CStone Pharmaceuticals - Interim / Quarterly Report 2013

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 2013

The board of directors (the “ Board ”) of the Company is pleased to announce the unaudited interim results of the Company and its subsidiaries for 2013. The interim results have been reviewed by the audit committee of the Board. This announcement, containing the full text of the Interim Report of the Company for 2013, 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 Hong Kong Stock Exchange at www. hkexnews.hk and of the Company at www.yanzhoucoal.com.cn.

As at the date of this announcement, the Directors are Mr. Zhang Yingmin, Mr. Shi Xuerang, Mr. Wu Yuxiang, Mr. Zhang Baocai and Mr. Dong Yunqing, and the independent non-executive directors of the Company are Mr. Wang Xianzheng, Mr. Cheng Faguang, Mr. Wang Xiaojun and Mr. Xue Youzhi.

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 Company 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 methanol project
	in Shaanxi province;
“Heze Neng Hua”	Yanmei Heze Neng Hua Company Limited, a company with limited liability
“Shanxi Neng Hua”	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 f eld in Heze city, Shandong province; 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;
“Tianhao Chemicals”	Shanxi Tianhao Chemicals Company Limited, a joint stock limited company
	incorporated under the laws of the PRC in 2002 and a 99.89% owned subsidiary of
	Shanxi Neng Hua, mainly engages in the production and operation of the 0.1 million
	tonnes methanol project in Shanxi province;
“Hua Ju Energy”	Shandong Hua Ju Energy Company Limited, a joint stock limited company
	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 with limited
	liability 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, company with limited
	liability 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 f eld in the Inner Mongolia Autonomous Region;
“Yancoal Australia”	Yancoal Australia 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 traded on the Australia Stock Exchange;
“Austar Company”	Austar Coal Mine Pty Limited, a company with limited liability incorporated under the
	laws of Australia in 2004 and a wholly-owned subsidiary of Yancoal Australia, mainly
	engages in coal producing, processing, washing and distributing;

2 Yanzhou Coal Mining Company Limited Interim Report 2013

DEFINITIONS – CONTINUED

“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 Limited, a limited company incorporated under the laws of Australia,
	which completed the merger with Yancoal Australia in June 2012 and became a
	wholly-owned subsidiary of Yancoal Australia;
“Yancoal International”	Yancoal International (Holding) Company Limited, a company with limited liability
	incorporated under the laws of Hong Kong in 2011 and a wholly-owned subsidiary of
	the Company;
“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;
“IFRS”	International Financial Reporting Standards;
“CSRC”	China Securities Regulatory Commission;
“Hong Kong Listing Rules”	Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong
	Limited;
“Hong Kong Stock Exchange”	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, unless otherwise specif ed.

Yanzhou Coal Mining Company Limited Interim Report 2013

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 of 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: [email protected]

Representative of 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) 5393679 Fax: (86537) 5383311

E-mail Address: [email protected]

(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

==> picture [144 x 60] intentionally omitted <==

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

E-mail Address: [email protected]

(5) Newspapers for 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 Websites for publishing the Company’s Interim Report overseas: http://www.hkexnews.hk

http://www.sec.gov

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

4 Yanzhou Coal Mining Company Limited Interim Report 2013

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
ADRs — Place of listing: The New York Stock Exchange, Inc. Ticker Symbol: YZC
(7) Other relevant information For details of initial business registration, please refer to Group Profi le in the annual report 1998. Date of current business registration: 17 January 2011
Current address of registration: 298 Fushan South Road, Zoucheng City, Shandong Province, 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 (special general partnership)

Offi ce Address: 9/F, Block A, Fuhua Mansion, 8 Chaoyangmen Beidajie, Dongcheng District, Beijing, 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 (special general partnership)

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

Yanzhou Coal Mining Company Limited Interim Report 2013 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 2013	June 2012	Decrease	decrease (%)
1.	Coal business
	Raw coal production		kilotonne	35,106	31,566	3,540	11.21
	Salable coal production		kilotonne	31,668	29,484	2,184	7.41
	Salable coal sales volume		kilotonne	45,375	42,472	2,903	6.84
2.	Railway transportation	business
	Transportation volume		kilotonne	8,462	8,837	-375	-4.24
3.	Coal chemicals business
	Methanol production		kilotonne	336	285	51	17.89
	Methanol sales volume		kilotonne	329	288	41	14.24
4.	Electric power business
	Power generation		10,000kWh	64,290	62,298	1,992	3.20
	Electricity sold		10,000kWh	45,832	43,466	2,366	5.44
5.	Heat business
	Heat generation	10,000 steam tonnes		89	91	-2	-2.20
	Heat sales volume	10,000 steam tonnes		2	21	-19	-90.48

II. FINANCIAL HIGHLIGHTS

(Prepared in accordance with the IFRS)

(I) OPERATING RESULTS

		For the six months ended 30 June	For the six months ended 30 June		For the year	ended 31	December
	2013		2012	Changes as		2012
	(RMB’000)	(RMB’000)		compared with	(RMB’000)
				the corresponding
		After adjustment	Before adjustment	period of last year	After adjustment	Before adjustment
	(unaudited)	(restatement)	(unaudited)	(%)	(restatement)		(audited)
Sales income	25,240,691	28,286,385	28,286,385	-10.77	58,146,184	58,146,184
Gross prof t	4,903,013	7,564,763	7,611,491	-35.19	12,625,835	12,813,283
Interest expenses	(940,392)	(775,394)	(775,394)	21.28	(1,448,679)	(1,448,679)
Income before income tax	(4,336,362)	5,335,557	5,382,285	-181.27	6,070,377		6,346,182
Net income attributable to equity
holders of the Company
for the reporting period	(2,073,012)	5,223,101	5,255,811	-139.69	6,105,656		6,218,969
Earnings per share	RMB(0.42)	RMB1.06	RMB1.07	-139.62	RMB1.24		RMB1.26

6 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 2 BUSINESS HIGHLIGHTS – CONTINUED

(I) 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 2013	of 2012	decrease
	(RMB’000)	(RMB’000)	(%)
The exchange gains or losses	-3,108,474	181,318	-1,814.38
The impact of exchange gains or losses on net
income attributable to equity holders of the Company	-1,717,371	130,240	-1,418.62

(II) ASSETS AND LIABILITIES

	For	the six months ended 30	the six months ended 30	June	For the year ended	31 December
	2013		2012		2012
	(RMB’000)	(RMB’000)			(RMB’000)
		After adjustment	Before adjustment		After adjustment Before adjustment
	(unaudited)	(restatement)		(unaudited)	(restatement)	(audited)
Current assets	24,713,299	33,099,129		33,145,857	29,833,491	30,282,380
Current liabilities	27,536,872	36,607,124		36,607,124	28,622,689	28,622,689
Total assets	119,203,986	119,195,356		119,242,084	122,165,077	122,702,323
Equity attributable to equity
holders of the Company	39,758,782	44,189,175		44,221,885	45,530,034	45,826,356
Net assets value per share	RMB8.08	RMB8.98		RMB8.99	RMB9.26	RMB9.32
Return on net assets(%)	(5.21)	11.82		11.89	13.41	13.57

(III) SUMMARY STATEMENT OF CASH FLOWS

			For the six months ended 30 June	For the six months ended 30 June		For the year ended 31	December
		2013		2012	Changes as	2012
		(RMB’000)	(RMB’000)		compared with	(RMB’000)
					the corresponding
			After adjustment	Before adjustment	period of last year	After adjustment Before adjustment
		(unaudited)	(restatement)	(unaudited)	(%)	(restatement)	(audited)
Net cash from operating activities		(166,614)	6,692,481	6,692,453	-102.49	6,503,610	6,503,610
Net increase in cash and
	cash equivalents	(4,277,407)	10,437,025	10,437,025	-140.98	4,461,375	4,461,375
Net cash f ow per share from
	operating activities	RMB(0.03)	RMB1.36	RMB1.36	-102.21	RMB1.32	RMB1.32

Note:

In 2013, the Group consolidated fi nancial statements of Haosheng Company and Shandong Yanmei Rizhao Port Coal Storage and Blending Co., Ltd.
Pursuant to the new regulations promulgated by International Financial Reporting Interpretations Committee with regard to the accounting method for overburden in advance in production phase of open cut mines, the Group need to re-measure the fi gures of overburden in advance since January 1, 2013 and made retrospective adjustment on the relevant fi gures in the balance sheet from the beginning of the reporting period and comparative fi nancial statements in the same period of last year.

Yanzhou Coal Mining Company Limited Interim Report 2013 7

CHAPTER 3 BOARD OF DIRECTORS’ REPORT

I. MANAGEMENT DISCUSSION AND ANALYSIS

(I) Operational Analysis by Industries, Products or Regions

1. Main business by industries

				Increase/	Increase/	Increase/
				decrease in	decrease in	decrease in
				sales income	sales cost	gross prof t ratio
				as compared	as compared	as compared
	Sales	Sales	Gross	with the same	with the same	with the same
	income	cost	prof t	period of 2012	period of 2012	period of 2012
	(RMB’000)	(RMB’000)	(%)	(%)	(%)	(percentage point)
1. Coal business	24,261,394	18,529,968	23.62	-11.10	-3.93	-5.70
2. Railway transportation business	211,008	165,837	21.41	-6.86	-5.67	-0.99
3. Coal chemicals business	588,175	449,002	23.66	3.48	-3.96	5.91
4. Electric power business	174,632	145,333	16.78	5.94	-9.82	14.55
5. Heat business	5,482	2,934	46.48	-84.55	-86.25	6.60
The operation of business segment

The operation of business segment
(1) Coal business
- 1) Coal Production

In the fi rst half of 2013, the raw coal production of the Group was 35.11 million tonnes, representing an increase of 3.54 million tonnes or 11.2% as compared with that of the fi rst half of 2012. Salable coal production of the Group for the reporting period was 31.67 million tonnes, representing an increase of 2.18 million tonnes or 7.4% as compared with that of the fi rst half of 2012. The increase of coal production was mainly due to the fact that the Group consolidated coal production of Gloucester since July 2012, which led to the increase of coal production in Australia as compared with the corresponding period in 2012.

8 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

The following table sets out the coal production of the Group for the fi rst half of 2013:

		For the six	For the six
		months ended	months ended	Increase/	Increase/
		30 June 2013	30 June 2012	decrease	decrease
		(kilotonne)	(kilotonne)	(kilotonne)	(%)
I.	Raw coal production	35,106	31,566	3,540	11.21
	1. The Company	16,960	17,167	-207	-1.21
	2. Shanxi Neng Hua	707	662	45	6.80
	3. Heze Neng Hua	1,304	1,461	-157	-10.75
	4. Ordos Neng Hua	3,033	3,452	-419	-12.14
	5. Yancoal Australia	9,965	8,595	1,370	15.94
	6. Yancoal International	3,137	229	2,908	1,269.87
II.	Salable coal production	31,668	29,484	2,184	7.41
	1. The Company	16,925	17,129	-204	-1.19
	2. Shanxi Neng Hua	697	652	45	6.90
	3. Heze Neng Hua	1,021	1,229	-208	-16.92
	4. Ordos Neng Hua	3,030	3,452	-422	-12.22
	5. Yancoal Australia	7,086	6,811	275	4.04
	6. Yancoal International	2,909	211	2,698	1,278.67

Note: On 22 June 2012, according to the merger arrangement 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. After the above mentioned assets transfer, coal production of Syntech Resources Pty Ltd. and Premier Coal Limited were included in Yancoal International, which were included in Yancoal Australia before the transfer.

2) Coal prices and sales

In the fi rst half of 2013, the demand for coal in the domestic and overseas markets was weak and the average coal price of the Group decreased as compared with that of last year.

The Group sold 45.38 million tonnes of coal in the fi rst half of 2013, representing an increase of 2.9 million tonnes or 6.8% as compared with that of the fi rst half of 2012. The sales volume comprises of 0.7 million tonnes of internal sales and 44.68 million tonnes of external sales.

In the fi rst half of 2013, the Group realized a sales income of RMB24.4421 billion for its coal business, representing a decrease of RMB2.9743 billion or 10.8% as compared with that of the fi rst half of 2012. The sales income comprises of RMB180.7 million of internal sales and RMB24.2614 billion of external sales.

Yanzhou Coal Mining Company Limited Interim Report 2013 9

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

The following table sets out the Group’s sales of coal for the fi rst half of 2013:

		For the six months ended	For the six months ended	30 June 2013	For the six months ended 30 June 2012	For the six months ended 30 June 2012	For the six months ended 30 June 2012
		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	200	832.46	166,185	130	1,097.60	142,643
	No. 2 Clean Coal	4,996	794.37	3,968,947	4,236	1,016.78	4,307,433
	No. 3 Clean Coal	657	645.21	423,632	1,179	795.60	937,868
	Domestic Sales	656	644.68	422,519	1,179	795.60	937,868
	Export	1	941.78	1,113	–	–	–
	Lump Coal	669	706.98	473,084	683	995.10	679,764
	Subtotal for Clean Coal	6,522	771.55	5,031,848	6,228	974.23	6,067,707
	Domestic Sales	6,521	771.52	5,030,735	6,228	974.23	6,067,707
	Export	1	941.78	1,113	–	–	–
	Screened Raw Coal	6,126	477.10	2,922,615	6,926	521.67	3,613,368
	Mixed Coal & Others	3,665	306.26	1,122,637	3,350	371.85	1,245,569
	Total for the Company	16,313	556.43	9,077,100	16,504	662.04	10,926,645
	Domestic Sales	16,312	556.40	9,075,987	16,504	662.04	10,926,645
2.	Shanxi Neng Hua	634	296.28	187,979	551	421.73	232,286
	Screened Raw Coal	634	296.28	187,979	551	421.73	232,286
3.	Heze Neng Hua	978	657.42	642,848	1,227	813.32	997,946
	No. 2 Clean Coal	546	920.68	502,644	629	1,153.65	725,956
	Mixed Coal & Others	432	324.64	140,204	598	455.04	271,990
4.	Ordos Neng Hua	2,666	194.20	517,684	3,228	269.16	868,767
	Screened Raw Coal	2,666	194.20	517,684	3,228	269.16	868,767
5.	Yancoal Australia	7,101	579.76	4,116,880	7,111	648.70	4,613,083
	Semi-hard coking coal	548	690.27	378,198	131	981.86	128,874
	Semi-soft coking coal	537	722.46	387,935	484	1,059.61	512,546
	PCI coal	1,489	731.12	1,088,471	1,187	1,000.27	1,187,557
	Steam coal	4,527	499.69	2,262,276	5,309	524.41	2,784,105
6.	Yancoal International	2,829	292.91	828,617	240	407.08	97,756
	Steam coal	2,829	292.91	828,617	240	407.08	97,756
7.	Sales of externally
	purchased coal	14,854	610.67	9,071,003	13,611	711.20	9,679,895
8.	Total for the Group	45,375	538.67	24,442,111	42,472	645.52	27,416,378

10 Yanzhou Coal Mining Company Limited Interim Report 2013

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
	in change	change in the
	coal sales	sales price
	volume	of coal
	(RMB’000)	(RMB’000)
The Company	-126,729	-1,722,816
Shanxi Neng Hua	35,228	-79,535
Heze Neng Hua	-202,628	-152,470
Ordos Neng Hua	-151,240	-199,843
Yancoal Australia	-6,660	-489,543
Yancoal International	1,053,848	-322,987
Externally purchased coal	884,381	-1,493,273
Total for the Group	1,486,200	-4,460,467

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 2013:

		For the six	months ended	For the six months ended	For the six months ended
		30 June 2013		30 June 2012
		Sales volume	Sales income	Sales volume	Sales income
		(Kiloton)	(RMB’000)	(Kiloton)	(RMB’000)
1.	China	36,532	20,167,728	35,724	23,179,370
	Eastern China	32,139	18,351,166	29,805	19,861,594
	Southern China	–	–	603	473,831
	Northern China	3,114	855,875	4,427	2,358,812
	Other regions	1,279	960,687	889	485,133
2.	Japan	790	526,066	974	938,935
3.	South Korea	1,666	1,001,291	1,550	1,146,137
4.	Australia	4,010	1,404,737	2,754	1,030,354
5.	Others	2,377	1,342,289	1,470	1,121,582
6.	Total for the Group	45,375	24,442,111	42,472	27,416,378

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

Yanzhou Coal Mining Company Limited Interim Report 2013 11

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 2013:

		For the six	months ended	For the six months ended	For the six months ended
		30 June 2013		30 June 2012
		Sales volume	Sales income	Sales volume	Sales income
		(Kiloton)	(RMB’000)	(Kiloton)	(RMB’000)
1.	Electricity	7,423	2,992,225	15,392	7,155,068
2.	Metallurgy	5,135	2,612,398	3,006	2,953,126
3.	Chemical	5,121	3,587,806	5,373	4,334,901
4.	Others	27,696	15,249,682	18,701	12,973,283
5.	Total for the Group	45,375	24,442,111	42,472	27,416,378

3) Cost of coal sales

The Group’s cost of coal sales in the fi rst half of 2013 was RMB18.53 billion, representing a decrease of RMB757.6 million, or 3.9% as compared with that of the fi rst half of 2012. This was mainly due to the fact that: (1) the decrease of sales volume of externally purchased coal decreased the sales cost by RMB701.2 million; (2) the decrease of sales volume of the Company and Heze Neng Hua and measures of improving effi ciency led to a decrease of sales cost by RMB521.4 million; (3) the merger with Gloucester increased coal sales volume in Australia, which led to an increase of the sales cost by RMB554 million.

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

			For the six	For the six		Percentage
			months ended	months ended	Increase/	of increase/
		Unit	30 June 2013	30 June 2012	decrease	decrease (%)
The Company	Total cost of sales	RMB’000	4,876,124	5,256,305	-380,181	-7.23
	Cost of sales per tonne	RMB	298.91	318.48	-19.57	-6.14
Shanxi Neng Hua	Total cost of sales	RMB’000	132,535	147,983	-15,448	-10.44
	Cost of sales per tonne	RMB	208.90	268.67	-59.77	-22.25
Heze Neng Hua	Total cost of sales	RMB’000	489,386	630,649	-141,263	-22.40
	Cost of sales per tonne	RMB	500.48	513.98	-13.50	-2.63
Ordos Neng Hua	Total cost of sales	RMB’000	434,109	511,617	-77,508	-15.15
	Cost of sales per tonne	RMB	162.85	158.51	4.34	2.74
Yancoal Australia	Total cost of sales	RMB’000	3,178,671	3,233,367	-54,696	-1.69
	Cost of sales per tonne	RMB	447.64	454.68	-7.04	-1.55
Yancoal International	Total cost of sales	RMB’000	673,823	65,159	608,664	934.12
	Cost of sales per tonne	RMB	238.19	271.33	-33.14	-12.21
Externally purchased coal Total cost of sales		RMB’000	8,949,185	9,650,366	-701,181	-7.27
	Cost of sales per tonne	RMB	602.48	709.03	-106.55	-15.03

12 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

In the fi rst half of 2013, the cost of coal sales of Yancoal International signifi cantly increased as compared with that of the first half of 2012. The main reason was that Yancoal International began to count coal production since June 22, 2012, and coal sales volume was much lower in the fi rst half of 2012.

In the fi rst half of 2013, the Group’s cost control measures achieved remarkable success. Except for Ordos Neng Hua, the coal sales cost per tonne of all the other operating entities of the Group decreased in different levels in the fi rst half of 2013. Coal sales cost per tonne of Ordos Neng Hua increased 2.7% due to the decrease of coal sales volume by 17.4% in the fi rst half of 2013.

(2) Railway transportation business

In the fi rst half of 2013, the transportation volume of the Railway Assets was 8.46 million tonnes, representing a decrease of 0.38 million tonnes or 4.2% as compared with that of the fi rst half of 2012. 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 RMB211 million in the fi rst half of 2013, representing a decrease of RMB15.543 million or 6.9% as compared with that of the fi rst half of 2012. The cost of railway transportation services was RMB165.8 million, representing a decrease of RMB9.965 million or 5.7% as compared with that of the fi rst half of 2012.

(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 2013:

		Production volume	Production volume	(Kilotonne)	Sales volume (Kilotonne)	Sales volume (Kilotonne)	Sales volume (Kilotonne)
		For the six	For the six	Percentage	For the six	For the six	Percentage
		months ended	months ended	of increase/	months endedmonths ended		of increase/
		30 June	30 June	decrease	30 June	30 June	decrease
		2013	2012	(%)	2013	2012	(%)
1.	Yulin Neng Hua	336	265	26.79	329	266	23.68
2.	Shanxi Neng Hua	–	20	–	–	22	–

Note: The methanol project of Shanxi Neng Hua has ceased production since April 2012, which is currently in the assets disposal procedure.

Yanzhou Coal Mining Company Limited Interim Report 2013 13

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

		Sales income (RMB’000)	Sales income (RMB’000)	Sales income (RMB’000)	Cost of Sales (RMB’000)	Cost of Sales (RMB’000)	Cost of Sales (RMB’000)
		For the six	For the six		For the six	For the six
		months endedmonths ended		Increase/	months endedmonths ended		Increase/
		30 June	30 June	decrease	30 June	30 June	decrease
		2013	2012	(%)	2013	2012	(%)
1.	Yulin Neng Hua	588,175	524,496	12.14	473,175	449,814	5.19
2.	Shanxi Neng Hua	–	43,901	–	–	41,866	–

(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 2013:

		Generation (10,000	Generation (10,000	kW/h)	Electricity sold (10,000	Electricity sold (10,000	kW/h)
		For the six	For the six	Percentage	For the six	For the six	Percentage
		months ended	months ended	of increase/	months ended	months ended	of increase/
		30 June	30 June	decrease	30 June	30 June	decrease
		2013	2012	(%)	2013	2012	(%)
1.	Hua Ju Energy	51,746	49,760	3.99	45,690	42,446	7.64
2.	Yulin Neng Hua	12,544	12,538	0.05	142	1,020	-86.08

Note: Electricity generated by power plant of Yulin Neng Hua is sold externally after satisfying its internal operating requirements.

		Sales income(RMB	Sales income(RMB	’000)	Cost of sales(RMB	Cost of sales(RMB	’000)
		For the six	For the six		For the six	For the six
		months endedmonths ended		Increase/	months endedmonths ended		Increase/
		30 June	30 June	decrease	30 June	30 June	decrease
		2013	2012	(%)	2013	2012	(%)
1.	Hua Ju Energy	174,262	162,296	7.37	144,864	157,419	-7.98
2.	Yulin Neng Hua	370	2,547	-85.47	468	3,745	-87.50

(5) Heat business

Hua Ju Energy generated heat energy of 0.89 million steam tonnes and sold 0.02 million steam tonnes in the fi rst half of 2013, realizing a sales income of RMB5.482 million, with the cost of sales at RMB2.934 million.

14 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

Main business by regions

		Increase/
		decrease in
	Sales income	sales income
	(RMB’000)	(%)
Domestic	20,966,307	-12.15
Overseas	4,274,384	-3.30
Total	25,240,691	-10.77

(II) Analysis of main business

Analysis of changes in brief Consolidated Income Statement items and brief Consolidated Statement of Cash Flow items

	For the six	For the six
	months ended	months ended	Increase/
	30 June 2013	30 June 2012	decrease
	(RMB’000)	(RMB’000)	(%)
Sales income	25,240,691	28,286,385	-10.77
Cost of coal transportation	1,044,604	608,277	71.73
Selling, general and administrative expenses	8,688,464	3,552,979	144.54
Other income	454,158	2,032,550	-77.66
Income tax	-1,252,939	85,803	-1,560.25
Net cash inf ow from operating activities	-166,614	6,692,481	-102.49
Net cash outf ow from investing activities	-4,492,018	2,621,996	-271.32
Net cash inf ow from f nancing activities	381,225	1,122,548	-66.04
R&D Expenditure	36,133	42,116	-14.21

(1) Analysis of changes in brief Consolidated Income Statement items

The Group’s sales income in the fi rst half of 2013 was RMB25.2407 billion, representing a decrease of RMB3.0457 billion or 10.8% as compared with that of the fi rst half of 2012. This was mainly due to the fact that: the increase of sales volume of self-produced coal resulted in an increase of sales income by RMB640.5 million; the decrease of price of self-produced coal led to a decrease of sales income by RMB2.9785 billion; the sales income of externally purchased coal decreased by RMB691.7 million.

In the first half of 2013, cost of coal transportation of the Group was RMB1.0446 billion, representing an increase of RMB436.3 million or 71.7% as compared with that of the fi rst half of 2012, which was mainly due to the increase of coal sales volume of the Group’s coal mines in Australia.

Yanzhou Coal Mining Company Limited Interim Report 2013 15

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

In the fi rst half of 2013, selling, general and administrative expenses of the Group was RMB8.6885 billion, representing an increase of RMB5.1355 billion or 144.5% as compared with that of the fi rst half of 2012, which was mainly due to: (1) the exchange losses of RMB3.1085 billion occurred in the reporting period; (2) accruing assets impairment losses of RMB2.2422 billion.

In the fi rst half of 2013, other income of the Group was RMB454.2 million, representing a decrease of RMB1.5784 billion or 77.7% as compared with that of the fi rst half of 2012, which was mainly due to the fact that there was an income of RMB1.4272 billion from the merger with Gloucester in the corresponding period of last year.

Income tax of the Group in the fi rst half of 2013 was RMB-1.2529 billion and was RMB85.803 million in the fi rst half of 2012. This was mainly due to the fact that exchange losses and accrued assets impairment losses in the reporting period affecting the income tax of RMB-1.5629 billion.

(2) Analysis of changes in brief Consolidated Statement of Cash Flow items

In the fi rst half of 2013, net cash outfl ow from operating activities of the Group was RMB166.6 million, and in the corresponding period of 2012, operating activities of the Group generated net cash infl ow of RMB6.6925 billion, which was mainly due to the fact that cash infl ow from coal sales decreased as a result of the decrease of coal price.

In the fi rst half of 2013, net cash outfl ow from investing activities of the Group was RMB4.492 billion, and in the corresponding period of 2012, investing activities of the Group generated net cash infl ow of RMB2.622 billion, which was mainly due to the facts that: (1) net cash outfl ow increased by RMB2.7006 billion as a result of the increase of payment for assets and equity acquisition; (2) net cash outfl ow decreased by RMB4.5956 billion as a result of the changes in the balance of bank guarantee deposit and restricted cash in the reporting period.

In the fi rst half of 2013, net cash infl ow from fi nancing activities of the Group was RMB381.2 million, representing a decrease of RMB741.3 million or 66.0% as compared with that of the fi rst half of 2012, which was mainly due to the facts that: (1) the increase of bank loan led to an increase of cash infl ow by RMB1.0257 billion; (2) the decrease of repayment for bank loan resulted in a decrease of cash outfl ow by RMB8.1496 billion; (3) during the reporting period, the capital fund of RMB3.6215 billion payable to Gloucester’s former shareholders by Yancoal Australia; (4) RMB6.3129 billion was raised from the issuance of bonds in the corresponding period of last year.

16 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

(3) Others

1) Specifi cations for signifi cant changes in components or sources of the Group’s profi ts

Not applicable.

2) Implementation status of the Group’s fi nancing, signifi cant assets reorganization activities of previous period

Not applicable.

3) Implementation status of the Group’s operating scheme

In the fi rst half of 2013, facing the situation of a slow global economic recovery and inadequate increase of coal demand, through the optimization and innovation of production organization and fl exible adjustment of sales strategies, the Group realized the operating scheme properly in all business segments. In the fi rst half of 2013, the Group sold 45.38 million tonnes coal, which accounts for 50.5% of the planned coal sales volume for the year 2013; the Group sold 0.33 million tonnes methanol, which accounts for 60.0% of the planned methanol sales volume for the year 2013.

4) Capital Sources and Use

In the fi rst half of 2013, the Group’s principal source of capital was the cash fl ow from operations and bank loans. The Group has utilized its capital mainly for operating business expenses, purchase of property, machinery and equipment and payment of shareholders’ dividend.

The Group’s capital expenditure for the purchase of property, machinery and equipment for the fi rst half of 2013 was RMB2.6828 billion, representing an increase of RMB1.0307 billion or 62.4% as compared with RMB1.6521 billion in the fi rst half of 2012. This was mainly due to the fact that: (1) To facilitate the development of Zhaolou power plant, the capital expenditure of Heze Neng Hua was increased by RMB356.4 million; (2) To facilitate the development of the methanol project and Zhuang Longwan coal mine, the capital expenditure of Ordos Neng Hua was increased by RMB299.8 million as compared with that in the same period of last year.

Yanzhou Coal Mining Company Limited Interim Report 2013 17

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

(III) Assets and Liabilities

Table for the analysis of changes in the consolidated assets and liabilities items

	As at	30 June 2013	As at 31	December 2012
		Percentage to		Percentage to	Increase/
		total assets		total assets	decrease
	RMB’000	(%)	RMB’000	(%)	(%)
Bank guarantee deposit	1,886,477	1.58	3,186,957	2.61	-40.81
Bills and accounts receivable	4,698,363	3.94	7,459,603	6.11	-37.02
Prepayments and other receivables	7,317,278	6.14	4,196,999	3.44	74.35
Investment in joint venture	705,576	0.59	998,628	0.82	-29.35
Deposit made on investment	117,926	0.10	3,253,381	2.66	-96.38
Bills and accounts payable	2,235,515	1.88	6,811,760	5.58	-67.18
Tax payable	451,398	0.38	1,171,341	0.96	-61.46

In the fi rst half of 2013, the Group’s bank guarantee deposit was RMB1.8865 billion, representing a decrease of RMB1.3005 billion or 40.8% as compared with that of the beginning of 2013. This was mainly due to the decrease of the balance of fi xed term deposit.

In the fi rst half of 2013, the Group’s bills and accounts receivable were RMB4.6984 billion, representing a decrease of RMB2.7612 billion or 37% as compared with that of the beginning of 2013. This was mainly due to the fact that: (1) the Company’s payment to suppliers in bank acceptance bill increased; (2) the Company’s discounted bank acceptance bill was RMB1.1443 billion.

In the fi rst half of 2013, the Group’s prepayment and other receivables were RMB7.3173 billion, representing an increase of RMB3.1203 billion or 74.4% as compared with that of the beginning of 2013. This was mainly due to the fact that: (1) prepayment for externally purchased coal was increased by RMB2.2253 billion; (2) prepayment for village relocation was increased by RMB524.3 million.

In the fi rst half of 2013, the Group’s investment in joint venture was RMB705.6 million, representing a decrease of RMB293.1 million or 29.4% as compared with that of the beginning of 2013. This was mainly due to the fact that: Middlemount joint venture experienced a loss, resulting in the balance of equity investment made by the Group decreased by RMB290.5 million by the end of the reporting period.

In the fi rst half of 2013, the Group’s deposit made on investment was RMB117.9 million, representing a decrease of RMB3.1355 billion or 96.4% as compared with that of the beginning of 2013. This was mainly due to the fact that: during the reporting period, fi nancial information of Haosheng Company was incorporated into the consolidated fi nancial statement and thus the payment for the equity acquisition paid in the previous years and the additional capital injection of RMB2.9828 billion were transferred out as deposit made on investment.

18 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

In the fi rst half of 2013, the Group’s bills and accounts payable were RMB2.2355 billion, representing a decrease of RMB4.5762 billion or 67.2% as compared with that of the beginning of 2013. This was mainly due to: the capital fund of RMB3.6215 billion payable to Gloucester’s former shareholders by Yancoal Australia.

In the fi rst half of 2013, the Group’s tax payable was RMB451.4 million, representing a decrease of RMB719.9 million or 61.5% as compared with that of the beginning of 2013. This was mainly due to the decrease of taxable income.

2. Other information

(1) Debt to equity ratio

As at 30 June 2013, the equity attributable to the equity holders of the Company and interestbearing debt amounted to RMB39.7588 billion and RMB47.2995 billion respectively, representing a debt to equity ratio of 119%. For detailed information on interest-bearing debt, please refer to Note 21 of the fi nancial statements prepared under IFRS or the Note VI.19, 28, 29, 30, 31 of the fi nancial statements prepared under CASs.

(2) Contingent liabilities

For details of the contingent liabilities, please see Note 31 of the fi nancial statements prepared under the IFRS.

(3) Pledge of assets

For details of pledge of assets, please see Note 16, 17 of the fi nancial statements prepared under IFRS or the Note VI. 11, 12, 14 of the fi nancial statements prepared under CASs.

(IV) Analysis of Core Competitiveness

In the fi rst half of 2013, confronted by severe downturn of the coal market, the Group deeply explored operation potential and optimized the synergetic development among various business sectors to further enhance the Group’s core competitiveness. As the coal mines outside Shandong Province release their production capacity steadily, it is the fi rst time that their coal production volume exceeds that of coal mines within Shandong Province; The non coal industry’s ability of profi t making and effi ciency creating was continuously improved and the synergetic effect was strengthened despite the adverse situation. Besides gradual enhancement of scientifi c and technological innovation capacity, as a coal company listed in four places and relying on internationalized production strategy, the Group effectively ensured sustainable development and further improved the risk resistance capability.

Yanzhou Coal Mining Company Limited Interim Report 2013 19

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

(V) Analysis of Investment

Overall analysis of the Group’s external equity investment during the reporting period

There was no external equity investment in the fi rst half of 2013.

(1) Shares of other listed companies held by the Company as at the end of the reporting period

								Changes in
						Book value	Gains or	shareholders’
		Cost of initial	Equity held	Equity held		at the end of	losses during	equity during
Stock	Stock	investment	at 1 January	at	30 June	the reporting	the reporting	the reporting	Accounting
code	abbreviation	(RMB)	2013 (%)	2013 (%)		period (RMB)	period (RMB)	period (RMB)	items
600642	Shenergy	60,420,274	0.77		0.80	138,698,393	4,379,949	-16,972,303	Available-for-sale
									f nancial assets
601008	Lianyungang	1,760,419	0.22		0.22	5,130,840	102,222	-834,210	Available-for-sale
									f nancial assets
Total		62,180,693	–		–	143,829,233	4,482,171	-17,806,513	–

Source of Shenergy shares: agreement for the transfer of public corporate shares in 2002, bonus issue shares in 2003 and subscription of placement shares in 2010 with cash in hand and shares dividend in 2010.

Source of Lianyungang shares: subscription of shares as a founder upon establishment of the company and shares dividend in 2007 and 2011.

20 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

(2) Equity interests in non-listed fi nancial corporations held by the Company as at the end of the reporting period

								Unit: RMB100 million
						Changes in
				Book value at	Gains or losses	shareholders’
	Amount of	Equity held	Equity held	the end of	during the	equity during
	initial	at 1January	at 30 June	the reporting	reporting	the reporting	Accounting	Source
Corporations	investment	2013 (%)	2013 (%)	period	period	period	items	of shares
Yankuang Group Finance	1.250	25	25	1.961	0.203	–	Long-term equity	Capital
Company Limited							investment	investment
Shandong Zoucheng	0.090	9	9	0.090	–	–	Long-term equity	Capital
Jianxin Cunzhen Bank							investment	investment
Company Limited
Total	1.340	–	–	2.051	0.203	–	–	–

The equity interests of non-listed fi nancial corporations held by the Company

Yanzhou Coal, Yankuang Group and China Credit Trust Co., Ltd jointly established Yankuang Group Finance Company Limited on 13 September 2010. The registered capital of Yankuang Group Finance Company Limited is RMB500 million, of which Yanzhou Coal contributed RMB125 million in cash, representing an equity interest of 25%.

Yanzhou coal, China Construction Bank Limited and eight other companies jointly established Shandong Zoucheng Jianxin Cunzhen Bank Company Limited in 2011. The registered capital of Zoucheng Jianxin Cunzhen Bank is RMB100 million, of which Yanzhou Coal contributed RMB9 million, representing an equity interest of 9%.

Yanzhou Coal Mining Company Limited Interim Report 2013 21

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

Commissioned fi nancing in nonfi nancial corporations and investment in derivatives
(1) Commissioned fi nancing

There were no commissioned fi nancing activities during the reporting period or such activities occurred in previous period and were extended to this period.

(2) Entrusted loan

					Whether	Whether	Interest income
	Amount of	Term of			extended	principal has	during the
Borrower	entrusted loan	entrusted loan	Interest rate	Purpose	the period	been recovered	reporting period
Yanzhou Coal Yulin Neng	RMB500 million	8 years	4.585%	Construction of	Yes	No	–
Hua Company Limited				methanol project
Yanzhou Coal Yulin Neng	RMB1.5 billion	8 years	4.585%	Construction of	Yes	No	–
Hua Company Limited				methanol project
Shanxi Tianhao Chemical	RMB190 million	5 years	6.40%	Construction of	No	No	–
Company Limited				methanol project
Yanmei Heze Neng Hua	RMB529 million	5 years	6.40%	Supplement for	No	RMB410 million	RMB3,850,000
Company Limited				working capital		has been recovered
Yanmei Heze Neng Hua	RMB600 million	5 years	6.40%	Expenditure of projects	No	No	RMB19,413,000
Company Limited				construction
Yanzhou Coal Yulin Neng	RMB53 million	3 years	6.15%	Supplement for	No	Yes	–
Hua Company Limited				working capital
Yanzhou Coal Ordos Neng	RMB1.95 billion	5 years	6.45%	Consideration of Zhuan	No	No	RMB63,586,000
Hua Company Limited				Longwan mining
				rights
Yanmei Heze Neng Hua	RMB1.7 billion, of	5 years	6.40%	Construction of	No	No	RMB9,653,000
Company Limited	which RMB690			Zhaolou power plant
	million has been			project
	withdrawn
Yanzhou Coal Ordos Neng	RMB200 million	3 years	6.15%	Supplement for	No	No	–
Hua Company Limited				working capital
Yanzhou Coal Ordos Neng	RMB2.8 billion	5 years	6.40%	Acquisition of Wenyu	No	No	–
Hua Company Limited				coal mine
Yanzhou Coal Ordos Neng	RMB1.9 billion	5 years	6.40%	Construction of	No	No	RMB54,791,000
Hua Company Limited				methanol project
Yanzhou Coal Ordos Neng	RMB2.592 billion	5 years	6.40%	Consideration of Zhuan	No	No	RMB11,059,000
Hua Company Limited				Longwan mining
				rights

22 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

Note:

The Company’s entrusted loans have been approved in accordance with the relevant legal procedures and all the borrowers are controlled subsidiaries of the Company, therefore, the entrusted loans should not be considered as connected transactions.

The source of the above mentioned entrusted loans was the Company’s self-owned fund, which was neither subject to any pledges or guarantors nor to any contentious matters.

The entrusted loan of RMB190 million to Tianhao Chemicals has been overdue and the Company recognized full amount of assets impairment in respect of the said entrusted loan. The other entrusted loans have not been overdue and have no relation to the accruement of assets impairment.

As approved at the general manager working meeting held on 22 January 2007, Shanxi Neng Hua provided RMB200 million entrusted loan to Tianhao Chemicals, the details of which are shown in the following table.

					Whether	Whether	Interest income
	Amount of	Term of			extended	principal has	during the
Borrower	entrusted loan	entrusted loan	Interest rate	Purpose	the period	been recovered	reporting period
Shanxi Tianhao Chemical	RMB200 million	5 years	6.40%	Construction of	No	No	–
Company Limited				methanol project

Note:

The entrusted loan involving Shanxi Neng Hua has been approved in accordance with the relevant legal procedures and the borrower is a controlled subsidiary of Shanxi Neng Hua, therefore, the entrusted loan should not be considered as a connected transaction.

The source of above mentioned entrusted loan was Shanxi Neng Hua’s self-owned fund, which was neither subject to any pledges or guarantors nor to any contentious matters.

The entrusted loan to Tianhao Chemicals has been overdue and Shanxi Neng Hua recognized full amount of assets impairment in respect of the said entrusted loan.
(3) Other investment fi nancing and investment in derivatives

There was no other investment fi nancing during the reporting period.

For details of the investment in derivatives during the reporting period, please see Note 24 of the fi nancial statements prepared under the IFRS.

Yanzhou Coal Mining Company Limited Interim Report 2013 23

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

3. Use of fund raised

Not applicable.

4. Projects of the Group using its own fund

Not applicable.

5. Analysis of major subsidiaries and associated companies

Yancoal Australia

Yancoal Australia experienced a loss of RMB4.5875 billion in the fi rst half of 2013 as compared with net profi t of RMB2.6513 billion in the fi rst half of 2012. This was mainly due to the fact that: (1) During the reporting period, the exchange loss of Yancoal Australia was RMB2.9839 billion as compared with exchange gains of RMB186.3 million in the same period of last year, resulting in the decrease of net profi t by RMB2.2191 billion as compared with the same period of last year; (2) During the reporting period, the accrued impairment loss of intangible assets was RMB2.0996 billion, resulting in the decrease of net profi t by RMB1.4697 billion as compared with the same period of last year; (3) Merger with Gloucester in the fi rst half of 2012 made a net profi t of RMB973.1 million; (4) The Mining Resources Rent Tax was RMB130 million during the reporting period as compared with that of RMB-1.0832 billion in the fi rst half of 2012, resulting in the decrease of net profi t by RMB1.2132 billion as compared with the same period of last year; (5) During the reporting period, the average coal sales price decreased, resulting in the decrease of net profi t by RMB869.8 million as compared with the same period of last year.

For details of the operation of Yancoal Australia, please refer to the section headed “(I) Operational analysis by Industries, Products or Regions” under this chapter.

II. CHANGES IN ACCOUNTING POLICIES

Pursuant to the new regulations promulgated by the International Financial Reporting Standards Committee with regard to the accounting method for overburden in advance in production phase of open cut mines, Yancoal Australia has made some adjustments to the accounting policy concerning the overburden in advance of open cut mines accordingly: the overburden in advance that meets the standard of capitalization will be amortized on the production basis; otherwise, the overburden in advance that does not meet the standard of recognition will be directly recognized as current profi t and loss. As approved at the sixteenth meeting of the fi fth session of the Board held on 19 August 2013, the overburden in advance occurring on 1 January 2013 and afterwards will be calculated according to the new regulation.

According to the new regulations, the carrying amount of the deferred overburden in advance related to open cut mine of the Group was RMB261.4 million (after tax: RMB183 million), which did not meet capitalization and thus the retained earnings at the beginning of 2013 should be decreased correspondingly. At the same time, data in the comparative fi nancial statement should be adjusted accordingly.

24 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

III. PROFIT DISTRIBUTION OR CAPITAL RESERVES TRANSFERRED TO SHARE CAPITAL

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

The 2012 annual general meeting of the Company held on 15 May 2013 approved the Company’s dividend distribution plan, which allowed the Company to distribute 2012 cash dividends of RMB1.7706 billion (tax inclusive) to the Shareholders, i.e., RMB0.36 per share (tax inclusive). As at the date of this Interim Report, except for Yankuang Group, the 2012 cash dividends have been distributed to the Shareholders.

(II) Mid-term profi t distribution for the fi rst half of 2013

The Company will not distribute any mid-term profi t, nor will the Company increase its capital from capital reserve in the fi rst half of 2013.

IV. CAPITAL EXPENDITURE PLAN

The capital expenditure for the fi rst half of 2013 and the estimated capital expenditure for the second half of 2013 of the Group are set out in the following table:

		The second		2013
	The f rst half of	half of 2013	(RMB100 million)
	2013	(Estimated)	Present	Previous
	(RMB100 million)	(RMB100 million)	estimate	estimate
The Company	4.148	10.795	14.943	20.869
Shanxi Neng Hua	0.165	0.606	0.771	0.416
Yulin Neng Hua	0.035	0.239	0.274	0.279
Heze Neng Hua	4.573	3.718	8.291	15.403
Hua Ju Energy	0.023	0.409	0.432	0.448
Ordos Neng Hua	5.534	13.828	19.362	34.182
Haosheng Company	1.751	3.397	5.148	6.728
Yancoal Australia	8.822	1.529	10.351	32.339
Yancoal International	1.777	0.007	1.784	9.382
Total	26.828	34.528	61.356	120.046

The Group possesses relatively sufficient financing facilities, which are expected to meet the operation and development requirements.

Yanzhou Coal Mining Company Limited Interim Report 2013 25

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

V. OUTLOOK

(I) Market outlook for the second half of 2013

For the second half of 2013, it is expected that the global economy will recover slowly and the demand for coal will increase at very low speed. It is estimated that international coal market will still present an oversupply tendency as a whole and the coal price will hardly increase in a short period. While the slowing down of China’s economic growth rate, the Chinese government has issued a series of policies and measures to maintain overall steady and balanced development of the economy by adhering to the comprehensive arrangements of maintaining sustainable growth, structure adjustment and reforms promotion. Positive impacts on the coalrelated industry of such measures will be refl ected gradually. The increasing concentration of the coal industry, the marketization of coal prices and measures promulgated by the state on mitigating tax burdens of the coal industry are conductive to regulating market activities, which will promote sustainable and healthy development in the industry.

(II) Operating strategies

Faced with complex and severe economic situation and unfavorable conditions, the Group will fully reinforce management and take more effective measures and actively respond to challenges to meet the target of achieving steady development. For the second half of 2013, the Group will primarily focus on the implementation of following operating strategies:

The Company will strengthen production and marketing administration and strive to reduce loss and increase profi t. Firstly, the Company will optimize coal mine production system and the coal production organization, unlock the potential capacity and improve the quality and effi ciency of coal production for coal mines within Shandong Province; boost sales to drive production and pay equal attention to production volume and profi tability for coal mines outside Shandong Province; and release effective production capacity and moderately reduce low effi ciency production capacity for overseas coal mines. Secondly, the Company will implement specialized management of coal washing by improving its washing process technology, increase clean coal recovery and coal washing effi ciency. Thirdly, the Company will attach importance to marketing strategies and profi tability. The Company will enhance study and judgment of market condition and establish a dynamic adjustment mechanism for production organization and product structure adaptable to the market and with quick response to increase profi t and production capacity; By expediting the establishment of an international and domestic marketing system, the Company will achieve product complementation and prioritize the domestic and overseas resources in high-end markets: making use of the advantage in domestic market, the Company will introduce the products of Yancoal Australia to the domestic market.

26 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

By implementing measures of striving to explore and develop potentials, the Company will strengthen control over operation. Firstly, the Company will strengthen its fi nancial management to achieve centralized fund management and fund raising, mitigate sales cost, general and administrative cost, and lower fi nancial cost to prevent fi nancial risks. Secondly, the Company will enhance the budget management and strictly controlled the process of fund raising, planning and use of proceeds. Setting up an early warning system in relation to its cash management to ensure capital supply chain safety. The Company will further optimize its debt structure and lower the ratio of interest bearing loans and fi nancial cost through replacing short-term debts with long-term debts and replacing high interest rate loans with low interest rate loans. Thirdly, the Company will focus on the cost control by unlocking potential capacity and improving effi ciency, reducing costs and enhancing profi tability and vigorously reduce investment in non-productive and low-effi cient projects and all kinds of charges and expenses to ensure the effi cient control over cost. Fourthly, the Company will accelerate management of enterprises running in the red, revitalize good quality assets by use of market leverage, disposal of assets with low profi tability or unprofi tability and allocate its advantageous resources to the development of advantageous industries and products.

The Company will strengthen projects construction management to support its continuous development. In order to mitigate risks in project investment activities, the Company will strengthen control over the project investment, duration, safety and quality with clear responsibility, and prohibit the constructions that are overdue, over budget or substandard. According to the nature and profi tability of projects, the Company will control capital expenditure and promote the construction of projects with good return. We will emphasize the development of Zhuan Longwan, Shilawusu and Ying Panhao coal mine projects and the construction of 0.6 million tonnes methanol project; prudently expedite the construction of Wanfu coal mine of Heze Neng Hua and Zhaolou coal mine power plant, and the exploration of the potash assets in Canada.

The Company will enhance control over overseas assets management to achieve synergetic and orderly development inside and outside China. We will establish a sound internal control system and operation management system for overseas subsidiaries. The Company will promote LEAN cost management mode in the coal mines of Yancoal Australia to reduce cost and increase profi tability. We will adequately prepare for the production expansion of Moolarben coal mine and exploration of the Ashton southeastern open cut coal mine project to improve the potentials in sustainable development. The Company will close overseas coal mines with low profi tability to reduce cost and improve profi tability and effi ciency. The Company will actively and stably promote the share exchange between Yanzhou Coal and minority shareholders of Yancoal Australia.

The Company will strengthen the operational risk control to improve its operation standard. We will enhance safe production management and strengthen the implementation of safety system and infrastructure construction to safeguard the Company’s development. The Company will optimize its corporate governance system and operational mechanism to avoid operational risks relating to the Company’s listing status. The Company will strengthen the prevention of operational and development risks and focus on the control and avoidance of strategic, investment, market, fi nancial and legal risks. We will carefully study the trend of international foreign exchange market and utilize various fi nancial instruments such as hedging and foreign exchange futures to mitigate foreign exchange risks.

Yanzhou Coal Mining Company Limited Interim Report 2013 27

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

(III) Major Risks faced by the Company, Impact and Measures

1. Risks arising from product price volatility

Affected by factors such as the slowdown of global economy growth and the adjustment of energy structure, the demand growth in domestic and overseas coal markets is falling, and the coal product price of the Group is subject to risks of decline, which will adversely affect the operating results of the Group.

Counter-measures: The Company will establish and optimize its market information analysis mechanism; proactively analyze and study the market; optimize marketing strategies; implement the strategy of “determining production volume based on anticipated sales” and “expanding sales volume and improving effi ciency” to fl exibly adjust the structure of products; strengthen controls on coal quality and improve the service quality to ensure economic benefi t maximization.

2. Risks arising from safety production

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.

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 technique; solidly carry out safety technique trainings and specific rectification; increase input for safety production; reinforce safety supervision and examination to continuously improve the safety production across all business sectors.

3. Risks arising from exchange rate fl uctuation

Exchange rate fl uctuation risks that the Group faces are mainly about fl uctuation of US dollar and Australian dollar exchange rates. Subject to the exchange rate fl uctuation risks, the exchange rate loss of the Group in the fi rst half year of 2013 was RMB3.1085 billion. With the continuous expansion of business operations in the overseas market, the impacts concerning exchange gains and losses are increasing.

Counter-measures: The Company will strengthen scientifi c and effective monitoring; build the early warning mechanism for exchange rate fl uctuation risk; make scientifi c research and judgments on the trend of international exchange rate; positively study the plan to prevent exchange risks and take effective measures to hedge exchange fl uctuation risks in a timely manner.

28 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

4. Risks arising from debt fi nancing

Due to the market collapse, net cash infl ows of the Group decreased. Meanwhile, relative concentration of investment in construction in progress resulted in a large amount of capital needs. Under the background of the continuous implementation of the prudent monetary policy by the state government, the Group faces risks of harder in fi nancing and higher debt level.

Counter-measures: The Company will accelerate the establishment of scientifi c and effi cient fund raising assessment system; improve the debt risk precaution mechanism; dynamically evaluate the cash fl ow of operation, investment and fi nancing etc.; predict the amount and time of fi nancing need of the Group; extend fi nancing channels and optimize the fi nancing plan to ensure the controllable, sustainable and ordered turnover of cash fl ow.

5. 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 complying with laws and regulations as well as executing appropriate management and control, the Company will improve its overall management and control ability to meet the requirements of the internationalized operation of the Group; the Company will accelerate the building of integrated fi nancial system, marketing system and purchasing system for domestic and overseas market and give full play to synergy effects of international industrial layout.

VI. OTHER DISCLOSURES

(I) The Impact of Exchange Rate Fluctuations

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

The overseas coal sales income as the overseas coal sales of the Group are denominated in U.S. dollars and Australian dollars;
The exchange gains and losses of the foreign currency deposits and borrowings;
The cost of imported equipment and accessories of the Group.

Yanzhou Coal Mining Company Limited Interim Report 2013 29

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

Affected by the changes in foreign exchange rates, the Group had the exchange loss of RMB3.1085 billion during the reporting period. This was mainly due to the fact that Yancoal Australia experienced exchange loss of RMB2.9839 billion during the reporting period. For details, please see Note VI.44 of the fi nancial statements 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.

(II) Taxation

During the reporting period, the Company and all its subsidiaries incorporated in the PRC are subject to an income tax rate of 25% on its taxable profi ts. Yancoal Australia and Yancoal International are subject to a tax rate of 30% and 16.5%, respectively on their taxable profi ts.

(III) Statements on the warnings and reasons for the expected accumulated net profi t may be negative from the beginning of 2013 till the end of the next reporting period or there might be signifi cant changes to accumulated net profi t as compared with the same period of last year.

(the data of this section are prepared under CASs)

It is estimated that net profi t attributable to the equity holders of the Company will decrease by RMB1.6142 billion in the fi rst 3 quarters of 2013. The net profi t attributable to the equity holders of the Company for the fi rst 3 quarters of 2012 was RMB4.8266 billion.

Deducting the estimated foreign exchange loss of RMB3.9168 billion for the fi rst 3 quarters of 2013 (based on related exchange rate by the end of July 2013) and the accrued impairment loss of intangible assets of RMB2.0996 billion, it is estimated that the net profi t attributable to the equity holders of the Company for the fi rst 3 quarters of 2013 will be RMB1.6875 billion.

30 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 4 SIGNIFICANT EVENTS

I. CORPORATE GOVERNANCE

(I) Corporate Governance

(in accordance with PRC regulatory requirements)

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 structure during the current reporting period as follows:

As approved at the twelfth meeting of the fi fth session of the Board held on 22 March 2013, amendments and improvements were made to terms concerning inside information governance and disclosure in the Rules for Disclosure of Information of Yanzhou Coal Mining Company Limited according to the regulatory requirements at home and abroad.

As approved at the 2012 annual general meeting held on 15 May 2013, according to the regulatory requirements and based on the actual situation, the Company made some amendments to related provisions concerning profi t distribution in its Articles and added provisions in relation to the decision-making procedures for approving the mutual provision of loans among overseas subsidiaries of the Company. The Company also made corresponding amendments to related provisions in the Rules of Procedures for Shareholder’s General Meeting, the Rules of Procedures for the Board and the Terms of Reference for the General Manager Working Meeting based on the amendments to the Articles. For details, please refer to the announcements of the Company in relation to the “Proposed Amendments to the Articles of Association” dated 24 August 2012 and the “Announcement in relation to the Resolutions passed at the 2012 Annual General Meeting” dated 15 May 2013. The above announcements were also posted on the websites of the Shanghai Stock Exchange, the Hong Kong Stock Exchange, the Company’s website and/or China Securities Journal and Shanghai Securities News.

(II) Compliance with the Corporate Governance Code and the Model Code

(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 2013 31

CHAPTER 4 SIGNIFICANT EVENTS – CONTINUED

The corporate governance rules implemented by the Group include, but not limited to the following: the Articles, the Rules of Procedure for Shareholders’ General Meeting, the Rules of Procedure for the Board, the Rules of Procedure for Supervisory Committee Meeting, 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. As at 30 June 2013, the corporate governance rules and practices of the Group are compliant with the principles and the code provisions set out in the on Corporate Governance Code (“the Code”) contained in Hong Kong Listing Rules. Some of the corporate governance practices adopted by the Group are stricter than the Code.

During the reporting period, there was no signifi cant difference between the Company’s compliance with the Code provisions with that disclosed in the Company’s 2012 annual report.

Having made specifi c enquiries to all Directors and Supervisors, during the reporting period, the Directors and Supervisors have strictly complied with the Model Code for Securities Transactions by Directors of Listed Issuers (the “Model Code”) set out in Appendix 10 to the Hong Kong Listing Rules and the Code for Securities Transactions by Management of the Company. 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. LITIGATION, ARBITRATION AND MEDIA QUESTIONED EVENTS

There were no signifi cant litigation, arbitration or media questioned events during the reporting period.

III. SHARE INCENTIVE SCHEME

The Company did not have any share incentive scheme during the reporting period.

IV. ASSET ACQUISITION, SALES AND MERGERS

(I) Proposal on shares exchange transaction with minority shareholders of Yancoal Australia

The Company sent a written proposal to Yancoal Australia’s independent board committee on 8 July 2013 that the Company would acquire the remaining 22% of Yancoal Australia’s issued shares from other public shareholders (the “Minority Shareholders”) who will receive Yanzhou CHESS Depositary Interests (the “CDIs”) and the shares underlying the CDIs will be the H Shares and those CDIs will be traded on the Australian Securities Exchange (“ASX”) (the “Shares Exchange Transaction”). After the Share Exchange Transaction, Yancoal Australia will be delisted from ASX and become a wholly-owned subsidiary of the Company.

As at the date of this Interim Report, the Company and Yancoal Australia’s independent board committee have been undertaking due diligence and value assessment and the details of the Shares Exchange Transaction are subject to further negotiation. The Shares Exchange Transaction is subject to approval procedures from both domestic and overseas regulatory departments.

32 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 4 SIGNIFICANT EVENTS – CONTINUED

For details, please refer to the announcement in relation to the Shares Exchange Transaction of the Company dated 8 July 2013. The above announcement was posted on the websites of the Shanghai Stock Exchange, the Hong Kong Stock Exchange, the Company’s website and/or China Securities Journal and Shanghai Securities News.

(II) Asset Disposal of Tianhao Chemicals

Since April 2012, Tianhao Chemicals methanol project has ceased production due to the shortage of raw materials supply. It was approved to publicly sell the methanol assets at the 2012 fi rst extraordinary general meeting of Tianhao Chemicals. The appraisal value for Tianhao Chemicals asset was RMB268 million as valued by Shandong Zhongxin Assets Appraisal Co., Ltd. The transaction is currently in the process of performing the procedure for asset disposal.

V. CONNECTED TRANSACTIONS

The Group’s connected transactions were mainly continuing connected transactions and temporary asset purchase transactions entered into with its Controlling Shareholder (including its subsidiaries) in respect of the mutual provisions of materials and services.

(I) Continuing Connected Transactions

At the 2011 annual general meeting held on 22 June 2012, fi ve continuing connected transaction agreements, namely, the “Provision of Material Agreement”, “Provision of Labor and Services Agreement”, “Provision of Insurance Fund Administrative Services Agreement”, “Provision of Products, Materials and Equipment Agreement” and “Provision of Electricity and Heat Agreement”, together with the annual caps for such transactions for the years of 2012 to 2014 had been approved. The main ways to determine transaction price include state price, market price and reasonable price. State price shall be adopted when available; Market price is applied when the state price is not available; Reasonable price (reasonable cost adds reasonable profi ts) is applied when neither state price nor 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 twelfth meeting of the fi fth session of the Board held on 22 March 2013, 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 year 2013. The rates for the fees to be charged by Yankuang Group Finance Company Limited for the fi nancial services to be provided to the Group shall be 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.

Yanzhou Coal Mining Company Limited Interim Report 2013 33

CHAPTER 4 SIGNIFICANT EVENTS – CONTINUED

1. Continuing connected transaction of the supply of materials and services (the data below are under CASs)

The sales of goods and provision of services by the Group to its Controlling Shareholder amounted to RMB1.7334 billion for the fi rst half of 2013. The goods and services provided by the Controlling Shareholder to the Group amounted to RMB1.0209 billion.

The following table sets out the continuing connected transactions of the supply of materials and services between the Group and the Controlling Shareholder for the fi rst half of 2013:

==> picture [437 x 159] intentionally omitted <==

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

|||||||
|---|---|---|---|---|---|
|Increase/|
|the fi rst half of 2013|the fi rst half of 2012|decrease of|
|Percentage of|Percentage of|connected|
|Amount Operating income|Amount|Operating income|transactions|
|(RMB’000)|(%)|(RMB’000)|(%)|(%)|
|Sales of goods and provision of|
|services by the Group to its|
|Controlling Shareholder|1,733,384|6.62|2,100,530|7.43|-17.48|
|Sales of goods and provision of|
|services by the Controlling|
|Shareholder to the Group|1,020,894|3.90|1,114,646|3.94|-8.41|

----- End of picture text -----

The table below shows the effect on the Group’s profi ts from sales of coal by the Group to the Controlling Shareholder for the fi rst half of 2013:

==> picture [387 x 47] intentionally omitted <==

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

|||||
|---|---|---|---|
|Operating income|Operating cost|Gross Profi ts|
|(RMB’000)|(RMB’000)|(RMB’000)|
|Coal sold to the Controlling Shareholder|1,471,344|880,747|590,597|

----- End of picture text -----

2. Continuing connected transaction of pension fund

Pursuant to the Provision of Insurance Fund Administrative Services Agreement, the Controlling Shareholder shall provide the Group’s employees with free management and handling services of endowment insurance fund, basic 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 2013 was RMB748.4 million.

34 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 4 SIGNIFICANT EVENTS – CONTINUED

3. Continuing connected transaction of fi nancial services

Pursuant to the “Financial Services Agreement”, as at 30 June 2013, the balance of deposit and loan of the Group with Yankuang Group Finance Company Limited was RMB2.1024 billion and RMB33.616 million, respectively.

Save as disclosed above, no other continuing connected transactions of fi nancial services occurred between the Group and Yankuang Group Finance Company Limited in the fi rst half of 2013.

The following table sets out the details of the annual transaction caps for 2013 and actual transaction amounts in the fi rst half of 2013 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 2013	of 2013
			(RMB’000)	(RMB’000)
1	Material and facilities provided by Yankuang Group	Provision of Materials Agreement	1,404,710	266,007
2	Labor and services provided by Yankuang Group	Provision of Labor and Services Agreement	2,501,050	754,887
3	Pension fund management and payment services	Provision of Insurance Fund Administrative	1,658,420	748,398
	provided by Yankuang Group (free of charge)	Services Agreement
	for the Group’s staff
4	Sale of products, material and equipment lease	Provision of Products, Material and	4,180,900	1,679,386
	provided to Yankuang Group	Equipment Agreement
5	Power and heat provided to Yankuang Group	Provision of Electricity and Heat Agreement	268,800	53,998
6	Financial services provided by Yankuang Group:	Financial Services Agreement
	– deposit balance		2,150,000	2,102,363
	– comprehensive credit facility services		2,000,000	33,616
	– miscellaneous f nancial services fees		28,540	0

(II) As at 30 June 2013, neither the Controlling Shareholder nor its subsidiaries had occupied the Group’s funds for non-operational matters.

Details of the Group’s related-party transactions prepared in accordance with the IFRS are set out in Note 26 to the consolidated fi nancial statements herein, or Note VII as prepared in accordance with CASs. Certain relatedparty transactions set out in Note 26 to the consolidated fi nancial statements prepared in accordance with the IFRS, or Note VII as prepared in accordance with CASs, also constitute continuing connected transactions in Chapter 14A of the Hong Kong Listing Rules, and the Company confi rmed that such transactions have complied with the relevant disclosure requirements under the Hong Kong Listing Rules.

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.

Yanzhou Coal Mining Company Limited Interim Report 2013 35

CHAPTER 4 SIGNIFICANT EVENTS – CONTINUED

VI. MATERIAL CONTRACTS AND PERFORMANCE

(I) During the current reporting period, the Group has not been involved in any trust arrangement, contract or lease of any other companies’ assets or any trust arrangement, contract or lease of the Group’s assets to any other companies, nor such transactions that occurred in the previous period but were extended to this period.
(II) Guarantees performed during the reporting period and outstanding guarantees provided in previous years which extended to the reporting period

Unit: RMB100 million

External guarantees(excluding guarantees to the controlled subsidiaries)
Total amount of guarantee during the reporting period	0
Total guarantee balance by the end of the reporting period(A)	0
Guarantees to controlled subsidiaries
Total amount of guarantee to controlled subsidiaries during the reporting period	6.11
Total balance of guarantee to controlled subsidiaries by the end of the reporting period(B)	273.04
Total guarantees (including guarantees to controlled subsidiaries)
Total amount of guarantees (A+B)	273.04
Percentage of total amount of guarantee in the equity attributable to the shareholders
of the Company (%)	70.32%
Including:
Amount of guarantees to Shareholders, actual controllers and related parties (C)	0
Amount of guarantees directly or indirectly to guaranteed parties with
a debt-to-assets ratio exceeding 70% (D)	273.04
Total amount of guarantee exceeding 50% of equity attributable to the shareholders (E)	78.91
Total amount of the above 3 categories guarantees (C+D+E)	351.95

Note: The above table is prepared based on CASs and calculated on the formula of USD1=RMB6.1787 and AUD1=RMB5.7061.

1. Information on guarantees that occurred in the previous period but were extended to the current reporting period:

As approved at the 2011 annual general meeting, the Company provided guarantees to Yancoal Australia which took a bank loan of USD2.94 billion for acquisition of equity interests in Yancoal Resources.

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

As approved at the sixth meeting of the fi fth session of the Board, the Company issued bank guarantee to its wholly-owned subsidiary, Yancoal International (Holding) Company Limited, for the bank loan of USD203 million.

36 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 4 SIGNIFICANT EVENTS – CONTINUED

A total of AUD192 million performance deposits and performance guarantees, which were needed for operation of Yancoal Australia and its subsidiaries, have been extended to the reporting period.

2. Information on guarantees arising during the current reporting period:

As approved at the 2011 annual general meeting of the Company, Yancoal Australia and its subsidiaries could provide guarantee, not exceeding AUD300 million, for their daily operation. During the reporting period, there were AUD107 million performance deposits and performance guarantees in total for needed operation of Yancoal Australia and its subsidiaries.

Save as disclosed above, there were no other guarantee contracts or outstanding guarantee contracts of the Group during the reporting period; there were no other external guarantees during the reporting period.

(III) Other Material Contracts

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 the management of investors’ relationship through effective information collection, compilation, examination, disclosure and feedback control procedures. In the fi rst half of 2013, 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 “SSE e-interaction platform”, consulting telephone, fax and e-mail. The Company had meetings with more than 630 analysts, fund managers and investors in total.

VIII. OTHER SIGNIFICANT EVENTS DISCLOSURES

(Prepared in accordance with the Hong Kong listing rules)

Repurchase, sale or redemption of listed shares of the Company

The 2012 annual general meeting was convened by the Company on 15 May 2013, pursuant to which a general mandate was granted to the Board to issue additional H Shares during the relevant authorized period. Depending on the needs and market conditions, upon obtaining approvals from the relevant regulatory authorities and complying with the relevant laws, regulations and the Articles, the issuance amount shall not exceed 20% of the aggregate nominal value of H Shares in issue as at the date of passing the resolution.

Yanzhou Coal Mining Company Limited Interim Report 2013 37

CHAPTER 4 SIGNIFICANT EVENTS – CONTINUED

The 2012 annual general meeting, the 2013 fi rst class meeting of the holders of A Shares and the 2013 fi rst class meeting of the holders of H Shares were convened by the Company on 15 May 2013, pursuant to which a general mandate was granted to the Board to repurchase H Shares not exceeding 10% of the aggregate nominal value of H Shares in issue as at the date of passing the resolution. Under the general mandate, the Board is authorized to repurchase H Shares during the relevant authorized period and to determine the relevant matters in relation to the repurchase of H Shares according to the needs and market conditions upon obtaining approvals from the relevant regulatory authorities and complying with the relevant laws, regulations and the Articles.

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

Save as disclosed above, there is no repurchase, sale or redemption of shares of the Company or any subsidiary of the Company during the reporting period.

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.

Auditors

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

As approved at the 2012 annual general meeting held on 15 May 2013, the Company engaged Shine Wing Certifi ed Public Accountants (special general partnership) and Grant Thornton (including Grant Thornton (special general partnership) and Grant Thornton Hong Kong Limited) as its domestic and international auditors of the Company for the year 2013.

38 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 4 SIGNIFICANT EVENTS – CONTINUED

IX. DURING THE REPORTING PERIOD, NEITHER THE COMPANY NOR ITS DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT, SHAREHOLDERS HOLDING MORE THAN 5% OF THE SHARES OF THE COMPANY, 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.

Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 5 CHANGES IN SHARES AND SHAREHOLDERS

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 2013, 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

As at the latest practicable date prior to the issue of this Interim Report, according to the information publically available to the Company and within the knowledge of the Directors, the Directors believe that during the reporting period, the public fl oat of the Company is more than 25% of the Company’s total issued shares, which is in compliance with the requirement of the Hong Kong Listing Rules.

II. SHAREHOLDERS

(I) Total Number of the Shareholders as at the End of the Reporting Period

As of 30 June 2013, the Company had a total of 107,746 Shareholders, of which three were holders of A Shares subject to a trading moratorium, 107,460 were holders of A Shares without a trading moratorium and 283 were holders of H Shares.

40 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 5 CHANGES IN SHARES AND SHAREHOLDERS – CONTINUED

(II) Top Ten Shareholders

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 2013, the top ten Shareholders were as follows:

Total number of Shareholders

Unit: share 107,746

Shareholdings of the top ten Shareholders

		Percentage		Increase/	Number of	Number of
		holding of		decrease	shares held	pledged or
	Nature of	the total	Number of	during the	with selling	locked
Name of Shareholder	Shareholders	capital	shares held	reporting period	restrictions	shares
		(%)		(shares)
Yankuang Group	State-owned	52.86	2,600,000,000	0	2,600,000,000	0
Company Limited	legal person
HKSCC (Nominees) Limited	Foreign legal person	39.65	1,950,282,345	-2,665,600	0	Unknown
BOC-Jiashi CSI300	Others	0.07	3,593,296	-1,099,205	0	3,600
Transactional Open-end
Index Securities
Investment Fund
ICBC-Shanghai Stock 50	Others	0.06	3,007,099	-1,801,230	0	0
Transactional Open-end
Index Securities
Investment Fund
ICBC-China CSI300	Others	0.05	2,538,200	639,000	0	0
Transactional
Open-end Index
Securities Investment Fund
Shandong International	State-owned	0.05	2,410,000	310,000	0	0
Trust Co., Ltd.	legal person
CCB-Shanghai Stock 180	Others	0.05	2,321,781	877,500	0	0
Transactional
Open-end Index
Securities Investment Fund
ICBC-Huataiborui CSI300	Others	0.04	2,076,546	-651,349	0	0
Transactional Open-end
Index Securities
Investment Fund
New China Life Insurance	Others	0.03	1,697,700	356,357	0	0
Co., Ltd.-universal
insurance-018L-
WN001-Shanghai
China Asset Management	Others	0.03	1,364,138	-186,054	0	0
(Hong Kong) Limited-
China CSI300 Index ETF

Yanzhou Coal Mining Company Limited Interim Report 2013 41

CHAPTER 5 CHANGES IN SHARES AND SHAREHOLDERS – CONTINUED

Top ten Shareholders holding tradable shares not subject to trading moratorium

Name of Shareholder	Number of tradable shares held	Number of tradable shares held	Class of shares held
HKSCC (Nominees) Limited		1,950,282,345	H Shares
BOC-Jiashi CSI300 Transactional Open-end
Index Securities Investment Fund		3,593,296	A Shares
ICBC-Shanghai Stock 50 Transactional Open-end
Index Securities Investment Fund		3,007,099	A Shares
ICBC-China CSI300 Transactional Open-end
Index Securities Investment Fund		2,538,200	A Shares
Shandong International Trust Co., Ltd.		2,410,000	A Shares
CCB-Shanghai Stock 180 Transactional Open-end
Index Securities Investment Fund		2,321,781	A Shares
ICBC-Huataiborui CSI300 Transactional Open-end
Index Securities Investment Fund		2,076,546	A Shares
New China Life Insurance Co., Ltd.-universal
insurance-018L-WN001-Shanghai		1,697,700	A Shares
China Asset Management (Hong Kong) Limited-
China CSI300 Index ETF		1,364,138	A Shares
Sun Shuhua		1,257,800	A Shares
Connected relationship or concerted-party	The fund managers of ICBC-Shanghai Stock 50 Transactional
relationship among the above Shareholders	Open-end Index	Securities Investment Fund, ICBC-China
	CSI300 Transactional Open-end Index Securities Investment
	Fund are China	Asset Management Co., Ltd. The fund
	manager of China	Asset Management	(Hong Kong) Limited-
	China CSI300 Index ETF is China Asset Management (Hong
	Kong) Limited, the wholly-owned subsidiary of China Asset
	Management Co., Ltd. Apart from this, it is not known whether
	other Shareholders are connected with one another or whether
	any of these Shareholders fall within the meaning of parties
	acting in concert.

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.

42 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 5 CHANGES IN SHARES AND SHAREHOLDERS – CONTINUED

(III) 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 2013, 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: I. be disclosed pursuant to Sections 2 and 3 under Part XV of the Securities and Futures Ordinance (the “SFO”): II. be recorded in the register to be kept pursuant to Section 336 of the SFO: III. notify the Company and the Hong Kong Stock Exchange in other way.

					Percentage	Percentage
					in the H share	in total share
Name of substantial	Class of		Number of	Nature of	capital of	capital of
shareholders	shares	Capacity	shares held(shares)	interests	the Company	the Company
Templeton Asset Management Ltd.	H Shares	Investment manager	156,573,032	Long position	7.99%	3.18%
JP Morgan Chase & Co.	H Shares	Benef cial owner	32,822,309	Long position	1.68%	0.67%
			24,508,969	Short position	1.25%	0.50%
		Investment manager	585,468	Long position	0.03%	0.01%
		Custodian corporation/	96,871,341	Long position	4.95%	1.97%
		approved lending agent
Deutsche Bank Aktiengesellschaft	H Shares	Benef cial owner	70,670,702	Long position	3.61%	1.44%
			61,283,506	Short position	3.13%	1.25%
		Interest of controlled corporations	1,226,000	Long position	0.06%	0.02%
			201,800	Short position	0.01%	0.004%
		Person having a security	55,335,033	Long position	2.83%	1.13%
		interest in shares
			49,938,473	Short position	2.55%	1.02%
		Custodian corporation/
		approved lending agent	5,522,000	Long position	0.28%	0.11%
BNP Paribas Investment	H Shares	Investment manager	117,641,207	Long position	6.00%	2.39%
Partners SA
Morgan Stanley	H Shares	Interest of controlled corporations	103,409,798	Long position	5.28%	2.10%
			84,367,465	Short position	4.30%	1.72%
UBS AG	H Shares	Benef cial owner	60,888,572	Long position	3.11%	1.24%
			95,397,998	Short position	4.87%	1.94%
		Person having a security
		interest in shares	502,700	Long position	0.03%	0.01%
		Interest of controlled
		corporations	37,942,602	Long position	1.94%	0.77%
			35,931,252	Short position	1.83%	0.73%

Notes:

The percentage fi gures above have been rounded off to the nearest second decimal place.
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, no other Shareholders recorded in the register of the Company as at 30 June 2013 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.

Yanzhou Coal Mining Company Limited Interim Report 2013 43

CHAPTER 6 DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEES

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

As at 30 June 2013, the current and resigned Directors, Supervisors and senior management during the reporting period 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 2013, none of the Directors, chief executive or Supervisors 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) which (i) was required to be recorded in the register established and maintained in accordance with section 352 of the SFO; or (ii) was required to be notifi ed to the Company and Hong Kong Stock Exchange in accordance with the Model Code (Appendix 10 to the Hong Kong Listing Rules) (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	Former Chairman of	1,800	0	0	1,800	unchanged
	Supervisory 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 2013, 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.

44 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 6 DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEES – CONTINUED

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

(I) Changes of Members of the Fifth Session of the Board

Mr. Li Weimin has tendered his resignation to the Board and resigned from the positions of the Chairman of the Company and the Director with effect from 22 July 2013 due to work allocation.

Mr. Wang Xin has tendered his resignation to the Board and resigned from the positions of the Vice Chairman of the Company and the Director with effect from 22 July 2013 due to work allocation.

As considered and approved at the fi fteenth meeting of the fi fth session of the Board held on 22 July 2013, Mr. Shi Xuerang was elected as the acting chairman of the Board to perform his duty as the Chairman.

As considered and approved at the fi fteenth meeting of the fi fth session of the Board held on 22 July 2013, Mr. Zhang Xinwen and Mr. Li Xiyong was nominated as candidates of Directors and their respective term of offi ce is proposed to start from the effective date of the appointments to the conclusion of the general meeting of the Company for the purpose of electing the members of the sixth session of the Board. Such proposed appointments will be subject to the Shareholders’ approval at the 2013 fi rst extraordinary general meeting of the Company.

(II) Changes of Members of the Fifth Session of the Supervisory Committee

Due to work allocation, Mr. Song Guo has tendered his resignation to the supervisory committee of the Company and resigned from the positions of a Supervisor and the chairman of the supervisory committee of the Company with effect from 15 May 2013.

Mr. Zhou Shoucheng has reached his age of retirement and has tendered his resignation to the supervisory committee of the Company. He resigned from the positions of a Supervisor and the deputy chairman of the supervisory committee of the Company with effect from 15 May 2013.

As considered and approved by the tenth meeting of the fi fth session of the supervisory committee of the Company held on 15 May 2013, Mr. Zhang Shengdong was appointed as the acting chairman of the fi fth session of the supervisory committee of the Company to perform his duty as the chairman.

Save as disclosed above, there was no other appointment or resignation of Directors, Supervisors and senior management during the current reporting period.

Yanzhou Coal Mining Company Limited Interim Report 2013 45

CHAPTER 6 DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEES – CONTINUED

III. CHANGES IN TITLES OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT IN THE SUBSIDIARIES OF THE COMPANY

(Prepared in accordance with the Hong Kong Listing Rules)

Title	Name	Before change	After change	New employment
Former Chairman	Li Weimin	Chairman of Yancoal Australia.	—	Since 22 July 2013
		Chairman of the board	—	Since 16 August
		of directors of Yancoal		2013
		International.

IX. EMPLOYEES

As at 30 June 2013, the Group had a total of 71,739 employees, of whom 5,869 were administrative personnel, 4,824 were technicians, 44,452 were involved in production and 16,594 were other supporting staff.

As at June 30 2013, the total wages and allowances of the staff of the Group for the reporting period amounted to RMB3.6021 billion.

==> picture [144 x 60] intentionally omitted <==

46 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED INCOME STATEMENT

FOR THE SIX MONTHS ENDED 30 JUNE 2013

Notes	Six months ended 30 June 2013 2012 RMB’000 RMB’000 (unaudited) (unaudited) (restated)
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 Share of loss of joint ventures Other income 7 Interest expenses 8 (Loss)/Prof t before income taxes 9 Income taxes 10 (Loss)/Prof t for the period Attributable to: Equity holders of the Company Non-controlling interests (Loss)/Earnings per share, basic 12 (Loss)/Earnings per ADS, basic 12	24,261,394 27,291,104 211,008 226,551 174,632 164,842 588,175 568,397 5,482 35,491
	25,240,691 28,286,385 (1,044,604) (608,277) (18,695,805) (19,463,335) (145,333) (161,164) (449,002) (467,508) (2,934) (21,338)
	4,903,013 7,564,763 (8,688,464) (3,552,979) 113,626 66,617 (178,303) – 454,158 2,032,550 (940,392) (775,394)
	(4,336,362) 5,335,557 1,252,939 (85,803)
	(3,083,423) 5,249,754
	(2,073,012) 5,223,101 (1,010,411) 26,653
	(3,083,423) 5,249,754
	RMB (0.42) RMB1.06
	RMB (4.21) RMB10.62

Yanzhou Coal Mining Company Limited Interim Report 2013 47

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 30 JUNE 2013

	Six months ended 30 June 2013 2012 RMB’000 RMB’000 (unaudited) (unaudited) (restated) (3,083,423) 5,249,754 (23,743) 253 5,936 2 (17,807) 255 (349,703) 23,079 (92,604) (3,076) 107,232 (6,219) (335,075) 13,784 (1,828,361) (447,996) (2,181,243) (433,957) (5,264,666) 4,815,797 (4,000,628) 4,789,144 (1,264,038) 26,653 (5,264,666) 4,815,797
(Loss)/Prof t for the period Items of other comprehensive income (after income tax) that will be reclassif ed subsequently to prof t or loss: 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 for the period Total comprehensive (loss)/income for the period Attributable to: Equity holders of the Company Non-controlling interests

Six months ended 30 June
2013
2012
RMB’000
RMB’000
(unaudited)
(unaudited)
(restated)
(3,083,423)
5,249,754
(23,743)
253
5,936
2
(17,807)
255
(349,703)
23,079
(92,604)
(3,076)
107,232
(6,219)
(335,075)
13,784
(1,828,361)
(447,996)
(2,181,243)
(433,957)
(5,264,666)
4,815,797
(4,000,628)
4,789,144
(1,264,038)
26,653
(5,264,666)
4,815,797

(Loss)/Prof t for the period
Items of other comprehensive income (after income tax)
that will be reclassif ed subsequently to prof t or loss:
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 for the period
Total comprehensive (loss)/income for the period
Attributable to:
Equity holders of the Company
Non-controlling interests

48 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONDENSED CONSOLIDATED BALANCE SHEET

AT 30 JUNE 2013

Notes	At 30 June At 31 December 2013 2012 RMB’000 RMB’000 (unaudited) (audited) (restated)
ASSETS CURRENT ASSETS Bank balances and cash Term deposits Restricted cash 13 Bills and accounts receivable 14 Royalty receivable 24 Inventories Prepayments and other receivables 15 Prepaid lease payments Derivative f nancial instruments Tax recoverable Overburden in advance TOTAL CURRENT ASSETS NON-CURRENT ASSETS Intangible assets 16 Prepaid lease payments Property, plant and equipment 17 Goodwill Investments in securities 18 Interests in associates Interests in joint ventures Long term receivables Royalty receivable 24 Deposits made on investments Deferred tax assets 22 TOTAL NON-CURRENT ASSETS TOTAL ASSETS	8,323,316 12,717,358 1,886,477 3,186,957 487,882 190,090 4,698,363 7,459,603 94,410 114,798 1,751,805 1,565,531 7,317,278 4,196,999 18,418 18,418 11,495 90,731 86,682 293,006 37,173 –
	24,713,299 29,833,491 39,841,687 33,634,245 692,765 695,675 39,036,561 39,503,103 2,488,810 2,573,811 182,544 207,076 2,663,723 2,624,276 705,576 998,628 1,889,610 2,001,458 1,035,713 1,234,649 117,926 3,253,381 5,835,772 5,605,284
	94,490,687 92,331,586
	119,203,986 122,165,077

Yanzhou Coal Mining Company Limited Interim Report 2013 49

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONDENSED CONSOLIDATED BALANCE SHEET — CONTINUED

AT 30 JUNE 2013

Notes	At 30 June At 31 December 2013 2012 RMB’000 RMB’000 (unaudited) (audited) (restated) 2,235,515 6,811,760 10,272,385 9,013,797 3,596,017 3,291,857 60,079 93,712 8,356,622 7,712,592 1,365,306 – 707,013 399,553 492,537 128,077 451,398 1,171,341 27,536,872 28,622,689 36,621,494 33,283,790 8,392,621 7,563,950 455,137 478,409 – 1,432,188 1,964,286 2,063,922 47,433,538 44,822,259 74,970,410 73,444,948 4,918,400 4,918,400 34,840,382 40,611,634 39,758,782 45,530,034 4,474,794 3,190,095 44,233,576 48,720,129 119,203,986 122,165,077
LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES Bills and accounts payable 19 Other payables and accrued expenses Provision for land subsidence, restoration, rehabilitation and environmental costs 20 Amounts due to Parent Company and its subsidiary companies Borrowings-due within one year 21 Contingent value rights shares liabilities 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 liabilities 22 Provision for land subsidence, restoration, rehabilitation and environmental costs 20 Contingent value rights shares liabilities 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

Notes

At 30 June
At 31 December
2013
2012
RMB’000
RMB’000
(unaudited)
(audited)
(restated)
2,235,515
6,811,760
10,272,385
9,013,797
3,596,017
3,291,857
60,079
93,712
8,356,622
7,712,592
1,365,306
–
707,013
399,553
492,537
128,077
451,398
1,171,341
27,536,872
28,622,689
36,621,494
33,283,790
8,392,621
7,563,950
455,137
478,409
–
1,432,188
1,964,286
2,063,922
47,433,538
44,822,259
74,970,410
73,444,948
4,918,400
4,918,400
34,840,382
40,611,634
39,758,782
45,530,034
4,474,794
3,190,095
44,233,576
48,720,129
119,203,986
122,165,077

LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Bills and accounts payable
19
Other payables and accrued expenses
Provision for land subsidence, restoration,
rehabilitation and environmental costs
20
Amounts due to Parent Company and its subsidiary companies
Borrowings-due within one year
21
Contingent value rights shares liabilities
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 liabilities
22
Provision for land subsidence, restoration,
rehabilitation and environmental costs
20
Contingent value rights shares liabilities
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

50 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2013

	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 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 Effect on change in accounting policy – – – – – – – (183,009) (183,009) – (183,009) Balance at 1 January 2012 (restated) 4,918,400 2,981,002 4,150,785 4,551,760 (376,832) 71,950 (108,271) 26,262,687 42,451,481 690,560 43,142,041 Prof t for the period (unaudited) (restated) – – – – – – – 5,223,101 5,223,101 26,653 5,249,754 Other comprehensive income (unaudited): – Fair value change of available-for-sale investments – – – – – 255 – – 255 – 255 – Cash f ow hedge reserve recognized – – – – – – 13,784 – 13,784 – 13,784 – Exchange difference arising on translation of foreign operations – – – – (447,996) – – – (447,996) – (447,996) Total comprehensive income for the period (unaudited) – – – – (447,996) 255 13,784 5,223,101 4,789,144 26,653 4,815,797 Transactions with owners (unaudited) – Appropriations to reserves – – 477,426 – – – – (477,426) – – – – Dividends – – – – – – – (2,803,488) (2,803,488) (352) (2,803,840) – Disposal of partial equity interest in Yancoal Australia – – – – – – – (430,971) (430,971) 2,569,100 2,138,129 Total transactions with owners (unaudited) – – 477,426 – – – – (3,711,885) (3,234,459) 2,568,748 (665,711) Balance at 30 June 2012 4,918,400 2,981,002 4,628,211 4,551,760 (824,828) 72,205 (94,487) 27,773,903 44,006,166 3,285,961 47,292,127	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 – – – – – – – (183,009) (183,009) – (183,009)
	– – – – (447,996) 255 13,784 5,223,101 4,789,144 26,653 4,815,797 – – 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) 27,773,903 44,006,166 3,285,961 47,292,127

Yanzhou Coal Mining Company Limited Interim Report 2013 51

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY — CONTINUED

FOR THE SIX MONTHS ENDED 30 JUNE 2013

				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 2013	4,918,400	2,981,002	4,796,004	4,975,378	(79,111)	67,598	(53,217)	28,220,302	45,826,356	3,264,842	49,091,198
Effect on change in accounting policy	–	–	–	–	–	–	–	(296,322)	(296,322)	(74,747)	(371,069)
Balance at 1 January 2013 (restated)	4,918,400	2,981,002	4,796,004	4,975,378	(79,111)	67,598	(53,217)	27,923,980	45,530,034	3,190,095	48,720,129
Loss for the period (unaudited)	–	–	–	–	–	–	–	(2,073,012)	(2,073,012)	(1,010,411)	(3,083,423)
Other comprehensive loss (unaudited):
– Fair value change of
available-for-sale investments	–	–	–	–	–	(17,807)	–	–	(17,807)	–	(17,807)
– Cash f ow hedge reserve recognized	–	–	–	–	–	–	(335,075)	–	(335,075)	–	(335,075)
– Exchange difference arising on
translation of foreign operations	–	–	–	–	(1,574,734)	–	–	–	(1,574,734)	(253,627)	(1,828,361)
Total comprehensive loss
for the period (unaudited)	–	–	–	–	(1,574,734)	(17,807)	(335,075)	(2,073,012)	(4,000,628)	(1,264,038)	(5,264,666)
Transactions with owners (unaudited):
– Appropriations to reserves	–	–	490,315	–	–	–	–	(490,315)	–	–	–
– Dividends	–	–	–	–	–	–	–	(1,770,624)	(1,770,624)	–	(1,770,624)
– Acquisition of subsidiaries	–	–	–	–	–	–	–	–	–	2,401,737	2,401,737
– Contribution from non-controlling
interests	–	–	–	–	–	–	–	–	–	147,000	147,000
Total transactions with owners
(unaudited)	–	–	490,315	–	–	–	–	(2,260,939)	(1,770,624)	2,548,737	778,113
Balance at 30 June 2013	4,918,400	2,981,002	5,286,319	4,975,378	(1,653,845)	49,791	(388,292)	23,590,029	39,758,782	4,474,794	44,233,576

52 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

FOR THE SIX MONTHS ENDED 30 JUNE 2013

Notes	Six months ended 30 June 2013 2012 RMB’000 RMB’000 (unaudited) (unaudited)
NET CASH (USED IN) FROM OPERATING ACTIVITIES NET CASH (USED IN) FROM INVESTING ACTIVITIES Purchase of property, plant and equipment Purchase of intangible assets Decrease in term deposits Increase in long term receivables Acquisition of Beisu and Yangcun Acquisition of Gloucester Acquisition of Hao Sheng 25 Increase in investment in interest in an associate (Increase) decrease in restricted cash Decrease in deposits made on investments Proceeds from disposal of intangible assets Proceeds from disposal of property, plant and equipment NET CASH FROM FINANCING ACTIVITIES Dividends paid Proceeds from bank borrowings Proceeds from issuance of guaranteed notes Contribution from non-controlling interests Repayments of bank borrowings Capital return to non-controlling interests-payment to original shareholders of Gloucester Dividends paid to non-controlling interests of a subsidiary Net (decrease) increase in cash and cash equivalents CASH AND CASH EQUIVALENTS, AT JANUARY 1 Effect of foreign exchange rate changes CASH AND CASH EQUIVALENTS, AT 30 JUNE REPRESENTED BY BANK BALANCES AND CASH	(166,614) 6,692,481
	(4,650,226) (1,426,027) (13,124) (397,871) 1,296,271 6,224,499 (156,229) (1,114,604) – (816,011) – 280,092 (802,089) – – (405,000) (328,843) 3,831 153,000 244,476 355 – 8,867 28,611
	(4,492,018) 2,621,996
	(129,600) – 7,338,719 6,313,000 – 6,312,900 147,000 – (3,353,407) (11,503,000) (3,621,487) – – (352)
	381,225 1,122,548
	(4,277,407) 10,437,025
	12,717,358 8,145,297 (116,635) (8,026)
	8,323,316 18,574,296

Yanzhou Coal Mining Company Limited Interim Report 2013 53

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2013

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 eight coal mines, namely the Xinglongzhuang coal mine, Baodian coal mine, Nantun coal mine, Dongtan coal mine, Jining II coal mine (“Jining II”), Jining III coal mine (“Jining III”), Beisu coal mine (“Beisu”) and Yangcun coal mine (“Yangcun”) as well as a regional railway network that links these mines with the national railway grid. The Company’s ultimate holding company is Yankuang Group Corporation Limited (the “Parent Company”), a state-owned enterprise in the PRC.

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 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.

54 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 7 CONDENSED 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. In 2007, the Company further acquired the remaining 2% equity interest in Shanxi Neng Hua at cash consideration of RMB14,965,000. 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”). In 2010, 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 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 principal 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.

Yanzhou Coal Mining Company Limited Interim Report 2013 55

CHAPTER 7 CONDENSED 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 rights 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.

56 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

1. GENERAL – CONTINUED

Organization and principal activities – continued

On 23 April 2012, the Company entered into an assets transfer agreement with the Parent Company and its subsidiary to purchase the target assets from the Parent Company and its subsidiary at a consideration of RMB824,142,000 to acquire all the assets and liabilities of Beisu and Yangcun and their equity investments in Zoucheng Yankuang Beisheng Industry & Trading Co., Ltd (“Beisheng Industry and Trade”), Shandong Shengyang Wood Co., Ltd (“Shengyang Wood”) and Jining Jiemei New Wall Materials Co., Ltd (“Jiemei Wall Materials”). Beisu and Yangcun mainly engaged in the production and exploration of PCI coal and thermal coal. The acquisition was completed on 31 May 2012.

During 2012, the Company entered into an agreement for investment in Shandong Coal Trading Centre Co., Limited (“Trading Centre”) with two independent third parties. The Company contribute RMB51,000,000 which represents 51% of the equity interest in Trading Centre. The principal activities of Trading Centre is to provide coal trading and relevant advisory services.

In 2010, the Company entered into a co-operative agreement with three independent third parties to acquire 51% equity interest of Inner Mongolia Hao Sheng Coal Mining Limited (“Hao Sheng”) and obtained the mining rights of the Shilawusu Coal Field (“the mining right”) in the name of Hao Sheng. From 2011 to 2013, the Company entered into agreements with contract parties to further acquire equity interest in Hao Sheng and increase Hao Sheng’s registered capital. Upon completion of these agreements during the period, the Company owns 74.82% equity interest in Hao Sheng with total consideration of RMB 7,136,536,000. As at 30 June 2013, Hao Sheng has not yet commenced any business.

In 2012, the Company entered into a cooperation agreement with two independent third parties to set up a company, Shandong Yanmei Rizhao Port Coal Storage and Blending Co., Ltd., to act as a coal blending, storage and distribution base in Rizhao Port. Upon completion of registration procedures during the period, the Company contributed RMB153, 000,000, which represents 51% equity interest in that company.

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.

Yanzhou Coal Mining Company Limited Interim Report 2013 57

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

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.

In the current period, the Group had applied, for the fi rst time, the following 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 2013 and are relevant to the Group’s condensed consolidated fi nancial statements. Apart from this, 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 2012.

IFRSs (Amendments)	Annual Improvements to IFRSs 2009-2011 Cycle
IFRS 7 (Amendments)	Disclosures – Offsetting Financial Assets and Financial Liabilities
IFRS 10	Consolidated Financial Statements
IFRS 11	Joint Arrangements
IFRS 12	Disclosure of Interests in Other Entities
IFRS 10, IFRS 11 and IFRS 12	Consolidated Financial Statements, Joint Arrangements and Disclosure
(Amendments)	of Interests in Other Entities: Transition Guidance
IFRS 13	Fair Value Measurement
IAS 1 (Amendments)	Presentation of Items of Other Comprehensive Income
IAS 19 (Revised)	Employee Benef ts
IAS 28 (Revised)	Investments in Associates and Joint Ventures
IFRIC 20	Stripping Costs in the Production Phase of a Surface Mine

Except as describe below, the application of the above new or revised IFRSs in the current interim period has had no material effect on the amounts reported in these condensed consolidated fi nancial statements and/or disclosures set out in these condensed consolidated fi nancial statements.

58 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

3. SIGNIFICANT ACCOUNTING POLICIES – CONTINUED

IFRS 11-Joint Arrangements

IFRS 11 introduces new accounting requirements for joint arrangements, replacing IAS 31-Interests in Joint Ventures. The option to apply the proportional consolidation method when accounting for jointly controlled entities is removed. Additionally, IFRS 11 eliminates jointly controlled assets to now only differentiate between joint operations and joint ventures. A joint operation is a joint arrangement whereby the parties that have joint control have rights to the assets and obligations for the liabilities. A joint venture is a joint arrangement whereby the parties that have joint control have rights to the net assets.

After the review and assessment by the directors of the Company, the directors concluded that the Group’s investment which was classifi ed as jointly controlled entities under IAS 31 should be classifi ed as joint ventures under IFRS 11 continue to apply the equity method.

• IFRS 13-Fair Value Measurement

IFRS 13 applies when another IFRS requires or permits fair value measurements or disclosures about fair value measurements (and measurements, such as fair value less costs to sell, based on fair value or disclosures about those measurements), except for certain exemptions. IFRS 13 requires the disclosures of fair values through a “fair value hierarchy”. The hierarchy categorizes the inputs used in valuation techniques into three levels. The hierarchy gives the highest priority to (unadjusted) quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure fair value are categorized into different levels of the fair value hierarchy, the fair value measurement is categorized in its entirety in the level of the lowest level input that is signifi cant to the entire measurement.

As a result of consequential amendments to the IAS 34, which require certain disclosures to be made in the interim condensed consolidated fi nancial statements, the Group has applied the new fair value measurement and disclosure requirements prospectively. Disclosures of fair value information are set out in note 24.

• Amendments to IAS 1 Presentation of Items of Other Comprehensive Income

The amendments to IAS 1 require additional disclosures to be made in the other comprehensive section such that items of other comprehensive income are grouped into two categories: (a) items that will not be reclassifi ed subsequently to profi t or loss; and (b) items that may be reclassifi ed subsequently to profi t or loss when specifi c conditions are met. Income tax on items of other comprehensive income is required to be allocated on the same basis — the amendments do not change the existing option to present items of other comprehensive income either before tax or net of tax. The amendments have been applied retrospectively, and hence the presentation of items of other comprehensive income has been modifi ed to refl ect the changes.

Yanzhou Coal Mining Company Limited Interim Report 2013 59

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

3. SIGNIFICANT ACCOUNTING POLICIES – CONTINUED

IFRIC 20-Stripping Costs in the Production Phase of a Surface Mine

IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine applies to waste removal costs that are incurred in surface mining activity during the production phase of the mine (“production stripping costs”). Under the Interpretation, the costs from this waste removal activity (“stripping”) which provide improved access to ore are recognized as a non-current asset (“stripping activity asset”) when certain criteria are met, whereas the costs of stripping activities where the benefi t is realised in the form of inventory produced are accounted for in accordance with IAS 2 Inventories. The stripping activity asset is accounted for as an addition to, or as an enhancement of, an existing asset and classifi ed as tangible or intangible according to the nature of the existing asset of which it forms part. When the costs of the stripping activity asset and the inventory produced are not separately identifi able, production stripping costs are allocated between the inventory produced and the stripping activity asset by using an allocation basis that is based on a relevant production measure.

Prior to the effective of IFRIC 20, stripping costs of the Group and its joint ventures which comprises the accumulation of expenses incurred to enable access to the coal seams, and includes direct removal costs, machinery and plant running costs are deferred then charged to the condensed 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.

The requirements in accordance with IFRIC 20 differs from the Group and its joint ventures’ previous policies in that only waste stripping costs which provide improved access to ore can be capitalized when certain criteria are met, and the capitalization and amortization of waste stripping costs is undertaken at the level of individual deposits or components thereof rather than on a whole-for-mine basis. In addition, specifi c transitional rules are provided to deal with any opening deferred stripping balances recognised under the previous accounting policies.

As a result of adoption of the IFRIC 20, any previously recognised asset balance that resulted from stripping activity undertaken during the production phase (predecessor stripping asset) is reclassifi ed as a part of an existing asset to which the stripping activity related, to the extent that there remains an identifi able component of the orebody with which the predecessor stripping asset can be associated. Such balances are then amortised over the remaining expected useful life of the identifi ed component of the orebody to which each predecessor stripping asset balance relates. If there is no identifi able component of the orebody to which the predecessor asset relates, it has been written off through opening retained earnings at the beginning of the earliest period presented. IFRIC 20 has been applied by Group and its joint ventures prospectively to production stripping costs incurred on or after the beginning of the earliest period presented.

60 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

3. SIGNIFICANT ACCOUNTING POLICIES – CONTINUED

IFRIC 20-Stripping Costs in the Production Phase of a Surface Mine – continued

The effect of the application of IFRIC 20 on the consolidated balance sheet at 1 January 2012 and 31 December 2012 are as follows:

	Assets Liabilities Equity Non- Overburden in Interests in Deferred controlling advance joint ventures tax liabilities Reserves interests RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
At 1 January 2012 as previously reported Adjustment on adoption of IFRIC 20 Balance at 1 January 2012 as restated At 31 December 2012 as previously reported Adjustment on adoption of IFRIC 20 Balance at 31 December 2012 as restated	261,441 19,453 (3,895,304) (37,716,090) (690,560) (261,441) – 78,432 183,009 –
	– 19,453 (3,816,872) (37,533,081) (690,560)
	448,889 1,086,985 (7,730,127) (40,907,956) (3,264,842) (448,889) (88,357) 166,177 296,322 74,747
	– 998,628 (7,563,950) (40,611,634) (3,190,095)

The effects on the consolidated income statement for the year ended 31 December 2012 and for the six months ended 30 June 2012 are as follows:

	Increase in cost	Share of		Decrease
	of sales and	result of	Decrease	in prof t
	service	joint	in income	for the
	provided	ventures	taxes	year/period
	RMB’000	RMB’000	RMB’000	RMB’000
For the period ended 30 June 2012	46,728	–	(14,018)	32,710
For the year ended 31 December 2012	187,448	88,357	(87,745)	188,060

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.

Yanzhou Coal Mining Company Limited Interim Report 2013 61

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

4. SEGMENT INFORMATION

The Group is engaged primarily in the 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 exploitation right of the Group’s foreign subsidiaries is not restricted. 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 subsidiaries and associates of the Company 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 mining business segment, are insignifi cant to the Group. Certain subsidiaries of the Company are engaged in production of methanol and other chemical products, and invest in heat and electricity.

Business segments

For management purposes, the Group is currently organized into three operating divisions – 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 and joint ventures, 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.

62 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 7 CONDENSED 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 2013 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	24,261,394 211,008 768,289 – 25,240,691 180,718 14,185 199,610 (394,513) – 24,442,112 225,193 967,899 (394,513) 25,240,691

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

RESULT Segment results (2,262,144) (8,846) 65,198 – Unallocated corporate expenses Unallocated corporate income Share of prof ts of associates 19,632 – 93,994 – Share of loss of joint ventures (178,303) – – – Interest income Interest expenses Loss before income taxes Income taxes Loss for the period	(2,262,144) (8,846) 65,198 –	(2,205,792) (1,475,451) 4,488 113,626 (178,303) 345,462 (940,392) (4,336,362) 1,252,939 (3,083,423)

Yanzhou Coal Mining Company Limited Interim Report 2013 63

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

4. SEGMENT INFORMATION – CONTINUED

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
GROSS REVENUE External sales Inter-segment sales Total	27,291,104 226,551 768,730 – 28,286,385 125,274 25,069 173,458 (323,801) –
	27,416,378 251,620 942,188 (323,801) 28,286,385

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

RESULT (restated) Segment results 5,916,453 (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	5,916,453 (16,258) 968 –	5,901,163 (263,007) 4,865 66,617 401,313 (775,394) 5,335,557 (85,803) 5,249,754

64 Yanzhou Coal Mining Company Limited Interim Report 2013

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5. SALES OF COAL AND TRANSPORTATION COSTS OF COAL

	For the six months ended 30 June 2013 2012 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	19,987,010 22,870,960 (199,790) (142,480)
	19,787,220 22,728,480
	4,274,384 4,420,144 (844,814) (465,797)
	3,429,570 3,954,347
	23,216,790 26,682,827

Net sales of coal represent the invoiced value of coal sold and are 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 2013 2012 RMB’000 RMB’000 (restated)
Materials Wages and employee benef ts Electricity Depreciation Land subsidence, restoration, rehabilitation and environmental costs Environmental protection Annual fee and amortization of mining rights Other transportation cost Costs of traded coal Business tax and surcharges Others	1,383,710 1,248,132 3,890,612 3,514,422 369,871 339,677 1,037,139 891,468 853,859 1,137,826 60,808 64,407 638,592 604,431 4,263 34,228 8,949,185 9,650,366 263,958 326,198 1,243,808 1,652,180
	18,695,805 19,463,335

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CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

7. OTHER INCOME

	For the six months ended 30 June 2013 2012 RMB’000 RMB’000
Interest income Exchange gain, net Bargain purchase Others	345,462 401,313 – 181,319 – 1,427,166 108,696 22,752
	454,158 2,032,550

8. INTEREST EXPENSES

	For the six months ended 30 June 2013 2012 RMB’000 RMB’000 906,208 657,961 99,550 115,066 17,637 2,367 1,023,395 775,394 (83,003) – 940,392 775,394
Interest expenses on: – Bank and other borrowings wholly repayable within 5 years – Bank and other borrowings not wholly repayable within 5 years – Bills receivable discounted without recourse Less: Interest expenses capitalized into construction in progress

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CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

9. (LOSS)/PROFIT BEFORE INCOME TAXES

	For the six months ended 30 June 2013 2012 RMB’000 RMB’000
(Loss)/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 Loss/(Gain) on disposal of property, plant and equipment Impairment loss of intangible assets Reversal of provision for impairment loss of inventory Exchange loss/(gain), net Provision for impairment loss of accounts receivable and other receivables	1,511,222 1,267,866 638,592 485,505 13,100 2,218
	2,162,914 1,755,589
	2,541 8,912 522 (4,203) 2,099,572 – (103,923) – 3,108,474 (181,319) 45,120 –

10. INCOME TAXES

	For the six months ended 30 June 2013 2012 RMB’000 RMB’000 (Restated)
Income tax: Current taxes Deferred tax (note 22): Australian Minerals Resources Rent Tax Others Total deferred tax	928,564 1,347,455
	37,317 (1,097,243) (2,218,820) (164,409)
	(2,181,503) (1,261,652)
	(1,252,939) 85,803

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 28.89% (six months ended 30 June 2012: 1.61%).

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11. DIVIDENDS

	For the six months ended 30 June 2013 2012 RMB’000 RMB’000
Final dividend approved, RMB0.36 per share (2012: RMB0.57)	1,770,624 2,803,488

Pursuant to the annual general meeting held on 15 May 2013, a fi nal dividend in respect of the year ended 31 December 2012 was approved.

12. (LOSS)/EARNINGS PER SHARE AND PER ADS

The calculation of the loss/earnings per share attributable to equity holders of the Company for the six months ended 30 June 2013 and 30 June 2012 is based on the loss and profi t for the period of RMB2,073,012,000 and RMB5,223,101,000 respectively and on 4,918,400,000 shares in issue during both periods.

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

No diluted loss/earnings per share have been presented as there are no dilutive potential shares in issue during the periods ended 30 June 2013 and 2012.

The earnings per share and per ADS for the six months ended 30 June 2012 has been restated to refl ect the effect on adoption of the IFRIC 20.

13. RESTRICTED CASH

At the balance sheet date, the restricted cash represents the bank deposits pledged to certain banks to secure banking facilities granted to the Group.

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14. BILLS AND ACCOUNTS RECEIVABLE

	At 30 June At 31 December 2013 2012 RMB’000 RMB’000
Accounts receivable Less: Impairment loss Total bills receivable Total bills and accounts receivable, net	1,493,326 928,935 (26,343) (2,532)
	1,466,983 926,403 3,231,380 6,533,200
	4,698,363 7,459,603

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 2013 2012 RMB’000 RMB’000
1-90 days 91-180 days 181-365 days Over 1 year	1,399,867 3,423,025 3,261,930 3,954,398 24,502 80,812 12,064 1,368
	4,698,363 7,459,603

15. PREPAYMENTS AND OTHER RECEIVABLES

	At 30 June At 31 December 2013 2012 RMB’000 RMB’000
Advances to suppliers Deposit for environment protection Prepaid relocation costs of inhabitants Others	3,077,135 729,216 817,008 813,212 2,402,248 1,877,911 1,020,887 776,660
	7,317,278 4,196,999

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CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

16. INTANGIBLE ASSETS

Potash
mineral
Mining
Mining exploration
Water
reserves resources
permit Technology
licenses
Others
Total
RMB’000
RMB’000
RMB’000
RMB’000
RMB’000
RMB’000
RMB’000
28,962,770
5,299,755
1,665,226
163,408
132,407
150,009 36,373,575
(2,667,970)
(649,660)
(114,425)
(20,755)
(997)
(15,874) (3,469,681)
12,089,682
–
–
–
–
– 12,089,682
–
13,124
–
–
–
–
13,124
–
–
–
–
–
(13,217)
(13,217)
30,995
(13,504)
(17,491)
–
–
–
–
38,415,477
4,649,715
1,533,310
142,653
131,410
120,918 44,993,483
2,544,570
163,408
–
–
–
31,352
2,739,330
(301,949)
(20,755)
–
–
(54)
(3,178)
(325,936)
638,592
–
–
–
158
12,942
651,692
–
–
–
–
–
(12,862)
(12,862)
2,099,572
–
–
–
–
–
2,099,572
4,980,785
142,653
–
–
104
28,254
5,151,796
33,434,692
4,507,062
1,533,310
142,653
131,306
92,664 39,841,687
26,418,200
5,136,347
1,665,226
163,408
132,407
118,657 33,634,245

Cost
At 1 January 2013
Exchange re-alignment
Acquisition of Hao Sheng
(note 25)
Additions for the period
Disposal for the period
Reclassif cation
At 30 June 2013
Accumulated amortization
and impairment
At 1 January 2013
Exchange re-alignment
Provided for the period
Eliminated on disposals
Impairment loss
At 30 June 2013
Carrying values
At 30 June 2013
At 31 December 2012

At 30 June 2013, intangible assets with a carrying amount of approximately RMB117,093,000 (31 December 2012: RMB1,960,908,000) have been pledged to secure the bank borrowings of the Group (note 21).

Given that the continuing decease in coal price during the period, management assessed the recoverable amount of Group’s intangible assets and concluded the recoverable amount of intangible assets owned by Moolarben Coal Pty and Stradford Coal Pty Limited were below its carrying amount, accordingly RMB2,099,572,000 impairment loss has been recognized.

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17. 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 2013 Exchange re- alignment Acquisition of Hao Sheng (note 25) Additions for the period Transfer Disposal for the period Reclassif cation At 30 June 2013 Accumulated depreciation and impairment At 1 January 2013 Exchange re – alignment Provided for the period Eliminated on disposal At 30 June 2013 Carrying values At 30 June 2013 At 31 December 2012	1,155,558 4,653,763 253,678 1,693,842 7,857,738 25,631,281 456,437 14,208,642 55,910,939 (152,046) (73,237) – – (418,101) (1,277,817) – (353,093) (2,274,294) – – – – – 390 1,533 300,282 302,205 883 1,005 – – 63,797 138,902 – 2,445,639 2,650,226 79,749 24,716 – – 324,826 474,935 258 (904,484) – – (4,000) – (2,795) (22,069) (201,750) (3,058) – (233,672) (2,851) 2,851 – – (343) 343 – – –
	1,081,293 4,605,098 253,678 1,691,047 7,805,848 24,766,284 455,170 15,696,986 56,355,404
	– 1,947,912 88,988 1,037,320 2,836,842 10,180,087 316,687 – 16,407,836 – (7,680) – – (89,107) (279,907) – – (376,694) – 84,996 – 79,954 195,322 1,129,439 21,511 – 1,511,222 – (1,958) – (1,986) (22,047) (194,472) (3,058) – (223,521)
	– 2,023,270 88,988 1,115,288 2,921,010 10,835,147 335,140 – 17,318,843
	1,081,293 2,581,828 164,690 575,759 4,884,838 13,931,137 120,030 15,696,986 39,036,561
	1,155,558 2,705,851 164,690 656,522 5,020,896 15,451,194 139,750 14,208,642 39,503,103

At 30 June 2013, property, plant and equipment and construction in progress with a carrying amount of approximately RMB4,724,518,000 (31 December 2012: RMB5,546,226,000) have been pledged to secure bank borrowings of the Group (note 21).

At 30 June 2013, the carrying amount of property, plant and equipment held under fi nance leases of the Group was approximately RMB301,555,000 (31 December 2012: RMB225,871,000).

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CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

18. INVESTMENTS IN SECURITIES

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

	At 30 June At 31 December 2013 2012 RMB’000 RMB’000
Investment in equity securities listed on the SSE – Stated at fair value Unlisted securities	143,829 167,572 38,715 39,504
	182,544 207,076

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.

BILLS AND ACCOUNTS PAYABLE	At 30 June At 31 December 2013 2012 RMB’000 RMB’000 2,119,000 2,906,612 116,515 3,905,148 2,235,515 6,811,760
Accounts payable Bills payable

19. BILLS AND ACCOUNTS PAYABLE

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

	At 30 June At 31 December 2013 2012 RMB’000 RMB’000
1-90 days 91-180 days 181-365 days Over 1 year	1,675,637 6,384,206 277,474 224,505 119,458 68,640 162,946 134,409
	2,235,515 6,811,760

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

	At 30 June 2013 RMB’000
At the beginning of period Exchange re-alignment Unwinding of discount Additional provision in the period Utilization of provision At the end of period Presented as: Current portion Non-current portion At the end of period	3,770,266 (101,792) 7,269 793,753 (418,342) 4,051,154 3,596,017 455,137 4,051,154

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 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

21. BORROWINGS

		At 30 June At 31 December 2013 2012 RMB’000 RMB’000 7,666,489 5,024,476 646,702 657,876 – 2,000,000 43,431 30,240 8,356,622 7,712,592 7,604,427 3,875,665 17,622,838 17,967,840 259,401 202,450 11,134,828 11,237,835 36,621,494 33,283,790 44,978,116 40,996,382 At 30 June At 31 December 2013 2012 RMB’000 RMB’000 7,666,489 5,024,476 338,073 256,000 3,266,354 3,619,665 4,000,000 – 15,270,916 8,900,141
Current liabilities Bank borrowings – Unsecured borrowings (i) – Secured borrowings (ii) Loan pledged by machineries Finance Lease Liabilities (iii) Non-current liabilities Bank borrowings – Unsecured borrowings (i) – Secured borrowings (ii) Finance Lease Liabilities (iii) Guaranteed notes (iv) 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
	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

The balance as of 30 June 2013 includes short-term loans of the Company amounting to RMB3,386,667,000 (31 December 2012: RMB3,110,432,000). Three short-term borrowings are denominated in Euro, equivalent to RMB1,045,160,000 (EUR130,165,000) carried interest at three-months LIBOR plus a margin of 2% (approximately 2.32%)(31 December 2012: 2.31%). One of the short-term borrowing is denominated in US dollar, equivalent to RMB975,364,000 (USD158,000,000) carried interest at one-year LIBOR plus a margin of 2.45% (approximately 3.13%) (31 December 2012: Nil). Other short-term loans are carried interest at 5.40% to 6.56% per annum (31 December 2012: 5.40%-6.56%).

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21. BORROWINGS – CONTINUED

(i) Unsecured borrowings are repayable as follows: – continued

The total amount of long-term borrowings of RMB8,667,299,000 (31 December 2012: RMB4,393,887,000), in which the amount of RMB1,149,872,000 is expired in one year. Including in the long-term borrowings, RMB borrowings with amount RMB2,270,978,000 are carried interest at 6.90% per annum. During the period, three new borrowings entered are denominated in United States dollar. Two of them are carried interest at three-months LIBOR plus a margin of 2.4% (approximately 2.72%), equivalent to RMB3,748,241,000 (USD596,000,000). One of them are carried interest at three-months LIBOR plus a margin of 1.2%(approximately 1.52%), equivalent to RMB33,616,000 (USD5,360,000). Other long-term loans are carried interest at annual interest rate ranged from 5.76% to 6.15% (31 December 2012: 5.80%). The interest rate will be adjusted in accordance with the benchmark lending rate published by the People’s Bank of China (“PBOC”). Long-term loans guaranteed by the Parent Company.

The loan of Shanxi Tianchi was a loan which acquired before the acquisition of Shanxi Tianchi with the amount of RMB99,000,000 (31 December 2012: RMB110,000,000) carried interest at 7.05% (31 December 2012: 7.05%) per annum and is subject to adjustment based on the interest rate stipulated by PBOC. This loan is repayable by 20 instalments over a period of 12 years, with the fi rst instalment due in May 2008. The loan is guaranteed by the Parent Company.

The amount of the loan of Heze is RMB10,000,000 (31 December 2012: RMB10,000,000) carried interest at 7.05% (31 December 2012: 7.05%) per annum and is subject to adjustment based on the interest rate stipulated by PBOC.

The two short-term borrowings of Yancoal International are denominated in USD, amounting to RMB3,107,950,000 (USD503,000,000) (31 December 2012: RMB1,275,822,000). One of them amounted to RMB1,254,302,000 (USD203,000,000) (31 December 2012: RMB1,275,822,000), carried interest at LIBOR plus a margin of 1.7% (approximately 1.97%) (31 December 2012: LIBOR plus 1.7%, approximately 2.01%). The other one amounted to RMB1,853,648,000 (USD300,000,000), carried interest at three-months LIBOR plus a margin of 1.55% (approximately 1.82%). The loan will be fully repayable at maturity.

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21. BORROWINGS – CONTINUED

(ii) Secured borrowings are repayable as follows:

	At 30 June At 31 December 2013 2012 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	646,702 657,876 640,474 685,521 67,639 1,105,228 16,914,725 16,177,091
	18,269,540 18,625,716

At 30 June 2013, loans obtained by the Group for the purpose of settling the consideration in respect of acquisition of Yancoal Resources amounting to RMB18,163,247,000 (USD2,939,655,000) (31 December 2012: RMB18,503,917,000). The borrowings of RMB11,924,891,000 (USD1,930,000,000) (31 December 2012: RMB12,148,554,000) carried interest at three-month LIBOR plus a margin of 0.75% (approximately 1.07%). The borrowings of RMB278,041,000 (USD45,000,000) (31 December 2012: RMB283,256,000) carried interest at three-months LIBOR plus a margin of 0.8% (approximately 1.02%). The borrowings of RMB5,960,315,000 (USD964,655,000) (31 December 2012: RMB6,072,107,000) carried interest at three-month LIBOR plus 2.8% (approximately 3.07%). Other borrowings arose from the acquisition of Gloucester, amounting to RMB106,293,000 (USD17,203,000) (31 December 2012: RMB121,799,000) carried interest at 5.68%. The borrowings together with loans pledged by machineries are guaranteed by the Company, counter-guaranteed by the Parent Company and secured by the Group’s intangible assets (note 16), property, plant and equipment (note 17) and other assets in Yancoal Resources.

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21. BORROWINGS – CONTINUED

(iii) Finance lease liabilities are repayable as follows:

	At 30 June At 31 December 2013 2012 RMB’000 RMB’000
Minimum payments Within one year More than one year, but not exceeding two years More than two years, but not exceeding f ve years More than f ve years Less: Future f nance charges Present value of lease payments	56,411 44,829 58,043 44,832 212,975 148,641 14,815 27,090
	342,244 265,392 (39,412) (32,702)
	302,832 232,690
	At 30 June At 31 December 2013 2012 RMB’000 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 exceeding 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	43,431 30,240 61,739 46,943 185,217 140,829 12,445 14,678
	302,832 232,690 (43,431) (30,240)
	259,401 202,450

Finance lease liabilities of RMB302,832,000 (AUD53,072,000) (31 December 2012: RMB232,690,000) which carried interest at 7.74% (31 December 2012: 7.74%) per annum.

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CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

21. BORROWINGS – CONTINUED

(iv) Guaranteed notes are detailed as follows:

	At 30 June At 31 December 2013 2012 RMB’000 RMB’000
Guaranteed notes denominated in USD repayable within two to f ve years Guaranteed notes denominated in RMB repayable within two to f ve years Guaranteed notes denominated in USD repayable after f ve years Guaranteed notes denominated in RMB repayable after f ve years	2,780,472 2,828,176 991,800 990,600 3,398,356 3,456,659 3,964,200 3,962,400
	11,134,828 11,237,835

The USD guaranteed notes as at 30 June 2013 and 31 December 2012 were issued by a subsidiary of the Company on 16 May 2012. Guaranteed notes with par value of USD450,000,000 and USD550,000,000 will mature in 2017 and 2022 and with interest rate of 4.461% and 5.730% per annum respectively. The notes are unconditionally secured by the Company and the respective security is non-cancellable. The notes are listed on Hong Kong Stock Exchange during the period by way of issuing to professional investors only. For the period ended 30 June 2013, there was no redemption on the notes.

With the approval from China Securities Regulatory Commission in 2012, the Company is allowed to issue RMB notes within PRC domicile, RMB notes with par value of RMB300,167,000 and RMB4,699,833,000 were issued to the public and institutional investors respectively. An unconditional and irrecoverable corporate guarantee was provided by the Parent Company on the RMB notes. At 30 June 2013, RMB notes of RMB4,956,000,000 (31 December 2012: RMB4,953,000,000) include notes of RMB3,964,200,000 (31 December 2012: RMB3,962,400,000) with a maturity period of ten years and interest rate of 4.20% per annum and notes of RMB991,800,000 (31 December 2012: RMB990,600,000) with a maturity period of fi ve years and interest rate of 4.95% per annum. For the period ended 30 June 2013, there was no redemption on the notes.

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CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

22. DEFERRED TAXATION

	Fair value adjustment Temporary on mining differences Available- Accelerated rights on Cash f ow for-sale tax (mining 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 2012 Effect on changes in accounting policy At 1 January 2012 (restated) Exchange re-alignment (restated) Acquisition of Beisu and Yangcun Acquisition of Gloucester Credit (charge) to other comprehensive income Deferred tax arising from the restructuring of Australian subsidiaries Credit (charge) to the consolidated income statement (restated) At 31 December 2012 and 1 January 2013 Exchange re-alignment Acquisition of Hao Sheng (note 25) Credit (charge) to other comprehensive income Credit (charge) to the consolidated income statement (note 10) At 30 June 2013	(23,615) (231,407) (2,183,756) (154,817) – 33,456 (2,560,139) – – – 78,432 – – 78,432
	(23,615) (231,407) (2,183,756) (76,385) – 33,456 (2,481,707) – (2,253) (90,646) 25,221 16,160 – (51,518) – – (47,375) 4,109 – – (43,266) – – (1,851,996) 778,477 258,003 – (815,516) 1,481 – – – – (28,641) (27,160) – – – (141,067) – – (141,067) – (9,227) 538,989 207,221 864,585 – 1,601,568
	(22,134) (242,887) (3,634,784) 797,576 1,138,748 4,815 (1,958,666) – 80,018 407,721 (111,975) (247,549) 1,352 129,567 – – (3,022,421) – – – (3,022,421) 5,936 – – – – 107,232 113,168 – (194,101) 798,735 838,200 738,669 – 2,181,503
	(16,198) (356,970) (5,450,749) 1,523,801 1,629,868 113,399 (2,556,849)

The temporary differences on income and expenses recognized mainly arose from unpaid provision of salaries and wages, provisions of compensation fees for mining rights and land subsidence, restoration, rehabilitation and environmental costs and also included payments on certain expenses such as exploration costs and certain income in Australia.

Yanzhou Coal Mining Company Limited Interim Report 2013 79

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

22. DEFERRED TAXATION – CONTINUED

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

	At 30 June At 31 December 2013 2012 RMB’000 RMB’000 (restated
Deferred tax assets Deferred tax liabilities	5,835,772 5,605,284 (8,392,621) (7,563,950
	(2,556,849) (1,958,666

There was no material un-provided deferred tax for the period or at the balance sheet date.

23. SHAREHOLDERS’ EQUITY

Share capital The Company’s share capital structure at	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 1,958,400,000 4,918,400,000 RMB’000 RMB’000 1,958,400 4,918,400

Number of shares At 31 December 2012 and 30 June 2013 Registered, issued and fully paid At 31 December 2012 and 30 June 2013		2,600,000,000 360,000,000
		RMB’000 RMB’000 2,600,000 360,000

Each share has a par value of RMB1.

There is no movement in share capital during the period.

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CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

23. SHAREHOLDERS’ EQUITY – CONTINUED

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.

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, Shanxi Tianchi, Xintai and Ordos 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 2013 was RMB1,387,821,000 (31 December 2012: RMB1,019,799,000).

Statutory common reserves fund

The Company and its subsidiaries in the PRC have 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.

Yanzhou Coal Mining Company Limited Interim Report 2013 81

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

23. SHAREHOLDERS’ EQUITY – CONTINUED

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 2013 is the retained earnings computed under PRC GAAP which amounted to approximately RMB23,640,034,000 (31 December 2012: RMB23,733,069,000).

24. FAIR VALUES

The following table presents the carrying value of the Group’s fi nancial instruments measured at fair value across the three levels of the fair value hierarchy.

three levels of the fair value hierarchy.

Level 1
Level 2
Level 3
Total
RMB’000
RMB’000
RMB’000
RMB’000
143,829
–
–
143,829
–
10,615
–
10,615
–
880
–
880
–
–
1,130,123
1,130,123
143,829
11,495
1,130,123
1,285,447
–
347,577
–
347,577
–
68,623
–
68,623
–
76,337
–
76,337
1,365,306
–
–
1,365,306
1,365,306
492,537
–
1,857,843

At 30 June 2013
Financial assets
Available-for-sale investments
– Investments in securities listed on the SSE
Derivative f nancial instruments
– Forward foreign exchange contracts
– Foreign exchange collar option
Royalty receivable (i)
Financial liabilities
Derivative f nancial instruments
– Forward foreign exchange contracts
– Foreign exchange collar option
– Interest rate swap contracts
CVR shares (ii)

82 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

24. FAIR VALUES – CONTINUED

The levels of fair value are defi ned as follows:

Level 1: fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets and liabilities;
Level 2: fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3: fair value measurements are those derived from valuation techniques that include inputs for the assets or liability that are not based on observable market data (unobservable inputs).

The fair value of available-for-sales investment and CVR shares were determined with reference to quoted market price. The fair values of the forward foreign exchange contracts are estimated based on the discounted cash fl ows between the contract forward rate and spot forward rate. The fair values of interest rate swap contracts are estimated based on the discounted cash fl ows between the contract fl oating rate and contract fi xed rate. The fair value of other fi nancial assets and fi nancial liabilities are determined in accordance with generally accepted pricing models based on discounted cash fl ow analysis.

(i) Royalty receivable

	2013 RMB’000
At beginning of the period Cash received Unwinding discount Exchange re-alignment Change in fair value recognised in the condensed consolidated income statement At the end of the period Current portion Non-current portion	1,349,447 (27,470) 69,506 (167,913) (93,447) 1,130,123 94,410 1,035,713 1,130,123

A right to receive a royalty of 4% of Free on Board trimmed sales from Middlemount mine operated by Middlemount Joint Venture was acquired as part of the acquisition of Gloucester. This fi nancial asset has been determined to have a fi nite life being the life of the Middlemount and is measured at fair value basis.

Yanzhou Coal Mining Company Limited Interim Report 2013 83

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

24. FAIR VALUES – CONTINUED

(i) Royalty receivable – continued

The royalty receivable is measured based on management expectations of the future cash fl ows with the input of expected sales volume, price and exchange rates with the re-measurement recorded in the consolidated income statement at each balance sheet date. The amount expected to be received in the next 12 month will be disclosed as current receivable and the discounted expected future cash fl ow beyond 12 months will be disclosed as a non-current receivable. Unwinding discount is included in interest income (note 7) and the fair value change is included in selling, general and administrative expenses.

(ii) CVR shares

The purpose of the issuance of CVR shares is to protect the original shareholders of Gloucester from the fl uctuation of the share price of the Yancoal Australia after the merger. If the weighted average price of the last 3 months in the next 18 months after the transaction is lower than AUD6.96 per share, the CVR shares will be redeemed by cash (or shares of Yancoal Australia held by the Company at the discretion of Yancoal Australia) at guaranteed price of AUD6.96 per share. 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 (or shares of the condition that is required by the ASX). Also, the holders of the CVR shares are not entitled to any dividend, right to enroll 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 CVR shares are stated at market value. The current period fair value gain for the CVR shares is RMB123,394,000 (For the period ended 30 June 2012: Nil).

84 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

25. ACQUISITION OF HAO SHENG

On 31 January 2013, the Company completed the acquisition of 74.82% equity intersect in Hao Sheng, the purpose of acquisition is to obtain the mining rights of Shilawusu Coal Field in the name of Hao Sheng. The acquisition was refl ected as purchases of assets and liabilities of which no goodwill was recognized.

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

	Carrying amounts RMB’000
Bank balances and cash Prepayments and other receivables Property, plant and equipment, net Intangible assets Other current liabilities Deferred taxation Net assets acquired Non-controlling interest arising from acquisition Considerations: Cash paid on acquisition Investment deposits and transaction costs paid for acquisition in prior year Add: Cash payable on acquisition Total considerations Net cash outf ow arising on acquisition: Cash paid on acquisition Bank balances and cash acquired	223,427 4,539 302,205 12,089,682 (59,159) (3,022,421)
	9,538,273 (2,401,737)
	7,136,536
	1,025,516 2,982,805
	4,008,321 3,128,215
	7,136,536
	1,025,516 (223,427)
	802,089

As at 30 June 2013, Hao Sheng has not yet commenced any business.

Yanzhou Coal Mining Company Limited Interim Report 2013 85

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

26. RELATED PARTY TRANSACTIONS

Transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed. Details of balances and transactions between the Group and other related parties are disclosed below.

Balances and transactions with related party

	At 30 June At 31 December 2013 2012 RMB’000 RMB’000 506,447 1,039,461 32,835 – 145,600 109,662 167,320 187,324 932,488 1,674,286
Nature of balances (other than those already disclosed) Bills and accounts receivable – Parent Company and its subsidiaries – Joint ventures Prepayments and other receivables – Parent Company and its subsidiaries – Joint ventures Other payables and accrued expenses – Parent Company and its subsidiaries

The amounts due from/to the Parent Company and its subsidiary companies and joint ventures are non-interest bearing, unsecured and repayable on demand.

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

	Six months ended 30 June 2013 2012 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 Road transportation services Construction services	1,471,344 1,756,371 53,998 115,327 163,322 205,034 44,719 23,792 2,130 19,018 266,007 364,463 77,248 71,169 102,818 107,681 5,897 27,786 236,040 181,233

86 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

26. RELATED PARTY TRANSACTIONS – CONTINUED

Balances and transactions with related party – continued

Certain expenditures for social welfare and support services (excluding medical and child care expenses) of RMB94,219,000 and RMB90,492,000 for each of the six months ended 30 June 2013 and 2012 respectively. 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 28).

During the current period, the sale of coal from subsidiaries of the Group in Australia to the Group’s joint ventures amounted to RMB285,325,000 (2012: RMB512,545,817).

As at 30 June 2013, the Company has deposited RMB2,102,363,000 (31 December 2012: RMB1,719,621,000) 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 RMB3,208,000 (2012: RMB4,830,000) and RMB9,383,000 (2012: RMB1,410,000) respectively.

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 2013 2012 RMB’000 RMB’000
Trade sales Trade purchases	3,056,133 5,934,799
	1,002,414 1,229,195

Yanzhou Coal Mining Company Limited Interim Report 2013 87

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

26. RELATED PARTY TRANSACTIONS – CONTINUED

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

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

	At 30 June At 31 December 2013 2012 RMB’000 RMB’000
Amounts due to other state-controlled entities Amounts due from other state-controlled entities	321,913 592,267
	1,062,000 1,361,139

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.

Compensation of key management personnel

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

	Six months ended 30 June 2013 2012 RMB’000 RMB’000
Directors’ fee Salaries, allowance and other benef ts in kind Retirement benef t scheme contributions	752 789 1,080 1,111 258 290
	2,090 2,190

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

88 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

27. COMMITMENTS

	At 30 June At 31December 2013 2012 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 operations Acquisition of intangible asset – the Group – share of joint operations Exploration and evaluation expenditure – the Group – share of joint operations	2,910,148 2,626,207 190,967 310,912 39 – 27 30 6,055 – 9,563 –
	3,116,799 2,937,149

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 2013, the Group is committed to further make security deposit of RMB1,594,000,000.

28. 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 8 May 2012, 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 2012 to 31 December 2014. 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.

Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

29. 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 2013 and 2012. Such expenses, amounting to RMB70,000,000 and RMB70,000,000 for each of the six months ended 30 June 2013 and 2012, 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.

30. OPERATING LEASE COMMITMENTS

	At 30 June At 31 December 2013 2012 RMB’000 RMB’000 14,246 40,160 57,178 65,756 71,424 105,916
Within one year More than one year, but not more than f ve years

Operating leases have average remaining lease terms of 1 to 5 years. Items that are subject to operating leases include mining equipment, offi ce space and small items of offi ce equipment.

90 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

31. CONTINGENT LIABILITIES

At 30 June
At 31 December
2013
2012
RMB’000
RMB’000

Guarantees
(a)
the Group
Guarantees secured over deposits
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 opearations
Guarantees secured over deposits
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

85,613
13,256
996,132
1,818,000
150,944
352,481
1,056
–
–
745
6,026
28,432

1,239,771
2,212,914

Yanzhou Coal Mining Company Limited Interim Report 2013 91

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

I. SUMMARY OF DIFFERENCES BETWEEN CONDENSED 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 condensed consolidated fi nancial statements in accordance with relevant accounting principles and regulations applicable to PRC enterprises.

The condensed 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, Beisu and Yangcun 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.

92 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

I. SUMMARY OF DIFFERENCES BETWEEN CONDENSED 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 condensed consolidated fi nancial statements prepared under IFRS and those under PRC GAAP:

Net loss
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
2013
2013
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, Beisu and Yangcun
– deferred tax
– others
As per f nancial statements prepared under PRC GAAP

(2,073,012)
39,758,782
(146,174)
–
(254,856)
(520,364)
5,728
(176,059)
–
(1,240,685)
54,281
991,697
17,118
13,966

(2,396,915)
38,827,337

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

Yanzhou Coal Mining Company Limited Interim Report 2013 93

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONSOLIDATED BALANCE SHEET

1 January-30 June 2013

Prepared by: Yanzhou Coal Mining Company Limited

Prepared by: Yanzhou Coal Mining Company Limited
ITEMS
NOTES

Unit: RMB’000
30 June 2013
1 January 2013
10,697,675
16,094,404
3,231,380
6,533,200
1,466,983
926,403
2,939,519
692,043
28,758
21,408
43,518
558,807
3,595,462
1,751,805
1,565,531
3,600,646
3,168,933
24,319,091
32,597,384
144,042
167,893
1,883,894
1,989,012
3,368,766
3,662,086
22,819,941
24,678,477
30,550,571
17,261,615
69,897
75,492
25,452,262
31,036,002
1,248,112
1,333,114
138,683
45,155
7,029,259
6,545,483
1,159,355
1,359,123
93,864,782
88,153,452
118,183,873
120,750,836

CURRENT ASSET:
Cash at bank and on hand
VI.1
Excess reserves settlement
Lending to banks and other f nancial institutions
Tradable f nancial assets
Notes receivable
VI.2
Accounts receivable
VI.3
Prepayments
VI.4
Premiums receivable
Accounts receivable reinsurance
Reserve for reinsurance contract receivable
Interest receivable
Dividends receivable
Other receivables
VI.5
Purchase of resold f nancial assets
Inventories
VI.6
Non-current assets due within one year
Other current assets
VI.7
TOTAL CURRENT ASSETS
NON CURRENT ASSETS:
Offering loan and advance
Available-for-sale f nancial assets
VI.8
Held-to-maturity investments
Long-term accounts receivable
VI.9
Long-term equity investments
VI.10
Investment property
Fixed assets
VI.11
Construction in progress
VI.12
Construction materials
VI.13
Disposal of f xed assets
Productive biological assets
Oil gas assets
Intangible assets
VI.14
Development expenditure
Goodwill
VI.15
Long-term deferred liabilities
Deferred tax assets
VI.16
Other non-current assets
VI.17
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS

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

The fi nancial statements from page 95 to page 107 are signed by the following persons-in charge.

Head of the Company: Shi Xuerang

Chief Financial Offi cer: Wu Yuxiang

Head of Accounting Department: Zhao Qingchun

94 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONSOLIDATED BALANCE SHEET – CONTINUED

1 January-30 June 2013

Prepared by: Yanzhou Coal Mining Company Limited ITEMS NOTES	Unit: RMB’000 30 June 2013 1 January 2013
CURRENT LIABILITIES: Short-term borrowings VI.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 VI.20 Accounts payable VI.21 Advances from customers VI.22 Amounts from sale of repurchased f nancial assets Service charge and commissions payable Salaries and wages payable VI.23 Taxes payable VI.24 Interest payable VI.25 Dividends payable VI.26 Other payables VI.27 Accounts receivable reinsurance Reserve for insurance contract Acting trading securities Acting underwriting securities Non-current liabilities due within one year VI.28 Other current liabilities VI.7 TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES: Long-term borrowings VI.29 Bonds payables VI.30 Long-term payables VI.31 Special accounts payable Estimated liabilities VI.32 Deferred tax liabilities VI.16 Other non-current liabilities VI.33 TOTAL NON CURRENT LIABILITIES TOTAL LIABILITIES SHAREHOLDERS’ EQUITY: Share capital VI.34 Capital reserves VI.35 less: treasury stock Special reserves VI.36 Surplus reserves VI.37 Provision for general risk Retained earnings VI.38 Translation reserve Equity attributable to shareholders of the Company Minority interest VI.39 TOTAL SHAREHOLDERS’ EQUITY TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	6,494,617 4,386,253 – – – – 117,723 3,905,148 2,177,871 3,004,847 556,425 1,368,734 – – 1,255,791 1,087,750 251,984 855,626 563,336 458,190 1,641,115 91 5,732,660 3,205,528 – – – – 4,060,231 6,278,470 4,395,269 3,744,702
	27,247,022 28,295,339
	25,230,046 21,843,506 11,134,828 11,237,835 1,884,359 1,835,647 – 777,957 892,109 8,595,143 7,567,464 26,353 1,460,580
	47,648,686 44,837,141
	74,895,708 73,132,480
	4,918,400 4,918,400 3,187,520 3,442,909 – 3,554,201 3,074,316 4,983,461 4,983,461 – 23,859,412 28,026,951 -1,675,657 -79,107
	38,827,337 44,366,930
	4,460,828 3,251,426
	43,288,165 47,618,356
	118,183,873 120,750,836

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

Yanzhou Coal Mining Company Limited Interim Report 2013 95

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

BALANCE SHEET OF THE PARENT COMPANY

1 January-30 June 2013

Prepared by: Yanzhou Coal Mining Company Limited
I
TEMS
NOTES

Unit: RMB’000
30 June 2013
1 January 2013
7,391,486
12,499,217
3,178,176
6,417,996
699,960
124,553
1,954,501
41,942
645,827
444,193
43,618
100
10,987,203
10,443,434
513,899
385,505
3,014,869
2,490,531
28,429,539
32,847,471
143,829
167,571
12,851,000
9,533,000
22,321,502
15,031,555
6,487,575
6,999,111
531,502
117,753
1,315
1,259
2,469,874
2,562,229
55
59
1,970,974
1,782,229
117,926
117,926
46,895,552
36,312,692
75,325,091
69,160,163

CURRENT ASSET:
Cash at bank and on hand
Tradable f nancial assets
Notes receivable
Accounts receivable
XIII.1
Prepayments
Interests receivable
Dividends receivable
Other receivables
XIII.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
XIII.3
Investment real estate
Fixed assets
Construction in progress
Materials construction
Disposal of f xed assets
Productive biological assets
Oil gas assets
Intangible assets
Development expenditure
Goodwill
Long-term deferred expenses
Deferred tax assets
Other non current assets
TOTAL NON CURRENT ASSETS
TOTAL ASSETS

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

96 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

BALANCE SHEET OF THE PARENT COMPANY – CONTINUED

1 January-30 June 2013

Prepared by: Yanzhou Coal Mining Company Limited

Prepared by: Yanzhou Coal Mining Company Limited ITEMS NOTES	Unit: RMB’000 30 June 2013 1 January 2013
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 payable Non-current liabilities due within one year Other current liabilities TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES: Long-term loans Bonds payable Long-term payable Special accounts payable Estimated liabilities 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 prof ts TOTAL SHAREHOLDERS’ EQUITY TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	3,386,666 3,110,432 76,337 114,421 117,723 68,537 773,934 997,432 496,836 1,207,127 665,356 527,241 457,339 1,214,552 320,538 138,144 1,641,024 – 6,035,122 3,416,922 2,911,463 3,012,507 3,752,529 3,405,778
	20,634,867 17,213,093
	7,517,427 3,777,667 4,956,000 4,953,000 1,585,139 1,585,139 – – – – 207,827 22,133 20,213 1,452,940
	14,286,606 11,790,879
	34,921,473 29,003,972
	4,918,400 4,918,400 3,809,526 3,827,333 3,097,306 2,739,038 4,938,351 4,938,351 23,640,035 23,733,069
	40,403,618 40,156,191
	75,325,091 69,160,163

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

Yanzhou Coal Mining Company Limited Interim Report 2013 97

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONSOLIDATED INCOME STATEMENT

1 January to 30 June 2013

Prepared by: Yanzhou Coal Mining Company Limited
ITEMS
NOTES

Unit: RMB’000
Januaryto June 2013
Januaryto June 2012
26,188,026
29,208,210
26,188,026
29,208,210
30,652,574
25,778,389
20,576,404
21,298,954
280,304
352,828
1,520,793
1,118,775
2,134,273
2,632,232
3,898,648
375,976
2,242,152
-376
-216,841
–
-60,014
69,000
-64,677
65,298
-4,741,403
3,498,821
29,260
1,420,475
19,522
9,931
10,906
799
-4,731,665
4,909,365
-1,307,220
21,262
-3,424,445
4,888,103
-2,396,915
4,873,479
-1,027,530
14,624
-0.4873
0.9909
-0.4873
0.9909
-2,181,241
-433,037
-5,605,686
4,455,066
-4,248,854
4,440,442
-1,356,832
14,624

1. TOTAL OPERATING REVENUE
Including: operating revenue
VI.40
Interest income
Premiums income
Income from service charges and commissions
2. TOTAL OPERATING COST
Including: Operating cost
VI.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
VI.41
Selling expense
VI.42
General and administrative expenses
VI.43
Financial expenses
VI.44
Impairment loss of assets
VI.45
Add: Gain on fair value change (The loss is listed beginning with “-”)
VI.46
Investment income(The loss is listed beginning with “-”)
VI.47
Including: Investment income of associates
Foreign exchange gain or loss (The loss is listed beginning with “-”)
3. Operating prof t (The loss is listed beginning with “-”)
Add: Non-operating revenue
VI.48
Less: Non-operating expenditures
VI.49
Including: Losses on disposal of non-current assets
4. Total prof t (The total loss is listed beginning with “-”)
Less: Income tax
VI.50
5. Net prof t (The net loss is listed beginning with “-”)
Net prof t attributed to shareholders of the Company
Minority interest
6. Earnings per share
(1) Earnings per share, basis
VI.51
(2) Earnings per share, diluted
VI.51
7. Other comprehensive income
VI.52
8. Total comprehensive income
Total comprehensive income attributable to shareholders of the parent company
Total comprehensive income attributable to minority shareholders

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

98 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

INCOME STATEMENT OF THE PARENT COMPANY

1 January to 30 June 2013

Prepared by: Yanzhou Coal Mining Company Limited

Unit: RMB’000

ITEMS NOTES	January to June 2013 January to June 2012
1. TOTAL OPERATING REVENUE XIII.4 Less: Operating cost XIII.4 Operating taxes and surcharges Selling expense General and administrative expense Financial 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 “-”) XIII.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	18,257,048 21,397,173 14,231,595 15,830,699 237,227 287,727 121,585 176,958 1,536,955 1,724,671 232,924 257,616 20,752 – -76,942 12,366 446,726 370,362 113,626 66,617
	2,245,794 3,502,230 12,407 5,621 5,420 1,006 2,976 –
	2,252,781 3,506,845 575,191 948,396
	1,677,590 2,558,449
	0.3411 0.5202 0.3411 0.5202
	-17,807 1,176
	1,659,783 2,559,625

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

Yanzhou Coal Mining Company Limited Interim Report 2013 99

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONSOLIDATED CASH FLOW STATEMENT

1 January to 30 June 2013

Prepared by: Yanzhou Coal Mining Company Limited
ITEMS
NOTES

Unit: RMB’000
Januaryto June 2013
Januaryto June 2012
30,969,281
36,287,871
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
359,069
255,169
361,091
1,129,608
31,689,441
37,672,648
20,146,617
17,119,170
–
–
–
–
–
–
–
–
–
–
5,021,062
5,068,603
3,834,245
5,664,158
1,877,505
2,099,626
30,879,429
29,951,557
810,012
7,721,091
–
397,194
74,190
20,590
4,102
3,907
–
–
997,064
5,658,732
1,075,356
6,080,423
4,515,401
1,576,403
–
563,485
–
–
802,089
1,153,258
221,749
946,436
5,539,239
4,239,582
-4,463,883
1,840,841

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
Other cash received relating to operating activities
VI.53
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 nancial 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
Other cash paid relating to operating activities
VI.53
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
Other cash received relating to investing activities
VI.53
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 amounts paid for acquisition of subsidiaries and other business units
Other cash paid relating to investing activities
VI.53
Sub-total of cash outf ows
NET CASH FLOW USED IN INVESTING ACTIVITIES

100

Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONSOLIDATED CASH FLOW STATEMENT – CONTINUED

1 January to 30 June 2013

Prepared by: Yanzhou Coal Mining Company Limited

Prepared by: Yanzhou Coal Mining Company Limited ITEMS NOTES	Unit: RMB’000 January to June 2013 January to June 2012
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 Other cash received relating to 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 Tax refund of minority shareholders-payment to original shareholders of Gloucester Other cash paid relating to f nancing activities Sub-total of cash outf ows NET CASH FLOW USED IN FINANCING ACTIVITIES 4. EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 5. NET INCREASE (DECREASE) ON CASH AND CASH EQUIVALENTS VI.53 Add: Cash and cash equivalent, opening VI.53 6. Cash and cash equivalents, closing VI.53	– – – – 7,338,719 6,940,861 – 6,312,900 – –
	7,338,719 13,253,761
	3,353,407 11,503,000 1,091,046 829,836 – 352 3,621,487 – – 54,798
	8,065,940 12,387,634
	-727,221 866,127
	-116,635 -8,026
	-4,497,727 10,420,033 12,799,757 8,154,224
	8,302,030 18,574,257

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

Yanzhou Coal Mining Company Limited Interim Report 2013 101

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CASH FLOW STATEMENT OF THE PARENT COMPANY

1 January to 30 June 2013

Prepared by: Yanzhou Coal Mining Company Limited
ITEMS
NOTES

Unit: RMB’000
Januaryto June 2013
Januaryto June 2012
23,059,264
28,364,534
–
–
333,180
455,092
23,392,444
28,819,626
14,232,029
15,140,993
3,462,946
3,494,500
3,237,460
4,544,165
1,624,074
1,572,627
22,556,509
24,752,285
835,935
4,067,341
214,000
562,194
237,133
115,101
944
1,468
–
–
997,064
6,219,902
1,449,141
6,898,665
431,251
257,214
–
563,485
1,025,516
817,030
7,280,241
500,000
8,737,008
2,137,729
-7,287,867
4,760,936
–
–
5,468,092
6,200,000
–
–
163,182
242,502
5,631,274
6,442,502
2,852,711
11,492,000
419,613
495,272
–
–
3,272,324
11,987,272
2,358,950
-5,544,770
-17,685
–
-4,110,667
3,283,507
9,388,641
6,014,806
5,277,974
9,298,313

1. CASH FLOW FROM OPERATING ACTIVITIES:
Cash received from sales of goods and rendering of services
Tax refunding
Other cash received relating to operating activities
Sub-total of cash inf ows
Cash paid for goods and services
Cash paid to and on behalf of employees
Taxes payments
Other cash paid relating to 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
Net cash received from disposal of f xed assets, intangible assets and other long-term assets
Net cash amount received from the disposal of sub companies and other business units
Other cash received relating to 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 subcompanies and other business units
Other cash paid relating to investing activities
Sub-total of cash outf ows
NET CASH FLOW USED IN 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 nancial 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
Other cash payment relating to f nancial activities
Sub-total of cash outf ows
NET CASH FLOW USED IN 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

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

Yanzhou Coal Mining Company Limited Interim Report 2013

102

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

1 January to 30 June 2013

Prepared by: Yanzhou Coal Mining Company Limited

Unit:RMB’000

ITEMS	Amount for the f rst half of 2013
	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 interest
I. Balance at December 31, 2012 4,918,400 3,402,027 – 3,074,316 4,983,461 – 28,364,156 -79,107 3,326,172 47,989,425 Add: Change in accounting policies – 40,882 – – – – -337,205 – -74,746 -371,069 Correction of errors in the early stage – – – – – – – – – – Others – – – – – – – – – – II. Balance at January 1, 2013 4,918,400 3,442,909 – 3,074,316 4,983,461 – 28,026,951 -79,107 3,251,426 47,618,356 III. Changes for the year (The decrease is listed beginning with “-”) – -255,389 – 479,885 – – -4,167,539 -1,596,550 1,209,402 -4,330,191 (I) Net prof t – – – – – – -2,396,915 – -1,027,530 -3,424,445 (II) Other comprehensive income – -255,389 – – – – – -1,596,550 -329,302 -2,181,241 Sub-total of (I) and (II) – -255,389 – – – – -2,396,915 -1,596,550 -1,356,832 -5,605,686 (III) Owner’s contributions and reduction in capital – – – – – – – – 2,548,737 2,548,737 1. Capital from shareholders – – – – – – – – 2,548,737 2,548,737 2. Consolidation under common control – – – – – – – – – – 3. Others – – – – – – – – – – (IV) Prof t distribution – – – – – – -1,770,624 – – -1,770,624 1. Transfer to surplus reserve – – – – – – – – – – 2. Provision for general risks – – – – – – – – – – 3. Distribution to shareholders – – – – – – -1,770,624 – – -1,770,624 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 – – – 479,885 – – – – 17,497 497,382 1. Provision of the year – – – 484,086 – – – – 17,497 501,583 2. Usage of the year – – – -4,201 – – – – – -4,201 (VII Others – – – – – – – – – – IV. Balance at June 30, 2013 4,918,400 3,187,520 – 3,554,201 4,983,461 – 23,859,412 -1,675,657 4,460,828 43,288,165	4,918,400 3,402,027 – 3,074,316 4,983,461 – 28,364,156 -79,107 3,326,172 47,989,425 – 40,882 – – – – -337,205 – -74,746 -371,069 – – – – – – – – – – – – – – – – – – – –
	4,918,400 3,442,909 – 3,074,316 4,983,461 – 28,026,951 -79,107 3,251,426 47,618,356
	4,918,400 3,187,520 – 3,554,201 4,983,461 – 23,859,412 -1,675,657 4,460,828 43,288,165

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

Yanzhou Coal Mining Company Limited Interim Report 2013 103

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY – CONTINUED

January to June 2013

Prepared by: Yanzhou Coal Mining Company Limited

Unit:RMB’000

					Amount for theyear of	Amount for theyear of	2012
				Attribute to	shareholders of the Parent Company
						Provision					Total of shareholders’
ITEMS	Share capital	Capital reserves Less:treasury stock		Special reserves	Surplus reserves	for General	Risk	Retained earnings	Translation reserve	Minority interest	interest
I. Balance at December 31, 2011	4,918,400	4,474,781	–	2,414,752	4,580,888		–	26,054,370	-376,828	666,184	42,732,547
Add: Change in accounting policies	–	–	–	–	–		–	-183,009	–	–	-183,009
Correction of errors in the early stage	–	–	–	–	–		–	–	–	–	–
Others	–	–	–	–	–		–	–	–	–	–
II. Balance at January 1, 2012	4,918,400	4,474,781	–	2,414,752	4,580,888		–	25,871,361	-376,828	666,184	42,549,538
III. Changes for the year (The decrease is listed
beginning with “-”)	–	-1,031,872	–	659,564	402,573		–	2,155,590	297,721	2,585,242	5,068,818
(I) Net prof t	–	–	–	–	–		–	5,361,651	–	33,830	5,395,481
(II) Other comprehensive income	–	50,612	–	–	–		–	–	297,721	–	348,333
Sub-total of (I) and (II)	–	50,612	–	–	–		–	5,361,651	297,721	33,830	5,743,814
(III) Owner’s contributions and reduction in capital	–	-1,082,574	–	–	–		–	–	–	2,577,218	1,494,644
1. Capital from shareholders	–	–	–	–	–		–	–	–	49,000	49,000
2. Consolidation under common control	–	-692,486	–	–	–		–	–	–	–	-692,486
3. Merger with Gloucester	–	-390,088	–	–	–		–	–	–	2,528,218	2,138,130
(IV) Prof t distribution	–	–	–	–	402,573		–	-3,206,061	–	-47,095	-2,850,583
1. Transfer to surplus reserve	–	–	–	–	402,573		–	-402,573	–	–	–
2. Provision for general risks	–	–	–	–	–		–	–	–	–	–
3. Distribution to shareholders	–	–	–	–	–		–	-2,803,488	–	-47,095	-2,850,583
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	–	–	–	659,564	–		–	–	–	21,289	680,853
1. Provision of the year	–	–	–	988,880	–		–	–	–	21,289	1,010,169
2. Usage of the year	–	–	–	-329,316	–		–	–	–	–	-329,316
(VII Others	–	90	–	–	–		–	–	–	–	90
IV. Balance at December 31, 2012	4,918,400	3,442,909	–	3,074,316	4,983,461		–	28,026,951	-79,107	3,251,426	47,618,356

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

104 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

STATEMENT OF CHANGES IN EQUITY OF THE PARENT COMPANY

1 January to 30 June 2013

Prepared by: Yanzhou Coal Mining Company Limited

Unit: RMB’000

ITEMS	Amount for the f rst half of 2013
	Provision Total of shareholders’ Share capital Capital reserves Less:treasury stock Special reserves Surplus reserves for General Risks Retained earnings interest
I. Balance at December 31, 2012 Add: Change in accounting policies Correction of errors in the early stage Others II. Balance at January 1, 2013 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. Consolidation 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 June 30, 2013	4,918,400 3,827,333 – 2,739,038 4,938,351 – 23,733,069 40,156,191 – – – – – – – – – – – – – – – – – – – – – – – –
	4,918,400 3,827,333 – 2,739,038 4,938,351 – 23,733,069 40,156,191
	– -17,807 – 358,268 – – -93,034 247,427 – – – – – – 1,677,590 1,677,590 – -17,807 – – – – – -17,807 – -17,807 – – – – 1,677,590 1,659,783 – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – -1,770,624 -1,770,624 – – – – – – – – – – – – – – – – – – – – – – -1,770,624 -1,770,624 – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – 358,268 – – – 358,268 – – – 358,268 – – – 358,268 – – – – – – – – – – – – – – – –
	4,918,400 3,809,526 – 3,097,306 4,938,351 – 23,640,035 40,403,618

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

Yanzhou Coal Mining Company Limited Interim Report 2013 105

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

STATEMENT OF CHANGES IN EQUITY OF THE PARENT COMPANY – CONTINUED

1 January to 30 June 2013

Prepared by: Yanzhou Coal Mining Company Limited

Unit: RMB’000

ITEMS

Amount for theyear of 2012
Provision
Total of shareholders’
Share capital
Capital reserves
Less:treasury stock
Special reserves
Surplus reserves
for General Risks
Retained earnings
interest
4,918,400
4,587,846
–
2,217,185
4,535,778
–
22,913,403
39,172,612
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
4,918,400
4,587,846
–
2,217,185
4,535,778
–
22,913,403
39,172,612
–
-760,513
–
521,853
402,573
–
819,666
983,579
–
–
–
–
–
–
4,025,727
4,025,727
–
-4,443
–
–
–
–
–
-4,443
–
-4,443
–
–
–
–
4,025,727
4,021,284
–
-756,160
–
–
–
–
–
-756,160
–
–
–
–
–
–
–
–
–
-756,160
–
–
–
–
–
-756,160
–
–
–
–
–
–
–
–
–
–
–
–
402,573
–
-3,206,061
-2,803,488
–
–
–
–
402,573
–
-402,573
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
-2,803,488
-2,803,488
–
–
–
–
–
–
–
–

–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
521,853
–
–
–
521,853
–
–
–
742,463
–
–
–
742,463
–
–
–
-220,610
–
–
–
-220,610
–
90
–
–
–
–
–
90
4,918,400
3,827,333
–
2,739,038
4,938,351
–
23,733,069
40,156,191

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. consolidation 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 December 31, 2012

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

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NOTES TO THE FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2013

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 Company 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 traded on Stock Exchange of Hong Kong Limited on April 1, 1998, and the American Depositary Shares was traded in the New York Stock Exchange on March 31, 1998. The total share capital has changed to RMB2,520 million after this issuance. The Company issued 80 million new A shares in June 1998. The above shares went to public and were traded on Shanghai Stock Exchange since July 1, 1998. After multiple increased issuance and bonus shares, the share capital of the Company had increased to RMB4,918.40 million by December 31, 2013.

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

1. The preparation foundation of fi nancial statements

The Group’s fi nancial statements have been prepared on a going concern basis and based on actual transactions and events, in accordance with “Accounting Standards for Business Enterprises” (herein refer to as “new CASs” or “ASBEs”) and other related regulations issued by the China Ministry of Finance and the accounting policies and estimates of the Group as stated in “signifi cant accounting policies, accounting estimates and preparation methods for consolidated fi nancial statements” in the notes.

2. 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.

3. Accounting period

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

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4. Functional currency

The functional currency of the Company and domestic subsidiaries is Renminbi (RMB). The overseas subsidiaries use foreign currency for accounting and translate into RMB when preparing fi nancial statements. See Note II. 9.

5. 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.

6. Business combinations

A business combination is a transaction or event that brings together of two or more than two 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 combining 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 adjusted 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.

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7. 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 intercompany transactions, balances, income and expenses in the consolidation scope are eliminated in full on consolidation. Unrealized loss from intercompany transactions shall, if there is evidence that the loss is part of the impairment loss of relevant assets, be recognized in full. Shareholder’s equity which is not belong to the parent company is identifi ed separately as minority interest on consolidated fi nancial statements.

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 used 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 on 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.

8. 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.

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

(1) Foreign currency transaction

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.

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

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.

10. Financial assets and fi nancial liabilities

(1) Financial assets

1) Financial assets by category

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’.

A 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.

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10. Financial assets and fi nancial liabilities – continued

(1) Financial assets – continued

1) Financial assets by category – continued

B Held-to-maturity investment

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

C Receivables:

Non-derivative fi nancial assets with fi xed or determinable payments are not quoted in an active market.

D 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-to-maturity investments.

2) Recognition and measurement

Financial assets are recognized in fair 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.

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10. Financial assets and fi nancial liabilities – continued

(1) Financial assets – continued

2) Recognition and measurement – continued

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.

3) Impairment of fi nancial assets

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.

4) Transfer of fi nancial asset

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.

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10. Financial assets and fi nancial liabilities – continued

(1) Financial assets – continued

4) Transfer of fi nancial asset – continued

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.

If 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.

(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.

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10. Financial assets and fi nancial liabilities – continued

(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.

The fair values of forward foreign exchange contracts of the Company and its overseas subsidiary 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 the fi xed interest rate.

11. 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.

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11. Accounting method for bad debt provisions of the receivables – continued

(1) The receivables with individual signifi cant amount accruing bad debts provisions Judgment basis or amount standards of individual signifi cant amount

The receivables with more than RMB 20 million individual amount shall be classifi ed into the signifi cant receivables;

The accruing method of the receivables The bad debt provisions shall be accrued based on the with individual signifi cant amount 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 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 The individual amount is not signifi cant, but the accrued bad debt provision on the basis of portfolio can not refl ect its risk. Accrual method 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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12. Inventories

(1) the classifi cation of inventories: The inventories include the raw materials, coal stock, methanol, 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 of cost and net realizable value. If the inventories are damaged, become partially or completely obsolete or sold at price lower than the cost, unrecoverable cost shall be estimated and recognized as a provision for decline in value. The excess of cost over the net realizable value is generally recognized as provision for decline in value of inventories on a separate inventory item.
(4) Net realizable 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.

13. 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.

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.

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.

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13. Long-term equity investments – continued

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 issuance of equity securities, the initial investment cost shall be the fair value of the securities issued. For 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, while the equity method is 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 long-term 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.

For the reason of decreasing investment, the Group no longer has any joint control or signifi cant infl uence on the investee, and in an active market the long-term equity investment, which has no offer and the 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 equity 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.

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14. 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.
(4) Subsequent expenditure of fi xed assets: the subsequent expenditure includes expenses for repair, renovation and improvement, which shall be capitalized 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 straight-line method are as follows:

			Estimated	annual
		Useful life	residual	depreciation
No.	Category	(years)	value rate (%)	rate (%)
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

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14. Fixed assets – continued

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.

Leased assets are depreciated during shorter of estimated useful life and lease period using straight-line method.

(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.
(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.

15. Construction in progress

(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 construction in progress to the fi xed assets: the construction in progress 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.

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16. 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.

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 the fi xed assets, investment properties, inventories, etc, which shall take a long time (generally over 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.

17. Intangible assets

The pricing method of intangible assets: The intangible assets of the Group include mainly mining rights, unproven mining interests, the land use rights, patents and know-hows 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) Unproven mining interests. Unproven mining interests 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).

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17. Intangible assets – continued

(3) Land use rights. The land use rights are evenly amortized over the transferred term since the rights are obtained.
(4) Patented technologies, non-patented technologies and other intangible assets.The patented technologies, non-patented technologies and other intangible assets with limited life shall be amortized under the shortest among expected useful life, benefi cial life agreed by contracts, and legally required useful life in composite life method. The patented technologies, non-patented technologies and other intangible assets with unsure life shall not be amortized and are tested for impairment at the end of each period.

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.

18. Exploration and evaluation expenditures

Exploration and evaluation expenditure incurred is accumulated in respect of each separately identifi able area of interest which is at individual mine level. These costs are only capitalized or temporarily capitalized where the mining rights for the area of interest is current and to the extent that they are expected to be recouped through successful development and commercial exploitation, or alternatively, sale of the area, or where activities in the area have not yet reached a stage which permits reasonable assessment of the existence of economically recoverable reserves and active and signifi cant operations in, or in relation to, the area of interest are continuing.

A regular review is undertaken of each area of interest to determine the appropriateness of continuing of capitalization forward costs in relation to that area of interest. Accumulated expenditure in relation to an abandoned area are written-off in full in the period in which the decision to abandon the area is made. The carrying amount of exploration and evaluation assets is assessed for impairment when facts or circumstances suggest the carrying amount of the assets may exceed their recoverable amount.

When production commences, the accumulated costs for the relevant area of interest are amortized over the life of the area according to the rate of depletion of the economically recoverable reserves.

Exploration and evaluation expenditure acquired in a business combination are recognised at their fair value at the acquisition date (the fair value of potential economically recoverable reserves at the acquisition date which is shown as “unproved mineral interests”).

According to the assets character, capitalized exploration and evaluation expenditure considered to be fi xed assets (Note II.14), construction in progress (Note II. 15) or intangible assets (Note II.17).

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19. 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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20. Goodwill

Goodwill is the difference between equity investment cost or consideration and fair value of net identifi able assets of investees or acquires on acquisition date or purchase date.

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.

21. 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.

22. 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 which is provided for when it is probable that settlement will be required and it is capable of being measured reliably.

When the Group terminates the employment relationship with employees before the employment contracts have expired, or provides compensation as an offer to encourage employees to accept voluntary redundancy, a provision for the termination benefi ts provided, is recognised in profi t or loss when both of the following conditions have been satisfi ed: the Group has a formal plan for the termination of employment or has made an offer to employees or voluntary redundancy, which will be implemented shortly; the Group is not allowed to withdraw from termination plan or redundancy offer unilaterally.

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23. 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.

24. Overburden in advance

Overburden in advance of open cut coal mine comprises the accumulation of expenditures incurred to enable access to the coal seams, and includes direct removal costs and machinery and plant running costs. The overburden in advance which can improve future mining capacity and meet special standards will be recognized as current assets (striping assets). The rest of overburden in advance will be accounted to the current operating cost and be transferred to inventory.

The overburden in advance which can improve future mining capacity and be recognized as noncurrent assets must meet all the following criteria:

(1) It is probable that the future economic benefi t associated with the striping activity will fl ow to the entity;
(2) the entity can identify the component of the ore body for which access has been improved; and
(3) the costs relating to the striping activity associated with that component can be measured reliably.

Striping assets should be recognized as the part of its related mineral assets.

Striping assets are classifi ed into tangible assets and intangible assets based on the nature present assets comprised by the related stripping assets. If striping assets and inventory cannot be independently identifi ed, overburden in advance should be distributed in striping assets and inventory according to corresponding production standards.

Striping assets will be depreciated in the estimated life of mine of related identifi ed ore body parts.

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25. Land subsidence, restoration, rehabilitation and environmental costs

The mining activities of the Group and the domestic subsidiaries may cause land f 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.

26. Special reserves

(1) Wei jian fees

Pursuant to the rules and regulations jointly issued by Ministry of Finance, State Administration of Coal Mine Safety and related government authorities in the PRC, the Company has to accrue production maintenance expenses (Maintenance fee) for maintaining production and technical improvement of coal mines.

Company Name	Standard
The Company and its subsidiaries in Shandong and Shanxi	RMB 6/Ton
Subsidiaries of the Company in Inner Mongolia	RMB 6.5/Ton

(2) Production safety expenses

In accordance with the regulations of the Ministry of Finance, the State Administration of Work Safety, the State Administration of Coal Mine Safety and local government departments, the Company also accrues for production safety expensed and for purchase of coal production equipment and safety expense of coal mining structure.

Company name	Accounting period	Standard
The Company and its subsidiaries in Shandong	Before 1 Feb 2012	RMB8/Ton
	After 1 Feb 2012	RMB15/Ton
Subsidiaries of the Company in Inner Mongolia	Before 1 Feb 2012	RMB10/Ton
	After 1 Feb 2012	RMB15/Ton
Subsidiaries of the Company in Shanxi	Before 1 Sep 2011	RMB15/Ton
	After 1 Sep 2011	RMB50/Ton

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26. Special reserves – continued

(2) Production safety expenses – continued

In accordance with the regulations of the Ministry of Finance, the State Administration of Work Safety, the State Administration of Coal Mine Safety and local government departments, 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 shareholders’ 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.

(3) 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.

(4) 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”.

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27. The Principles of Revenue recognition

(1) Principles: 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.

(2) Policies
1) The Company has transferred to the buyer the main risks and rewards of ownership of the coal, methanol, heat, auxiliary materials and other sales revenue. The Company neither retains continuing management usually associated with ownership, nor effectively controls over the goods sold.
2) Electricity sales revenue is recognized when transmitting power to power companies. The revenue is measured by the amount of power and the appropriate electricity price settled by related power companies.
3) Revenue of railway and air transportation and other services are recognized when the services are completed.
4) Interest revenue is measured by the period of cash borrowings and the actual interest rates.

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28. 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.

29. 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.

30. 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.

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31. 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.

32. Mineral Resources Rent Tax

Mineral Resources 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 II. 29 and II. 31 for details.

33. 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.

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34. Operation Method of Hedges Business

The Group’s overseas subsidiaries use derivative fi nancial instruments such as forward foreign exchange contracts, coal swap contracts and 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.

35. Common control operation

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

The subsidiaries in Australia 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.

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36. 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.

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.

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

36. Signifi cant accounting policies and accounting estimates – continued

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

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.

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

As described in Note 2 (19), 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.

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

36. Signifi cant accounting policies and accounting estimates – continued

(5) Tax

The Company has obligations to pay a variety of taxes in a number of countries and regions. There are uncertainties for fi nal tax treatments of many transactions and matters in normal operating activities. If there are differences between the ultimately ascertained results of these tax matters and the amounts that were initially recorded then the differences will impact the tax balance in the period that the above ultimate assertion being made.

If the management expects probable future taxable profi t, and it can be utilized as deductable temporary differences or tax losses, then deferred tax assets will be recognized based on these deductible temporary differences or tax losses. When the expected amount is different from the original estimation, the difference will affect the recognition of deferred tax assets in the period in which the estimation changes. If the management expects to not be able to eliminate future taxable income, deferred tax assets are not recognized on temporary differences and tax losses.

As a result of the MRRT legislation that was enacted on 19 March 2012 and that was effective from 1 July 2012, additional deferred tax balances have been recognized. Judgment is required for the Group’s Australian subsidiaries to assess whether deferred tax assets and deferred tax liabilities arising from MRRT are recognized on the balance sheet. Deferred tax assets are recognized only when it is considered probable that they will be recovered. Recoverability is dependent on the generation of suffi cient future taxable profi ts. Assumptions about the generation of future taxable profi ts depend on managements estimates of future cash fl ows. These in turn depend on estimates of future sales volumes, operating costs, capital expenditure and government royalty payable.

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

1. Changes in accounting policies

The open cut mine overburden removal cost (striping cost) of the Group was recognized as striping assets as occurred and accounted into profi t and loss in subsequent period based on tonnage of run of mine (ROM) mined according to the previous accounting policy. This is calculated by: ROM tones * weighted average cost per BCM * average strip ratio (the average strip ratio is ratio of overburden in cubic meter required to be mined in order to extract ROM in tones). Strip ratio of the Company’s each Australia subsidiaries is mostly determined by life of mine and design.

According to International Financial Reporting Interpretations Committee—No.20 striping costs in the production phase of a surface mine (IFRIC 20), the Group has changed accounting policy in relation to striping cost to: for striping activity which can improve future access to ore body will be as non-current assets (striping assets) if certain criteria are met. The striping assets will be depreciated over benefi cial period, the rest striping cost will account into operating cost and transfer to inventory.

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III. CHANGE OF ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES AND CORRECTION OF EARLY ERRORS – CONTINUED

Changes in accounting policies – continued
IFRIC 20 is in effect from fi nancial year beginning on or after January 1, 2013. Since “Accounting Standards for Business Enterprises” doesn’t present any specifi c requirement for striping cost, thus, as reviewed and approved by the 16th Meeting of the 5th Board Meeting on August 19, 2013, the Group will adopt IFRIC 20 and related accounting treatments and the effect tive date is January 1, 2013. On implementation day, based on the new rules, the Group made new judgment on striping assets listed in the balance sheet and wrote-off the related striping assets as they were independent of identifi ed ore body. At same time, in accordance with IFRIC 20, the related adjustment is accounted into opening balance of retained earnings of the earliest period presented. The comparative fi nancial statements for the year 2013 have restated.

Retroactive adjustment method was applied to the changes in accounting policy and the impact on each period fi nancial statement is as following:

(1) Impact on equity interests at the beginning of 2012 is RMB-183,009 thousand. The accumulated effect on equity interests attributable to shareholders of the parent company is RMB-183,009 thousand among which the undistributed profi t decreased RMB 183,009 thousand.
(2) For January to June 2012, the effected amount is to decrease net profi t RMB 32,710 thousand; among which the net profi t for the shareholders of the parent company decreased RMB 32,710 thousand;
(3) For June 30 2012, impact on equity interests is RMB-215,719 thousand; the effected amount of equity interests for shareholders of the parent company is RMB-174,837 thousand; among which decrease undistributed profit RMB 215,719 thousand, increase capital reserve RMB 40,882 thousand and decrease minority shareholders equity interests RMB 40,882 thousand.
(4) For the equity interests at the beginning of 2013 the effected amount is RMB-371,069 thousand. The effected amount of equity interests for shareholders of the parent company is RMB-296,323 thousand; among which undistributed profi t is decreased RMB 337,205 thousand, capital reserve is increased RMB 40,882 thousand and minority shareholders equity interests is decreased RMB 74,746 thousand.

2. Changes in accounting estimates

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

3. Prior accounting errors amendments and impact

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

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IV. TAXES

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

1. Income tax

Except Anyuan coal mine of Ordos Neng Hua and Inner Mongolia Xintai Coal Mining Co., Ltd, income tax is calculated at 25% of the total assessable income of the subsidiaries of the Group that registered in PRC.

According to notice of approval to preferential taxation for western development issued by Ejin Horo local tax bureau on April 16,2013, Anyuan coal mine of Ordos Neng Hua and Inner Mongolia Xintai Coal Mining Co., Ltd meet the requirements of western development preferential policies, of which income tax is calculated at 15% in 2013.3

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.

According to the approval of “Ji Lu Jing Xin Xun Zi (2012) Document No.646, 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%.

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.

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IV. TAXES – CONTINUED

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.

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.

Pursuant to the “Notice of the adjustment of resource tax amount of the Inner Mongolia Autonomous Region” (Caishui [2005] No.172), which was issued by the State Administration of Taxation, resource tax of Inner Mongolia Autonomous Region 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%.

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

Taxes	Taxation basis	Rate
Income tax (note 1)	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%
Mineral Resource Rent Tax (note 2)	Taxable prof t	22.5%

Note 1: Income tax for overseas subsidiaries of the Company is calculated at 30% of the total income. Yancoal Australia Limited (as referred to “Yancoal Australia) and its 100% owned Australian subsidiaries are a taxation consolidated group pursuant to the rules of taxation consolidation in Australia. Yancoal Australia 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.

Note 2: Mineral 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. The 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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IV. TAXES – CONTINUED

iii. Main taxes and rates applicable to other overseas subsidiaries of the Company thereof as following:

Areas or countries	Tax	Taxation basis	Rate
Hong Kong	Prof ts tax	Taxable income	16.5%
Luxemburg	Business income tax	Taxable income	22.5%
Canada	Goods and services tax	Taxable price of goods	5%
Canada	Business income tax	Taxable income	27%

V. BUSINESS COMBINATIONS AND CONSOLIDATED FINANCIAL STATEMENTS

i. Subsidiaries (secondary subsidiaries and all other tier signifi cant subsidiaries)

					Shareholding	Ratio of
Name of subsidiaries	Place of registration	Registered capital	Business scope	Investment capital	proportion	voting right
I. Subsidiaries acquired under common control
Secondary subsidiaries
Yanzhou Coal Shanxi Neng Hua Co., Ltd	Jinzhong, Shanxi	RMB600 million	Thermoelectricity investment, coal	RMB508.21 million	100.00%	100.00%
			technology service
Shandong Hua Ju Energy Co., Ltd	Zoucheng, Shandong	RMB288.59 million	Production and sales of thermal	RMB766.25 million	95.14%	95.14%
			power and comprehensive
			utilization of waste heat
Zoucheng Yankuang Beisheng	Zoucheng, Shandong	RMB2.4 million	Gangue selecting and processing,	RMB2.4 million	100.00%	100.00%
Industry and Trade Co., Ltd			cargo transportation
II. Subsidiaries acquired not under common control
Secondary subsidiaries
Shandong Yanmei Shipping Co., Ltd.	Jining, Shandong	RMB5.5 million	Freight transportation and coal sales	RMB10.57 million	92.00%	92.00%
Inner Mongolia Haosheng Coal Mining	Ordos	RMB500 million	Sales of coal mining machinery and	RMB7.13654 billion	74.82%	74.82%
Company Limited			equipment and accessories
Three-tier subsidiaries
Gloucester Coal Ltd.	Australia	AUD719.72 million	Development and operating of coal	AUD550.45 million	100.00%	100.00%
			and relevant resources
Four-tier subsidiaries
Yancoal Resources Ltd	Australia	AUD446.41 million	Exploring and extracting coal	AUD3.35418 billion	100.00%	100.00%
			resources
Syntech Holdings Pty Ltd	Australia	AUD223.47 million	Holding company and mining	AUD186.17 million	100.00%	100.00%
			management
Syntech Holdings II Pty Ltd	Australia	AUD6.32 million	Holding company	AUD22.31 million	100.00%	100.00%
Premier Coal Limited	Australia	AUD8.78 million	Coal mining and sales	AUD312.73 million	100.00%	100.00%

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V. BUSINESS COMBINATIONS AND CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

i. Subsidiaries (secondary subsidiaries and all other tier signifi cant subsidiaries) – continued

==> picture [459 x 274] intentionally omitted <==

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

||||||||
|---|---|---|---|---|---|---|
|Shareholding|Ratio of|
|Name of subsidiaries|Place of registration|Registered capital|Business scope|Investment capital|proportion|voting right|
|III. Subsidiaries established by investment|
|Secondary subsidiaries|
|Qingdao Free Trade Zone Zhongyan|Qingdao, Shandong|RMB2.1 million|Trade and storage in free trade zone|RMB2.71 million|52.38%|52.38%|
|Trade Co., Ltd|
|Yanzhou Coal Mining Yulin Neng Hua|Yulin, Shaanxi|RMB1.4 billion|Production and sales of methanol|RMB1.4 billion|100.00%|100.00%|
|Co., Ltd|and acetic acid|
|Yanmei Heze Neng Hua Co., Ltd|Heze, Shandong|RMB3 billion|Coal mining and sales|RMB2.92434 billion|98.33%|98.33%|
|Yanzhou Coal Ordos Neng Hua Co., Ltd|Inner Mongolia|RMB3.1 billion|Production and sales of methanol|RMB3.1 billion|100.00%|100.00%|
|(600,000 tons)|
|Yancoal Australia Limited|Australia|AUD656.7 million|Investment and shareholding|RMB2.46869 billion|78.00%|78.00%|
|Yancoal International (Holding) Co., Ltd.|Hong Kong|USD2.8 million|Investment and shareholding|RMB17.92 million|100.00%|100.00%|
|Shandong Coal Trading Centre Co., Ltd.|Zoucheng, Shandong|RMB100 million|Coal spot trade service and|RMB51 million|51.00%|51.00%|
|management; sales of real estate|
|Shandong Yanmei Rizhao Port Coal|Rizhao, Shandong|RMB300 million|Wholesales of coal|RMB153 million|51.00%|51.00%|
|Storage and Blending Co., Ltd.|
|Three-tier subsidiaries|
|Austar Coal Mine Pty Limited.|Australia|AUD 64 million|Coal mining and sales|AUD403.28 million|100.00%|100.00%|

----- End of picture text -----

138 Yanzhou Coal Mining Company Limited Interim Report 2013

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V. BUSINESS COMBINATIONS AND CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED
i. Subsidiaries (secondary subsidiaries and all other tier signifi cant subsidiaries) – continued

			Account for reducing
			prof t and loss
			to the minority
	Consolidated		Shareholders in
	statements	Minority interest at	minority interest at
Name of subsidiaries	(yes/no)	December 31, 2012	December 31, 2012
I. Subsidiaries acquired under common control
Secondary subsidiaries
Yanzhou Coal Shanxi Neng Hua Co., Ltd	Yes	15,323	1,663
Shandong Hua Ju Energy Co., Ltd	Yes	46,708	–
Zoucheng Yankuang Beisheng Industry	Yes	–	–
and Trade Co., Ltd
II. Subsidiaries acquired not under common	control
Secondary subsidiaries
Shandong Yanmei Shipping Co., Ltd.	Yes	1,628	–
Inner Mongolia Haosheng Coal Mining	Yes	2,399,600	2,137
Company Limited
Three-tier subsidiaries
Gloucester Coal Ltd.	Yes	–	–
Four-tier subsidiaries
Yancoal Resources Limited	Yes	–	–
Syntech Holdings Pty Ltd	Yes	–	–
Syntech Holdings II Pty Ltd	Yes	–	–
Premier Coal Limited	Yes	–	–
III. Subsidiaries established by investment
Secondary subsidiaries
Qingdao Free Trade Zone Zhongyan Trade	Yes	3,334	–
Co., Ltd
Yanzhou Coal Mining Yulin Neng Hua Co., Ltd	Yes	–	–
Yanmei Heze Neng Hua Co., Ltd	Yes	52,728	–
Yanzhou Coal Ordos Neng Hua Co., Ltd	Yes	–	–
Yancoal Australia Limited	Yes	1,237,546	1,290,672
Yancoal International (Holding) Co., Ltd.	Yes	–	–
Shandong Coal Trading Centre Co., Ltd.	Yes	48,308	692
Shandong Yanmei Rizhao Port Coal Storage	Yes	145,435	1,565
and Blending Co., Ltd.
Three-tier subsidiaries
Austar Coal Mine Pty Limited.	Yes	–	–

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V. BUSINESS COMBINATIONS AND CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

i. Subsidiaries (secondary subsidiaries and all other tier signifi cant subsidiaries) – continued 1. 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 November 2006, Yankuang Group and Yankuang Lunan Fertilizer Plant transferred the equities of Shanxi Neng Hua to the Company and thus the Company held 100% in the total registered 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.

As at the end of the reporting date, the subsidiaries of Shanxi Neng Hua are as follows:

	Place of	Registered	Shareholding
Name of Subsidiaries	registration	capital	Business Scope proportion
Shanxi Heshun Tianchi Energy	Shanxi Heshun	RMB90 million	Raw coal mining, production 81.31
Co., Ltd			and sales
Shanxi Tianhao Chemicals Co., Ltd	Shanxi Xiaoyi	RMB150 million	Methanol, chemical production, 99.89
			coke production and
			development

2. 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 shareholders, i.e. Yankuang Group, Shandong Chuangye Investment Development Company, Shandong Honghe Mining Group Co., Ltd. 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 shareholders invested currency following the above ratio, and total number of shares 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. 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 code is 370000018085042; legal person representative is Hao Jingwu. Hua Ju Energy is mainly engaged in thermal power generation by coal slurry and gangue, sales of electricity on the grid and comprehensive use of waste heat.

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i. Subsidiaries (secondary subsidiaries and all other tier signifi cant subsidiaries) – continued 3. Zoucheng Yankuang Beisheng Industry and Trade Co., Ltd. Zoucheng Yankuang Beisheng Industry and Trade Co., Ltd. (as referred to “Beisheng Industry and Trade”) 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 were incorporated into the Company after the acquisition, accordingly, Beisheng Industry and Trade 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.
1. 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 RMB10.57 million purchasing 92% of the registered capital in 2003, and Shandong Chuangye Investment and Development Co., Ltd. attained the other 8%. In 2010, Shandong Chuangye Investment and Development Co., Ltd. transferred its equity interest in Yanmei Shipping to Shandong Borui Investment Company. 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.

Inner Mongolia Haosheng Coal Mining Company Limited

Inner Mongolia Haosheng Coal Mining Company Limited (as referred to “Haosheng Company”) was established in May 2010 by three shareholders, i.e. Shanghai Huayi (Group) Company, Ordos Jiutaimanlai Coal Mining Company, Ordos Jinchengtai Chemical Company, with registered capital of RMB150 million. Haosheng Company is responsible for the operation of Shilawusu coal mine. After multiple acquisitions and capital incremental, the Company has acquired 74.82% share rights of Haosheng Company in January 2013 and Haosheng Company has become the holding subsidiary of the Company. In June 30, 2013, registered capital of Haosheng Company is RMB 500 million. The corporation business license code is 150000000009736 and the legal representative is Mr. Yin Mingde. The company is mainly engaged in sales of coal mining machinery and equipment and accessories.

Gloucester Coal Ltd

Gloucester Coal Ltd (as referred to “Gloucester”), a company 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.

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V. BUSINESS COMBINATIONS AND CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

i. Subsidiaries (secondary subsidiaries and all other tier signifi cant subsidiaries) – continued 6. Gloucester Coal Ltd – continued

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, 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.

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.

(1) As at 30 June 2013, the controlled subsidiaries of Gloucester include:

	Registration	Registered		Shareholding
Name of subsidiaries	place	capital (AUD)	Scope of business	Proportion (%)
Westralian Prospectors NL	Australia	93,001	Dormant	100
Eucla Mining NL	Australia	707,500	Dormant	100
CIM Duralie Pty Ltd	Australia	665	Dormant	100
Duralie Coal Marketing Pty Ltd	Australia	2	Dormant	100
Duralie Coal Pty Ltd	Australia	2	Coal mining	100
Gloucester (SPV) Pty Ltd	Australia	2	Holding company	100
Gloucester (Sub Holdings 1) Pty Ltd	Australia	2	holding company	100
Gloucester (Sub Holdings 2) Pty Ltd	Australia	2	Holding company	100
CIM Mining Pty Ltd	Australia	30,180,720	Dormant	100
Donaldson Coal Holdings Limited	Australia	204,945,942	Holding company	100
Monash Coal Holdings Pty Ltd	Australia	100	Dormant	100
CIM Stratford Pty Ltd	Australia	21,558,606	Dormant	100
CIM Services Pty Ltd	Australia	8,400,002	Dormant	100
Donaldson Coal Pty Ltd	Australia	6,688,782	Coal mining and sales	100
Donaldson Coal Finance Pty Ltd	Australia	10	Finance company	100
Monash Coal Pty Ltd	Australia	200	Coal mining and sales	100
Stradford Coal Pty Ltd	Australia	10	Coal mining	100
Stradford Coal Marketing Pty Ltd	Australia	10	Coal sales	100
Abakk Pty Ltd	Australia	6	Dormant	100
Newcastle Coal Company Pty Ltd	Australia	2,300,999	Coal mining	100
Primecoal International Pty Ltd	Australia	–	Dormant	100

142

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V. BUSINESS COMBINATIONS AND CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

i. Subsidiaries (secondary subsidiaries and all other tier signifi cant subsidiaries) – continued 6. Gloucester Coal Ltd – continued
(2) Joint venture of Gloucester

			Shareholding
Name	Place	Business scope	proportion (%)
Middlemount Coal Pty Ltd	Australia	Coal mining and sales	50

7. Yancoal Resources Limited

Yancoal Resources Limited (previously known as Felix Resource Ltd., Co. hereafter as “Yancoal Resources”), a limited liability company established at January 1970 in Brisbane, Queensland, Australia, is mainly engaged in businesses such as coal mining and exploration, company registration number 000 754 174.

Austar, a subsidiary of the Company, is the registered holder of 196.46 million shares representing 100% of the issued share of Felix.

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

	Place of	Registered		Shareholding
Subsidiaries	registration	capital (AUD)	Business scope	proportion (%)
White Mining Limited	Australia	3,300,200	Holding company & Coal	100
			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
Yancoal Resources NSW Pty Limited	Australia	2	Holding company	100
Moolarben Coal Sales Pty Ltd	Australia	2	Coal sales	100

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i. Subsidiaries (secondary subsidiaries and all other tier signifi cant subsidiaries) – continued 7. 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.

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

(3) Jointly controlled entities of Yancoal Resources
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.

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

	Place of	Registered		Shareholding
Subsidiaries	registration	capital (AUD)	Business 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

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i. Subsidiaries (secondary subsidiaries and all other tier signifi cant subsidiaries) – continued 9. 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		Shares
Subsidiaries	registration	capital (AUD)	Business scope	proportion (%)
AMH (Chinchilla Coal) Pty Ltd	Australia	2	Exploration	100

10. 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.

11. 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 registered 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.

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i. Subsidiaries (secondary subsidiaries and all other tier signifi cant subsidiaries) – continued 12. 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.
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 registered capital of RMB600 million, of which, the Company held 95.67%. In July 2007, Heze Neng Hua increased the registered 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 registered capital of RMB 1.5 billion and the registered 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.

14. 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 registered 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.

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i. Subsidiaries (secondary subsidiaries and all other tier signifi cant subsidiaries) – continued 14. Yanzhou Coal Ordos Neng Hua Company Limited – continued As at the end of the reporting period, subsidiaries are as follows:

	Place of			Shareholding
Name of subsidiaries	registration	Registered capital	Business scope	proportion
Inner Mongolia Yize Mining	Inner Mongolia	RMB538.74 million	Mining and chemical	100
Investment Company Limited			engineering investment;
			Public engineering, utilities,
			waste water solution
Inner Mongolia Rongxin	Inner Mongolia	RMB645.36 million	Methanol from coal	100
Chemicals Company Limited			production and sales
Inner Mongolia Daxin Industrial	Inner Mongolia	RMB210 million	Supply of industrial gas	100
Gas Company Limited
Inner Mongolia Xintai Coal	Inner Mongolia	RMB5 million	Coal mining and sales	100
Mining Company Limited

15. Yancoal Australia Limited

Yancoal Australia Limited (as referred to “Yancoal Australia”), a wholly owned subsidiary of the Company, was established in Nov. 2004 with the actual registered 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 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. The corporation business licence code is 111859119 and it mainly takes responsibility of the activities such as operations, budget, investment and fi nance of the Company in Australia.

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

	Place of	Registered		Shares
Subsidiaries	registration	capital (AUD)	Business scope	proportion (%)
Gloucester Coal Ltd.	Australia	AUD719,720,000	Development and operating of coal	100
			and relevant resources
Austar Coal Mine Pty Ltd.	Australia	AUD64,000,000	Coal mining and sales	100
Yancoal Resources Ltd	Australia	AUD446,410,000	Exploring and extracting coal resources	100

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i. Subsidiaries (secondary subsidiaries and all other tier signifi cant subsidiaries) – continued 16. Yancoal International (Holding) Co., Ltd.
Yancoal International (Holding) Co., Ltd. (as referred to“Hong Kong Company”), a wholly-owned subsidiary of the Company, was established on 13 July 2011, with the actual registered capital of USD2.8 million. The corporation business licence code is 1631570 and it mainly takes responsibility of investment, mine technology development, transference and consulting services, international trade, etc.

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

	Place of			Shares
Subsidiaries	registration	Registered capital	Business scope	proportion (%)
Yancoal International	Hong Kong	USD1 million	Development of mining technology,	100
Technology Development			transit and consulting services
Co., Ltd.
Yancoal International Trading	Hong Kong	USD1 million	Transit trade of coal	100
Co., Ltd.
Yancoal International	Hong Kong	USD600,000	Exploration and development of	100
Resources Development			mineral resources
Co., Ltd.
Yancoal Luxembourg Energy	Luxemburg	USD500,000	Investment	100
Holding Co., Ltd.
Yancoal Canada Resources	Canada	USD290 million	Mineral resources development	100
Holding Co., Ltd.			and sales
Athena (Holding) Ltd	Australia	AUD2	Shareholding company	100
Tonford (Holding) Ltd	Australia	AUD2	Shareholding company	100
Wilpeena (Holding) Ltd	Australia	AUD3.46 million	Shareholding company	100
Premier (Holding) Ltd	Australia	AUD8.78 million	Shareholding company	100
Yancoal Eneergy Pty Ltd	Australia	AUD202.98 million	Shareholding company	100

17. Shandong Coal Trading Centre Co., Ltd.

Shandong Coal Trading Centre Co., Ltd (as referred to “Coal Trading Centre”) was established jointly by the Company, Jining Sources of Energy Development Group Co., Ltd. and Jining Delin Commerce and Trade Co., Ltd in August 2012 with registered capital of RMB100 million, of which, RMB51 million in cash by the Company with equity interests of 51%. The business licence code of Coal Trading Centre is 370000000004294-1 and the legal representative is Mr. Hou Qingdong. The company is mainly engaged in coal spot trade service and management; coal information consultation etc.

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i. Subsidiaries (secondary subsidiaries and all other tier signifi cant subsidiaries) – continued 18. Shandong Yanmei Rizhao Port Coal Storage and Blending Co., Ltd.
Shandong Yanmei Rizhao Port Coal Storage and Blending Co., Ltd. (as referred to “Coal Storage and Blending Company”) was established jointly the Company, Rizhao Port Co., Ltd. and Shandong Shipping Co., Ltd. in January 2013 with registered capital of RMB300 million, of which, RMB153 million by the Company in cash with equity interests of 51%. The business licence code of Coal Storage and Blending Company is 370000000004632 and organization code is 06044704-X and the legal representative is Mr. Liu Chun. The company is mainly engaged in coal wholesale dealing (valid until 31 May 2015), other commodity business, etc.

19. Austar Coal Mine Pty Limited

Austar Coal Mine Pty Limited (as referred to “Austar Company”), a wholly owned subsidiary of Yancoal Australia, was established in December 2004 with the actual registered capital of AUD64 million. The corporation business licence code is 111910822, and it is mainly engaged in the coal production, process, washing and sales and so on in Southland Coal Mine in Australia.

ii. The changes of consolidation scope for the period

Companies newly included in the consolidation for the period

			Net assets at
			the end of the	Net prof ts at the
	Reason for	Shareholding	reporting period	reporting period
Companies	consolidation	proportion (%)	(RMB 10,000)	(RMB 10,000)
Inner Mongolia Haosheng	Equity acquisition	74.82	46,252	-849
Coal Mining Co., Ltd.
Shandong Yanmei Rizhao	Newly established	51	29,681	-319
Port Coal Storage and	subsidiary
Blending Co., Ltd.

Note: On behalf of Haosheng company, the Company made shares transfer payment of RMB1,025.52 million to the transferee in January 2013. As at 14 January 2013, the accumulated shares transfer payment made by the Company has reached 54% of the total transfer amount. At the same time, the related approval procedures and changes of business registration have been accomplished. Since 1 January 2013, Inner Mongolia Haosheng Coal Mining Company Limited has been incorporated into the Company.

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iii. Combination in the reporting period

Subsidiaries acquired in business combination not under common control

==> picture [387 x 76] intentionally omitted <==

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

|||||||
|---|---|---|---|---|---|
|Place of|Registered|Shareholding|
|Name of subsidiaries|Registration|capital|Investment capital|proportion (%)|Business scope|
|Inner Mongolia Haosheng|Ordos|RMB500 million|RMB7,136.54 million|74.82|Coal mine engineering|
|Coal Mining Co., Ltd.|equipment and|
|accessories sales|

----- End of picture text -----

(1) The information related to the acquisition of Haosheng company is described in Note “V, i, 5”. The date of the acquisition of Haosheng company by the Group is 1 January 2013; related fi nancial information of this acquisition is based on the information dated 1 March 2013.
(2) The identifi able assets and liabilities at the acquisition date:

==> picture [414 x 200] intentionally omitted <==

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

||||
|---|---|---|
|The identifi able assets and liabilities at the acquisition date:|
|RMB’000|
|1 January 2013|
|Items|Carrying amount|Fair value|
|Bank balance and cash|223,427|223,427|
|Prepayment|2,000|2,000|
|Fixed assets|1,923|1,923|
|Construction in progress|300,282|12,389,964|
|Tax payable|-2,539|-2,539|
|Other payable|59,159|59,159|
|Deferred tax liability|–|3,022,421|
|Net assets attributable to the Shareholders|
|of the Company|471,012|9,538,273|

----- End of picture text -----

Note: Fair value of the identifi able assets, liabilities at the date of the acquisition of Haosheng company is determined on the basis of the evaluation report issued by Qingdao Hengyuande Mining Rights Appraisal and Consultation Company Limited (Qingdao Hengyuandekuangzizi [2013] No. 01).

(3) The total acquisition consideration is RMB7,136.54 million, which is the same as the fair value of the identifi able assets of Haosheng company.

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iii. Combination in the reporting period – continued

Subsidiaries acquired in business combination not under common control – continued
(4) The operation conditions of the acquirees after acquisition date (Unit: RMB’000)

Items	1 January	2013 – 30 June 2013
Operating revenue		–
Net prof t		-8,488
Net cash f ow generated from operating activities		-14,299
Net cash f ow		-117,667

iv. 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 5.7061
The income statement and	AUD	approximate spot exchange rate on transaction date,
cash f ow statement		average of the year 6.1212
The equity	AUD	spot exchange rate on arising, except for
		undistributed prof ts
Assets and liabilities	HKD	spot exchange rate on balance sheet date 0.7966
The income statement and	HKD	approximate spot exchange rate on transaction date,
cash f ow statement		average of the year 0.8038
The equity	HKD	spot exchange rate on arising, except for

spot exchange rate on arising, except for undistributed profi ts

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VI. NOTES TO CONSOLIDATION FINANCIAL STATEMENTS

The date disclosed below in this fi nancial statement, except for the special note, “the beginning of the reporting period” refers to 1 January 2013, “the end of the reporting period” refers to 30 June 2013, “the reporting period” refers to the period from 1 January 2013 to 30 June 2013, “the same period of last year” refers to the period from January 1, 2012 to June 30, 2012.

1. Bank balance and cash

		At June 30, 2013			At January 1, 2013
	Original	Exchange	RMB	Original	Exchange	RMB
Items	currency	rate	equivalent	currency	rate	equivalent
Cash on hand
Including: RMB	783	1.0000	783	8,433	1.0000	8,433
USD	27	6.1787	167	27	6.2855	170
AUD	10	5.7061	57	13	6.5363	85
Subtotal			1,007			8,688
Cash in bank
Including: RMB	5,607,801	1.0000	5,607,801	11,573,843	1.0000	11,573,843
USD	531,167	6.1787	3,281,922	257,691	6.2855	1,619,717
AUD	232,279	5.7061	1,325,407	416,490	6.5363	2,722,304
CAD	66	5.8901	389	153	6.3184	967
HKD	445	0.7966	354	72	0.8108	58
EUR	26	8.0536	209	17	8.3176	141
GBP	1	9.4213	9	1	10.1611	10
Subtotal			10,216,091			15,917,040
Other monetary assets
Including: RMB	212,201	1.0000	212,201	101,374	1.0000	101,374
USD	2,706	6.1787	16,720	138	6.2855	867
AUD	44,103	5.7061	251,656	10,164	6.5363	66,435
Subtotal			480,577			168,676
Total			10,697,675			16,094,404

(1) As at the end of the reporting period, the Group held RMB1,886.47 million of time deposits; RMB 221.04 million of guarantee contract with priority to transfer money; RMB21.29 million of environmental guarantee deposits; RMB266.84 million of other guarantee deposits; totalling RMB2,395.64 million.

(2) At the end of the reporting period, overseas bank balance and cash of the Group is RMB2,919.29 million, owned by the overseas subsidiaries of the Company.

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2. Notes receivable

(1) Notes receivable categories

Notes categories	At June 30, At January 1, 2013 2013
Bank acceptance bills Commercial acceptance bills Total	3,231,380 6,432,200 – 101,000
	3,231,380 6,533,200

(2) Bills endorsed to other parties by the end of the period but still be immature (top fi ve)

Notes Categories
Drawer
Drawing date
Maturity date
Amount (RMB’000)

Bank acceptance bills
Rizhao Jinghua Pipeline Co., Ltd
22 March 2013
22 September 2013
Bank acceptance bills
Shandong Daotong Trade Co., Ltd
13 June 2013
13 December 2013
Bank acceptance bills
Jiangsu Tianyu Energy Co., Ltd
14 June 2013
14 December 2013
Bank acceptance bills
Jiangsu Tianyu Energy Co., Ltd
14 June 2013
14 December 2013
Bank acceptance bills
Shandong Zhongxu Coal and
9 April 2013
9 October 2013
Metallurgical Energy Co., Ltd
Total

25,000
20,000
20,000
20,000
15,000

100,000

(3) As at the end of the reporting period, the Group had no immature discounted notes of RMB 945.63 million.

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3. Accounts receivable

(1) Accounts receivable category

Items	At 30 June 2013 At 1 January 2013 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	– – – – – – – – 619,256 41 26,343 100 24,249 3 2,533 100 874,070 59 – – 904,687 97 – – 1,493,326 100 26,343 100 928,936 100 2,533 100
	1,493,326 100 26,343 100 928,936 100 2,533 100

1) There was no 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 30,2013 At January 1, 2013 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	617,571 4 24,703 22,548 4 902 – 30 – 100 30 30 90 50 45 – 50 – 1,595 100 1,595 1,601 100 1,601
	619,256 – 26,343 24,249 – 2,533

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

Items	Carrying Bad debt amount amount
Risk-free portfolio Total	874,070 –
	874,070 –

Note: As at the end of the period, accounts receivable in risk-free portfolio included RMB632.40 million from overseas subsidiaries of the Company which did not accrue bad debt provision because of claims still in the normal credit period and RMB230.50 million of L/C issued by the bank.

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3. Accounts receivable

(2) There is no bad debt provision to recover during the reporting period.
(3) There is no write-off 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 period; accounts receivables arising on related parties was RMB87.93 million. See Note “VII, (III), 2”.
(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 (%)
Huadian Power International Corporation Third party Zoucheng Pengxiang Industry and Third party Trade Co., Ltd. Baoshan Iron and Steel Third party Linyi Mengfei Commerce Co., Ltd. Third party Korea Southern Power Third party Total	201,473 Within 1 year 80,000 Within 1 year 72,192 Within 1 year 62,000 Within 1 year 61,599 Within 1 year 477,264	13 5 5 4 4
		31

(6) Balance of accounts receivables denominated in foreign currency

Foreign currency	At June 30,2013 At January 1, 2013 Original Exchange RMB Original Exchange RMB currency rate equivalent currency rate equivalent
USD Total	83,959 6.1787 518,757 73,259 6.2855 460,469
	518,757 460,469

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

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4. Prepayments

(1) The aging analysis of prepayments

Items	At June 30,2013 At January 1, 2013 RMB % RMB %
Within 1 year 1 to 2 years 2 to 3 years Over 3 years Total	2,740,150 93 465,077 67 107,167 4 177,903 26 92,102 3 48,767 7 100 – 296 –
	2,939,519 100 692,043 100

Note: Prepayments with aging over 1 year are prepayments for equipment. As the equipment is not yet arrived and still under execution, the Group has not made the settlement.

(2) Main companies of prepayments

Main companies of prepaym	ents
Company name	Relationship with the Company	Amounts	Age	Reasons
Linyi Mengfei Commerce Co., Ltd.	Third party	249,889	Within 1 year	Goods to arrival, under executing
The Goodyear Tire&Rubber Company	Third party	106,050	Within 1 year	Goods to arrival, under executing
Shanghai Zhenzhong Fuel Co. Ltd.	Third party	100,128	Within 1 year	Goods to arrival, under executing
Henan Shuncheng Group Coke	Third party	100,000	Within 1 year	Goods to arrival, under executing
Co., Ltd
Shandong Huagang Energy	Third party	99,934	Within 1 year	Goods to arrival, under executing
Development Co., Ltd.
Total		656,001

(3) Prepayments due from shareholders of the Group which holds more than 5% (including 5%) of the total shares are not included by the end of the period; accounts receivables arising on related parties was RMB60.36 million, accounting for 2% of the total accounts receivables. See Note “VII, (III), 4, ”.

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4. Prepayments – continued

(4) Balance of prepayments denominated in foreign currency

Item	At June 30, 2013 At January 1, 2013 original Exchange RMB Original Exchange RMB currency rate equivalent currency rate equivalent
USD Total	59 6.1787 365 817 6.2855 5,135
	365 5,135

5. Other receivables

(1) Other receivables by category

Items	At June 30, 2013 At January 1, 2013 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	– – – – – – – – 217,817 36 46,601 100 95,356 3 24,918 100 387,591 64 – – 3,525,024 97 – – 605,408 100 46,601 100 3,620,380 100 24,918 100
	605,408 100 46,601 100 3,620,380 100 24,918 100

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, 2013 At January 1, 2013 Amount Bad debt Bad debt RMB % provision Amount % provision
Within 1 year 1 to 2 year 2 to 3 years Over3 years Total	126,273 4 5,051 73,315 4 2,933 71,370 30 21,411 71 30 21 70 50 35 13 50 7 20,104 100 20,104 21,957 100 21,957
	217,817 – 46,601 95,356 – 24,918

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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 method

Items	Carrying Bad debt amount amount
Risk-free portfolio Total	387,591 –
	387,591 –

(2) There is no bad debt provision to recover during the reporting period.
(3) There is no write-off during the reporting period.
(4) As at the end of the reporting period, accounts receivable due from the controlling shareholder of the Company is RMB16.99 million (at June 30, 2012: RMB16.89 million); accounts receivable due from related parties is RMB343.11 million, accounting for 57% of the total other receivables. See Note VII, iii, 3”.
(5) The top fi ve debtors

Relationship with Company name the Company	Proportion of other receivables Amounts Age (%) Nature or contents	Proportion of other receivables Amounts Age (%) Nature or contents
Ashton Coal Mines Limited Joint venture company Shandong Shengyang Wood Co., Ltd Associates Xintai Company minority shareholders: Third party Wang Jun, etc. New South Wales Local Tax Bureau Third Party Shenmu County Guobiao Commerce Third Party and Trade Co., Ltd. Total	167,320 Within 1 year 90,355 Within 1 year 89,087 1 to 2 years 81,031 Within 1 year 15,070 1 to 2 years 442,863	28 Dealing amounts 15 Dealing amounts 15 advance payment 13 Tax refund 2 Advance payment 73

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

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6. Inventories and provision for inventory impairment

(1) Inventory by category

Items	At June 30, 2013 At January 1, 2013 Provision for Provision for Book inventory Book Book inventory Book Balance impairment Value Balance impairment Value
Raw materials Coal stock Methanol stock Low value consumables Total	208,420 – 208,420 249,268 – 249,268 1,391,271 90,504 1,300,767 1,262,999 214,641 1,048,358 18,333 – 18,333 9,470 – 9,470 224,285 – 224,285 258,435 – 258,435
	1,842,309 90,504 1,751,805 1,780,172 214,641 1,565,531

(2) Provision for inventory impairment

Items	Increase Decrease Foreign currency At 1 January translation At 30 June 2013 Accrual Others Reversal Others difference 2013
Raw materials Coal stock Methanol stock Low value consumables Total	– – – – – – – 214,641 97,088 – – 201,010 -20,215 90,504 – – – – – – – – – – – – – –
	214,641 97,088 – – 201,010 -20,215 90,504

Note: The increased amount of RMB97.09 million is the provision for inventory impairment of Yancoal Australia according to the difference between book value and the net realizable value of inventories deducting the cost of realization by the end of the reporting period.

The reversal amount was the provision for inventory impairment accrued at the beginning of the reporting period by Yancoal Australia. The amount of this provision carried forward into product sales cost for this reporting period is RMB201.01 million.

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7. Other current assets and other current liabilities

(1) Other current assets

(2)	Items	At June 30, At January 1, 2013 2013 Nature 2,402,248 1,877,911 Note II.25 1,092,493 1,085,493 Note XII.4 94,410 114,798 Note 1 11,495 90,731 Note 2 3,600,646 3,168,933 At June 30, At January 1, 2013 2013 Nature 3,897,879 3,508,133 Note II.25 76,337 114,421 Note 3 4,852 108,492 Note 4 416,201 13,656 Note 2 4,395,269 3,744,702
	Land subsidence, restoration, rehabilitation and environment costs Environment management guarantee deposit Mining royalty receivable Hedging instrument-forward foreign exchange contract Total Other current liabilities Items
	Land subsidence, restoration, rehabilitation and environment costs Hedging instrument-interest rate swap Deferred income Hedging instrument-forward foreign exchange contract Total

Note 1: It is the right of Middlemount Coal Pty Ltd, a company jointly controlled by the Company and its subsidiary Gloucester, of collecting the mining royalties (ie, 4% of its FOBT profi ts) from Middlemount coal mine during the mining period. The management calculated this on every reporting date based on its present value of the discounted cash fl ow, the change of profi t or loss is recorded as the current profi t or loss for the period. As at 30 June 2013, AUD16.55 million of mining royalties receivable within one year is recognized as other current assets and AUD181.51 million of mining royalties receivable over 1 year is recognized as other non-current asset.

Note 2: To avoid the risk of foreign currency rate fl uctuation, Australian subsidiaries of the Company enter into forward foreign exchange contracts to hedge foreign currency risks caused by daily coal sales and big equipment purchasing program: 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 based on the difference between the forward market exchange rate taken on the balance sheet date and on the contracts signing date.

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7. Other current assets and other current liabilities – continued

(2) Other current liabilities – continued
Note 3: To meet the requirement of the acquisition of Yancoal Resources, Yancoal Australia borrowed a bank loan of USD3 billion. In July 2012, 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 four years. At the end of June 2013, the fair value of the Contracts was RMB76.34 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 4: It is the deferred income of Ashton Joint Venture, a company jointly controlled by the Company, amounting up to AUD0.66 million, which is the government subsidy given by Australian Energy and Tourism Department to the coal mines with signifi cant emissions before the execution of the carbon emission price. This expense may occur in the future reporting period.

8. Available-for-sale fi nancial assets

Items	Fair value at Fair value at June 30, 2013 January 1, 2013
Available-for-sale equity instruments Total	144,042 167,893
	144,042 167,893

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

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9. Long-term accounts receivable

Items	At June 30, At January 1, 2013 2013
Middlemount loans (Note 1) Gladstone long-term securities (Note 2) E class Wiggins Island Preference Securities (Note 2) Total	1,616,735 1,682,984 179,742 205,893 87,417 100,135
	1,883,894 1,989,012

Note 1: Middlemount Loans refer to the long-term loans provided by Gloucester, the subsidiary of Yancoal Australia, to Middlemount Joint Venture which is due on 24 December 2015 with the interest rate of business loan with the same duration.
Note 2: Yancoal Australia invested the following securities issued by Wiggins Island Coal Export Terminal Pty Ltd.
1) The purchasing price and par 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 cannot be traded.

10. Long-term equity investments

(1) Long-term equity investments

Items	At June 30, At January 1, 2013 2013
Equity investments under cost method Equity investments under equity method Long-term equity investments-Total Less: provision for impairment Long-term equity investments – Net	38,503 39,183 3,330,263 3,622,903
	3,368,766 3,662,086 – –
	3,368,766 3,662,086

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10. Long-term equity investments – continued

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

Ratio of Shares voting Name of investees proportion (%) shares (%)	Original Opening Closing Cash amount balance Addition Reversals balance dividends
Under cost method Yankuang Group Zoucheng Ziyuan Construction Co., Ltd 8.33 8.33 Yankuang Group Zoucheng Huaming company. 8.00 8.00 Yankuang Group Zoucheng Fuhui Company. 16.00 16.00 Shenzhen Weiersen Floriculture Co., Ltd. – – Yankuang Group Guohong Chemical Co., Ltd. 5.00 5.00 Zoucheng Jianxin Cunzhen 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 Material Co., Ltd 20.00 20.00 Australian Coal Processing Holding Pty Ltd 90.00 50.00 Ashton Coal Mines Limited 90.00 50.00 Newcastle Coal Infrastructure Group Pty Ltd (“NCIG”) 27 27 Middlemount Joint Venture 50.00 50.00 Subtotal Total	500 500 – 500 – – 100 100 – 100 – – 80 80 – 80 – – 100 100 – – 100 – 29,403 29,403 – – 29,403 – 9,000 9,000 – – 9,000 –
	39,183 39,183 – 680 38,503 –
	900,000 1,082,194 93,994 97,590 1,078,598 97,590 125,000 191,417 20,296 15,625 196,088 15,625 540,000 1,350,000 – – 1,350,000 – 6,000 418 – 418 – – 720 246 – 246 – – 1 – – – – 18,737 19,838 – 2,518 17,320 – 1 1 – 1 – – 1,171,376 978,789 – 290,532 688,257 –
	2,761,835 3,622,903 114,290 406,930 3,330,263 113,215
	2,801,018 3,662,086 114,290 407,610 3,368,766 113,215

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10. Long-term equity investments – continued

(3) Investment in joint venture and associates

		Ratio of	Total assets	Total liabilities	Net assets
	Shares	voting	by the end	by the end	by the end	Operating
Name of investees	proportion (%)	shares(%)	of the period	of the period	of the period	revenue	Net prof t
Associates
China HD Zouxian Co., Ltd.	30	30	6,100,716	2,505,389	3,595,327	2,210,145	313,314
Yankuang Group Finance Co., Ltd	25	25	6,620,773	5,836,422	784,351	150,436	81,182
Shaanxi Future Energy Chemical
Corp. Ltd	25	25	5,838,947	438,947	5,400,000	–	–
Shandong Shengyang Wood Co., Ltd	39.77	39.77	95,398	97,483	-2,085	30,821	-3,136
Jining Jiemei New Wall Material
Co., Ltd	20	20	7,205	7,281	-76	2,511	-1,304
Newcastle Coal Infrastructure
Group Pty Ltd(NCIG)	27	27	19,886,290	22,040,795	-2,154,505	1,684,656	-1,211,271
Joint venture enterprises
Australian Coal Processing Holding
Pty Ltd (Note)	90	50	–	–	–	–	–
Ashton Coal Mines Limited(Note)	90	50	38,966	38,071	895	317,027	–
Middlemount Joint Venture	About 50	50	3,377,894	3,889,537	-511,643	686,756	-416,710
Total			41,966,189	34,853,925	7,112,264	5,082,352	-1,237,925

Note: There is difference between shares proportion and voting shares proportion of joint venture enterprises caused by the items described in note “V, (I), 7, (2)”. The Group cannot exercise control over this fact, 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, therefore 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, 2013 Addition Decrease difference At June 30, 2013
Cost Land Buildings Mining structure Ground structure Harbour works and craft Plant, machinery and equipments Transportation equipment Others	41,726,681 4,778,069 2,236,993 -1,903,236 42,364,521 989,796 80,632 2,851 -134,981 932,596 4,922,136 11,080 4,000 -76,110 4,853,106 7,921,926 388,623 22,411 -413,570 7,874,568 2,031,632 – 2,795 – 2,028,837 253,677 – – – 253,677 24,129,530 4,258,793 2,086,924 -1,278,575 25,022,824 515,503 2,545 3,058 – 514,990 962,481 36,396 114,954 – 883,923
	Addition Accrual
Accumulated depreciation Land Buildings Mining structure Ground buildings Harbour works and craft Plant, machinery and equipments Transportation equipment Others Net book value Land Buildings Mining structure Ground buildings Harbour works and craft Plant, machinery and equipments Transportation equipment Others Provision for impairment	16,439,730 1,845,559 1,413,626 404,087 -329,646 18,965,182 – – – – – – 2,298,332 – 68,300 1,958 -6,281 2,358,393 2,718,488 – 195,892 22,047 -58,878 2,833,455 1,230,656 – 79,398 1,986 – 1,308,068 88,870 – – – – 88,870 9,311,185 1,845,559 649,369 262,399 -264,487 11,279,227 395,674 – 15,550 3,058 – 408,166 396,525 – 405,117 112,639 – 689,003 25,286,951 – – – 23,399,339 989,796 – – – 932,596 2,623,804 – – – 2,494,713 5,203,438 – – – 5,041,113 800,976 – – – 720,769 164,807 – – – 164,807 14,818,345 – – – 13,743,597 119,829 – – – 106,824 565,956 – – – 194,920 608,474 – – -29,076 579,398

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11. Fixed assets – continued

(1) Fixed assets by category – continued

Items

Foreign
exchange
translation
At January 1, 2013
Addition
Decrease
difference
At June 30, 2013
–
–
–
–
–
65,182
–
–
–
65,182
228,921
–
–
-29,076
199,845
24,398
–
–
–
24,398
–
–
–
–
–
289,674
–
–
–
289,674
215
–
–
–
215
84
–
–
–
84
24,678,477
–
–
–
22,819,941
989,796
–
–
–
932,596
2,558,622
–
–
–
2,429,531
4,974,517
–
–
–
4,841,268
776,578
–
–
–
696,371
164,807
–
–
–
164,807
14,528,671
–
–
–
13,453,923
119,614
–
–
–
106,609
565,872
–
–
–
194,836

Land
Buildings
Mining structure
Ground structure
Harbour works and craft
Plant, machinery and equipments
Transportation equipment
Others
Book value
Land
Buildings
Mining structure
Ground structure
Harbour works and craft
Plant, machinery and equipments
Transportation equipment
Others

Note: In 2012, 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 original value of RMB3,662.44 million and net value of RMB2,000 million was sold to Agricultural Bank of China Financial Lease Company Ltd. for a consideration of RMB2,000 million. Meanwhile, the deadline of leaseback of the machine and equipment is 1 year (interest rate 6.56%) and they will be repurchased by the Company as RMB400 after the expiration date. The leaseback agreement has expired during the reporting period, so the Company repurchased the machine and equipment and it will re-accounted with the amount of the original value of fi xed asset and accumulated depreciation.

(2) Fixed assets acquired through fi nance lease

Items	Accumulated Book value depreciation Net book value
Machine and Equipment Total	322,566 21,011 301,555
	322,566 21,011 301,555

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11. Fixed assets – continued

(3) Among the addition of fi xed assets during the reporting period, RMB903.97 million is transferred from construction in process. Among the increased amount of accumulated depreciation, RMB1,413.63 million is accrued during the reporting period.
(4) There is no provision and depreciation of lands as Australian subsidiaries enjoy the permanent land use rights.
(5) As at the end of the reporting period, the fi xed assets still in use with fully depreciation is RMB6,278.18 million in the Group.
(6) As at the end of the reporting period, RMB4,103.71 million included in fi xed assets is pledged as collateral.

12. Construction in progress

(1) Construction in progress by category

Items	At June 30, 2013 At January 1, 2013 Provision for Provision for Book value impairment Net book value Book value impairment Net book value
1. Wei jian construction 2. Technical revamping 3. Infrastructure construction 4. Safety construction 5. Exploration construction Total	534,377 – 534,377 315,043 – 315,043 363,330 – 363,330 573,921 – 573,921 28,390,432 144,690 28,245,742 15,465,199 165,445 15,299,754 750,141 – 750,141 727,450 – 727,450 656,981 – 656,981 345,447 – 345,447
	30,695,261 144,690 30,550,571 17,427,060 165,445 17,261,615

Note 1: During the reporting period, the decrease of balance of provision for the impairment of construction in progress is mainly caused by the fl uctuation of foreign exchange rate;

Note 2: As at the end of the reporting period, RMB620.81 million included in construction in progress is pledged as collateral.

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12. Construction in progress – continued

(2) Changes of signifi cant construction in progress

Items

Reduction
Transferred
Foreign exchange
into Fixed
translation
At January 1, 2013
Addition
assets
Others
difference
At June 30, 2013
8,059,640
72,363
605
–
–
8,131,398
2,017,156
438,567
–
–
–
2,455,723
1,832,719
12,590
–
–
-137,624
1,707,685
435,787
392,511
–
–
–
828,298
–
12,565,053
–
–
–
12,565,053
12,345,302
13,481,084
605
–
-137,624
25,688,157
Including:
capitalized
Rate of
Accumulated
interests
capitalized
Investment/
amount of
during the
interests
Budgeted
budget
capitalized
reporting
for the
Capital
amount
ratio(%)
interests
period
period (%)
sources
10,082,225
81
8,586
4,911
6.4
Borrowings
5,114,900
48
147,428
65,281
6.4
Borrowings
1,888,319
98
–
–
–
Self-raised
1,767,000
47
2,590
2,177
6.4
Borrowings
16,721,054
75
–
–
–
Self-raised
35,573,498
158,604
72,369
–

Zhuan Longwan coal project
Ordos methanol project
Canada potash project
Zhaolou power plant project
Shilawusu coal mine and
coal processing project
Total
Items

Zhuan Longwan coal project
Ordos methanol project
Canada potash project
Zhaolou power plant project
Shilawusu coal mine and
coal processing project
Total

13. Construction materials

Items	At June 30, At Jan. 1, 2013 Addition Reversals 2013
Construction materials Construction equipments Total	14,278 249,381 224,008 39,651 61,214 249,599 280,567 30,246 75,492 498,980 504,575 69,897

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14. Intangible assets

Items

Foreign
exchange
Decrease
translation
At January 1, 2013
Addition
and transfer
difference
At June 30, 2013

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
Net book value
Mining rights
Unproved mining equity interests
Land use rights
Patents and know-how
Water access right
Software
Provision for impairment
Mining rights
Unproved mining equity interests
Land use rights
Patents and know-how
Water access right
Soft ware access right
Book value

34,487,119
32,391
13,217
-3,173,117
31,333,176
29,463,588
30,995
–
-2,667,192
26,827,391
3,673,107
–
–
-466,535
3,206,572
912,569
–
–
-441
912,128
163,408
–
–
-20,755
142,653
132,406
–
–
-996
131,410
142,041
1,396
13,217
-17,198
113,022
3,193,641
684,662
12,862
-166,492
3,698,949
2,969,592
663,345
–
-163,260
3,469,677
–
–
–
–
–
198,583
9,236
–
-73
207,746
–
–
–
–
–
340
158
–
-54
444
25,126
11,923
12,862
-3,105
21,082
31,293,478
–
–
–
27,634,227
26,493,996
–
–
–
23,357,714
3,673,107
–
–
–
3,206,572
713,986
–
–
–
704,382
163,408
–
–
–
142,653
132,066
–
–
–
130,966
116,915
–
–
–
91,940
257,476
2,099,571
–
-175,082
2,181,965
257,476
2,099,571
–
-175,082
2,181,965
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
31,036,002
–
–
–
25,452,262

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14. Intangible assets – continued

Items	Foreign exchange Decrease translation At January 1, 2013 Addition and transfer difference At June 30, 2013
Mining rights Unproved mining equity interests Land use rights Patents and know-how Water access right Soft ware access right	26,236,520 – – – 21,175,749 3,673,107 – – – 3,206,572 713,986 – – – 704,382 163,408 – – – 142,653 132,066 – – – 130,966 116,915 – – – 91,940

Note 1: During the reporting period, the Group’s management assesses that the economic performance of Moolarben coal mine and Stratford coal mine, which are the subsidiaries of the Group, would be lower than the estimation. Therefore, the difference resulted from the net book value less the present value of the future cash fl ow estimated by the assets assessment group is recognized as the impairment loss of mining rights, amounting to RMB2,099.57 million.

Note 2: As at the end of the reporting period, RMB117.09 million included in the intangible assets is pledged as collateral.

15. Goodwill

Items	Foreign exchange Provision for translation impairment At 1 Jan. 2013 Increase Decrease differences At 30 June 2013 at 30 June 2013
Acquisition of Xintai Acquisition of Yancoal Resources Acquisition of Syntech II Acquisition of Premier Acquisition of Yanmei Shipping Total	653,836 – – – 653,836 – 640,641 – – -81,370 559,271 – 28,592 – – -3,632 24,960 – 17,780 – – -2,258 15,522 15,522 10,045 – – – 10,045 – 1,350,894 – – -87,260 1,263,634 15,522

Note: At the end of 2012, the Group’s management assesses that the economic performance of Premier Holding, the subsidiary of the Group would be lower than the estimation. Therefore, the impairment loss of goodwill is recognized as AUD5.14 million after test of impairment for assets is completed. The decrease of the balance and the provision for impairment of goodwill during the reporting period was mainly due to the effect of foreign exchange rate fl uctuation.

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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, 2013 2013
1. Deferred tax assets Deferred tax assets of the parent company and its domestic subsidiaries Land subsidence, restoration, rehabilitation and environmental costs Provision for Wei jian fees, safety production, and development fund Accrued and unpaid salaries and social insurance Differences of the depreciation of f xed assets Hedging instrument liability Provision for impairment of assets Contingent value right (CVR) Deferred income Others Subtotal Deferred tax assets of subsidiaries of Yancoal Australia Minerals resource rent tax and its effect on income tax Un-recouped losses Accrued and unpaid salaries and other expenses Assets amortization Reclamation costs Take or pay liabilities Hedging instrument liability Finance lease Others Subtotal Total deferred tax assets	900,304 819,181 824,842 745,059 190,861 142,892 120,931 95,092 21,089 31,074 14,592 6,832 13,098 20,051 4,325 – 2,439 2,505
	2,092,481 1,862,686
	2,309,923 2,742,644 1,629,868 1,094,396 198,838 195,878 208,754 135,870 141,697 155,013 116,845 154,061 126,111 – 60,941 69,807 143,801 135,128
	4,936,778 4,682,797
	7,029,259 6,545,483

Yanzhou Coal Mining Company Limited Interim Report 2013 171

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16. Deferred tax assets and deferred tax liabilities – continued

(1) Confi rmed deferred tax assets and deferred tax liabilities – continued

Items

At June 30,
At January 1,
2013
2013
3,696,591
719,689
191,629
–
16,198
22,133
3,904,418
741,822
2,817,153
3,654,182
1,789,010
2,110,090
48,461
975,103
34,027
51,644
904
22,513
1,170
12,110
4,690,725
6,825,642
8,595,143
7,567,464

2. Deferred tax liabilities
Deferred tax liabilities of the parent company and
its domestic subsidiaries
Amortization and recognition of assets
Amortization and recognition of environmental deposits
Fair value adjustment of available-for-sale f nancial assets
Subtotal
Deferred tax liabilities of subsidiaries of Yancoal Australia
Amortization and recognition of assets
Minerals resource rent tax (MRRT) and its effect on income tax
Unrealized gain or loss on foreign currency exchange
Royalty receivables
Hedging instrument assets
Others
Subtotal
Total deferred tax liabilities

172 Yanzhou Coal Mining Company Limited Interim Report 2013

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16. Deferred tax assets and deferred tax liabilities – continued

(2) Breakdown of taxable temporary differences items and deductable differences items

1) Temporary differences of the Company and its domestic subsidiaries

Items

At June 30,
At January 1,
2013
2013

1. Deductible temporary differences items
Land subsidence, restoration,
rehabilitation and environmental costs
Provision for Wei jian fees, safety productionand
development fund
Accrued and unpaid salaries and social insurance
Differences of the depreciation of f xed assets
Hedging instrument liability
Contingent value right (CVR)
Provision for impairment of assets
Deferred income
Others
Total
2. Taxable temporary differences items
Amortization and recognition of assets
Amortization and recognition of environmental deposits
Fair value adjustment of available-for-sale f nancial assets
Total

3,601,214
3,276,723
3,392,888
2,980,235
763,445
571,568
486,451
380,368
84,357
124,295
67,154
27,328
52,393
80,204
17,301
–
9,754
10,021
8,474,957
7,450,742
14,786,365
2,878,754
766,514
–
64,792
88,533

15,617,671
2,967,287

Yanzhou Coal Mining Company Limited Interim Report 2013 173

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16. Deferred tax assets and deferred tax liabilities – continued

(2) Breakdown of taxable temporary differences items and deductable differences items – continued

2) Temporary differences of overseas subsidiaries

Items

At June 30,
At January 1,
2013
2013
7,699,744
9,142,147
5,432,892
3,647,987
662,792
652,925
695,848
452,901
472,322
516,709
389,483
513,538
420,371
–
203,136
232,691
479,338
450,426
16,455,926
15,609,324
9,390,510
12,180,607
5,963,366
7,033,634
161,537
3,250,343
113,424
172,148
3,012
75,042
3,901
40,367
15,635,750
22,752,141

1. Deductible temporary differences items
MRRT and its effect on income tax (note)
Un-recouped loss
Accrued and unpaid salary expenses and other expenses
Amortization of assets
Reclamation costs
Take or pay liabilities
Hedging instrument liability
Finance lease
Others
Total
2. Taxable temporary differences items
Assets amortization and recognition
MRRT and its effect on income tax (note)
Unrealized gain or loss on foreign currency exchange
Mining royalties receivables
Hedging instruments assets
Others
Total

Note: 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, while 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.

17. Other non-current assets

Items	At June 30, At January 1, 2013 2013
Mining royalties receivable(VI,7, note 2) Prepayment for investment (IX,1, (1) Security deposit of Gloucester Total	1,035,713 1,234,649 117,926 117,926 5,716 6,548
	1,159,355 1,359,123

174 Yanzhou Coal Mining Company Limited Interim Report 2013

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18. Provision for impairment of assets

Items	Increase decrease Foreign currency At January 1, translation At June 30, 2013 Accrual others Reversal others differences 2013
Bad debt provision Provision for impairment of inventories Provision for impairment of f xed assets Provision for impairment of construction in progress Provision for impairment of intangible assets Provision for impairment of goodwill Total	27,451 45,493 – – – – 72,944 214,641 97,088 – – 201,010 -20,215 90,504 608,474 – – – – -29,076 579,398 165,445 – – – – -20,755 144,690 257,476 2,099,571 – – – -175,082 2,181,965 17,780 – – – – -2,258 15,522 1,291,267 2,242,152 – – 201,010 -247,386 3,085,023

19. Short-term loans

Items	At June 30, At January 1, 2013 2013
Debt of honour Guaranteed debt(note) Total	2,186,667 1,910,431 4,307,950 2,475,822
	6,494,617 4,386,253

Note: As at the end of the reporting period, USD 300 million guaranteed debt was guaranteed by China Merchants Bank Co., Ltd (CMBC); remaining amounts was guaranteed by Yankuang Group, the controlling shareholder of the Company.

20. Notes payable

Items	At June 30, At January 1, 2013 2013
Independent trustee promissory notes (note 1) Commercial acceptance bills (note 2) Total	– 3,836,611 117,723 68,537
	117,723 3,905,148

Note 1: As described in “Note V, (I), 6”, Gloucester will make a cash distribution to its shareholders, of which, AUD586.19 million will be distributed as capital return with 6 months after merger. In June 2012, total amount of AUD586.19 million promissory notes were issued by Gloucester to its appointed trustees, who will hold the promissory notes and make the payment to the original shareholders of Gloucester. The process of payment to original shareholders of Gloucester has been completed as at 7 January 2013.

Note 2: All the commercial acceptance bills will be due within 6 months.

Yanzhou Coal Mining Company Limited Interim Report 2013 175

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21. Accounts payable

(1) Accounts payable

Items	At June 30, At January 1, 2013 2013
Total Including: over 1 year	2,177,871 3,004,847
	250,152 134,447

(2) Large amount accounts payable aging over 1 year mainly is last payment payable for equipments and materials, and there is no large amount of subsequent payments after the period end.

(3) Accounts payable at the end of the reporting period due to the controlling shareholder of the Company is RMB340 thousand.

nces from customers Advances from customers Items	At June 30, At January 1, 2013 2013 556,425 1,368,734 66,932 58,248
Total Including: over 1 year

22. Advances from customers

(1) Advances from customers

(2) Advances aging over 1 year are RMB66.93 million, mainly due to the unrealized sales, caused by the decline of demand by costumers or disagreement on the price, so that customers did not pick up coals after advances payments.

(3) Advances from customers in the end of the current period payable to shareholders of the Company holding more than 5% (including 5%) shares are excluded for the reporting period.

176 Yanzhou Coal Mining Company Limited Interim Report 2013

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23. Salaries and wages payable

Items

Foreign
At January 1,
Addition for
Payment for
exchange
At June 30,
2013
the period
the period
translation
2013

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

586,719
3,492,203
3,452,643
-3,868
622,411
–
453,971
453,521
–
450
22,221
899,022
814,465
–
106,778
3,521
254,644
217,506
–
40,659
7,338
515,681
510,206
–
12,813
7,238
50,421
42,370
–
15,289
1,128
51,687
21,556
–
31,259
2,996
26,589
22,827
–
6,758
4,279
181,404
180,561
–
5,122
44,029
104,148
52,391
–
95,786
–
16,068
5,831
-694
9,543
430,502
241,088
198,307
-57,582
415,701
1,087,750
5,387,904
5,157,719
-62,144
1,255,791

Note: “Others” are employees benefi ts accrued for Yancoal Australia, such as annual leave, sick leave, etc. See Note “VI.32, note 3”. The balance of Salary accrued at the end of this reporting period is about to be released in July 2013.

24. Taxes payable

Items	At June 30, At January 1, 2013 2013
Value added tax Business tax Income tax Price reconciliation fund Goods and service tax Others Total	-163,601 -107,626 16,797 11,602 364,713 879,296 64,009 51,995 -67,716 -67,017 37,782 87,376
	251,984 855,626

Yanzhou Coal Mining Company Limited Interim Report 2013 177

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25. Interest payable

Items	At June 30, At January 1, 2013 2013 273,158 152,365 284,724 288,211 5,454 17,086 – 528 563,336 458,190 At June 30, At January 1, 2013 2013 936,000 – 705,024 – 91 91 1,641,115 91
Interest for corporate bonds Interest for fund occupancy Interest of long-term borrowing with instalment payment of interest and principal due at maturity Interest for short-term borrowing Total Dividend payable Names
Yankuang Group H shares Payable to Qingdao Zhongyan minorities Total Note: See Note “VI, 38”.

26. Dividend payable

27. Other payable

(1) Other payable

Items	At June 30, At January 1, 2013 2013
Total Including: aging over 1 year	5,732,660 3,205,528
	862,124 1,019,288

(2) As at June 30, 2013, other payable due to the controlling shareholder of the Company is totaling up to RMB612.24 million.

178 Yanzhou Coal Mining Company Limited Interim Report 2013

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27. Other payable – continued

(3) Other payables with large amount by the end of the reporting period

	Payable
Items	RMB	Age	Nature
4 investors including Shanghai Huayi (Group)	3,128,215	Within 1 year	Investment fund for equity
			acquisition of Haosheng Company
Yankuang Group Co., Ltd	612,237	1 to 2 years	Material and project funds
Yankuang Group Donghua Construction Co., Ltd	122,423	Within 1 year	Project funds
The fund settlement centre of the Ministry of Railways	57,440	1 to 2 years	freight
Yankuang Donghua Thirty-seven Chu	28,383	Within 1 year	Project funds
Total	3,948,698

28. Non-current liabilities due within one year

(1) Non-current liabilities due within one year

Items	At June 30, At January 1, 2013 2013
Long-term borrowing due within one year CVR (note 1) Long-term payable due within one year Provision due within 1 year (note 2) Deferred income due within 1 year Total Long-term borrowing due within one year Loan by category	1,815,793 1,296,099 1,365,306 – 779,716 4,766,525 96,563 212,578 2,853 3,268
	4,060,231 6,278,470
	At June 30, At January 1, 2013 2013
Guaranteed loans(note 3) Mortgaged loan Debt of honour Total	1,765,207 1,245,852 26,586 26,247 24,000 24,000
	1,815,793 1,296,099

(2) Long-term borrowing due within one year

Yanzhou Coal Mining Company Limited Interim Report 2013 179

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28. Non-current liabilities due within one year – continued

(3) Long-term payable due within a year

Names	At June 30, At January 1, 2013 2013
The Department of Land and Resources of the Inner Mongolia Autonomous (note 4) Agricultural Bank of China Financial Leasing Co., Ltd. (note 5) Jining Municipal Land and Resources Bureau (note 6) Freight f nance lease (note 7) Total	340,000 2,340,000 – 2,000,000 396,285 396,285 43,431 30,240
	779,716 4,766,525

Note 1: Contingent Value Right (CVR) is a guarantee that protects the value of the merged Yancoal’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 guarantee.

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.

As CVR can be publicly traded in ASX, the CVR liabilities at the end of period are measured by the fair values of the open market. The differences between changes of fair value at each end of the period are recognized in profi t or loss on changes of fair value.

Note 2: The estimated liabilities due within one year mainly composed of AUD500,000 of onerous contracts and AUD13.41million of take-or-pay liabilities. Onerous contract refers to the fi xed price contract entered into between Gloucester, the subsidiary of the Company and the customer. At the end of the reporting period, management considered that this contract will cause losses and then recognized it as the estimated liabilities. The information related to the take-or-pay liabilities are described in “VII, 32, note 2”.

Note 3: Yancoal Australia borrowed USD3,040 million 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. On 17 December 2012, Yancoal Australia entered into contracts of rollover loans with Sydney branch of BOC and Hong Kong branch of CBC, extending repayment date to 16 December 2019; on the same day, Yancoal Australia returned the matured borrowings of USD100.34 million to Hong Kong branch of CDB. The Company will provide guarantee to the amount of RMB914.66 due in guarantee letter of rollovers. As at 30 June 2013, USD100.34 million of borrowing due within one year was recognized as other non-current liabilities due within 1 year; USD2,839.32 million due over 1 year was recognized as long-term borrowings.

In 2011, the Company borrowed RMB3,900 million from Tiexi branch of ICBC. Prior to fulfi l the acquisition payment of Zhuan Longwan coal mine fi eld. The borrowing was guaranteed by the controlling shareholder, Yankuang Group before obtaining the mining rights, and would be pledged by mining rights of Zhuan Longwan as collateral after they are obtained. As at 30 June 2013, the loans of RMB1,125.87 million due within one year were recognized as other non-current liabilities due within one year, while the rest part of loans of RMB2,134.31 million over 1 year were recognized as long-term borrowings.

180 Yanzhou Coal Mining Company Limited Interim Report 2013

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28. Non-current liabilities due within one year – continued

(3) Long-term payable due within a year – continued

Note 3: – continued

Heshun Tianchi, a subsidiary of the Company borrowed RMB99 million from Taiyuan branch of China Development Bank, which was guaranteed by Yankuang Group, the controlling shareholder of the Company. As at 30 June 2013, RMB22 million of borrowing due within 1 year was recognized as other non-current liabilities due within 1 year; RMB77 million due over 1 year was recognized as long-term borrowings.

Note 4: Ordos Neng Hua, the subsidiary of the Company has successfully bided the mining rights of Zhuan Longwan coal mine fi eld of Dongsheng coal fi eld in Inner Mongolia Autonomous Region for a consideration of RMB7,878.66 million. According to the deal confi rmation, the consideration of RMB2,340 million of mining rights in the last installment should be paid by the end of 30 November 2012. In August 2012, Inner Mongolia Autonomous Region Department of Land and Resources issued the Opinion on the Relevant Matters in relation to Zhuan Longwan Coal Mine Project [Neiguotuzi (2012) No. 508] and approved the consideration of Zhuan Longwan mining rights for the third installment to be paid after the license granted. According to the requirement of Inner Mongolia Autonomous Region Department of Land and Resources, Ordos Nenghua paid RMB2 billion during the reporting period and the remaining amount of RMB340 million will be paid on the second half of 2013.

Note 5: It is the fi nance lease payable as described in “VI, 11”, which was guaranteed by Yankuang Group, the controlling shareholder of the Company.

Note 6: According to the Plans for conducting compensated use of coal resource pilot reform, jointly issued by the Ministry of fi nance, Ministry of Land and Resources, and Development and Reform Commission, approved by the State Council in September 2006, the Company should pay the consideration of mining rights after assessment and evaluation by remaining reserves for the original fi ve coal mines.

On 3 August 2012, pursuant to the assessment report for the consideration of mining rights of fi ve coal mines (Jining No.2 coal mine, Nantun coal mine, Dongtan coal mine, Baodian coal mine and Xinglongzhuang coal mine) owned by the Company fi led in Shandong Provincial Department of Land and Resources, the Notice of payment for mining rights by Yanzhou Coal Mining Company Limited [JiGuotuzi(2012) No.212] issued by Jining Municipal Land and Resources Bureau determined the consideration of mining rights, which amounts to RMB2,476.78 million. According to the Notice, the down payment RMB495.36 million should be paid by 30 September 2012, while the rest amount should be paid in fi ve equal installments with capital occupation charges. As at the end of the reporting period, the company had paid RMB495.36 million, with RMB1,981.42 million unpaid (including RMB396.28 million will be paid in the next year).

Note 7: It is the fi nance lease of subsidiaries of Gloucester, of which AUD7.61 million of fi nance lease payable due within 1 year was recognized as other non-current liabilities due within 1 year; AUD45.46 million due over 1 year was recognized as long-term payable.

29. Long-term loan

(1) Long-term loan by category

Loan category	At June 30, At January 1, 2013 2013
Guaranteed loan Debt of honour Mortgaged loan Total	19,689,110 20,771,955 5,461,687 976,000 79,249 95,551
	25,230,046 21,843,506

Yanzhou Coal Mining Company Limited Interim Report 2013 181

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29. Long-term loan – continued

(2) Five largest long-term borrowings

Lender	At June 30, 2013 At January 1, 2013 Beginning day Expiration date Currency Interest rate (%) USD RMB USD RMB
Sydney branch of BOC(note1) Zoucheng branch of BOC (note 2) Tiexi branch of ICBC(note 1) Hong Kong branch of CCB(note1) Sydney branch of BOC(note1)	2009-12-16 2019-12-16 USD Libor+0.75%- 2,400,000 14,828,880 2,400,000 15,085,200 Libor+2.80% 2013-1-4 2018-1-4 USD Libor+2.4% 596,000 3,682,505 – – 2011–9-29 2016-9-29 RMB 6.4 – 2,134,306 – 2,801,667 2009-12-16 2019-12-16 USD Libor+0.75%- 200,000 1,235,740 200,000 1,257,100 Libor+2.80% 2009-12-9 2019-12-16 USD Libor+0.80%- 140,000 865,018 140,000 879,970 Libor+2.80%

Note 1: See “VI, 28 note 6”.

Note 2: In 2013, the Company borrowed USD596 million from Zoucheng branch of BOC for the merger with Gloucester with L/C as the guarantee.

(3) The long-term rollover loans

					Estimated
		Interest	Condition of	Expiration	repayment
Lender	Principal (USD)	rate(%)	extension	date	period
Sydney Branch of BOC	802.76 million	Libor+2.80%	Interest rate re-def ned	2017-12-17	5 years
Hong Kong branch of CCB	66.90 million	Libor+2.80%	Interest rate re-def ned	2017-12-17	5 years
Sydney Branch of BOC	45 million	Libor+2.80%	Interest rate re-def ned	2017-12-17	5 years
Total(Note VI, 27, note 3)	914.66 million	–	–	–	–

30. Bonds payable

Category Total face value Issuing date Maturity	Category Total face value Issuing date Maturity	Issued amount
Corporate bond (note 1) Corporate bond (note 1) Corporate bond (note 2) Corporate bond (note 2) Total	2,846,205 2012-5-16 5 years 3,478,695 2012-5-16 10 years 1,000,000 2012-7-23 5 years 4,000,000 2012-7-23 10 years 11,324,900	2,846,205 3,478,695 990,000 3,960,000
		11,274,900

182 Yanzhou Coal Mining Company Limited Interim Report 2013

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30. Bonds payable – continued

Category	Interest Accrual of Interest payable interest Interest payable Balance at 1 Jan payable for paid during at 30 June at 30 June 2013 this period the period 2013 2013
Corporate bond Corporate bond Corporate bond Corporate bond Total	17,523 62,941 62,892 17,572 2,780,473 27,509 98,811 98,734 27,586 3,398,355 18,783 21,117 – 39,900 991,800 88,550 99,550 – 188,100 3,964,200 152,365 282,419 161,626 273,158 11,134,828

Note 1: As approved by a resolution passed at the second extraordinary general meeting held on 23 April 2012, the secondtier wholly-owned subsidiary of the Company, made an overseas issuance of US dollar-dominated bonds with an aggregate principal amount of USD1.0 billion in Hong Kong in May 2012, of which, the annual interest rate for the fi ve-year corporate bonds of USD450 million and ten-year corporate bonds of USD550 million are 4.461% and 5.730%, respectively.

Note 2: As approved by a resolution passed at 2012 fi rst extraordinary general meeting held on 8 February 2012, the Company will issue corporate bonds of no more than RMB15 billion at appropriate time. After that, the Company received the “Reply Letter in relation to the approval on the issue of corporate bonds by Yanzhou Coal Ming Company Limited” of CSRS (the Zhengjian Xuke[2012] No. 592) and was approved to make an public issuance of corporate bonds with face value not exceeding RMB10 billion. On 25 July 2012, the Company issued the fi rst tranche of the corporate bonds amounting to RMB5 billion, of which, the annual interest rate for the fi ve-year corporate bonds of RMB1 billion and ten-year corporate bonds of RMB4 billion are 4.2% and 4.95%, respectively.

31. Long-term payables

(1) The breakdown of long-term payables

Lender	Amount Amount Expiration at January 1, Interest rate Accrued at June 30, (Year) 2013 (%) Interest 2013 Loan condition
Total Including: Jining Municipal Land and Resources Bureau (VI, 28 note6) freight f nancial lease market service fees to Noble Group Deferred payment for acquisition of Minerva	– 1,835,647 – 92,433 1,884,359 – 2-5 1,585,139 6.15 92,433 1,585,139 unsecured 5-8 202,448 5.43 – 259,401 unsecured -12.24 – 39,971 – – 33,825 unsecured and interest-free 2-4 8,089 – – 5,994 unsecured and interest-free

Yanzhou Coal Mining Company Limited Interim Report 2013 183

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

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31. Long-term payables – continued

(2) The breakdown of fi nancial lease payables included in long-term payables

==> picture [387 x 117] intentionally omitted <==

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

||||||
|---|---|---|---|---|
|At June 30, 2013|At January 1, 2013|
|Foreign|Foreign|
|Items|currency|RMB|currency|RMB|
|Komatsu Australian|
|Finance Company|40,106|228,851|25,461|166,421|
|Bradken Finance Lease|5,354|30,550|5,512|36,027|
|Total (VI,28, note 7)|45,460|259,401|30,973|202,448|

----- End of picture text -----

Note: The fi nancial lease activities of the Group were not guaranteed by an independent third party.

32. Estimated liabilities

==> picture [459 x 174] intentionally omitted <==

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

|||||||
|---|---|---|---|---|---|
|Foreign|
|exchange|
|At January 1,|Carry|translation|At 30 June|
|Items|2013|Additions|forward|differences|2013|
|Reclamation, restoration and|
|environment recovery expense|
|(note 1)|478,408|40,220|–|-63,491|455,137|
|Take-or-pay liability (note 2)|402,331|–|41,037|-48,319|312,975|
|Long-term service leave (note 3)|11,370|–|87|-1,438|9,845|
|Total|892,109|40,220|41,124|-113,248|777,957|

----- End of picture text -----

Note 1: Reclamation, restoration and environment recovery expense accrued for restoring of coal mines are based on the accounting policy as stated in Note “II, 25”. The obligation of restoring will be exercised when mining areas become out of use or coal resources dry up.

Note 2: 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.
Note 3: It is calculated on the basis of relevant laws and regulations and service term of employees, of which, service liability payable within a year is calculated in the salaries and wages payable, service liability payable over 1 year is recognized as expected liabilities.

184 Yanzhou Coal Mining Company Limited Interim Report 2013

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33. Other non-current liabilities

Items	At June 30, At January 1, 2013 2013
Contingent Value Right(CVR) (see “VI.28.note1”) Deferred income-government grant (Note) Total	– 1,432,188 26,353 28,392
	26,353 1,460,580

Note: At 30 June 2013, government grant were the infrastructure construction subsidies and mining emergency rescue equipment subsidies to the Group received last years.

Government grant category	Balance at June 30, 2013 Amounts Amount Amount included included charged to in other in other current Amount of non-current current prof t return for Reason of liability liability and loss the year return
Infrastructure construction subsidies Mining emergency rescue equipment subsidies Total	25,090 – – – – 1,263 1,078 539 – –
	26,353 1,078 539 – –

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34. Share capital

Shareholders
names/category

At January 1, 2013
Addition/reversal during the reporting period
At June 30, 2013
Reserve
New
Shares
transferred
shares
dividend
to share
Amount
%
Issue
distribution
capital
Others
Subtotal
Amount
%
2,600,000
53
–
–
–
–
–
2,600,000
53
22
–
–
–
–
–
–
22
–
2,600,022
53
–
–
–
–
–
2,600,022
53
359,978
7
–
–
–
–
–
359,978
7
1,958,400
40
–
–
–
–
–
1,958,400
40
2,318,378
47
–
–
–
–
–
2,318,378
47
4,918,400
100
–
–
–
–
–
4,918,400
100

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

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. As Yankuang Group has fi nished the commitments made in the reform of share equity split, the shares owned by Yankuang Group can be tradable if the application made by Yankuang was approved by the competent authority. By the reporting date, since Yankuang Group has not submitted the application, its holding shares in the Company will not be traded in the market.

35. Capital reserves

Items	At January 1, At June 30, 2013 Addition Reversals 2013
Share premium Other capital reserves (Note) Total	1,607,200 – – 1,607,200 1,835,709 – 255,389 1,580,320 3,442,909 – 255,389 3,187,520

Note: The changes of other capital reserves were caused by the changes of fair value of cash fl ow hedging contract and available-for-sale fi nancial assets held by the Group.

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36. Special reserves

Items	At January 1, At June 30, 2013 Addition Reversals 2013
Wei jian fees Production safety expenses Specif c fund for reform and development Environmental guarantee deposit Production transforming fund Total	1,368,247 131,570 – 1,499,817 1,025,063 343,897 4,201 1,364,759 611,513 – – 611,513 46,026 5,746 – 51,772 23,467 2,873 – 26,340 3,074,316 484,086 4,201 3,554,201

37. Surplus reserves

Items	At January 1, At June 30, 2013 Addition Reversals 2013
Statutory surplus reserve Total	4,983,461 – – 4,983,461 4,983,461 – – 4,983,461

38. Retained earnings

Items	Proportion of accrue or Amount distribution (%)
Closing balance of last period Add: adjustment from opening balance of retained earnings Opening balance Add: net prof t attributable to shareholders of parent company Less: Appropriations to statutory surplus reserve Distribution of dividend of common shares Closing balance	28,364,156 -337,205 28,026,951 -2,396,915 – 10% 1,770,624 23,859,412

Note: On 15 May 2013, as approved at the 2012 annual general meeting of the Company, the Company made a cash dividend payment at RMB3.6 per ten shares (tax included), i.e. the sum of RMB1,770.62 million, on the basis of total capital on December 31, 2012.

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39. Minority interest

Proportion of Subsidiary minority interest (%)	At June 30, At January 1, 2013 2013 52,728 52,383 46,708 42,777 3,334 3,441 1,628 1,388 15,323 8,267 – – 510,219 518,001 1,237,545 2,576,094 48,308 49,075 2,399,600 – 145,435 – 4,460,828 3,251,426 Jan. 1, 2013- Jan. 1,2012- June 30, 2013 June 30, 2012 25,240,691 28,785,091 947,335 423,119 26,188,026 29,208,210 19,625,041 20,740,951 951,363 558,003 20,576,404 21,298,954
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 Coal Trading Centre 49.00 Haosheng Company 25.18 Coal Storage and Blending Company 49.00 Total Operation revenue and operation cost Items
Principal operations Other operations Total Principal operations cost Other operations cost Total

40. Operation revenue and operation cost

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40. Operation revenue and operation cost – continued

(1) Principal operations-Classifi cation by sector

Items	Jan. 1, 2013-June 30, 2013 Jan. 1,2012-June 30, 2012 Operation revenue Operation costOperation revenue Operation cost
Coal mining Coal chemical Railway transportation Electricity power Heating supply Total	24,261,394 18,872,453 27,789,810 19,922,215 588,175 445,765 568,397 466,074 211,008 160,815 226,551 170,455 174,632 143,074 164,842 160,869 5,482 2,934 35,491 21,338
	25,240,691 19,625,041 28,785,091 20,740,951

(2) Principal operations-Classifi cation by product

Items	Jan. 1, 2013-June 30, 2013 Jan. 1,2012-June 30, 2012 Operation revenue Operation costOperation revenue Operation cost
Sales of self-produced coal Sales of externally purchased coal Sales of methanol Revenue from railway transportation services Sales of electricity power Sales of heat Total	15,232,857 9,882,878 18,109,915 10,271,849 9,028,537 8,989,575 9,679,895 9,650,366 588,175 445,765 568,397 466,074 211,008 160,815 226,551 170,455 174,632 143,074 164,842 160,869 5,482 2,934 35,491 21,338
	25,240,691 19,625,041 28,785,091 20,740,951

(3) Principal operations-Classifi cation by area

Area	Jan. 1, 2013-June 30, 2013 Jan. 1,2012-June 30, 2012 Operation revenue Operation costOperation revenue Operation cost
Domestic Overseas Total	20,966,307 16,290,816 24,364,947 17,643,232 4,274,384 3,334,225 4,420,144 3,097,719
	25,240,691 19,625,041 28,785,091 20,740,951

(4) Total sales amount of the 5 largest customers till June 30, 2013 is RMB4,334.22 million, which accounts for 17% in total revenue.

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41. Operating taxes and surcharges

Items	Jan. 1, 2013- Jan. 1, 2012- June 30, 2013 June 30, 2012 Proportion
Business tax City construction tax Education fee Local education fee Resource tax Water conservancy construction fund Total	10,734 11,274 3%, 5% 101,360 145,804 7% 47,817 106,296 3% 30,952 8,588 1%, 2% 75,553 80,605 13,888 261 280,304 352,828

42. Selling expenses

Items	Jan. 1, 2013- Jan. 1,2012- June 30, 2013 June 30, 2012 677,065 509,423 340,189 323,364 355,414 112,069 19,793 28,702 128,332 145,217 1,520,793 1,118,775
Freight charge Mining right royalty(Note) Coal port dues, handling cost Benef ts, social insurance and welfare of employees Others Total

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, 2013- Jan. 1,2012- June 30, 2013 June 30, 2012
Benef ts, social insurance and welfare of employees Materials and repairs expenses Depreciation expense Expenses on acquiring Gloucester Taxes Mineral resources compensation fees Property management fees Business travel, off ce, conference and hospitality fees Commission, consulting and service charges Amortization, leasing fees, etc. Research and Development Costs Others Total	1,121,741 1,048,676 225,860 404,903 194,824 139,096 – 325,855 165,060 168,555 103,577 134,175 68,608 68,610 46,429 50,975 46,244 50,138 42,581 30,574 36,225 72,595 83,124 138,080
	2,134,273 2,632,232

190

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44. Finance costs

Items	Jan. 1, 2013- Jan. 1, 2012- June 30, 2013 June 30, 2012
Interest expenses Less: interest income Add: exchange gain or loss Add: other expenses Total	922,755 827,662 345,463 400,680 3,108,474 -181,318 212,882 130,312
	3,898,648 375,976

45. Impairment loss

Items	Jan. 1, 2013- Jan. 1,2012- June 30, 2013 June 30, 2012
Impairment loss of intangible assets (see VI note 1) Impairment loss of f xed assets Impairment loss of construction in progress Impairment loss of inventories (see VI, 6, (2)) Impairment loss of goodwill Allowance for Bad debt (see VI,3, VI, 5) Total	2,099,571 – – – – – 97,088 – – – 45,493 -376
	2,242,152 -376

46. Gains from changes in fair value

Items	Jan. 1, 2013- Jan. 1,2012- June 30, 2013 June 30, 2012
Contingent Value Rights (CVR) (see “VI.28.note 1”) Fair value adjustment on royalty receivable (see “VI.7.note 1”) Total	-115,026 – -101,815 –
	-216,841 –

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47. Investment income

(1) Sources of investment income

Items	Jan. 1, 2013- Jan. 1,2012- June 30, 2013 June 30, 2012
Long-term equity investment income under equity method Investment income from the holding of AFS f nancial assets Investment income from disposal of long-term equity investment Total	-64,677 65,298 4,482 3,702 181 –
	-60,014 69,000

Note: During the reporting period, the investment income from disposal of long-term equity investment included RMB30,000 from the sale of Yankuang Group Zoucheng Ziyuan Construction Co., Ltd., RMB110,000 from the sale of Yankuang Group Zoucheng Huaming Company and RMB40,000 from the sale of Yankuang Group Zouheng Fuhui Company.

(2) Long-term equity investment income under equity method

	Jan. 1, 2013-	Jan. 1,2012-	Reasons
Items	June 30, 2013	June 30, 2012	for change
Total	-64,677	65,298
Including:
Middlemount Joint Venture	-178,303	–	Prof t decrease
			for the period
China HD Zouxian Co., Ltd.	93,994	47,353	Prof t increase
			for the period
Yankuang Group Finance Co., Ltd.	20,296	19,436	Prof t increase
			for the period
Shandong Shengyang Wood Co., Ltd.	-418	-1,487
Jining Jiemei New Wall Materials Co., Ltd.	-246	-4

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48. Non-operating income

(1) Breakdown of non-operating income

Items	Amount for current period’s Jan. 1, 2013- Jan. 1,2012- extraordinary June 30, 2013 June 30, 2012 gain/loss
Gain on disposal of non-current assets Including: Gain on disposal of f xed assets Government grants (2) Acquisition gains Other Total	10,384 4,894 10,384 10,384 4,894 10,384 7,939 4,639 7,939 – 1,391,019 – 10,937 19,923 10,937 29,260 1,420,475 29,260

Note: Acquisition gains were the gains generating from the consolidation of the difference between the total transaction costs that Yancoal Australia acquired Gloucester and fair value of the identifi able assets and liabilities, a total amount of AUD199.97 million.

(2) Breakdown of government grants

Items

Jan. 1, 2013-
Jan. 1,2012-
June 30, 2013
June 30, 2012
Basis and sources

Taxation reduce on product from
comprehensive use of resources
Allocation from Finance Bureau for the construction
of permanent refuge chamber and the update
of mine gas drainage systems
Mining emergency rescue equipment subsidy
Financial subsidies on sub-purchase of high eff ciency
motor from Henan Zhengbeng Technology Company
Subsidy income from that maintenance fees
for special-purpose equipment and technique
of VAT tax control system deducted VAT
Central f nancial subsidies on purchasing Jiamusi
High Eff ciency Motors
Others
Total

5,416
3,783
Lujingxinxunzi (2012)NO.646
1,960
–
Shaanxi Provincial Finance Department
“Notice of allocation on 2012 central
investment budget of capital construction”
539
561
State Administration of Work Safety
(f nance correspondence (2011) No. 159)
12
–
NDRC document of Finance Ministry
(Caijian (2011) No. 62)
1
–
“Notice on maintenance fees for
special-purpose equipment and
technique of VAT tax control
system deducted VAT”
(Caishui (2012) No. 15)
–
234
Ministry of Finance DRC Financial
Supervision (2011) No. 62
11
61
7,939
4,639

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49. Non-operating expenses

Items	Account for current period’s Jan. 1, 2013- Jan. 1, 2012- extraordinary June 30, 2013 June 30, 2012 gain/loss
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	10,906 799 10,906 10,906 799 10,906 2,966 6,656 2,966 5,482 2,139 5,482 168 337 168 19,522 9,931 19,522

me taxes Income taxes Items	Jan. 1, 2013- Jan. 1, 2012- June 30, 2013 June 30, 2012 187,106 1,456,056 33,574 -1,083,223 -1,527,900 -351,571 -1,307,220 21,262
Current tax expense MRRT deferred tax expense (Note) Other deferred tax expenses Total

50. Income taxes

(1) Income taxes

Note: 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. The tax rate of MRRT is 22.5%. MRRT legislation was passed by Australian Senate on March 19, 2012 and started to be effective from 1 July 2012 in Australia. Pursuant to related laws of MRRT, Yancoal Australia should determine starting base of MRRT, which can be measured by either book value method or market value method and amortised in certain period. In current reporting period the Group has recognised MRRT related deferred tax effects in compliance with related accounting standards.

(2) Current tax expense

Items	Amount
The Company and the domestic subsidiaries	696,354
Subsidiaries in Australia	-509,248
Total of current tax expense	187,106

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50. Income taxes – continued

(2) Current tax expense – continued
1) Current tax expense (the Company and the domestic subsidiaries)

Items	Amount
Total prof t of the period	2,310,966
Add: increase of tax adjustment	1,950,217
Less: decrease of tax adjustment	894,572
Less: recoupment of prior year tax losses	–
Taxable income of the period	3,366,611
Statutory income tax rate	15%-25%
Income tax payable of the period	823,632
Add: other adjustments	-127,278
Current tax expense	696,354

2) Current tax expense (Subsidiaries in Australia)

Items	Amount
Total prof t of the period	-6,656,671
Add: increase of tax adjustment	8,767,442
Less: decrease of tax adjustment	3,808,265
Less: recoupment of prior year tax losses	–
Taxable income of the period	-1,697,494
Statutory income tax rate	30%
Income tax payable of the period	-509,248
Add: other adjustments	–
Current tax expense	-509,248

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51. Computation process of basic and diluted earnings per share

Items
No.

Jan. 1, 2013-
Jan. 1,2012-
June 30, 2013
June 30, 2012
-2,396,915
4,873,479
-73,734
2,011,946
-2,323,181
2,861,533
4,918,400
4,918,400
–
–
–
–
–
–
–
–
–
–
6
6
4,918,400
4,918,400
-0.4873
0.9909
-0.4723
0.5818
–
–
–
–
25%
25%
–
–
-0.4873
0.9909
-0.4723
0.5818

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)

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52. Other comprehensive income

Items	Jan. 1, 2013- Jan. 1,2012- June 30, 2013 June 30, 2012
1. Gains (losses) generated by available for sales f nancial assets Less: income tax inf uence generated by available for sales 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 overseas operation statements Less: amount transferred into prof t and loss of the current period from disposal of overseas operating Subtotal Total	-23,742 1,568 -5,936 392 – –
	-17,806 1,176
	-467,690 20,637 -142,304 5,487 12,129 -1,367
	-313,257 13,783
	-1,850,178 -447,996 – –
	-1,850,178 -447,996
	-2,181,241 -433,037

53. Cash fl ow

(1) Cash received/paid relating to operating activities/investment/fi nance activities

1) OTHER CASH RELATING TO OPERATING ACTIVITIES

Items	Jan. 1, 2013- June 30, 2013
Interest income Received cash from funds paid on other’s behalf Sundry revenue Total	191,222 65,372 104,497 361,091

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53. Cash fl ow – continued

(1) Cash received/paid relating to operating activities/investment/fi nance activities – continued
2) OTHER CASH PAID RELATING TO OPERATING ACTIVITIES

Items	Jan. 1, 2013- June 30, 2013
Sporadic cash payment Payments for selling and administrative expenses Penalty and Overdue Payment Donation expenditure Total	1,388,263 482,640 5,392 1,210 1,877,505

3) OTHER CASH RECEIVED RELATING TO INVESTING ACTIVITIES

Items	Jan. 1, 2013- June 30, 2013 997,064 997,064
Decrease of restricted deposits Total

4) OTHER CASH PAID RELATING TO OTHER INVESTING ACTIVITIES

Items	Jan. 1, 2013- June 30, 2013
Payment of borrowings to joint ventures and associates Increase of restricted deposits Others Total	108,578 111,641 1,530 221,749

198 Yanzhou Coal Mining Company Limited Interim Report 2013

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53. Cash fl ow – continued

(1) Cash received/paid relating to operating activities/investment/fi nance activities – continued
5) SUPPLEMENTAL INFORMATION OF CONSOLIDATED CASH FLOW STATEMENT

Items	Jan. 1, 2013- Jan. 1,2012- June 30, 2013 June 30, 2012
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) Loss on fair value change (“-” represents gain) Financial expenses (“-” represents gain) Loss arising from investments (“-” represents gain) Inf uence of deferred taxes(“-“ 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	-3,424,445 4,888,103 2,242,152 -376 1,413,626 1,146,294 684,662 488,212 1,016 1,910 501,583 516,364 522 -4,095 216,841 – 4,031,229 646,344 60,014 -69,000 -1,494,326 -1,434,794 -186,274 -431,349 143,989 3,108,373 -3,380,577 -1,134,895
	810,012 7,721,091
	8,302,030 18,574,257 12,799,757 8,154,224 -4,497,727 10,420,033

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53. Cash fl ow – continued

(2) Information of acquired or disposed subsidiaries and other operating entities in current period

Items	Items	Jan. 1, 2013- June 30, 2013 1,025,516 223,427 802,089 225,427 302,205 56,620 – Jan. 1,2012- June 30, 2012 18,574,257 1,429 18,571,688 1,140 – 18,574,257 –
Acquisition of subsidiaries and other operating entities 1. Acquisition price for subsidiaries and other operating entities acquisition 2. Cash or cash equivalent paid to acquiring subsidiaries and other operating entities Less: Cash or cash equivalent owned by subsidiaries and other operating entities 3. Net cash paid for acquiring subsidiaries and other operating entities 4. Net assets of subsidiaries acquired Current assets Non-current assets Current liabilities Non-current liabilities Cash and cash equivalents Jan. 1, 2013- Items June 30, 2013
Cash Including: cash on hand Bank 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	8,302,030 1,007 8,299,466 1,557 – 8,302,030 –

(3) Cash and cash equivalents

200 Yanzhou Coal Mining Company Limited Interim Report 2013

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VII. 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	Legal	Organization
ultimate controlling party	enterprise	Location	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, 2013 Addition Reversals At June 30, 2013	Parent Company At January 1, 2013 Addition Reversals At June 30, 2013
Yankuang Group Co. Ltd	3,353,388 – – 3,353,388

(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, 2013 2013 2013 2013
Yankuang Group Co. Ltd	2,600,000 2,600,000 52.86% 52.86%

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VII. RELATIONSHIP OF RELATED PARTIES AND THEIR TRANSACTIONS – CONTINUED

I. Relationship of related parties – continued

2. Subsidiaries

(1) Subsidiaries

	Type of	Registration	Business	Legal	Organization
Subsidiaries	enterprise	location	nature	representative	code
Yancoal Australia 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	–	–
Gloucester Coal Ltd.	limited liability	Australia	Coal mining and sales	–	–
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 methanol and coals	Jin Fangyu	73403278-1
Yanzhou Coal Yulin Neng Hua Co., Ltd.	limited liability	Shaanxi	Production and sales of methanol	Li Weimin	75881603-8
Yanmei Heze Neng Hua Co., Ltd.	limited liability	Shandong	and acetic acid Coal mining and sales	Wang Yongjie	75445658-1
Shandong Yanmei Shipping Co., Ltd.	limited liability	Shandong	Freight transportation and coal sales	Wang Xinkun	16612592X
Qingdao Free Trade Zone Zhongyan Trade Co., Ltd.	limited liability	Shandong	Trade and storage	Fan Qingqi	16362500-5
Shandong Hua Ju Energy Co., Ltd.	limited liability	Shandong	Sales and production of electricity power	Hao Jingwu	73927723-5
			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, coal mining	Li Weimin	69594585-1
			and sales
Inner Mongolia Yize Mining Investment Co., Ltd.	limited liability	Inner Mongolia	Investment	Yin Mingde	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., Ltd.	limited liability	Inner Mongolia	Coal mining and sales	Yin Mingde	79364061-3
Yancoal International (Holding) Co., Ltd.	limited liability	Hong Kong	Investment and shareholding	–	–
Yancoal International Technology Development	limited liability	Hong Kong	Development of miner’s exploitation	–	–
Co., Ltd.			technology
Yancoal Technology (Holding) Ltd.	limited liability	Australia	Holding company	–	–
Premier Char Pty Ltd.	limited liability	Australia	Research and development of the	–	–
			technology and procedures in relation
			to processing coal char
Yancoal International Trading Co., Ltd.	limited liability	Hong Kong	Transit trade of coal	–	–
Yancoal International Resources Development	limited liability	Hong Kong	Exploration and development of mining resources	–	–
Co., Ltd.
Yancoal Luxembourg Energy Holding Co., Ltd.	limited liability	Luxembourg	Investment and shareholding	–	–
Yancoal Canada Resources Holding Co., Ltd.	limited liability	Canada	Development and sales of mining resources	–	–

202 Yanzhou Coal Mining Company Limited Interim Report 2013

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VII. RELATIONSHIP OF RELATED PARTIES AND THEIR TRANSACTIONS – CONTINUED

I. Relationship of related parties – continued

2. Subsidiaries – continued

(1) Subsidiaries – continued

	Type of	Registration	Business	Legal	Organization
Subsidiaries	enterprise	location	nature	representative	code
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	–	–
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	–	–
Premier Coal Holdings Ltd.	limited liability	Australia	Holding company	–	–
Premier Coal Limited	limited liability	Australia	Coal mining and sales	–	–
Zoucheng Yankuang Beisheng Industry	limited liability	Shandong	Gangues soring and processing, freight	Zhang Chuanwu	16613184-4
and Trade Co., Ltd.			transportation
Shandong Coal Trading Centre Co., Ltd.	limited liability	Shandong	Coal spot trade service and management	Hou Qingdong	05239376-6
Inner Mongolia Haosheng Coal Minig Co., Ltd.	limited liability	Ordos	Sales of coal mine machinery equipment	Yin Mingde	55280650-4
			and accessories
Shandong Yanmei Rizhao Port Coal Storage	limited liability	Shandong Rizhao	Coal wholesale management and others	Liu Chun	06044704-X
and Blending Co., Ltd.

(2) Changes in registered capital

	At January 1,			At June 30,
	2013			2013
Subsidiaries	(RMB’0000)	Addition	Reversal	(RMB’0000)
Yancoal Australia Limited	AUD656,700,000	–	–	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
Gloucester Coal Ltd.	AUD719,720,000	–	–	AUD719,720,000
Yanzhou Coal Shanxi Neng Hua Co., Ltd.	60,000	–	–	60,000
Shanxi Heshun Tianchi Energy Co., Ltd.	9,000	–	–	9,000
Shanxi Tianhao Chemicals Co., Ltd.	15,000	–	–	15,000
Yanzhou Coal Yulin Neng Hua Co., Ltd.	140,000	–	–	140,000
Yanmei Heze Neng Hua Co., Ltd.	300,000	–	–	300,000
Shandong Yanmei Shipping Co., Ltd.	550	–	–	550
Qingdao Free Trade Zone Zhongyan
Trade Co., Ltd.	210	–	–	210

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VII. RELATIONSHIP OF RELATED PARTIES AND THEIR TRANSACTIONS – CONTINUED

I. Relationship of related parties – continued

2. Subsidiaries – continued

(2) Changes in registered capital – continued

Subsidiaries

At January 1,
At June 30,
2013
2013
(RMB’0000)
Addition
Reversal
(RMB’0000)
28,859
–
–
28,859
310,000
–
–
310,000
13,626
40,248
–
53,874
300
64,236
–
64,536
411
20,589
–
21,000
500
–
–
500
USD2,800,000
–
USD2,800,000
USD1,000,000
–
USD1,000,000
AUD75,410,000
–
–
AUD75,410,000
AUD1,000,000
–
–
AUD1,000,000
USD1,000,000
–
USD1,000,000
USD600,000
–
USD600,000
USD500,000
–
USD500,000
USD290,000,000
–
USD290,000,000
AUD202,980,000
–
–
AUD202,980,000
AUD223,470,000
–
–
AUD223,470,000
AUD6,320,000
–
AUD6,320,000
AUD24,450,000
–
–
AUD24,450,000
AUD46,410,000
–
–
AUD46,410,000
AUD3,460,000
–
–
AUD3,460,000
AUD321,610,000
–
–
AUD321,610,000
AUD8,780,000
–
–
AUD8,780,000
240
–
–
240
10,000
–
–
10,000
50,000
–
–
50,000
30,000
–
–
30,000

Shandong Hua Ju Energy Co., Ltd.
Yanzhou Coal Ordos Neng Hua Co., Ltd.
Inner Mongolia Yize Mining Investment Co., Ltd.
Inner Mongolia Rongxin Chemicals Co., Ltd.
Inner Mongolia Daxin Industrial Gas Co., Ltd.
Inner Mongolia Xintai Coal Mining Co., Ltd.
Yancoal International (Holding) Co., Ltd.
Yancoal International Technology Development
Co., Ltd.
Yancoal Technology (Holding) Ltd.
Premier Char Pty Ltd.
Yancoal International Trading Co., Ltd.
Yancoal International Resources Development
Co., Ltd.
Yancoal Luxembourg Energy Holding Co., Ltd.
Yancoal Canada Resources Holding Co., Ltd.
Yancoal Energy Pty Ltd.
Syntech Holdings Pty Ltd.
Syntech Holdings II Pty Ltd.
Athena Holdings Pty Ltd.
Tonford Holdings Pty Ltd.
Wilpeena Holdings Pty Ltd.
Premier Coal Holdings Ltd.
Premier Coal Limited
Zoucheng Yankuang Beisheng Industry and
Trade Co., Ltd.
Shandong Coal Trading Centre Co., Ltd.
Inner Mongolia Haosheng Coal Minig Co., Ltd.
Shandong Yanmei Rizhao Port Coal Storage
and Blending Co., Ltd.

204 Yanzhou Coal Mining Company Limited Interim Report 2013

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VII. RELATIONSHIP OF RELATED PARTIES AND THEIR TRANSACTIONS – CONTINUED

I. Relationship of related parties – continued

2. Subsidiaries – continued

(3) Changes in shareholding proportion or equity interest of subsidiaries.

	Shareholding amount (RMB’0000)	Shareholding amount (RMB’0000)	Shareholding	proportion (%)
Subsidiaries	At June 30, 2013	At January 1, 2013	At June 30, 2013	At January 1, 2013
Yancoal Australia Limited	AUD656,700,000	AUD656,700,000	78.00	78.00
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
Gloucester Coal Ltd.	AUD719,720,000	AUD719,720,000	100.00	100.00
Yanzhou Coal Shanxi Neng Hua Co., Ltd.	60,000	60,000	100.00	100.00
Shanxi Heshun Tianchi Energy Co., Ltd.	7,318	7,318	81.31	81.31
Shanxi Tianhao Chemicals Co., Ltd.	14,979	14,979	99.89	99.89
Yanzhou Coal Yulin Neng Hua Co., Ltd.	140,000	140,000	100.00	100.00
Yanmei Heze Neng Hua Co., Ltd.	295,000	295,000	98.33	98.33
Shandong Yanmei Shipping Co., Ltd.	506	506	92.00	92.00
Qingdao Free Trade Zone Zhongyan
Trade Co., Ltd.	110	110	52.38	52.38
Shandong Hua Ju Energy Co., Ltd.	27,459	27,459	95.14	95.14
Yanzhou Coal Ordos Neng Hua Co., Ltd.	310,000	310,000	100.00	100.00
Inner Mongolia Yize Mining Investment Co., Ltd.	53,874	13,626	100.00	100.00
Inner Mongolia Rongxin Chemicals Co., Ltd.	64,536	300	100.00	100.00
Inner Mongolia Daxin Industrial Gas Co., Ltd.	21,000	411	100.00	100.00
Inner Mongolia Xintai Coal Mining Co., Ltd.	400	400	80.00	80.00
Yancoal International (Holding) Co., Ltd.	USD2,800,000	USD2,800,000	100.00	100.00
Yancoal International Technology
Development Co., Ltd.	USD1,000,000	USD1,000,000	100.00	100.00
Yancoal Technology (Holding) Ltd.	AUD75,410,000	AUD75,410,000	100.00	100.00
Premier Char Pty Ltd.	AUD1,000,000	AUD1,000,000	100.00	100.00
Yancoal International Trading Co., Ltd.	USD1,000,000	USD1,000,000	100.00	100.00

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VII. RELATIONSHIP OF RELATED PARTIES AND THEIR TRANSACTIONS – CONTINUED

I. Relationship of related parties – continued

2. Subsidiaries – continued

(3) Changes in shareholding proportion or equity interest of subsidiaries. – continued

	Shareholding amount (RMB’0000)	Shareholding amount (RMB’0000)	Shareholding	proportion (%)
Subsidiaries	At June 30, 2013	At January 1, 2013	At June 30, 2013	At January 1, 2013
Yancoal International Resources
Development Co., Ltd.	USD600,000	USD600,000	100.00	100.00
Yancoal Luxembourg Energy Holding Co., Ltd.	USD500,000	USD500,000	100.00	100.00
Yancoal Canada Resources Holding Co., Ltd.	USD290,000,000	USD290,000,000	100.00	100.00
Yancoal Energy Pty Ltd.	AUD202,980,000	AUD202,980,000	100.00	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
Athena Holdings Pty Ltd.	AUD24,450,000	AUD24,450,000	100.00	100.00
Tonford Holdings Pty Ltd.	AUD46,410,000	AUD46,410,000	100.00	100.00
Wilpeena Holdings Pty Ltd.	AUD3,460,000	AUD3,460,000	100.00	100.00
Premier Coal Holdings Ltd.	AUD321,610,000	AUD321,610,000	100.00	100.00
Premier Coal Limited	AUD8,780,000	AUD8,780,000	100.00	100.00
Zoucheng Yankuang Beisheng Industry and
Trade Co., Ltd.	240	240	100.00	100.00
Shandong Coal Trading Centre Co., Ltd.	5,100	5,100	51.00	51.00
Inner Mongolia Haosheng Coal Minig Co., Ltd.	713,654	–	74.82	–
Shandong Yanmei Rizhao Port Coal Storage
and Blending Co., Ltd.	15,300	–	51.00	–

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VII. RELATIONSHIP OF RELATED PARTIES AND THEIR TRANSACTIONS – CONTINUED

I. Relationship of related parties – continued

3. Joint venture and associates

(1) Joint venture and associates

	Type of	Registration	Business	Legal	Registered	Shareholding	Registered
Investee name	enterprise	location	nature	representative	capital	proportion (%)	No.
Associated company
China HD Zouxian Co., Ltd.	limited liability	Shandong	Electricity	Zhong	RMB	30	66930776-8
			power	Tonglin	3 billion
Yankuang Group Finance Co., Ltd.	limited liability	Shandong	Finance	Zhang	RMB	25	56250962-6
				Shengdong	500million
Shaanxi Future Energy Chemical	limited liability	Shaanxi	Coal mining	Li Weimin	RMB	25	56714796-X
Co., Ltd.			and the CTL		5.4 billion
			development
			project
Shandong Shengyang Wood	limited liability	Shandong	Decoration	Guo Dechun	RMB	39.77	74989916-9
Co., Ltd.			and ornament		15.09 million
			materials
Jining Jiemei New Wall Materials	limited liability	Shandong	Coal gangues	Tian Peng	RMB	20	73170806-1
Co., Ltd.			f red brick		3.6 million
Newcastle Coal Infrastructure	limited liability	Australia	Coal terminal	–	–	27	–
Group Pty Ltd (NCIG)
Joint venture company
Ashton Coal Mines Limited	limited liability	Australia	Holding and	–	AUD100	90	–
			sales of
			real-estate
Australian Coal Processing	limited liability	Australia	No operating	–		90	–
Holding Pty Ltd.			company in
			Australia
Middlemount Joint Venture Pty Ltd	limited liability	Australia	Coal mining	–	–	About 50	–
			and sales

Note: The Company holds 90% shares and 50% voting rights of Australian Coal Processing Holding Pty Ltd and Ashton Coal Mines Limited, detailed in Note V.I.6. (2).

(2) Financial information is stated in Note VI.10. (3).

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VII. RELATIONSHIP OF RELATED PARTIES AND THEIR TRANSACTIONS – CONTINUED

I. Relationship of related parties – continued

4. Other related parties (limited to transaction 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

Sales of goods and materials, purchase of materials, acceptance of labors service Sales of goods and materials, purchase of materials, acceptance of labors service Sales of goods and materials, purchase of materials

Yankuang Group Dalu Machinery Co., Ltd. Yankuang Group Zoucheng Jinming Gongmao Co., Ltd. Shandong Yankuang International Coking Co., Ltd. Yankuang Group Logistics Co., Ltd. Yankuang Group Donghua Construction Co., Ltd. Yankuang Group Zoucheng Jintong rubber Co., Ltd. Yankuang Meihua Gongxiao Co., Ltd Shandong Yankuang Jisan Electricity Co., Ltd. Yankuang Group Coal Chemical Co., Ltd. Yankuang Group Xinshiji Co., Ltd.

Sales of goods and materials

Sales of goods, acceptance of labours service Sales of goods, purchase of materials, acceptance of labours service Sales of goods and purchase of materials

Sales of goods Sales of goods

Sales of goods Sales and purchase of materials, acceptance of labors service Sales and purchase of materials, acceptance of labors service Sales of materials Sales of materials

Yankuang Group Electrical and Machinery Equipment Co., Ltd. Yankuang Guotai Chemicals Co., Ltd. Yankuang Group Hailu Construction Co., Ltd.

Yankuang Donghua 37 Chu Yankuang Donghua Geological Co., Ltd. Yankuang Donghua Jianan Co., Ltd. Yankuang Group Zoucheng Huajiang Design and Research Co., Ltd.

Acceptance of labors service Acceptance of labors service Purchase of materials, acceptance of labors service Purchase of materials, Acceptance of labors service

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VII. RELATIONSHIP OF RELATED PARTIES AND THEIR TRANSACTIONS – CONTINUED

I. Relationship of related parties – continued

4. Other related parties (limited to transaction with the Group) – continued

Type of relationship Related parties Transactions Yankuang Boyang Foreign Economic and Purchase of materials Trading Co., Ltd. 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 Dehailan Purchase of materials Rubber Co., Ltd. Yankuang Xinshiji Kenuode Dianqishebei Purchase of materials, acceptance of labours service Co., Ltd. Yanzhou Dongfang Jidian Co., Ltd. Purchase of materials, acceptance of labours service Yankuang Group Finance Co., Ltd Deposit Other enterprises under control of the Sales and purchase of materials, acceptance same controlling shareholder of labors service (2) Joint ventures Ashton Mining Co., Ltd. Dealing accounts, sales of goods (3) Other related parties Noble Group Dealing accounts, sales of goods

ii. Related party transactions

1. Goods purchasing

Type and name of related parties	Jan. 1, 2013-June 30, 2013 Jan. 1,2012-June 30, 2012 Amount Proportion (%) Amount Proportion (%)
Parent company and entities it controls Total	266,007 3 355,284 3
	266,007 3 355,284 3

Note: Based on market price, calculated at negotiated price.

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VII. RELATIONSHIP OF RELATED PARTIES AND THEIR TRANSACTIONS – CONTINUED

ii. Related party transactions – continued

2. Goods sales

Type and Name of related parties	Jan. 1, 2013-June 30, 2013 Jan. 1,2012-June 30, 2012 Amount Proportion (%) Amount Proportion (%) 1,471,344 6 1,904,760 7 285,325 1 512,546 2 163,322 34 153,743 32 53,998 23 89,257 45 44,719 8 23,792 4 850,635 4 – – 2,869,343 2,684,098
Controlling shareholder and entities it controls (Coal sales) Joint Ventures (Coal sales) Controlling shareholder and entities it controls (Material sales) Controlling shareholder and entities it controls (Electricity power and heat supply) Controlling shareholder and entities it controls (Methanol sales) Others Total

Note: Based on market price, calculated at negotiated price.

3. Guarantee

			Guarantee	Guarantee
Assurance Provider	Secured party	Amount guaranteed	starting date	maturity date	Completion
Yankuang Group	Shanxi Neng Hua	RMB110 million	2006-02-13	2018-02-19	No
Yankuang Group	The Company	RMB3,393.89 million	2011-09-29	2016-09-28	No
Yankuang Group	Yancoal International	USD203 million	2011-12-28	2012-12-27	No
Yankuang Group	The Company	RMB500 million	2012-04-05	2013-04-04	No
The Company (note)	Yancoal Australia	USD2,803 million	2009-12-16	2014-12-16	No
The Company (note)	Yancoal Australia	USD135.5 million	2009-12-09	2014-12-16	No
The Company	Yancoal Australia	USD847.76 million	2012-12-17	2017-12-16	No
The Company	Yancoal Australia	USD66.90 million	2012-12-17	2017-12-16	No

Note: The Company provides bank guarantee, and its controlling shareholder Yankuang Group provides counterguarantee for this guaranteeing event.

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VII. RELATIONSHIP OF RELATED PARTIES AND THEIR TRANSACTIONS – CONTINUED

ii. Related party transactions – continued

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, 2013 is RMB2.09 million. RMB2.19 million was paid as compared with same period in 2012.

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

As at the end of this reporting period, the balance of deposits of the Company in Yankuang Group Finance Company Limited was RMB2.10236 billion and the interest income during this reporting period was RMB3.21 million.

As at the end of this reporting period, the balance of loans of the Company from Yankuang Group Finance Company Limited was RMB 33.62 million and the interest expense during this reporting period was RMB 130 thousand.

7. Other transactions

Pursuant to an agreement signed between the Company and Yankuang Group, Yankuang Group manages staff social insurance for the Company. Amount charged to expenses of the Company for the period from January 1-June 30, 2013 and the period from January 1-June 30, 2012 are RMB748.40 million and RMB795.14 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, 2013 and the period from January 1-June 30, 2012 are RMB330.75 million and RMB343.3 million respectively.

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VII. RELATIONSHIP OF RELATED PARTIES AND THEIR TRANSACTIONS – CONTINUED

ii. Related party transactions – continued

7. Other transactions – continued

Pursuant to an agreement signed by the Company and Yankuang Group, the department and subsidiaries of Yankuang Group provided the following services and charged related service fees during the period, transaction price shall be determined by market price, government pricing or negotiated price. Details are shown as following:

Items	Jan. 1, 2013- Jan. 1, 2012- June 30, 2013 June 30, 2012 (RMB’0000) (RMB’0000) 23,604 18,123 590 2,779 2,561 2,188 6,861 6,861 7,725 7,117 860 1,719 213 1,902 – 650 42,414 41,339
Laboring received from the Group Construction service Road transportation fee Gas and heating expenses Buildings management fee Maintenance and Repairing service Employees’ benef ts Communication Services Others Subtotal

iii. Amount due to or from related party

1. Notes receivables

2.	Related parties (Items)	At June 30, At January 1, 2013 2013
	Parent company Other enterprises under the control of the same parent company Total Accounts receivables	– 3,850 451,352 1,034,774
		451,352 1,038,624

Related parties (Items)	At June 30, At January 1, 2013 2013
Other enterprises under the control of the same parent company Joint venture Others Total	1,861 837 32,835 – 53,235 –
	87,931 837

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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, 2013 2013
	Parent company Other enterprises under the control of the same parent company Joint venture Associates Total Prepayment Related parties (Items)	16,994 16,894 68,250 26,079 167,320 187,324 90,541 90,924
		343,105 321,221
		At June 30, At January 1, 2013 2013
	Other enterprises under the control of the same parent company Total Notes payables Related parties (Items)	60,356 66,689
		60,356 66,689
		At June 30, At January 1, 2013 2013
	Other enterprises under the control of the same parent company Total Accounts payables Related parties (Items)	551 –
		551 –
		At June 30, At January 1, 2013 2013
	Parent company Other enterprises under the control of the same parent company Total	338 338 59,190 93,374
		59,528 93,712

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VII. 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, 2013 2013 612,237 1,164,998 282,717 413,815 – 44,451 16,277 – 5,826 – 917,057 1,623,264 At June 30, At January 1, 2013 2013 31,709 95,473 31,709 95,473
Parent company Other enterprises under the control of the same parent company Joint venture Associates Others Total Advance from the related parties Related parties (Items)
Other enterprises under the control of the same parent company Total

8. Advance from the related parties

VIII. CONTINGENCY

1. Australian subsidiaries and joint ventures

Items	As at June 30, As at January 1, 2013 2013
Performance guarantees provided to daily operations Guarantees provided in respect of the cost of restoration of certain mining rights, given to government departments as required by statute. Total	208,077 1,832,002 1,576,669 380,913
	1,784,745 2,212,915

Note: The events stated above are mainly due to the acquisition of Yancoal Resources, Syntech, Syntech II, Premier Coal and Premier Char, etc.

Except for the contingencies stated above and included in Note “VII, ii, 3”, as at June 30, 2013, the Group does not have any other signifi cant contingencies.

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CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

IX. 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. Pursuant to agreement, the Company shall pay RMB196.80 million and the Company has paid RMB117.93 million (Note VI. 17). By the end of the reporting period, RMB78.87 million is still not paid by the Company. As at this reporting date, the Company’s application legal fi les for establishment and registration have been handled to National Development and Reform Committee (Shan 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. On 15 September 2012, the third extraordinary general meeting of Inner Mongolia Haosheng Coal Mining Co., Ltd in 2012 approved another capital increase resolution. The consideration for equity transfer and capital contribution were RMB6,812.45 million and RMB323.74 million, total of which were RMB7,136.19 million. As at the end of the reporting period, RMB4,007.97 million has been paid by the Company and RMB3,128.22 million was still unpaid.

2. Ongoing lease agreements and related fi nancial infl uence

As at June 30, 2013 (T), the amount shall be carried by the Group for irrevocable operating lease and fi nance lease of machinery and equipments, buildings, etc are stated as the follows:

Terms	Operating lease Finance lease (RMB ’0000) (RMB ’0000)
T+1years T+2years T+3years T+3years later Total	1,425 5,641 1,386 5,804 1,370 5,840 2,962 16,939
	7,143 34,224

By June 30, 2013, the Group’s other commitments which have not been recognized in the fi nancial statements are as follows:

Commitments	At June 30, At January 1, 2013 2013 (RMB ’0000) (RMB ’0000)
Capital expenditure-purchase and construction of assets Total	311,680 293,715
	311,680 293,715

Except for the above stated commitments, the Company has no other signifi cant commitments to claim by June 30, 2013.

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CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

X. EVENTS AFTER BALANCE SHEET DATE

The Company sent a written proposal to Yancoal Australia’s Independent Director Committee on 18 July 2013 that the Company would take partial H shares as the underlying securities to appear on the Australian Securities Exchange by taking depository receipts, to acquire the remaining 22% of Yancoal Australia’s issued shares held by other public shareholders (“ the minority shareholders”) (“shares swap). Currently, Yanzhou Coal holds 78% equity interests of Yancoal Australia. After the proposed transaction, Yancoal Australia will delist from ASX and become a wholly-owned subsidiary of Yanzhou Coal.
Except for the events stated above, as at the end of the reporting period, the Group has no other signifi cant events after balance sheet day to claim.

XI. SEGMENT REPORT

1. Segment report during January. 1, 2013-June 30, 2013

Items

Methanol,
Railway
Electricity
Coal mining
transportation
power and
Undistributed
Inter-segment
business
business
Thermal force
items
elimination
Total
25,748,623
225,875
1,321,115
23,471
1,131,058
26,188,026
25,138,346
211,690
831,850
6,140
–
26,188,026
610,277
14,185
489,265
17,331
1,131,058
–
30,335,509
236,830
1,191,189
20,908
855,007
30,929,429
19,708,825
161,490
696,086
10,003
–
20,576,404
446,583
11,604
391,412
5,408
855,007
–
10,180,101
63,736
103,691
5,497
–
10,353,025
-4,586,886
-10,955
129,926
2,563
276,051
-4,741,403
148,069,808
516,995
7,217,579
2,014,124
39,634,633
118,183,873
102,230,774
98,261
2,784,710
109,497
30,327,534
74,895,708
1,840,170
34,730
223,269
1,135
–
2,099,304
2,242,106
–
46
–
–
2,242,152
4,268,838
–
184,736
61,827
–
4,515,401

Operating revenue
– External
– Inter-segment
Operating cost and expenses
– External
– Inter-segment
– Overheads
Total operating prof t(loss)
Total assets
Total liabilities
Complementary information
Depreciation and amortization
Non-cash expenses excluding
depreciation and amortization
Capital expenditure

216 Yanzhou Coal Mining Company Limited Interim Report 2013

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XI. SEGMENT REPORT – CONTINUED

2. Segment report during January. 1, 2012-Jun. 30, 2012

Items	Methanol, Railway Electricity Coal mining transportation power and Undistributed Inter-segment business business Thermal force items elimination Total
Operating revenue – External – Inter-segment Operating cost and expenses – External – Inter-segment – Overheads Total operating prof t 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
	24,876,558 262,976 1,282,659 23,209 736,013 25,709,389
	20,339,189 171,152 780,031 8,582 21,298,954 336,143 19,372 371,352 9,146 736,013 4,201,226 72,452 131,276 5,481 4,410,435
	3,668,772 -10,520 25,900 3,484 188,815 3,498,821
	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

XII. OTHER IMPORTANT EVENTS

1. Leases

(1) See Note VI.11.(2) for fi xed assets by fi nancial leases.
(2) See Note IX.2 for the minimum fi nancial lease payment.
(3) See Note IX.2 for the minimum payment of signifi cant operating leases.
(4) See Note VI.11. (1) note 1 for leaseback of fi xed assets after sold.

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XII. OTHER IMPORTANT EVENTS – CONTINUED

2. Assets and liabilities measured at fair value

Items	Gain or loss Accumulative Accrued from change of change of fair impairment At January 1, fair value for the value charged for the At June 30, 2013 current period in equity current period 2013
Financial assets Hedging instrument Available-for-sales f nancial assets Subtotal Financial liabilities Hedging instrument Subtotal	90,731 – -50,846 – 11,495 167,893 – -17,806 – 144,042 258,624 – -68,652 – 155,537 128,077 – -303,582 – 492,538 128,077 – -303,582 – 492,538

3. Financial assets and liabilities denominated in foreign currency

Items	Gain or loss Accumulative Accrued from change of change of fair impairment At January 1, fair value for the value charged for the At June 30, 2013 current period in equity current period 2013
Financial assets Bank balance and cash Hedging instrument Loans and accounts receivables Subtotal Financial liabilities Hedging instrument Bank Loans Others f nancial liabilities Subtotal	1,621,952 – – – 3,299,031 90,731 – -50,846 – 11,495 465,601 – – – 482,957 2,178,284 – -50,846 – 3,793,483 128,077 – -303,582 – 492,538 19,901,538 – – – 27,102,277 9,498,432 – – – 6,279,420 29,528,047 – -303,582 – 33,874,235

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XII. OTHER IMPORTANT EVENTS – CONTINUED

4. Deposit of Environment Restoration

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 period, the Company and the subsidiary Heze Neng Hua have handed in RMB1,000 million and RMB42 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 RMB52.49 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 rights of the coal mine; intangible assets such as the land use rights; 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. As at the reporting date, the emendation of the license for mining rights, business license, organization code certifi cate and tax registration certifi cate of Anyuan coal mine has been completed. The name of the company changed to: Anyuan Coal Mine of Yanzhou Coal Ordos Neng Hua Co., Ltd. Organization type: unincorporated enterprise. The emendation of the coal production permit and work safety permit of Anyuan coal mine are still under process.

219

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XIII. NOTES TO STATEMENTS OF FINANCIAL STATEMENTS OF THE PARENT COMPANY

1. Accounts receivable

(1) Accounts receivable by category

	At June 30, 2013 At January 1, 2013 Book value Bad debt Provision Book value 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	— — — — — — — — 482,208 67 20,757 100 24,135 19 2,419 100 238,509 33 – – 102,837 81 – – 720,717 100 20,757 100 126,972 100 2,419 100
	720,717 100 20,757 100 126,972 100 2,419 100

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 portfolio accrued the bad debt provisions as per accounting aging analysis method:

Items	At June 30, 2013 At January 1, 2013 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	480,631 4 19,225 22,548 4 902 – 30 – 100 30 30 90 50 45 – 50 – 1,487 100 1,487 1,487 100 1,487
	482,208 — 20,757 24,135 — 2,419

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XIII. NOTES TO STATEMENTS OF FINANCIAL STATEMENTS OF THE PARENT COMPANY – CONTINUED

1. Accounts receivable – continued

(1) Accounts receivable by category – continued
3) Accounts receivables in the portfolio accrued bad debt provision under other method:

Item	Carrying Bad debt amount amount
Risk-free portfolio Total	238,509 –
	238,509 –

Note: As of the end of the period, all risk-free portfolios are considered as accounts receivables without recovery risk by the management.

(2) There were no accounts receivables wrote off during the reporting period.
(3) Accounts receivable due from shareholders of the Group holding more than 5% (including 5%) of the total shares are not included for the period.

(4) The fi ve largest debtors

Relationship Company name with the Company	Proportion of total accounts Amount Aging receivables (%)	Proportion of total accounts Amount Aging receivables (%)
Huadian Power . Third party International Corp., Ltd Zoucheng Pengxiang Third party Industrial and Trading Company Baoshan Iron & Third party Steel Co., Ltd. Linyi Mengfei Commerce Third party Company Haoyu Materials Group Third party Company Total	201,473 Within 1 year 80,000 Within 1 year 72,192 Within 1year 62,000 Within 1 year 48,500 Within 1year 464,165	28 11 10 9 7
		65

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2. Other receivables

(1) Other receivables by category

		At June 30,	2013			At January	1, 2013
	Book	value	Bad debt Provision		Book value		Bad debt Provision
Items	RMB	%	RMB	%	RMB	%	RMB	%
Accounts receivables
accrued bad debt provision
as per portfolio	—	—	—	—	—	—	—	—
Accounting aging portfolio	111,305	1	22,282	100	24,522	–	19,868	100
Risk-free portfolio	10,898,180	99	–	–	10,438,780	100	–	–
The subtotal of portfolio	11,009,485	100	22,282	100	10,463,302	100	19,868	100
Total	11,009,485	100	22,282	100	10,463,302	100	19,868	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 portfolio accrued the bad debt provisions as per accounting aging analysis method:

Items	At June 30, 2013 At January 1, 2013 Amount Bad debt Amount Bad debt RMB % provision RMB % provision
Within 1 year 1 to 2 year 2 to 3 years Over3 years Total	90,569 4 3,623 4,790 4 192 2,917 30 875 71 30 21 70 50 35 13 50 7 17,749 100 17,749 19,648 100 19,648
	111,305 — 22,282 24,522 — 19,868

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2. Other receivables – continued

(1) Other receivables by category – continued
3) Other receivables in the portfolio accrued bad debt provision under other method:

Item	Carrying Bad debt amount amount
Risk-free portfolio Total	10,898,180 –
	10,898,180 –

Note: As at the end of the period, risk-free portfolio included RMB10.87484 billion receivables due from related parties,

(2) There were no other receivables wrote off during the reporting period.
(3) As at June 30 2013, the account receivables due from the controlling shareholder of the Company were RMB16.99 million (RMB16.89 million at June 30 2012).

(4) The fi ve largest other debtors

Relationship with Company name the Company	Proportion of other receivables Nature or Amount Aging (%) contents	Proportion of other receivables Nature or Amount Aging (%) contents
Yancoal International Holding subsidiary (Holding) Co., Ltd. Yancoal Australia Ltd. Holding subsidiary Yanzhou Coal Ordos Neng Hua Holding subsidiary Company Limited Shanxi Hesun Tianchi Holding subsidiary Energy Co., Ltd Shandong Shengyang Associate Wood Co., Ltd. Total	4,194,595 1 to 2 yea 3,719,886 Within 1 year 2,655,000 2 to 3 year 210,000 1 to 2 yea 90,355 Within 1 year 10,869,836	38 Investment 34 Borrowing, Advance payment 24 Borrowing 2 Borrowing 1 Dealing accounts 99

(5) Other receivables due from related parties were RMB10.87484 billion by the end of the period, accounting for 99% of total other receivables.

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XIII. NOTES TO STATEMENTS OF FINANCIAL STATEMENTS OF THE PARENT COMPANY – CONTINUED

2. Other receivables – continued

(6) Other receivables denominated in foreign currency.

Item	At June 30, 2013 At January 1, 2013 Original Exchange RMB Original Exchange RMB currency rate equivalent currency rate equivalent
USD Total	602,050 6.1787 3,719,886 7,183 6.2855 45,149
	3,719,886 45,149

3. Long-term equity investment

(1) Long-term equity investment

Items	At June 30, At January 1, 2013 2013 19,696,816 12,407,280 2,624,686 2,624,275 22,321,502 15,031,555 – – 22,321,502 15,031,555
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

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3. Long-term equity investment – continued

(2) Under cost method and equity method

Name of Shareholding Voting rights investees proportion proportion	Original Opening Closing Cash amount balance Additions Reversals Balance dividends
Under cost method Qingdao Zhongyan 52.38 52.38 Yanmei Shipping 92 92 Heze Neng Hua 98.33 98.33 Yancoal Australia 100 100 Yulin Neng Hua 100 100 Shanxi Neng Hua 100 100 Ordos Neng Hua 100 100 Hua Ju Energy 95.14 95.14 Yancoal International 100 100 (Holing) Co., Ltd. Beisheng Industry and 100 100 Trade Co., Ltd Shandong Zoucheng 9 9 Jianxin Cunzhen Bank Coal Trading Centre 51 51 Haosheng Company 74.82 74.82 Coal Storage and 51 51 Blending Company Subtotal Under equity method China HD Zouxian Co., Ltd. 30.00 30.00 Yankuang Group 25.00 25.00 Finance Co., Ltd Shaanxi Future Energy 25.00 25.00 Chemical Corp. Ltd Shengyang Wood 39.77 39.77 Jiemei Wall Materials 20.00 20.00 Subtotal Total	1,100 2,710 – – 2,710 – 3,430 10,576 – – 10,576 – 1,450,000 2,924,344 – – 2,924,344 – 403,282 3,781,600 – – 3,781,600 – 776,000 1,400,000 – – 1,400,000 – 600,000 508,206 – – 508,206 – 500,000 3,100,000 – – 3,100,000 – 599,523 599,523 – – 599,523 – 17,917 17,917 – – 17,917 – 2,404 2,404 – – 2,404 – 9,000 9,000 – – 9,000 – 51,000 51,000 – – 51,000 – 7,136,536 – 7,136,536 – 7,136,536 – 153,000 – 153,000 – 153,000 –
	11,703,192 12,407,280 7,289,536 – 19,696,816 –
	900,000 1,082,194 93,994 97,590 1,078,598 97,590 125,000 191,417 20,296 15,625 196,088 15,625 540,000 1,350,000 – – 1,350,000 – 6,000 418 – 418 – – 720 246 – 246 – –
	1,571,720 2,624,275 114,290 113,879 2,624,686 113,215
	13,274,912 15,031,555 7,403,826 113,879 22,321,502 113,215

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XIII. NOTES TO STATEMENTS OF FINANCIAL STATEMENTS OF THE PARENT COMPANY – CONTINUED

3. Long-term equity investment – continued

(3) Investment in associates

Name of
Shareholding
Voting rights
investees
proportion
proportion

Operating
Total assets Total liabilities
Net assets
income for
Net prof t
by the end of
by the end of
by the end of
the current for the current
the period
the period
the period
period
period
6,100,716
2,505,389
3,595,327
2,210,145
313,314
6,620,773
5,836,422
784,351
150,436
81,182
5,838,947
438,947
5,400,000
–
–
95,398
97,483
-2,085
30,821
-3,136
7,205
7,281
-76
2,511
-1,304
18,663,039
8,885,522
9,777,517
2,393,913
390,056

Associates
China HD Zouxian Co., Ltd.
30
30
Yankuang Group
25
25
Finance Co., Ltd
Shaanxi Future Energy
25
25
Chemical Co., Ltd
Shandong Shengyang
39.77
39.77
Wood Co., Ltd
Jining Jiemei New Wall
20
20
Material Co., Ltd

(4) No impairment occurred in long-term equity investment of the Company, so there is no provision accrued.

4. Operation revenue and operation cost

Items	Jan. 1, 2013- Jan. 1,2012- June 30, 2013 June 30, 2012
Principal operations revenue Other operations revenue Total Principal operations cost Other operations cost Total	17,320,193 20,833,090 936,855 564,083
	18,257,048 21,397,173 13,227,370 15,173,742 1,004,225 656,957
	14,231,595 15,830,699

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4. Operation revenue and operation cost – continued

(1) Principal operations-Classifi cation by business

Items	Jan. 1, 2013-June 30, 2013 Jan. 1,2012-June 30, 2012 Operating revenue Operating cost Operating revenue Operating cost
Coal mining Railway transportation Total	17,109,185 13,066,555 20,606,539 15,003,287 211,008 160,815 226,551 170,455
	17,320,193 13,227,370 20,833,090 15,173,742

(2) Principal operations-Classifi cation by product

Items	Jan. 1, 2013-June 30, 2013 Jan. 1,2012-June 30, 2012 Operating revenue Operating cost Operating revenue Operating cost
Sales of self-produced coal Sales of coal purchased from other companies Revenue from railway transportation services Total	9,077,100 5,070,583 10,926,644 5,352,921 8,032,085 7,995,972 9,679,895 9,650,366 211,008 160,815 226,551 170,455
	17,320,193 13,227,370 20,833,090 15,173,742

(3) Principal operations-Classifi cation by area

Area	Jan. 1, 2013-June 30, 2013 Jan. 1,2012-June 30, 2012 Operating revenue Operating cost Operating revenue Operating cost
Domestic International Total	17,319,080 13,226,608 20,833,090 15,173,742 1,113 762 – –
	17,320,193 13,227,370 20,833,090 15,173,742

(4) Total sales amount of the 5 largest customers in the reporting period is RMB3,786.34 million, which accounts for 21% in total revenue.

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XIII. NOTES TO STATEMENTS OF FINANCIAL STATEMENTS OF THE PARENT COMPANY – CONTINUED

5. Investment income

(1) Sources of investment income

			Jan. 1, 2013-	Jan. 1,2012-
Items			June 30, 2013	June 30, 2012
Long-term equity investment income under cost method			–	4,048
Long-term equity investment income under equity method			113,626	66,617
Investment income of entrust loan			328,618	295,995
Investment income of AFS f nancial assets			4,482	3,702
Total			446,726	370,362
Long-term equity investment income under equity method
	Jan.	1, 2013-	Jan. 1,2012-	Reason of
Item	June 30, 2013		June 30, 2012	change
Total		113,626	66,617
Including:
China HD Zouxian Co., Ltd.		93,994	47,353	HD Zouxian
				current prof t
				increased
Yankuang Group Finance Co., Ltd		20,296	19,436	Finance Company
				current prof t
				increased
Shengyang Wood		-418	-141	Shengyang Wood
				current prof t
				decreased
Jiemei Wall Materials		-246	-31	Jiemei Wall
				Material current
				prof t decreased

(2) Long-term equity investment income under equity method

(3) There is no major limit on recovery of investment income to the Group.

228 Yanzhou Coal Mining Company Limited Interim Report 2013

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XIII. NOTES TO STATEMENTS OF FINANCIAL STATEMENTS OF THE PARENT COMPANY – CONTINUED

6. Supplement information of cash fl ow statement of the parent company

Items	Jan. 1, 2013- Jan. 1,2012- June 30, 2013 June 30, 2012
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 Losses 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) Loss arising from investments (“-” represents gain) Effects 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	1,677,590 2,558,449 20,752 – 509,286 506,434 92,356 13,253 4 4 358,268 380,468 -6,640 -4,203 76,942 -12,366 313,938 494,109 -446,726 -370,362 2,883 -252,831 -128,394 -348,599 275,432 3,232,442 -1,909,756 -2,129,457
	835,935 4,067,341
	5,277,974 9,298,313 9,388,641 6,014,806
	-4,110,667 3,283,507

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CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

IXV. APPROVAL OF FINANCIAL STATEMENTS

The fi nancial statements have been approved by board of directors on August 19, 2013.

SUPPLEMENT

1. Reconciliation for differences of net profi ts and net assets

Items

Equity attributable to
Net prof t attributable to
parent company shareholders
parent company shareholders
At June 30,
At 1 January
Jan. 1,2013-
Jan. 1,2012-
2013
2013
June 30, 2013
June 30, 2012
39,758,782
45,530,034
-2,073,012
5,223,101
-1,416,744
-1,422,472
5,728
3,594
-520,364
-615,984
-401,030
-374,007
991,697
936,685
54,281
69,681
13,966
-61,333
17,118
-48,890
38,827,337
44,366,930
-2,396,915
4,873,479

As per the f nancial statements
prepared under IFRS
1) Business combination adjustment
under common control (note 1)
2) Special reserves (note 2)
3) Deferred tax effect(note 3)
4) Others
As per PRC ASBEs

(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 II. 26, in accordance with relevant regulations of the Chinese authorities, the company has to accrue for special reserve like Weijianfei, Work Safety expenses etc, which are presented in cost of 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 full amount carryover accumulated depreciation. On the basis of IFRS, expenses are confi rmed when it occurs in the period, and relevant capital expenditures are confi rmed as fi xed assets when occurs and depreciated following corresponding depreciating method.
(3) The differences between the above mentioned standards bring differences in tax and infl uence of minority equity.

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CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

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, 2013-
Jan. 1, 2012-
June 30, 2013
June 30, 2012

Gain and loss from disposal of non-current assets
Government subsidies included in the gains and losses of the period
Income from the fair value of the identif able net assets received
from the investees less the investment cost of subsidiaries,
associates and joint ventures acquired
Current net prof t or loss from beginning of the year to
the combination date for subsidiaries generated
by business combination under common control
Investment income from available for sales f nancial assets
Fair value changes of CVR
Other non-operating revenues and expenses
excluding the above items
Subtotal
Income tax effect
Including: income tax effect arising on initial introduction of
MRRT and other income tax relevant to MRRT
Other income tax effect
Subtotal
Extraordinary gain or loss excluding income tax effect
Including: attributable to shareholders of the parent company
Minority interest effect(after tax)

-522
4,095
7,939
4,639
–
1,391,019
–
-62,188
4,482
3,702
-115,026
–
2,321
10,791

-100,806
1,352,058
–
-1,083,223
-25,893
423,207
-25,893
-660,016
-74,913
2,012,074
-73,734
2,011,946
-1,179
128

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 Company 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	-5.66	-0.4873	-0.4873
Net prof t attributable to shareholders of the parent company,
excluding extraordinary gain or loss	-5.49	-0.4723	-0.4723

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CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

SUPPLEMENT – CONTINUED

Signifi cant fl uctuation and related reasons for main items of fi nancial statements Items of the end of the reporting period with signifi cant changes compared to the beginning of the reporting period on the consolidated balance sheet are shown below:

Items

At June 30,
At January 1,
2013
2013
Fluctuation
Note
(%)
10,697,675
16,094,404
-33.53
1
3,231,380
6,533,200
-50.54
2
1,466,983
926,403
58.35
3
2,939,519
692,043
324.76
4
558,807
3,595,462
-84.46
5
30,550,571
17,261,615
76.99
6
25,452,262
31,036,002
-17.99
7
6,494,617
4,386,253
48.07
8
117,723
3,905,148
-96.99
9
2,177,871
3,004,847
-27.52
10
556,425
1,368,734
-59.35
11
251,984
855,626
-70.55
12
5,732,660
3,205,528
78.84
13
4,060,231
6,278,470
-35.33
14
25,230,046
21,843,506
15.50
15
26,353
1,460,580
-98.20
14

Bank balance and cash
Notes receivable
Accounts receivable
Prepayments
Other receivables
Construction work in progress
Intangible assets
Short-term loans
Notes payable
Accounts payable
Advances from customers
Taxes payable
Other payables
Non-current liabilities within one year
Long-term loans
Other non-current liabilities

Note 1: The decrease of cash at bank was mainly due to the decrease of net cash fl ow generated from operating activities compared to last year.

Note 2: The decrease of notes receivable was mainly due to the increase of clearing form of paying to suppliers by notes and the increase of notes discounted.

Note 3: The increase of accounts receivable was mainly due to the increase of accounts receivable from coal sales for the reporting period.
Note 4: The increase of prepayments was mainly due to the increase of prepayment for externally purchased coal for the reporting period.
Note 5: The decrease of other receivables was mainly due to the fact that Haosheng Company and Coal Storage and Blending Company were consolidated into the statements, the capital for share acquisition and registration amounting to RMB3,135.81 million was transferred into long-term equity investment.
Note 6: The increase of construction work in progress was mainly due to the Shilawusu Project of Haosheng Company amounting to RMB12.56505 billion.
Note 7: The decrease of intangible assets was mainly due to the provision for impairment of mining rights by Yancoal Australia for the period. See Note VI. 14.
Note 8: The increase of short-term loans was mainly due to the newly loans of USD300 million of Yancoal International, the subsidiary of the Group.

232 Yanzhou Coal Mining Company Limited Interim Report 2013

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

SUPPLEMENT – CONTINUED

Signifi cant fl uctuation and related reasons for main items of fi nancial statements – continued Note 9: The decrease of notes payable was mainly due to the capital fund paid to Gloucester’s former shareholders amounting to AUD586.19 million (approximately RMB3.83662 billion) by Yancoal Australia.
Note 10: The decrease of accounts payable was mainly due to the fact that the increase of clearing form of paying by notes lead to the decrease of accounts payable for the reporting period.
Note 11: The increase of advances from customers was mainly due to the decrease of advances from coal sales for the reporting period.
Note 12: The decrease of tax payable was mainly due to reduction of total profi t and income tax payable accrued but not yet paid in current reporting period.
Note 13: The increase of other payables was mainly due to the fact that the unpaid consideration balance for share acquisition amounting to RMB3,128.22 million by Haosheng Company was transferred into this subject.
Note 14: The decrease of non-current liabilities within one year was mainly due to the fact that Ordos Neng Hua paid RMB2 billion for the mining rights of Zhuan Longwan coal mine and the parent company paid back RMB2 billion of fi nance leases; besides, CVR, issued for the merger between Yancoal Australia and Gloucester, was transferred into the non-current liabilities within one year during the reporting period, the balance of CVR by the end of the period was RMB1,365.31 million.
Note 15: The increase of long-term loans was mainly due to the newly USD596 million loans for the reporting period.

Items for this year that have signifi cant changes compared to last year on the consolidated income statement are shown below:

Items	Jan. 1, 2013- Jan. 1, 2012- June 30, 2013 June 30, 2012 Fluctuation Note (%)
Selling expenses Administrative expenses Finance cost Impairment loss of assets Gain or loss on the changes of fair value Investment income Non-operating revenue Income tax expense Other comprehensive income	1,520,793 1,118,775 35.93 1 2,134,273 2,632,232 -18.92 2 3,898,648 375,976 936.94 3 2,242,152 -376 -597,173.00 4 -216,841 – – 5 -60,014 69,000 -186.98 6 29,260 1,420,475 -97.94 7 -1,307,220 21,262 -6,248.12 8 -2,181,241 -433,037 403.71 9

Yanzhou Coal Mining Company Limited Interim Report 2013 233

CHAPTER 7 CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

SUPPLEMENT – CONTINUED

Signifi cant fl uctuation and related reasons for main items of fi nancial statements – continued
Note 1: The increase of selling expenses was mainly due to the increase of coal sales of Yancoal Australia and resulted the increase of freight charge and port handling charge.
Note 2: The decrease of administrative expenses was mainly due to the fact that administrative expenses for the last period included expenses on acquiring Gloucester.
Note 3: The increase of fi nance cost was mainly due to the fact that the USD credit and debt of overseas subsidiary accounted with AUD as its recording currency generated exchange losses amounting 2,983.95 million owing to the high fl uctuation in exchange rate for the reporting period.
Note 4: The increase of impairment loss of assets was mainly due to the fact that Yancoal Australia accrued the provision for impairment amounting 2,099.57million See Note VI. 14.
Note 5: The decrease of gain on fair value changes was mainly due to the fl uctuation of fair value of CVRs that were issued to shareholders when acquired Gloucester. CVRs are traded in public market and measured at fair value.
Note 6: The decrease of investment income was mainly due to the decrease of net profi t of each subsidiary as a whole under equity method for the reporting period.
Note 7: The decrease of non-operating revenues was mainly due to the comparison to last year on which the non-operating revenues amounting 1,391.02 million by acquiring Gloucester mine.
Note 8: The decrease of income tax expense was mainly due to the decrease of current income tax expense caused by operating profi t reduction.
Note 9: The decrease of other comprehensive income was mainly due to signifi cant decline in exchange rate of Australian dollars in current reporting period.

Yanzhou Coal Mining Company Limited

19 August 2013

234 Yanzhou Coal Mining Company Limited Interim Report 2013

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:

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;
All documents and announcements published during the reporting period in websites designated by the CSRC;
The full text of the Interim Report released in other securities markets.

On behalf of the Board Acting Chairman of the Board: Shi Xuerang Yanzhou Coal Mining Company Limited 19 August 2013

235

Yanzhou Coal Mining Company Limited Interim Report 2013

AI assistant

CStone Pharmaceuticals — Interim / Quarterly Report 2013

50715_rns_2013-08-19_5ed14105-78d4-48d1-a335-3e5423ab7480.pdf

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

INTERIM RESULTS ANNOUNCEMENT FOR THE PERIOD AS AT 30 JUNE 2013

DEFINITIONS

DEFINITIONS – CONTINUED

CHAPTER 1 GROUP PROFILE AND GENERAL INFORMATION

I. REVIEW OF OPERATIONS

II. FINANCIAL HIGHLIGHTS

(I) OPERATING RESULTS

(I) OPERATING RESULTS – CONTINUED

(II) ASSETS AND LIABILITIES

(III) SUMMARY STATEMENT OF CASH FLOWS

I. MANAGEMENT DISCUSSION AND ANALYSIS

(I) Operational Analysis by Industries, Products or Regions

1. Main business by industries

3) Cost of coal sales

(2) Railway transportation business

(3) Coal chemicals business

(4) Electric power business

(II) Analysis of main business

(2) Analysis of changes in brief Consolidated Statement of Cash Flow items

(3) Others

4) Capital Sources and Use

(III) Assets and Liabilities

2. Other information

(2) Contingent liabilities

(IV) Analysis of Core Competitiveness

(V) Analysis of Investment

(2) Entrusted loan

3. Use of fund raised

4. Projects of the Group using its own fund

5. Analysis of major subsidiaries and associated companies

Yancoal Australia

II. CHANGES IN ACCOUNTING POLICIES

III. PROFIT DISTRIBUTION OR CAPITAL RESERVES TRANSFERRED TO SHARE CAPITAL

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

(II) Mid-term profi t distribution for the fi rst half of 2013

IV. CAPITAL EXPENDITURE PLAN

V. OUTLOOK

(I) Market outlook for the second half of 2013

(II) Operating strategies

(III) Major Risks faced by the Company, Impact and Measures

1. Risks arising from product price volatility

2. Risks arising from safety production

3. Risks arising from exchange rate fl uctuation

4. Risks arising from debt fi nancing

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

VI. OTHER DISCLOSURES

(I) The Impact of Exchange Rate Fluctuations

(II) Taxation

I. CORPORATE GOVERNANCE

(I) Corporate Governance

(II) Compliance with the Corporate Governance Code and the Model Code

II. LITIGATION, ARBITRATION AND MEDIA QUESTIONED EVENTS

III. SHARE INCENTIVE SCHEME

IV. ASSET ACQUISITION, SALES AND MERGERS

(I) Proposal on shares exchange transaction with minority shareholders of Yancoal Australia

(II) Asset Disposal of Tianhao Chemicals

V. CONNECTED TRANSACTIONS

(I) Continuing Connected Transactions

3. Continuing connected transaction of fi nancial services

(II) As at 30 June 2013, neither the Controlling Shareholder nor its subsidiaries had occupied the Group’s funds for non-operational matters.

VI. MATERIAL CONTRACTS AND PERFORMANCE

(III) Other Material Contracts

VII. INVESTOR RELATIONS

VIII. OTHER SIGNIFICANT EVENTS DISCLOSURES

Repurchase, sale or redemption of listed shares of the Company

Remuneration policy

Auditors

I. CHANGES IN SHARE CAPITAL

II. SHAREHOLDERS

(I) Total Number of the Shareholders as at the End of the Reporting Period

(II) Top Ten Shareholders

Total number of Shareholders

(III) Substantial Shareholders’ Interests and Short Positions in the Shares and Underlying Shares of the Company

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

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

(I) Changes of Members of the Fifth Session of the Board

CStone Pharmaceuticals Interim / Quarterly Report 2013