash f ow hedging instruments Net amount presented in other comprehensive income in past periods and transferred in prof ts and losses at current period Subtotal 3. Difference from translation of foreign f nancial statements Less: net amount transferred into prof t and loss of the current period from disposal of overseas operations Subtotal Total	1,567,652 4,594,276 391,913 1,148,569 – –
	1,175,739 3,445,707
	20,636,865 138,403,776 5,486,645 43,521,334 -1,367,196 3,724,806
	13,783,024 98,607,248
	-447,995,378 129,948,557 – –
	-447,995,378 129,948,557
	-433,036,615 232,001,512

Note: Other comprehensive income decreased by 287%, mainly due to the substantial decrease of both fair value of cash fl ow hedging and the exchange rate of AUD.

52. Cash fl ow

• (1) Cash received/paid relating to operating activities/investing activities/fi nancing activities

• 1) Other cash received relating to operating activities

Items	Jan. 1, 2012- June 30, 2012
Interest income Received cash from funds paid on other’s behalf Sundry revenue Total	388,544,370 388,979,386 352,084,160 1,129,607,916

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52. Cash fl ow – continued

• (1) Cash received/paid relating to operating activities/investing activities/fi nancing activities – continued 2) Other cash paid relating to operating activities

3) 4) 5)	Items	Jan. 1, 2012- June 30, 2012
	Payments for selling and administrative expenses Sporadic cash payment Donation expenditure Penalty and Overdue Payment Total Other cash received relating to investment activities Items	1,950,878,349 139,951,545 6,656,333 2,139,465 2,099,625,692
		Jan. 1, 2012- June 30, 2012
	Decrease of restricted deposits Sale of available-for-sale f nancial assets Adjustment of working capital received relating to acquisition of Premier Total Other cash paid relating to other investment activities Items	5,551,108,664 98,042,807 9,580,357 5,658,731,828
		Jan. 1, 2012- June 30, 2012
	Increase of restricted deposits Others Total Other cash paid relating to other f nancing activities Items	839,755,244 106,681,161 946,436,405
		Jan. 1, 2012- June 30, 2012
	Payment of security underwriting Total	54,798,250 54,798,250

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VIII. NOTES TO CONSOLIDATION FINANCIAL STATEMENTS – CONTINUED

52. Cash fl ow – continued

• (2) Supplemental information of consolidated cash fl ow statement

Items	Jan. 1, 2012- Jan. 1, 2011- June 30, 2012 June 30, 2011
1. Reconciliation of net prof t to net cash f ow from operating activities Net prof t Add: Provision of impairment of assets Depreciation of f xed assets Amortization of intangible assets Amortization of long-term deferred expenses Accrued special reserves Losses on disposal of f xed assets, intangible and other long-term assets (“-” represents gain) Financial expenses (“-” represents gain) Loss arising from investments (“-” represents gain) Inf uence of deferred taxes assets (“-“ represents increase) Decrease in inventories (“-“ represents increase) Decrease in receivables under operating activities (“-“ represents increase) Increase in payables under operating activities (“-“ represents decrease) Net cash f ow from operating activities 2. Changes in cash and cash equivalents Cash, closing Less: Cash, opening Net addition in cash and cash equivalents	4,920,812,780 5,038,856,876 -375,524 988,608 1,146,293,775 1,041,360,686 488,212,417 280,816,808 1,909,575 2,572,506 516,363,845 318,125,670 -4,094,661 7,300,619 646,344,359 -835,077,267 -69,000,264 -15,239,068 -1,420,776,236 599,200,919 -431,348,908 353,086,851 3,075,663,503 7,616,971,813 -1,148,912,672 -893,616,981
	7,721,091,989 13,515,348,040
	18,574,258,116 12,226,649,915 8,154,223,808 6,778,388,923 10,420,034,308 5,448,260,992

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52. Cash fl ow – continued

(3) Information of acquired or disposed subsidiaries and other operating entities in current period

(4)	Items	Jan. 1, 2012-June 30, 2012 Domestic Overseas (RMB) (AUD)
	Acquired subsidiaries and other operating entities 1. Consideration of acquired subsidiaries and other operating entities 2. Cash or cash equivalents paid to acquire subsidiaries and other operating entities Less: Cash or cash equivalents owned by acquired subsidiaries and other operating entities 3. Net cash amount paid to acquire subsidiaries and other operating entities 4. Net assets acquired Current assets Non-current assets Current liabilities Non-current liabilities Cash and cash equivalents	824,724,371 550,453,738 824,724,371 – 7,693,953 44,127,040 817,030,418 -44,127,040 -30,147,290 768,536,528 202,106,875 143,139,032 570,400,181 2,637,219,816 802,654,346 899,638,234 – 1,112,184,086

Items	Jan. 1, 2012- Jan. 1, 2011- June 30, 2012 June 30, 2011
Cash Including: Cash on hand Deposits that can be readily drawn on demand Other cash that can be readily drawn on demand Cash equivalents Cash and cash equivalents balance Including: Cash and cash equivalents with restricted use right by parent company or subsidiaries of the Group	18,574,258,116 12,226,649,913 1,429,098 1,013,516 18,571,689,221 12,220,227,668 1,139,797 5,408,729 – – 18,574,258,116 12,226,649,915 18,574,258,116 12,226,649,915

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IX. RELATIONSHIP OF RELATED PARTIES AND THEIR TRANSACTIONS

i. Relationship of related parties

1. Parent company and ultimate controlling party

• (1) Parent company and ultimate controlling party

Parent company and	Type of	Registration	Business	Statutory	Organization
ultimate controlling party	ownership	address	nature	representative	code
Yankuang Group	State-owned	Zoucheng,	Industry	Wang Xin	166122374
Co., Ltd	Enterprise	Shandong	processing

• (2) The registered capital of the Parent Company and its changes.

Parent Company At January 1, 2012 Addition Reversals At June 30, 2012	Parent Company At January 1, 2012 Addition Reversals At June 30, 2012
Yankuang Group Co., Ltd	3,353,388,000 – – 3,353,388,000

• (3) The proportion and changes of equity interest of the parent company

Parent Company	Shareholding amount Shareholding proportion At June 30, At January 1, At June 30, At January 1, 2012 2012 2012 2012
Yankuang Group Co., Ltd	2,600,000,000 2,600,000,000 52.86% 52.86%

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IX RELATIONSHIP OF RELATED PARTIES AND THEIR TRANSACTIONS – CONTINUED

i. Relationship of related parties – continued

2. Subsidiaries (1) Subsidiaries

	Type of	Registration	Business	Statutory
Subsidiaries	enterprise	location	nature	representative	Organization code
Qingdao Free Trade Zone Zhongyan Trade Co., Ltd.	limited liability	Shandong	Trade and storage	Fan Qingqi	16362500-5
Yanzhou Coal Yulin Neng Hua Co., Ltd.	limited liability	Shaanxi	Production and sales of	Li Weimin	75881603-8
			methanol and acetic acid
Yancoal Australia Pty Limited	limited liability	Australia	investment and shareholding
Austar Coal Mine Pty Limited	limited liability	Australia	Coal mining and sales
Yancoal Resources Limited	limited liability	Australia	Coal mining and sales
Yancoal Technology Development Holdings Pty Ltd.	limited liability	Australia	Holding company
Premier Coal Holdings Pty Ltd.	limited liability	Australia	Holding company
Athena Holdings Pty Ltd.	limited liability	Australia	Holding company
Tonford Holdings Pty Ltd.	limited liability	Australia	Holding company
Wilpeena Holdings Pty Ltd.	limited liability	Australia	Holding company
Yancoal Energy Pty Ltd.	limited liability	Australia	Holding company
Syntech Holdings Pty Ltd.	limited liability	Australia	Holding company and
			mining management
Syntech Holdings II Pty Ltd.	limited liability	Australia	Holding company
Premier Coal Limited	limited liability	Australia	Coal mining and sales
Premier Char Pty Ltd.	limited liability	Australia	Research and development of
			the technology and
			procedures in relation to
			processing coal char
Yancoal International (Holding) Co., Limited.	limited liability	Hong Kong	Investment and shareholding
Yancoal International Technology Development Co., Limited.	limited liability	Hong Kong	Development of
			mining technology
Yancoal International Trading Co., Limited.	limited liability	Hong Kong	Transit trade of coal
Yancoal International Resources Development Co., Limited.	limited liability	Hong Kong	Exploration and development
			of mining resources
Yancoal Luxembourg Energy Holding Co. Limited.	limited liability	Luxembourg	Investment and shareholding
Yancoal Canada Resources Holding Co., Ltd.	limited liability	Canada	Development and sales
			of mining resources
Yanmei Heze Neng Hua Co., Ltd.	limited liability	Shandong	Coal mining and sales	Wang Yongjie	75445658-1
Yanzhou Coal Shanxi Neng Hua Co., Ltd.	limited liability	Shanxi	Thermoelectricity investment,	Shi Chengzhong	74601732-7
			coal technology service
Shanxi Heshun Tianchi Energy Co., Ltd.	limited liability	Shanxi	Intensive process of coal product	Zhang Hua	11285097-4
Shanxi Tianhao Chemicals Co., Ltd.	limited liability	Shanxi	Production and sales of	Jin Fangyu	73403278-1
			methanol and coals

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IX RELATIONSHIP OF RELATED PARTIES AND THEIR TRANSACTIONS – CONTINUED

i. Relationship of related parties – continued

2. Subsidiaries – continued

• (1) Subsidiaries – continued

	Type of	Registration	Business	Statutory
Subsidiaries	enterprise	location	nature	representative	Organization code
Shandong Yanmei Shipping Co., Ltd.	limited liability	Shandong	Freight transportation	Wang Xinkun	16612592X
			and coal sales
Shandong Hua Ju Energy Co., Ltd.	limited liability	Shandong	Sales and production of	Hao Jingwu	73927723-5
			electricity power with coal
			slimes and gangue, and
			comprehensive use
			of waste heat
Yanzhou Coal Ordos Neng Hua Co., Ltd.	limited liability	Inner Mongolia	600,000 tons methanol	Wang Xin	69594585-1
			production, coal mining
			and sales
Inner Mongolia Yize Mining Investment Co., Ltd.	limited liability	Inner Mongolia	Investment	Wang Xin	76786334-6
Inner Mongolia Rongxin Chemicals Co., Ltd.	limited liability	Inner Mongolia	Methanol production	Yin Mingde	67067850-7
Inner Mongolia Daxin Industrial Gas Co., Ltd.	limited liability	Inner Mongolia	Industrial gas production	Yin Mingde	67691995-7
Inner Mongolia Xintai Coal Mining Co., Limited.	limited liability	Inner Mongolia	Coal mining and sales	Yin Mingde	79364061-3
Zoucheng Yankuang Beisheng Industry and Trade Co., Ltd.	limited liability	Shandong	Gangues ref ning	Zhang Chuanwu	16613184-4
			and processing,
			freight transportation

• (2) The registered capital of subsidiaries and its changes

Subsidiaries	At January 1, 2012	Addition	Reversal	At June 30, 2012
Qingdao Free Trade Zone
Zhongyan Trade Co., Ltd.	2,100,000	–	–	2,100,000
Yanzhou Coal Yulin Neng
Hua Co., Ltd.	1,400,000,000	–	–	1,400,000,000
Yancoal Australia Pty Limited	AUD973,000,000	AUD336,840,000	AUD653,140,000	AUD656,700,000
Austar Coal Mine Pty Limited.	AUD64,000,000	–	–	AUD64,000,000
Yancoal Resources Limited.	AUD 446,410,000	–	–	AUD 446,410,000
Yancoal Technology
Development Holdings Pty Ltd.	–	AUD75,410,000	–	AUD75,410,000
Premier Coal Holdings Pty Ltd.	–	AUD321,610,000	–	AUD321,610,000
Athena Holdings Pty Ltd.	–	AUD24,450,000	–	AUD24,450,000
Tonford Holdings Pty Ltd.	–	AUD46,410,000	–	AUD46,410,000
Wilpeena Holdings Pty Ltd.	–	AUD3,460,000	–	AUD3,460,000

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i. Relationship of related parties – continued

2. Subsidiaries – continued

• (2) The registered capital of subsidiaries and its changes – continued

Subsidiaries	At January 1, 2012	At January 1, 2012	Addition	Reversal	At June 30, 2012
Yancoal Energy Pty Ltd.		–	AUD202,980,000	–	AUD202,980,000
Syntech Holdings Pty Ltd.	AUD223,470,000			–	AUD223,470,000
Syntech Holdings II Pty Ltd.		AUD6,320,000		–	AUD6,320,000
Premier Coal Limited		AUD8,780,000		–	AUD8,780,000
Premier Char Pty Ltd.		AUD1,000,000		–	AUD1,000,000
Yancoal International (Holding)
Co., Limited		USD2,800,000		–	USD2,800,000
Yancoal International Technology
Development Co., Limited		USD1,000,000		–	USD1,000,000
Yancoal International Trading Co., Limited		USD1,000,000		–	USD1,000,000
Yancoal International Resources
Development Co., Limited		USD600,000		–	USD600,000
Yancoal Luxembourg Energy
Holding Co. Limited		USD500,000		–	USD500,000
Yancoal Canada Resources
Holding Co., Ltd.	USD290,000,000			–	USD290,000,000
Yanmei Heze Neng Hua Co., Ltd.		3,000,000,000	–	–	3,000,000,000
Yanzhou Coal Shanxi Neng
Hua Co., Ltd.		600,000,000	–	–	600,000,000
Shanxi Heshun Tianchi
Energy Co., Ltd.		90,000,000	–	–	90,000,000
Shanxi Tianhao Chemicals Co., Ltd.		150,000,000	–	–	150,000,000
Shandong Yanmei Shipping Co., Ltd.		5,500,000	–	–	5,500,000
Shandong Hua Ju Energy Co., Ltd.		288,590,000	–	–	288,590,000
Yanzhou Coal Ordos Neng Hua Co., Ltd.		3,100,000,000	–	–	3,100,000,000
Inner Mongolia Yize Mining
Investment Co., Ltd.		136,260,000	–	–	136,260,000
Inner Mongolia Rongxin Chemicals Co.,	Ltd.	3,000,000	–	–	3,000,000
Inner Mongolia Daxin Industrial Gas Co.,	Ltd.	4,110,000	–	–	4,110,000
Inner Mongolia Xintai Coal
Mining Co., Limited		5,000,000	–	–	5,000,000
Zoucheng Yankuang Beisheng
Industry and Trade Co., Ltd.		2,400,000	–	–	2,400,000

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IX RELATIONSHIP OF RELATED PARTIES AND THEIR TRANSACTIONS – CONTINUED

i. Relationship of related parties – continued

2. Subsidiaries – continued

• (3) The shareholding proportion or equity interest of subsidiaries and their changes

	Shareholding amount	Shareholding amount	Shareholding proportion (%)	Shareholding proportion (%)
Subsidiaries	At June 30, 2012	At January 1, 2012	At June 30, 2012	At January 1, 2012
Qingdao Free Trade Zone
Zhongyan Trade Co., Ltd.	1,100,000	1,100,000	52.38	52.38
Yanzhou Coal Yulin
Neng Hua Co., Ltd.	1,400,000,000	1,400,000,000	100.00	100.00
Yancoal Australia Pty Limited	AUD656,700,000	AUD973,000,000	78.00	100.00
Austar Coal Mine Pty Limited	AUD64,000,000	AUD64,000,000	100.00	100.00
Yancoal Resources Limited.	AUD 446,410,000	AUD 446,410,000	100.00	100.00
Yancoal Technology Development
Holdings Pty Ltd.	AUD75,410,000	–	100.00
Premier Coal Holdings Pty Ltd.	AUD321,610,000	–	100.00
Athena Holdings Pty Ltd	AUD24,450,000	–	100.00
Tonford Holdings Pty Ltd	AUD46,410,000	–	100.00
Wilpeena Holdings Pty Ltd	AUD3,460,000	–	100.00
Yancoal Energy Pty Ltd	AUD202,980,000	–	100.00
Syntech Holdings Pty Ltd	AUD223,470,000	AUD223,470,000	100.00	100.00
Syntech Holdings II Pty Ltd.	AUD6,320,000	AUD6,320,000	100.00	100.00
Premier Coal Limited	AUD8,780,000	AUD8,780,000	100.00	100.00
Premier Char Pty Ltd.	AUD1,000,000	AUD1,000,000	100.00	100.00
Yancoal International
(Holding) Co., Limited	USD2,800,000	USD2,800,000	100.00	100.00
Yancoal International Technology
Development Co., Limited	USD1,000,000	–	100.00	100.00
Yancoal International Trading
Co., Limited	USD1,000,000	–	100.00	100.00
Yancoal International Resources
Development Co., Limited	USD600,000	–	100.00	100.00
Yancoal Luxembourg Energy
Holding Co. Limited	USD500,000	USD500,000	100.00	100.00

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IX RELATIONSHIP OF RELATED PARTIES AND THEIR TRANSACTIONS – CONTINUED

i. Relationship of related parties – continued

2. Subsidiaries – continued

• (3) The shareholding proportion or equity interest of subsidiaries and their changes – continued

	Shareholding amount	Shareholding amount	Shareholding proportion (%)	Shareholding proportion (%)
Subsidiaries	At June 30, 2012	At January 1, 2012	At June 30, 2012	At January 1, 2012
Yancoal Canada Resources
Holding Co., Ltd.	USD290,000,000	USD290,000,000	100.00	100.00
Yanmei Heze Neng Hua Co., Ltd.	2,950,000,000	2,950,000,000	98.33	98.33
Yanzhou Coal Shanxi
Neng Hua Co., Ltd.	600,000,000	600,000,000	100.00	100.00
Shanxi Heshun Tianchi
Energy Co., Ltd.	73,180,000	73,180,000	81.31	81.31
Shanxi Tianhao
Chemicals Co., Ltd.	149,790,000	149,790,000	99.89	99.89
Shandong Yanmei
Shipping Co., Ltd.	5,060,000	5,060,000	92.00	92.00
Shandong Hua Ju
Energy Co., Ltd.	274,590,000	274,590,000	95.14	95.14
Yanzhou Coal Ordos
Neng Hua Co., Ltd.	3,100,000,000	500,000,000	100.00	100.00
Inner Mongolia Yize Mining
Investment Co., Ltd.	136,260,000	136,260,000	100.00	100.00
Inner Mongolia Rongxin
Chemicals Co., Ltd.	3,000,000	3,000,000	100.00	100.00
Inner Mongolia Daxin Industrial
Gas Co., Ltd.	4,110,000	4,110,000	100.00	100.00
Inner Mongolia Xintai Coal
Mining Co., Limited	4,000,000	4,000,000	80.00	80.00
Zoucheng Yankuang Beisheng
Industry and Trade Co., Ltd.	2,400,000	2,400,000	100.00	100.00

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IX RELATIONSHIP OF RELATED PARTIES AND THEIR TRANSACTIONS – CONTINUED

i. Relationship of related parties – continued

3. Joint venture and associates

• (1) Joint ventures and associates

	Type of	Registration	Business	Statutory	Registered	Shareholding	Registered
Investee name	enterprise	location	nature	representative	capital	proportion (%)	No.
Associates
China HD Zouxian Co., Ltd.	limited liability	Shandong	Electricity	Zhong	RMB 3 billion	30	66930776-8
			power	Tonglin
Yankuang Group Finance Co., Ltd.	limited liability	Shandong	Finance	Zhang	RMB500	25	56250962-6
				Shengdong	million
Shaanxi Future Energy	limited liability	Shaanxi	Coal mining	Li Weimin	RMB5.4 billion	25	56714796-X
Chemical Co., Ltd.			and
			liquefaction
			of coal
Shandong Shengyang	limited liability	Shandong	Decoration and	Guo Dechun	RMB15.09	39.77	74989916-9
Wood Co., Ltd.			ornament		million
			materials
			processing
Jining Jiemei New Wall	limited liability	Shandong	Coal gangues	Tian Peng	RMB3.6 million	20	73170806-1
Materials Co., Ltd.			f red to brick
Joint ventures
Ashton Coal Mines Limited	limited liability	Australia	Real-estate	–	AUD100	90	–
		holding and sales
Australian Coal Processing	limited liability	Australia	Dormant	–		90	–
Holding Pty Ltd.			company
			in Australia

• Note: The company holds 90% shares and 50% voting rights of both Australian Coal Processing Holding Pty Ltd and Ashton Coal Mines Limited, detailed in NoteVII.i.5. (2).

(2) Financial information stated in Note VIII.10. (3).

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i. Relationship of related parties – continued

4. Other related parties (limited to those that have transactions with the Group)

Type of relationship Related parties Transactions (1) Other enterprises under control of the same controlling shareholder and ultimate controlling party Yankuang Group Tangcun Shiye Co., Ltd. Sales of goods and materials, purchase of materials, acceptance of labors service Yankuang Group Dalu Machinery Co., Ltd. Sales of goods and materials, purchase of materials, acceptance of labors service Yankuang Group Zoucheng Sales of goods and materials, purchase of materials Jinming Gongmao Co., Ltd. Shandong Yankuang Sales of goods and materials International Coking Co., Ltd. Yankuang Group Logistics Co., Ltd. Sales of goods, acceptance of labours service Yankuang Group Donghua Sales of goods, purchase of materials, Construction Co., Ltd. acceptance of labours service Yankuang Group Zoucheng Sales of goods and purchase of materials Jintong rubber Co., Ltd. Yankuang Meihua Gongxiao Co., Ltd Sales of goods Shandong Yankuang Sales of goods Jisan Electricity Co., Ltd. Yankuang Group Coal Chemical Co., Ltd. Sales of goods Yankuang Group Xinshiji Co., Ltd. Sales and purchase of materials, acceptance of labors service Yankuang Group Electrical and Sales and purchase of materials, Machinery Equipment Co., Ltd. acceptance of labors service Yankuang Guotai Chemicals Co., Ltd. Sales of materials Yankuang Group Hailu Sales of materials Construction Co., Ltd. Yankuang Donghua 37 Chu Acceptance of labors service Yankuang Donghua Geological Co., Ltd. Acceptance of labors service Yankuang Donghua Jianan Co., Ltd. Purchase of materials, acceptance of labors service Yankuang Group Zoucheng Huajian Purchase of materials, Acceptance of labors service Design and Research Co., Ltd. Yankuang Boyang Foreign Economic Purchase of materials, Acceptance of labors service and Trading Co., Ltd.

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IX RELATIONSHIP OF RELATED PARTIES AND THEIR TRANSACTIONS – CONTINUED

i. Relationship of related parties – continued

4. Other related parties (limited to those that have transactions with the Group)

Type	of
relationship Related parties		Transactions
	Yankuang Group Changlong Cable Co., Ltd.	Purchase of materials
	Yankuang Group Fuxing Shiye Co., Ltd.	Purchase of materials, acceptance of labours service
	Yankuang Group Labour Service Co., Ltd.	Purchase of materials, acceptance of labours service
	Yankuang Group Zoucheng	Purchase of materials
	Dehailan Rubber Co., Ltd.
	Yankuang Xinshiji Kenuode
	Dianqishebei Co., Ltd.	Purchase of materials, acceptance of labours service
	Yanzhou Dongfang Jidian Co., Ltd.	Purchase of materials, acceptance of labours service
	Yankuang Group Finance Co., Ltd	Deposit, f nance service
	Other enterprises under control of the	Sales and purchase of materials,
	same controlling shareholder	acceptance of labors service
(2)	Joint ventures
	Ashton Mining Co., Ltd.	Dealing accounts, sales of goods

• (3) Other related parties

• Noble Group

Borrowing

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ii. Relationship of related parties

1. Goods purchasing

Type and name of related parties	Jan. 1, 2012-June 30, 2012 Jan. 1,2011-June 30, 2011 Amount Proportion (%) Amount Proportion (%)
Parent company and entities it controls Total Note: Based on market price or	355,284,183 28 346,390,830 9
	355,284,183 28 346,390,830 9
	negotiated price.

2. Goods sales

Type and Name of related parties	Jan. 1, 2012-June 30, 2012 Jan. 1,2011-June 30, 2011 Amount Proportion (%) Amount Proportion (%)
Parent company and entities it controls (Coal sales) Parent company and entities it controls (Methanol sales) Joint Ventures (Coal sales) Parent company and entities it controls (Material sales) Parent company and entities it controls (Electricity power and heat supply) Total	1,904,759,576 7 1,104,527,517 6 23,791,803 4 – – 512,545,817 2 726,957,049 4 153,742,852 32 169,180,848 35 89,257,210 45 69,081,756 39
	2,684,097,258 2,069,747,170

Note: Based on market price or negotiated price.

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IX RELATIONSHIP OF RELATED PARTIES AND THEIR TRANSACTIONS – CONTINUED

ii. Relationship of related parties – continued

3. Guarantee

			Guarantee	Guarantee
Assurance Provider	Secured party	Amount guaranteed	starting date	maturity date	Completion
Yankuang Group	Shanxi Neng Hua	RMB121,000,000	2006-02-13	2018-02-19	No
Yankuang Group	The Company	RMB2,700,000,000	2011-09-29	2016-09-28	No
Yankuang Group	Yancoal International	USD203,000,000	2011-12-28	2012-12-27	No
Yankuang Group	The Company	RMB500,000,000	2012-04-05	2013-04-04	No
The Company (note)	Yancoal Australia Pty	USD2,900,000,000	2009-12-16	2014-12-16	No
The Company (note)	Yancoal Australia Pty	USD140,000,000	2009-12-09	2014-12-16	No

Note: The Company provides bank guarantee, and its controlling shareholder Yankuang Group provides counterguarantee for this guaranteeing events.

4. Transaction with key management

Total amount of remuneration paid to key management (including salaries, welfare and subsidies paid in the form of cash, goods and others) for the period ended June 30, 2012 is RMB2.19 million. RMB4.44 million was paid as compared with same period in 2011.

5. Free use of trademark

The trademark of the Company registered and owned by controlling shareholder, can be freely used by the Company.

6. Transactions with Yankuang Group Finance Company Limited and Noble Group

As at the end of this reporting period, the balance of deposits of the Company in Yankuang Group Finance Company Limited was RMB1.81 billion and the interest income during this reporting period was RMB4.83 million. The amount of discounted notes through Finance Company during this reporting period was RMB80 million, and the total discounted payment was RMB1.41 million.

As at the end of this reporting period, the balance of borrowings of Gloucester, the subsidiary of the Company, from Noble Group was RMB2,182.61 million and the interest payment during this reporting period was RMB27.8 million.

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IX RELATIONSHIP OF RELATED PARTIES AND THEIR TRANSACTIONS – CONTINUED

ii. Relationship of related parties – continued

7. Establishment of Shaanxi Future Energy Chemical Corp. Ltd as a Joint Stock Company As approved at the seventeenth meeting of the fourth session of the Board held on 30 December 2010, Shaanxi Future Energy Chemical Corp. Ltd (“Future Energy”) was jointly funded and established by the Company, Yankuang Group and Shaanxi Yanchang Petroleum (Group) Corp. Ltd on 25 February 2011. The registered capital of Future Energy is RMB5.4 billion, in which Yankuang Group will contribute RMB 2.70 billion in cash, representing 50% of total registered capital, the Company and Shaanxi Yanchang Petroleum (Group) Corp. Ltd will both contribute RMB1.35 billion in cash, representing an equity interest of 25% respectively. The registered capital will be paid in full in 3 instalments before August 2012. By the end of this reporting period, the Company had injected RMB945 million. Future Energy mainly engages in investment and participation in the coal liquefaction project in Shaanxi Province as well as the preparation for development of compatible coal mines.

8. Other transactions

Pursuant to an agreement signed between the Company and Yankuang Group, Yankuang Group manages employees’ social insurance for the Company. Amount charged to expenses of the Company for the period from January 1-June 30, 2012 and the period from January 1-June 30, 2011 are RMB795.14 million and RMB648.24 million respectively.

Pursuant to an agreement signed between the Company and Yankuang Group, Yankuang Group manages the retired personnel for the Company. Amount charged to expenses of the Company for the period from January 1-June 30, 2012 and the period from January 1-June 30, 2011 are RMB343.3 million and RMB269.02 million respectively.

Pursuant to an agreement signed by the Company and Yankuang Group, the departments and subsidiaries of Yankuang Group provided the following services and charged related service fees during the year, transaction price shall be determined by market price, government pricing or negotiated price. Details are as following:

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IX RELATIONSHIP OF RELATED PARTIES AND THEIR TRANSACTIONS – CONTINUED

ii. Relationship of related parties – continued

8. Other transactions – continued

Items Laboring received from the Group Construction service Road transportation fee Gas and heating expenses Buildings management fee Technicians training fee Maintenance and repairing service Employees’ benef ts Environmental protection and greening Communication Services Others Subtotal iii. Amount due to or from related party 1. Notes receivables Related parties (Items) Parent company Other enterprises under the control of the same parent company Associates Total 2. Accounts receivables Related parties (Items) Joint venture Total	Items	Jan. 1-June 30, Jan. 1-June 30, 2012 2011 (RMB million) (RMB million)
		181.23 48.81 27.79 27.10 21.88 – 68.61 70.00 – 13.00 71.17 131.55 17.19 12.01 – 20.85 19.02 14.26 6.50 23.05
		413.39 360.63
		At June 30, At January 1, 2012 2012
	Parent company Other enterprises under the control of the same parent company Associates Total Accounts receivables Related parties (Items)	1,000,000 4,000,000 475,869,736 644,175,994 – 1,000,000
		476,869,736 649,175,994
		At June 30, At January 1, 2012 2012
	Joint venture Total	– 181,164,191
		– 181,164,191

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iii. Amount due to or from related party – continued

3. Other receivables

4. 5. 6.	Related parties (Items)	At June 30, At January 1, 2012 2012
	Parent company Other enterprises under the control of the same parent company Joint venture Associates Total Prepayment Related parties (Items)	17,694,070 57,567,428 35,445,143 24,456,093 179,025,091 198,779,543 95,271,881 89,213,092
		327,436,185 370,016,156
		At June 30, At January 1, 2012 2012
	Other enterprises under the control of the same parent company Total Notes payables Related parties (Items)	214,269,985 86,017,242
		214,269,985 86,017,242
		At June 30, At January 1, 2012 2012
	Other enterprises under the control of the same parent company Total Accounts payables Related parties (Items)	300,000 3,623,266
		300,000 3,623,266
		At June 30, At January 1, 2012 2012
	Parent company Other enterprises under the control of the same parent company Total	338,284 338,284 53,516,864 48,700,564
		53,855,148 49,038,848

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IX RELATIONSHIP OF RELATED PARTIES AND THEIR TRANSACTIONS – CONTINUED

iii. Amount due to or from related party – continued

7. Other payables

Related parties (Items)	At June 30, At January 1, 2012 2012
Parent company Other enterprises under the control of the same parent company Total Advance from the related parties Related parties (Items)	443,613,122 1,162,612,324 191,861,340 223,780,904
	635,474,462 1,386,393,228
	At June 30, At January 1, 2012 2012
Other enterprises under the control of the same parent company Associates Total	111,053,296 119,923,935 – 502,632
	111,053,296 120,426,567

8. Advance from the related parties

X. CONTINGENCY

1. Australian subsidiaries and joint ventures

Items	As at June 30, As at January 1, 2012 2012
Guarantees provided for daily operations Guarantees provided in respect of the cost of restoration of certain mining leases, given to government departments as required by statute Total	1,682,216,626 1,100,485,399 371,555,729 292,079,909
	2,053,772,355 1,392,565,308

Note: The events stated above are mainly due to the acquisition of Yancoal Resources, Syntech, Syntech II, Premier Coal and Premier Char, etc.

1. Besides the contingencies stated above and included in Note “IX, ii, 3”, as at June 30, 2012, the Group does not have any other signifi cant contingencies.

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XI. COMMITMENTS

1. Ongoing investment agreement and related fi nancial expenditure

• (1) In August 2006, the Company entered into an agreement with two independent third parties to establish a company to operate Yulin Yushuwan Coal Mine in Shaanxi Province. Pursuant to agreement, the Company shall pay RMB196.80 million and the Company has paid RMB117.93 million (Note VIII, 17). By June 30, 2012, RMB78.87 million has not been paid by the Company. As at this reporting date, the Company’s application legal fi les for establishment and registration have been submitted to National Development and Reform Committee (Shaan Development and Reform Coal and Electricity (2009) No. 1652) and related government departments, and are still waiting to be approved.

• (2) The Company entered into equity transfer agreements and supplementary agreements with three independent third parties on 16 September 2010 and 19 October 2010 to acquire 51% equity interests of Inner Mongolia Haosheng Coal Mining Company Limited and to increase registered capital as per share proportion. The Company also entered into equity transfer agreements with two independent third parties on 31 March 2011 to acquire 10% equity interest of Haosheng Company. On 6 March 2012 the Company entered into the agreement on reducing the registered capital of Haosheng Company with other shareholders of Haosheng and entered into the equity transfer supplementary agreements with an independent third party to acquire 9.45% equity interests of Haosheng., The capital increase resolution was approved by 2011 general meeting of Inner Mongolia Haosheng Coal Mining Company Limited, which was held on 19 March 2012. The total consideration for equity transfer and capital contribution was RMB6,949.14 million. As at the end of the reporting period, RMB2,195.41 million has been paid by the Company and RMB4,753.73 million was still unpaid.

• (3) As described in Note IX, Ii, 7, the Company, Yankuang Group and Shaanxi Yanchang Petroleum (Group) Corp. Ltd entered into a co-operative agreement to establish Shaanxi Future Energy Chemical Corp. Ltd as a joint stock company. It is agreed that capital contribution of the Company was RMB 1.35 billion. As at the end of the reporting period, RMB945 million has been paid and RMB405 million is still unpaid.

• (4) As approved at the nineteenth meeting of the forth session of the Board held on 28 January 2011, Ordos Neng Hua, the subsidiary of the Company, successfully bid the mining rights of Zhuan Longwan coal mine fi eld of Dongsheng Coal Field in Inner Mongolia Autonomous Region for a consideration of RMB7,878.66 million. According to the deal confi rmation, the payment of mining rights is to be paid in three instalments, and fund occupancy fee needs to be paid for unpaid instalments. The license for mining rights will be granted after all payments are made. At the end of the reporting period, the Company has paid the fi rst instalment RMB3,198.66 million and second instalment RMB2,340 million; the third instalment of RMB2,340 million will be paid by 30 November 2012.

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CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

XI. COMMITMENTS

1. Ongoing lease agreements and related fi nancial infl uence As at June 30, 2012 (T), the amount shall be carried by the Group for irrevocable operating lease and fi nance lease of machinery and equipments and buildings, etc are stated as the follows.

Terms	Operating lease Finance lease (million) (million)
T+1years T+2years T+3years T+3years later Total	3.76 2,123.66 10.17 5.58 13.53 5.58 47.28 20.03
	74.74 2,154.85

1. By June 30, 2012, the Group’s other commitments which have not been recognized in the fi nancial statements are as follows:

Commitments	At June 30, 2012 At January 1, 2012 (million) (million)
Capital expenditure – purchase and construction of assets Total	6,311.12 2,203.63
	6,311.12 2,203.63

1. Except for the above stated commitments, the Company has no other signifi cant commitments to claim by June 30, 2012.

XII. EVENTS AFTER BALANCE SHEET DATE

1. Upon approval at the Fifth Meeting of the Fifth Session of the Board of the Company held on 2 December 2011 and voting at the fi rst 2012 extraordinary general meeting of the Company held on 8 February 2012, and ratifi ed by CSRS (the Zhengjian Xuke[2012] No. 592), the Company was approved to make an issuance of corporate bonds In the PRC, with an aggregate principal amount not exceeding RMB10 billion. On July 2012, the Company issued corporate bonds, with face value of RMB100 and principal amount of RMB5 billion.

2. Except for the above stated events, as at the end of the reporting period, the Group has no other signifi cant events after balance sheet day to claim.

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XIII. SEGMENT REPORT

1. Segment report from Jan. 1, 2012 to Jun. 30, 2012

Unit: RMB’000

	Unit: RMB’000
Items	Railway Electricity Coal mining transportation power and Undistributed Inter-segment business business methanol items elimination Total
Operating revenue – External – Inter-segment Operating cost and expenses – External – Inter-segment – Operating expense during the period Total operating prof t (loss) Total assets Total liabilities Complementary information Depreciation and amortization Non-cash expenses excluding depreciation and amortization Capital expenditure	28,545,330 252,456 1,308,559 26,693 924,828 29,208,210 28,125,152 227,387 844,369 11,302 – 29,208,210 420,178 25,069 464,190 15,391 924,828 – 24,829,830 262,976 1,282,659 23,209 736,013 25,662,661 20,292,460 171,152 780,031 8,582 – 21,252,225 336,143 19,372 371,352 9,146 736,013 – 4,201,227 72,452 131,276 5,481 – 4,410,436 3,715,500 -10,520 25,900 3,484 188,815 3,545,549 141,901,902 577,810 5,689,686 46,007 29,489,306 118,726,099 87,599,933 91,193 2,951,119 23,326 18,446,785 72,218,786 1,377,288 37,543 221,401 184 – 1,636,416 – – -376 – – -376 1,408,576 280 167,547 – – 1,576,403

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XIII. SEGMENT REPORT – CONTINUED

2. Segment report from Jan. 1, 2011 to Jun. 30, 2011

Items	Unit: RMB’000 Railway Electricity Coal mining transportation power and Undistributed Inter-segment business business methanol items elimination Total
Operating revenue – External – Inter-segment Operating cost and expenses – External – Inter-segment – Operating expense during the period Total operating prof t Total assets Total liabilities Complementary information Depreciation and amortization Non-cash expenses excluding depreciation and amortization Capital expenditure	20,749,683 268,572 1,148,040 21,250 898,866 21,288,679
	20,324,252 242,877 718,390 3,160 – 21,288,679 425,431 25,695 429,650 18,090 898,866 –
	13,625,520 239,060 1,133,822 17,910 774,265 14,242,047
	10,748,286 150,952 671,503 2,816 – 11,573,557 403,946 15,990 343,720 10,609 774,265 – 2,473,288 72,118 118,599 4,485 – 2,668,490
	7,124,163 29,512 14,218 3,340 124,601 7,046,632
	106,937,722 618,160 4,466,357 39,649 22,119,264 89,942,624 60,405,616 90,639 3,068,212 17,493 13,081,090 50,500,870 1,043,420 36,780 243,128 1,422 – 1,324,750 – – 989 – – 989 4,812,970 18,738 35,833 170 – 4,867,711

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CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

XIV. OTHER IMPORTANT EVENTS

1. Assets and liabilities measured by fair values

Items At	Gain or loss Accumulative Accrued from change of change of fair impairment fair value for the value charged for the At June 30, January 1, 2012 current period in equity current period 2012
Financial assets Hedging instrument Available-for-sales f nancial assets Subtotal Financial liabilities Hedging instrument Subtotal	104,909,672 – 23,583,449 – 137,423,368 333,617,636 – 1,175,739 – 281,907,120 438,527,308 – 24,759,188 – 419,330,488 222,089,021 – 9,800,425 – 236,322,727 222,089,021 – 9,800,425 – 236,322,727

2. Financial assets and liabilities in foreign currency

Items At	Gain or loss Accumulative Accrued from change of change of fair impairment fair value for the value charged for the At June 30, January 1, 2012 current period in equity current period 2012
Financial assets Bank balance and cash Hedging instrument Loans and receivables Available-for-sales f nancial assets Subtotal Financial liabilities Hedging instrument Bank loans Others f nancial liabilities Subtotal	2,446,558,017 – – – 9,628,663,170 104,909,672 – 23,583,449 – 137,423,368 1,525,542,769 – – – 1,590,402,471 160,122,978 – – – 106,844,807 4,237,133,436 – 23,583,449 –11,463,333,816 42,471,284 – 20,366,647 – 69,071,264 20,433,818,700 – – –23,516,689,184 1,383,556,577 – – – 9,224,835,015 21,859,846,561 – 20,366,647 –32,810,595,463

Note: the table above includes all relevant fi nancial assets and fi nancial liabilities of overseas subsidiaries.

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CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

XIV. OTHER IMPORTANT EVENTS – CONTINUED

3. Mining rights

• According to the Mining Rights Agreement signed between the Company and the Group in October, 1997 and supplementary agreement signed in February 1998, an annual fee as compensation for mining rights of fi ve coal mines owned by the Yankuang Group is RMB12.98 million which is subject to new regulations after a tenyear period if they comes out. Pursuant to Implement Scheme about Experimental Units of Coal Mining Rights Paid which was approved by the State Council and jointly issued by the Ministry of Finance, State Resources Department and Development and Reformation Committee in September, 2006, despite free mining rights developed and invested by the country, enterprises should pay mining price on the base of reevaluation on remaining resource reserves. Shandong Province is one of the experimental provinces carrying paid mining rights. By the reporting day, the Company has completed assessment on remaining reserves and has been making the approval process of Shandong Provincial Department of Land & Resources. Pursuant to preliminary result of evaluation, compensation fee of RMB7 is accrued for each ton of ROM mined for fi ve coal mines owned by the Company, which is subject to detailed scheme when it comes out. RMB10 million has been accrued according to this criterion during the period from January 1, 2012 to June 30, 2012.

• Pursuant to “Temporary Management Measurements for Deposit of Shandong Province Mine Geological Environment Restoration” and respective regulations issued by the Shandong Province Finance Bureau and Shandong Provincial Department of Land & Resources, the mining rights owners shall implement obligation of mine environment restoration and hand in geological environment restoration deposit. The interests and principal of the deposit shall be returned to the mining rights owners after the acceptance of such restorations. In accordance with the provisions of such regulation, the Company and the subsidiary Heze Neng Hua shall hand in the deposit of RMB1,732.84 million and RMB903.19 million before the expiration of mining rights. By the end of the reporting period, the Company and the subsidiary Heze Neng Hua have handed in RMB800 million and RMB32 million. In addition, pursuant to the provisions of “Notice of Withdrawal Management of Mine Environment Restoration Guarantee Deposit (Experimental)” issued by Shanxi government (Jinzhengfa (2007) No. 41), by the end of the reporting period, Heshun Tianchi, the subsidiary of the Company has paid the environmental guarantee deposits RMB45.49 million.

• Ordos Neng Hua, the subsidiary of the Company, independent third party and its controlling entity entered into the Asset Transfer Agreement and the Supplementary Agreement dated on 20 November 2010 and 20 January 2011, respectively, for the acquisition of all the assets and equities of Anyuan coal mine owned by the independent third party in Nalintaohai Town of Inner Mongolia Ejin Horo Banner City, for a consideration of RMB1.435 billion. These assets and equities include: mining right of the coal mine; intangible assets such as land use right; real estate ownership; machinery equipment and other fi xed assets related to businesses with Anyuan coal mine and related rights. By the end of the reporting period, the Company has paid all the asset transfer payment. By the date of this report, the amendation for the registration of business license and organization code certifi cate of Anyuan coal mine are still under process.

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XV. NOTES TO STATEMENTS OF FINANCIAL STATEMENTS OF THE PARENT COMPANY

1. Accounts receivable

• (1) Accounts receivable category

	At June 30, 2012 At January 1, 2012 Book balance Bad debt Provision Book balance Bad debt Provision Amount Amount Amount Amount RMB % RMB % RMB % RMB %
Accounts receivables accrued bad debt provision as per portfolio Accounting aging portfolio Risk-free portfolio The subtotal of portfolio Total	— — — — — — — — 5,780,955 4 4,987,763 100 4,783,605 19 3,990,412 100 129,439,283 96 – – 20,000,000 81 – – 135,220,238 100 4,987,763 100 24,783,605 100 3,990,412 100
	135,220,238 100 4,987,763 100 24,783,605 100 3,990,412 100

• 1) There was no the individually signifi cant amounts of accounts receivables accrued the bad debt provision separately for the period.

• 2) Accounts receivables in the category of which the bad debt provisions are accrued as per accounting aging analysis method are:

Item	At June 30, 2012 At January 1, 2012 Amount Bad debt Amount Bad debt RMB % provision RMB % provision
Within 1 year 1 to 2 years 2 to 3 years Over 3 years Total	145,732 4 5,829 145,733 4 5,829 – 30 – – 30 – 1,306,579 50 653,290 1,306,579 50 653,290 4,328,644 100 4,328,644 3,331,293 100 3,331,293
	5,780,955 — 4,987,763 4,783,605 — 3,990,412

Note: The increase of the amount over 3 years is due to the acquisition of Beisu Coal Mine and Yangcun Coal Mine by the Company.

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XV. NOTES TO STATEMENTS OF FINANCIAL STATEMENTS OF THE PARENT COMPANY – CONTINUED

1. Accounts receivable – continued

• (1) Accounts receivable category – continued

• 3) Accounts receivables in the category of which the bad debt provisions are accrued under other methods are:

Item	Carrying Bad debt amount amount
Risk-free portfolio Total	129,439,283 –
	129,439,283 –

Note: As of the end of the period, all risk-free portfolios are considered as accounts receivables without recovery risk by the management.

• (2) Accounts receivable due from shareholders of the Group holding more than 5% (including 5%) of the total shares are not included for the period.

• (3) The fi ve largest debtors

Relationship with Items the Company	Proportion of total accounts Amount Age receivables (%)	Proportion of total accounts Amount Age receivables (%)
Baoshan Iron & Third party Steel Co., Ltd. Shandong Rizhao Power Third party Generation Co., Ltd. Letter of credit of Third party Shandong Jinneng Guangzhou Suitong Third party Material company Yanzhoushi Anqiufu Depot Third party Total	81,811,452 Within 1 year 27,673,563 Within 1 year 20,000,000 Within 1year 1,439,726 Over 3 years 1,306,579 2 to 3 year 132,231,320	61 20 15 1 1
		98

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XV. NOTES TO STATEMENTS OF FINANCIAL STATEMENTS OF THE PARENT COMPANY – CONTINUED

2. Other receivables

• (1) Other receivables category

		At June 30,	2012			At January	1, 2012
	Carrying	amount	Bad debt Provision		Carrying amount		Bad debt Provision
Item	RMB	%	RMB	%	RMB	%	RMB	%
Accounts receivables
accrued bad debt provision
as per portfolio	—	—	—	—	—	—	—	—
Accounting aging portfolio	43,935,284	—	27,499,734	100	17,395,045	—	13,817,768	100
Risk-free portfolio	9,533,104,505	100	–	–	4,994,728,470	100	–	–
The subtotal of portfolio	9,577,039,789	100	27,499,734	100	5,012,123,515	100	13,817,768	100
Total	9,577,039,789	100	27,499,734	100	5,012,123,515	100	13,817,768	100

• 1) There was no the individually signifi cant amounts of other receivables accrued the bad debt provision separately for the reporting period.

• 2) Other receivables in the category of which the bad debt provisions are accrued as per accounting aging analysis method are:

Item	At June 30, 2012 At January 1, 2012 Amount Bad debt Amount Bad debt RMB % provision RMB % provision
Within 1 year 1 to 2 years 2 to 3 years Over3 years Total	14,629,884 4 585,195 1,231,339 4 49,254 22,659 30 6,798 28,180 30 8,454 4,750,000 50 2,375,000 4,750,932 50 2,375,466 24,532,741 100 24,532,741 11,384,594 100 11,384,594
	43,935,284 — 27,499,734 17,395,045 — 13,817,768

Note: The increase of the amount over 3 years is due to the acquisition of Beisu Coal Mine and Yangcun Coal Mine by the Company.

Yanzhou Coal Mining Company Limited Interim Report 2012 225

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XV. NOTES TO STATEMENTS OF FINANCIAL STATEMENTS OF THE PARENT COMPANY – CONTINUED

2. Other receivables – continued

• (1) Other receivables category – continued

• 3) Other receivables in the category of which the bad debt provisions are accrued under other methods are:

Item	Carrying Bad debt amount amount
Risk-free portfolio Total	9,533,104,505 –
	9,533,104,505 –

Note: As at the end of the period, risk-free portfolio included RMB2,195.41 million of prepayment for investment and RMB7,293.46 million receivables due from related parties.

• (2) As at June 30, 2012, the account receivables due from the controlling shareholder of the Company were RMB17.69 million (RMB57.57 million at June 30, 2011).

• (3) The fi ve largest other debtors

Relationship with Items the Company	Proportion of other receivables Nature or Amount Age (%) contents	Proportion of other receivables Nature or Amount Age (%) contents
Yancoal International Holding subsidiary (Holding) Co., Ltd. Yanzhou Coal Ordos Neng Hua Holding subsidiary Company Limited Prepayment of investment Third party Shanxi Heshun Tianchi Holding subsidiary Energy Co., Ltd Shandong Shengyang Wood Co., Ltd. Associate Total	4,194,594,986 Within 1 year 2,655,000,000 1 to 2 years 2,195,405,200 1 to 2 years 275,747,116 Within 1 year 95,085,917 Within 1 year 9,415,833,219	44 Investment 28 Borrowing 23 Prepayment of investment 3 Borrowing, Materials 1 Advance payment on Dealing accounts 99

• (4) Other receivables due from related parties were RMB7,293.46 million as at 30 June 2012, accounting for 76% of total other receivables.

226 Yanzhou Coal Mining Company Limited Interim Report 2012

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2. Other receivables – continued

• (5) Foreign currency balance in other receivables

Item	At June 30, 2012 At January 1, 2012 Original Exchange RMB Original Exchange RMB currency rate equivalent currency rate equivalent
USD Total	2,381,897 6.3249 15,065,260 10,439,296 6.3009 65,776,960
	15,065,260 65,776,960

3. Long-term equity investment

• (1) Long-term equity investment

Items	At June 30, At January 1, 2012 2012
Long-term equity investments under cost method Long-term equity investments under equity method Long-term equity investments-Total Less: provision for impairment Long-term equity investments – net	12,356,279,695 15,235,557,746 2,143,816,439 1,683,897,233 14,500,096,134 16,919,454,979 – –
	14,500,096,134 16,919,454,979

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XV. NOTES TO STATEMENTS OF FINANCIAL STATEMENTS OF THE PARENT COMPANY – CONTINUED

3. Long-term equity investment – continued

(2) Under cost method and equity method

Name of Shareholding Ratio of investees proportion voting rights	Original Opening Closing Cash amount balance Additions Reversals Balance dividends
Under cost method Qingdao Zhongyan 52.38 52.38 Yanmei Shipping 92.00 92.00 Heze Neng Hua 98.33 98.33 Yancoal Australia Pty 100.00 100.00 Yulin Neng Hua 100.00 100.00 Shanxi Neng Hua 100.00 100.00 Ordos Neng Hua 100.00 100.00 Hua Ju Energy 95.14 95.14 Yancoal International (Holing) Co., Limited 100.00 100.00 Beisheng Industry and Trade Co., Ltd 100.00 100.00 Shandong Zoucheng Jianxin Cunzhen Bank 9.00 9.00 Subtotal Under equity method China HD Zouxian Co., Ltd. 30.00 30.00 Yankuang Group Finance Co., Ltd 25.00 25.00 Shaanxi Future Energy Chemical Corp. Ltd 25.00 25.00 Shengyang Wood 39.77 39.77 Jiemei Wall Materials 20.00 20.00 Subtotal Total	1,100,000 2,709,904 – – 2,709,904 – 3,430,000 10,575,733 – – 10,575,733 4,400,000 1,450,000,000 2,924,343,542 – – 2,924,343,542 – 403,281,954 6,663,281,954 1,312,912,935 4,194,594,986 3,781,599,903 – 776,000,000 1,400,000,000 – – 1,400,000,000 – 600,000,000 508,205,965 – – 508,205,965 – 500,000,000 3,100,000,000 – – 3,100,000,000 – 599,523,448 599,523,448 – – 599,523,448 – 17,917,200 17,917,200 – – 17,917,200 – 2,404,000 – 2,404,000 – 2,404,000 – 9,000,000 9,000,000 – – 9,000,000 –
	4,362,656,602 15,235,557,746 1,315,316,935 4,194,594,986 12,356,279,695 4,400,000
	900,000,000 973,670,742 47,352,843 – 1,021,023,585 – 125,000,000 170,226,491 19,436,470 15,625,000 174,037,961 15,625,000 540,000,000 540,000,000 405,000,000 – 945,000,000 – 6,000,000 – 4,886,462 1,487,495 3,398,967 – 720,000 – 359,859 3,933 355,926 –
	1,571,720,000 1,683,897,233 477,035,634 17,116,428 2,143,816,439 15,625,000
	5,934,376,602 16,919,454,979 1,792,352,569 4,211,711,414 14,500,096,134 20,025,000

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XV. NOTES TO STATEMENTS OF FINANCIAL STATEMENTS OF THE PARENT COMPANY – CONTINUED

3. Long-term equity investment – continued

• (3) Investment in associates

Type of Registered Business Registered Shareholding Ratio of Name of investees enterprise location nature capital proportion voting rights	Total assets Total liabilities Net assets Operating Net prof t at the end of at the end of at the end of income for the for the the period the period the period current period current period
China HD Zouxian Co., Ltd. Limited Tangcun, Electricity power RMB3 billion 30% 30% liability Zoucheng resources and Shandong related development, production, investment, sales and construction Yankuang Group Finance Limited liability Shandong Finance RMB500 million 25% 25% Co., Ltd Shaanxi Future Energy Chemical Limited liability Shaanxi Liquefaction of RMB5.4 billion 25% 25% Corp. Ltd coal and coal mining Shengyang Wood limited liability Shandong Decoration RMB15.09 million 39.77% 39.77% and ornament materials Jiemei Wall Materials limited liability Shandong Coal gangues RMB3.6 million 20% 20% f red brick Total	6,231,852,589 2,828,440,638 3,403,411,951 2,167,675,364 157,842,811 7,343,440,627 6,647,288,787 696,151,840 155,946,030 77,745,878 3,911,270,486 131,270,486 3,780,000,000 – – 110,600,366 102,053,806 8,546,560 24,916,406 -3,740,245 8,380,602 6,600,972 1,779,630 3,421,099 -19,663
	17,605,544,670 9,715,654,689 7,889,889,981 2,351,958,899 231,828,781

(4) No impairment occurred in long-term equity investment of the Company, so there is no provision.

4. Operation revenue and operation cost

Items	Jan. 1-Jun. 30, Jan. 1-Jun. 30, 2012 2011
Principal operations revenue Other operations revenue Total Principal operations cost Other operations cost Total	20,833,090,211 13,652,153,510 564,082,956 652,767,667
	21,397,173,167 14,304,921,177 15,173,742,048 7,201,818,809 656,956,615 708,343,489
	15,830,698,663 7,910,162,298

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XV. NOTES TO STATEMENTS OF FINANCIAL STATEMENTS OF THE PARENT COMPANY – CONTINUED

4. Operation revenue and operation cost – continued

(1) Principal operations – Classifi cation by business

Items	Jan. 1-Jun. 30, 2012 Jan. 1-Jun. 30, 2011 Operation revenue Operation cost Operation revenue Operation cost
Coal mining 20,606,539,463 15,003,286,981 13,409,276,725 7,050,867,226 Railway transportation 226,550,748 170,455,067 242,876,785 150,951,583 Total 20,833,090,211 15,173,742,048 13,652,153,510 7,201,818,809 Principal operations – Classif cation by product Jan. 1, 2012-Jun. 30, 2012 Jan. 1,2011-Jun. 30, 2011 Items Operation revenue Operation cost Operation revenue Operation cost	20,606,539,463 15,003,286,981 13,409,276,725 7,050,867,226 226,550,748 170,455,067 242,876,785 150,951,583
	20,833,090,211 15,173,742,048 13,652,153,510 7,201,818,809
Revenue from domestic sales of coal products Sales of coal purchased from other companies Revenue from railway transportation services Total	10,926,644,720 5,352,920,667 10,975,586,336 4,655,737,504 9,679,894,743 9,650,366,314 2,433,690,389 2,395,129,722 226,550,748 170,455,067 242,876,785 150,951,583
	20,833,090,211 15,173,742,048 13,652,153,510 7,201,818,809

• (2) Principal operations – Classifi cation by product

• (3) Principal operations – Classifi cation by area

Area	Jan. 1, 2012-June 30, 2012 Jan. 1,2011-June 30, 2011 Operation revenue Operation cost Operation revenue Operation cost
Domestic International Total	20,833,090,211 15,173,742,048 13,645,421,774 7,197,614,167 – – 6,731,736 4,204,642
	20,833,090,211 15,173,742,048 13,652,153,510 7,201,818,809

(4) Total revenue of the 5 largest customers from 1 January to 30 June 2012 is RMB5,362.13 million, which accounts for 25% in total revenue.

230 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

XV. NOTES TO STATEMENTS OF FINANCIAL STATEMENTS OF THE PARENT COMPANY – CONTINUED

5. Investment income

• (1) Sources of investment income

Items	Jan. 1-Jun. 30, Jan. 1-Jun. 30, 2012 2011
Long-term equity investment income under cost method 4,048,000 5,060,000 Long-term equity investment income under equity method 66,616,878 14,137,463 Investment income of entrust loan 295,994,812 62,923,499 Investment income of AFS f nancial assets 3,702,379 2,433,305 Total 370,362,069 84,554,267 Long-term equity investment income under equity method Jan. 1-Jun. 30, Jan. 1-Jun. 30, Reason Item 2012 2011 of change	4,048,000 5,060,000 66,616,878 14,137,463 295,994,812 62,923,499 3,702,379 2,433,305
	370,362,069 84,554,267
Total 66,616,878 14,137,463 Including: China HD Zouxian Co., Ltd. 47,352,843 7,078,491 HD Zouxian’s current prof t increased Yankuang Group Finance Co., Ltd 19,436,470 7,058,972 Yankuang Group Finance Co., Ltd’s current prof t increased Shengyang Wood -141,341 – New addition in this period Jiemei Wall Materials -31,094 – New addition in this period

• (2) Long-term equity investment income under equity method

• (3) There is no major limit on recovery of investment income to the Group.

Yanzhou Coal Mining Company Limited Interim Report 2012 231

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XV. NOTES TO STATEMENTS OF FINANCIAL STATEMENTS OF THE PARENT COMPANY – CONTINUED

6. Supplement information of cash fl ow statement of the Company

Items	Jan. 1-Jun. 30, Jan. 1-Jun. 30, 2012 2011
1. Reconciliation of net prof t to net cash f ow from operating activities Net prof t Add: Provision of impairment of assets Depreciation of f xed assets Amortization of intangible assets Amortization of long-term deferred expenses Special reserves accrued Gain or loss on disposal of f xed assets, intangible and other long-term assets (“-” represents gain) Gain or loss from change of fair value (“-” represents gain) Financial costs (“-” represents gain) Gain or loss arising from investments (“-” represents gain) Deferred tax effect (“-” represents increase) Decrease in inventories (“-” represents increase) Decrease in receivables under operating activities (“-” represents increase) Increase in payables under operating activities (“-” represents decrease) Net cash f ow from operating activities 2. Changes in cash and cash equivalents: Cash, closing Less: Cash, opening Net addition in cash and cash equivalents	2,558,449,995 3,226,205,508 – – 506,434,347 473,150,696 13,252,997 8,432,343 3,750 3,750 380,467,803 236,275,892 -4,202,544 -2,073,711 -12,366,274 34,479,350 494,108,730 37,095,602 -370,362,069 -84,554,267 -252,831,478 -146,899,788 -348,599,467 196,713,011 3,232,441,744 6,628,628,935 -2,129,456,512 -285,386,774
	4,067,341,022 10,322,070,547
	9,298,311,711 6,483,975,340 6,014,805,639 5,336,180,576
	3,283,506,072 1,147,794,764

232 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

XVI. SUPPLEMENT

1. Reconciliation for differences of net profi ts and net assets

Items	Equity attributable to parent Net prof t attributable to parent company shareholders company shareholders Jan 1-June 30, Jan 1-June 30, At June 30, 2012 At Jan 1, 2012 2012 2011
As per the f nancial statements prepared under IFRS 1) Business combination adjustment under common control (note1) 2) Special reserves (note 2) 3) Deferred tax effect (note 3) 4) Others As per PRC ASBEs	44,221,884,644 42,634,490,236 5,255,810,641 5,183,335,432 -1,502,419,408 -769,953,755 3,593,676 3,026,732 -426,296,412 -535,479,918 -374,006,701 -196,031,163 928,163,560 737,915,971 69,681,452 41,042,686 19,867,544 -610,072 -48,890,749 -1,796,536
	43,241,199,928 42,066,362,462 4,906,188,319 5,029,577,151

• (1) Pursuant to CASs, when relevant assets and subsidiaries purchased from Yankuang Group come into combination with enterprises under the common control, assets and liabilities of acquiree should be measured based on book value on the date of acquisition. The difference of book value of net assets acquired by the Company and consolidation price paid was adjusted as capital reserves. While pursuant to IFRS, acquirees recognize identifi able assets, liabilities and contingent liabilities according to the fair value on the date of acquisition. When the cost of a business combination exceeds the acquirer’s interest in the fair value of the acquiree’s identifi able asset, liabilities and contingent liabilities, the difference shall be recognized as goodwill.

• (2) As stated in Note IV. (22), in accordance with relevant regulations of the Chinese authorities for coal mining companies, provision for production maintenance, production safety and other related expenditures are accrued base on coal production volume, and are presented in expenses of the period and the amount that has been accrued but not used are presented in special reserve of owner’s equity. Fixed assets purchased with special reserve, are presented in related assets and same amount of accumulated depreciation is recognized at the same time. While under IFRS, these expenses are recognized when it occurs in the period, and relevant capital expenditures are recognized as fi xed assets when they occur and depreciated according to corresponding depreciation method.

• (3) The differences between the above mentioned standards bring differences in tax and infl uence of minority equity.

Yanzhou Coal Mining Company Limited Interim Report 2012 233

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

XVI. SUPPLEMENT – CONTINUED

2. Extraordinary gain

Pursuant to Explanation to Information Disclosure and Presentation Rules for Companies Making Public Offering No.1 Extraordinary Gain, extraordinary gains of the Company are as follows:

Items	Jan 1-June 30, Jan 1-June 30, 2012 2011
Gain and loss from disposal of non-current assets Government subsidies included in the gains and losses of the period Income from the difference between the fair value of the identif able net assets receivable from the investees and investment cost of its subsidiaries, associates and joint ventures Investment income from available for sales f nancial assets Gains and losses from entrusted loan Other net non-business revenues and expenses excluding the above items Others Subtotal Income tax effect Including: Yancoal Australia’s MRRT effect Extraordinary gain excluding income tax effect Including: attributable to shareholders of the parent company Minority interest effect (after tax)	4,094,661 -7,300,619 4,639,016 5,600,675 1,391,019,268 – 3,702,379 2,433,305 – – 10,790,981 -6,164,977 – –
	1,414,246,305 -5,431,616 -660,016,291 -1,468,829 -1,083,223,372 2,074,262,596 -3,962,787 2,074,134,717 -4,212,101 127,879 249,314

3. Return on net assets and earnings per share

Pursuant to Information Disclosure and Presentation Rules for Companies Making Public Offering No.9 computation and disclosure of Return on net assets and earnings per share Issued by China Securities Regulatory Commission, the weighted average return on net assets and earnings per share of the Group are as follows:

		Earnings per	share
	Weighted average	Basic Earnings	Diluted earnings
Prof t during the report period	return on net assets (%)	per share	per share
Net prof t attributable to shareholders of the parent company	11.01	0.9975	0.9975
Net prof t attributable to shareholders of the parent company,
excluding extraordinary gain	6.36	0.5758	0.5758

XVII. APPROVAL OF FINANCIAL STATEMENTS

The fi nancial statements have been approved by board of directors on August 24, 2012.

234 Yanzhou Coal Mining Company Limited Interim Report 2012

CHAPTER 8 DOCUMENTS AVAILABLE FOR INSPECTION

The following documents are available for inspection in the offi ce of the secretary to the Board at 298 Fushan South Road, Zoucheng, Shandong Province, the PRC:

1. The full text of the Interim Report signed by the chairman of the Board;

2. Financial statements of the Company with the corporate seal affi xed and signed by the legal representative, person responsible for accounting work and responsible person of the accounting department;

3. All documents published during the reporting period in newspapers designated by the CSRC;

4. The full text of the interim report released in other securities markets.

5. The Articles

On behalf of the Board

Li Weimin Chairman

Yanzhou Coal Mining Company Limited 24 August 2012

Yanzhou Coal Mining Company Limited Interim Report 2012 235