CStone Pharmaceuticals - Interim / Quarterly Report 2015

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

2015 Interim Report

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IMPORTANT NOTICE

The Board, Supervisory Committee and the Directors, Supervisors and senior management of the Company warrant the authenticity, accuracy and completeness of the information contained in this interim report (the “Interim Report”) and there are no any misrepresentations, misleading statements contained in or material omissions from the Interim Report for which they shall assume joint and several responsibilities.

The Interim Report 2015 of Yanzhou Coal Mining Company Limited has been approved by the eleventh meeting of the sixth session of the Board. All ten Directors attended the meeting.

The Interim Report 2015 of Yanzhou Coal Mining Company Limited has been reviewed and approved by the audit committee of the Board.

The Company does not distribute profi t in the fi rst half of 2015. There is no capital reserve transferred to share capital in the reporting period.

The fi nancial statements in this Interim Report have not been audited.

There was no appropriation of funds of the Company by the Controlling Shareholder and its related parties in non-operational activities.

There were no guarantees granted to external parties by the Company which are against the prescribed decision-making procedures.

Mr. Li Xiyong, Chairman of the Board, Mr. Wu Yuxiang, Chief Financial Offi cer, and Mr. Zhao Qingchun, General Manager Assistant and Head of Finance Management Department, hereby warrant the authenticity, accuracy and completeness of the fi nancial report in this Interim Report.

The forward-looking statements contained in this Interim Report regarding the Company’s future plans do not constitute any substantive commitment to investors and investors are reminded of investment risks and to exercise caution in their investment.

Yanzhou Coal Mining Company Limited Interim Report 2015 1

DEFINITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Chapter 1 GROUP PROFILE AND GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Chapter 2 BUSINESS HIGHLIGHTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Chapter 3 BOARD OF DIRECTORS’ REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Chapter 4 SIGNIFICANT EVENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	38
Chapter 5 CHANGES IN SHARES AND SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	52
Chapter 6 DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEES . . . . . . . . . . . . . . . . . . .	57
Chapter 7 FINANCIAL REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	60
Chapter 8 DOCUMENTS AVAILABLE FOR INSPECTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	244

2 Yanzhou Coal Mining Company Limited Interim Report 2015

DEFINITION

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

“Yanzhou Coal”, “Company” or
“the Company”

Yanzhou Coal Mining Company Limited, a joint stock limited company incorporated 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
“the Controlling Shareholder”
Yankuang Group Company Limited, a company with limited liability reformed and established in accordance with PRC laws in 1996, being the controlling shareholder of the Company directly and indirectly holding 56.52% 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 incorporated under the laws of the PRC in 2004 and a 98.33% owned subsidiary of the Company, mainly engages in the development of Juye coal fi eld in Heze city, Shandong province;
“Shanxi Neng Hua” Yanzhou Coal Shanxi Neng Hua Company Limited, a company with limited liability incorporated under the laws of the PRC in 2002 and a wholly-owned subsidiary of the Company, mainly engages in the management of the projects invested in Shanxi province by the Company;
“Hua Ju Energy” Shandong Hua Ju Energy 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 heat supply;
“Ordos Neng Hua” Yanzhou Coal 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, a 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 fi eld located in Ordos, Inner Mongolia Autonomous Region;

Yanzhou Coal Mining Company Limited Interim Report 2015 3

DEFINITION – CONTINUED

“Donghua Heavy Industry”	Yankuang Donghua Heavy Industry Company Limited, a company with limited liability
	incorporated under the laws of the PRC in 2013 and a wholly-owned subsidiary of
	the Company, mainly engages in the design, manufacturing, installation, repairing and
	maintenance of the Company’s mining equipment, electromechanical equipments
	and parts;
“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 Australian Securities Exchange;
“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 and the relevant explanations issued
	by the Ministry of Finance of PRC;
“IFRS”	International Financial Reporting Standards issued by the International Accounting
	Standard Board;
“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;

4 Yanzhou Coal Mining Company Limited Interim Report 2015

DEFINITION – CONTINUED

“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 specifi ed; “AUD” Australian dollars, the lawful currency of Australia; and “USD” the United States dollars, the lawful currency of the United States.

Yanzhou Coal Mining Company Limited Interim Report 2015

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

Abbreviation of English Name: Yanzhou Coal
(2) Legal Representative: Li Xiyong
(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 Road South, Zoucheng City, Shandong Province, PRC

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

E-mail Address: [email protected] Representative of the Shanghai Stock Exchange: Jin Qingbin Address: Offi ce of the Secretary to the Board, 298 Fushan Road South, Zoucheng City, Shandong Province, PRC Tel: (86537) 5393760 Fax: (86537) 5383311 E-mail Address: [email protected]

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

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

6 Yanzhou Coal Mining Company Limited Interim Report 2015

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: 3 June 2015

Current address of registration: 298 Fushan Road South, Zoucheng City, Shandong Province, PRC Registration number of Corporate Business License 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: 12th Floor, 28 Hennessy Road, Wanchi, Hong Kong Name: Grant Thornton (special general partnership) Offi ce Address: 5th Floor, Scitech Place 22 Jianguomen Wai Avenue Chaoyang District Beijing, PRC

Yanzhou Coal Mining Company Limited Interim Report 2015 7

CHAPTER 2 BUSINESS HIGHLIGHTS

I. REVIEW OF OPERATIONS

				For the	For the
				six months	six months		Percentage
				ended 30	ended 30	Increase/	increase/
				June 2015	June 2014	Decrease	decrease (%)
1.	Coal business
	Raw coal production		kilotonne	34,933	36,701	-1,768	-4.82
	Salable coal production		kilotonne	31,995	33,687	-1,692	-5.02
	Salable coal sales volume		kilotonne	42,992	59,417	-16,425	-27.64
2.	Railway transportation	business
	Transportation volume		kilotonne	7,526	8,894	-1,368	-15.38
3.	Coal chemicals business
	Methanol production		kilotonne	834	332	502	151.20
	Methanol sales volume		kilotonne	829	338	491	145.27
4.	Electric power business
	Power generation		10,000kWh	124,987	60,228	64,759	107.52
	Electricity sold		10,000kWh	74,613	16,491	58,122	352.45
5.	Heat business
	Heat generation	10,000 steam tonnes		90	88	2	2.27
	Heat sales volume	10,000 steam tonnes		4	5	-1	-20.00

8 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 2 BUSINESS HIGHLIGHTS – CONTINUED

II. FINANCIAL HIGHLIGHTS

(Prepared in accordance with the IFRS)

(I) Operating Results

For the six months ended 30 June

			Changes as
			compared	For the year
			with the	ended 31
			corresponding	December
	2015	2014	period of	2014
	(RMB’000)	(RMB’000)	last year	(RMB’000)
	(unaudited)	(unaudited)	(%)	(audited)
Sales income	18,143,958	30,933,389	-41.35	60,370,764
Gross prof t	3,222,131	4,336,943	-25.71	7,481,414
Interest expenses	(1,502,540)	(1,120,423)	34.10	(2,183,581)
Income before income tax	244,077	337,429	-27.67	1,599,910
Net income attributable to equity
holders of the Company for
the reporting period	(50,626)	587,235	-108.62	766,158
Earnings per share	RMB(0.01)	RMB0.12	-108.33	RMB0.16

(II) Assets and Liabilities

			For the year ended
	For the six months	ended 30 June	31 December
	2015	2014	2014
	(RMB’000)	(RMB’000)	(RMB’000)
	(unaudited)	(unaudited)	(audited)
Current assets	40,288,743	39,931,920	38,086,343
Current liabilities	31,283,229	28,988,372	27,329,883
Total assets	134,393,916	138,648,875	133,098,114
Equity attributable to equity holders
of the Company	36,834,550	42,562,726	38,725,846
Net assets value per share	RMB7.49	RMB8.65	RMB7.87
Return on net assets (%)	-0.14	1.38	1.98

Yanzhou Coal Mining Company Limited Interim Report 2015 9

CHAPTER 2 BUSINESS HIGHLIGHTS – CONTINUED

(III) Summary Statement of Cash Flows

	For the six months ended 30 June	For the six months ended 30 June	For the six months ended 30 June
			Changes as
			compared	For the year
			with the	ended 31
			corresponding	December
	2015	2014	period of	2014
	(RMB’000)	(RMB’000)	last year	(RMB’000)
	(unaudited)	(unaudited)	(%)	(audited)
Net cash from operating activities	-2,042,466	409,735	-598.48	4,171,816
Net increase in cash and
cash equivalents	71,952	2,561,514	-97.19	4,329,190
Net cash f ow per share from
operating activities	RMB-0.42	RMB0.08	-625.00	RMB0.85

10 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 3 BOARD OF DIRECTORS’ REPORT

I. MANAGEMENT DISCUSSION AND ANALYSIS

(I) Operational Analysis by Industries, Products or Regions

Main business by industries

					Increase/	Increase/	Increase/
					decrease in	decrease	decrease in
					sales income	in 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 2014	period of 2014	period of 2014
		(RMB’000)	(RMB’000)	(%)	(%)	(%)	(percentage point)
1.	Coal business	16,472,325	12,755,272	22.57	-45.10	-48.57	5.23
2.	Railway transportation business	156,455	109,271	30.16	-27.37	-17.35	-8.47
3.	Coal chemicals business	1,218,377	869,177	28.66	93.12	101.49	-2.96
4.	Electric power business	286,641	249,910	12.81	311.67	357.90	-8.80
5.	Heat business	10,160	4,047	60.17	-18.84	-32.55	8.10

The operation of business segments
(1) Coal business

1) Coal Production

In the fi rst half of 2015, the raw coal production of the Group was 34.93 million tonnes, representing a decrease of 1.77 million tonnes or 4.8% as compared with that of the fi rst half of 2014. Salable coal production of the Group for the reporting period was 32 million tonnes, representing a decrease of 1.69 million tonnes or 5.0% as compared with that of the fi rst half of 2014.

Yanzhou Coal Mining Company Limited Interim Report 2015 11

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

The following table sets out the coal production of the Group for the fi rst half of 2015:

		For the six	For the six
		months ended	months ended	Increase/	Increase/
		30 June 2015	30 June 2014	decrease	decrease
		(kilotonne)	(kilotonne)	(kilotonne)	(%)
I.	Raw coal production	34,933	36,701	-1,768	-4.82
	1. The Company	17,745	18,940	-1,195	-6.31
	2. Shanxi Neng Hua	667	851	-184	-21.62
	3. Heze Neng Hua	1,965	1,559	406	26.04
	4. Ordos Neng Hua	1,816	2,801	-985	-35.17
	5. Yancoal Australia	9,258	9,819	-561	-5.71
	6. Yancoal International	3,482	2,731	751	27.50
II.	Salable coal production	31,995	33,687	-1,692	-5.02
	1. The Company	17,735	18,922	-1,187	-6.27
	2. Shanxi Neng Hua	656	843	-187	-22.18
	3. Heze Neng Hua	1,963	1,558	405	25.99
	4. Ordos Neng Hua	1,813	2,796	-983	-35.16
	5. Yancoal Australia	6,694	7,117	-423	-5.94
	6. Yancoal International	3,134	2,451	683	27.87

2) Coal prices and sales

In the fi rst half of 2015, 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 the fi rst half of 2014.

The Group sold 42.99 million tonnes of coal in the fi rst half of 2015, representing a decrease of 16.43 million tonnes or 27.6% as compared with that of the fi rst half of 2014. The decrease of coal sales was mainly due to the decrease in sales by 14.71 million tonnes of externally purchased coal as compared with that of the fi rst half of 2014.

In the fi rst half of 2015, the Group realized a sales income of RMB16.4723 billion for its coal business, representing a decrease of RMB13.5326 billion or 45.1% as compared with that of the fi rst half of 2014.

12 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

The following table sets out the Group’s sales of coal for the fi rst half of 2015:

			For the six months	ended 30 June	2015		For the six months	ended 30 June	2014
		Coal	Sales	Sales	Sales	Coal	Sales	Sales	Sales
		production	volume	price	income	production	volume	price	income
		(kilotonne)	(kilotonne)	(RMB/tonne)	(RMB’000)	(kilotonne)	(kilotonne)	(RMB/tonne)	(RMB’000)
1.	The Company
	No. 1 clean coal	66	112	517.56	57,832	103	148	640.75	95,190
	No. 2 clean coal	4,119	3,521	475.45	1,674,029	5,023	5,221	601.57	3,140,621
	Domestic sales	—	3,521	475.45	1,674,029	—	5,213	601.23	3,134,193
	Export	—	—	—	—	—	8	834.81	6,428
	No. 3 clean coal	2,091	2,136	414.58	885,630	2,303	2,462	487.80	1,200,792
	Lump coal	1,065	1,112	419.75	466,863	1,187	1,201	548.31	658,499
	Sub-total of clean coal	7,341	6,881	448.23	3,084,354	8,616	9,032	564.13	5,095,102
	Domestic sales	—	6,881	448.23	3,084,354	—	9,024	563.89	5,088,674
	Export	—	—	—	—	—	8	834.81	6,428
	Screened raw coal	6,812	5,866	321.67	1,886,810	5,669	5,799	416.99	2,418,099
	Mixed coal & Others	3,582	3,570	246.39	879,536	4,637	3,250	292.80	951,562
	Total for the Company	17,735	16,317	358.57	5,850,700	18,922	18,081	468.17	8,464,763
	Domestic sales	—	16,317	358.57	5,850,700	—	18,073	468.01	8,458,335
2.	Shanxi Neng Hua	656	658	167.89	110,448	843	773	229.05	177,012
	Screened raw coal	656	658	167.89	110,448	843	773	229.05	177,012
3.	Heze Neng Hua	1,963	1,279	415.78	531,816	1,558	1,690	524.16	885,740
	No. 1 clean coal	—	—	—	—	21	21	782.05	16,155
	No. 2 clean coal	1,052	911	511.56	465,961	874	1,006	687.82	691,761
	Mixed coal & Others	911	368	178.95	65,855	663	663	268.04	177,824
4.	Ordos Neng Hua	1,813	1,893	187.06	354,138	2,796	2,474	173.02	428,061
	Screened raw coal	1,813	1,893	187.06	354,138	2,796	2,474	173.02	428,061
5.	Yancoal Australia	6,694	7,484	406.35	3,041,023	7,117	7,063	520.90	3,679,105
	Semi-hard coking coal	478	535	510.42	273,010	481	477	584.15	278,762
	Semi-soft coking coal	557	623	524.22	326,499	728	722	617.58	445,457
	PCI coal	1,039	1,161	511.95	594,621	1,634	1,622	591.38	959,362
	Thermal coal	4,620	5,165	357.61	1,846,893	4,274	4,242	470.40	1,995,524
6.	Yancoal International	3,134	3,182	285.56	908,658	2,451	2,451	295.22	723,516
	Thermal coal	3,134	3,182	285.56	908,658	2,451	2,451	295.22	723,516
7.	Externally purchased coal	—	12,179	465.98	5,675,542	—	26,885	581.98	15,646,753
8.	Total for the Group	31,995	42,992	383.15	16,472,325	33,687	59,417	504.99	30,004,950

Yanzhou Coal Mining Company Limited Interim Report 2015 13

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

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

	Impact of	Impact of
	change in	change in
	coal sales	the sales
	volume	price of coal
	(RMB’000)	(RMB’000)
The Company	–825,720	–1,788,343
Shanxi Neng Hua	–26,321	–40,243
Heze Neng Hua	–215,306	–138,618
Ordos Neng Hua	–100,501	26,578
Yancoal Australia	219,210	–857,292
Yancoal International	215,880	–30,738
Externally purchased coal	–8,558,447	–1,412,764

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

The following table sets out the Group’s sales in terms of geographical regions for the fi rst half of 2015:

		For the six	months ended	For the six months ended	For the six months ended
		30 June 2015		30 June 2014
		Sales volume	Sales income	Sales volume	Sales income
		(Kilotonne)	(RMB’000)	(Kilotonne)	(RMB’000)
1.	China	32,969	12,817,883	51,032	26,183,450
	Eastern China	27,987	10,943,784	47,187	24,689,148
	Northern China	2,117	638,594	3,444	1,250,355
	Other regions	2,865	1,235,505	401	243,947
2.	Japan	1,157	521,222	1,090	566,577
3.	South Korea	2,474	1,055,098	1,935	1,047,630
4.	Australia	2,625	706,471	2,771	848,300
5.	Others	3,767	1,371,651	2,589	1,358,993
6.	Total for the Group	42,992	16,472,325	59,417	30,004,950

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

14 Yanzhou Coal Mining Company Limited Interim Report 2015

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 2015:

		For the six months ended	For the six months ended	For the six months ended	For the six months ended	For the six months ended
		30 June		2015	30 June 2014
		Sales volume	Sales income		Sales volume	Sales income
		(Kilotonne)		(RMB’000)	(Kilotonne)	(RMB’000)
1.	Electricity	15,005		5,793,385	11,238	4,630,434
2.	Metallurgy	2,689		1,395,189	3,518	2,021,591
3.	Chemical	3,705		1,653,691	4,118	2,445,695
4.	Trades	18,029		6,675,824	37,907	19,590,515
5.	Others	3,564		954,236	2,636	1,316,715
6.	Total for the Group	42,992		16,472,325	59,417	30,004,950

3) Cost of coal sales

The Group’s cost of coal sales in the fi rst half of 2015 was RMB12.7553 billion, representing a decrease of RMB12.0457 billion, or 48.6% as compared with that of the fi rst half of 2014. This was mainly due to the fact that: (1) the decrease of the cost of sales by RMB9.8978 billion affected by the decrease of externally purchased coal as compared with that of the fi rst half of 2014. (2) the cost of sales was affected and decreased by RMB1.9466 billion through the implementation of expense economization, expense reduction and strengthening of cost controls.

The following table sets out the cost of coal sales in terms of business entities:

			For the six	For the six		Percentage
			months ended	months ended	Increase/	of increase/
		Unit	30 June 2015	30 June 2014	decrease	decrease (%)
The Company	Total cost of sales	RMB’000	3,789,555	4,933,333	–1,143,778	–23.18
	Cost of sales per tonne	RMB	224.02	264.91	–40.89	–15.44
Shanxi Neng Hua	Total cost of sales	RMB’000	90,595	125,501	–34,906	–27.81
	Cost of sales per tonne	RMB	137.72	162.40	–24.68	–15.20
Heze Neng Hua	Total cost of sales	RMB’000	453,652	527,489	–73,837	–14.00
	Cost of sales per tonne	RMB	264.53	312.16	–47.63	–15.26
Ordos Neng Hua	Total cost of sales	RMB’000	279,348	371,434	–92,086	–24.79
	Cost of sales per tonne	RMB	147.56	150.13	–2.57	–1.71
Yancoal Australia	Total cost of sales	RMB’000	2,299,911	2,856,586	–556,675	–19.49
	Cost of sales per tonne	RMB	307.32	404.45	–97.13	–24.02
Yancoal International	Total cost of sales	RMB’000	645,988	694,375	–48,387	–6.97
	Cost of sales per tonne	RMB	203.01	283.33	–80.32	–28.35
Externally purchased coal Total cost of sales		RMB’000	5,651,060	15,548,891	–9,897,831	–63.66
	Cost of sales per tonne	RMB	463.97	578.35	–114.38	–19.78

Yanzhou Coal Mining Company Limited Interim Report 2015 15

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

In the fi rst half of 2015, the cost of coal sales of the Company is RMB3.7896 billion, representing a decrease of RMB1.1438 billion or 23.2% as compared with that of the fi rst half of 2014. The cost of coal sales per tonne is RMB224.02, representing a decrease of RMB40.89 or 15.4%. The main reasons were that: (1) the cost of sales per tonne was affected and decreased by RMB45.53 through the optimization of human resource confi guration, staffs downsizing and effi ciency improvement, personnel transfers to the external development projects to reduce labor costs; (2) the cost of sales per tonne was affected and decreased by RMB10.78 through optimization of production systems and process, decreasing of material consumption per tonne, controls of cost of materials purchasing and decreasing of material expenses; (3) the cost of sales per tonne was affected and decreased by RMB3.46 through cutting down of the other controllable costs; (4) coal sales volume was decreased as compared with the fi rst half of 2014. Therefore the cost of coal sales per tonne was affected and increased by RMB20.53.

In the fi rst half of 2015, the cost of coal sales of Shanxi Neng Hua is RMB90.595 million, representing a decrease of RMB34.906 million or 27.8% as compared with that of the fi rst half of 2014. The cost of sales per tonne is RMB137.72, representing a decrease of RMB24.68 or 15.2% as compared with that of the fi rst half of 2014. The main reasons were: (1) the cost of sales per ton was affected and decreased by RMB19.50 through the reduction of outsourcing laboring services; (2) the cost of sales per tonne was affected and decreased by RMB15.14 and RMB6.29 respectively through the optimization of human resource confi guration, decreasing of labor cost and material cost; (3) the decrease in coal sales volume increased the cost of coal sales per tonne by RMB20.49 as compared with that of the fi rst half of 2014.

In the fi rst half of 2015, the cost of coal sales of Heze Neng Hua is RMB453.7 million, representing a decrease of RMB73.837 million or 14.0% as compared with that of the fi rst half of 2014. The cost of sales per tonne is RMB264.53, representing a decrease of RMB47.63 or 15.3% as compared with that of the fi rst half of 2014. The main reasons were that: (1) the cost of sales per tonne was affected and decreased by RMB18.30 through the optimization of human resource confi guration, staffs downsizing and effi ciency improvement to reduce the labor cost; (2) the cost of sales per tonne was affected and decreased by RMB20.13 and RMB8.69 respectively through optimization of production systems and process, decreasing of material consumption and electricity consumption.

16 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

In the fi rst half of 2015, the cost of coal sales of Yancoal Australia is RMB2.2999 billion, representing a decrease of RMB556.7 million or 19.5% as compared with that of the fi rst half of 2014. The cost of sales per tonne is RMB307.32, representing a decrease of RMB97.13 or 24.0% as compared with that of the fi rst half of 2014. The main reasons were that: (1) the cost of sales per tonne was affected and decreased by RMB14.18 through the optimization of mining production layouts, reduction of material consumptions; (2) the cost of sales per tonne was affected and decreased by RMB8.18 through the optimization of human resources confi guration and reduction labors; (3) the cost of coal sales per tonne was affected and decreased by RMB7.78 through the optimization and regulating of the equipment application, and reduction of equipment rental fees; (4) coal sales volume was increased as compared with that of the fi rst half of 2014. Therefore the cost of sales per tonne was affected and decreased by RMB18.31; (5) the cost of coal sales per tonne was affected and decreased by RMB27.88 due to the exchange rate depreciation of Australian dollar against RMB as compared with that of the fi rst half of 2014.

In the fi rst half of 2015, the cost of coal sales of Yancoal International is RMB646 million, representing a decrease of RMB48.387 million or 7.0% as compared with that of the fi rst half of 2014. The cost of sales per tonne is RMB203.01, representing a decrease of RMB80.32 or 28.3% as compared with that of the fi rst half of 2014. The main reason was that (1) coal sales volume was increased as compared with that of the fi rst half of 2014. Therefore the cost of coal sales per tonne was affected and decreased by RMB60.58; (2) the cost of coal sales per tonne was affected and decreased by RMB17.44 due to the exchange rate depreciation of Australian dollar against RMB as compared with that of the fi rst half of 2014.

(2) Railway transportation business

In the fi rst half of 2015, the transportation volume of the Railway Assets was 7.53 million tonnes, representing a decrease of 1.37 million tonnes or 15.4% as compared with that of the fi rst half of 2014. 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 RMB156.5 million in the fi rst half of 2015, representing a decrease of RMB58.958 million or 27.4% as compared with that of the fi rst half of 2014. The cost of railway transportation services was RMB109.3 million, representing a decrease of RMB22.935 million or 17.3% as compared with that of the fi rst half of 2014.

Yanzhou Coal Mining Company Limited Interim Report 2015 17

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

(3) Coal chemicals business

The following table sets out the summary of operation of the Group’s methanol business for the fi rst half of 2015:

	Methanol production	Methanol production	(Kiloton)		Methanol sold (Kiloton)	Methanol sold (Kiloton)
	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
	2015	2014	(%)	2015	2014	(%)
1.Yulin Neng Hua	351	332	5.72	357	338	5.62
2.Ordos Neng Hua	483	—	—	472	—	—

Note: the methanol project of Ordos Neng Hua was put into commercial operating since January 2015.

	Sales income (RMB’000)	Sales income (RMB’000)	Sales income (RMB’000)	Cost of sales (RMB	Cost of sales (RMB	’000)
	For the six	For the six	Percentage	For the six	For the six	Percentage
	months endedmonths ended		of increase/	months endedmonths ended		of increase/
	30 June	30 June	decrease	30 June	30 June	decrease
	2015	2014	(%)	2015	2014	(%)
1.Yulin Neng Hua	526,458	630,880	–16.55	396,424	455,543	–12.98
2.Ordos Neng Hua	691,919	—	—	472,754	—	—

(4) Power generation business

The following table sets out the summary of operation of the Group’s power generation business for the fi rst half of 2015:

	Power generation (10,000 kW/h)	Power generation (10,000 kW/h)	Power 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
	2015	2014	(%)	2015	2014	(%)
1.Hua Ju Energy	48,796	46,720	4.44	15,472	15,811	–2.14
2.Yulin Neng Hua	13,160	13,508	–2.58	594	680	–12.65
3. Heze Neng Hua	63,031	—	—	58,547	—	—

Note: 1. Since March 2014, the electricity generated by power plant of Hua Ju Energy is sold externally after satisfying its internal operating requirements.

Electricity generated by power plant of Yulin Neng Hua is sold externally after satisfying its internal operation requirements.
The power plant of Heze Neng Hua was put into commercial operation since November 2014.

18 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

	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
	2015	2014	(%)	2015	2014	(%)
1.Hua Ju Energy	76,425	68,085	12.25	51,509	52,288	–1.49
2.Yulin Neng Hua	1,348	1,543	–12.64	1,872	2,290	–18.25
3. Heze Neng Hua	208,868	—	—	196,529	—	—

(5) Heat business

Hua Ju Energy generated heat energy of 0.9 million steam tonnes and sold 40,000 steam tonnes in the fi rst half of 2015, realizing a sales income of RMB10.16 million, with a cost of sales of RMB4.047 million.

3. Main business by regions

		Increase
		decrease in
		sales income
		as compared
		with that of the
	Sales income	f rst half of 2014
	(RMB’000)	(%)
Domestic	14,489,516	–46.56
Overseas	3,654,442	–4.37
Total	18,143,958	–41.35

Yanzhou Coal Mining Company Limited Interim Report 2015 19

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

(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 2015	30 June 2014	decrease
	(RMB’000)	(RMB’000)	(%)
Sales income	18,143,958	30,933,389	–41.35
Cost of sales	13,987,677	25,425,139	–44.98
Cost of coal transportation	934,150	1,171,307	–20.25
Selling, general and administrative expenses	2,844,697	3,568,844	–20.29
Investment returns from associated enterprises	227,629	99,240	129.37
Joint venture investment losses	77,646	188,592	–58.83
Other business income	1,219,200	779,105	56.49
Interest cost	1,502,540	1,120,423	34.10
Income tax	242,546	–33,723	—
Net cash inf ow from operating activities	–2,042,466	409,735	–598.48
Net cash outf ow from investing activities	3,764,468	–5,597,708	–32.75
Net cash inf ow from f nancing activities	5,878,886	7,749,487	–24.14
R&D Expenditure	19,418	58,050	–66.55

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

The Group’s sales income in the fi rst half of 2015 was RMB18.144 billion, representing a decrease of RMB12.7894 billion or 41.3% as compared with that of the fi rst half of 2014. This was mainly due to the fact that: (1) the decrease of sales volume and sales price of self-produced coal resulted in a decrease of sales income by RMB732.8 million and RMB2.8287 billion, respectively, compared with that of the fi rst half of 2014; (2) the decrease of the sales volume of externally purchased coal resulted in a decreased of sales income by RMB9.9712 billion compared with that of the fi rst half of 2014; (3) related projects were put into production, therefore the sales income of coal chemical business and power generation business was increased by RMB804.5 million compared with that of the fi rst half of 2014.

The Group’s cost of sales in the fi rst half of 2015 was RMB13.9877 billion, representing a decrease of RMB11.4375 billion or 45.0% as compared with that of the fi rst half of 2014. This was mainly due to: (1) the cost of coal sales was decreased by RMB12.0457 billion compared with that of the fi rst half of 2014; (2) related projects were put into production, therefore the cost of sales of coal chemical business and power generation business was increased by RMB633.1 million compared with that of the fi rst half of 2014.

20 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

The Group’s associated enterprise investment income in the fi rst half of 2015 was RMB227.6 million, representing an increase of RMB128.4 million or 129.4% as compared with that of the fi rst half of 2014. This was mainly due to the fact that: during the reporting period, the income of the investments in Huadian Zouxian Power Generation Co., Ltd. and Shaanxi Future Energy Chemical Co., Ltd. held by the Company was increased by RMB127.3 million as compared with that of the fi rst half of 2014.

The Group’s Joint Venture investment loss in the fi rst half of 2015 was RMB77.646 million, representing a decrease of RMB110.9 million or 58.8% as compared with that of the fi rst half of 2014. This was mainly due to the fact that during the reporting period, the losses of Middlemount Mine Joint Venture was decreased by RMB109.8 million as compared with that of the fi rst half of 2014.

The Group’s other income in the fi rst half of 2015 was RMB1.2192 billion, representing an increase of RMB440.1 million or 56.5% as compared with that of the fi rst half of 2014. This was mainly due to: (1) the interest income was increased by RMB198.4 million as compared with that of the fi rst half of 2014; (2) the income of the fair value changes of shares in Qilu Bank Co., Ltd. (“Qilu Bank”) held by the Company was RMB246.2 million.

The Group’s interest cost in the fi rst half of 2015 was RMB1.5025 billion, representing an increase of RMB382.1 million or 34.1% as compared with that of the fi rst half of 2014. This was mainly due to the fact that the increase of the liability with interest resulted in the increase of payable interest cost as compared with that of the fi rst half of 2014.

The Group’s income tax in the fi rst half of 2015 was RMB242.5 million and the income tax of the fi rst half of 2014 was RMB-33.723 million. This was mainly due to the fact that the Company paid the RMB251.7 million income taxes payable for previous years during the reporting period.

The Group’s R&D expenditure in the fi rst half of 2015 was RMB19.418 million, representing a decrease of RMB38.632 million or 66.6% as compared with the fi rst half of 2014. This was mainly due to the fact that the special research and development projects which were implemented in the fi rst half of 2014 had been completed thoroughly as at the end of 2014. During the reporting period, no similar business was implemented.

Yanzhou Coal Mining Company Limited Interim Report 2015 21

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

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

In the fi rst half of 2015, net cash infl ow from operating activities of the Group was RMB-2.0425 billion, representing a decrease of RMB2.4522 billion or 598.5%, which was mainly due to (1) the decrease of sales income of self-produced coal resulted in a decrease of cash infl ow by RMB3.0364 billion as compared with that of the fi rst half of 2014; (2) a decrease of sales cost of self-produced coal resulted in a decrease of cash outfl ow of RMB1.5512 billion as compared with that of the fi rst half of 2014; (3) an increase of interest expense resulted in an increase of cash outfl ow by RMB959.8 million as compared with that of the fi rst half of 2014.

In the fi rst half of 2015, net cash outfl ow from investing activities of the Group was RMB3.7645 billion, representing a decrease of RMB1.8332 billion or 32.8% as compared with that of the fi rst half of 2014, which was mainly due to: (1) the increase of assets acquisitions and equity investment resulted in an increase of net cash outfl ow by RMB1.778 billion as compared with that of the fi rst half of 2014; (2) during the reporting period, the changes of bank guarantee deposit and restricted cash balance resulted in a decrease of the net cash outfl ow by RMB3.5449 billion as compared with that of the fi rst half of 2014.

In the fi rst half of 2015, net cash infl ow from fi nancing activities of the Group was RMB5.8789 billion, representing a decrease of RMB1.8706 billion or 24.1% as compared with that of the fi rst half of 2014, which was mainly due to the fact that: (1) during the reporting period, the fi rst tranche short-term fi nancing bonds of RMB5 billion of 2014 was repaid; (2) as compared with the fi rst half of 2014, the fund acquired through the issuance of perpetual capital bonds was increased, resulting in the cash infl ow increase of RMB2.1283 billion; (3) RMB1.4492 billion of CVR repurchases amount was paid to the original shareholders of Gloucester (excluding Noble Group) during the fi rst half of 2014.

(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 operating scheme

Facing the adverse conditions of the slowing down of macroeconomic growth and weak demands from downstream industries, both the sales volume of Group’s self produced coal and externally purchased coal decreased. In the fi rst half of 2015, the Group sold 42.99 million tonnes coal, which accounts for 35.2% of the planned coal sales volume for the year 2015, of which 30.81 million tonnes of self-produced coal was sold, accounting for 44.6% of the planned coal sales volume for the year 2015. The Group sold 830 thousand tonnes methanol, which accounts for 59.2% of the planned methanol sales volume for the year 2015.

22 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

3) Capital Sources and Use

In the fi rst half of 2015, the Group’s principal source of capital was the cash fl ow from operations, issuance of the various types of bonds and bank loans. The Group has utilized its capital mainly for operating business expenses, purchase of property, machinery and equipment, payment of shareholders’ dividend, and repayment of bank loans.

The Group’s capital expenditure for the purchase of property, machinery and equipment for the fi rst half of 2015 was RMB2.3253 billion, representing an increase of RMB69 million or 3.1% as compared with RMB2.2563 billion in the fi rst half of 2014.

(III) Assets and Liabilities

1. Analysis of changes in the consolidated assets and liabilities items

	As at	30 June 2015	As at 31	December 2014
		Percentage to		Percentage to	Increase/
		total assets		total assets	decrease
	RMB’000	(%)	RMB’000	(%)	(%)
Prepayment and other receivables	9,242,954	6.88	7,219,251	5.42	28.03
Securities investment	1,550,856	1.15	388,764	0.29	298.92
Borrowing, due within one year	16,759,532	12.47	10,871,689	8.17	54.16
Shareholders’ equity attributable to
holders of perpetual capital bonds	6,618,352	4.92	2,521,456	1.89	162.48

At the end of the reporting period, the Group’s prepayment and other receivables were RMB9.243 billion, representing an increase of RMB2.0237 billion or 28.0% as compared with that of the beginning of 2015. This was mainly due to: (1) the increase of RMB1.1631 billion of the prepayment; (2) the increase of RMB252.1 million of prepayment for material and equipment purchasing; (3) the increase of RMB165.9 million of receivable dividends.

At the end of the reporting period, the Group’s securities investments were RMB1.5509 billion, representing an increase of RMB1.1621 billion or 298.9% as compared with that of the beginning of 2015. This was mainly due to: (1) after the newly increased subscription of shares of Qilu Bank, the carrying amount was RMB1.0292 billion at the end of reporting period; (2) the fair value of the shares in Shenergy Co., Ltd. and Jiangsu Lianyungang Port Co., Ltd. held by the Company was increased by RMB132.9 million as compared with that of the beginning of 2015.

Yanzhou Coal Mining Company Limited Interim Report 2015 23

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

At the end of the reporting period, the Group’s borrowings expiring within one year was RMB16.7595 billion, representing an increase of RMB5.8878 billion or 54.2% as compared with that of the beginning of 2015. This was mainly due to the issuance of fi rst and second tranche of super-short-term fi nancing bonds, totally amounting to RMB5 billion of 2015 during the reporting period.

At the end of the reporting period, the Group’s equity attributable to the holders of perpetual capital bonds was RMB6.6184 billion, representing an increase of RMB4.0969 billion or 162.5% as compared with that of the beginning of 2015. This was mainly due to the issuance of the 2015 fi rst tranche of non-public fi nancing instruments and the 2015 fi rst tranche of medium term notes, totally amounting to RMB4 billion during the reporting period.

2. Other information

(1) Debt to equity ratio

As at 30 June 2015, the equity attributable to the equity holders of the Company and interestbearing debt amounted to RMB36.8346 billion and RMB63.4846 billion respectively, representing a debt to equity ratio of 172.4%. For detailed information on interest-bearing debt, please refer to Note 21 of the fi nancial statements prepared under IFRS or the Note VI.9, 21 and 30-33 of the fi nancial statements prepared under CASs.

(2) Contingent liabilities

For details of the contingent liabilities, please see Note 34 of the fi nancial statements prepared under 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 15-16 of the fi nancial statements prepared under CASs.

24 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

(IV) Analysis of Core Competitiveness

In the fi rst half of 2015, confronted by the adverse situation of weak balance in coal markets at home and abroad, the Group continues to focus on “Three Reductions and Three Enhancements” to intensify backward cost reduction; strengthen scientifi c and technological research through manufacturing technique optimizing, equipment upgrade and information construction to reduce cost and raise effi ciency; adjust the way of marketing by database marketing service to promote business model innovation; enhance fi nancial industrial layout on the base of entity industry consolidation and the operating and value-creating capacity ranks the top of the industry.

(V) Analysis of Investment

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

(The fi nancial data listed in this section were calculated according to CASs)

(1) New external equity investment during the reporting period

In the fi rst half of 2015, the external equity investment of the Company was RMB1.0475 billion in total. The relevant information of projects invested is set out as follows:

		Total
		investment	Company’s			The
		amount of	investment			Company’s
		projects	amount			equity interest
	Projects of external	(RMB100	(RMB100	Name of the		in the invested
No.	equity investment	million)	million)	invested company	Main business	company
1	Subscription of placing shares	7.829	7.829	Qilu Bank Co., Ltd.	RMB, foreign exchange and other	8.67%
	of Qilu Bank Co., Ltd.				business approved by authorities
2	Investment to Shanghai	2.646	2.646	Shanghai CIFCO	Commodity futures broker, f nancial	33.33%
	CIFCO Futures Co., Ltd.			Futures Co., Ltd.	futures broker, futures investment
					consultant
Total		10.475	10.475	–	–	–

Yanzhou Coal Mining Company Limited Interim Report 2015 25

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

(2) Equity interests in other listed companies held by the Company as at the end of the reporting period

								Changes in
							Gains or	shareholders’
		Cost of initial	Equity held	Equity held		Book value	losses during	equity during
Stock	Stock	investment	at 1 January	at	30 June	at 30 June	the reporting	the reporting	Accounting
code	abbreviation	(RMB)	2015 (%)	2015 (%)		2015 (RMB)	period (RMB)	period (RMB)	items
600642	Shenergy	77,277,051	0.80		0.80	365,360,766	0	97,180,124	Available-for-sale
									f nancial assets
601008	Lianyungang	1,760,419	0.22		0.22	16,989,180	59,629	2,589,169	Available-for-sale
									f nancial assets
Total		79,037,470	—		—	382,349,946	59,629	99,769,293	–

Notes: The above mentioned “Gains or losses during the reporting period” refer to the effect from the related investment to the net profi ts in consolidated statement of the Group during the reporting period.

Source of Shenergy shares: agreement for the transfer of public corporate shares in 2002, bonus issue shares in 2003, 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.

26 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

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

							Unit: RMB100 million	Unit: RMB100 million
						Changes in
					Gains or	shareholders’
	Amount of	Equity held	Equity held	Book value	losses during	equity during
	initial	at 1 Jan.	at 30 June	at 30 June	the reporting	the reporting	Accounting	Source
Corporations	investment	2015 (%)	2015 (%)	2015	period	period	items	of shares
Yankuang Group Finance	1.250	25	25	3.289	0.186	0.186	Long-term equity	Capital
Company Limited							investment	investment
Shandong Zoucheng	0.090	9	9	0.090	0	0	Available-for-	Capital
Jianxin Rural Bank							sale f nancial	investment
Company Limited							assets
Qilu Bank Co., Ltd.	7.829	0	8.67	10.292	1.847	1.847	Tradable f nancial	Equity
							assets	investment
Shanghai CIFCO Futures	2.646	0	33.33	2.646	0	0	Long-term equity	Equity
							investment	investment
Total	11.815	—	—	16.317	2.033	2.033	—	—

Note: The above mentioned “Gains or losses during the reporting period” refer to the effect from the related investment to the net profi ts in consolidated statement of the Group during the reporting period.

Yanzhou Coal Mining Company Limited Interim Report 2015 27

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

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 (hereinafter ‘Yankuang Finance’) on 13 September 2010. In the initial contribution to the registered capital of Yankuang Finance, Yanzhou Coal contributed RMB125 million in cash, representing an equity interest of 25% in Yankuang Finance. As approved at the fi rst meeting of the sixth session of the Board, on 20 June 2014 Yanzhou Coal and other shareholders of Yankuang Finance increased the registered capital of Yankuang Finance from RMB500 million to RMB1 billion in proportion to their original shareholding in Yankuang Finance, of which Yanzhou Coal contributed RMB125 million.

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

As reviewed and approved at the sixth meeting of the sixth session of the Board held on 23 December 2014, the Company subscribed for RMB246.21 million placing shares in Qilu Bank. The registration of transfer of the above mentioned equity in industrial and commercial administration was completed on 7 August 2015.

As considered and approved at the seventh meeting of the sixth session of the Board held on 27 March 2015, the Company would invest RMB264.56 million, contributing 33.33% equity interests in Shanghai CIFCO Futures.

28 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

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

For details of commissioned fi nancing, please refer to the section headed “VI. Material Contracts and Performance” under “Chapter 4 Signifi cant Events” in this report.

(2) Entrusted loan

As at the date of this report, entrusted loans provided by the Company are listed below:

									Actual interest
									income
									received
	Amount								during the
	of loan					Connected	Extend the		reporting
	(RMB100	Term of	Interest		Overdue	transaction	period	Connected	period
Borrower	million)	loan	rate	Purpose	(yes/no)	(yes/no)	(yes/no)	relationship	(RMB’000)
Yanzhou Coal Yulin Neng Hua	15	8 years	4.59%	Construction of	No	No	Yes	wholly-owned	16,779
Company Limited				methanol project				subsidiary
Shanxi Tianhao Chemicals	1.9	5 years	6.40%	Construction of	Yes	No	No	controlled	–
Company Limited				methanol project				subsidiary
Yanmei Heze Neng Hua	6	5 years	6.40%	Expenditure of projects	No	No	No	controlled	15,821
Company Limited				construction				subsidiary
Yanmei Heze Neng Hua	8.9	5 years	6.40%	Construction of Zhaolou	No	No	No	controlled	26,051
Company Limited				power plant project				subsidiary
Yanzhou Coal Ordos Neng Hua	2	3 years	6.15%	Supplement for working	No	No	No	wholly-owned	47,151
Company Limited				capital				subsidiary
Yanzhou Coal Ordos Neng Hua	28	5 years	6.40%	Acquisition of Wenyu	No	No	No	wholly-owned	394,062
Company Limited				coal mine				subsidiary
Yanzhou Coal Ordos Neng Hua	19	5 years	6.40%	Construction of	No	No	No	wholly-owned	235,702
Company Limited				methanol project				subsidiary
Yanzhou Coal Ordos Neng Hua	18.82	5 years	6.40%	Consideration of Zhuan	No	No	No	wholly-owned	256,612
Company Limited				Longwan mining				subsidiary
				rights
Yanzhou Coal Ordos Neng Hua	6.3	3 years	6.15%	Acquisition of 20%	No	No	No	wholly-owned	66,473
Company Limited				equity interests of				subsidiary
				Xintai Company
Shandong Yanmei Rizhao Port	2.5	1 year	6.00%	Supplement for working	No	No	No	controlled	6,815
Coal Storage and Blending				capital				subsidiary
Company Limited
Shaanxi Future Energy Chemical	12.5	1 year	6.00%	Supplement for working	No	Yes	No	shareholder	46,944
Co., Ltd.				capital

Yanzhou Coal Mining Company Limited Interim Report 2015 29

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

Note:

The source of the above mentioned entrusted loans was the Company’s self-owned fund, which was not subject 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 no provisions of assets impairment loss are made in respect of such entrusted loans.
The entrusted loan, provided by the Company to Shaanxi Future Chemical Co., Ltd. (“Shaanxi Future Energy”) was fully, unconditionally, irrevocably guaranteed by Yankuang Group and Yankuang Group made a pledge for this by way of its 30% equity interests in Shaanxi Future Energy. As at 3 August 2015, Shaanxi Future Energy has repaid all the principal amount and the interest to the Company. There were no other pledges or guarantors for the above mentioned entrusted loan.

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.

	Amount of
	entrusted				Whether	Whether	Interest income
	loan (RMB100	Term of			extended the	principal has	during the
Borrower	million)	entrusted loan	Interest rate	Purpose	period	been recovered	reporting period
Shanxi Tianhao Chemicals	2	5 years	6.40%	Construction of methanol	No	No	Nil
Company Limited				project

Note:

The entrusted loan provided by 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 does not constitute 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.

30 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

(3) Other investment fi nancing and investment in derivatives

		Investment			Whether involved
Category	Fund source	shares	Product type	Prof t and loss	in lawsuits
Commodity futures	self-owned fund	5250	Thermal coal	RMB2.338 million	No

Note for futures investment:

From 28 August 2014, the Company bought futures contract TC1501 of thermal coal in batches. As at 9 January 2015 (value date), the Company possessed 5250 TC1501 contracts which could convert into 1.05 million tonnes of thermal coal. On the value date, the Company bought 1.0454 million tonnes coal with RMB550.49 million of settlement funds. After calculating, the abovementioned futures contract of thermal coal made a book profi t of RMB2.338 million.

For details of the investment in other derivatives during the reporting period, please see Note 26 of the fi nancial statements prepared under the IFRS or Note VI.9 and Note IX of the fi nancial statements prepared under CASs.

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

3. Use of fund raised

In the fi rst half of 2015, the Group raised RMB14 billion in total by issuing short-term fi nancing bonds, debt fi nancing notes through private placement, medium-term notes and two super-short-term fi nancing bonds. For details of the use of fund raised, please refer to the section headed “II. Securities Issuance” under “Chapter 5 Changes in Shares and Shareholders”.

Major projects of the Group using its own fund

Not applicable.

Yanzhou Coal Mining Company Limited Interim Report 2015 31

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

Analysis of major subsidiaries and associated companies

(All the fi nancial data listed in this section were calculated under CASs)

During the reporting period, details of subsidiaries and associated companies which brought greater effects on the Group’s net profi t attributable to shareholders of the Company are as follows:

				Net prof t for
		Nature of	Main products	the f rst half of
Name of company		business	or services	2015 (RMB’000)
I.	Controlled subsidiaries
	Heze Neng Hua	Energy	Coal	78,806
	Yancoal Australia	Energy	Coal	–706,488
	Yancoal International	Investment	Investment projects	243,847
		management	management
		and energy	and coal
	Hua Ju Energy	Power generation	Power and heat	62,431
II.	Associated companies
	Huadian Zouxian	Power Generation	Power and heat	561,260
	Power Generation
	Company Limited

32 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

II. CHANGES IN ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES OR AMENDMENTS TO SIGNIFICANT ACCOUNTING ERRORS

During the reporting period, there were no changes in accounting policies, accounting estimates or amendments to signifi cant accounting errors of the Group.

III. PROFIT DISTRIBUTION OR CAPITAL RESERVES TRANSFERRED TO SHARE CAPITAL

(I) Implementation of Cash Dividend Plan during the Reporting Period

The 2014 annual general meeting of the Company held on 22 May 2015 approved the Company’s dividend distribution plan, which allowed the Company to distribute 2014 cash dividends of RMB98.368 million (tax inclusive) to the Shareholders, i.e., RMB0.02 per share (tax inclusive). As at the disclosure date of this report, the fi nal cash dividends for the year 2014 have been distributed to the Shareholders.

(II) Interim Profi t Distribution for the First Half of 2015

The Company will not distribute any interim dividend, nor will the Company increase its capital from capital reserve in the fi rst half of 2015.

IV. CAPITAL EXPENDITURE PLAN

The capital expenditure for the fi rst half of 2015 of the Group is set out in the following table:

		The second		2015
	The f rst half	half of 2015	(RMB’0000)
	of 2015	(Estimated)	Present	Previous
	(RMB’0000)	(RMB’0000)	estimate	estimate
The Company	63,451	151,380	214,831	231,342
Shanxi Neng Hua	3,845	5,074	8,919	8,919
Yulin Neng Hua	59	3,622	3,681	3,681
Heze Neng Hua	16,171	74,419	90,590	90,590
Hua Ju Energy	1,794	2,768	4,562	4,562
Ordos Neng Hua	50,784	51,110	101,894	244,120
Haosheng Company	41,423	189,366	230,789	230,789
Yancoal Australia	34,666	104,450	139,116	147,731
Yancoal International	19,891	5,460	25,351	6,934
Zhongyin Financial Leasing	449	450	899	–
Total	232,533	588,099	820,632	968,668

Currently, the Group possesses suffi cient fi nancing channels, which are expected to meet the operation and development requirements.

Yanzhou Coal Mining Company Limited Interim Report 2015 33

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

V. OUTLOOK

(I) Operating Strategies for the Second Half of 2015

In the second half of 2015, affected by multiple factors such as low growth of global economy and new energy alternatives, the supply of coal worldwide continues to exceed demand. However, benefi tting from the effect of a series of favorable policies to stabilize growth, reduce poverty and promote development in the coal industry, the decision of major coal suppliers in the world to reduce production and the increasing demand for coal from emerging developing countries such as India, it is estimated that the global coal price will recover from weakness and stabilize.

The Group will closely monitor the characteristics of the coal industry and development trends, implement more fl exible and effi cient strategic measures to ensure maximization of economic benefi ts for the year 2015. For the second half of 2015, the Group will primarily focus on the implementation of the following operating measures:

Optimize industry layout to achieve synergic effect between production and fi nancing. The Group will improve the technical equipment and production layout, increase daily production and daily development, raise production capacity of effi cient mines and reduce non-effi cient capacity so that the coal mines will achieve the transformation of lean production mode: from “quantity-oriented” to “effi ciency-oriented”. The Group will ensure timely release of economic benefi ts by leveraging the regional and scale-wise advantages of its methanol projects. It will also improve the level of automation, intelligentization, unifi cation and becoming high-end in the coal equipment manufacturing industry. The Group will build an integrated development and operating model which will include “manufacturing, leasing and re-manufacturing”. The Group will achieve synergic effect by utilizing the fi nancial operation platforms of Duanxin Investment Holding (Beijing) Co., Ltd., Zhongyin Financial Leasing Co., Ltd., actively implementing fi nancial investment and operation, stably carrying out fi nance hedging and futures fi nancing, fortifying capital investment income, achieving transformation and upgrade of real economy through fi nancial development.

Expand the room for cost reduction and profi tability through greater use of backfl ush costing. Firstly, the Group will systematically arrange and analyze the structure of assets, liabilities, investment, staff, etc., formulate the program of staff downsizing and effi ciency improvement by classifi cation for optimization and rigidly apply back-fl ush costing indicators to reduce cost via structure optimization. Secondly, the Group will implement the management measure of “strict control of the two ends and precise management of the middle section”. In terms of the source of procurement, the Group will intensify centralized purchasing for materials and equipment, competitive negotiation and online procurement to control expenditure. In terms of the sales end, the Group will optimize marketing channels and directions of the fl ow to lower marketing cost. In terms of the middle section, the Group will improve key business process reengineering and integrate operational elements and the relevant resources to reduce cost from process management. Thirdly, the Group will strengthen the ability to tackle scientifi c and technological problems, further optimize production design and technical craft and break the bottleneck of cost control through scientifi c and technological innovations.

34 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

Innovate business models and give play to the roles of cooperative marketing. Using data-based marketing, the Group will promote the construction of a 24-hour accurate distribution circle. The Group will scientifi cally optimize coal product categories, the scale of coal matching expand product customization and implement product fl ow segmentation, being directed by customer demand. The Group will also expand domestic and foreign trade business, strengthen the coordination of internal and external markets and consolidate strategic customers, seek for new customers and increase market shares. Further, by means of “online marketing”, the Group will increase the size of online transactions, reduce the cost of sales; based on the Group’s internal logistics resources and market, actively develop third party logistics, integrate the resources of marketing, trade and logistics and realize the functions of professional operations, resources complementarities, synergistic operations and unifi ed benefi t-making.

Highlight a strict and detailed management, and promote the connotation development level. The Group will deepen benchmarking management and internal marketization management, improve the overall level of control and supervision; control the plans for various funds strictly, increase the concentration of funds and the effi ciency of such use; adjust the fi nancing structure, implement low-cost fi nancing and low risk fi nancial management, strengthen the management of, and profi ts generated by, stock funds; optimize the project investment, accelerate the construction and procedures of promising and effective projects, strictly control the operations of commissioned projects and realize the abilities and profi ts of projects as soon as possible; take steps in the early implementation of the risk control measures, strictly regulate production, trade and other business processes and avoid losses due to any kind of risk.

(II) Major Risks Faced by the Group, Impact and Measures

Risks arising from macro-economy downturn

For the reason that domestic economic situation is intricate and complex, uncertainties that affect future economic development increase and Chinese government strengthens the efforts to resolve the haze problem, outdate industries with overcapacity, and adjust industrial structures, the coal industry remains in low operation which is now the “new norm”.

Counter-measures: In order to transform the risk in economic operation into an industrial upgrading opportunity, it is necessary to continue in-depth studies of global economic trends and industrial development trends, pay special attention to the role played by the synergetic effect of domestic and overseas markets and resources, carefully explore the integrated development strategy of entity industry and fi nancial industry.

Risks arising from product price volatility

Affected by multiple factors of slowdown in coal demand, excess capacity, and slip of international energy prices, the trend of oversupply in the coal market is diffi cult to change in the short term. The Group still faces more downward pressure on coal prices.

Yanzhou Coal Mining Company Limited Interim Report 2015 35

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

Counter-measures: The Group would take various measures to reduce costs, unleash potentials, expand the external markets, and increase profi tability. Aimed at consistent quality and excellent performance of coal marketing, we will thoroughly implement value recreation of “Three Reductions and Three Enhancements” to the entire procedures, optimize the market arrangements, innovate the marketing model and strategy, and improve the quality of services and products.

Risks arising from product trade

In recent years, the Group’s coal trade volume continues to grow at a strong pace. However, profi tability of coal trade remains low because of the change of market demands and the infl uence of price fl uctuations. Meanwhile, with market downturn and prudent bank lending, prepayment for coal trade will take high occupation of the Group’s funds, which is more risky.

Counter-measures: Adhere to the principles of prioritizing benefi ts, strictly controlling risks, and giving equal value to quantity and quality of products, reinforce risk prevention of trade partners, control access mechanism of trade customers, and enhance management of funds and accountability system to make sure that the operational size and effi ciency of products trade increase simultaneously.

Risks arising from safe production

Coal mining, coal chemical and power generation are the three main 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: With the guidance of the reinforcement of safety concept, the Group would fi rmly establish a conscious safety red line; reinforce the management of security level to highlight the responsibility of security principal; strengthen the management of security response to improve the emergency plan and intensify the exercise of emergency training; enhance the examination of security supervision and strictly implement rewards and punishments to ensure the safety and effi ciency of production.

Risks arising from debt fi nancing

Because of the continuous weakness of the coal market and uncertainties of the fi nancing environment at home and abroad, fi nancing becomes more diffi cult and debts risks and default risks become greater.

Counter-measures: Strictly manage and control the funds, actively use various fi nancing platforms to conduct low-cost fi nancing, optimize the liability structure, and guarantee the capital needs. In the meantime, control the debt scale and make the assets liabilities ratio stay at rational level so as to reduce the risks of debts fi nancing.

Risks arising from project implementation

The construction projects of the Group cover wide scope and high investment. Partial projects under construction are in the approval process which has the risks of prolonging the examination and construction period.

36 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 3 BOARD OF DIRECTORS’ REPORT – CONTINUED

Counter-measures: Formulate a table of the construction projects’ approval procedures, strengthen the management force of examination and approval processes to make sure that the construction projects are completed successfully. Tighten the control on investment, construction period, and quality to make sure that projects can be put into production on schedule and the expected benefi ts can be achieved as well.

VI. OTHER DISCLOSURES

(I) The Impact of Exchange Rate Fluctuation

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

the overseas sales income as the overseas product sales of the Group are denominated in USD and AUD;
the exchange gains and losses of the foreign currency deposits and borrowings;
the cost of imported equipment and accessories of the Group.

Affected by the changes in foreign exchange rates, the Group had the exchange gain of RMB80.314 million during the reporting period. For details of the exchange gain or loss, please see Note VI.51 of the fi nancial statements prepared under CASs or Note 7 of the fi nancial statements prepared under IFRS.

To manage foreign currency risks arising from the expected revenue, Yancoal Australian has entered into foreign exchange hedging contracts with a bank. For details of the foreign exchange hedging contracts, please see Note 26 of the fi nancial statements prepared under IFRS or Note VI.9 and Note IX of the fi nancial statements prepared under the CASs.

To hedge the exchange losses of USD loan arising from the fl uctuation of foreign exchange, Yancoal Australia and Yancoal International took measures of foreign exchange hedging to such debt on the accounting basis and effectively mitigated the impact on the current profi ts and losses.

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 2015 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.

Not Applicable.

Yanzhou Coal Mining Company Limited Interim Report 2015 37

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 2014 annual general meeting held on 22 May 2015, according to the actual situation of operation and development, the Company expanded its business scope and made corresponding amendments to the Articles. For details, please refer to the announcement in relation to Amendments to the Articles of the Company dated 27 March 2015 and the announcement in relation to the resolutions passed at the 2014 annual general meeting dated 22 May 2015, respectively. The above announcements were also posted on the websites of the Shanghai Stock Exchange, the Hong Kong Stock Exchange, the Company 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.

38 Yanzhou Coal Mining Company Limited Interim Report 2015

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 Management of Connected Transactions of the Company, the Rules for the Management of Relationships with Investors, the Rules for Internal Reporting of Material Information, 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 2015, the corporate governance rules and practices of the Group are compliant with the principles and the code provisions set out in the Corporate Governance Code (“the Code”) contained in Hong Kong Listing Rules. Some of the corporate governance practices adopted by the Group are more stringent than the Code.

During the reporting period, the Company has strictly complied with the mentioned corporate governance documents and abided by the provisions of the Code without any deviation. For details of the corporate governance report, please refer to the 2014 annual report of the Company.

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. SIGNIFICANT LITIGATION, ARBITRATION AND EVENTS CALLED INTO QUESTION BY THE MEDIA EXTENDED TO THE REPORTING PERIOD

(I) Update on the dispute arbitration in relation to the performance of the contract execution between Shanxi Neng Hua and Shanxi Jinhui Coke Chemical Co., Ltd.

In February 2005, Shanxi Nenghua entered into an asset swap contract and a material supply contract with Shanxi Jinhui Coke Chemical Co., Ltd. (“Shanxi Jinhui”), according to which, Shanxi Jinhui shall compensate Tianhao Chemical, the subsidiary of Shanxi Nenghua, its actual losses if Shanxi Jinhui fail to provide the land for lease, gas, water, electricity supply and rail transportation for the establishment and production of Tianhao Chemical. In addition, Shanxi Jinhui shall purchase all the equity interests in Tianhao Chemicals held by Shanxi Neng Hua to compensate the losses at a price not less than the total investment in Tianhao Chemical as well as the interest on bank loans over the same period, if Tianchi Chemical is unable to operate continually caused by Shanxi Jinhui’s default.

Shanxi Jinhui failed to fulfi ll the “contractual obligations to provide gas, middlings and land supply” and unilaterally suspended the gas supply. As a result, Tianhao Chemicals was unable to operate continually and subsequently ceased production of methanol in April 2012. In September 2013, Shanxi Neng Hua submitted the arbitration to Beijing Arbitration Commission, requesting Shanxi Jinhui to purchase all the equity interests in Tianhao Chemicals held by Shanxi Neng Hua and paid a total of RMB798.8 million comprising equity transfer and other losses in accordance with the contracts.

Yanzhou Coal Mining Company Limited Interim Report 2015 39

CHAPTER 4 SIGNIFICANT EVENTS – CONTINUED

In October 2013, Shanxi Neng Hua submitted the application for property preservation to the People’s Court of Xinghualing District, Taiyuan City, Shanxi Province. 39% of equity equivalents of Shanxi Jinhui Longtai Coal Co., Ltd. held by Shanxi Jinhui was frozen and sealed up.

In order to fully protect the interests of the Company, Shanxi Neng Hua applied to Beijing Arbitration Commission for withdrawal of the request for arbitration. Recently, Shanxi Neng Hua received Beijing Arbitration Commission’s reply granting withdrawal of the Arbitration. As at the disclosure date of this interim report, the Company and Shanxi Neng Hua are further studying the plan of dispute resolution.

For details, please refer to the announcements in relation to the update on the arbitration of the wholly owned subsidiary of Yanzhou Coal Co., Ltd. dated 24 August, 2015. The above announcements were also posted on the websites of the Shanghai Stock Exchange, the Hong Kong Stock Exchange and the Company and/or China Securities Journal and Shanghai Securities News.

(II) Update on the litigation on Coal Sales Contract between Zhongxin Daxie Fuel Co., Ltd. and the Company

Zhongxin Daxie Fuel Co., Ltd. (“Zhongxin Daxie”), as the plaintiff, brought a civil litigation against the Company, as the defendant, at the Shandong Provincial Higher People’s Court in September 2013, alleging a failure by the Company to perform its delivery obligations under a coal sales contract between the parties. Zhongxin Daxie sued for the termination of the coal sales contract, return of payments for goods and damage in an amount of RMB163.6 million.

The Company has delivered goods to the third party designated by Zhongxin Daxie after the execution of the contract and Zhongxin Daxie has settled the payment with the Company. All the obligations have been fulfi lled under the contract.

It was the fi rst instance judgment of the Shandong Provincial Higher People’s Court that: Zhongxin Daxie’s claim was rejected and the litigation fee of RMB0.8602 million shall be on Zhongxin Daxie, as the plaintiff of the litigation. On 30 June 2014, the Company received the Notice of the Decision on Appeal from the Supreme People’s Court of the People’s Republic of China (the “Supreme Court”), the Supreme Court has decided to accept Zhongxin Daxie’s appeal of judgment of the fi rst instance of the litigation. As at the disclosure date of this interim report, the case has not yet been heard.

For details, please refer to the announcements in relation to the update on this litigation dated 29 April 2014 and 30 June 2014, respectively. The above announcements were also posted on the websites of the Shanghai Stock Exchange, the Hong Kong Stock Exchange and the Company and/or China Securities Journal and Shanghai Securities News.

As at the disclosure date of this interim report, the above mentioned signifi cant arbitration events have not been heard and the fi nal result is unknown. So the Company is unable to accurately estimate the impact of the litigation on the company’s current profi t and profi t after the reporting period for the time being.

Save as disclosed above, there were no other signifi cant litigation, arbitration and events called into question by the Media during the reporting period or extended to the reporting period.

40 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 4 SIGNIFICANT EVENTS – CONTINUED

III. SHARE INCENTIVE SCHEME

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

IV. ASSET ACQUISITION, SALES AND MERGERS

Subscription of the Placing Shares of Qilu Bank

As reviewed and approved at the sixth meeting of the sixth session of the Board held on 23 December 2014, the Company subscribed for RMB246.21 million placing shares in Qilu Bank at the offering price of RMB3.18 per share and completed the registration of transfer in the industrial and commercial administration on 7 August 2015. Qilu Bank has been listed in the share transfer system for national small and medium-sized enterprises seeking to publicly transfer their shares since 29 June 2015.

For details, please refer to the announcement in relation to the external investment dated 23 December 2014. The above announcement was posted on the websites of the Shanghai Stock Exchange, the Hong Kong Stock Exchange, and the Company and/or China Securities Journal and Shanghai Securities News.

Save as disclosed above, there was no signifi cant asset acquisition, sales and mergers during the reporting period.

V. CONNTECTED TRANSACTIONS

During the reporting period, the Group’s connected transactions were mainly continuing connected transactions entered into with its Controlling Shareholder (including its subsidiaries) in respect of the mutual provisions of materials and services and other temporary connected transactions.

(I) Continuing Connected Transactions

At the 2014 second extraordinary general meeting of the Company held on 12 December 2014, fi ve continuing connected transaction agreements, namely, the “Provision of Material Supply Agreement”, “Mutual Provision of Labor and Services Agreement”, “Provision of Insurance Fund Administrative Services Agreement”, “Provision of Products, Materials and Equipment Leasing Agreement” and “Provision of Electricity and Heat Agreement”, together with the annual caps for such transactions for the years of 2015 to 2017 had been approved. The main ways to determine transaction price include: state price; market price is applied when the state price is not available; actual cost pricing is applied when neither state price nor market price is available. The charge for transaction 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.

Yanzhou Coal Mining Company Limited Interim Report 2015 41

CHAPTER 4 SIGNIFICANT EVENTS – CONTINUED

At the seventh meeting of the sixth session of the Board held on 27 March 2015, the Company considered and approved: (i) “Financial Services Agreement’ and the annual cap for such transaction for the period from 1 April 2015 to 31 March 2016, applying state-prescribed price as the main way of pricing; (ii) “Coal Train Escort Services Agreement” and the annual cap for such transaction for the period from 1 February 2015 to 31 March 2016, applying reasonable cost plus reasonable profi ts as the main ways to determine transaction price.

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

The sales of goods and provision of services by the Group to its Controlling Shareholder amounted to RMB908.7 million for the fi rst half of 2015. The goods and services provided by the Controlling Shareholder to the Group amounted to RMB786.4 million.

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 2015:

					Increase/
	The f rst half of 2015		The	f rst half of 2014	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	908,734	3.61	1,747,814	5.39	-48.01
Sales of goods and provision of services
by the Controlling Shareholder to the Group	786,371	3.13	1,157,775	3.57	-32.08

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 2015:

	Operating income	Operating cost	Gross prof ts
	(RMB’000)	(RMB’000)	(RMB’000)
Coal sold to the Controlling Shareholder	595,201	327,361	267,840

2. Continuing connected transaction of insurance fund

Pursuant to the Provision of Insurance Fund Administrative Services Agreement, the Controlling Shareholder shall provide the Group’s employees with 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”) for free. The amount of the Insurance Fund paid by the Group in the fi rst half of 2015 was RMB488.3 million.

42 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 4 SIGNIFICANT EVENTS – CONTINUED

3. Continuing connected transaction of fi nancial services

Pursuant to the “Financial Services Agreement”, as at 30 June 2015, the principal and interest balance of deposit and loan of the Group in Yankuang Group Finance Company Limited was RMB1.1757 billion and RMB331.2 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 2015.

The following table sets out the details of the annual caps for 2015 and the actual transaction amounts in the fi rst half of 2015 for the above continuing transactions.

				Value of
			Annual	transaction for
	Type of connected		cap for the year	the f rst half of
No.	transaction	Agreement	2015	2015
			(RMB’000)	(RMB’000)
1	Material and facilities provided by Yankuang Group	Provision of Materials Agreement	1,387,000	254,948
2	Labor and services provided by Yankuang Group	Mutual Provision of Labor and Services Agreement	2,496,600	531,423
3	Insurance fund management and payment services	Provision of Insurance Fund Administrative Services	1,501,830	488,268
	provided by Yankuang Group (free of charge)	Agreement
	for the Group’s staff
4	Sale of products, material and equipment lease	Provision of Products, Material and Equipment Lease	5,827,150	846,794
	provided to Yankuang Group	Agreement
5	Power and heat provided to Yankuang Group	Provision of Electricity and Heat Agreement	142,600	58,194
6	Professional services including coal washing and	Mutual Provision of Labor and Services Agreement	311,640	3,746 Note
	processing services, management of operation
	of coal mining services and training services
	provided to Yankuang Group
7	Financial services provided by Yankuang Group:	Financial Services Agreement
	– deposit balance		1,180,000	1,175,678
	– comprehensive credit facility services		400,000	331,198
	– miscellaneous f nancial services fees		14,000	0
8	Train escort services provided by Yankuang Group	Coal Train Escort Services Agreement	33,000	0

Note: This fi gure shows the transaction between Shengdi Fenlei Coal Preparation Engineering Technology (Tianjin) Co., Ltd. (“this company”) and connected parties of the Company.

Pursuant to the applicable fi nancial reporting standards, the fi nancial data of this company is not included in the consolidated fi nancial statements of the Company. However, as directors of this company designated by the Company are in the majority, according to applicable Hong Kong rules and regulations and Shanghai Stock Exchange listing rules, this company should be recognized as a subsidiary of the Company.

Yanzhou Coal Mining Company Limited Interim Report 2015 43

CHAPTER 4 SIGNIFICANT EVENTS – CONTINUED

(II) Temporary Connected Transactions

1. Investment to Shanghai CIFCO Futures

As considered and approved at the seventh meeting of the sixth session of the Board held on 27 March 2015, the Company would invest RMB264.6 million, contributing 33.33% equity interests in Shanghai CIFCO Futures. For details, please refer to the announcement in relation to resolutions passed at the seventh meeting of the sixth session of the Board and the announcement in relation to connected transactions dated 27 March 2015. The above announcements were also posted on the websites of the Shanghai Stock Exchange and the Hong Kong Stock Exchange, the website of the Company and/or China Securities Journal and Shanghai Securities News.

2. Acquisition of 100% of the equity interest of Donghua Heavy Industry

As considered and approved at the ninth meeting of the sixth session of the Board held on 27 July 2015, the Company acquired 100% of equity interest in Donghua Heavy Industry held by Yankuang Group Co., Ltd. with a transaction price of RMB676 million. For details, please refer to the announcement in relation to resolutions passed at the ninth meeting of the sixth session of the Board and the announcement in relation to connected transactions dated 27 July 2015. The above announcements were also posted on the websites of the Shanghai Stock Exchange and the Hong Kong Stock Exchange, the website of the Company and/or China Securities Journal and Shanghai Securities News.

3. Repayment by Shaanxi Future Energy of an Entrusted Loan

As considered and approved at the fi rst meeting of the sixth session of the Board held on 14 May 2014, the Company has provided the entrusted loan of a total amount of RMB1.25 billion to Shaanxi Future Energy, a connected party of the Company in batches since 4 August 2014. As at 3 August 2015, Shaanxi Future Energy has repaid all the principal amount and the interest to the Company, the aggregate amount being RMB1.3234 billion. As a result, the Entrusted Loan has come to an end. For details, please refer to the announcement in relation to resolutions passed at the fi rst meeting of the sixth session of the Board and the announcement in relation to connected transactions dated 14 May 2014, and the announcement in relation to repayment by Shaanxi Future Energy of an Entrusted Loan Provided by the Company dated 4 August 2015, respectively. The above announcements were also posted on the websites of the Shanghai Stock Exchange and the Hong Kong Stock Exchange, the website of the Company and/or China Securities Journal and Shanghai Securities News.

44 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 4 SIGNIFICANT EVENTS – CONTINUED

(III) As at 30 June 2015, 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 28 to the consolidated fi nancial statements herein, or Note X as prepared in accordance with CASs. Certain relatedparty transactions set out in Note 28 to the consolidated fi nancial statements prepared in accordance with the IFRS 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.

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 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	10.24
Total balance of guarantee to controlled subsidiaries by the end of the reporting period(B)	371.65
Total guarantees (including guarantees to controlled subsidiaries)
Total amount of guarantees (A+B)	371.65
Percentage of total amount of guarantee in the equity attributable to the Shareholders
of the Company (%)	90.04
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)	353.31
Total amount of guarantee exceeding 50% of equity attributable to the Shareholders (E)	165.26
Total amount of the above 3 categories guarantees (C+D+E)	518.57

Note: The above table is prepared based on CASs and calculated on the formula of USD1=RMB6.1136 and AUD1=RMB4.6993.

Yanzhou Coal Mining Company Limited Interim Report 2015 45

CHAPTER 4 SIGNIFICANT EVENTS – CONTINUED

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, Yancoal Australia took a bank loan of USD3.04 billion for acquisition of equity interests of Yancoal Resources Limited. One tranche of the loan amounting to USD1.015 billion were due on 17 December 2012. After the repayment of USD100 million, Yancoal Australia extended the repayment date of the remaining principal amounting to USD45 million for 5 years, that is to 16 December 2017; USD300 million for 7.5 years, that is to 16 June 2020; and USD570 million for 8 years, that is to 16 December 2020. Another tranche of USD1.015 billion were due on 17 December 2013. After the repayment of USD100 million, Yancoal Australia extended the repayment date of the remaining principal amounting to USD45 million for 5 years, that is to 16 December 2018; USD300 million for 7.5 years, that is to 16 June 2021; and USD570 million for 8 years, that is to 16 December 2021. The tranche of USD1.010 billion were due on 16 December 2014. After the repayment of USD100 million, Yancoal Australia extended the repayment date of the remaining principal amounting to USD50 million for 5 years, that is to 16 December 2019; USD300 million for 7.5 years, that is to 16 June 2022; and USD560 million for 8 years, that is to 16 December 2022. As at 30 June 2015, the balance of the above loan was USD2.74 billion. The Company provided the guarantees of USD1.825 billion and RMB6.545 billion to Yancoal Australia.

As approved at the 2012 second extraordinary general meeting, the Company provided a guarantee 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 2012 annual general meeting, the Company issued a bank guarantee of RMB3.0 billion for a bank loan of USD455 million benefi ting its wholly-owned subsidiary, Yancoal International (Holding) Company Limited.

As approved at the 2012 annual general meeting, the Company issued a bank guarantee of RMB5.536 billion for a bank loan of USD1.0 billion benefi ting its wholly-owned subsidiary, Yancoal International (Holding) Company Limited.

As approved at the 2012 annual general meeting, the Company provided a guarantee to its wholly-owned subsidiary, Yancoal International Trading Co., Ltd., for issuing USD300 million perpetual bonds in the overseas market.

As approved at the 2014 fi rst extraordinary general meeting, the Company provided a fi nancing guarantee in the credit amount of AUD187 million to Yancoal Australia. In 2014, a total of AUD150 million guarantees were provided to Yancoal Australia by the Company.

A total of AUD266 million performance deposits and performance guarantees, which were needed for operation of Yancoal Australia and its subsidiaries, have been extended to the reporting period.

46 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 4 SIGNIFICANT EVENTS – CONTINUED

2. Information on guarantees arising during the reporting period:

As approved at the 2014 annual general meeting of the Company, Yancoal Australia and its subsidiaries could provide guarantee to subsidiaries, not exceeding AUD500 million, for their daily operation. During the reporting period, there were AUD218 million performance deposits and performance guarantees in total for daily 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

Purchase of Bank’s Wealth Management Products

At the 2014 fi rst extraordinary general meeting of the Company held on 24 October 2014, the Company was approved to carry out principal guaranteed fi nancing business for an aggregate amount not exceeding RMB5.0 billion.

On 13 February 2015 and 16 February 2015, the Company entered into agreements with 6 banks, namely, Zoucheng sub-branch of Agricultural Bank of China Limited, Zoucheng sub-branch of Industrial and Commercial Bank of China Limited, Zoucheng sub-branch of Bank of China Limited, Jinan Yanshan sub-branch of Qilu Bank Co., Ltd., Jining branch of Industrial Bank Co., Ltd. and Jining branch of Guangdong Development Bank, respectively, to purchase the principal-guaranteed wealth management products from above mentioned 6 banks with a total amount of RMB5 billion by own fund. Each investment term is 1 month. Types of products are principal-guaranteed and fl oating income wealth management product and principal and income guaranteed wealth management product. After the maturity date, the Company has taken back all principal, as well as the income amounting to RMB19.775 million of the above principal-guaranteed wealth management products and not involved in any lawsuit.

On 21 April 2015, the Company entered into agreement with Zoucheng, Jining sub-branch of Bank of Communications Co., Ltd. to purchase the principal guaranteed wealth management product with a total amount of RMB1 billion by own fund. Type of product is principal and income guaranteed wealth management product and investment term is 3 months. After the maturity date, the Company has taken back all principal, as well as the income amounting to RMB13.962 million of the above principal-guaranteed wealth management product and not involved in any lawsuit.

On 23 June and 24 June 2015, the Company entered into agreements with Jining branch of Guangdong Development Bank and Jinan Yanshan sub-branch of Qilu Bank Co., Ltd., to purchase the principal-guaranteed wealth management products with a total amount of RMB4 billion by own fund. Both products are principal and income guaranteed wealth management products and their investment terms are 92 days.

On 23 July 2015, the Company entered into agreements with Zoucheng, Jining sub-branch of Bank of Communications Co., Ltd. and Jinan Yanshan sub-branch of Qilu Bank Co., Ltd., to purchase the principalguaranteed wealth management products with a total amount of RMB950 million by own fund. All products are principal and income guaranteed wealth management products and their investment terms are 3 months.

Yanzhou Coal Mining Company Limited Interim Report 2015 47

CHAPTER 4 SIGNIFICANT EVENTS – CONTINUED

On 28 July 2015, the Company entered into agreements with Zoucheng, Jining sub-branch of Bank of Communications Co., Ltd. to purchase the principal-guaranteed wealth management products with a total amount of RMB50 million by own fund. This product is a principal and income guaranteed wealth management product and its investment term is 92 days.

For details, please refer to the announcements in relation to the purchase of wealth management products dated 13 February and 16 February, 21 April, 23 June and 24 June, 23 July and 28 July 2015, respectively. 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.

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. During the reporting period, the Company has achieved the two-way communication with capital market through conducting international and domestic road-shows on the results of the Company, 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 190 analysts, fund managers and investors in total.

VIII. PERFORMANCE OF THE UNDERTAKINGS

Undertaker	Undertakings	Deadline for performance	Performance
Yankuang Group	Avoidance of horizontal competition	Long-term effective	Ongoing (there is no violation of
	Yankuang Group and the Company entered		undertaking by Yankuang Group)
	into the Restructuring Agreement when the
	Company was carrying out the restructure
	in 1997, pursuant to which Yankuang Group
	undertook that it would take various effective
	measures to avoid horizontal competition with
	the Company.
	Transfer of the mining right of Wanfu coal	Within 12 months when	Such performance has not been
	mine	Yankuang Group obtained	completed yet. (Yankuang Group
	In 2005, the Company acquired equity	the mining right of Wanfu coal	obtained the mining right of Wanfu
	interests of HezeNeng Hua held by Yankuang	mine	coal mine on 14 July 2015)
	Group. At that time, Yankuang Group made
	such undertaking that: the Company had
	the right to acquire the mining right of Wanfu
	coal mine once obtaining such mining right is
	obtained 12 months later.

48 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 4 SIGNIFICANT EVENTS – CONTINUED

Undertaker	Undertakings	Deadline for performance	Performance
	Not reducing shareholding in the Company	10 July 2015 to 10 January	Ongoing (there is no violation of
	On 10 July 2015, the Controlling Shareholder	2016	undertaking by Yankuang Group)
	of the Company, Yankuang Group, undertook
	that it would not reduce its shareholding in the
	Company within 6 months.
Directors,	Not reducing shareholding in the Company	During the period of their	Ongoing (there is no violation of
supervisors,	The directors, supervisors and senior	increase holding of A shares	shareholding reduction of the
senior	management of the Company undertook	of the Company and within	Company)
management of	that they would not reduce their respective	6 months after completion of
the Company	shareholding in the Company during the	further increase.
	period of their increase holding of A shares
	of the Company and within 6 months after
	completion of further increase.

IX. OTHER SIGNIFICANT EVENTS DISCLOSURES

(I) Establishment of Organizations and Subsidiaries

Establishment of Futures Finance Department

As approved at the ninth meeting of the sixth session of the Board of the Company held on 27 July 2015, the Company established Futures Finance Department, which mainly carries out futures and fi nancial business of the Company.

Establishment of Shandong Duanxin Supply Chain Management Co., Ltd.

As approved at the general working meeting of the Company held on 11 May 2015, the Company established Shandong Duanxin Supply Chain Management Co., Ltd., a wholly-owned subsidiary of the Company, on 14 July 2015, with registered capital of RMB200 million. Its main scope of business includes: logistics, storage and leasing.

(II) Other Events

(Prepared in accordance with the Hong Kong listing rules)

Repurchase, sale or redemption of listed shares of the Company

The 2014 annual general meeting was convened by the Company on 22 May 2015, at which a general mandate was granted to the Board to issue additional H Shares during the relevant authorized period. Under the general mandate, the Board is authorized to issue or not to issue additional H Shares with issuance amount not exceeding 20% of the aggregate nominal value of H Shares in issue as at the date of passing the resolution during the relevant authorized period 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.

Yanzhou Coal Mining Company Limited Interim Report 2015 49

CHAPTER 4 SIGNIFICANT EVENTS – CONTINUED

The 2014 annual general meeting, the 2015 fi rst class meeting of the holders of A Shares and the 2015 fi rst class meeting of the holders of H Shares were convened by the Company on 22 May 2015, at 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, risk control system and special contribution 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, profitability, difficulties in operating management, employees’ income of the Company, 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 on the basis of their positions and responsibilities and their quantifi ed assessment results, which includes 4 units: post wage, performance wage, allowances and supplementary wage. In accordance with the principle of “wages depend on economic efficiency”, the Company implements flexible and diverse distribution scheme: a combination of annual salary and safe production mortgage applies to managers; a unit-based wage system for the workers and commission-based system according to the performance for salespersons.

50 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 4 SIGNIFICANT EVENTS – CONTINUED

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 2014 annual general meeting held on 22 May 2015, 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 2015.

X. 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 OR IMPOSED ADMINISTRATIVE PENALTY BY THE CSRC, BANNED FROM ENTERING INTO THE SECURITIES MARKET, PUBLICLY CRITICIZED OR CONFIRMED AS NON-FIT OR PROPER PERSONS, OR PUBLICLY REPRIMANDED BY OTHER ADMINISTRATIVE DEPARTMENTS OR THE STOCK EXCHANGES.
XI. DURING THE REPORTING PERIOD, THERE WAS NO BANKRUPTCY RESTRUCTURING WITHIN THE COMPANY.

Yanzhou Coal Mining Company Limited Interim Report 2015 51

CHAPTER 5 CHANGES IN SHARES AND SHAREHOLDERS

I. CHANGES IN SHARE CAPITAL

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

As at 30 June 2015, the share capital structure of the Company was as follows:

			Unit: share
		Shares	Percentage
			(%)
1.	Listed shares with restricted trading moratorium	20,000	0.0004
	Natural person shareholding in A SharesNote	20,000	0.0004
2.	Shares without trading moratorium	4,918,380,000	99.9996
	A Shares	2,959,980,000	60.1818
	H Shares	1,958,400,000	39.8178
3.	Total share capital	4,918,400,000	100.0000

Note: The natural person shareholding in listed A shares with restricted trading moratorium is Mr. Wu Yuxiang, a director and Chief Financial Offi cer of the Company.

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 this interim 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 supervisory requirements of the place(s) of listing.

52 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 5 CHANGES IN SHARES AND SHAREHOLDERS – CONTINUED

II. SECURITIES ISSUANCE

During the reporting period, the securities issued by the Company are as follows:

	Issuance of the short-	The 2015 f rst tranche	Issuance of the 2015 f rst	Issuance of the 2015 f rst	Issuance of the 2015 second
	term f nancing notes in	non-public issuance of	tranche of medium term	tranche of super-short	tranche of super-short term
	2015 (f rst tranche)	f nancing instruments	notes	term bonds	bonds
Examination and approval	Considered and approved	Considered and approved	Considered and approved	Considered and approved	Considered and approved
procedures	at the 2012 annual general	at the 2012 annual general	at the 2013 annual general	at the 2013 annual general	at the 2013 annual general
	meeting of the Company	meeting of the Company	meeting of the Company	meeting of the Company	meeting of the Company held
	held on 15 May 2013	held on 15 May 2013	held on 14 May 2014	held on 14 May 2014	on 14 May 2014
Issuer	Yanzhou Coal Mining Co.,	Yanzhou Coal Mining Co.,	Yanzhou Coal Mining Co.,	Yanzhou Coal Mining Co.,	Yanzhou Coal Mining Co., Ltd.
	Ltd.	Ltd.	Ltd.	Ltd.
Issue date	18 March 2015	10 April 2015	30 April 2015	11 June 2015	18 June 2015
Value date	20 March 2015	13 April 2015	5 May 2015	15 June 2015	19 June 2015
Maturity date	20 March 2016	—	—	11 March 2016	15 March 2016
Interest rate	5.19%	6.50%	6.19%	4.20%	4.20%
Issue price	RMB100/par value	RMB100/par value	RMB100/par value	RMB100/par value	RMB100/par value
	RMB100	RMB100	RMB100	RMB100	RMB100
Amount of Issue	RMB5 billion	RMB2 billion	RMB2 billion	RMB2.5 billion	RMB2.5 billion
Net proceeds	RMB4.99 billion	RMB1.982 billion	RMB1.982 billion	RMB2.496 billion	RMB2.496 billion
Use of proceeds	Replenishment of working	Repayment of loans from	Replenishment of working	Replenishment of working	Replenishment of working
	capital for operation	f nancial institutions	capital for operation and	capital for operation and	capital for operation and
	and production of the		production	production	production
	Company, repayment of
	loans from banks
Total amount of Proceeds that	RMB4.99 billion	RMB1.982 billion	RMB1.982 billion	RMB2.496 billion	RMB2.496 billion
Has been used during The
reporting period
Total accumulated amount	RMB4.99 billion	RMB1.982 billion	RMB1.982 billion	RMB2.496 billion	RMB2.496 billion
of Proceeds that Has been
used during The reporting
period
Total amount Of remaining	0	0	0	0	0
proceeds
Date and credit Rating of	29 June 2015	—	29 June 2015	—	—
tracked	Rating: A-1		Rating: AAA
ratings

Yanzhou Coal Mining Company Limited Interim Report 2015 53

CHAPTER 5 CHANGES IN SHARES AND SHAREHOLDERS – CONTINUED

III. SHAREHOLDERS

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

As of 30 June 2015, the Company had a total of 73,879 Shareholders, of which one was holder of A Shares subject to a trading moratorium, 73,596 were holders of A Shares without a trading moratorium and 282 were holders of H Shares.

(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 2015, the top ten Shareholders were as follows:

Unit: share Total number of Shareholders 73,879

Shareholdings of the top ten Shareholders

		Percentage		Increase/	Number of shares	Number of
		holding of		decrease	held subject	pledged or
	Nature of	the total	Number of	during the	to a trading	locked
Name of Shareholder	Shareholders	capital	shares held	reporting period	moratorium	shares
		(%)
Yankuang Group Company State-owned legal person		52.86	2,600,000,000	0	0	0
Limited
HKSCC (Nominees) Limited	Foreign legal person	39.68	1,951,433,499	2,030,000	0	Unknown
National Social Security	Others	0.13	6,465,478	4,760,957	0	0
Fund 412 Portfolio
CBC-BoseraYufu CSI300	Others	0.06	3,056,516	-2,756,500	0	0
Index Securities
Investment Fund
BOC-Coal Power Index	Others	0.06	3,007,911	3,007,911	0	0
Classif cation under
the China Merchants
Securities Investment Funds
ICBC-Penghua CIS A Shares	Others	0.05	2,563,914	-734,017	0	0
Resource Industry Index
Classif cation Securities
Investment Fund
Wang Lianzhi	Domestic natural person	0.05	2,280,000	2,280,000	0	0
Chen Liang	Domestic natural person	0.04	2,208,294	2,208,294	0	0
CBC-Fortune SG Income &	Others	0.04	2,020,700	2,020,700	0	0
Growth Hybrid Securities
Investment Fund
Bank of Communications	Others	0.04	2,009,058	2,009,058	0	0
Co., Ltd.- Everbright
Pramerica SOE Reform
Theme Stock Securities
Investment Fund

54 Yanzhou Coal Mining Company Limited Interim Report 2015

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	Class of shares held
Yankuang Group Company Limited		2,600,000,000	A Shares
HKSCC (Nominees) Limited		1,951,433,499	H Shares
National Social Security Fund 412 Portfolio		6,465,478	A Shares
CBC - BoseraYufu CSI300 Index Securities		3,056,516	A Shares
Investment Fund
BOC - Coal power index classif cation under
the China Merchants Securities Investment
Funds		3,007,911	A Shares
ICBC - Penghua CIS A Shares Resource Industry
Index Classif cation Securities Investment Fund		2,563,914	A Shares
Wang Lianzhi		2,280,000	A Shares
Chen Liang		2,208,294	A Shares
CBC - Fortune SG Income & Growth Hybrid
Securities Investment Fund		2,020,700	A Shares
Bank of Communications Co., Ltd. -
Everbright Pramerica SOE Reform
Theme Stock Securities Investment Fund		2,009,058	A Shares
Connected relationship or concerted-party	The subsidiary of Yankuang Group in Hong Kong held 180
relationship among the above Shareholders	million H shares through HKSCC (Nominees) Limited. Save as
	disclosed above, 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.

Yanzhou Coal Mining Company Limited Interim Report 2015 55

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 2015, other than the Directors, Supervisors or chief executives of the Company, there were no other persons who were substantial shareholders of the Company or had interests or short positions 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
Yankuang Group		A Shares	Benef cial owner	2,600,000,000	Long position	—	52.86%
		(state-owned
		legal person
		shares)
Yankuang Group	(Note 1)	H shares	Interest of controlled	180,000,000	Long position	9.19%	3.66%
			corporations
BlackRock, Inc.		H shares	Interest of controlled	104,375,081	Long position	5.33%	2.12%
			corporations	7,294,380	Short position	0.37%	0.15%
Templeton Asset		H Shares	Investment manager	233,066,800	Long position	11.90%	4.74%
Management Ltd.
JP Morgan		H Shares	Benef cial owner	54,678,403	Long position	2.79%	1.11%
Chase & Co.				12,041,527	Short position	0.61%	0.24%
			Investment manager	14,000	Long position	0.00%	0.00%
			Custodian corporation/	61,752,735	Long position	3.15%	1.26%
			approved lending agent
BNP Paribas Investment Partners SA H Shares			Investment manager	117,641,207	Long position	6.01%	2.39%

Notes:

Yankuang Group’s subsidiary in Hong Kong holds such H Shares in the capacity of benefi cial owner.
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 2015 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.

56 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 6 DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEES

I. CHANGES IN SHARES HELD BY DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT DURING THE REPORTING PERIOD

As at the end of this interim report, the current and resigned Directors, Supervisors and senior management during the reporting period together held 20,000 of the Company’s A shares, representing 0.0004% of the total issued share capital of the Company.

As at the disclosure date of this interim report, the current and resigned Directors, Supervisors and senior management during the reporting period together held 170,500 of the Company’s A shares, representing 0.00347% of the total issued share capital of the Company.

As at the disclosure date of this interim report, save as disclosed below, 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).

Shareholding of the Company:

The shareholding of A shares of the Company by directors, supervisors and senior management of the Company is as follows:

			Increase from	Decrease from	Number of
		Number of	1 Jan 2015 till	1 Jan 2015 till	shares held at
		shares held at	the disclosure	the disclosure	the disclosure
		the beginning	date of this	date of this	date of this	Reasons for
Name	Title	of the period	interim report	interim report	interim report	the change
		(shares)	(shares)	(shares)	(shares)
Li Xiyong	Chairman	0	10000	0	10000	Secondary
						Transaction
Yin Mingde	Director, general manager	0	10000	0	10000	Secondary
						Transaction
Wu Yuxiang	Director, Chief Financial	20,000	10000	0	30000	Secondary
	Off cer					Transaction
Wu Xiangqian	Director	0	10000	0	10000	Secondary
						Transaction
Jiang Qingquan	Employee director	0	10000	0	10000	Secondary
						Transaction
Zhang	Chairman of the supervisory	0	10000	0	10000	Secondary
Shengdong	committee					Transaction
Gu Shisheng	Vice chairman of the	0	10000	0	10000	Secondary
	supervisory committee					Transaction

Yanzhou Coal Mining Company Limited Interim Report 2015 57

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

			Increase from	Decrease from	Number of
		Number of	1 Jan 2015 till	1 Jan 2015 till	shares held at
		shares held at	the disclosure	the disclosure	the disclosure
		the beginning	date of this	date of this	date of this	Reasons for
Name	Title	of the period	interim report	interim report	interim report	the change
		(shares)	(shares)	(shares)	(shares)
Zhen Ailan	Supervisor	0	10000	0	10000	Secondary
						Transaction
Guo Jun	Employee supervisor	0	10000	0	10000	Secondary
						Transaction
Chen Zhongyi	Employee supervisor	0	10500	0	10500	Secondary
						Transaction
Shi Chengzhong	Deputy general manager	0	10000	0	10000	Secondary
						Transaction
Liu Chun	Deputy general manager	0	10000	0	10000	Secondary
						Transaction
Ding Guangmu	Deputy general manager	0	10000	0	10000	Secondary
						Transaction
Wang Fuqi	Chief engineer	0	10000	0	10000	Secondary
						Transaction
Zhao Honggang	Deputy general manager	0	10000	0	10000	Secondary
						Transaction

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

Shareholding in associated corporations of the Company:

The shareholding of shares of Yancoal Australia by directors, supervisors and senior management of the Company is as follows:

		Number of shares held
		at the disclosure date of
Name	Position	this interim report	Reasons for the change
		(shares)
Zhang Baocai	Director, deputy general manager,	1,162,790	Secondary Transaction
	secretary to the Board

Save as disclosed above, as at the disclosure date of this interim report, 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 2015, 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.

58 Yanzhou Coal Mining Company Limited Interim Report 2015

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

II. ELECTION OR RESIGNATION OF DIRECTORS AND SUPERVISORS AND APPOINTMENT OR DISMISSAL OF SENIOR MANAGEMENT

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

Due to work allocation, Mr. Zhang Xinwen, former vice chairman of the Company, has tendered his resignation to the Company. He resigned from the positions of a director and vice chairman of the Company with effect from 13 March 2015.

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

Mr. Shi Xuerang, the former chairman of the Supervisory Committee of the Company, has reached his age of retirement and has tendered his resignation to the Company. He resigned from the position of a supervisor and chairman of the Supervisory Committee of the Company with effect from 30 June 2015.

As considered and approved at the sixth meeting of the sixth session of the Supervisory Committee of the Company held on 1 July 2015, Mr. Zhang Shengdong and Mr. Gu Shisheng were elected as the chairman of the sixth session of Supervisory Committee and vice chairman of the sixth session of Supervisory Committee of the Company.

III. CHANGES IN POSITIONS 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
Director, general	Yin Mingde	—	Director of Yancoal	Since 12 January 2015
manager			International (Holding) Co.,
			Ltd.
Deputy general	Liu Chun	—	Executive director of	Since 9 July 2015
manager			Shandong Duanxin Supply
			Chain Management Co.,
			Ltd.

IV. EMPLOYEES

As at 30 June 2015, the Group had a total of 67,062 employees, of whom 5,030 were administrative personnel, 4,272 were technicians, 42,081 were involved in production and 15,679 were other supporting staff.

As at 30 June 2015, the total wages and allowances of the staff of the Group for the reporting period amounted to RMB2.8393 billion.

Yanzhou Coal Mining Company Limited Interim Report 2015 59

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED INCOME STATEMENT

FOR THE SIX MONTHS ENDED JUNE 30, 2015

Notes	Six months ended June 30, 2015 2014 RMB’000 RMB’000 (unaudited) (unaudited)
Gross sales of coal 5 Railway transportation service income Gross sales of electricity power Gross sales of methanol Gross sales of heat supply Total revenue Transportation costs of coal 5 Cost of sales and service provided 6 Cost of electricity power Cost of methanol Cost of heat supply Gross prof t Selling, general and administrative expenses Share of prof t of associates Share of loss of joint ventures Other income 7 Interest expenses 8 Prof t before income taxes 9 Income taxes 10 Prof t for the period Attributable to: Equity holders of the Company Owners of perpetual capital securities Non-controlling interests – Perpetual capital securities – Other (Loss) Earnings per share, basic and diluted 12 (Loss) Earnings per ADS, basic and diluted 12	16,472,325 30,004,950 156,455 215,413 286,641 69,628 1,218,377 630,880 10,160 12,518
	18,143,958 30,933,389 (934,150) (1,171,307) (12,864,543) (24,933,191) (249,910) (54,578) (869,177) (431,370) (4,047) (6,000)
	3,222,131 4,336,943 (2,844,697) (3,568,844) 227,629 99,240 (77,646) (188,592) 1,219,200 779,105 (1,502,540) (1,120,423)
	244,077 337,429 (242,546) 33,723
	1,531 371,152
	(50,626) 587,235 132,896 – 66,535 14,696 (147,274) (230,779)
	1,531 371,152
	(RMB 0.01) RMB 0.12
	(RMB 0.1) RMB 1.19

Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED JUNE 30, 2015

	Six months ended June 30, 2015 2014 RMB’000 RMB’000 (unaudited) (unaudited)
Prof t for the period Other comprehensive (loss) income (after income tax): Items that may 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 Share of other comprehensive income of associates Exchange difference arising on translation of foreign operations Other comprehensive (loss) income for the period Total comprehensive (loss) income for the period Attributable to: Equity holders of the Company Owners of perpetual capital securities Non-controlling interests – Perpetual capital securities – Others	1,531 371,152 132,946 (7,821) (33,237) 1,955
	99,709 (5,866) 86,983 (791,983) (23,565) 977,099 (24,262) 558,363
	39,156 743,479 22,637 – (2,337,288) 1,332,149
	(2,175,786) 2,069,762
	(2,174,255) 2,440,914
	(1,792,928) 2,282,416 132,896 – 66,535 14,696 (580,758) 143,802
	(2,174,255) 2,440,914

Yanzhou Coal Mining Company Limited Interim Report 2015 61

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONDENSED CONSOLIDATED BALANCE SHEET

AT JUNE 30, 2015

Notes	At June 30, At December 31, 2015 2014 RMB’000 RMB’000 (unaudited) (audited)
ASSETS CURRENT ASSETS Bank balances and cash Term deposits 13 Restricted cash 13 Bills and accounts receivable 14 Royalty Receivable 26(i) Inventories Prepayments and other receivables 15 Prepaid lease payments Long term receivables-due within one year Derivative f nancial instruments Tax recoverable 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 Restricted cash 13 Long term receivables Royalty Receivable 26(i) Deposits made on investments Deferred tax assets 22 TOTAL NON-CURRENT ASSETS TOTAL ASSETS	15,096,732 15,041,928 5,597,453 5,154,296 144,927 275,981 6,558,978 7,084,105 84,786 89,137 1,795,091 1,470,480 9,242,954 7,219,251 20,709 22,343 1,644,157 1,705,757 1,175 359 101,781 22,706
	40,288,743 38,086,343 35,770,812 37,287,549 766,857 776,751 44,079,471 44,174,612 2,211,945 2,232,751 1,550,856 388,764 3,304,582 2,955,629 54,781 130,867 5,011 53,870 291,165 302,517 870,203 909,927 118,926 118,926 5,080,564 5,679,608
	94,105,173 95,011,771
	134,393,916 133,098,114

62 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONDENSED CONSOLIDATED BALANCE SHEET — CONTINUED

AT JUNE 30, 2015

Notes	At June 30, At December 31, 2015 2014 RMB’000 RMB’000 (unaudited) (audited)
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 Long term payable and provision-due within one year Derivative f nancial instruments Tax payable TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Borrowings-due after one year 21 Deferred tax liability 22 Provision for land subsidence, restoration, rehabilitation and environmental costs 20 Long term payable and provision-due after one year TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES Capital and reserves Share capital 23 Reserves 23 Equity attributable to equity holders of the Company Owners of perpetual capital securities 24 Non-controlling interests – Perpetual capital securities 24 – Subordinated capital notes 25 – Others TOTAL EQUITY TOTAL LIABILITIES AND EQUITY	2,940,561 4,037,204 8,042,957 8,736,690 2,894,563 2,900,054 226,557 190,408 16,759,532 10,871,689 398,634 398,794 – 81,602 20,425 113,442
	31,283,229 27,329,883 46,725,068 50,566,399 7,032,911 7,554,413 676,998 529,953 1,052,001 1,118,950
	55,486,978 59,769,715
	86,770,207 87,099,598
	4,918,400 4,918,400 31,916,150 33,807,446
	36,834,550 38,725,846 6,618,352 2,521,456 1,852,254 1,851,903 3,102 3,102 2,315,451 2,896,209
	47,623,709 45,998,516
	134,393,916 133,098,114

Yanzhou Coal Mining Company Limited Interim Report 2015 63

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED JUNE 30, 2015

										Non-controlling interests	Non-controlling interests
									Attributable to
			Future	Statutory		Investment	Cash f ow		equity holders	Perpetual
	Share	Share	development	common	Translation	revaluation	hedge	Retained	of the	capital
	capital	premium	fund	reserve fund	reserve	reserve	reserve	earnings	Company	securities	Others	Total
	RMB’000	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)						(note 24b)
Balance at January 1, 2014	4,918,400	2,981,002	3,975,732	5,511,323	(3,232,348)	71,560	(750,785)	26,903,794	40,378,678	–	3,607,383	43,986,061
Prof t for the period (unaudited)	–	–	–	–	–	–	–	587,235	587,235	14,696	(230,779)	371,152
Other comprehensive income (unaudited):
– Fair value change of available-for-sale
investments	–	–	–	–	–	(5,866)	–	–	(5,866)	–	–	(5,866)
– Cash f ow hedge reserve recognized	–	–	–	–	–	–	584,127	–	584,127	–	159,352	743,479
– Exchange difference arising on
translation of foreign operations	–	–	–	–	1,116,920	–	–	–	1,116,920	–	215,229	1,332,149
Total comprehensive income for
the period (unaudited)	–	–	–	–	1,116,920	(5,866)	584,127	587,235	2,282,416	14,696	143,802	2,440,914
Transactions with owners (unaudited):
– Issue of perpetual capital security	–	–	–	–	–	–	–	–	–	1,835,747	–	1,835,747
– Appropriations to and utilization
of reserves	–	–	(237,299)	–	–	–	–	237,299	–	–	–	–
– Dividends	–	–	–	–	–	–	–	(98,368)	(98,368)	–	–	(98,368)
Total transactions with owners
(unaudited)	–	–	(237,299)	–	–	–	–	138,931	(98,368)	1,835,747	–	1,737,379
Balance at June 30, 2014	4,918,400	2,981,002	3,738,433	5,511,323	(2,115,428)	65,694	(166,658)	27,629,960	42,562,726	1,850,443	3,751,185	48,164,354

64 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY — CONTINUED

FOR THE SIX MONTHS ENDED JUNE 30, 2015

	Attributable to equity holders of the Company Perpetual Capital Future Statutory Investment Cash f ow Securities Share Share development common Translation revaluation hedge Retained issued by capital premium fund reserve fund reserve reserve reserve earnings Total the Company 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) (note 24a)	Non-controlling interests Perpetual Capital Securities issued by Subordinated a subsidiary Capital Notes Others Total RMB’000 RMB’000 RMB’000 RMB’000 (note 24b) (note 25)
Balance at January 1, 2015 Prof t for the period (unaudited) Other comprehensive (loss) (unaudited): – Fair value change of available-for-sale investments – Share of comprehensive income from associate – Cash f ow hedge reserve recognized – Exchange difference arising on translation of foreign operations Total comprehensive (loss) for the period (unaudited) Transactions with owners (unaudited) – Issuance of perpetual capital securities – Distribution paid to holders of perpetual capital securities – Appropriations to and utilization of reserves – Dividends Total transactions with owners (unaudited) Balance at June 30, 2015	4,918,400 2,981,002 1,659,447 5,930,111 (4,916,438) 140,185 (1,455,942) 29,469,081 38,725,846 2,521,456 – – – – – – – (50,626) (50,626) 132,896 – – – – – 99,709 – – 99,709 – – – – – – 22,637 – – 22,637 – – – – – – – 31,384 – 31,384 – – – – – (1,896,032) – – – (1,896,032) –	1,851,903 3,102 2,896,209 45,998,516 66,535 – (147,274) 1,531 – – – 99,709 – – – 22,637 – – 7,772 39,156 – – (441,256) (2,337,288) 66,535 – (580,758) (2,174,255) – – – 3,964,000 (66,184) – – (66,184) – – – – – – – (98,368) (66,184) – – 3,799,448 1,852,254 3,102 2,315,451 47,623,709
	– – – – (1,896,032) 122,346 31,384 (50,626) (1,792,928) 132,896 – – – – – – – – – 3,964,000 – – – – – – – – – – – – (656,675) 75,959 – – – 580,716 – – – – – – – – – (98,368) (98,368) –
	– – (656,675) 75,959 – – – 482,348 (98,368) 3,964,000
	4,918,400 2,981,002 1,002,772 6,006,070 (6,812,470) 262,531 (1,424,558) 29,900,803 36,834,550 6,618,352

Yanzhou Coal Mining Company Limited Interim Report 2015 65

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2015

Notes	Six months ended June 30, 2015 2014 RMB’000 RMB’000 (unaudited) (unaudited)
NET CASH (USED IN) FROM OPERATING ACTIVITIES NET CASH USED IN INVESTING ACTIVITIES Purchase of property, plant and equipment Purchase of intangible assets Increase in term deposits Increase in long term receivables Increase in investment in interest in an associate Decrease in restricted cash Proceeds on disposal of property, plant and equipment Increase in investment securities Increase in interest in a joint venture Acquisition of additional interests in joint operation 27 NET CASH FROM FINANCING ACTIVITIES Dividend paid Proceeds from bank borrowings Proceeds from other borrowings Proceeds from issuance of guaranteed notes Proceeds from issuance of perpetual capital securities Repayments of bank borrowings Repayment of contingent value rights shares Repayment of guarantee note Distribution paid to perpetual capital security holders Net increase in cash and cash equivalents CASH AND CASH EQUIVALENTS, AT BEGINING OF THE PERIOD Effect of foreign exchange rate changes CASH AND CASH EQUIVALENTS, AT END OF THE PERIOD BY BANK BALANCES AND CASH	(2,042,466) 409,735
	(2,157,259) (1,647,219) (137,489) (12,242) (451,767) (3,852,918) (56,729) – (264,560) (125,000) 176,448 32,642 7,151 7,029 (782,948) – (7,000) – (90,315) –
	(3,764,468) (5,597,708)
	(98,368) (98,368) 1,863,710 1,910,000 8,824 – 9,982,500 9,947,500 3,964,000 1,835,747 (4,775,596) (4,396,152) – (1,449,240) (5,000,000) – (66,184) –
	5,878,886 7,749,487
	71,952 2,561,514
	15,041,928 10,922,637 (17,148) 222,723
	15,096,732 13,706,874

66 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2015

1. GENERAL

Organization and principal activities

Yanzhou Coal Mining Company Limited (the “Company”) is established as a joint stock company with limited liability in the People’s Republic of China (the “PRC”). In April 2001, the status of the Company was changed to that of a Sinoforeign joint stock limited company. The Company’s A shares are listed on the Shanghai Stock Exchange (“SSE”), its H shares are listed on The Stock Exchange of Hong Kong (the “SEHK”), and its American Depositary Shares (“ADS”, one ADS represents 10 H shares) are listed on the New York Stock Exchange, Inc. The addresses of the registered offi ce and principal place of business of the Company are disclosed in the General Information to the interim report.

The Company 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 rail network that links the eight mines with the national rail network. The Company’s parent and ultimate holding company is Yankuang Group Corporation Limited (the “Parent Company”), a state-owned enterprise in the PRC.

Acquisitions and establishment of major subsidiaries

In 2006, the Company acquired 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 from a subsidiary of the Parent Company 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 Chemicals Company Limited (“Shanxi Tianhao”). In 2010, Shanxi Neng Hua acquired approximately 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 it has commenced production in 2008.

In 2004, the Company acquired 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 exploit and sale of coal in Juye coal fi eld. 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 RMB1.5 billion in 2010.

Yanzhou Coal Mining Company Limited Interim Report 2015 67

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

1. GENERAL – CONTINUED

Acquisitions and establishment of major subsidiaries – continued

The Company originally held 97% equity interest in Yanzhou Coal Yulin Power Chemical Co., Ltd. (“Yulin”). The Company acquired the remaining 3% equity interest and made further investment of RMB600,000,000 in Yulin in 2008.

In February 2009, the Company acquired a 74% equity interest in Shandong Hua Ju Energy Company Limited (“Hua Ju Energy”) from the Parent Company at a consideration of RMB593,243,000. Hua Ju Energy is a joint stock limited company established in the PRC with the principal business of 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 agreed to acquire 21.14% equity interest in Hua Ju Energy at a consideration of RMB173,007,000.

In 2009, the Company entered into a binding scheme implementation agreement with Felix Resources Limited (“Felix”), a corporation incorporated in Australia with shares listed on the Australian Securities Exchange (“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. This 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 Neng Hua 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. In 2011, the Company invested additional equity in the registered capital of Ordos of RMB2.6 billion. 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.

In 2010, the Company acquired 100% equity interest of Inner Mongolia Yize Mining Investment Co., Ltd (“Yize”) and other two companies at a 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. On September 30, 2014, Ordos acquired remaining 20% of non-controlling interests of Xintai with consideration of RMB680,287,000.

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 August 1, 2012.

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1. GENERAL – CONTINUED

Acquisitions and establishment of major subsidiaries – continued

The Company entered into a sales and purchases agreement on September 27, 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 December 30, 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. Yancoal International has four subsidiaries, 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 September 30, 2011.

On December 22, 2011 and March 5, 2012, the Company, Yancoal Australia Limited (“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 June 27, 2012. The ordinary shares and CVR shares of Yancoal Australia was listed on the ASX on June 28, 2012. On June 22, 2012, according to the merger agreement, the equity interest in Syntech and Premier Coal held by Yancoal Australia has been transferred to Yancoal International.

On April 23, 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 May 31, 2012.

In 2012, the Company entered into an agreement for investment in Shandong Coal Trading Centre Co., Limited (“Trading Centre”) with two 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. During the current period, Trading Centre has not yet commenced any business.

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1. GENERAL – CONTINUED

Acquisitions and establishment of major subsidiaries – continued

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 RMB7,136,536,000. In 2014, the Company made additional contribution of RMB224,460,000 to registered capital in proportion to its equity interest. As at June 30, 2015, 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. (“Rizhao”), to act as a coal blending, storage and distribution base in Rizhao Port. Upon completion of registration procedures in 2013, the Company contributed RMB153,000,000, which represents 51% equity interest of Rizhao.

On March 14, 2014, the company entered into a co-operative agreement withYancoal International to set up Zhongyin Finance Lease Company Limited (“Zhongyin Finance”) in Shanghai Pilot Free Trade Zone, to provide fi nance lease, lease consulation and guaranteed and commercial insurance service for fi nance lease business. The registration process is completed in May 20, 2014.

On May 8, 2014, the company invested RMB300,000,000 to set up a wholly-owned subsidiary of Shandong Zhong Yin Logistics Co., Ltd., mainly engaged in the business of sales of coal and procurement of coal mining machinery and equipment parts.

On November 17, 2014, the Company invested RMB100,000,000 to set up a wholly-owned subsidiary of Duanxin Investment Holding (Beijing) Company Limited, mainly engaged in the business of consultancy service of operation management and investment management. As at June 30, 2015, Duanxin Investment Holding (Beijing) Company Limited has not yet commenced any business.

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2. BASIS OF PREPARATION

The condensed interim consolidated fi nancial statements (the interim fi nancial statements) are for the six months ended June 30, 2015 and are presented in Renminbi (“RMB”), which is the functional currency of the parent company. They have been prepared in accordance with IAS 34 ‘Interim Financial Reporting’ (IAS 34) and with the applicable disclosure requirements of Appendix 16 of the Rules Governing the Listing of Securities on the SEHK. They do not include all of the information required in annual fi nancial statements in accordance with IFRSs, and should be read in conjunction with the consolidated fi nancial statements for the year ended December 31, 2014. The interim fi nancial statements are unaudited.

The interim fi nancial statements have been approved for issue by the Board of Directors on August 28, 2015.

3. SIGNIFICANT ACCOUNTING POLICIES

The interim fi nancial statements have been prepared in accordance with the accounting policies adopted in the Group’s most recent annual fi nancial statements for the year ended December 31, 2014.

The accounting policies adopted are consistent with those followed in the preparation of the Group’s annual fi nancial statements for the year ended December 31, 2014, except a number of accounting policies that are adopted by the Company and effective for annual periods beginning on or after January 1, 2015.

In the current period, the Group had applied, for the fi rst time, the new standards and interpretations and revised/ amended standards and interpretations (the new “IFRSs”) issued by the International Accounting Standards Board (the “IASB”) and the International Financial Reporting Interpretations Committee (the “IFRIC”) of the IASB, which are effective for the fi nancial year beginning on January 1, 2015. The new IFRSs relevant to these interim fi nancial statements are as follows:

Amendments to IFRSs Annual Improvements to IFRSs 2010-2012 Cycle Amendments to IFRSs Annual Improvements to IFRSs 2011-2013 Cycle

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

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

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4. SEGMENT INFORMATION

The Group is engaged primarily in the mining business. The Group is also engaged in the coal railway transportation business. The Company does not currently have direct export rights in the PRC and all of its export sales is made through China National Coal Industry Import and Export Corporation (“National Coal Corporation”), 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 of the Company’s subsidiaries and associates are engaged in trading and processing of mining machinery and the transportation business via rivers and lakes and fi nancial 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 of the Company’s subsidiaries are engaged in production of methanol and other chemical products, and invest in heat and electricity.

Gross revenue disclosed below is same as the turnover (total revenue).

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

Principal activities are as follows:

Coal 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 heat supply	–	Production and sales of methanol and electricity and related
		heat supply services

Segment results represents the results of 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.

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4. SEGMENT INFORMATION – CONTINUED

Segment information about these businesses is presented below:

INCOME STATEMENT

	For the six months ended June 30, 2015 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	16,472,325 156,455 1,515,178 – 18,143,958 107,697 28,967 325,553 (462,217) – 16,580,022 185,422 1,840,731 (462,217) 18,143,958

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

RESULT Segment results 1,997,830 13,513 195,557 – Unallocated corporate expenses Unallocated corporate income Share of loss of joint ventures (77,646) Share of prof t of associates 59,251 168,378 Interest income Interest expenses Prof t before income taxes Income taxes Prof t for the period	1,997,830 13,513 195,557 –	2,206,900 (1,208,229) 80,374 (77,646) 227,629 517,589 (1,502,540) 244,077 (242,546) 1,531

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4. SEGMENT INFORMATION – CONTINUED

INCOME STATEMENT

	For the six months ended June 30, 2014 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	30,004,950 215,413 713,026 – 30,933,389 134,509 30,137 326,154 (490,800) –
	30,139,459 245,550 1,039,180 (490,800) 30,933,389

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

RESULT Segment results 2,335,208 38,732 28,928 – Unallocated corporate expenses Unallocated corporate income Share of loss of joint ventures (188,592) Share of prof t of associates 17,503 81,737 Interest income Interest expenses Prof t before income taxes Income taxes Prof t for the period	2,335,208 38,732 28,928 –	2,402,868
		(1,174,944) 90 (188,592) 99,240 319,190 (1,120,423)
		337,429 33,723
		371,152

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5. SALES OF COAL AND TRANSPORTATION COSTS OF COAL

	For the six months ended June 30, 2015 2014 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	12,817,883 26,183,450 (254,412) (422,780)
	12,563,471 25,760,670
	3,654,442 3,821,500 (679,738) (748,527)
	2,974,704 3,072,973
	15,538,175 28,833,643

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

6. COST OF SALES AND SERVICE PROVIDED

	For the six months ended 30 June, 2015 2014 RMB’000 RMB’000
Materials Wages and employee benef ts Electricity Depreciation Land subsidence, restoration, rehabilitation and environmental costs Environmental protection Amortization of mining rights Other transportation cost Costs of traded coal Business tax and surcharges Others	1,038,941 1,524,115 2,586,030 3,650,597 255,308 333,330 1,052,495 1,173,790 788,181 694,091 43,115 6,061 394,669 579,551 4,258 7,358 5,651,060 15,548,891 372,719 271,027 677,767 1,144,380
	12,864,543 24,933,191

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7. OTHER INCOME

	For the six months ended 30 June, 2015 2014 RMB’000 RMB’000
Interest income Government grants Exchange gain, net Gain on change in fair value of investments in securities Others	517,589 319,190 190,988 98,036 80,314 56,381 246,210 – 184,099 305,498
	1,219,200 779,105

8. INTEREST EXPENSES

	For the six months ended June 30, 2015 2014 RMB’000 RMB’000
Interest expenses on: – borrowings wholly repayable within 5 years – borrowings not wholly repayable within 5 years – bills receivable discounted without recourse Less: interest expenses capitalized into construction in progress	1,122,376 1,008,137 390,120 324,419 5,649 –
	1,518,145 1,332,556 (15,605) (212,133)
	1,502,540 1,120,423

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9. PROFIT BEFORE INCOME TAXES

	For the six months ended June 30, 2015 2014 RMB’000 RMB’000
Prof t before income taxes has been arrived at after (crediting) charging: 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 Release of prepaid lease payments Loss (Gain) on disposal of property, plant and equipment Impairment loss recognised in respect of inventories Exchange gain, net Provision of impairment loss on accounts receivable and other receivables	1,720,231 1,591,314 394,669 579,551 11,344 6,441
	2,126,244 2,177,306
	9,572 9,387 11,074 (2,546) 137,060 113,657 (80,314) (56,381) 31,829 17,019

10. INCOME TAXES

	For the six months ended June 30, 2015 2014 RMB’000 RMB’000
Income tax: Current taxes Deferred taxes (note 22):	180,279 257,595 62,267 (291,318)
	242,546 (33,723)

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%.

Note: The Australian Minerals Resources Rent Tax (“MRRT”) legislation was enacted on 19 March 2012 and effective from 1 July 2012. According to the relevant provisions of the MRRT tax laws, subsidiaries in Australia are required to determine the starting base allowance on the balance sheet. Book value or market value approach can be selected in calculating the starting base and subsequently amortize within the prescribed useful life. Market value approach was selected for mines in Australia. Under the market value approach, base value is determined based on market value of the coal mines on 1 May 2010 and amortize based on the shorter of the life of mining project, mining rights and mining production. During 2013, the Australian Government released an exposure draft legislation which proposed to repeal the MRRT legislation. On 5 September 2014, the Minerals Resource Rent Tax Repeal and Other Measures Act 2014 received royal assent. Entities would not be required to pay MRRT commencing on 1 October 2014, accordingly, the current and deferred MRRT assets and liabilities have been derecognised in 2014.

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11. DIVIDENDS

	For the six months ended June 30, 2015 2014 RMB’000 RMB’000
Final dividend approved, RMB0.02 per share (2014: RMB0.02)	98,368 98,368

Pursuant to the annual general meeting held on May 22, 2015, a fi nal dividend in respect of the year ended December 31, 2014 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 June 30, 2015 and June 30, 2014 is based on the loss and profi t for the period of RMB50,626,000 and RMB587,235,000 and on 4,918,400,000 shares in issue during both periods.

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

On 31 December 2014, the Company’s subsidiary issued subordinated capital notes. Noteholders will be permitted to convert the subordinated capital notes into 1,000 Yancoal Australia Limited ordinary shares.

Diluted loss per share for the six months ended June 30, 2015 is the same as the basic loss per share as there is no dilutive effect of potential ordinary shares outstanding.

No diluted earnings per share have been presented for the period ended June 30, 2014, as there were no dilutive potential shares in issue.

13. RESTRICTED CASH/TERM DEPOSITS

At the balance sheet date, the restricted cash of PRC portion mainly represents the deposits paid for safety work as required by the State Administrative of work safety. Term deposits was pledged to certain banks as security for loans and banking facilities granted to the Group.

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14. BILLS AND ACCOUNTS RECEIVABLE

	At June 30, At December 31, 2015 2014 RMB’000 RMB’000
Accounts receivable Less: Impairment loss Total bills receivable Total bills and accounts receivable, net	2,449,312 2,029,449 (44,863) (13,697)
	2,404,449 2,015,752 4,154,529 5,068,353
	6,558,978 7,084,105

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 June 30, At December 31, 2015 2014 RMB’000 RMB’000
1-90 days 91-180 days 181-365 days Over 1 year	3,795,703 6,625,097 1,887,846 187,440 470,908 259,850 404,521 11,718
	6,558,978 7,084,105

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15. PREPAYMENTS AND OTHER RECEIVABLES

	At June 30, At December 31, 2015 2014 RMB’000 RMB’000
Advances to suppliers Prepaid relocation costs of inhabitants Advance to an associate Others	3,172,183 2,009,055 2,102,117 2,102,117 1,250,000 1,250,000 2,718,654 1,858,079
	9,242,954 7,219,251

16. INTANGIBLE ASSETS

	Potash mineral Coal Coal exploration Water reserves resources permit Technology licenses Others Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Cost At January 1, 2015 Exchange re-alignment Additions for the period At June 30, 2015 Accumulated amortization and impairment At January 1, 2015 Exchange re-alignment Provided for the period At June 30, 2015 Carrying values At June 30, 2015 At December 31, 2014	36,962,052 4,204,067 1,357,984 226,417 130,585 115,670 42,996,775 (1,074,724) (274,235) (85,448) (7,953) (382) (6,963) (1,449,705) 121,750 13,767 – – – 1,972 137,489
	36,009,078 3,943,599 1,272,536 218,464 130,203 110,679 41,684,559
	5,539,920 125,436 – – 181 43,689 5,709,226 (190,970) (7,953) – – (278) (2,291) (201,492) 394,669 – – 2,525 2,315 6,504 406,013
	5,743,619 117,483 – 2,525 2,218 47,902 5,913,747
	30,265,459 3,826,116 1,272,536 215,939 127,985 62,777 35,770,812
	31,422,132 4,078,631 1,357,984 226,417 130,404 71,981 37,287,549

At June 30, 2015, intangible assets with a carrying amount of approximately RMB10,044,846,000 (December 31, 2014: RMB13,045,169,000) have been pledged to secure the Group borrowings (note 21).

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17. PROPERTY, PLANT AND EQUIPMENT

	Freehold Plant, Tran- land Railway Mining machinery and sportation Construction in Australia Buildings structures structures equipment equipment in progress Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Cost At January 1, 2015 Exchange re-alignment Additions for the period Reclassif cation Transfer Written off Disposals for the period At June 30, 2015 Accumulated depreciation At January 1, 2015 Exchange re-alignment Reclassif cation Provided for the period Eliminated on disposals At June 30, 2015 Carrying values At June 30, 2015 At December 31, 2014	1,132,661 5,078,345 3,232,703 9,822,570 30,308,887 729,710 14,122,774 64,427,650 (71,822) (31,759) – (239,434) (605,609) – (91,193) (1,039,817) 1,865 1,522 – 193,702 395,349 211 1,810,447 2,403,096 – (1,408,417) 1,457,480 – (2,648,851) 2,599,788 – – – 2,537 – 226,828 382,829 103 (612,297) – – – – – – (556) – (556) (1,506) (3,837) – (9,903) (51,108) (6,570) – (72,924)
	1,061,198 3,638,391 4,690,183 9,993,763 27,781,497 3,322,686 15,229,731 65,717,449
	– 2,272,152 1,347,200 3,551,900 12,630,954 450,832 – 20,253,038 – (7,512) – (65,557) (206,967) – – (280,036) – (1,073,257) 937,197 – (1,413,148) 1,549,208 – – – 82,105 104,707 278,585 1,147,370 107,464 – 1,720,231 – (1,853) – (9,903) (37,051) (6,448) – (55,255)
	– 1,271,635 2,389,104 3,755,025 12,121,158 2,101,056 – 21,637,978
	1,061,198 2,366,756 2,301,079 6,238,738 15,660,339 1,221,630 15,229,731 44,079,471
	1,132,661 2,806,193 1,885,503 6,270,670 17,677,933 278,878 14,122,774 44,174,612

At June 30, 2015, property, plant and equipment with a carrying amount of approximately RMB1,319,956,000 (December 31, 2014: RMB3,134,300,000) have been pledged to secure bank borrowings of the Group (note 21).

At June 30, 2015, the carrying amount of property, plant and equipment held under fi nance leases of the group was RMB203,962,000 (December 31, 2014: RMB227,391,000).

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18. INVESTMENTS IN SECURITIES

The investment in securities represents security investments:

	At June 30, At December 31, 2015 2014 RMB’000 RMB’000
Available-For-Sale Equity Investments Investment in equity securities listed on the SSE – Stated at fair value through other comprehensive income Unlisted equity securities Investment in equity securities listed on the NEEQ – Stated at fair value through prof t and loss Other unlisted equity securities	382,350 249,404 1,029,158 – 139,348 139,360
	1,550,856 388,764

The investments in equity securities listed on the Shanghai Stock Exchange (“SSE”) and National Equities Exchange and Quotations System (“NEEQ”) are carried at fair value determined according to the quoted market prices in active market.

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.

During the period, the Company invested equity securities listed on the NEEQ, which are stated at fair value through profi t and loss, subject to a 5-year lock-up period.

19. BILLS AND ACCOUNTS PAYABLE

	At June 30, At December 31, 2015 2014 RMB’000 RMB’000
Accounts payable Bills payable	2,324,810 1,969,617 615,751 2,067,587
	2,940,561 4,037,204

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19. BILLS AND ACCOUNTS PAYABLE – CONTINUED

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

	At June 30, At December 31, 2015 2014 RMB’000 RMB’000
1-90 days 91-180 days 181-365 days Over 1 year	2,277,929 1,979,699 353,647 1,815,913 175,501 103,260 133,484 138,332
	2,940,561 4,037,204

The average credit period for account payable and pill payable is 90 days, the Group has fi nancial risk management policies in place to ensure that all payables are within the credit time frame.

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

	At June 30, 2015 RMB’000
At the beginning of period Exchange re-alignment Additional provision in the period Unwinding of discount Utilization of provision At the end of period Presented as: Current portion Non-current portion	3,430,007 (40,259) 181,405 5,307 (4,899) 3,571,561 2,894,563 676,998 3,571,561

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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21. BORROWINGS

	At June 30, At December 31, 2015 2014 RMB’000 RMB’000
Current liabilities Bank borrowings – Unsecured borrowings (i) – Secured borrowings (ii) Finance lease liabilities (iv) Guaranteed note (v) Non-current liabilities Bank borrowings – Unsecured borrowings (i) – Secured borrowings (ii) Loans pledged by machineries (iii) Finance lease liabilities (iv) Guaranteed notes (v) Total borrowings (i) Unsecured borrowings are repayable as follows:	4,327,904 5,597,568 2,403,665 233,953 41,296 40,585 9,986,667 4,999,583
	16,759,532 10,871,689 5,559,256 7,828,178 23,191,516 24,731,562 1,800,000 1,800,000 133,330 166,051 16,040,966 16,040,608
	46,725,068 50,566,399
	63,484,600 61,438,088

	At June 30, At December 31, 2015 2014 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	4,327,904 5,597,568 2,479,572 5,035,222 3,069,684 2,782,956 10,000 10,000
	9,887,160 13,425,746

At June 30, 2015, short-term borrowings are amounting to RMB1,527,040,000 (December 31, 2014: RMB2,827,850,000). One of the short-term borrowings, amounting to RMB917,040,000 (USD150,000,000) (December 31, 2014: RMB917,850,000 (USD150,000,000)), denominated in foreign currency with interest rates at three-months LIBOR plus a margin of 2.75%, approximately 3.08% per annum (December 31, 2014: threemonths LIBOR plus a margin of 2.75%, approximately 3.12% per annum). The remaining short-term borrowings carried interest at 5.40%-5.69% per annum (December 31, 2014: 5.10%-6.00% per annum).

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

The short-term borrowings of Yancoal International amounting to RMB947,623,000 (USD155,000,000) (December 31, 2014: RMB948,572,000 (USD155,000,000)) carried interest at three-month LIBOR plus a margin of 3.25% (December 31, 2014: interest at three-month LIBOR plus a margin of 3.25%).

Long-term borrowings are amounting to RMB6,497,684,000 (December 31, 2014: RMB8,727,592,000) with RMB1,841,014,000 (December 31, 2014: RMB1,821,146,000) payable within one year. Long-term borrowing of RMB3,740,084,000 (December 31, 2014: RMB4,145,798,000) carried interest at a range from 5.54%6.40% per annum (December 31, 2014: at a range from 5.54%-6.40% per annum). The other part of longterm borrowings, amounting to RMB2,757,600,000 (December 31, 2014: RMB2,760,648,000) carried interest at three-months LIBOR plus a margin of 1.20%-2.40% (December 31, 2014: three-months LIBOR plus a margin of 1.20%-3.45%). The loan of Heze Neng Hua amounting to RMB10,000,000 (December 31, 2014: RMB10,000,000) carried interest at the lending rate published by the People’s of Bank China (“PBOC”), approximately 5.40% (December 31, 2014: approximately 6.15%). Long-term borrowings are guaranteed by the Parent Company.

The long-term borrowing of Zhongyin Finance, which is denominated in foreign currency, is amounting to RMB904,813,000 (USD148,000,000) (December 31, 2014: RMB911,731,000) with RMB12,227,000 (USD2,000,000) payable within one year. The loan term is 36 months and carried interest at three-month LIBOR plus a margin of 2.60% (December 31, 2014: three-month LIBOR plus a margin of 2.60%).

(ii) Secured borrowings are repayable as follows:

	At June 30, At December 31, 2015 2014 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	2,403,665 233,953 5,198,398 5,736,318 3,903,667 3,090,294 14,089,451 15,904,950
	25,595,181 24,965,515

At June 30, 2015, secured borrowings of Yancoal Australia is amounting to RMB17,042,725,000. One of the secured borrowings obtained by the Group for the purpose of settling the consideration in respect of acquisition of Yancoal Resources amounting to RMB16,765,732,000 (USD2,740,000,000) (December 31, 2014: RMB16,761,370,000 (USD2,740,000,000)). Such borrowings carried interest at three-month LIBOR plus a margin of 2.8% per annum, approximately 3.07% per annum (December 31, 2014: three-month LIBOR plus a margin of 2.8% per annum, approximately 3.04% per annum).

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(ii) Secured borrowings are repayable as follows: – continued

Part of the borrowings arose from the acquisition of Gloucester amounting to RMB42,028,000 (USD6,869,000) (December 31, 2014: RMB64,347,000 (USD10,519,000)) carried interest at 5.68% (December 31, 2014: 5.68% per annum). It is pledged by bank deposit (note 13), intangible assets (note 16), and property, plant and equipment (note 17) and other assets in Yancoal Resources.

During the period, one additional short term secured borrowings, which amounted to RMB234,965,000 (AUD50,000,000) was obtained by Yancoal Australia. It was carried interest at BBSY rate plus 2.70% per annum, approximately 4.79% per annum and guaranteed by the Company.

At June 30, 2015, secured borrowings of the Company is amounting to RMB1,811,360,000 (December 31, 2014: RMB1,400,000,000). During the period, two additional secured borrowings which amounted to RMB611,360,000 (USD100,000,000) were obtained by the Company. Such borrowings were denominated in foreign currency with interest rate at six-month LIBOR plus a margin of 3.20%, approximately 3.61%. It was pledged by bank acceptances of the Company.

The remaining secured borrowings of RMB1,200,000,000 (December 31, 2014: RMB1,400,000,000), with RMB300,000,000 (December 31, 2014: RMB200,000,000) payable in one year, is carried interest rate 6.98% per annum (December 31, 2014: 7.04% per annum). The interest rate will be adjusted at each payment days in accordance with the benchmark of 5 years lending rate published by the PBOC plus 10%. It is guaranteed by the Company and; counter-guaranteed by the Parent Company and secured by 46.67% ordinary shares of Heze Neng Hua.

At June 30, 2015, secured borrowings of Yancoal International is amounting to RMB6,725,069,000 (USD1,100,000,000) (December 31, 2014: RMB6,731,799,000 (USD1,100,000,000)), with RMB1,834,110,000 (USD300,000,000) payable in one year. It was carried interest rate at three-month LIBOR plus a margin of ranged 1.55%-3.00%. It is guaranteed by the Parent Company and its stand by letter of credits.

Premier Coal Limited and Premier Holdings Pty., Ltd., the subsidiaries of the Company, signed a loan agreement with their client Synergy which carried with interest rate of 8.7% on October 2014. Synergy agrees to loan to Premier a portion of the Contract Price for every tonne of coal supplied by Premier to Synergy under the coal supply agreement during the loan period. It is secure by total assets of Premier Coal Limited including its interest in the Coal Mine. At June 30, 2015, the balance of the loan is RMB16,027,000 (AUD3,410,000) (December 31, 2014: RMB7,999,000 (AUD1,594,000)).

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(ii) Secured borrowings are repayable as follows: – continued

In November 2013, the Company’s subsidiary, Yancoal Australia, obtained two amendments to the loan agreement on future compliance for debt covenants in respect of certain bank borrowings amounting to RMB15,111 million (USD2,490 million) and RMB303.4 million (USD50 million), respectively, as of December 31, 2013. The amendments were obtained without any consideration paid to the lenders. The relevant covenants of the two borrowings are identical and are required to be tested half-yearly, with an initial test date of December 31, 2013. The amendments obtained deferred the initial test date of the fi nancial covenants to June 30, 2014 and reduced the interest cover ratio, and for the consolidated net worth covenant, to December 31, 2014.

In March, 2014, further amendments were obtained to defer the initial test date of the meeting minimum interest cover ratio requirements to June 30, 2015 and reduced the required minimum interest cover ratio. In October 2014, further amendments were obtained to defer the initial test date of the meeting minimum interest cover ratio to June 30, 2016.

The original covenants required Yancoal Australia to maintain the following as of and/or for the year ended December 31, 2013: (i) a gearing ratio not exceeding 0.9, (ii) interest cover ratio of not less than 1.5 and (iii) consolidated net worth not less than AUD2,000,000,000. Yancoal Australia believed that it could not meet the above debt covenants and requested amendments in November 2013 and October 2014, respectively.

Under the amendments received from the lenders, the covenants have been revised as follows:

The gearing ratio of Yancoal Australia will not exceed 0.9 on June 30, 2014 and 0.8 thereafter;
The interest coverage ratio of Yancoal Australia will not be less than 1.15 for the 12 month period ending on each test date on and from 30 June 2016; and
The consolidated net worth of Yancoal Australia is not less than AUD1,600,000,000 on each test date on and after December 31, 2014.

The fi nancial position of Yancoal Australia as of and for the period ended June 30, 2015 did not meet the above debt covenants requirements if required. The actual covenants calculations as of and for the period ended June 30, 2015 as calculated from the unaudited fi nancial statements of Yancoal Australia, which are prepared in accordance with the Australian Accounting Standards and also complied with IFRS, would have been: (i) a gearing ratio of 0.65 (December 31, 2014: 0.59); (ii) interest cover ratio of-0.33 (December 31, 2014: 0.74); and (iii) consolidated net worth of AUD2,166,088,000 (December 31, 2014: AUD2,487,188,000).

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

	At June 30, At December 31, 2015 2014 RMB’000 RMB’000
Minimum payments Within one year More than one year, but not exceeding two years More than two years, but not more than f ve years Less: Future f nance charges Present value of payments	121,805 121,472 121,805 121,472 1,944,953 2,006,188
	2,188,563 2,249,132 (388,563) (449,132)
	1,800,000 1,800,000
	At June 30, At December 31, 2015 2014 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 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	– – 200,000 – 1,600,000 1,800,000
	1,800,000 1,800,000 – –
	1,800,000 1,800,000

At June 30, 2015, a loan of RMB1,800,000,000 (December 31, 2014: RMB1,800,000,000) carried interest at lending rate of 3-5 years loan published by the PBOC plus a margin of 4%, approximately 9.25% per annum (December 31, 2014: approximately 10%) and is pledged by machineries of the Group.

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(iv) Finance lease liabilities are repayable as follows:

	At June 30, At December 31, 2015 2014 RMB’000 RMB’000
Minimum payments Within one year More than one year, but not exceeding two years More than two years, but not more than f ve years Less: Future f nance charges Present value of payments	50,900 54,268 51,052 54,425 95,800 129,560
	197,752 238,253 (23,126) (31,617)
	174,626 206,636
	At June 30, At December 31, 2015 2014 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 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	41,296 40,585 42,555 53,052 90,775 112,999
	174,626 206,636 (41,296) (40,585)
	133,330 166,051

Finance lease liabilities of RMB174,626,000 (AUD37,160,000) (December 31, 2014: RMB206,636,000 (AUD41,184,000)) was obtained from the acquisition of Gloucester in 2012, which carried interest at 5.09% per annum (December 31, 2014: 5.16% per annum).

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21. BORROWINGS – CONTINUED

(v) Guaranteed notes are detailed as follows:

	At June 30, At December 31, 2015 2014 RMB’000 RMB’000
Guaranteed notes denominated in: RMB repayable within one year USD repayable within two to f ve years RMB repayable within two to f ve years USD repayable after f ve years RMB repayable after f ve years	9,986,667 4,999,583 2,751,165 2,753,918 2,931,900 2,928,950 3,362,534 3,365,899 6,995,367 6,991,841
	26,027,633 21,040,191

The above USD guaranteed notes were issued by a subsidiary of the Company on May 16, 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. At June 30, 2015, the notes are amounting to RMB6,113,699,000 (December 31, 2014: RMB6,119,817,000). The notes are unconditionally secured by the Company and the respective security is non-cancellable. The notes have been issued and sold in Hong Kong Exchange and Clearing Limited to institutional investors. For the period ended June 30, 2015, there was no redemption on the notes.

In 2012, with the approval from China Securities Regulatory Commission, the Company is allowed to issue RMB notes in the PRC, RMB notes with par value of RMB300,167,000 and RMB4,699,833,000 was 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 June 30, 2015, RMB notes of RMB4,968,000,000 (December 31, 2014: RMB4,965,000,000) included notes of RMB3,971,800,000 (December 31, 2014: RMB3,969,800,000) with a maturity period of ten years and interest rate of 4.95% per annum and notes of RMB996,200,000 (December 31, 2014: RMB995,200,000) with a maturity period of fi ve years and interest rate of 4.20% per annum. For the period ended June 30, 2015, there was no redemption on the notes.

In 2014, with the approval from China Securities Regulatory Commission, the Company is allowed to issue RMB notes in the PRC at interest rate of 5.92% per annum with maturity period of 5 years and 6.15% per annum with maturity period of 10 years, with par value amounting to RMB1,950,000,000 and RMB3,050,000,000 respectively. The issuance amount of the notes were RMB1,930,500,000 and RMB3,019,500,000 respectively. At June 30, 2015, RMB notes of RMB4,959,267,000 included notes of RMB1,935,700,000 (December 31, 2014: RMB1,933,750,000) with maturity period of 5 years and RMB3,023,567,000 (December 31, 2014: RMB3,022,041,000) with maturity period of 10 years respectively. For the period ended June 30, 2015, there was no redemption on the notes.

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(v) Guaranteed notes are detailed as follows: – continued

In 2014, with the approval from China Securities Regulatory Commission, the Company is allowed to issue RMB notes in the PRC with par value of RMB5,000,000,000. Such RMB notes were fully repaid during the period (December 31, 2014: RMB4,999,583,000).

In 2013, with the approval from the National Association of Financial Market Institutional Investors, the Company was allowed to issue RMB short-term notes in the PRC. During the period, the Company has completed the issuance of the 2015 fi rst tranche of short-term notes with par value of RMB5,000,000,000 which had a maturity period of 1 year and interest rate of 5.19% per annum. At June 30, 2015, the short-term notes amounted to RMB4,993,333,000. For the period ended June 30, 2015, there was no redemption on the short-term note.

During the period, with the approval from the National Association of Financial Market Institutional Investors, the Company was allowed to issue RMB super-short-term notes with an aggregate amount of RMB20,000,000,000 in the PRC. During the period, the Company issued two super-short-term notes with an aggregate amount of RMB5,000,000,000. Both super-short-term notes had a maturity period of 270 days and interest rate of 4.20% per annum. At June 30, 2015, those super-short-term notes amounted to RMB4,993,334,000. For the period ended June 30, 2015, there was no redemption on the super-short-term notes.

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22. DEFERRED TAXATION

	Fair value Temporary adjustment differences on Available- Accelerated on mining income and Cash f ow for-sale tax rights (coal expenses hedge investment depreciation reserves) recognized Tax losses reserve Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Balance at January 1, 2014 Exchange re-alignment (Charge) credit redit to other comprehensive income Credit (charge) to the consolidated income statement At December 31, 2014 and January 1, 2015 Exchange re-alignment Charge to other comprehensive income Credit (charge) to the consolidated income statement (note 10) At June 30, 2015	(23,455) (522,019) (5,423,638) 895,770 2,365,673 346,310 (2,361,359) – 6,481 237,010 (104,443) (284,403) (71,300) (216,655) (19,137) – – – – 394,986 375,849 – 350,234 (110,570) (12,019) 99,715 – 327,360
	(42,592) (165,304) (5,297,198) 779,308 2,180,985 669,996 (1,874,805) – 9,267 164,673 10,742 (198,095) (68,897) (82,310) (33,237) – – – – (24,262) (57,499) – 44,934 (58,887) (1,001,177) 1,077,397 – 62,267
	(75,829) (111,103) (5,191,412) (211,127) 3,060,287 576,837 (1,952,347)

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.

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

	At June 30, At December 31, 2015 2014 RMB’000 RMB’000
Deferred tax assets Deferred tax liabilities	5,080,564 5,679,608 (7,032,911) (7,554,413)
	(1,952,347) (1,874,805)

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

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23. SHAREHOLDERS’ EQUITY

Share capital

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

		Foreign Domestic invested shares invested shares State legal H shares person shares (including H shares (held by the represented Parent Company) A shares by ADS) Total

Number of shares At December 31, 2014 and June 30, 2015 Registered, issued and fully paid At December 31, 2014 and June 30, 2015 Each share has a par value of RMB1.		2,600,000,000 360,000,000 1,958,400,000 4,918,400,000
		(RMB’000) (RMB’000) (RMB’000) (RMB’000) 2,600,000 360,000 1,958,400 4,918,400

There is no movement in share capital during the period.

Reserves

Future Development Fund

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

From 2008 onwards, Shanxi Tianchi is required to transfer an additional amount at RMB5 per tonne of raw coal mined as coal mine transformation fund. Pursuant to the Shanxi Provincial Government’s decision, coal mine transformation fund would be suspended since August 1, 2013.

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 July 1, 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 January 1, 2008.

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23. SHAREHOLDERS’ EQUITY – CONTINUED

Reserves – continued

Future Development Fund – continued

In accordance with the regulations of the State Administration of Work Safety, the Company has a commitment to incur RMB8 (Shanxi Tianchi: RMB50, Xintai and Ordos: increased from RMB7 to RMB15 from February 1, 2012 onwards) for each tonne of raw coal mined from May 1, 2004 which will be used for enhancement of safety production environment and improvement of facilities (“Work Safety Cost”). From February 1, 2012 onwards, the work safety cost increased to RMB15 per tonne. In prior years, the work safety expenditures are recognized only when acquiring the fi xed assets or incurring other work safety expenditures. The Company, Heze, Shanxi Tianchi, Xintai and Ordos make appropriation to the future development fund in respect of unutilized Work Safety Cost from 2008 onwards. In accordance with the regulations of the State Administration of Work Safety, the Company’s subsidiaries, Hua Ju Energy, Shanxi Tianhao and Yulin, have a commitment to incur Work Safety Cost at the rate of: 4% of the actual 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 June 30, 2015 was RMB351,530,000 (December 31, 2014: RMB1,611,120,000).

Statutory Common Reserves Fund

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

to make good losses in previous years; or
to convert into capital, provided such conversion is approved by a resolution at a shareholders’ general meeting and the balance of the statutory common reserve fund does not fall below 25% of the registered capital.

Retained earnings

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

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

The Company’s distributable reserve as at June 30, 2015 is the retained earnings computed under IFRS which amounted to approximately RMB30,928,204,000 (December 31, 2014: RMB30,419,601,000, the retained earnings computed under IFRS).

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24. PERPETUAL CAPITAL SECURITIES

	Perpetual capital Perpetual capital securities issued by securities issued the Company by a subsidiary Total RMB’000 RMB’000 RMB’000 (note a) (note b)
At January 1, 2015 Issuance of perpetual capital security Prof t attributable to holders of perpetual capital security Distribution paid to holders of perpetual capital security At June 30, 2015	2,521,456 1,851,903 4,373,359 3,964,000 – 3,964,000 132,896 66,535 199,431 – (66,184) (66,184) 6,618,352 1,852,254 8,470,606

a) The Company issued 6.8% perpetual capital securities with par value of RMB1,500,000,000 and RMB1,000,000,000 on September 19, 2014 and November 17, 2014 respectively. Coupon payments of 6.8% per annum on the perpetual capital securities are paid in arrears and can be deferred at the discretion of the Group. The perpetual capital securities have no fi xed maturity and are redeemable at the discretion of the Group at their principal amounts together with any accrued, unpaid or deferred coupon interest payments. In addition, while any coupon payments are unpaid or deferred, the Company undertakes not to declare, pay any dividends nor to make any distributions or similar periodic payments in respect of, or repurchase, redeem or otherwise acquire any securities of lower or equal rank. Since the perpetual capital security does not include any payment of cash or other contractual obligation of fi nancial instrument, it is categorized as equity under IFRS.

The Company issued 6.50% and 6.19% perpetual capital securities with par value of RMB2,000,000,000 and RMB2,000,000,000 on April 10, 2015 and April 30, 2015 respectively. Coupon payments of 6.50% and 6.19% per annum, which will be reset every 3 years, on the perpetual capital securities are paid in arrears and can be deferred at the discretion of the Group. Those perpetual capital securities have no fi xed maturity and are redeemable at the discretion of the Group at their principal amounts together with any accrued, unpaid or deferred coupon interest payments. In addition, while any coupon payments are unpaid or deferred, the Company undertakes not to declare, pay any dividends nor to make any distributions or similar periodic payments in respect of, or repurchase, redeem or otherwise acquire any securities of lower or equal rank. Since the perpetual capital security does not include any payment of cash or other contractual obligation of fi nancial instrument, it is categorized as equity under IFRS.

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24. PERPETUAL CAPITAL SECURITIES – CONTINUED

b) On May 22, 2014, Yancoal International Trading Co., Limited issued 7.2% Perpetual Capital Securities with par value of USD300,000,000 (“Perpetual capital securities”) which is guaranteed by the Company. Coupon payments of 7.2% per annum on the perpetual capital securities are paid semi-annually in arrears and can be deferred at the discretion of the Group. The perpetual capital securities have no fi xed maturity and are redeemable at the discretion of the Group on or after May 22, 2016 at their principal amounts together with any accrued, unpaid or deferred coupon interest payments. In addition, while any coupon payments are unpaid or deferred, the Group undertakes not to declare, pay any dividends nor to make any distributions or similar periodic payments in respect of, or repurchase, redeem or otherwise acquire any securities of lower or equal rank. The securities were listed and traded on the Hong Kong Stock Exchange and sold to professional investors only on May 23, 2014. Since the perpetual capital security does not include any payment of cash or other contractual obligation of fi nancial instrument, it is categorized as equity under IFRS.

25. SUBORDINATED CAPITAL NOTES

On 31 December 2014, Yancoal SCN Limited, a wholly owned subsidiary of Yancoal Australia issued 18,005,102 Subordinated Capital Notes (“SCN”) at US$100 each. Each SCN is convertible into 1,000 Yancoal Australia ordinary shares and is traded on ASX. The distribution rate is set at 7% per annum, with interest will be paid half a year at Yancoal Australia’s discretion.

SCN do not have any fi xed maturity date and do not have to be redeemed except in a winding up of the Issuer or Yancoal Australia. Conversion occurs at a fi xed price so the value of the Yancoal Australia ordinary shares issued on conversion may be more or less than the face value of the SCN converted. Note holders will be permitted to convert the SCN into Yancoal Australia ordinary shares after 40 days until the 30 year conversion period ends. The SCN will be initially convertible into Yancoal Australia ordinary shares at a conversion price of US$0.10 per share. Almost all the notes were purchased by the Company and only RMB3,102,000 of the note is issued to other third parties. The SCN do not contain any contractual obligation to pay cash or other fi nancial assets in accordance with IFRS, they are classifi ed as equity.

26. FAIR VALUES

The fair value of available-for-sales investment is 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 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.

The directors consider that the carrying amounts of fi nancial assets and fi nancial liabilities recorded at amortized cost in the consolidated fi nancial statements approximate their fair values.

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CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

26. FAIR VALUES – CONTINUED

Fair values of fi nancial assets and fi nancial liabilities are determined as follows:

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

	At June 30 Level 1 Level 2 Level 3 Total RMB’000 RMB’000 RMB’000 RMB’000
2015 Assets Available-for-sale investments – Investments in securities listed on the SSE (stated at fair value through other comprehensive income) – Investments in securities listed on the NEEQ (stated as fair value through prof t and loss) Derivative f nancial instruments – Forward foreign exchange contracts – Royalty receivable (i)	382,350 – – 382,350 1,029,158 – – 1,029,158 – 1,175 – 1,175 – – 954,989 954,989 1,411,508 1,175 954,989 2,367,672

In current period, there are no change in categories between level 1 and level 2 and no movement from or into level 3.

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26. FAIR VALUES – CONTINUED

(i) Royalty receivable

	June 30, 2015 RMB’000
As at January 1 Cash received Unwinding discount Exchange re-alignment Change in fair value As at June 30 Current portion Non-current portion	999,064 (42,476) 50,789 (63,994) 11,606 954,989 84,786 870,203 954,989

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 assets has been determined to have a fi nite life being the life of the Middlemount and is measured at fair value basis.

The royalty receivable is measured based on management expectations of the future cash fl ows with the remeasurement recorded in the 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). Change in fair value is included in selling, general and administrative expenses.

27. ACQUISITION OF ADDITIONAL INTERESTS IN JOINT OPERATION

The Australia subsidiaries of the Group originally held 80% equity interests in Moolarben joint operation. On March 30, 2015, the Group acquired additional 1% equity interests in Moolarben joint operation from another venturer at a consideration of AUD19.3 million. Upon completion of the acquisition, the Group held 81% equity interest in Moolarben joint operation.

Under the shareholders agreement, the 81% equity interest held in Moolarben remained classifi ed as a joint operation.

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28. RELATED PARTY TRANSACTIONS

Balances and transactions with related party

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.

	At June 30, At December 31, 2015 2014 RMB’000 RMB’000
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 – Associates Other payables and accrued expenses – Parent Company and its subsidiaries – Associates	409,379 545,329 195,668 160,660 197,848 224,151 112,770 116,883 960,779 1,037,193 12,622 –

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

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CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

28. RELATED PARTY TRANSACTIONS – CONTINUED

Balances and transactions with related party – continued

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

	Six months ended June 30, 2015 2014 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 Coal processing service	595,201 1,388,034 58,194 60,906 246,289 195,856 5,304 100,862 2,009 22,863 254,948 514,441 84,824 83,514 91,498 100,628 4,671 6,098 78,482 160,631 21,390 –

Expenditures for social welfare and support services (excluding medical and child care expenses) are RMB91,498,000 and RMB100,628,000 for each of the six months period ended June 30, 2015 and 2014. These expenses will be negotiated with and paid by the Parent Company each year.

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

As at June 30, 2015, the Company has deposited RMB1,173,520,000 (December 31, 2014: RMB927,255,000) to the Company’s associate, Yan Kuang Group Finance Company Limited. The interest income received during the period amounted to RMB2,195,000 (2014: RMB4,108,000). No fi nance cost paid during the period (2014: Nil).

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.

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28. RELATED PARTY TRANSACTIONS – CONTINUED

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

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

	Six months ended June 30, 2015 2014 RMB’000 RMB’000
Trade sales Trade purchases Material balances with other state-controlled entities are as follows:	718,148 2,676,170
	196,948 899,862
	At June 30, At December 31, 2015 2014 RMB’000 RMB’000
Amounts due to other state-controlled entities Amounts due from other state-controlled entities	206,827 201,797
	106,996 440,387

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.

Balances and transactions with joint ventures

	At June 30, At December 31, 2015 2014 RMB’000 RMB’000
Due from a joint venture	1,644,157 1,705,757

The amount due from a joint venture is unsecured and interest is calculated at commercial rate, interest received by the Group in the current year amounting to RMB55,647,076 (six months ended June 30, 2014: RMB51,142,000).

During the current period, the sales of coal from subsidiaries of the Group in Australia to the Group’s jointly ventures amounted to Nil (six months ended June 30, 2014: RMB373,738,000).

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CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

28. RELATED PARTY TRANSACTIONS – CONTINUED

Compensation of key management personnel

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

	Six months ended June 30, 2015 2014 RMB’000 RMB’000
Directors’ fee Salaries, allowance and other benef ts in kind Retirement benef t scheme contributions	260 260 3,459 3,302 302 565
	4,021 4,127

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

29. COMMITMENTS

	At June 30, At December 31, 2015 2014 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 Exploration and evaluation expenditure – share of joint operations	2,148,292 2,725,021 35,804 5,515 5,259 1,382
	2,189,355 2,731,918

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 June 30, 2015, the Group is committed to further make security deposit of RMB1,538 million (December 31, 2014: RMB1,584 million).

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CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

30. RETIREMENT BENEFITS

Qualifying employees of the Company are entitled to 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 October 24, 2014, the monthly contribution rate is at 20% (2014: 20%) of the total monthly basic salaries and wages of the Company’s employees for the period from January 1, 2015 to December 31, 2017. Other welfare benefi ts will be provided by the Parent Company, which will be reimbursed by the 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. During the year, contributions paid and payable by the subsidiaries pursuant to this arrangement were insignifi cant to the Group. The Group’s overseas subsidiaries pay fi xed contribution as pensions under the laws and regulations of the relevant countries.

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

31. HOUSING SCHEME

The Parent Company is responsible for providing accommodation to its employees and the domestic employees of the Company. The Company and the Parent Company share the incidental expenses relating to the accommodation at a negotiated amount for each of the six months ended June 30, 2015 and 2014. Such expenses, amounting to RMB58,310,000 and RMB68,500,000 for each of the six months ended June 30, 2015 and 2014, have been included as part of the social welfare and support services expenses summarized in note 28.

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

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CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

32. POST BALANCE SHEET EVENT

Acquisition of Donghua Heavy Industry

In July, 2015, the Company and the Parent Company approved an Equity Transfer Agreement. Pursuant to the Equity Transfer Agreement, the Company agreed to acquire from the Parent Company 100% of the equity interest in Donghua Heavy Industry held by the Parent Company with a consideration of RMB676,045,800. Commencing from the completion date, Donghua Heavy Industry becomes a wholly-owned subsidiary of the Company. In January 2013, the Parent Company through its wholly-owned subsidiary Yankuang Donghua Group Co., Ltd., solely set up Donghua Heavy Industry. Donghua Heavy Industry is principally engaged in mining, design, manufacturing, installation, maintenance and sales of mechanical and electrical equipment and accessories, etc. The Acquisition is expected to stimulate synergy between the Company’s and the Parent Company’s operation and also facilitate the reduction of connected transactions between the Company and the Parent Company. As of the reporting date, the Acquisition is completed.

33. OPERATING LEASE COMMITMENTS

	At June 30, At December 31, 2015 2014 RMB’000 RMB’000
Within one year More than one year, but not more than f ve years	228,785 152,981 260,938 132,547
	489,723 285,528

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.

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CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

34. CONTINGENT LIABILITIES

(i) Guarantees

At June 30,
At December 31,
2015
2014
RMB’000
RMB’000

(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
Guarantees provided in respect of land acquisition
(b)
Joint ventures
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

136,538
136,080
795,474
979,025
457,989
171,892
311,705
–
2,500
–
–
528,262
–
46,487

1,704,206
1,861,746

(ii) The Australian Taxation Offi ce (“ATO”) has undertaken an audit of certain matters in the Company’s tax fi lings for the year ended 31 December, 2009, 2010 and 2011. These matters remain in progress and steps are being taken to fi nalise them.
(iii) Yancoal Australia will provide fi nancial support to joint venture, Middlemount Coal Pty Ltd, confi rming that Yancoal Australia will not demand the repayment of any loan due from Middlemount, expect to the extent that Middlemount agrees otherwise provided in the loan agreement; and provide fi nancial support to Middlemount to enable it to meet its debts as and when they become due and payable, by way of new shareholder loans in proportion to its share of the net assets of Middlemount. The letter of support will remain in force whilst Yancoal Australia is a shareholder of Middlemount or until notice of not less than 12 months is provided or such shorter period as agreed by Middlemount.
(iv) The Company was sued by Zhongxin Daxie Fuel Co., Ltd. (“Zhongxin Daxie”) at the Shandong Provincial Higher People’s Court for not performing the duty of delivering goods pursuant to the Coal Sales Contract. It requested the termination of the Coal Sales Contract signed by both sides, the return of payments for goods and compensation for economic losses of RMB163.6 million in total. Zhongxin Daxie’s claim was rejected by the fi rst instance judgment of the Shandong Provincial Higher People’s Court. On June 30, 2014, the Company received the Notice of the Decision on Appeal from the Supreme People’s Court of the People’s Republic of China (the “Supreme Court”). As at report date, the case is still being tried in court and has not yet been heard.

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CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

SUPPLEMENTAL INFORMATION

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

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

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

(1) Future development fund and work safety cost

(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 charged 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 charged to expenses when acquired.

(2) Consolidation using acquisition method under IFRS and using common control method under PRC GAAP

(2a) 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 their assets and liabilities 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 entities above are under the common control of the Parent Company, their assets and liabilities of are required to be included in the consolidated balance sheet of the Group at historical cost. The difference between the historical cost of their assets and liabilities acquired and the purchase price paid is recorded as an adjustment to shareholders’ equity.

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

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CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

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

(4) Reversal of impairment loss on intangible assets in Yancoal Australia

(4a) Under IFRS, the reversal of impairment loss on mining reserves was classifi ed as other income in income statement.
Under PRC GAAP, no reversal of impairment loss on mining reserves was recognised.

(5) The perpetual capital security issued by the Company is classifi ed as equity attributable to shareholders under PRC GAAP.

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

Net income
attributable to
Net assets
equity holders
attributable to
of the Company
equity holders
For six months
of the Company
ended June 30,
As at June 30,
2015
2015
RMB’000
RMB’000

As per condensed f nancial statements prepared under IFRS
Impact of IFRS adjustments in respect of:
– transfer to future development fund which is charged
to income before income taxes
– reversal of work safety cost
– fair value adjustment and related amortization
– goodwill arising from acquisition of Jining II,
Railway Assets, Heze, Shanxi Group and Hua Ju Energy,
Yangcun Coal Mine and Beisu Coal Mine
– deferred tax
– perpetual capital security
– reversal of impairment loss on intangible assets
in Yancoal Australia
– others
As per f nancial statements prepared under PRC GAAP

(50,626)
36,834,550
758,537
–
(24,009)
(475,433)
5,288
(153,311)
–
(1,240,695)
(181,651)
101,502
132,896
6,618,316
–
(657,901)
(11,222)
250,972

629,213
41,278,000

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

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CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONSOLIDATED BALANCE SHEET

For the six months ended 30 June 2015

Prepared by: Yanzhou Coal Mining Company Limited ITEMS NOTES	Unit: RMB’000 30 June 2015 1 January 2015
Current assets Cash and cash equivalents VI.1 Transaction settlement funds Loans to other banks or f nancial institutions Financial assets at fair value through prof t or loss VI.2 Financial assets derivatives (if necessary) Notes receivable VI.3 Accounts receivable VI.4 Advances to suppliers VI.5 Insurance premium receivable Reinsurance premium receivable Reserves for reinsurance contract receivable Interests receivable Dividends receivable Other receivables VI.6 Financial assets purchased with agreement to re-sale Inventories VI.7 Held-to-sale assets Non-current assets due within one year VI.8 Other current assets VI.9 Total current assets Non-current assets Loans and advances to customers Available-for-sale f nancial assets VI.10 Held-to-maturity investment VI.11 Long-term receivables VI.12 Long-term equity investments VI.13 Investment properties Fixed assets VI.14 Construction in progress VI.15 Construction materials Disposal of f xed assets Productive biological assets Oil and gas assets Intangible assets VI.16 Research and development expenses Goodwill VI.17 Long-term prepayments Deferred tax assets VI.18 Other non-current assets VI.19 Total non-current assets Total assets	20,844,121 20,526,075 – – – – 1,029,158 – – – 4,154,529 5,068,353 2,404,449 2,015,752 3,129,808 1,971,564 – – – – – – 103,480 53,403 165,873 – 696,586 648,847 – – 1,920,995 1,569,913 – – 2,894,165 1,743,254 3,504,951 3,287,107
	40,848,115 36,884,268
	– – 521,698 388,763 – 1,250,000 236,461 234,914 3,359,363 3,086,497 – – 28,073,964 29,156,814 29,625,149 28,710,049 26,216 20,033 – – – – – – 21,199,587 22,518,822 – – 971,247 992,053 36,992 39,476 6,086,336 6,797,493 1,005,893 1,056,016
	91,142,906 94,250,930
	131,991,021 131,135,198

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

The fi nancial statements from page 108 to page 121 are signed by the following persons-in charge.

Head of the Company: Li Xiyong Chief Financial Offi cer: Wu Yuxiang Head of Accounting Department: Zhao Qingchun

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CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONSOLIDATED BALANCE SHEET – CONTINUED

For the six months ended 30 June 2015

CONSOLIDATED BALANCE SHEET – CONTINUED For the six months ended 30 June 2015
Prepared by: Yanzhou Coal Mining Company Limited ITEMS NOTES	Unit: RMB’000 30 June 2015 1 January 2015
Current liabilities: Short-term borrowings VI.21 Borrowings from central bank Receipt of deposits and deposits from other banks Loans from other banks or f nancial institutions Financial liabilities at fair value through prof t or loss VI.22 Financial liability derivatives (if necessary) Notes payable VI.23 Accounts payable VI.24 Advances from customers VI.25 Funds from selling out and repurchasing f nancial assets Fee and commission payable Employee benef ts payable VI.26 Taxes payable VI.27 Interest payable VI.28 Dividends payable Other payable VI.29 Reinsured accounts payable Reserves for insurance contract Funds from securities trading agency Funds from underwriting securities agency Held-to-sale liabilities Non-current liabilities due within one year VI.30 Other current liabilities VI.9 Total current liabilities Non-current liabilities Long-term borrowings VI.31 Bonds payable VI.32 Including: preferred shares perpetual bonds Long-term payable VI.33 Long-term employee benef t payable VI.34 Special payables Contingent liabilities VI.35 Deferred revenue VI.36 Deferred tax liabilities VI.18 Other non-current liabilities VI.37 Total non-current liabilities Total liabilities Shareholders’ Equity Share capital VI.38 Other equity instrument VI.39 Including: preferred shares perpetual bonds Capital reserves VI.40 Less: Treasury shares Other comprehensive income VI.41 Special reserves VI.42 Surplus reserves VI.43 General risk reserves Retained earnings VI.44 Total equity attributable to shareholders of the Company Minority interest VI.45 Total shareholder’s equity Total liabilities and shareholder’s equity	1,762,005 2,827,850 – – – – – – – 664 – – 617,957 2,102,358 2,507,146 2,125,594 788,434 798,437 – – – – 952,496 872,079 -83,794 -193,152 778,352 957,773 91,168 – 4,681,008 5,721,476 – – – – – – – – – – 5,603,622 3,632,943 12,990,353 8,405,051
	30,688,747 27,251,073
	28,750,817 32,547,502 16,040,966 16,040,608 – – – – 2,454,786 2,460,272 8,812 7,563 – – 860,519 766,010 53,376 57,509 7,926,606 8,365,210 13,461 –
	56,109,343 60,244,674
	86,798,090 87,495,747
	4,918,400 4,918,400 6,449,000 2,485,000 – – 6,449,000 2,485,000 1,285,991 1,285,991 – – -7,709,464 -5,954,077 1,124,876 1,785,012 5,976,094 5,900,135 – – 29,233,103 28,778,217
	41,278,000 39,198,678 3,914,931 4,440,773
	45,192,931 43,639,451
	131,991,021 131,135,198

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

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CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

BALANCE SHEET OF THE PARENT COMPANY

For the six months ended 30 June 2015

Prepared by: Yanzhou Coal Mining Company Limited ITEMS NOTES	Unit: RMB’000 30 June 2015 1 January 2015
Current assets: Cash and cash equivalents Financial assets at fair value through prof t or loss Financial assets derivatives (if necessary) Notes receivable XV.1 Accounts receivable Advances to suppliers Interest receivables Dividend receivables Other receivables XV.2 Inventories Held-to-sale assets Non-current assets due within one year Other current assets Total current assets Non-current assets: Available-for-sale f nancial assets Held-to-maturity investments Long-term receivables Long-term equity investments XV.3 Investment properties Fixed assets Construction in progress Construction materials Disposal of f xed assets Productive biological assets Oil and gas assets Intangible assets Research and development expenses Goodwill Long-term deferred expenses Deferred tax assets Other non-current assets Total non-current assets Total assets	17,890,251 18,425,914 1,029,158 – – – 4,059,919 5,050,409 1,161,203 528,576 923,821 248,314 2,009,344 1,741,124 165,873 – 7,229,857 3,997,717 766,699 654,160 – – 1,250,008 8 3,108,807 2,887,428
	39,594,940 33,533,650
	11,395,849 11,272,623 9,172,000 11,302,000 – – 33,109,920 32,750,851 – – 7,444,673 7,990,457 625,722 54,564 – – – – – – – – 2,069,884 2,168,814 – – – – 33 37 1,155,979 1,426,160 117,926 117,926
	65,091,986 67,083,432
	104,686,926 100,617,082

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CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

BALANCE SHEET OF THE PARENT COMPANY – CONTINUED

For the six months ended 30 June 2015

Prepared by: Yanzhou Coal Mining Company Limited ITEMS NOTES	Unit: RMB’000 30 June 2015 1 January 2015
Current liabilities: Short-term loans Financial liabilities at fair value through prof t and loss Financial liability derivatives (if necessary) Notes payable Accounts payable Advance from customers Employee benef ts payable Taxes payable Interests payable Dividends payables Other payables Held-to-sale liabilities Non-current liabilities due within one year Other current liabilities Total current liabilities Non-current liabilities: Long-term loans Bonds payable Including: preferred shares perpetual bonds Long-term payables Long-term employee benef ts payable Special Payables Contingent liabilities Deferred revenue Deferred tax liabilities Other non-current liabilities Total non-current liabilities Total liabilities Shareholders’ Equity Share capital Other equity instruments Including: preferred shares perpetual bonds Capital reserves Less: Treasury shares Other comprehensive income Specif c reserves Surplus reserves Retained earnings Total shareholder’s equity Total liabilities and shareholder’s equity	1,527,040 2,827,850 – 664 – – 301,934 1,767,508 1,101,310 932,681 391,591 403,618 423,470 383,699 242,111 118,398 945,727 866,185 91,168 – 13,418,554 13,949,327 – – 2,537,299 2,417,431 12,784,905 8,204,748
	33,765,109 31,872,109
	6,168,030 8,106,446 9,927,267 9,920,792 – – – – 3,529,077 3,569,389 – – – – – – 11,699 13,091 282,312 199,197 – –
	19,918,385 21,808,915
	53,683,494 53,681,024
	4,918,400 4,918,400 6,449,000 2,485,000 – – 6,449,000 2,485,000 1,939,077 1,939,077 – – 262,532 140,185 767,574 1,447,774 5,930,984 5,855,025 30,735,865 30,150,597
	51,003,432 46,936,058
	104,686,926 100,617,082

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

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CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONSOLIDATED INCOME STATEMENT

For the six months ended 30 June 2015

Prepared by: Yanzhou Coal Mining Company Limited ITEM NOTES	Unit: RMB’000 January to January to June 2015 June 2014
1. Total operating income Including: Operating income VI.47 Interest income Earned insurance premiums Fees and commission income 2. Total operating cost Including: Operating cost VI.47 Interest expenses Fees and commission expenses Refunded premiums Net amount of compensation payout Net amount of reserves for reinsurance contract Policy dividend payment Reinsured expenses Operating taxes and surcharges VI.48 Selling expenses VI.49 Administrative expenses VI.50 Financial expenses VI.51 Impairment loss VI.52 Add: Gain arising from the changes in fair value (loss listed with”-”) VI.53 Investment income (Loss listed with “-”) VI.54 Including: income from investments in associates and joint ventures (Loss listed with “-”) Exchange gain (Loss listed with “-”) 3. Operating prof t (Loss listed with “-”) Add: Non-operating income VI.55 Including: Gain from disposal of non-current assets Less: Non-operating expenses VI.56 Including: Loss on disposal of non-current assets 4. Total prof t (Loss listed with “-”) Less: Income taxes VI.57	25,143,406 32,428,612 25,143,406 32,428,612 – – – – – –
	24,930,664 31,986,507 20,215,590 26,853,095 – – – – – – – – – – – – – – 392,915 285,523 1,262,608 1,568,210 1,875,008 2,342,926 1,015,654 806,077 168,889 130,676 258,480 -61,986 196,792 -89,268 149,982 -89,353 – –
	668,014 290,851 383,048 390,517 2,237 2,751 81,977 11,719 13,311 3,369
	969,085 669,649 424,198 52,583

112 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONSOLIDATED INCOME STATEMENT – CONTINUED

For the six months ended 30 June 2015

Prepared by: Yanzhou Coal Mining Company Limited

Prepared by: Yanzhou Coal Mining Company Limited ITEM NOTES	Unit: RMB’000 January to January to June 2015 June 2014
5. Net prof t (Net loss listed with “-”) Net prof t attributable to shareholders of the parent Including: net prof t attributable to hoders of other equity instruments Non-controlling prof t/loss 6. After-tax net other comprehensive income after tax Total after-tax net comprehensive income attributable to shareholders of the parent 1). Other comprehensive income not reclassif ed to prof t and loss in the future 2). Other comprehensive income reclassif ed to prof t and loss in the future 1. Other comprehensive income classif ed to prof t and loss in the future shared by investee accounted under equity method 2. Gain/loss on fair value movement for available-for-sale f nancial assets 3. Effective Gain/loss on cashf ow hedge 4. Translation difference on foreign currencies After-tax net comprehensive income attributable to non-controlling interest 7. Total comprehensive income Comprehensive income attributable to the parent Including: total comprehensive income attributable to hoders of other equity instruments Total comprehensive income attributable to non-controlling interest 8. Earnings per share Basic earnings per share Diluted earnings per share	544,887 617,066 629,213 835,552 132,897 – -84,326 -218,486
	-2,134,180 2,069,691 -1,755,387 2,069,691 – – -1,755,387 2,069,691 22,637 – 99,710 -5,866 185,053 743,479 -2,062,787 1,332,078 -378,793 –
	-1,589,293 2,686,757 -1,126,174 2,905,243 132,897 – -463,119 -218,486
	0.1009 0.1699 0.1009 0.1699

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

Yanzhou Coal Mining Company Limited Interim Report 2015 113

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

INCOME STATEMENT OF THE PARENT COMPANY

For the six months ended 30 June 2015

Prepared by: Yanzhou Coal Mining Company Limited ITEMS NOTES	Unit: RMB’000 January to January to June 2015 June 2014
1. Total operating income XV.4 Less: operating cost XV.4 Business taxes and surcharges Selling expenses Administrative expenses Finance expenses Loss on impairment of assets Add: Gain arising from the changes in fair value (Loss listed with “-”) Investment income (Loss listed with “-”) XV.5 Including: income from investments in associates and joint ventures (Loss listed with “-”) 2. Operating prof t (Loss listed with “-”) Add: Non-operating income Including: Gain from disposal of non-current assets Less: Non-operating expenses Including: Gain from disposal of non-current assets 3. Total prof t (Total loss listed with “-”) Less: Income tax expenses 4. Net prof t (Net loss listed with “-”) Net prof t attributable to shareholders Including: net prof t attributable to hoders of other equity instruments 5. After-tax net other comprehensive income after tax 1). Other comprehensive income not reclassif ed to prof t and loss in the future 2). Other comprehensive income reclassif ed to prof t and loss in the future 1. Other comprehensive income classif ed to prof t and loss in the future shared by investee accounted under equity method 2. Gain/loss on fair value movement for available-for-sale f nancial assets 3. Effective Gain/loss on cashf ow hedge 4. Translation difference on foreign currencies 6. Total comprehensive income Comprehensive income attributable Including: total comprehensive income attributable to hoders of other equity instruments 7. Earnings per share: Basic earnings per share Diluted earnings per share	11,849,696 22,814,488 8,474,826 18,576,140 310,107 229,248 252,618 353,242 1,339,950 1,678,699 1,074,229 867,515 31,829 14,370 246,874 -37 551,939 583,716 230,745 100,182
	1,164,950 1,678,953 248,868 331,774 17 2,166 65,018 7,361 35 3,280
	1,348,800 2,003,366 589,205 495,327
	759,595 1,508,039 759,595 1,508,039 132,897 –
	122,347 -5,866 – – 122,347 -5,866 22,637 – 99,710 -5,866 – – – –
	881,942 1,502,173 881,942 1,502,173 132,897 –
	0.1274 0.3066 0.1274 0.3066

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

114 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONSOLIDATED CASH FLOW STATEMENT

For the six months ended 30 June 2015

Prepared by: Yanzhou Coal Mining Company Limited ITEMS NOTES	Unit: RMB’000 January to January to June 2015 June 2014
1. Cash f ows from operating activities: Cash received from sales of goods and rendering of services Net increase in deposits from customers and deposits from other banks Net increase in loans from central bank Net increase in loans from other f nancial institutions Cash receipts of premium of direct insurance contracts Net cash received from reinsurance contracts Net increase in deposits from insurance policy holders and investment Net increase from disposal of f nancial assets at fair value through prof t/loss Cash receipts of interest, fees and commission Net increase in placement from banks and other f nancial institution Net increase in sales and repurchase operations Cash received from taxes refund Cash received from other operating activities VI.59 Sub-total of cash inf ows from operating activities Cash paid for goods and services Net increase in loans and disbursement to customers Net increase in deposit with central bank and inter-banks Cash paid for claims of direct insurance contracts Cash paid for interest, fee and commission Cash paid for dividends of insurance policies Cash paid to and on behalf of employees Payments of taxes and surcharges Cash paid to other operating activities VI.59 Sub-total of cash outf ows from operating activities Net cash f ows from operating activities 2. Cash f ows from investment activities: Cash received from investment Cash received from investments income Net cash received from disposal of f xed assets, intangible assets and other long-term assets Net cash received from disposal of subsidiaries and other business units Cash received from other investing activities VI.59 Sub-total of cash inf ows from investing activities Cash paid to acquire f xed assets, intangible assets and other long-term assets Cash paid for investments Net increase in pledged deposits Net cash paid to acquire subsidiaries and other business units Cash paid to other investing activities VI.59 Sub-total of cash outf ow from investing activities Net cash f ows from investing activities	20,276,783 37,904,800 – – – – – – – – – – – – – – – – – – – – 331,214 277,047 934,006 409,696
	21,542,003 38,591,543
	14,508,821 28,191,001 – – – – – – – – – – 3,802,510 4,900,296 2,535,643 4,035,971 1,281,850 1,709,391
	22,128,824 38,836,659
	-586,821 -245,116
	4,495 – 18,759 199,413 6,033 3,894 – – 95,957 165,169
	125,244 368,476
	2,435,348 1,644,652 1,147,077 – – – – 125,000 – 3,491,375
	3,582,425 5,261,027
	-3,457,181 -4,892,551

Yanzhou Coal Mining Company Limited Interim Report 2015 115

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONSOLIDATED CASH FLOW STATEMENT – CONTINUED

For the six months ended 30 June 2015

Prepared by: Yanzhou Coal Mining Company Limited ITEMS NOTES	Unit: RMB’000 January to January to June 2015 June 2014
3. Cash f ows from f nancing activities Cash received from investment Including: Cash received by subsidiaries from investment absorpotion of non-controlling interest Cash received from issuance of other equity instruments Cash received from borrowings Cash received from issuing of bonds Cash received from other f nancing activities VI.59 Sub-total of cash inf ows from f nancing activities Cash paid for loan repayments Cash paid for dividends, prof ts distribution or payments of interest Including: Dividens and prof ts paid by subsidiaries to non-controlling interest Cash paid to other f nancing activities VI.59 Sub-total of cash outf ows from f nancing activities Net cash f ows from f nancing activities 4. Effect of changes in foreign exchange rate on cash and cash equivalents 5. Net increase in cash and cash equivalents Add: Cash and cash equivalents at the beginning of the year 6. Cash and cash equivalents at the end of the reporting period	3,964,000 – – – 3,964,000 – 1,620,790 3,135,164 9,982,500 11,773,607 – –
	15,567,290 14,908,771
	9,744,484 4,407,153 1,353,730 771,482 – – 14,044 1,971,081
	11,112,258 7,149,716
	4,455,032 7,759,055
	-17,148 113,580
	393,882 2,734,968 20,207,279 10,965,667
	20,601,161 13,700,635

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

116 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CASH FLOW STATEMENT OF THE PARENT COMPANY

For the six months ended 30 June 2015

Prepared by: Yanzhou Coal Mining Company Limited ITEMS NOTES	Unit: RMB’000 January to January to June 2015 June 2014
1. Cash f ows from operating activities Cash received from sales of goods and rendering of services Cash received from taxes refund Cash received from other operating activities Sub-total of cash inf ows from operating activities Cash paid for goods and services Cash paid to and on behalf of employees Payments of taxes and surcharges Cash paid to other operating activities Sub-total of cash outf ows from operating activities Net cash f ows from operating activities 2. Cash f ows from investing activities Cash received from investment Cash received from investments income Cash received from disposal of f xed assets, intangible assets and other long-terms assets Net cash received from disposal of subsidiaries and other business units Cash received from other investing activities Sub-total of cash inf ows from investing activities Cash paid to acquire f xed assets, intangible assets and other long-term assets Cash paid for investments Net cash paid to acquire subsidiaries or other business units Cash paid to other investing activities Sub-total of cash outf ows from investing activities Net cash f ows from investing activities 3. Cash f ows from f nancing activities Cash received from investment Cash received from borrowings Cash received from issuing of bonds Cash received from other f nancing activities Sub-total of cash inf ows from f nancing activities Cash paid for loan repayments Cash paid for dividends, prof ts appropriation or payments of interests Cash paid to other f nancing activities Sub-total of cash outf ows from f nancing activities Net cash f ows from f nancing activities 4. Effect of changes in foreign exchange rate on cash and cash equivalents 5. Net increase in cash and cash equivalents Add: Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the reporting period	9,479,265 27,068,748 – – 1,152,816 434,067
	10,632,081 27,502,815
	6,508,832 19,425,542 2,454,860 3,367,456 1,965,181 3,223,461 1,385,590 1,566,249
	12,314,463 27,582,708
	-1,682,382 -79,893
	884,495 319,000 88,311 318,336 777 2,545 – – 694,154 742,783
	1,667,737 1,382,664
	634,515 654,493 2,181,628 – – 600,000 2,543,557 3,494,977
	5,359,700 4,749,470
	-3,691,963 -3,366,806
	3,964,000 – 1,620,790 1,910,000 9,982,500 9,947,500 32,695 96,715
	15,599,985 11,954,215
	9,737,476 4,396,153 1,021,287 394,931 – 1,941,007
	10,758,763 6,732,091
	4,841,222 5,222,124
	-2,541 8,109
	-535,664 1,783,534 18,327,805 6,620,343
	17,792,141 8,403,877

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

Yanzhou Coal Mining Company Limited Interim Report 2015 117

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONSOLIDATED STATEMENT OF CHANGES IN OWNERS’ EQUITY

For the six months ended 30 June 2015

Prepared by: Yanzhou Coal Mining Company Limited

Item		Amount for 1 January2015 to 30 June 2015 Equityattributable to the shareholders of the Company Otherequityinstruments Less: Other General Non- Total Preferred Perpetual Capital Treasury comprehensive Specif c Surplus risk Retained controlling shareholders’ shares bonds Others reserves shares income reserves reserves reserve earnings interest equity

	Share capital
1. Closing balance of 2014 Add: Changes in accounting policies Correction of prior periods errors Business combination under common control Others 2. Beginning balance of 2015 3. Increase/Decrease for the year (Decrease listed with “-”) (1) Total comprehensive income (2) Capital contribution and reduction 1. Ordinary shares contributed by shareholders 2. Contributions by other equity instrument holders 3. Share-based payment in shareholders’ equity 4. Others (3) Prof t distribution 1. Surplus reserves 2. Reserve for ordinary risk 3. Distribution to owners (shareholders) 4. Distribution to holders of other equity instruments 5. Others (4) Inter transfer of shareholders’ equity 1. Transfer capital reserves to capital addition 2. Transfer surplus reserves to capital addition 3. Transfer surplus reserves to offset loss 4. Others (5) Specif c reserves 1.Provision for current year 2.Utilization for current year (6) Others 4. Closing balance at 30 June 2015	4,918,400 – – – –	– 2,485,000 – 1,285,991 – –5,954,077 1,785,012 5,900,135 – 28,778,217 4,440,773 43,639,451 – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – 2,485,000 – 1,285,991 – –5,954,077 1,785,012 5,900,135 – 28,778,217 4,440,773 43,639,451 – 3,964,000 – – – –1,755,387 –660,136 75,959 – 454,886 –525,842 1,553,480 – – – – – –1,755,387 – – – 629,213 –463,119 –1,589,293 – 3,964,000 – – – – – – – – – 3,964,000 – – – – – – – – – – – – – 3,964,000 – – – – – – – – – 3,964,000 – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – 75,959 – –174,327 –66,184 –164,552 – – – – – – – 75,959 – –75,959 – – – – – – – – – – – – – – – – – – – – – – – –98,368 – –98,368 – – – – – – – – – – –66,184 –66,184 – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –660,136 – – – 3,461 –656,675 – – – – – – 484,678 – – – 5,179 489,857 – – – – – – –1,144,814 – – – –1,718 –1,146,532 – – – – – – – – – – – – – 6,449,000 – 1,285,991 – –7,709,464 1,124,876 5,976,094 – 29,233,103 3,914,931 45,192,931
	4,918,400
	– – – – – – – – – – – – – – – – – – – – – –
	4,918,400

118 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONSOLIDATED STATEMENT OF CHANGES IN OWNERS’ EQUITY (CONTINUED)

For the six months ended 30 June 2015

Prepared by: Yanzhou Coal Mining Company Limited

Item		Amount for 1 January2014 to 31 December 2014
		Equityattributable to the shareholders of the Company Otherequityinstruments Less: Other General Non- Total Preferred Perpetual Capital Treasury comprehensive Specif c Surplus risk Retained controlling shareholders’ shares bonds Others reserves shares income reserves reserves reserve earnings interest equity
	Share capital
1. Closing balance of 2013 Add: Changes in accounting policies Correction of prior periods errors Business combination under common control Others 2. Beginning balance of 2014 3. Increase/Decrease for the year (Decrease listed with “-”) (1) Total comprehensive income (2) Capital contribution and reduction 1.Ordinary shares contributed by shareholders 2.Contributions by other equity instrument holders 3.Share-based payment in shareholders’ equity 4.Others (3) Prof t distribution 1. Surplus reserves 2. Reserve for ordinary risk 3. Distribution to owners (shareholders) 4. Distribution to holders of other equity instruments 5. Others (4) Inter transfer of shareholders’ equity 1. Transfer capital reserves to capital addition 2. Transfer surplus reserves to capital addition 3. Transfer surplus reserves to offset loss 4. Others (5) Specif c reserves 1.Provision for current year 2.Utilization for current year (6) Others 4. Closing balance at 31 December 2014	4,918,400 – – – –	– – – 3,106,650 – –3,822,501 2,285,384 5,493,640 – 26,998,913 3,576,561 42,557,047 – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
	4,918,400	– – – 3,106,650 – –3,822,501 2,285,384 5,493,640 – 26,998,913 3,576,561 42,557,047
	– – – – – – – – – – – – – – – – – – – – – –	– 2,485,000 – –1,820,659 – –2,131,576 –500,372 406,495 – 1,779,304 864,212 1,082,404 – – – – – –2,131,576 – – – 2,284,167 –908,687 –756,096 – 2,485,000 – – – – – – – – 1,838,849 4,323,849 – – – – – – – – – – – – – 2,485,000 – – – – – – – – 1,838,849 4,323,849 – – – – – – – – – – – – – – – – – – – – – – – – – – – –1,820,659 – – 1,820,659 406,495 – –504,863 –65,922 –164,290 – – – – – – – 406,495 – –406,495 – – – – – – – – – – – – – – – – – – – – – – – –98,368 – –98,368 – – – – – – – – – – –65,922 –65,922 – – – –1,820,659 – – 1,820,659 – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –2,321,031 – – – –28 –2,321,059 – – – – – – 983,726 – – – 11,630 995,356 – – – – – – –3,304,757 – – – –11,658 –3,316,415 – – – – – – – – – – – –
	4,918,400	– 2,485,000 – 1,285,991 – –5,954,077 1,785,012 5,900,135 – 28,778,217 4,440,773 43,639,451

Yanzhou Coal Mining Company Limited Interim Report 2015 119

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

STATEMENT OF CHANGES IN EQUITY OF THE PARENT COMPANY

For the six months Ended 30 June 2015

Prepared by: Yanzhou Coal Mining Company Limited

Item		Amount for 1 January2015 to 30 June 2015 Other equityinstruments Less: Other Total Preferred Perpetual Capital Treasury comprehensive Specif c Surplus Retained Shareholder’s shares bonds Others reserves shares income reserves reserves earings equity
	Share capital
1. closing balance of 2014 4,918,400 Add: Changes in accounting policies – Correction of prior periods errors – Others – 2. Beginning balance of 2015 4,918,400 3. Increase/Decrease for the year (Decrease listed with “-”) – (1) Total comprehensive income – (2) Capital contribution and reduction – 1.Ordinary shares contributed by shareholders – 2.Contributions by other equity instrument holders – 3.Share-based payment in shareholders’ equity – 4.Others – (3) Prof t distribution – 1. Surplus reserves – 2. Distribution to owners (shareholders) – 3. Others – (4) Inter transfer of shareholders’ equity – 1. Transfer capital reserves to capital addition – 2. Transfer surplus reserves to capital addition – 3. Transfer surplus reserves to offset loss – 4. Others – (5) Specif c reserves – 1.Provision for current year – 2.Utilization for current year – (6) Others – 4. Closing balance at 30 June 2015 4,918,400	4,918,400 – rs – –	– 2,485,000 – 1,939,077 – 140,185 1,447,774 5,855,025 30,150,597 46,936,058 – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – 2,485,000 – 1,939,077 – 140,185 1,447,774 5,855,025 30,150,597 46,936,058 – 3,964,000 – – – 122,347 –680,200 75,959 585,268 4,067,374 – – – – – 122,347 – – 759,595 881,942 – 3,964,000 – – – – – – – 3,964,000 – – – – – – – – – – – 3,964,000 – – – – – – – 3,964,000 – – – – – – – – – – – – – – – – – – – – – – – – – – – 75,959 –174,327 –98,368 – – – – – – – 75,959 –75,959 – – – – – – – – – –98,368 –98,368 – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –680,200 – – –680,200 – – – – – – 374,204 – – 374,204 – – – – – – –1,054,404 – – –1,054,404 – – – – – – – – – – – 6,449,000 – 1,939,077 – 262,532 767,574 5,930,984 30,735,865 51,003,432
	4,918,400
	4,918,400

120

Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

STATEMENT OF CHANGES IN EQUITY OF THE PARENT COMPANY (CONTINUED)

For the six months Ended 30 June 2015

Prepared by: Yanzhou Coal Mining Company Limited

Item		Amount for 1 January2014 to 31 December 2014
	Share capital	Other equityinstruments Less: Other Total Preferred Perpetual Capital Treasury comprehensive Specif c Surplus Retained Shareholder’s shares bonds Others reserves shares income reserves reserves earings equity
1. Closing balance of 2013 4,918,400 Add: Changes in accounting policies – Correction of prior periods errors – Others – 2. Beginning balance of 2014 4,918,400 3. Increase/Decrease for the year (Decrease listed with “-”) – (1) Total comprehensive income – (2) Capital contribution and reduction – 1.Ordinary shares contributed by shareholders – 2.Contributions by other equity instrument holders – 3.Share-based payment in shareholders’ equity – 4.Others – (3) Prof t distribution – 1. Surplus reserves – 2. Distribution to owners (shareholders) – 3. Others – (4) Inter transfer of shareholders’ equity – 1. Transfer capital reserves to capital addition – 2. Transfer surplus reserves to capital addition – 3. Transfer surplus reserves to offset loss – 4. Others – (5) Specif c reserves – 1.Provision for current year – 2.Utilization for current year – (6) Others – 4. Closing balance at 31 December 2014 4,918,400	4,918,400 – – –	– – – 3,759,736 – 71,560 1,850,945 5,448,530 26,554,058 42,603,229 – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
	4,918,400	– – – 3,759,736 – 71,560 1,850,945 5,448,530 26,554,058 42,603,229
		– 2,485,000 – –1,820,659 – 68,625 –403,171 406,495 3,596,539 4,332,829 – – – – – 68,625 – – 4,101,402 4,170,027 – 2,485,000 – – – – – – – 2,485,000 – – – – – – – – – – – 2,485,000 – – – – – – – 2,485,000 – – – – – – – – – – – – – – – – – – – – – – – – – – – 406,495 –504,863 –98,368 – – – – – – – 406,495 –406,495 – – – – – – – – – –98,368 –98,368 – – – – – – – – – – – – – –1,820,659 – – 1,820,659 – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –1,820,659 – – 1,820,659 – – – – – – – – – –2,223,830 – – –2,223,830 – – – – – – 730,479 – – 730,479 – – – – – – –2,954,309 – – –2,954,309 – – – – – – – – – –
	4,918,400	– 2,485,000 – 1,939,077 – 140,185 1,447,774 5,855,025 30,150,597 46,936,058

Yanzhou Coal Mining Company Limited Interim Report 2015 121

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

I. GENERAL

Yanzhou Coal Mining Company Limited (the “Company”) is a stock company with limited liability 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 registered address is Zoucheng, Shandong Province. The total share capital was RMB1,670 million with par value of RMB1.00 per share upon the establishment of the Company.

As approved by Zhengweifa (1997) No. 12 document issued by Securities Committee of State Council, the Company issued H share with par 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 commenced trading on Stock Exchange of Hong Kong Limited on 1 April 1998, and the American Depositary Shares was traded on the New York Stock Exchange on 31 March 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 public and were traded on Shanghai Stock Exchange on 1 July 1998. After multiple increased issuance and bonus shares, the share capital of the Company had increased to RMB4.9184 billion as at 30 June 2015.

The Company and its subsidiaries (hereinafter collectively referred to as the “Group”) mainly engage 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. SCOPE OF CONSOLIDATED FINANCIAL STATEMENTS

The scope of Group’s consolidated fi nancial statements covers 16 secondary subsidiaries including Yancoal Australia Ltd., Yanmei Heze Neng Hua Co., Ltd., Yanzhou Coal Erdos Neng Hua Co., Ltd. and other companies; 22 subsecondary subsidiaries including Austar Coal Mine Pty Ltd., Gloucester Coal Ltd. and other controlled subsidiaries.

Please refer to Note VII. Scope changes of consolidated fi nancial statements and Note VIII. Equity interests in other entities for more details.

122 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

III. BASIS OF PREPARATION ON FINANCIAL STATEMENTS

1. Basis of preparation

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 (referred to as “ASBEs”) and other related regulations issued by the China Ministry of Finance and accounting policies and estimates stated in Principle Accounting Policies, Accounting Estimates in the Note IV.

2. Going concern

With the recent history of generating profi t from operation and the fi nancial support, the Group has the capability to operate for a period of 12 months commencing the closing date of this report, and there is no signifi cant matter which has impact on going concern. Therefore the assumption of this fi nancial statement prepared on going concern is reasonable.

IV. PRINCIPLE ACCOUNTING POLICIES, ACCOUNTING ESTIMATES

1. Statement of compliance with ASBES

The fi nancial statements of the Group have been prepared in accordance with the ASBEs and presented truly and completely the Group’s fi nancial position, fi nancial performance and cash fl ows and other related information.

2. Accounting period

The accounting period is from 1 January to 31 December of each calendar year.

3. Functional currency

The functional currency of the Company and domestic subsidiaries is Renminbi (RMB). The Company translates foreign currencies into RMB upon preparation of fi nancial statements when overseas subsidiaries use foreign currency as functional currency (refer to Note IV. 8).

4. Accounting treatment for business combinations under/not under common control

The Group, as the acquirer, recognises acquired assets and liabilities under common control at their carrying amounts in consolidated fi nancial statements of the ultimate shareholder on the acquisition date. The difference between the carrying amount of the net assets obtained and the amount of consideration paid for the combinations adjusted to capital reserves (capital premium). If the balance of capital reserves (capital premium) is insuffi cient, any excess is adjusted against retained earnings.

Identifi able assets, liabilities and contingencies acquired through business combination not under common control are recognised at their fair values at the acquisition date. The cost of business combination is the sum of cash paid, fair value of non-cash assets, liabilities incurred or assumed, equity securities issued on the date of acquisition, and other direct expenses incurred in order to obtain the control over acquiree. Where the cost of combination exceeds the acquirer’s interest in the fair value of the acquiree’s identifi able net assets, the difference shall be recognised as goodwill. Where the cost of combination is less than the acquirer’s interest in the fair value of the acquiree’s identifi able net assets after reassessment, the acquirer shall recognise the remaining difference as non-operating income in the current profi t or loss.

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5. Preparation of consolidated fi nancial statements

The Group takes all subsidiaries owning the actual controlling power into the scope of the consolidated fi nancial statements.

If any confl icts between accounting policies or accounting period introduced in the subsidiaries and those of the Company, necessary adjustments shall be made to the fi nancial statements of the subsidiaries according to accounting policies or accounting period adopted by the Company when preparing consolidated fi nancial statements.

All the signifi cant intra group transactions, balances and unrealized profi ts within the consolidation scope shall be eliminated upon preparation of consolidated fi nancial statements. The portion of owner’s equity of subsidiaries not attributable to parent and minority interest in current period profi t and loss, other comprehensive income and total comprehensive income shall be presented in non-controlling interests, non-controlling profi t and loss, other comprehensive income attributable to non-controlling shareholders and total comprehensive income attributable to non-controlling shareholders on the consolidated fi nancial statements.

For subsidiaries acquired through business combination under common control, the operating results and cash fl ows shall be included in the consolidated fi nancial statements at the beginning of the current consolidation period. Adjustments to related comparatives shall be made upon preparation of consolidated financial statements. This is to consider the consolidated fi nancial statement to be existed since commencement of ultimate control.

Equity of invested entity under common control, acquired by steps and a business combination fi nally occurred, shall be adjusted upon preparation of consolidated fi nancial statements in the condition that current situation is deemed to exist from the beginning of control commenced. Comparatives reporting date shall not be earlier than the beginning of ultimate control of the Group and acquiree takes effect. Accquiree’s assets and liabilities shall be consolidated into comparatives. Increased net assets resulted from business combination shall be adjusted to relevant items in shareholders’ equity of comparatives. To avoid repeated calculations on the value of net assets of the acquiree, existing profi t and loss, other comprehensive income and movement on other net assets of long-term equity investment held by the Group before the combination shall be offset to opening balance of retained earnings and current profi t and loss, for the period commencing from, the date on the later of original acquisition date on such long-term equity and the date of common control of the Group and the acquire takes effect, to the date of business combination.

For subsidiaries acquired through business combination not under common control, the operating results and cash fl ows shall be included in the consolidated fi nancial statements at the date of the Group’s acquiring of controls. Adjustments shall be made to subsidiary’s fi nancial statements based on fair value of identifi able assets, liabilities and contingencies on the date of combination, upon preparation of consolidated fi nancial statements.

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5. Preparation of consolidated fi nancial statements – continued

Equity of invested entity, held by the acquirer before acquisition date, not under common control acquired by steps and a business combination fi nally occurred, shall be re-evaluated at the fair value on the acquisition date and the difference between fair value and carrying amount shall be recognised as investment income in current period; if the related acquiree’s equity held before the acquiring date contains other comprehensive income and the other changes of owner’s equity except for net profi ts and losses, other comprehensive income and profi t distributions, it shall be transferred to investment gains or losses on the date of acquisition, excluding the other comprehensive income derived from changes of net liabilities or net assets due to re-measurement on defi ned benefi t plan by the investee.

The difference between disposal consideration of long-term equity investment in subsidiaries partially disposed by the Group without losing controls and the share of net assets calculated from the date of acquisition or combination date shall be adjusted to capital premium or share premium. Adjustments shall be made to retained earnings in the event that capital reserves are not suffi cient.

When the Group loses the controls over the investee due to partially disposal of equity investment and other reasons, the remaining equity shall be re-measured in accordance with the fair value on the date of losing control upon preparation of the consolidated fi nancial statements. The amount of the sum of the consideration obtained from equity disposal and the fair value of remaining equity deducting the difference between shared net asset of original subsidiaries that were started to be calculated on the acquisition date or merging date, shall be recorded as investment gain or loss in the period of losing control, and a written down to goodwill shall be made at the same time. Other comprehensive income related to former equity investment in subsidiaries shall be recognised as current investment income upon losing of controls.

For the Group’s disposal on the subsidiaries’ equity investment by steps until the loses of controls, if transactions in disposal of subsidiaries’ equity investment until losing control are in a package deal, each transaction shall be treated as one transaction of disposal on subsidiaries and loses of control; but the difference between considerations from each disposal of investment and shared net asset of the subsidiary before losing controls shall be recognized as other comprehensive income in the consolidated fi nancial statements, and transferred to investment income for the period of losing controls.

6. Classifi cations of joint arrangement and accounting treatment of common cooperation

The joint arrangement of the Group includes common operations and joint ventures. For common operation projects, as a joint operation party the Company recognises assets and liabilities solely held by the Group and assets and liabilities held on proportion. Revenue and expenses solely or proportionally recognised in accordance with relevant agreements. Transactions on asset purchase or sales with joint ventures that do not form normal business activity shall only recognise parts of profi ts and losses generated in above transactions belonging to other joint operation parties.

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7. Cash and cash equivalents

Cash in cash fl ow shall be cash on hand and deposits available for payment at any time. Cash equivalents in cash fl ow shall be investments which shall be 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.

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

(1) Foreign currency transaction

The Group’s foreign currency transactions shall be converted to RMB at the spot exchange rate of the day when the transaction occurs. At the balance sheet date, foreign currency monetary items shall be translated to RMB using the spot exchange rate of the day. Exchange differences arising shall be 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 shall be qualifi ed for capitalization.

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

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

Foreign exchange gain or loss from net foreign investments to overseas operating subsidiaries in foreign currencies, presented in functional currency of the parent or subsidiary, shall be recognised as other comprehensive income; foreign exchange gain or loss presented in currencies other than functional currency of the parent or subsidiary shall be offset each other by parent and subsidiary, and remaining difference shall be recognised as other comprehensive income.

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9. Financial assets and fi nancial liabilities

The Group recognises a fi nancial asset or liability when it enters a fi nancial instrument contract.

(1) Financial assets

1) Financial assets by category and recognition and measurement

According to investment objectives and economic essence, the Company’s financial assets shall be classifi ed as fi nancial assets at fair value through profi t or loss (FVTPL), held-to-maturity investments, receivables and available-for-sale (AFS) fi nancial assets.

Financial assets at fair value through profi t or loss include trading fi nancial assets and the fi nancial assets designated as, when initially recognized, the fi nancial assets measured at fair value and its movement recorded through profi t and loss. A fi nancial asset is classifi ed as held for trading if it is: acquired or incurred principally for the purpose of selling or repurchasing it in the near term; part of a portfolio of identifi ed fi nancial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profi t-taking; or a derivative except for a derivative that is a designated and effective hedging instrument, a fi nancial guarantee contract, a derivative settled by giving out the equity instrument and pegged with the equity investment that is not quoted in an active market and whose fair value cannot be reliably measure. Financial assets are designated at fair value through profi t or loss upon initial recognition when: the designation eliminates or signifi cantly reduces an accounting mismatch in the gain and loss recognition arising from the difference in measurement basis of the fi nancial assets or fi nancial liabilities; risk management of the Group and formal written documents regarding the investment strategy indicate that the fi nancial assets are managed, evaluated and reported internally on a fair value basis; or if a contract contains one or more embedded derivatives, an entity may designate the entire hybrid (combined) contract as a fi nancial asset or fi nancial liability at fair value through profi t or loss unless: the embedded derivative(s) does not signifi cantly modify the cash fl ows that otherwise would be required by the contract; or it is clear with little or no analysis when a similar hybrid (combined) instrument is fi rst considered that separation of the embedded derivative(s) is prohibited. Fair value is adopted as the method for subsequent measurement on these fi nancial assets. Movement of fair value is accounted for profi t or loss from change in fair value. Interest or cash dividends earned with the holding period are recognized as investment income or loss with adjustment on profi t or loss from change in fair value.

Held-to-maturity investments are non-derivative fi nancial assets with fi xed maturity and fi xed or determinable payments for which management has both positive intention and ability to hold to maturity. Held to maturity investment is subsequently measured under amortized costs on actual interest rate. Its amortization, impairment, and gain or loss from de-recognition is recognised as profi t or loss of the current year.

Receivables are non-derivative fi nancial assets with fi xed or determinable payments that are not quoted in an active market. Receivables are subsequently measured under amortized costs on actual interest rate. Its amortization, impairment, and gain or loss from de-recognition is recognised as profi t or loss of the current year.

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9. Financial assets and fi nancial liabilities – continued

(1) Financial assets – continued

1) Financial assets by category and recognition and measurement – continued Available-for-sale fi nancial assets are non-derivative fi nancial assets that are either designated in this category or not classifi ed as fi nancial assets of any other class at initial recognition. For equity instruments which do not have quotations in active market and the fair values of which cannot be reliably measured and linked to that equity instrument, and derivatives linked to such equity instrument and settled through delivery of such equity instrument, will be measured at cost. Other equity instrument which do not have quotations in active market but the fair values of which can be reliably measured is measured by fair value of which the change will be recognized as other comprehensive income. Except for exchange of impairment loss and exchange gain or loss arising from foreign currency monetary fi nancial assets, changes in fair value of available-for-sale fi nancial assets are directly recorded in shareholders’ equity. Until such fi nancial assets are derecognized, the accumulated change in the amount of fair value previous recorded in equity is transferred to the profi t and loss account for the period. Interests for the period in which the assets are held are calculated using the effective interest method is charged to profi t or loss for the period as ‘Investment income’. Cash dividends declared by the investee company relating to available-for-sale equity instruments are charged to profi t or loss for the period as ‘Investment income’. Instruments that do not have quotation in an active market and fair values cannot be reliably measured shall be measured at cost.

2) Recognition and measurement of fi nancial assets transfers

A fi nancial asset is derecognised when any one of the following conditions is satisfi ed: i) the rights to receive cash fl ows from the asset expire, ii) the fi nancial asset has been transferred and the Group transfers substantially all risks and rewards relating to the fi nancial assets to the transferee, iii) the fi nancial asset has been transferred to the transferee, the Group has given up its control of the fi nancial asset although the Group neither transfers nor retains all risks and rewards of the fi nancial asset.

Where an entity neither transfers nor retains substantially all risks and rewards of fi nancial asset and does not give up the control over such fi nancial asset, then the entity recognises such fi nancial asset to the extent of its continuous involvement and recognises the corresponding liabilities.

In the case where the fi nancial asset as a whole qualifi es for the de-recognition conditions, the difference between the carrying value of transferred fi nancial asset and the sum of the amount received for transfer and the accumulated amount of changes in fair value that was previously recorded under other comprehensive income is charged into profi t or loss for the period.

In the case where only part of the fi nancial asset meets the criteria for de-recognition, the carrying amount of fi nancial asset being transferred is allocated between the portions that to be derecognised and the portion that continued to be recognised according to their relative fair value. The amount of consideration received for the transfer and the accumulated amount of changes in fair value that was previously recorded in other comprehensive income of the part qualifi es for derecognition and the above-mentioned allocated carrying amount is charged to profi t or loss for the period.

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9. Financial assets and fi nancial liabilities – continued

(1) Financial assets – continued
3) Test and accounting treatment on impairment of fi nancial assets

The Group assesses the carrying amount of fi nancial assets, other than those at fair value through profi t and loss, at the balance sheet date. Impairment of fi nancial assets is accrued when there is objective evidence that a fi nancial asset is impaired.

If there is objective evidence indicating that the value of the fi nancial asset is recovered and recovery is related objectively to events occurring after the impairment was recognised, the previously recognised impairment loss is reversed and the amount of reversal is recognised in profi t and loss for the period.

When there is a signifi cant or prolonged decline in the fair value of available-for-sale fi nancial assets, the accumulated losses in fair value that was previously directly recorded in shareholder’s equity are transferred out and recognised as impairment losses. For the available-for-sale investment on debt instruments which impairment losses have been recognised, if in subsequent period, its fair value increases and the increase is objectively related to an event occurring after the impairment loss was recognised in profi t or loss, the previous recognised impairment loss is reversed into profi t or loss for the period. For an investment in an equity instrument classifi ed as available-for-sale equity on which impairment loss has been recognised, the increase in its fair value in a subsequent period is directly charged into shareholders’ equity.

(2) Financial liabilities

1) Classifi cation, reorganization and measurement of fi nancial liabilities Upon initial recognition, fi nancial liabilities shall be classifi ed as either fi nancial liabilities at fair value through profi t or loss (FVTPL) or other fi nancial liabilities.

Financial liabilities at fair value through profi t or loss include fi nancial liabilities held for trading and those designated as fair value through profi t or loss on initial recognition. They are subsequently measured at fair value. The net gain or loss arising from changes in fair value, dividends and interest paid related to such fi nancial liabilities are recorded in profi t or loss for the period in which they are incurred.

Other liabilities are subsequently measured at residual cost using the effective interest rate method

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9. Financial assets and fi nancial liabilities – continued

(2) Financial liabilities – continued
2) De-recognition of fi nancial liability

A fi nancial liability is derecognised when the underlying present obligations (or part of those obligations) are discharged. Existing fi nancial liability is derecognised and new fi nancial liability is recognised when the Group enters an agreement with its debtor to replace existing liability with a new fi nancial liability and the contractual terms on new fi nancial liability are different with the existing one. An existing fi nancial liability is fully or partially de-recognised and a new fi nancial liability is recognised when the Group signifi cantly amends all or part of contractual terms on existing fi nancial liability. The difference between consideration paid and the carrying amount of de-recognised fi nancial liability is recorded as current profi t or loss.

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

Fair values on fi nancial assets and liabilities are determined by prices existed in major markets. Where there is no major market the most benefi cial market prices together with then available and suffi cient data and other evaluation technology supporting information are used to determine fair values of fi nancial assets and liabilities. Input data for determining fair values has three layers, the fi rst layer is the available unadjusted price for a same asset or liability on the date of evaluation in an active market; the second layer is the direct or indirect visible input data related to the same asset or liability apart from data in the fi rst layer; the third layer is the invisible input data related to the same asset or liability.

10. Provision for bad debt provisions on account receivables

The Group recognises bad debts when the following conditions are met: the debtors are dissolved, bankrupt, insolvent, in signifi cant diffi culty in cash fl ows or suspended its business due to natural disaster and unable to settle the debts in the foreseeable period; or debtors are defaulted for repayment more than three years; or there are conclusive evidences indicating the debts are not recovered or not likely to be recoverable.

Provision for bad debts is made using allowance account method. At the balance sheet date, receivables are assessed for impairment on individual or portfolio basis. Provision for bad debts is recognised in the profi t or loss for the period. When there are objective evidences indicating the receivable are considered not recoverable, it is written off against the allowance account in accordance with the approval procedures of the Group.

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10. Provision for bad debt provisions on account receivables – continued

(1) Accounts receivable that are individually signifi cant and individually provided for bad debts The basis or standard for determining Consider individual receivables above RMB20 million as the significant level of individual signifi cant amount receivable

Consider individual receivables above RMB20 million as signifi cant amount

Provision-making Method on individual The provision of bad debts is made according to the receivables above signifi cant level difference between the present value of future cash fl ows and the carrying amount of receivables

(2) Receivables that are provided for bad debts on portfolio basis of risks The basis of portfolio Aging group Use the aging of the receivables as the credit risk characteristics to classify the portfolio Risk-free group Use the amount characteristics of the receivables, the relation with transaction party and its credit as characteristics to classify the portfolio

The accrual method Aging group Provision for bad debt made by aging analysis Risk-free group Not provision for bad debt

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

	Accrual percentage	Accrual percentage
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) Accounts receivable that are individually insignifi cant but are provided for bad debts on individual basis Reason for accruing provision of bad Individual receivables below significant level whereby the debts individually combined method does not refl ect its risk characteristics Method for provision of bad debts Provision for bad debts is made using the difference between the present value of future cash fl ows and the book value of receivables

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11. Inventories

The Group’s inventory includes raw materials, coal stock, methanol, real estate, real estate development cost and low value consumables etc.

The Group maintains a perpetual inventory system. Inventories are recorded at actual cost of purchase. Cost is calculated using weighted average method when the inventories are issued or consumed. Real estate development cost is measured at the actual cost of land, building, facilities, out sourced construction and public facilities. Actual cost on developing real estate projects is recognized as real estate upon completion.

Closing balance on inventories is 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 impairment of inventories on a separate inventory item.

Net realizable value of inventories directly for sale, such as coal, methanol, real estate, 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.

12. Long-term equity investments

Long-term equity investments mainly include investment to subsidiaries, joint ventures and associates.

The Group judges a joint control exists when all parties or groups of parties control that arrangement unilaterally and decisions relating to the basis operating activity of the entity require the unanimous consent of the parties sharing the control.

The Group holds, directly or through subsidiaries, more than 20% (including 20%) but less than 50% of the voting power of the investee, it is presumed that the Group has signifi cant infl uence. When the Company holds less than 20% of the voting power of the investee, signifi cant infl uence shall be considered under actual fact and circumstances such as there is a delegate of the investor in the investee’s the Board of Directors and other similar power bodies, the investor gets involved in investee’s fi nancial and operating policies decision-making process, there are signifi cant transactions occurred between the investor and the investee, the investor assigns management personnel in the investee and the investor provides key technical support to the investee.

When control exists the investee becomes a subsidiary of the Group. The investment cost for long-term equity investment acquired through business combination under common control is the carrying value of the share of equity at the combination date in the acquired company. The investment cost is recorded as zero when the carrying amount of the share of equity at the combination date in the acquired company is in defi cit.

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12. Long-term equity investments – continued

For the Group’s disposal on the subsidiaries’ equity investment under common control by steps until the loses of controls, if transactions in disposal of subsidiaries’ equity investment until losing control are in a package deal, each transaction shall be treated as one transaction for obtaining control; if it’s not a package deal, on the date of combination, the initial cost of long-term equity investment shall be recognised at the share of carry amount of net assets for the acquiree in the consolidated fi nancial statements of the ultimate controller after combination. The difference between initial cost and sum of carry amount of long-term equity investment before combination and consideration paid for obtaining new shares upon combination shall be adjusted to capital reserve; in case that capital reserve is insuffi cient, it shall be offset to retained earnings.

The investment cost for long-term equity investment acquired through business combination not under common control is the cost of business combination.

For the Group’s disposal on the subsidiaries’ equity investment under common control by steps until the loses of controls, if transactions in disposal of subsidiaries’ equity investment until losing control are in a package deal, each transaction shall be treated as one transaction for obtaining control; if it’s not a package deal, on the date of combination, the initial cost of long-term equity investment shall be recognised at the sum of carrying amount of existing investment and additional cost of investment. Equity acquired before the date of combination shall be accounted on equity method; no adjustment shall be made to other comprehensive income related to existing items accounted on equity method. The same accounting treatment shall be applied upon disposal of such investment, where the investee disposes related assets or liabilities. Equity held before business combination shall be treated as available for sale fi nancial assets and measured at fair value; accumulated movement on fair value previously recorded as other comprehensive income shall be transferred to current investment income on the date of combination.

Apart from the long-term equity investments acquired through business combination mentioned above, the cost of investment for the long-term equity investments acquired by cash payment is the amount of cash paid. For long-term equity investment acquired by issuing equity instruments, the cost of investment is the fair value of the equity instrument issued. For long-term equity investment injected to the Group by the investor, the investment cost is the consideration as specifi ed in the relevant contract or agreement; initial cost of long-term equity investment acquired through exchange of non-monetary items and debt restructuring shall be recognised according to relevant accounting policies.

Investments in subsidiaries are accounted for by the Group using cost method and equity method is used for investment in joint ventures and associates.

Additional investments to long-term equity investments subsequently accounted on the cost method are measured to increase its carrying amount on the fair value of the additional cost and other transaction related expenses occurred. Dividends declared or profi t distributed by the investee shall be recognised as investment income in the current period.

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12. Long-term equity investments – continued

The carrying amount of long-term investment subsequently accounted on the equity method shall be adjusted to increase or decrease according to the movement of owner’s equity of the investee. In determining the share of net profi t from the investee, according to the Group’s accounting policies and accounting period, adjustments shall be made towards the net profi t based on fair values of all identifi able assets at the time of acquisition after eliminating proportioned profi t or loss attributable to the investor resulted from intergroup transactions between joint venture and associates, before recognising net profi t from the investee.

If the long-term equity investment is disposed different between the actual consideration received and the carrying amount should be recognized as investment income for current year. For long-term investment accounted under equity method, the amount originally recognized as equity due to other change except for investee’s net profi t or loss should be proportionally transferred into current profi t and loss when the long-term investment is disposed.

If the control or signifi cant infl uence on the investee lost due to disposal of partial equity investment, the remaining equity after disposal shall be accounted as available for sale fi nancial assets; the difference between fair value and carry amount of the remaining equity shall be recognised as the current profi ts and losses at the date when the common control or signifi cant infl uence lost. The same accounting treatment shall be applied to other comprehensive income recognised due to original equity investment accounted on equity method when equity method is terminated, where investee disposes related assets or liabilities.

If the common control on the invested entity lost due to disposal of partial long-term equity investment, and the remaining equity after disposal has common control or signifi cant infl uence on the investee, the equity method shall be applied alternatively. The difference between the carrying amount of the disposed equity and consideration shall be recognised as the investment income, and the remaining equity shall be adjusted by equity method since initial acquisition. If the remaining equity after disposal does not have common control or signifi cant infl uence on the investee, it shall be treated with related accounting policies as available for sale fi nancial assets. The difference between the carry amount of disposed equity and consideration shall be recognised as investment income, and the difference between the fair value and carrying amount of the remaining equity shall be recognized as the current profi ts and losses at the date when the common control or signifi cant infl uence is lost.

The Group’s disposal of equity by steps until loss of control that are not in a package deal shall be treated individually. Disposal transactions that are in one package deal shall be treated as one transaction. But the difference between consideration for each disposal transaction and the carrying amount of long-term equity investment that has disposal before the loss of controls shall be recognised as other comprehensive income; it shall be transferred to profi t and loss in the period when loss of control occurs.

13. Fixed assets

The Group’s fi xed assets are tangible assets that are held for production or operation, and have a service life more than one accounting year.

Fixed asset is recognised when it is probable that future economic benefi ts associated with the item will fl ow to the Group and the cost of the item can be measured reliably. The Group’s fi xed assets consist of buildings, mine buildings, ground buildings, harbour works and craft, plant, machinery and equipment, transportation equipment, and land etc.

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13. Fixed assets – continued

part from those fi xed assets that are fully depreciated but still in use, as well as land separately recognised, the Group depreciates all fi xed assets on a straight-line basis, except mining structures are depreciated on the estimated production capacity method. Useful life, estimated residual value, depreciation rate of fi xed assets are as the following:

			Estimated	Annual
			residual	depreciation
No.	Category	Useful life (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

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.

The Group shall review useful lives and estimated net residual value of fi xed asset and the depreciation method at least once a year.

A change in the useful life or estimated net residual value of a fi xed asset or depreciation method shall be treated as a change in an accounting estimate.

Regarding to the fi nancial leased fi xed assets, the value lower between the fair value of the rental assets and the current value of the minimum rental payment shall be recognized as the entry value of the rental assets. The difference between the entry value of the rental assets and the minimum rental payment shall be recognized as the fi nancing costs.

The depreciation policy applied for fi nancial leased fi xed assets is the consistent with the depreciation policy for self-owned fi xed assets. If it can be confi rmed reasonably that the ownership of the rental assets can be obtained when the rental term expires, the depreciation of the rental fi xed assets shall be implemented within service life; otherwise, the depreciation shall be implemented in the shorter period between the leasing term of the rental fi xed assets and the estimated service life of the rental fi xed assets.

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14. Construction in progress

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.

15. Borrowing costs

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.

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.

16. Intangible assets

The intangible assets of the Company include mining rights, unproved mining interests, the land use rights, patents and exclusively used technologies 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 out of the common control, which are owned by the acquirer but not recognized in the fi nancial statements, shall be recognized as the intangible assets at their fair value when the acquiree’s assets are initially recognized.

Cost of mining rights is amortized over the life of the mine on a unit of production basis of the estimated total proven and probable reserves. Productivity method is used based on the Australia Joint Ore Reserves Committee (JORC) reserves for subsidiaries in Australia.

Unproved 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).

The land use rights are evenly amortized over the transferred term since the rights are obtained.

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16. Intangible assets – continued

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.

The useful life and the amortization method of intangible asset with a fi nite useful life shall be reviewed at the end of each fi nancial year. A change in the useful life or amortization method shall be treated as a change in an accounting estimate. The useful life of an intangible asset with indefi nite useful life shall be re-assessed in each accounting period. If there is evidence indicating that the useful life of that intangible asset is fi nite, the useful life of that asset shall be estimated and applies to accounting requirements of the Standard accordingly.

17. 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 indicate the carrying amount of the asset may exceed recoverable amount.

When production commences, 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 fair value on the date of acquisition, which is the fair value of potential economically recoverable reserves at the acquisition date, and shown as unproved mineral interests.

Exploration and evaluation expenditure shall be recognised as fi xed assets (refer to Note IV. 13), construction in progress (refer to Note IV. 14) or intangible assets (refer to Note IV. 16) based on its assets character.

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18. Impairment of non-fi nancial assets

The Group assesses at each balance sheet date whether there is any indication that the long-term equity investments, investment property, fi xed assets, construction in progress and intangible assets with defi nite useful life may be impaired. When there are signs of impairment, the asset will be tested for impairment. Goodwill arising in a business combination and intangible asset with infi nite useful life are tested for impairment annually no matter there is any indication of impairment or not. If it is not possible to estimate the recoverable amount of an individual asset, the recoverable amount is determined on the basis of the asset groups or asset portfolio to which the asset belongs.

If the carrying amount exceeds recoverable value after test of impairment, the excess will be recognized as impairment loss which is not allowed to reverse in the subsequent accounting period.

The indications of impairment are as follows:

(1) The market price of an asset declines substantially during the period. The decline is explicitly more than that as expected caused by passage of time or normal application;
(2) There are signifi cant changes in the economic, technical or legal environment in which the enterprise is operating and in the market of an asset in the current period or in the near future causing an adverse impact on the enterprise;
(3) The market interest rate or rate of return of other investments was increased in the current period that affects the discount rate used by enterprise to calculate the present value of estimated cash fl ow resulting in a substantial decline in the recoverable amount of the assets;
(4) There is evidence to demonstrate that the asset has gone obsolete or damaged;
(5) The asset has already been or will be left idle, retired or disposed before it was planned;
(6) There is evidence from the entity’s internal reports that economic returns of the asset, such as generation of net cash fl ows or realisation operating profi t (loss), was lower or will be lower than expectation;
(7) Other signs indicating the assets have been impaired.

19. Goodwill

Goodwill is the excess of equity investment cost or business combination cost not under common control over fair value of the identifi able net asset of acquiree shared or acquired through business combination on the acquisition date or combination date.

Goodwill related to subsidiaries shall be disclosed separately on the consolidated fi nancial statements; goodwill related to joint operation and joint ventures shall be included as long-term equity investment.

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20. 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.

21. Employee benefi ts

Employee’s benefi ts include short-term remuneration, post-employment benefi ts, layoff benefi ts and other longterm benefi ts.

The short-term compensation includes wages and salary, bonus, Allowances and subsidies, welfare expenses, medical insurance premiums, industrial injury insurance premiums, birth insurance premiums, housing fund, labour union dues, employee education fund, paid short-term absence and others. In the accounting period in which an employee has rendered service to the Group, the Group 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.

Welfare after departure mainly includes the basic endowment insurance, enterprise annuity payment, etc., In accordance with the risks and obligations undertaken by the Group, the welfare after departure is classifi ed as defi ned contribution plans and defi ned benefi t pension plans. For the defi ned contribution plans, the Group shall recognize the sinking fund paid to individual entity as a liability in exchange of services from the employee in accounting period, and recorded into related assets costs or current profi ts or losses in accordance with the benefi t objects.

The termination benefi ts are raised from the compensations due to the termination of employment relationship. The employee compensation liabilities raised from termination benefi ts shall be confi rmed on the date of balance sheet, and recognized as the current profi ts and losses.

Other long-term benefi ts are employment benefi ts other than short-term benefi ts, post-employment benefi ts and termination benefi ts.

22. Contingent liability

The Group 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: The obligation is a present obligation of the Group; It is probable that an outfl ow of economic benefi ts from the Group will be required to settle the obligation; The amount of the obligation can be measured reliably.

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22. Contingent liability – continued

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.

23. Overburden in advance

Overburden in advance of open cut coalmine 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 that 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 current assets must meet all the following conditions: Associated economic benefi ts are likely to fl ow into the enterprise; Enterprise can identify ore body constituent parts of which future mining capacity have been improved; Overburden in advance for the constituent part of ore body can be reliably measured.

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 remained service life of related identifi ed ore body parts.

24. Land subsidence, restoration, rehabilitation and environmental costs

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

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

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25. Special reserves

(1) Maintenance 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. Accrual standard for various companies is as the following:

Company Name	Standard
The Company and its subsidiaries in Shandong and Shanxi	RMB6/Ton
Subsidiaries of the Company in Inner Mongolia	RMB6.5/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. Accrual standard for various companies is as the following:

Company name	Standard
The Company and its subsidiaries in Shandong	RMB15/Ton
Subsidiaries of the Company in Inner Mongolia	RMB15/Ton
Subsidiaries of the Company in Shanxi	RMB30/Ton

Note: Accrual standard of production safety for subsidiaries of the Company in Shanxi was RMB50/Ton before 1 October 2013 and RMB30/Ton after 1 October 2013.

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.

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25. Special reserves – continued

(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.

According to Notice on the issuance of the province to further promote the development of coal economy sustainable growth measures (Jinzhengfa [2013] 26), Coal Mine Switching to Other Business Development Fund was suspended.

(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”.

According to the Issuance Notice of Leading to Further Promotion of the Development of the Province’s Coal Economy to Achieve Sustainable Growth Mode Measures (Jinzhengfa [2013] No.26), the environment rehabilitation management guarantee deposit was suspended.

26. Preferred shares, perpetual bond and other fi nancial instruments

The preferred shares, perpetual bond classifi ed as debt instruments shall be measured initially according to its fair value amount after the deduction of the transaction costs, and its subsequent measurement shall be implemented using the effective interest method according to the amortised costs. Its interest or dividend distribution is processed as the borrowing costs for processing, and its profi ts and losses rose from repurchasing or redemption shall be recognized as the profi t or loss.

The preferred shares, perpetual bond classifi ed as debt instruments increases the owner’s equity after deduction of the transaction costs from the consideration received on date of issuance. Its interest or dividend distribution is processed as the profi t distribution, and its repurchasing or write-off shall be processed as the equity changes.

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27. 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 Group 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 Group has transferred to the buyer the main risks and rewards of ownership of the coal, methanol, heat, auxiliary materials and other sales revenue. The Group 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) The Group recognizes revenue from the sales of products in development when: 1. Development is completed and qualifi ed for acceptance; 2. Legal force is binded by sales contract signed; primary risk on ownership and compensation of the product are transferred to buyers; 3. The Group maintains no management or control on the products that are already sold.
4) Revenue of railway and maritime transportation and other services are recognized when the services are completed.
5) 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 Company 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 allocated 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. For the temporary difference formed by the initial recognition of the assets or liabilities generated from non business combination transactions, which does not affect accounting profi t or taxable income amount (or the deductible loss), the corresponding deferred income tax assets and deferred income tax liabilities shall not be recognized. 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.

The Group recognized the deferred income tax assets with the limitation of the future taxable income amounts, which is likely to be obtained suffi ciently to deduct the deductible the temporary difference, deductible losses and tax deduction.

30. Leases

The Group classifi es the leases into fi nancing lease and operating lease on the lease beginning date.

Financing 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.

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 for income tax

The accounting for 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. Segment reporting

The Group determines the operating segments on the basis of internal structure, management requirements and internal reporting system and adopts these operating segments as the basis for reporting segments for disclosure purposes. An operating segment is a component of the Group that satisfi es all of the following conditions:

1) It is able to earn revenue and incur expenses from ordinary business activities;
2) Its operating results are regularly reviewed by the Group’s management for making decision about resources to be allocated to the segment and to assess its performance; and
3) For which the fi nancial information on the fi nancial position, operating results and cash fl ow of these components is available to the Group.

33. Operation Method of Hedges

The Group uses derivative fi nancial instruments such as forward foreign exchange contracts and interest rate swaps contracts to hedge cash fl ow for foreign exchange risks and fl uctuation in interest rate.

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 for prospective evaluations 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.

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33. Operation Method of Hedges – continued

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 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 once the expected transactions occur.

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 occurs. In the event that expected transactions will not occur, then, accumulated gain or loss in shareholder’s equity will be transferred to the current profi t and loss.

34. Signifi cant accounting policies and accounting estimates

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

The Group makes regulatory check on above mentioned judgments, estimates and assumptions. The Group 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.

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34. Signifi cant accounting policies and accounting estimates – continued

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

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

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

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

As described in Note 4 (18), 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 Company 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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34. Signifi cant accounting policies and accounting estimates – continued

(5) Taxes

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.

Deferred tax assets shall be recognized on deductible temporary differences or tax losses when the management expects a probable future taxable profi t to offset deductable temporary differences or tax losses. When the expected amount is different from the original estimation, the difference shall affect the recognition of deferred tax assets in the period in which the estimation changes. Deferred tax assets shall not be recognized on temporary differences and tax losses when the management expects no future taxable income to be offset.

35. Signifi cant changes of accounting policies and accounting estimates

(1) Signifi cant changes of accounting policies

During the reporting period, there are no signifi cant changes in accounting policies.

(2) Signifi cant changes of accounting estimates

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

V. TAXES

i. The major tax categories and tax rate applicable to the Company 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 Company that registered in PRC.

According to Notice of approval to preferential taxation for western development issued by Ejin Horo local tax bureau dated 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%.

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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%, 6% and 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 Jining City National Tax Bureau Jiguoshuiliupizi (2012) Document No.1, 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 the interest income of loan provided by the Company to subsidiaries and the business tax is paid at the 5%.

4. City construction tax & education fee

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

5. Resource tax

(1) Resource tax in Shandong area

According to Notice for Adjustment on Coal Resources Tax in Shandong Province by the Minister of Finance, the State Administration of Taxation (caishui [2005]86), the applicable coal resource tax in Shandong Province is RMB3.6 per ton.

Pursuant to the Notice of Adjustment of Resource Tax in Shandong Province (Lucaishui [2014] No.43), which was jointly issued by the Ministry of Finance and the State Administration of Taxation, since 1 December 2014, the collection basis of resource tax in Shandong province has been changed from volumes into prices and the amount of business tax has been changed from RMB3.60 per tonne into 4%.

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5. Resource tax – continued

(2) Resource tax in Shanxi area

According to Notice for Adjustment on Coal Resources Tax in Shanxi Province by the Minister of Finance, the State Administration of Taxation (caishui [2004]187), the applicable coal resource tax in Shanxi Province is RMB3.2 per ton.

Pursuant to the Notice of the Reformation Implementation of Coal Resource Tax in Shanxi Province (Jincaishui [2014] No.37), which was jointly issued by the Ministry of Finance and the State Administration of Taxation, since 1 December 2014, the collection basis of resource tax in Shanxi province has been changed from volumes into prices and the amount of business tax has been changed from RMB3.20 per tonne into 8%.

(3) Resource tax in Inner Mongolian area

According to Notice for Adjustment on Coal Resources Tax in Inner Mongolia by the Minister of Finance, the State Administration of Taxation (caishui [2005]172), the applicable coal resource tax in Inner Mongolia is RMB3.2 per ton.

Pursuant to the document of local government of Inner Mongolia the Announcement of Applicable Coal Resource Tax Rate in whole area (Neizhengfa [2014]135), since 1 December 2014, the collection basis of resource tax in Inner Mongolia has been changed from volumes into prices and the amount of business tax has been changed from RMB3.20 per tonne into 9%.

With resource tax paid on price, the Company and its domestic subsidiaries pay resource tax on the amount of actual sales on the sum of raw coal and washed coal products times applicable tax rate.

With resource tax paid on volume, the Company and its domestic subsidiaries thereof pay resource tax on the total taxable sales times applicable tax rate.

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6. Real estate tax

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

ii. Main taxes and rates applicable to Australia 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%

Note 1: Income tax for Australian 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.
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%

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VI. NOTES TO CONSOLIDATION FINANCIAL STATEMENTS

Information of fi nancial statements disclosed as the following, except for otherwise indicated, “Beginning balance” refers to 1 January 2015, “Ending balance” refers to 30 June 2015, “Current year” refers to the year from 1 January 2015 to 30 June 2015, “Last year” refers to the year from 1 January 2014 to 30 June 2014, and the presenting currency unit is thousand RMB Yuan.

1. Cash and cash equivalents

Items	At June 30, 2015 At January 1, 2015 Original Exchange RMB Original Exchange RMB currency rate equivalent currency rate equivalent
Cash on hand Including: RMB USD AUD Subtotal Cash in bank Including: RMB USD AUD CAD HKD EUR GBP Subtotal Cash equivalents Including: RMB USD AUD GBP Subtotal Total	509 1.0000 509 737 1.0000 737 27 6.1136 165 27 6.1190 165 6 4.6993 28 8 5.0174 40
	702 942
	17,527,634 1.0000 17,527,634 16,568,184 1.0000 16,568,184 375,520 6.1136 2,295,779 457,040 6.1190 2,796,628 84,049 4.6993 394,971 55,603 5.0174 278,982 3,029 4.9232 14,912 1,716 5.2755 9,053 24 0.7886 19 31 0.7889 24 1,992 6.8699 13,685 1,992 7.4556 14,852 1 9.6422 10 – 9.5437 –
	20,247,010 19,667,723
	579,398 1.0000 579,398 802,191 1.0000 802,191 – 6.1136 – 4,598 6.1190 28,135 3,620 4.6993 17,011 5,396 5.0174 27,074 – 9.6422 – 1 9.5437 10
	596,409 857,410
	20,844,121 20,526,075

At the end of the reporting period, the Company held RMB110.03 million as environmental guarantee deposits and RMB132.93 million as other guarantee deposits with the total amount of RMB242.96 million.

At the end of the reporting period, the cash of the Company deposited overseas is RMB1.27535 billion, which is owned by the overseas subsidiaries of the Company.

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2. Financial assets at fair value through profi t or loss

(1) Types of fi nancial assets held for trading

Item	At June 30, 2015 At January 1, 2015
Financial assets designated at fair value through prof t or loss Including: Investment on equity instrument Total	1,029,158 - 1,029,158 -
	1,029,158 -

Note: The fi nancial assets designated at fair value through profi t or loss by the Company during the current year is the Company’s acquisition on the stock of targeted issuance by Qilu Bank Co., Ltd. (targeted stock issuance).

3. Notes receivable

(1) Classifi cation of notes receivable

Category	At June 30, 2015 At January 1, 2015
Bank acceptance Commercial acceptance Letter of credit Total	3,795,813 5,022,043 3,505 46,310 355,211 -
	4,154,529 5,068,353

(2) Ending balance of notes receivable pledged

Ending balance of notes receivable Items pledged	Ending balance of notes receivable Items pledged
Bank acceptance Total	649,991 649,991

(3) Notes receivable endorsed or discounted at the end of the year and is not yet due as at balance sheet date

Items	Ending balance Ending balance without of derecognition derecognition
Bank acceptance Total	2,154,408 -
	2,154,408 -

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3. Notes receivable – continued

(4) Overdue notes receivable at the end of the year

Ending balance for overdue notes Items receivable	Ending balance for overdue notes Items receivable
Bank acceptance Total	439,245 439,245

Note: the Company entrusts the banks to deposit the notes through the note depository agreement signed between the Company and banks, and the overdue notes receivable with the amount of RMB418 million is deposited in China Construction Bank (Zoucheng Branch).

4. Accounts receivable

(1) Classifi cation of accounts receivable

Items	At June 30, 2015 At January 1, 2015 Carrying amount Bad debt Provision Carrying Carrying amount Bad debt Provision Carrying Amount % Amount % Amount Amount % Amount % Amount
Provided for bad debts on portfolio basis Aging portfolio Risk-free portfolio Subtotal Total	— — — — — — — — 1,084,960 44 44,863 4 1,040,097 305,216 15 13,699 4 291,517 1,364,352 56 – – 1,364,352 1,724,235 85 – – 1,724,235
	2,449,312 100 44,863 2 2,404,449 2,029,451 100 13,699 1 2,015,752
	2,449,312 — 44,863 — 2,404,449 2,029,451 — 13,699 — 2,015,752

1) Accounts receivable that are accrued for bad debts under aging analysis

Items	At June 30, 2015 Accounts Provision for Percentage receivable bad debt of accrual (%)
Within 1 year 1 to 2 years 2 to 3 years Over 3 years Total	1,083,434 43,337 4 – – 30 – – 50 1,526 1,526 100 1,084,960 44,863 —

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4. Accounts receivable – continued

(1) Classifi cation of accounts receivable – continued
2) Provision for bad debt accrued under other method

Items	At June 30, 2015 Accounts Provision for Percentage receivable bad debt of accrual (%)
Risk-free portfolio Total	1,364,352 – – 1,364,352 – –

Note: Ending accounts receivable under risk-free portfolio includes the amount of RMB998.34 million which due from Australian subsidiaries of the Company and was not accrued for bad debt since it is still under the normal term of credit.

(2) There is no accounts receivable that is written off during the current year.
(3) Ending accounts receivable due from the Company’s shareholders holding more than 5% (including 5%) voting power are excluded. Total amounts due from related parties is RMB280.65 million, refer to Note XI, iii, 1 for details.
(4) The top-fi ve accounts receivables

			Proportion to	Ending balance
			total accounts	or bad debt
Company name	Ending balance	Aging	receivable (%)	fprovision
Huadian Power (Beijing) Trade
Co., Ltd-Shandong Branch	280,983	Within 1 year	11	11,239
Dongguan Huihuang Energy
Co., Ltd.	254,347	Within 1 year	10	10,174
Middlemount Joint Venture	195,668	Within 1 year	8	-
Wuxi Zhongmai Trade Co., Ltd.	136,893	Within 1 year	6	5,476
State Grid Shandong
Electric Power Company
Heze Power Supply Co.	59,907	Within 1 year	2	-
Total	927,798		37	26,889

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5. Advances to suppliers

(1) Aging analysis

Items	At June 30, 2015 At January 1, 2015 Amount % Amount %
Within 1 year 1 to 2 years 2 to 3 years Over 3 years Total	2,848,766 91 1,864,710 95 279,976 9 93,120 5 276 – 13,734 – 790 – – –
	3,129,808 100 1,971,564 100

Note: Advances to suppliers aged over one year are advanced payment for equipment purchase, which is resulted from the circumstance that the equipment is under execution and not yet arrived therefore the Company has not yet made the settlement.

(2) The top-fi ve advances to suppliers

			Proportion to
			ending balance
			of advances
Company Name	Amounts	Aging	to suppliers (%)
Inner Mongolia China Coal Import and
Export Trade Co., Ltd.	174,602	Within 1 year and 1-2 years	6
Poly Xiexin Electric Power Fuel Co., Ltd	171,313	Within 1 year	5
Jining Gaoxin Construction Investment Co., Ltd.	160,290	Within 1 year and 1-2 years	5
Tianyuan High-Tech Development Co., Ltd.	160,000	Within 1 year	5
Jiangsu Tianyu Energy Co., Ltd.	156,778	Within 1 year	5
Total	822,983		26

(3) Ending balance of advances to suppliers due from the Company’s shareholders holding more than 5% (including 5%) of voting power is RMB2.3 million; the total of advances to suppliers due from related parties is RMB11.57 million, equalling 0.37% of the total balance. See Note XI, iii, 1 for details.

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6. Other receivables

(1) Classifi cation of other receivables

Items	At June 30, 2015 At January 1, 2015 Carrying amount Bad debt Provision Book Carrying amount Bad debt Provision Book Amount % Amount % value Amount % Amount % value
Accrued for bad debts under portfolio basis Aging portfolio Risk-free portfolio Subtotal Individually insignif cant but accrued for bad debts under individual basis Total	— — — — — — — — 37,626 5 16,664 44 20,962 26,061 4 16,001 61 10,966 675,624 95 – 675,624 638,787 96 – – 638,878
	713,250 100 16,664 2 696,586 664,848 100 16,001 2 648,847
	3,163 3,163 100 – 3,163 – 3,163 100
	716,413 — 19,827 — 696,586 668,011 — 19,164 — 648,847

1) Provision for bad debt under aging analysis

Aging	At June 30, 2015 Other Bad debt receivables provision %
Within 1 year 1 to 2 year 2 to 3 years Over 3 years Total	21,315 853 4 – – 30 1,000 500 50 15,311 15,311 100 37,626 16,664 —

2) Provision for bad debt under other method

Items	At June 30, 2015 Carrying Provision for amount bad debt %
Risk-free portfolio Total	675,624 – – 675,624 – –

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6. Other receivables – continued

(1) Classifi cation of other receivables – continued
3) Individually insignifi cant but accrued for bad debts under individual basis

Name	Carrying Provision amount for bad debt % Reason
National Energy Total	3,163 3,163 100 uncollectable
	3,163 3,163 — —

(2) There is no other receivable that is written off during the reporting period.
(3) Classifi ed by nature

Nature of receivables	At June 30, 2015 At January 1, 2015
Security deposit Current account Receivable for materials Petty cash Amount paid on others behalf Deductible tax Receivable from investment Total	175,510 329,246 343,274 231,504 142,943 65,009 54,593 17,819 93 471 – 23,478 – 484
	716,413 668,011

(4) At the end of the reporting period, amounts due from controlling shareholders of the Company is RMB11 million (last year: RMB16.99 million); total amounts due from related parties is RMB243.16 million, equalling 33.94% of the total ending balance. Refer to Note XI, iii, 1 for details.

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6. Other receivables – continued

(5) The top-fi ve other receivables

Company name Nature	Ending Proportion balance for Ending to other Bad debt balance Aging receivables (%) provision	Ending Proportion balance for Ending to other Bad debt balance Aging receivables (%) provision
Off ce of State Revenue-New South Wales Tax refund Yankuang Xinjiang Mining Co., Ltd. Liuhuanggou Coal Mine Current account Yankuang Donghua Heavy Industry Co., Ltd. Current account Shaanxi Future Energy and Chemical Co., Ltd. Current account Inner Mongolia Dalate Economic Development Zone Management Committee Deposit Total	46,073 Within 1 year 52,601 1 to 2 years 28,979 Within 1 year 20,816 Within 1 year 20,000 Within 1 year 168,469	6 – 7 – 4 – 3 – 3 – 23 –

7. Inventories

(1) Classifi cation of inventories

Items	At June 30, 2015 At January 1, 2015 Carrying Provision Book Carrying Provision Book amount for impairment value amount for impairment value
Raw materials Coal stock Methanol stock Low value consumables Cost of real estate development Total	177,667 – 177,667 167,173 – 167,173 1,532,861 182,156 1,350,705 1,111,773 52,942 1,058,831 23,991 – 23,991 17,966 – 17,966 242,728 – 242,728 226,510 – 226,510 125,904 – 125,904 99,433 – 99,433
	2,103,151 182,156 1,920,995 1,622,855 52,942 1,569,913

(2) Provision for impairment

Items	Foreign At January 1, Increase Decrease translation At June 30, 2015 Accrual Others Reversal Others difference 2015
Coal stock Total	52,942 181,864 – 44,804 – -7,846 182,156
	52,942 181,864 – 44,804 – -7,846 182,156

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8. Non-current assets due within one year

Items	At June 30, 2015 At January 1, 2015 Nature
Long-term receivables due within one year Long-term prepayments due within one year Held-to-maturity investments due within one year Total	1,644,157 1,705,757 Loan to Middlemount (Note 1) 8 37,497 Deferred expense 1,250,000 – Entrusted loan (Note 2)
	2,894,165 1,743,254

Note 1: Loan to Middlemount is to Middlemount Joint Venture’s long-term loan due to Gloucester Coal Ltd, the subsidiary of Yancoal Australia. It is due at 24 December 2015 with interest rate equals to commercial loans in the same period.
Note 2: Approved on 1st meeting of the sixth session of the Board, the Company provided entrusted loans, to Shaanxi Future Energy Co., Ltd with the amount of RMB1.25 billion, of which the term is from August 2014 to August 2015 and the annual rate is 8%. Meanwhile the Company accepted the 30% share in Shaanxi Future Energy Co., Ltd. Held by Yankuang Group Co., Ltd. as a pledge guarantee.

9. Other current assets and other current liabilities

(1) Other current assets

Items	At June 30, 2015 At January 1, 2015 Nature
Land subsidence, restoration, rehabilitation and environmental costs Environment management guarantee deposit Special royalty receivable Hedging-forward foreign exchange contract Input VAT sit for certif cation Total	2,102,118 2,102,118 Note IV.24 1,095,493 1,095,493 Note XV.2 84,786 89,137 Note 1 1,175 359 221,379 –
	3,504,951 3,287,107

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

Items At December 31, 2014 At January 1, 2014 Nature	Items At December 31, 2014 At January 1, 2014 Nature
Land subsidence, restoration, rehabilitation and environmental costs Short-term f nancing bonds Deferred income Advances for management fee Hedging-forward foreign exchange contract Hedging-Collar option Total	2,998,038 3,320,888 Note IV.24 9,986,667 4,999,583 Note 2 3,408 3,642 Note 3 2,240 – 2,621 – 78,317
	12,990,353 8,405,051

Note 1: It is the right owned by Gloucester, a subsidiary of the Company, to collect the mining royalties (i.e., 4% of its FOB selling price) from Middlemount project. On each reporting date, management calculated the value of the right through its present value of the discounted cash fl ow, and the change of the value is recorded as current profi t or loss. As at 30 June 2015, mining royalty receivable of AUD18.04 million due within one year is recognized as other current assets and the one of AUD185.18 million due over one year is recognized as other non-current asset.
Note 2: In accordance with the Notice of Acceptance of Registration coded [Zhongshixiezhu [2013] PPN No.306] and the one coded [Zhongshixiezhu [2013] CP No.418] issued by China’s National Association of Financial Market Intuitional Investors, the Company was approved to register short-term fi nancing bonds with aggregate amount of RMB15 billion. The Company received RMB5 billion through the issuance of the 2014-fi rst-tranche-short-term fi nancing of which the term is one year and interest rate is 5.19%. Actual receipt after issuing cost is RMB4.9975 billion with the redemption incurred during the current year. On 18 March 2015, the Company received RMB5 billion through the issuance of the 2015-fi rst-tranche-shortterm fi nancing of which the term is one year and interest rate is 5.19%. Actual receipt after issuing cost is RMB4.99 billion.

In accordance with the Notice of Acceptance of Registration coded [Zhongshixiezhu [2015] SCP No.114] issued by China’s National Association of Financial Market Intuitional Investors, the Company was approved to register ultra short fi nancing bonds with aggregate amount of RMB20 billion. On 11 June 2015, the Company received RMB2.5 billion through the issuance of the 2015-fi rst-tranche-ultra-short fi nancing of which the term is 270 days and interest rate is 4.2%. Actual receipt after issuing cost is RMB2.49625 billion. From 17 June 2015 to 18 June 2015, the Company received RMB2.5 billion through the issuance of the 2015-second-tranche-ultra-short fi nancing of which the term is 270 days and interest rate is 4.2%. Actual receipt after issuing cost is RMB2.49625 billion.

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9. Other current assets and other current liabilities – continued

(2) Other current liabilities – continued

Details of short-term bonds payable is as follows:

Category	At Issuance Interest Amortization Redemption At Face Issued Issued January 1, during accrual per on premium for current June 30, value date Maturity amount 2015 the year face value or discount year 2015
Corporate short-term bond Corporate short-term bond Corporate ultra-short bond Corporate ultra-short bond Total	5,000,000 2014-3-14 1 year 4,997,500 4,999,583 – 56,194 – 5,000,000 – 5,000,000 2015-3-20 1 year 4,990,000 – 4,990,000 73,525 3,333 – 4,993,333 2,500,000 2015-6-15 270 days 2,496,250 – 2,496,250 4,375 417 – 2,496,667 2,500,000 2015-6-19 270 days 2,496,250 – 2,496,250 3,208 417 – 2,496,667
	— — — 14,980,000 4,997,583 9,982,500 137,302 4,167 5,000,000 9,986,667

Note 3: The Company has reclassifi ed the government grants of RMB3.408 million, which will be recognized in profi t/ loss within one year, into the other current liabilities. Details are as the followings:

Government grant	Amount recognized as Addition for non-operating Foreign Related to At January 1, current income for Other translation At June 30, assets/ 2015 year currentyear movement difference 2015 earnings
Infrastructure construction subsidies Mining emergency rescue equipment subsidies Total	3,028 1,262 1,262 – – 3,028 Related to assets 614 131 365 – – 380 Related to assets
	3,642 1,393 1,627 – – 3,408

10. Available-for-sale fi nancial assets

(1) Details

Items	At June 30, 2015 At January. 1, 2015 Carrying Provision for Book Carrying Provision for Book amount impairment value amount impairment value
AFS debt instruments AFS equity instruments at fair value at cost Total	– – – – – – 521,698 – 521,698 388,763 – 388,763 382,350 – 382,350 249,403 – 249,403 139,348 – 139,348 139,360 – 139,360
	521,698 – 521,698 388,763 – 388,763

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10. Available-for-sale fi nancial assets – continued

(2) Available-for-sale fi nancial assets measured at fair value

	Available-for-sale
Items	equity instruments	Total
Cost of equity instruments/amortized cost of debt instruments	79,037	79,037
Fair value	382,350	382,350
Changes in fair value recognized in accumulated
other comprehensive income	303,313	303,313
Accrued amount for impairment	–	–

(3) Available-for-sale fi nancial assets measured at cost

Investees	Carrying amount Foreign Proportion At 1 January translation At 30 June to share Cash 2015 Addition Reversals difference 2015 in investees (%) dividends
Ordos South Railway Co., Ltd. Yankuang Group Guohong Chemical Co., Ltd. Jianxin Zoucheng Rural Bank Co., Ltd. Shenzhen Weiersen Floriculture Co., Ltd. Investment on Wiggins Island Coal Export Terminal Investment on Waratah port Total	100,670 – – – 100,670 5 – 29,403 – – – 29,403 5 – 9,000 – – – 9,000 9 – 100 – – – 100 1.25 – – – – – – 5.6 – 187 – – -12 175 – –
	139,360 – – -12 139,348 – –

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11. Held-to-maturity investment

(1) Details

Items	At June 30, 2015 At January 1, 2015 Carrying Provision for Book Carrying Provision for Book amount impairment value amount impairment value
Entrusted loans to Shannxi Future Energy Chemicals Co., Ltd. Total	– – – 1,250,000 – 1,250,000
	– – – 1,250,000 – 1,250,000

12. Long-term receivables

(1) Long-term receivables

Items	At June 30, 2015 At January 1, 2015 Carrying Provision for Book Carrying Provision for Book amount impairment value amount impairment value
Gladstone long-term securities E class Wiggins Island Preference Securities Ashton long-term receivables Total	148,028 – 148,028 158,048 – 158,048 71,993 – 71,993 76,866 – 76,866 16,440 – 16,440 – – –
	236,461 – 236,461 234,914 – 234,914

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

1) The purchasing price of GiLTS (Gladstone Long Term Securities) is AUD31.5 million.
2) The purchasing price and par value of WIPS (E class Wiggins Island Preference Securities) are AUD15.32 million and AUD30.60 million respectively.
3) As WIPS and GiLTS have no active market and cannot be traded.

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13. Long-term equity investments

						Increase/Decrease
				Investment	Adjustments
				prof ts and	of other		Declare of	Accruals		Foreign		Ending balance
	At 1 January			losses under	comprehensive	Other equity cash	dividends	of provision	Other	translation	At 30 June	of provision
Name of investees	2015	Increase	Decrease	equity method	income	changes	or prof ts for impairment		decrease	difference	2015	for impairment
I. Joint venture
Middlemount Joint Venture	127,516	–	–	-80,763	–	–	–	–	–	-5,440	41,313	–
Shengdi Fenlei Coal Preparation and
Engineering Technology (Tianjin)
Co., Ltd.	3,351	7,000	–	3,116	–	–	–	–	–	–	13,467	–
II. Associates
China HD Zouxian Co., Ltd.	1,188,757	–	–	168,378	–	–	165,873	–	–	–	1,191,262	–
Yankuang Group Finance Co., Ltd.	310,308	–	–	18,590	–	–	–	–	–	–	328,898	–
Shaanxi Future Energy Chemical Co, Ltd.	1,456,564	–	–	40,661	22,637	–	–	–	–	–	1,519,862	–
Shandong Shengyang Wood Co., Ltd	–	–	–	–	–	–	–	–	–	–	–	–
Jining Jiemei New Wall Material Co., Ltd	–	–	–	–	–	–	–	–	–	–	–	–
Shanghai CIFCO Futures (note)	–	264,560	–	–	–	–	–	–	–	–	264,560	–
Newcastle Coal Infrastructure Group
Pty Ltd (“NCIG”)	1	–	–	–	–	–	–	–	–	–	1	–
Total	3,086,497	271,560	–	149,982	22,637	–	165,873	–	–	-5,440	3,359,363	–

Note: At the seventh meeting of the sixth session of the Board of the Company approved the Proposal regarding the Discussion and Consideration on the Investment from Yanzhou Coal Mining Co., Ltd. to Shanghai CIFCO Futures, and the Company paid RMB265 million on the 33.33% shares of Shanghai CIFCO Futures.

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14. Fixed assets

(1) Breakdown of fi xed assets

Items

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

I. Cost
1. Beginning balance
1,037,609
5,321,202
9,871,726
3,571,188
253,677
28,774,708
541,079
1,699,943
51,071,132
2. Increase
1,865
8,304
420,043
872,439
–
773,747
2,897,250
318
4,973,966
(1) Purchase
–
4,730
166,322
–
–
368,507
–
176
539,735
(2) Transfers in from
construction in progress
–
2,537
226,828
–
–
382,655
307
142
612,469
(3) Addition from business
combination
1,865
1,037
3,476
–
–
22,585
–
–
28,963
(4) Reclassif cation
–
–
23,417
872,439
–
–
2,896,943
–
3,792,799
3. Decrease
1,506
770,565
9,903
833
253,677
2,467,864
7,125
321,836
3,833,309
(1) Disposals
1,506
3,837
9,903
833
–
40,683
7,125
527
64,414
(2) Reclassif cation
–
766,728
–
–
253,677
2,427,181
–
321,309
3,768,895
4. Foreign translation
difference
-65,795
-32,860
-237,185
–
–
-615,092
–
–
-950,932
5. Ending balance
972,173
4,526,081
10,044,681
4,442,794
–
26,465,499
3,431,204
1,378,425
51,260,857
II. Accumulated depreciation
1. Beginning balance
–
2,554,013
3,460,247
1,538,296
94,572
12,947,578
439,977
324,358
21,359,041
2. Increase
–
97,006
278,296
1,229,643
–
982,095
1,787,317
758,901
5,133,258
(1) Accrual
–
96,871
277,615
87,092
–
977,424
110,096
46,990
1,596,088
(2) Reclassif cation
–
–
–
1,142,551
–
–
1,677,221
711,911
3,531,683
(3) Business combination
–
135
681
–
–
4,671
–
–
5,487
3. Decrease
–
1,222,450
61,910
–
94,572
2,201,443
6,448
397
3,587,220
(1) Disposals
–
1,853
9,903
–
–
36,936
6,448
397
55,537
(2) Reclassif cation
–
1,220,597
52,007
–
94,572
2,164,507
–
–
3,531,683
4. Foreign translation difference
–
-6,976
-53,834
–
–
-200,841
–
–
-261,651
5. Ending balance
–
1,421,593
3,622,799
2,767,939
–
11,527,389
2,220,846
1,082,862
22,643,428
III. Provision for impairment
1. Beginning balance
–
65,182
175,724
24,398
–
289,674
215
84
555,277
2. Increase
–
–
–
–
–
–
–
–
–
3. Decrease
–
–
695
–
–
–
–
–
695
4. Foreign translation difference
–
–
-11,117
–
–
–
–
–
-11,117
5. Ending balance
–
65,182
163,912
24,398
–
289,674
215
84
543,465
IV. Carrying amount
1. At 30 June 2015
972,173
3,039,306
6,257,970
1,650,457
–
14,648,436
1,210,143
295,479
28,073,964
2. At 1 January 2015
1,037,609
2,702,007
6,235,755
2,008,494
159,105
15,537,456
100,887
1,375,501
29,156,814

1,037,609
5,321,202
9,871,726
3,571,188
253,677
28,774,708
541,079
1,699,943
51,071,132
1,865
8,304
420,043
872,439
–
773,747
2,897,250
318
4,973,966
–
4,730
166,322
–
–
368,507
–
176
539,735
–
2,537
226,828
–
–
382,655
307
142
612,469
1,865
1,037
3,476
–
–
22,585
–
–
28,963
–
–
23,417
872,439
–
–
2,896,943
–
3,792,799
1,506
770,565
9,903
833
253,677
2,467,864
7,125
321,836
3,833,309
1,506
3,837
9,903
833
–
40,683
7,125
527
64,414
–
766,728
–
–
253,677
2,427,181
–
321,309
3,768,895
-65,795
-32,860
-237,185
–
–
-615,092
–
–
-950,932
972,173
4,526,081
10,044,681
4,442,794
–
26,465,499
3,431,204
1,378,425
51,260,857

972,173
3,039,306
6,257,970
1,650,457
–
14,648,436
1,210,143
295,479
28,073,964
1,037,609
2,702,007
6,235,755
2,008,494
159,105
15,537,456
100,887
1,375,501
29,156,814

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14. Fixed assets – continued

(2) Fixed assets acquired through fi nance lease

Items	Accumulated Provision for Cost depreciation impairment Carrying amount
Plant, machinery and equipments Total	2,065,651 387,962 – 1,677,689 2,065,651 387,962 – 1,677,689

(3) Fixed assets with no certifi cate of title

Items	Carrying amount Reason
Buildings Total	499,586 Self-constructed buildings, certif cate of property rights are in progress 499,586

(4) There depreciation of lands should be accrued as overseas subsidiaries hold permanent ownership.
(5) At the end of the reporting period, the amount of the Company’s fi xed assets that are fully depreciated but still in use is RMB706.87 million.

15. Construction in progress

(1) Breakdown of construction in progress

Items	At 30 June 2015 At 1 January 2015 Carrying Provision for Carrying Provision for amount impairment Book value amount impairment Book value
I. Maintenance construction II. Technical revamping III. Infrastructure construction IV. Safety construction V. Exploration construction VI. Repairing construction Total	1,176,063 – 1,176,063 426,178 – 426,178 664,295 – 664,295 156,791 – 156,791 27,482,833 119,520 27,363,313 27,143,962 127,472 27,016,490 238,469 – 238,469 564,914 – 564,914 181,780 – 181,780 545,676 – 545,676 1,229 – 1,229 – – – 29,744,669 119,520 29,625,149 28,837,521 127,472 28,710,049

Note: As at the end of the reporting period, the amount for construction in progress pledged as collateral is RMB132 million.

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15. Construction in progress – continued

(2) Changes of signifi cant construction in progress

Items	Reduction Transferred Foreign At 1 January into Other translation At 30 June 2015 Additions f xed assets decrease difference 2015
Shilawusu coal mine and coal processing project Zhuan Longwan coal project Ying Panhao coal project Canada potash project Wanfu mine project Total (Continued)	13,415,329 194,580 – 878 – 13,609,031 8,798,604 64,045 – – – 8,862,649 1,738,244 342,385 – 257,644 – 1,822,985 1,646,191 25,180 – – -107,577 1,563,794 482,333 125,377 5,971 – – 601,739 26,080,701 751,567 5,971 258,522 -107,577 26,460,198

					Including:	Rate of
	Accumulated		Accumulated		amount of	capitalized
	investment to			amount of	capitalized	interests for
		budget ratio		capitalized	interests for	current year	Sources of
Items	Budget	(%)	Progress	interests	current year	(%)	capital
Shilawusu coal mine and
coal processing project	16,724,671	81	81	23,154	12,331	6.15	Borrowings
Zhuan Longwan coal project	10,082,225	88	88	65,564	–	6.4	Borrowings
Ying Panhao coal project	9,645,116	19	19	95,265	9,911	6.4	Borrowings
Canada potash project	N/A	–	–	6,171	3,036	Libor+2.4%	Borrowings
Wanfu mine project	3,449,799	17	17	37,475	11,774	6.4	Borrowings
Total		–	–	227,629	37,052

Note: Canadian potash project is still at early stage of exploration, no overall budget is currently available.

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16. Intangible assets

(1) Details of intangible assets

Items	Interests in Water Mining unproved Land Patents and access tenements mining use rights known-how rights Software Total
I. Cost 1. Beginning balance 2. Increase (1) Purchase (2) Business combination (3) Reclassif cation 3. Decrease (1) Disposals (2) Reclassif cation 4. Foreign translation difference 5. Ending balance II. Accumulated amortization 1. Beginning balance 2. Increase (1) Accrual (2) Reclassif cation 3. Decrease (1) Disposals (2) Reclassif cation 4. Foreign translation difference 5. Ending balance III. Provision for impairment 1. Beginning balance 2. Increase (1) Accrual 3. Decrease (1) Disposals 4. Foreign translation difference 5. Ending balance IV. Carrying amount 1. At 30 June 2015 2. At 1 January 2015	25,373,968 2,819,553 1,034,993 226,417 130,584 107,896 29,693,411 140,783 – 124,563 – – 2,191 267,537 140,783 – – – – 2,191 142,974 – – – – – – – – – 124,563 – – – 124,563 – – – – 124,563 14 124,577 – – – – – 14 14 – – – – 124,563 – 124,563 -1,093,761 -178,758 -1,126 -7,953 -382 -7,104 -1,289,084 24,420,990 2,640,795 1,158,430 218,464 5,639 102,969 28,547,287
	4,983,776 – 236,060 – 261 35,879 5,255,976 413,021 – 12,508 2,525 161 7,603 435,818 413,021 – 12,508 2,525 161 7,603 435,818 – – – – – – – – – – – – 14 14 – – – – – 14 14 – – – – – – – -137,507 – -61 – -43 -3,442 -141,053 5,259,290 – 248,507 2,525 379 40,026 5,550,727
	1,918,613 – – – – – 1,918,613 – – – – – – – – – – – – – – – – – – – – – – – – – – – – -121,640 – – – – – -121,640 1,796,973 – – – – – 1,796,973
	17,364,728 2,640,795 909,923 215,939 5,260 62,943 21,199,587 18,471,579 2,819,553 798,933 226,417 130,323 72,017 22,518,822

Note: As at the end of the reporting period, intangible assets include the mining tenement pledged as collateral with the net value of RMB10.045 billion.

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16. Intangible assets – continued

(2) Land use rights with no certifi cate of title

Items	Carrying amount Reason for the lack of title
Land use rights Land use rights Land use rights Total	107,098 New purchase, application of title in process 58,142 Service fees related to land are outstanding 56,000 Original land title expired, new land title in progress 221,240

17. Goodwill

Items	Increase Decrease Foreign Ending balance of At 1 January Business Acquisition of translation At 30 June provision for 2015 combination Others subsidiaries others difference 2015 impairment
Acquisition of Xintai Acquisition of Yancoal Resources Acquisition of Syntech II Acquisition of Premier Acquisition of Yanmei Shipping Total	653,836 – – – – – 653,836 – 306,225 – – – – -19,415 286,810 – 21,947 – – – – -1,391 20,556 – 13,648 – – – – -865 12,783 -12,783 10,045 – – – – – 10,045 – 1,005,701 – – – – -21,671 984,030 -12,783

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18. Deferred tax assets and deferred tax liabilities

(1) Deferred tax assets without elimination

	At 30 June 2015	At 30 June 2015	At 1 January 2015
	Deductible		Deductible
	temporary	Deferred	temporary	Deferred
Items	differences	tax assets	differences	tax assets
Deferred tax assets of
the parent company
and its domestic subsidiaries
Land subsidence, restoration,
rehabilitation and environmental costs	2,468,596	617,149	2,895,311	723,827
Provision for maintenance fees,
safety production and development fund	902,524	225,631	1,669,857	395,681
Differences of depreciation on f xed assets	699,244	174,811	763,985	189,732
Accrued but not yet paid salaries and
social insurance	445,612	111,403	385,740	96,435
Interest occupied by mining tenements	238,876	59,719	238,875	59,719
Contingent value right (CVR)	–	–	–	–
Hedging instrument liability	–	–	664	166
Provision for impairment on assets	64,916	16,229	33,237	8,272
Deferred income	15,108	3,777	16,733	4,183
Difference of amortization for
Mintangible assets	–	–	111,478	27,869
Undistributed def cit	–	–	407,334	101,833
Others	481,360	120,340	8,913	2,230
Subtotal	5,316,236	1,329,059	6,532,127	1,609,947
Deferred tax assets from
Yancoal Australia
Undistributed def cit	10,200,956	3,060,287	9,938,631	2,981,589
Hedging instrument liability	2,961,194	888,358	4,083,464	1,225,039
Rehabilitation costs	686,358	205,907	541,504	162,451
Take or pay liabilities	341,765	102,529	282,251	84,675
Finance lease	177,417	53,225	209,615	62,885
Amortization of assets	587,286	176,186	1,292,930	387,879
Others	902,615	270,785	943,426	283,028
Subtotal	15,857,591	4,757,277	17,291,821	5,187,546
Total deferred tax assets	21,173,827	6,086,336	23,823,948	6,797,493

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18. Deferred tax assets and deferred tax liabilities – continued

(2) Deferred tax liabilities without elimination

Items	At 30 June 2015 At 1 January 2015 Taxable Taxable temporary Deferred temporary Deferred differences tax liabilities differences tax liabilities
Deferred tax liabilities of the Company and its domestic subsidiaries Fair value of mining tenement Amortization and recognition of environmental deposits Fair value adjustment of available-for-sale f nancial assets Subtotal Deferred tax liabilities from Yancoal Australia Amortization and recognition of assets Unrealized gain or loss on foreign currency exchange Hedging instrument assets Others Subtotal Total deferred tax liabilities	14,230,852 3,557,713 15,800,224 3,579,002 579,724 144,931 626,423 156,606 549,524 137,381 170,366 42,592
	15,360,100 3,840,025 16,597,013 3,778,200
	8,969,654 2,690,896 9,920,534 2,976,160 916,879 275,064 3,008,125 902,437 3,421,368 1,026,410 2,044,850 613,455 314,036 94,211 316,527 94,958
	13,621,937 4,086,581 15,290,036 4,587,010
	28,982,037 7,926,606 31,887,049 8,365,210

19. Other non-current assets

Items	At 30 June 2015 At 1 January 2015
Special royalties receivable (VI, 8, Note 1) Prepayment on investment (XII, 1, (1)) Customer’s contracts Security deposit of Gloucester Total	870,203 909,927 117,926 117,926 13,056 23,137 4,708 5,026
	1,005,893 1,056,016

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20. Provision for assets impairment

Items	Increase Decrease Foreign At 1 January Other Other translationAt 30 June 2015 Accrual transfer in Reversal transfer out difference 2015
Bad debt provision Provision for impairment on inventories Provision for impairment on f xed assets Provision for impairment on construction in progress Provision for impairment on intangible assets Provision for impairment on goodwill Total	32,863 31,827 – – – – 64,690 52,942 137,060 – – – -7,846 182,156 555,277 – – – 695 -11,117 543,465 127,472 – – – – -7,952 119,520 1,918,613 – – – – -121,640 1,796,973 13,648 – – – – -865 12,783 2,700,815 168,887 – – 695 -149,420 2,719,587

21. Short-term loans

(1) Classifi cation of short-term loans

Items	At 30 June 2015 At 1 January 2015
Credit loans Pledge loans Total	1,527,040 2,827,850 234,965 –
	1,762,005 2,827,850

Note: Interest rate of short-term loans is between 3.08% and 6.24%.

22. Financial liabilities at fair value through profi t or loss

Items	At 30 June 2015 At 1 January 2015
Investment on futures (note) Total	– 664
	– 664

Note: The Company has purchased thermal coal futures from Shanghai CIFCO Futures since August 2014. At the end of reporting period, these futures have been closed position.

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23. Notes payable

Items	At 30 June 2015 At 1 January 2015
Bank acceptance Commercial acceptance (Note) Total	203,308 1,806,399 414,649 295,959
	617,957 2,102,358

Note: All commercial acceptances will be due within 6 months.

24. Accounts payable

Items	At 30 June 2015 At 1 January 2015
Total Including: over 1 year	2,507,146 2,125,594
	175,479 138,380

(1) At the end of the reporting period, amount due to controlling shareholder of the Company is RMB4.86 million.

25. Advances from customers

(1) Advances from customers

Items	At 30 June 2015 At 1 January 2015
Total Including: over 1 year	788,434 798,437
	90,694 42,026

(2) At the end of the reporting period, there is no advanced payment due to the Company’s shareholders holding more than 5% (including 5%) voting power.

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26. Employee benefi ts payable

(1) Classifi cation of salaries and wages payable

Items	Foreign At 1 January translation At 30 June 2015 Increase Decrease difference 2015
Short-term salaries and wages Post-employment benef ts-def ned contribution plan Termination benef ts Other benef ts due within 1 year Total	767,009 4,289,770 4,168,363 -28,070 860,346 70,401 466,232 446,860 89,773 – – – – – 34,669 131,733 162,846 -1,179 2,377 872,079 4,887,735 4,778,069 -29,249 952,496

(2) Short-term salaries and wages

Items	Foreign At 1 January translation At 30 June 2015 Increase Decrease difference 2015
Salary, bonus, benef ts and allowance Employees’ benef ts Social insurance Including: medical insurance injury insurance maternity insurance Housing fund Union fund and training fund Short-term paid leave Total	317,365 2,956,998 2,946,120 -2,723 325,520 – 96,431 96,460 – -29 34,018 266,726 242,220 – 58,524 30,062 207,705 201,109 – 36,658 811 37,854 26,444 – 12,221 3,145 21,167 14,667 – 9,645 4,406 254,810 251,563 – 7,653 39,202 73,854 44,846 – 68,210 372,018 640,951 587,154 -25,347 400,468 767,009 4,289,770 4,168,363 -28,070 860,346

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26. Employee benefi ts payable – continued

(3) Defi ned contribution plan

Items	Foreign At 1 January translation At 30 June 2015 Increase Decrease difference 2015
Basic pension insurance Unemployment insurance Total	64,149 425,078 416,388 – 72,839 6,252 41,154 30,472 – 16,934 70,401 466,232 446,860 – 89,773

27. Taxes payable

Items	At 30 June 2015 At 1 January 2015
Value added tax Business tax Corporate income tax Price reconciliation fund Goods and service tax Others Total	-54,831 -374,731 15,539 18,258 -81,280 90,913 14,837 14,837 -46,636 -47,499 68,577 105,070
	-83,794 -193,152

28. Interest payable

(1) Classifi cation of interest payable

Item	At 30 June 2015 At 1 January 2015
Interest payable on corporate bonds Interest occupied by fund Interest payable on short-term bonds Interest of long-term borrowing with instalment payment of interest and principal due at maturity Interest for long-term account payable Total	388,272 417,447 238,875 238,875 81,108 241,306 49,052 39,844 21,045 20,301
	778,352 957,773

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29. Other payable

(1) Other payable classifi ed by nature

Nature	At 30 June 2015 At 1 January 2015
Investment payable Project funds Current accounts Withholding payable Security deposit Freight charges payable Total	2,519,313 2,519,313 1,204,907 2,150,809 493,315 429,373 400,091 580,514 62,477 39,891 905 1,576
	4,681,008 5,721,476

(2) Signifi cant other payable with aging over 1 year

Company	Reasons for outstanding At 30 June 2015or not yet transfer
Payable of equity investment for the acquisition on Haosheng Company Yankuang Group Donghua Construction Co., Ltd. Inner Mongolia Enwei Planning and Design Co., Ltd. Yankuang Xinlu Construction and Development Co., Ltd. Shandong ChangJinHao Coal Industry Co., Ltd. Total	2,519,313Amount for investment on equity share 66,597Project not yet completed 58,785Settlement date not yet reached 45,519Project not yet completed 43,000Settlement date not yet reached 2,733,214

(3) As at 30 June 2015, amount for other payable due to the controlling shareholder of the Company is RMB336.4 million.

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29. Other payable – continued

(4) Other payables with signifi cant amount

Item	Amount Aging Nature/Content
Consideration on equity investments due to Haosheng Yankuang Group Co., Ltd Yankuang Group Donghua Construction Co., Ltd Inner Mongolia Enwei Planning and Design Co., Ltd.; Yankuang Group Donghua Heavy Industry Co., Ltd. Total	2,519,313 2 to 3 years Consideration of equity investment 336,398 Within 1 year; Withholding payable 1 to 2 years 99,682 Within 1 year; Project funds 1 to 2 years 58,785 Within 1 year Project funds 1 to 2 years 51,000 Within 1 year; Equipment funds 1 to 2 years 3,065,178

30. Non-current liabilities due within one year

(1) Non-current liabilities due within one year

Items	At 30 June 2015 At 1 January 2015
Long-term borrowing due within one year Long-term payable due within one year Estimated liabilities due within 1 year (Note 1) Total	4,969,519 3,015,909 439,931 439,379 194,172 177,655
	5,603,622 3,632,943

(2) Long-term borrowing due within one year

Loan by category	At 30 June 2015 At 1 January 2015
Guaranteed loan (Note 2) Debt of honour Pledge loan (Note 3) Total	3,621,410 1,788,294 1,013,519 993,662 334,590 233,953
	4,969,519 3,015,909

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

(3) Long-term payable due within one year

Names	At 30 June 2015 At 1 January 2015
Jining Municipal Land and Resources Bureau (Note 4) Freight f nance lease Deferred payment for acquisition of Minerval Total	396,285 396,285 41,296 40,585 2,350 2,509
	439,931 439,379

Note 1: The estimated liabilities due within one year mainly composed of AUD17.03 million of take-or-pay liabilities, AUD0.7 million of reclamation, restoration and environment recovery expense accrued for restoring of coal mines, and AUD23 million of tax payable for R&D project of Ashton coal mine. The information related to the take-or-pay liabilities are described in “VI, 35, Note 2”.
Note 2: In 2011, the Company obtained a loan from Tiexi branch of ICBC with the amount of RMB3.9 billion. The borrowing was guaranteed by the controlling shareholder, Yankuang Group, and would be pledged by the mining tenement of Zhuan Longwan until they are obtained. As at the end of the reporting period, the amount of principal borrowing that is still outstanding is RMB1.29458 billion including the borrowing of RMB839.72 million which is required to be paid back within one year were recognized as other non-current liabilities due within one year and the remaining of RMB454.86 million which will be paid back within the period of over one year were recognized as long-term borrowings.

Yancoal International, the subsidiary of the Company, borrowed USD155 million from the bank syndicate of banks taken the lead by New York Branch of China Merchants Bank (“CMB”), which was guaranteed by Jining and Qingdao Branch of CMB, the entrusted guarantee of the Company. The maturity date is in 2015.

In 2013, Yancoal International, the subsidiary of the Company, obtained a loan of USD300 million from Hong Kong Wing Lung Bank, which was guaranteed by Xiangxi Branch of CMB, the entrusted guarantee of the Company. The loan will be matured in 2016.

Note 3: ICBC Ruixin Investment Management Co., Ltd established plan on special management of equity investment of Yanzhou Coal to purchase 46.67% shareholdings of the Company’s subsidiary Heze Neng Hua with purchase price of RMB1.4 billion. The Company shall repurchase this plan within fi ve years in installment to obtain the right of disposing equity of Heze Neng Hua and pay fi xed income to the holders of the plan. ICBC Ruixin signed Equity Trust Deed with the Company and promised no participation in daily operating activities of Heze Neng Hua, no right of receiving bonus or value added or derived related rights from the underlying equity, no right to vote or to be elected and etc. The Company, therefore, treated this transaction as borrowings from the fi nancial plan agent Industrial and Commercial Bank of China Limited. As at the end of the reporting period, the unpaid principal of the borrowing is RMB1.2 billion, including RMB300 million due within one year recognized as other non-current liability due within one year and RMB900 million over one year recognized as long-term borrowing.
Note 4: 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 Department of Land and Resources of Shandong Provincial, 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 before 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 paid RMB1.28792 billion, with RMB1.18886 billion unpaid, including RMB396.28 million due next year and RMB792.58 million due over 1 year.

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31. Long-term borrowings

(1) Borrowings by category

Borrowings category	At 30 June 2015 At 1 January 2015
Guaranteed borrowing Borrowing of honour Mortgaged borrowing Total	22,121,597 24,377,892 5,110,421 6,931,217 1,518,799 1,238,393
	28,750,817 32,547,502

Note: Long-term borrowing of RMB carried interest at a range from 5.535%-6.4% per annum, while foreign currency carried interest at LIBOR plus a margin 1.5%-5% per annum.

(2) Top-fi ve long-term borrowings as at 30 June 2015

Lender	At 30 June 2015 At 1 January 2015 Beginning date Expiration date Currency Interest rate USD RMB USD RMB (%)
Sydney branch of BOC (Note1) Sydney branch of BOC (Note 2) Zoucheng branch of BOC (Note 3) Paris branch of BOC (Note 4) Yanzhou Coal Mining District Branch of CCB (Note 5)	16-12-2009 16-12-2022 USD Libor+5% 2,540,000 15,528,544 2,400,000 14,685,600 29-8-2013 20-10-2016 USD 3M Libor+2.3% 300,000 1,834,080 300,000 1,835,700 14-1-2013 4-1-2018 USD Libor+2.4% 296,000 1,809,626 296,000 1,811,224 9-1-2014 9-1-2017 USD 3M Libor+3% 200,000 1,222,720 200,000 1,223,800 29-11--2013 18-11-2016 USD 3M Libor+2.95% 149,500 913,983 149,600 915,402

Note 1: Yancoal Australia borrowed USD3.04 billion from the bank syndicate of banks taken the lead by Sydney branch of BOC, which was guaranteed by the Company in 2009, including: USD2.54 billion from Sydney branch of Bank Of China; USD200 million from Hong Kong branch of China Construction Bank; USD300 million from Hong Kong branch of China Development Bank, at the same time, the Company was counter guaranteed by Yankuang Group, the controlling shareholder of the Company. The loan period is from 16 December 2009 to 16 December 2014 and interest should be paid on schedule. That is to say, the principal should be repaid in three installments starting from 16 December 2012. 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; principal repayment starting date is postponed to 16 December 2017. In 2014, Yancoal Australia continued to enter into contracts of rollover loans with Sydney branch of BOC and Hong Kong branch of CBC, extending repayment date to 16 December 2022; principal repayment starting date is postponed to 16 December 2019, while guaranteed by the Company. As at 30 June 2015 Yancoal Australia returned the matured borrowings of USD300 million, with USD274 million unreturned.

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31. Long-term borrowings – continued

(2) Top-fi ve long-term borrowings as at 30 June 2015 – continued
Note 2: In 2013, Yancoal International (Holding) Co., Ltd., a subsidiary of the Company, borrowed USD300 million from Sydney Branch of BOC, which was guaranteed by the Company.
Note 3: In 2013, the Company borrowed USD596 million from Zoucheng branch of BOC for the merger with Gloucester with L/C as the guarantee. On 30 August 2013, the Company prepaid USD300 million.
Note 4: In 2014, Yancoal International (Holding) Co., Ltd., a subsidiary of the Company, borrowed USD200 million from Paris Branch of BOC, which was guaranteed by the Company.
Note 5: In 2013, the Company borrowed USD150 million from Yanzhou Coal Mining District Branch of CCB. As at the end of the reporting period, the borrowing principal unreturned is USD149.7 million and the borrowing of USD0.2 million due within 1 year were recognized as other non-current liabilities due within 1 year, with the rest part of loans of USD149.5 million over 1 year were recognized as long-term borrowings.

32. Bonds payable

(1) Bonds payable by category

Items	At 30 June 2015 At 1 January 2015
Corporate bonds Total	16,040,966 16,040,608
	16,040,966 16,040,608

(2) Increase or decrease of bonds payable

At 1 January Items Total face value Issuing date Maturity Issued amount 2015	At 1 January Items Total face value Issuing date Maturity Issued amount 2015
Corporate bond (Note 1) Corporate bond (Note 1) Corporate bond (Note 2) Corporate bond (Note 2) Corporate bond (Note 2) Corporate bond (Note 2) Total	2,846,205 2012-5-16 5 years 2,846,205 2,753,918 3,478,695 2012-5-16 10 years 3,478,695 3,365,898 1,000,000 2012-7-23 5 years 990,000 995,200 4,000,000 2012-7-23 10 years 3,960,000 3,969,800 1,950,000 2014-3-6 5 years 1,930,500 1,933,750 3,050,000 2014-3-6 10 years 3,019,500 3,022,042
	16,324,900 16,224,900 16,040,608

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32. Bonds payable – continued

(2) Increase or decrease of bonds payable – continued

Items	Accrued Amortization Interest Foreign Issued amount interest of premiums paid during Currency At 30 June for this year at par or discounts the period Difference 2015
Corporate bond (Note 1) Corporate bond (Note 1) Corporate bond (Note 2) Corporate bond (Note 2) Corporate bond (Note 2) Corporate bond (Note 2) Total	– 61,720 – – -2,753 2,751,165 – 96,894 – – -3,365 3,362,534 – 21,117 1,000 – – 996,200 – 99,550 2,000 – – 3,971,800 – 58,041 1,950 – – 1,935,700 – 94,309 1,525 – – 3,023,567 – 431,631 6,475 – -6,118 16,040,966

Note 1: As approved by a resolution passed at the second extraordinary general meeting held on 23 April 2012, second-tier wholly-owned subsidiaries of the Company were approved to make an overseas issuance of US dollar-dominated bonds with an aggregate principal amount not exceeding USD1.0 billion (including USD1.0 billion). Yancoal International Resource Development, a second-tier wholly-owned subsidiary of the Company, issued corporate bonds amounted to USD1.0 billion in Hong Kong in May 2012, of which, the annual interest rates 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 Mining 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. On 6 March 2014, the Company issued the second tranche of the corporate bonds amounting to RMB5 billion, of which, the annual interest rate for the fi ve-year corporate bonds of RMB1.95 billion and ten-year corporate bonds of RMB3.05 billion are 5.92% and 6.15%, respectively.

33. Long-term payable

(1) Long-term payable classifi ed by nature

Nature	At 30 June 2015 At 1 January 2015
Finance lease Acquisition of mining rights Market service fees Total	1,643,409 1,634,854 793,581 794,735 17,796 30,683
	2,454,786 2,460,272

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33. Long-term payable – continued

(2) Long-term payables classifi ed by lender

		At 1 January	Interest rate	Accrued	At 30 June
Lender	Expiration	2015	(%)	interest	2015	Loan condition
Total	—	2,460,272	—	60,091	2,454,786	—
Including:
Jianxin Finance Lease Co., Ltd.	61 months	1,468,803	4% above	60,091	1,510,079	unsecured
			interest rate of
		the	corresponding
			period
Jining Municipal Land and Resources Bureau	2-5 years	792,570	6.15	–	792,570	unsecured
(VI, 29, Note 4)
Freight f nance lease	5-8 years	166,051	5.43	–	133,330	unsecured
			-12.24
Market service fees to Noble Group	–	30,683	–	–	17,796	unsecured and
						interest-free
Deferred payment for acquisition of Minerval	2-4 years	2,165	–	–	1,011	unsecured and
						interest-free

(3) The breakdown of fi nance lease payable included in long-term payables

Items	At 30 June 2015 At 1 January 2015 Foreign currency RMB Foreign currency RMB
Jianxin Finance Lease Co., Ltd. Komatsu Australian Finance Company Bradken Finance Lease Total	– 1,510,079 – 1,468,803 23,550 110,669 27,862 139,795 4,822 22,661 5,233 26,256
	28,372 1,643,409 33,095 1,634,854

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

34. Long-term employee benefi t payable

Items	At 30 June 2015 At 1 January 2015
Other long-term benef ts (Note) Total	8,812 7,563
	8,812 7,563

Note: Other long-term benefi t is calculated on the basis of Australia relevant laws and regulations and duration of services employees provided, and is the amount of future benefi t that employees have earned in return for their service to the reporting date.

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35. Contingent liabilities

Items	At 30 June At 1 January 2015 2015 Reasons
Reclamation, restoration and environment recovery expense (Note 1) Take-or-pay liability (Note 2) Maintenance expense of leased machinery (Note 3) Total	485,159 529,953 Note 1 261,738 231,546 Note 2 113,622 4,511 Note 3 860,519 766,010

Note 1: Reclamation, restoration and environment recovery expense accrued for restoring of coal mines are based on the accounting policy as stated in Note “IV, 24”. The obligation of restoring will be exercised when mining areas become out of use or coal resource 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: Provision for maintenance expense of leased machinery includes the overhaul expense at the end of the lease. Where a machine is bought at the end of the lease, the balance of such provision will be eliminated by the purchasing cost.

36. Deferred revenue

(1) Deferred revenue by category

Items	Foreign At 1 January translation At 30 June 2015 Increase Decrease difference 2015Reasons
Government grant Deferred income from Carbon emission Total	21,441 910 1,393 – 20,958Government grant 36,068 – 1,410 -2,240 32,418Transitional subsidies prior to the implementation of marketization of “carbon emission price” 57,509 910 2,803 -2,240 53,376—

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36. Deferred revenue – continued

(2) Government grants

Items	Recognized in Foreign At 1 January non-operating translation At 30 June Related to assets/ 2015 Increase income Other change difference 2015 related to earnings
Infrastructure construction subsidies Mining emergency rescue equipment subsidies Total	21,244 910 1,262 – 20,892 Related to assets 197 – 131 – 66 Related to assets 21,441 910 1,393 – 20,958

Note: Other change mainly refers to that the government grant which is estimated to be transferred into income statement within 1 year was recognized as other current liabilities.

37. Other non-current liabilities

Item	At 30 June 2015 At 1 January 2015
Prepayment for purchasing the exploration licence of Nissa Total	13,461 –
	13,461 –

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38. Share capital

Shareholders names/category	At 1 January 2015 Increase/reversal during the reporting period At 30 June 2015 Reserve New Shares transferred Proportion shares dividend to share Proportion Amount (%) Issue distribution capital Others Subtotal Amount (%)
Listed shares with restricted trading conditions Held by state-owned legal person Held by executives Subtotal Shares without trading conditions Ordinary shares in RMB Foreign shares listed overseas Subtotal Total	– – – – – – – – – 20 – – – – – – 20 – 20 – – – – – – 20 – 2,959,980 60 – – – – – 2,959,980 60 1,958,400 40 – – – – – 1,958,400 40 4,918,380 100 – – – – – 4,918,380 100 4,918,400 100 – – – – – 4,918,400 100

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39. Other equity instrument

Financial instruments issued	At 1 January 2015 Increase Decrease At 30 June 2015 Carrying Carrying Carrying Carrying Quantity amount Quantity amount Quantity amount Quantity amount
First issuance of perpetual bond (Note 1) Second issuance of perpetual bond (Note 2) Third issuance of perpetual bond (Note 1) Fourth issue of perpetual bond (Note 3) Total	14,865 1,486,500 14,865 1,486,500 9,985 998,500 9,985 998,500 – – 19,820 1,982,000 19,820 1,982,000 – – 19,820 1,982,000 19,820 1,982,000 24,850 2,485,000 39,640 3,964,000 – – 64,490 6,449,000

Note 1: The Company issued fi rst tranche of private directional debt fi nancing instrument amounting to RMB1.5 billion to 4 entities including Agricultural Bank of China Limited and etc. in September 2014. The Company raised fund of RMB1.487 billion excluding the cost of issue through this instrument with no fi xed term of repayment and face value of 100. Unless there is deferred interest payment, the Company shall annually pay bond purchaser interest based on fi xed interest rate of 6.8% which will be reset once every three years. The Company issued 2015 fi rst tranche of private directional debt fi nancing instrument amounting to RMB2 billion to 6 entities including Agricultural Bank of China Limited and etc. in April 2015. The Company raised fund of RMB1.982 billion excluding the cost of issue through this instrument with no fi xed repayment period and face value of 100. Unless there is deferred interest payment, the Company shall annually pay bond purchaser interest based on fi xed interest rate of 6.5% which will be reset once every three years.
Note 2: The Company issued second tranche of private directional debt fi nancing instrument amounting to RMB1 billion to 4 entities including Bank of China Limited and etc. in November 2014. The Company raised fund of RMB999 million excluding the cost of issue through this instrument with no fi xed repayment period and face value of 100. Unless there is deferred interest payment, the Company shall annually pay bond purchaser interest based on fi xed interest rate of 6.8% which will be reset once every three years.
Note 3: The Company issued fi rst tranche of medium-term notes amounting to RMB2 billion in April 2015. The Company raised fund of RMB1.982 billion excluding the cost of issue through this instrument with no fi xed repayment period and face value of 100. Unless there is deferred interest payment, the Company shall annually pay bond purchaser interest based on fi xed interest rate of 6.19% which will be reset once every three years.

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40. Capital reserves

Items	Items	At 1 January 2015 Addition Reversals At 30 June 2015
Share premium 1,270,513 1,270,513 Other capital reserves 15,478 15,478 Total 1,285,991 1,285,991 Other comprehensive income Increase/decrease of current year Including: amount recognised in other comprehensive income in prior periods and transferred Attributable to Attributable to prof ts the parent to minority At 1 January Increase/ and losses at Income tax company shareholders At 30 June Items 2015 decrease current period expense after tax after tax 2015		1,270,513 1,270,513 15,478 15,478 1,285,991 1,285,991
Other comprehensive income that will be reclassif ed to prof ts and losses in the future Including: Earnings from other comprehensive income that will be reclassif ed to prof ts and losses in invested companies under equity method Prof ts or losses from changes in fair value of AFS f nancial assets Effective hedging prof ts or losses of cash f ow Foreign translation difference Total	12,410 22,637 – – 22,637 – 35,047 127,775 132,947 – 33,237 99,710 – 227,485 -1,456,342 165,780 63,432 -133,819 185,053 51,114 -1,271,289 -4,637,920 -2,492,693 – – -2,062,787 -429,906 -6,700,707 -5,954,077 -2,171,329 63,432 -100,582 -1,755,387 -378,792 -7,709,464

41. Other comprehensive income

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42. Special reserves

Items	At 1 January 2015	Increase	Decrease	At 30 June 2015
Maintenance fees	833,447	147,516	851,399	129,564
Production safety expenses	264,217	337,407	293,660	307,964
Specif c fund for reform and development	611,513	–	–	611,513
Environmental guarantee deposit	48,960	–	–	48,960
Production transforming fund	26,875	–	–	26,875
Total	1,785,012	484,923	1,145,059	1,124,876

43. Surplus reserves

Items	At 1 January 2015 Increase Decrease At 30 June 2015
Statutory surplus reserve Total	5,900,135 75,959 – 5,976,094 5,900,135 75,959 – 5,976,094

44. Retained earnings

Items

2015

Closing balance of last period
Add: adjustment from opening balance of retained earnings
Including: changes in accounting policies
Opening balance of the reporting period
Add: net prof t attributable to shareholders of parent company
Including:net prof t attribute to other equity instrument holders
of parent company
Less: Appropriations to statutory surplus reserve
Distribution of dividend of ordinary shares
Others
Closing balance of the reporting period

28,778,217
–
–
28,778,217
629,213
132,897
75,959
98,368
–
29,233,103

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45. Minority interest

Items	At 30 June At 1 January 2015 2015
Minority interest attribute to ordinary share holders Minority interest attribute to other equity instrument holders Total	2,059,539 2,585,768 1,855,392 1,855,005
	3,914,931 4,440,773

(1) Minority interest attribute to ordinary share holders

Proportion of Subsidiary minority interest (%)	At 30 June 2015 At 1 January 2015
Coal Trading Centre 49 Coal Storage and Blending Company 49 Zhongyan Company 47.62 Haosheng Company 25.18 Yancoal Australia 22 Shanxi Tianchi 18.69 Yanmei Shipping 8 Hua Ju Energy 4.86 Heze Neng Hua 1.67 Shanxi Tianhao 0.11 Total	43,126 44,194 167,625 162,714 3,578 3,538 2,465,483 2,467,988 -760,147 -224,560 17,450 14,989 2,325 1,599 59,471 56,437 60,628 58,869 – –
	2,059,539 2,585,768

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45. Minority interest – continued

(2) Minority interest attribute to other equity instrument holders
1) Details of minority interest attribute to other equity instrument holders at 30 June 2015

Financial instrument issued Issue date Classif cation Interest rate	At 30 June 2015
Senior secured perpetual capital bond (Note 1) 15 May 2014 Equity instrument 7.20% Subordinated capital note (Note 2) 31 December 2014 Equity instrument 7% Total	1,852,290 3,102 1,855,392

Note 1: With the approval of Hong Kong Exchanges and Clearing Limited, Yancoal International Trading Co., Ltd., a subsidiary of the Company, issued USD300 million (RMB1.836 billion) of senior secured perpetual capital bond secured by the Company on 15 May 2014. The annual interest of the senior secured perpetual capital bond is 7.2% paid every half year since the issue date (including the issue date) until 22 May 2016 which is the fi rst reset date (excluding this date). Yancoal International Trading Co., Ltd. can decide by itself whether defer interest payment or not. The perpetual capital bond has no fi xed expiring date and will be redeemed on 22 May 2016 or later decided by Yancoal International Trading Co., Ltd. based on principal and any unpaid deferred interest. As at the end of the reporting period, undistributed interest is RMB 16.507 million.

Note 2: Yancoal Australia, a subsidiary of the Company, issued 18,005,102 of subordinated capital notes with par value of USD100 per note through its wholly-owned subsidiary SCN Company on 31 December 2014. Each note can be converted to 1,000 of ordinary shares of Yancoal Australia. The subordinated capital notes have been traded in ASX with code “YCNPA” in deferred settlement since 2 January 2015. They have also been traded in normal settlement since 8 January 2015. The Company has purchased all the notes except those issued to third parties amounting to RMB 3,102,000. The original annual distributed rate is 7% with payment every half year. These bonds are unsecured convertible equity bonds which bond holders have the right to redeem. Unless the bond issuer redeems the bond or the bond holders convert the bonds into shares, there is no expiring date for this bond. The redemption price is the par value adding unpaid deferred interest. The bond holders have the right to convert the bonds into one ordinary share of Yancoal Australia on USD0.1 per share after 40 days of issuance until 30 years after the issue date.

2) Changes on minority interest attribute to other equity instrument holders

Financial				At 30 June
instrument issued	At 1 January 2015	Increase	Decrease	2015
Senior secured perpetual
capital bond	1,851,903	387	–	1,852,290
Subordinated capital
notes	3,102	–	–	3,102
Total	1,855,005	387	–	1,855,392

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46. Information on other equity instrument holders

Items	At 30 June 2015 At 1 January 2015
1. Equity attribute to ordinary share holders of parent company (1) Equity attribute to ordinary share holders in parent company (2) Equity attribute to other equity holders in parent company 2. Minority interest (1) Minority interest attribute to ordinary share holders (2) Minority interest attribute to other equity instrument holders	41,278,000 39,198,678 34,696,103 36,677,222 6,581,897 2,521,456
	3,914,931 4,440,773 2,059,539 2,585,768 1,855,392 1,855,005

47. Operating income and operating cost

Items	Current year Last year Revenue Cost Revenue Cost
Principal operations Other operations Total	18,143,957 12,862,407 30,933,390 24,976,364 6,999,449 7,353,183 1,495,222 1,876,731
	25,143,406 20,215,590 32,428,612 26,853,095

Total sales income from the fi ve largest customers during the reporting period was RMB4.92872 billion, which accounts for 19.60% in total revenue.

48. Operating taxes and surcharges

Items	Current year Last year
Business tax City maintenance and construction tax Education surcharge Local education surcharge Resource tax Water conservancy construction fund Total	6,558 1,212 68,329 107,252 31,544 47,583 21,015 31,064 253,979 85,581 11,490 12,831
	392,915 285,523

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49. Selling expenses

Items	Current year Last year
Freight charges, coal port dues and loading cost Mining royalty (Note) Salaries, social insurance and benef ts of employees Others Total	973,650 1,172,158 211,068 300,443 20,131 21,214 57,759 74,395
	1,262,608 1,568,210

Note: Royalties are expenses incurred during the sales process, which are levied by Australian Government to the Australian subsidiaries of the Company.

50. Administrative expenses

Items	Current year Last year
Salaries, social insurance and benef ts of employees Taxes Materials and repairing expenses Depreciation expense Property management fees Business travel, off ce, conference and hospitality fees Amortization, leasing fees, etc Commission, consulting and service charges Research and development costs Mineral resources compensation fees Others Total	887,810 1,079,243 325,750 388,523 237,083 235,766 173,275 217,646 58,310 68,560 50,575 42,769 43,524 38,448 29,206 44,155 19,840 27,940 – 99,155 49,635 100,721
	1,875,008 2,342,926

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51. Financial expenses

Items	Current year Last year
Interest expenses Less: interest income Add: exchange gains or losses Add: other expenses Total	1,496,891 1,120,423 473,214 319,190 -80,314 -56,381 72,291 61,225
	1,015,654 806,077

52. Impairment loss

53.	Items	Current year Last year
	Allowance for bad debt Impairment loss of inventories Total Gains/losses from changes in fair value	31,829 17,019 137,060 113,657
		168,889 130,676

Items	Current year Last year
FVTPL f nancial assets FVTPL f nancial liabilities Contingent Value Rights (CVR) Mining royalty receivable (see “VI. 9 Note 1”) Total	246,210 – 664 – – -19,697 11,606 -42,289
	258,480 -61,986

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54. Investment income

(1) Sources of investment income

Items	Current year Last year
Long-term equity investment income under equity method Investment income from the holding of held-to-maturity investment Investment income from the disposal of f nancial liabilities at fair value through prof t or loss Investment income from the holding of available-for sale f nancial assets Total	149,982 -89,353 44,375 – 2,375 – 60 85
	196,792 -89,268

(2)	Long-term equity investment income under equity method Reasons for change Items Current year Last year between two periods	Long-term equity investment income under equity method Reasons for change Items Current year Last year between two periods
	Total Including: China HD Zouxian Co., Ltd. Shanxi Future Energy Chemicals Co., Ltd. Yankuang Group Finance Co., Ltd Shengdi Fenlei Coal Preparation Engineering (Tianjin) Co., Ltd. Middle mount Joint Venture Ashton Coal Mines Limited Shandong Shengyang Wood Co., Ltd Jining Jiemei New Wall Materials Co., Ltd.	149,982 -89,353 168,378 81,737 Prof t change for the period 40,661 – Prof t change for the period 18,590 17,503 Prof t change for the period 3,116 942 Prof t change for the period -80,763 -190,598 Prof t change for the period – 1,063 Be consolidated into the Company’s consolidated f nancial statement in 30 Sep. 2014 – – – –

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55. Non-operating income

(1) Breakdown of non-operating income

Items	Amount for current year’s extraordinary Current year Last year prof ts or losses
Gains on disposal of non-current assets Including: gains on disposal of f xed assets Government grants (2) Acquisition gains (Note 1) Deferred income Others (Note 2) Total	2,237 2,751 2,237 2,237 2,751 2,237 190,988 98,036 190,988 38,083 – 38,083 1,627 2,053 1,627 150,113 287,677 150,113
	383,048 390,517 383,048

Note 1: The gain is resulted from the acquisition on the 1% share of Moolarben Joint Venture by Yancoal Australia, a subsidiary of the Company.

Note 2: Others are funds for supporting enterprise development by Yanzhou Municipal Finance Bureau.

(2) Breakdown of government grants

Items

Related to
assets/related
Current year
Last year
Sources and basis
to earnings

Fund for supporting enterprise development by
Finance Bureau of Yanzhou District, Jining City
Fund for supporting enterprise development by
Finance Bureau of Yanzhou District, Jining City
Fiscal supporting fund to replace the
business tax with a VAT by
Zoucheng Municipal Finance Bureau
Taxation reduction on product from comprehensive use
of resources
Fund for supporting enterprise development by
Finance Bureau of Yanzhou City
Taxation reduction on product from
comprehensive use of resources
Others
Total

110,000
–
Yancai (2015) No. 33
Earnings
50,000
–
Yancai (2015) No. 37
Earnings
15,030
–
Lucaishui (2013) No. 49
Earnings
13,654
–
Lujingxinxun (2014) No.637
Earnings
–
95,000
Yancai (2014) No. 11
Earnings
–
2,704
Jiguoshuiliupi (2011) No. 1
Earnings
2,304
332
190,988
98,036

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56. Non-operating expenses

Items	Amount for current year’s Current year Last year extraordinary 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	13,311 3,369 13,311 13,311 3,369 13,311 5,050 1,545 5,050 62,490 2,877 62,490 1,126 3,928 1,126 81,977 11,719 81,977

57. Income taxes

(1) Income taxes

Items	Current year Last year
Current tax expense Other deferred tax expenses Total	321,509 536,805 102,689 -484,222
	424,198 52,583

(2) Adjustment of accounting profi ts and income taxes

Items

Current year

Total consolidated income this year
Income taxes calculated by statutory/applicable tax rate
Effect of different applicable tax rate by subsidiaries
Effect of adjustments for current tax of prior periods
Effect of revenue which are not taxable
Effect of deemed sales income
Effect of cost, expenses and losses which are not deductible
Effect of using deductible losses which are not recognized to
deferred income tax assets in prior period
Effect of deductible temporary difference and deductible losses
which are not recognized to deferred income tax assets this year
Effect on de-recognition of MRRT
Tax-free investment income
Others
Income tax expenses

969,085
242,271
-30,020
252,435
-63,670
23,451
55,860
-26,401
14,114
-6,771
-58,295
21,224
424,198

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58. Other comprehensive income

For details, please refer to Note “VI, 41. Other comprehensive income”

59. Cash fl ow

(1) Cash received/paid relating to operating activities, investing activities and fi nancing activities 1) CASH RECEIVED RELATING TO OTHER OPERATING ACTIVITIES

Items	Current year
Interest income Cash received from advance payment Revenue from government grants and supporting fund Sundry revenue Total	271,679 100,408 247,834 314,085 934,006

2) CASH PAID RELATING TO OTHER OPERATING ACTIVITIES

3) 4)	Items	Current year
	Payments for selling and administrative expenses Sundry cash payment Donation expenditure Penalty and Overdue Fines Total CASH RECEIVED RELATING TO OTHER INVESTING ACTIVITIES Items	603,838 580,319 4,570 93,123 1,281,850
		Current year
	Structured interests received Deposit received Total CASH PAID RELATING TO OTHER FINANCING ACTIVITIES Items	82,040 13,917 95,957
		Current year
	Commissions from issuing bonds, acquiring borrowings, etc. Total	14,044 14,044

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59. Cash fl ow – continued

(2) Supplemental information of consolidated cash fl ow statement

Items	Current year Last year
1. Reconciliation of net prof t to net cash f ow from operating activities Net prof t Add: Provision for 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) Losses on fair value change (“-” represents gain) Financial costs (“-” represents gain) Loss arising from investments (“-” represents gain) Gains arising from acquisition Decreased of deferred tax assets (“-” represents increase) Increased of deferred tax liabilities (“-” represents decrease) Decrease in inventories (“-” represents increase) Decrease in receivables from operating activities (“-” represents increase) Increase in payables from operating activities (“-” represents decrease) Net cash f ow from operating activities 2. Major investing and f nancing activities not related to cash f ow Capital transferred from debt Convertible corporate bond due within 1 year Fixed assets on f nance lease 3. Changes in cash and cash equivalents Ending balance of cash Less: opening balance of cash Add: ending balance of cash equivalents Less: opening balance of cash equivalents Net addition in cash and cash equivalents	544,887 617,066 168,889 130,676 1,596,088 1,460,961 435,818 589,568 733 4 489,857 532,898 11,074 618 -258,480 61,986 1,317,049 1,212,537 -196,792 89,268 -38,083 624,408 -880,652 -521,719 396,430 -480,296 10,723 -1,018,669 -1,908,819 -3,261,585 -2,558,380
	-586,821 -245,116
	– – – – – –
	20,601,161 13,700,635 20,207,279 10,965,667 – – – –
	393,882 2,734,968

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59. Cash fl ow – continued

(3) Cash and cash equivalents

Items	Current year Last year
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 Ending balance of cash and cash equivalents Including: Cash and cash equivalents with restricted use right by the Company or subsidiaries of the Company	702 1,007 20,128,009 8,299,466 472,450 1,557 – 20,601,161 8,302,030

60. Assets with restricted ownership or right to use

Items	Carrying amount at 30 June 2015 Restricted reason
Cash and cash equivalents Notes receivable Construction in progress Intangible asset	242,959 Environment management guarantee deposit and other deposit 649,991 Acceptance bill pledging 1,319,956 Mortgage loan 10,044,846 Mortgage loan

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61. Foreign currency denominated monetary items

(1) Foreign currency denominated monetary items

		Foreign	RMB translation balance
Items	At 30 June 2015	exchange rate	at 30 June 2015
Cash and cash equivalents
Including: USD	375,560	6.1136	2,296,025
EUR	1,992	6.8699	13,685
GBP	1	9.6422	9
Accounts receivable
Including: USD	32,095	6.1136	196,218
Other payable:
Including: USD	2,739	6.1136	16,747
Accounts payable:
Including: USD	45,863	6.1136	280,389
Short-term borrowing
Including: USD	150,000	6.1136	917,040
Non-current liabilities due within 1 year
Including: USD	311,213	6.1136	1,902,632
Long-term borrowing:
Including: USD	4,687,716	6.1136	28,658,819
Bond payable:
Including: USD	10,000,000	6.1136	61,136,000

(2) Overseas operating entities

The signifi cant overseas operating entities of the Company are Hong Kong Company and Yancoal Australia. The functional currency of the above companies is HK dollars and Australian dollars, respectively.

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VII. THE CHANGES OF CONSOLIDATION SCOPE

1. Business combination not under common control

(1) Current-year Business combination not under common control

On 30 March 2015, Moolarben Coal Mines Pty Limited (“MCM”) a subsidiary of Yancoal Australia Ltd (“Yancoal”, the subsidiary of the Company) accepted the Hanwha Resources (Australia) Pty Limited (“Hanwha”) offer to sell its 1% interest in the Moolarben Joint Venture (“Moolarben”). Consideration is AUD 19.26 million. Yancoal Australia owns 81% of Moolarben’s share after the acquisition of the 1% equity.

(2) Cost and goodwill of business combination

Items (in thousand AUD)	Moolarben Joint Venture
Acquisition cost	19,264
Less: Fair value of net identif able assets acquired	27,161
Goodwill/gain on business combination	-7,897

(3) Identifi able assets and liabilities as at acquisition date

	Moolarben	Joint Venture
	Fair value at	Book value at
Items (in thousand AUD)	acquisition date	acquisition date
Assets:
Cash and cash equivalents	93	93
Accounts receivable	431	431
Inventory	326	326
Fixed assets	6,095	6,095
Intangible assets	24,022	24,022
Other assets	479	479
Liabilities:
Accounts payable	-587	-587
Contingent liabilities	-150	-150
Deferred tax liabilities	-3,548	-3,548
Net assets	27,161	27,161
Less: minority interest	–	–
Net assets acquired	27,161	27,161

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VIII. EQUITY IN OTHER ENTITIES

1. Equity in Subsidiaries

1. Organisational structure of the Company

	Place of	Place of	Registered	Business	Equity	holding
Name of subsidiaries	operation	registration	capital	nature	Direct	Indirect
			(RMB’0000)
I. Subsidiaries acquired under common control
Second-tier subsidiaries
Yanzhou Coal Shanxi Neng Hua Co., Ltd	Jinzhong, Shanxi	Jinzhong, Shanxi	60,000	Thermoelectricity investment,	100.00
				coal technology service
Shandong Hua Ju Energy Co., Ltd	Zoucheng,	Zoucheng,	28,859	Production and sales of	95.14
	Shandong	Shandong		thermal power and
				comprehensive utilization
				of waste heat
Zoucheng Yankuang Beisheng Industry	Zoucheng,	Zoucheng,	240	Refuse selecting and processing,	100.00
and Trade Co., Ltd	Shandong	Shandong		cargo transportation
II. Subsidiaries acquired not under
common control
Second-tier subsidiaries
Shandong Yanmei Shipping Co., Ltd.	Jining, Shandong	Jining, Shandong	550	Freight transportation and coal sales	92.00
Inner Mongolia Haosheng Coal Mining	Ordos	Ordos	80,000	Sales of coal mining machinery	74.82
Company Limited				and equipment and
				accessories
Third-tier subsidiaries
Gloucester Coal Ltd.	Australia	Australia	71,972	Development and operating		100.00
			(AUD)	of coal and relevant resources
Fourth-tier subsidiaries
Yancoal Resources Ltd	Australia	Australia	44,641	Exploring and extracting		100.00
			(AUD)	coal resources
Syntech Holdings Pty Ltd	Australia	Australia	22,347	Holding company and		100.00
			(AUD)	mining management
Syntech Holdings II Pty Ltd	Australia	Australia	632	Holding company		100.00
			(AUD)
Premier Coal Limited	Australia	Australia	878	Coal mining and sales		100.00
			(AUD)

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VIII. EQUITY IN OTHER ENTITIES – CONTINUED

1. Equity in Subsidiaries – continued

1. Organisational structure of the Company – continued

	Place of	Place of	Registered	Business	Equity	holding
Name of subsidiaries	operation	registration	capital	nature	Direct	Indirect
			(RMB’0000)
III. Subsidiaries established by investment
Qingdao Free Trade Zone Zhongyan Trade Co., Ltd	Qingdao, Shandong	Qingdao, Shandong	210	Trade and storage in free trade zone	52.38
Yanzhou Coal Mining Yulin Neng Hua Co., Ltd	Yulin, Shaanxi	Yulin, Shaanxi	140,000	Production and sales of methanol	100.00
				and acetic acid
Yanmei Heze Neng Hua Co., Ltd	Heze, Shandong	Heze, Shandong	300,000	Coal mining and sales	98.33
Yanzhou Coal Ordos Neng Hua Co., Ltd	Inner Mongolia	Inner Mongolia	810,000	Production and sales of methanol	100.00
				(600,000 tons)
Yancoal Australia Limited	Australia	Australia	310,556	Investment and shareholding	78.00
			(AUD)
Yancoal International (Holding) Co., Ltd.	Hong Kong	Hong Kong	68,931	Investment and shareholding	100.00
			(USD)
Shandong Coal Trading Centre Co., Ltd.	Zoucheng,	Zoucheng,	10,000	Coal spot trade service and	51.00
	Shandong	Shandong		management; sales
				of real estate
Shandong Yanmei Rizhao Port Coal Storage	Rizhao, Shandong	Rizhao, Shandong	30,000	Wholesales of coal	51.00
and Blending Co., Ltd.
Zhongyin Logistics and Trade Co., Ltd	Jinan, Shandong	Jinan, Shandong	30,000	Sales of coal mining machinery	100.00
				and equipment and accessories
Zhongyin Financial Leasing Co., Ltd	Shanghai	Shanghai	50,000	Finance lease	100.00
Duanxin Investment Holdings (Beijing) Co., Ltd	Beijing	Beijing	1,000	Investment management	100.00
Third-tier subsidiaries
Austar Coal Mine Pty Limited.	Australia	Australia	6,400	Coal mining and sales		100.00
			(AUD)
Yancoal Australia Sales	Australia	Australia	0.01	Coal sales		100.00
			(AUD)
Yancoal SCN Ltd.	Australia	Australia	0.0001	Investment management		100.00
			(USD)

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VIII. EQUITY IN OTHER ENTITIES – CONTINUED

1. Equity in Subsidiaries – continued

1. Organisational structure of the Company – continued

Introduction to the main subsidiaries:

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 and 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	Business	Equity held by
Name of Subsidiaries	registration	capital	Scope	the Company
Shanxi Heshun Tianchi Energy Co., Ltd	Shanxi Heshun	RMB90 million	Raw coal mining, further	81.31
			processing, producing
			and selling
Shanxi Tianhao Chemicals Co., Ltd	Shanxi Xiaoyi	RMB150 million	Methanol, chemical production,	99.89
			coke production and
			development

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VIII. EQUITY IN OTHER ENTITIES – CONTINUED

1. Equity in Subsidiaries – continued

2. Inner Mongolia Haosheng Coal Mining Company Limited

Inner Mongolia Haosheng Coal Mining Company Limited (as referred to “Haosheng Company”) was established in March 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. By series of acquiring and share capital increasing, in January 2013, the Company holds the equity of 74.82% and Haosheng Company became the Company’s subsidiary with registered capital of RMB500 million. In April 2013, on the shareholders’ meeting, a registered capital increasing of RMB300 million was approved. In December 2013, Inner Mongolia Zhonglei Accounting Firm provided a capital verifi cation report ‘Nei Zhonglei Yan Zi (2013)’ with document No. 86 to verify the registered capital increasing. The share capital of Haosheng Company increased to RMB800 million equalling to the Company original holding of 74.82%. The corporation business license code is 150000000009736 and the legal representative is Mr. Wu Xiangqian. The company is mainly engaged in sales of coal mining machinery and equipment and accessories.

3. 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.

Upon the approval at the sixth meeting of the fi fth session of the Board and the seventh meeting of the fi fth session of the Board held on 22 December 2011 and 5 March 2012, respectively, the Company, Yancoal Australia and Gloucester (the Company’s subsidiaries) 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 in replace of Gloucester.

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VIII. EQUITY IN OTHER ENTITIES – CONTINUED

1. Equity in Subsidiaries – continued

3. Gloucester Coal Ltd. – continued

(1) As at 30 June 2015, the controlled subsidiaries of Gloucester include:

(1)	As at 30 June 2015, the controlled subsidiaries of Gloucester include:
(2)	Registered Shareholding Registration capital Scope of Proportion Name of subsidiaries place (AUD) business (%)
	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 Joint venture of Gloucester Name Place Main business Control Ratio (%)
	Middlemount Joint Venture Pty Ltd Australia Coal mining and sales 50

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VIII. EQUITY IN OTHER ENTITIES – CONTINUED

1. Equity in Subsidiaries – continued

4. Yancoal Resources Limited

Yancoal Resources Limited (previously known as “Felix Resource Limited”, “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 is 000754174.

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

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

				Shareholding	Shareholding
	Place of		Registered		proportion
Subsidiaries	registration	capital (AUD)		Business scope	(%)
White Mining Limited	Australia		3,300,200	Holding company &	100
				Coal business management
Ashton Coal Mines Limited	Australia		5	Coal sales	100
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
Agrarian Finance Pty Ltd	Australia		2	No business, to be liquidated	100
Balhoil Nominees Pty Ltd	Australia		7,270	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

(2) Jointly controlled entities of Yancoal Resources

			Interests
Entities	Address	Main business	proportion (%)
Boonal Joint Venture	Australia	Coal transportation	50
		and equipments
Athena Joint Venture	Australia	Coal exploration	51
Moolarben Joint Venture	Australia	Coal mine development	81
		and operation

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1. Equity in Subsidiaries – continued

5. 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 jointly by the Company, Shandong Chuangye Investment Development Co. Ltd., China Hualu Engineering Co., Ltd in February 2004. of which, the Company held 97% of the total capital of RMB800 million. In April 2008, the Company held 100% of equity after assignment of equity from Shandong Chuangye Investment Development Co., Ltd. and 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 increased to RMB1.4 billion. The corporation business license code is 612700100003307, and the legal representative is Mr. He Ye. 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.

6. 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%. 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.

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VIII. EQUITY IN OTHER ENTITIES – CONTINUED

1. Equity in Subsidiaries – continued

7. Yanzhou Coal Ordos Neng Hua Company Limited Yanzhou Coal Ordos Neng Hua Company Limited (as referred to Ordos Neng Hua) was established on 18 December 2009 with registered capital of RMB500 million as a wholly owned subsidiary of the Company. 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. In November 2014, the Company once again increased capital investment to Ordos Neng Hua of RMB5 billion and the registered capital of Ordos Neng Hua increased to RMB8.1 billion. The corporation business license code is 152700000024075, and the legal representative is Mr. Wu Xiangqian. The company is mainly engaged in production and sales of 600,000 tons methanol. The project is in early stage.

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

	Place of	Registered		Equity held by
Name of subsidiaries	registration	capital	Business scope	the company (%)
Inner Mongolia Yize Mining Investment	Inner Mongolia	RMB675 million	Mining and chemical engineering	100
Company Limited			investment; public engineering,
			utilities, waste water solution
Inner Mongolia Rongxin Chemicals	Inner Mongolia	RMB648.36 million	Methanol from coal production	100
Company Limited			and sales
Inner Mongolia Daxin Industrial Gas	Inner Mongolia	RMB209.99 million	Supply of industrial gas	100
Company Limited
Inner Mongolia Xintai Coal Mining
Company Limited	Inner Mongolia	RMB5 million	Coal mining and sales	100
Ordos Zhuanlongwan Coal Mining	Inner Mongolia	RMB5.05 billion	Coal mining and sales, manufacturing	100
Company Limited			and sales of mining equipment
			and machinery
Ordos Yingpanhao Coal Mining	Inner Mongolia	RMB300 million	Coal mining and sales, manufacturing	100
Company Limited			and sales of mining equipment
			and machinery

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CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

VIII. EQUITY IN OTHER ENTITIES – CONTINUED

1. Equity in Subsidiaries – continued

8. Yancoal Australia Limited

Yancoal Australia Limited (as referred to “Yancoal Australia”), a wholly owned subsidiary of the Company, was established in November 2004 with the share 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. In December 2014, the registered capital of Yancoal Australia could be increased to AUD 3.10556 billion through issue of convertible hybrid capital bonds and exercise of contingent value rights (CVR). Yancoal Australia was listed at Australian Securities Exchange in replace of Gloucester on 28 June 2012. 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, main controlled subsidiaries of Yancoal Australia are as follows:

	Place of	Registered
Subsidiaries	registration	capital (AUD)	Business scope	Shares proportion (%)
Gloucester Coal Ltd.	Australia	719,720,000	Development and operating of
			coal and relevant resources	100
Austar Coal Mine Pty Ltd.	Australia	64,000,000	Coal mining and sales	100
Yancoal Resources Ltd	Australia	446,410,000	Exploring and extracting
			coal resources	100

Yanzhou Coal Mining Company Limited Interim Report 2015 211

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

VIII. EQUITY IN OTHER ENTITIES – CONTINUED

1. Equity in Subsidiaries – continued

9. 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 registered capital of USD2.8 million. The corporation business licence code is 1631570 and it mainly engages in external investment, mine technology development, assignment, consulting services, and importing and exporting trade, etc. In June 2014, the Company increased capital investment of RMB4.1946 billion, which was the account receivable from Hong Kong Company, thus the registered capital was increased to USD689.31 million.

As at the end of the reporting period, controlled subsidiaries of Hong Kong Company are as follows:

	Place of
Subsidiaries	registration	Registered capital	Business scope	Shares proportion (%)
Yancoal International Technology	Hong Kong	USD1 million	Development of mining technology,	100
Development Co., Ltd.			assigning, and consulting services
Yancoal International Trading Co., Ltd.	Hong Kong	USD1 million	Transit trade of coal	100
Yancoal International Resources	Hong Kong	USD600,000	Exploration and development of	100
Development Co., Ltd.			mineral resources
Yancoal Luxembourg Resources
Holding Co., Ltd.	Luxemburg	USD500,000	External investment	100
Yancoal Canada Resources	Canada	USD290 million	Mineral resources development	100
Holding Co., Ltd.			and sales
Athena (Holding) Ltd	Australia	AUD24.45 million	Shareholding company	100
Tonford (Holding) Ltd	Australia	AUD46.41 million	Shareholding company	100
Wilpeena (Holding) Ltd	Australia	AUD3.46 million	Shareholding company	100
Premier (Holding) Ltd	Australia	AUD321.61 million	Shareholding company	100
Yancoal Energy Pty Ltd.	Australia	AUD202.98 million	Shareholding company	100

10. Shandong Zhongyin Logistics and Trade Co., Ltd.

Shandong Zhongyin Logistics and Trade Co., Ltd. (as referred to “Zhongyin Logistics Company”), a wholly owned subsidiary of the Company, was established in May 2014 with the registered capital of RMB300 million. The business code of Zhongyin Logistics Company is 370127200093828 and organization code is 30686339-4 and the legal representative is Mr. Liu Chun. The company is mainly engaged in sales of coal, mining machinery and parts, and mining specialised equipments, etc.

212 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

VIII. EQUITY IN OTHER ENTITIES – CONTINUED

1. Equity in Subsidiaries – continued

11. Zhongyin Financial Leasing Co., Ltd.

Zhongyin Financial Leasing Co., Ltd. (as referred to “Zhongyin Financial Leasing Company”), was established jointly by the Company and its subsidiary, Hong Kong Company in May 2014 with the registered capital of RMB500 million, of which, RMB375 million by the Company in cash with equity interests of 75% and RMB125 million by Hong Kong Company in cash with equity interests of 25%. The business code of Zhongyin Logistics Company is 310000400737220 and organization code is 094402317 and the legal representative is Mr. Wu Yuxiang. The company is mainly engaged in Financial Leasing, etc.

12. Duanxin Investment Holding (Beijing) Co., Ltd.

Duanxin Investment Holding (Beijing) Co., Ltd. (as referred to “Duanxin Investment Holding Company”), was established in November 2014 with the registered capital of RMB10 million. The business code of Duanxin Investment Holding Company is 110106018199309 and organization code is 31829604-0 and the legal representative is Mr. Wu Yuxiang. The company is mainly engaged in investment management and enterprises management consultation, etc.

13. Yancoal Australia Sales Pty Ltd.

Yancoal Australia Sales Pty Ltd. (as referred to “Australia Sales Company”), a wholly-owned subsidiary of Yancoal Australia, was established in April 2014 with the share capital of AUD100. The corporation business licence code is 167884460, and it is mainly engaged in sales of blended coal, etc.

14. Yancoal SCN Ltd.

Yancoal SCN Pty Ltd. (as referred to “SCN Company”), a wholly-owned subsidiary of Yancoal Australia, was established in November 2014 with the share capital of USD1. The corporation business licence code is 602841556, and it is mainly engaged in convertible bonds issuance.

1. Signifi cant non-wholly-owned subsidiaries

			Declared
		Prof t/loss	dividend	Ending
	Minority	attributable	allocation to	balance of
	shareholding	to minority	minority	minority
	proportion	shareholders	shareholders	shareholder’s
Companies	(%)	this year	this year	interest
Heze Neng Hua	1.67	1,316	–	60,628
Yancoal Australia	22	-155,427	–	-760,147

Yanzhou Coal Mining Company Limited Interim Report 2015 213

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

VIII. EQUITY IN OTHER ENTITIES – CONTINUED

1. Equity in Subsidiaries – continued

14. Yancoal SCN Ltd. – continued

Key fi nancial information of signifi cant non-wholly-owned subsidiaries

Companies	At 30 June 2015 At 1 January 2015 Current Non-current Total Current Non-current Total Current Non-current Total Current Non-current Total assets assets assets liabilities liabilities liabilities assets assets assets liabilities liabilities liabilities	At 30 June 2015 At 1 January 2015 Current Non-current Total Current Non-current Total Current Non-current Total Current Non-current Total assets assets assets liabilities liabilities liabilities assets assets assets liabilities liabilities liabilities
Heze Neng Hua Yancoal Australia Companies	728,247 5,140,099 5,868,346 537,913 1,700,000 2,237,913 431,921 5,079,208 5,511,129 486,077 1,500,000 1,986,077 2,858,794 31,519,090 34,377,884 1,634,482 23,024,846 24,659,328 3,273,687 33,675,797 36,949,484 1,651,693 23,310,285 24,961,978
		1 January 2015 to 30 June 2015 1 January 2014 to Dec. 31 2014 cash f ow cash f ow Total from Total from Operating Net comprehensive operating Operating Net comprehensive operating Revenue prof t income activities Revenue prof t income activities
Heze Neng Hua Yancoal Australia		745,027 78,806 78,806 340,237 893,596 200,172 200,172 251,864 2,945,786 -706,488 -2,268,951 54,131 3,503,486 -1,082,702 -2,566,572 51,768

214 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

VIII. EQUITY IN OTHER ENTITIES – CONTINUED

2. Interests in JVs or Associates

(1) Signifi cant joint ventures or associates

									Accounting
									Treatments
							Shareholding		On investment
		Place					proportion(%)		to JVs or
	Companies	of Main	Registration	Business	Legal	Registered	Directly-	Indirectly-	Associated
Companies	Type	operation	Location	nature	representative	capital	held	held	Companies
Associates
China HD Zouxian Co., Ltd.	limited liability	Shandong	Shandong	Electricity power	Li Qingkui	RMB 3	30		Under equity
						billion			method
Yankuang Group Finance	limited liability	Shandong	Shandong	Finance	Zhang	RMB1	25		Under equity
Co., Ltd.					Shengdong	billion			method
Shaanxi Future Energy	limited liability	Shaanxi	Shaanxi	Coal mining and	Zhang	RMB5.4	25		Under equity
Chemical Co. Ltd.				the CTL	Minglin	billion			method
				development
				project
Joint Ventures
Middlemount Joint Venture	limited liability	Australia	Australia	Coal mining	–	–		About 50	Under equity
				and sales					method

Yanzhou Coal Mining Company Limited Interim Report 2015 215

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

VIII. EQUITY IN OTHER ENTITIES – CONTINUED

2. Interests in JVs or Associates – continued

(2) Key fi nancial information of signifi cant joint ventures

ests in JVs or Associates – continued
Key f nancial information of signif cant joint ventures

Items

Middlemount
Middlemount
Joint Venture
Joint Venture
Pty Ltd
Pty Ltd
(at 30 June 2015/
(at 1 Jan 2015/
for current year)
for last year)

Current assets:
Including: cash and cash equivalents
Non-current asset
Total asset
Current liabilities:
Non-current liabilities
Total liabilities
Minority interests
shareholders’ equity attributable to the parent company
net assets calculated on a shareholding proportion
Adjustment items
– goodwill
– unrealized prof t from insider transaction
– others
carrying amount of equity investment to joint ventures
Operating income
Financial expense
Income tax expense
Net prof t
Other comprehensive prof t
Total comprehensive prof t
dividend received from Joint Ventures for the reporting period

439,681
338,787
52,289
16,768
3,167,648
6,630,534
3,607,329
6,969,321
4,539,688
856,796
588,742
5,857,488
5,128,430
6,714,284
–
–
-1,521,101
255,037
-760,546
127,516
-760,546
127,516
1,020,336
962,432
-113,656
-119,709
7,229
110,664
-64,485
-282,477
–
–
-64,485
-282,477
–
–

216 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

VIII. EQUITY IN OTHER ENTITIES – CONTINUED

2. Interests in JVs or Associates – continued

(3) Key fi nancial information of signifi cant associates

Items

As at 30 June 2015
At 1 January 2015
Shaanxi
Shaanxi
Yankuang
Future
Yankuang
Future
China
Group
Energy
China
Group
Energy
HD Zouxian
Finance
Chemical
HD Zouxian
Finance
Chemical
Co., Ltd.
Co., Ltd
Co., Ltd.
Co., Ltd.
Co., Ltd
Co., Ltd.

Current assets:
Including: cash and cash
equivalents
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Minority interests
shareholders’ equity attributable to
the parent company
net assets calculated on
a shareholding proportion
Adjustment items
– goodwill
– unrealized prof t from insider
transaction
– others
carrying amount of equity
investment to joint ventures
Operating income
Financial expense
Income tax expense
Net prof t
Other comprehensive prof t
Total comprehensive prof t
dividend received from associates
for the reporting period

580,210
2,524,659
1,247,574
540,291
2,196,345
654,572
191,653
2,524,610
554,461
64,514
1,328,234
104,261
5,375,887
4,888,592
13,633,978
5,519,769
4,518,561
12,346,714
5,956,097
7,413,251
14,881,552
6,060,060
6,714,906
13,001,286
972,081
6,097,659
5,783,102
1,083,392
5,473,672
5,080,297
1,013,144
–
3,019,003
1,014,144
–
2,094,735
1,985,225
6,097,659
8,802,105
2,097,536
5,473,672
7,175,032

3,970,872
1,315,592
6,079,447
3,962,524
1,241,234
5,826,254
1,191,262
328,898
1,519,862
1,188,757
310,308
1,456,564
1,191,262
328,898
1,519,862
1,188,757
310,308
1,456,564
2,205,886
145,606
731,197
1,883,729
139,718
–
48,532
–
49,715
57,811
–
–
187,087
24,863
109,795
93,117
23,341
–
561,260
74,588
162,644
279,351
70,022
–
–
–
–
–
–
–
561,260
74,588
162,644
614,345
70,022
–
165,873
–
–
178,645
57,500
–

Yanzhou Coal Mining Company Limited Interim Report 2015 217

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

VIII. EQUITY IN OTHER ENTITIES – CONTINUED

2. Interests in JVs or Associates – continued

(4) Key fi nancial information of insignifi cant joint ventures and associates

Items	At 30 June 2015/ At 1 January 2015/ for current year for last year
Joint ventures: Total carrying amount of investments Total amount calculated using shareholding rate – Net prof t – Other comprehensive income – Total comprehensive income Associates: Total carrying amount of investments Total amount calculated using shareholding rate – Net prof t – Other comprehensive income – Total comprehensive income	13,467 3,351 3,116 351 – – 3,116 351
	264,561 1 -3,350 -3,084 – – -3,350 -3,084

Note: On 30 June 2015, the Company paid the consideration of RMB265 million to acquire 33% of the share on Shanghai CIFCOO Futures Co., Ltd.

(5) Excessive loss of Joint ventures or associates

		Unidentif ed	Accumulated
	Accumulated	loss in current year	unidentif ed loss
Name of joint venture	unidentif ed loss	(or shared net prof t	as at 30 June
or associates	in the previous years	in current year)	2015
Shandong Shengyang Wood Co., Ltd	-4,312	-3,217	-7,529
Jining Jiemei New Wall Material Co., Ltd	-505	-133	-638

218 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

IX. DISCLOSURE ON FAIR VALUE

Assets and liabilities measured at fair value as at 30 June 2015 and levels of fair value hierarchy measurement

hierarchy measurement

Items

Fair value at 30 June 2015
Level 1
Level 2
Level 3
Total

I. Continuous fair value measurement
(I) Financial asset at fair value through
prof t or loss
(1) Designated f nancial asset at fair
value through prof t or loss
(II) Available-for-sale f nancial instrument
Other current asset
(1) Investment on equity instrument
(III) Other current asset
(1) Hedging instrument-forward foreign
exchange contract
(2) Royalty receivable
(IV) Other non-current asset
(1) Royalty receivable
Total assets subsequently measured
at fair value
Total liabilities subsequently
measured at fair value

1,029,158
–
–
1,029,158
1,029,158
–
–
1,029,158
382,350
–
–
382,350
382,350
–
–
382,350
–
1,175
84,786
85,961
–
1,175
–
1,175
–
–
84,786
84,786
–
–
870,203
870,203
–
–
870,203
870,203
1,411,508
1,175
954,989
2,367,672
–
–
–
–

Financial instrument of which fair value is measured under level 1: Shares of listed companies and future contracts purchased by the Company, which is quoted in active market. Its fair value is measured by the closing quoted market price.
Financial instrument of which fair value is measured under level 2: Forward exchange and collar option, which is not quoted in active market. Its fair value measurement is referred to the Company’s valuation techniques. Those techniques include various observable market data as factors.
Financial instrument of which fair value is measured under level 3: Royalty receivable measured by discounted future cash fl ows.
In 2015 and 2014, there is no transfer between different levels.

Yanzhou Coal Mining Company Limited Interim Report 2015 219

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

X. RELATIONSHIP OF RELATED PARTIES AND TRANSACTIONS

I. Relationship of Related Parties

1. Controlling shareholder and ultimate controlling party

(1) Controlling shareholder and ultimate controlling party

						Shareholding	Voting
						Proportion	Proportion
Controlling shareholder and	Type of	Registration	Business	Legal	Registered	of the	of the
ultimate controlling party	enterprise	location	nature	representative	capital	Company (%)	Company
Yankuang Group	State-owned	Zoucheng,	Industry	Zhang Xinwen	3,353,388	52.86	52.86
Co. Ltd	Enterprise	Shandong	processing

(2) Registered capital of controlling shareholder and its changes

Controlling	At 1 January			At 30 June
shareholder	2015	Addition	Reduction	2015
Yankuang Group	3,353,388	–	–	3,353,388
Co. Ltd

(3) The proportion and changes of equity or interest of controlling shareholder

Controlling shareholder	Amount Proportion to share holding At 30 June At 1 January At 30 June At 1 January 2015 2015 2015 2015
Yankuang Group Co. Ltd	2,600,000 2,600,000 52.86% 52.86%

Note: Except the information presented in the above table, at the end of this reporting period, Yankuang Group Co. Ltd. holds 180,000,000 H shares of the Company through its wholly-owned subsidiaries, accounting for approximately 3.66% of the Company’s total issued share capital.

220 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

X. RELATIONSHIP OF RELATED PARTIES AND TRANSACTIONS – CONTINUED

I. Relationship of Related Parties – continued

2. Subsidiaries

For detailed information of subsidiaries, please refer to Note “VIII, ii, (1) Organizational structure of the Company.

3. Joint ventures and associates

For detailed information of joint ventures or associates, please refer to Note “VIII, ii, (1)” under the chapter “Signifi cant joint ventures or associates”. Joint ventures and associates incurring related party transactions with the Company in current year or previous years and generating balance are as the followings:

Company name	Relation to the Company
Shandong Shengyang Wood Co., Ltd	Associates
Jining Jiemei New Wall Material Co., Ltd	Associates
Newcastle Coal Infrastructure Group Pty Ltd (“NCIG”)	Associates
Shengdi Fenlei Coal Preparation and Engineering	Joint venture
Technology (Tianjin) Co., Ltd.
Ashton Coal Mines Limited (Note)	Joint ventures

Note: In October 2014, subsidiary of the Company acquired 10% equity interests of Ashton Coal Mines Limited through which the Company’s holding in Ashton reached to 100%. Therefore Ashton is consolidated into the Company’s consolidation fi nancial statement. Please refer to Note “VII, I”.

Yanzhou Coal Mining Company Limited Interim Report 2015 221

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

X. RELATIONSHIP OF RELATED PARTIES AND TRANSACTIONS – CONTINUED

I. Relationship of Related Parties – continued

4. Other related parties

Related parties	Type of related relationship	Transactions
Yankuang Group Tangcun	Other enterprises under control of the same controlling	Sales of goods and materials, purchase of
Shiye Co., Ltd.	shareholder and ultimate controlling party	materials, acceptance of labour service
Yankuang Group Dalu	Other enterprises under control of the same controlling	Sales of goods and materials, purchase of
Machinery Co., Ltd.	shareholder and ultimate controlling party	materials, acceptance of labour service
Yankuang Group Zoucheng	Other enterprises under control of the same controlling	Sales and purchase of materials,
Jinming Electrical and	shareholder and ultimate controlling party	acceptance of labour service
Mechanical Co., Ltd.
Shandong Yankuang International	Other enterprises under control of the same controlling	Sales of goods
Coking Co., Ltd.	shareholder and ultimate controlling party
Yankuang Group Donghua	Other enterprises under control of the same controlling	Sales of goods and material, purchase
Logistics Co., Ltd.	shareholder and ultimate controlling party	of goods
Yankuang Donghua Zoucheng	Other enterprises under control of the same controlling	Sales and purchase of goods
Haitian Trading Co., Ltd.	shareholder and ultimate controlling party
Yankuang Guohong Chemicals	Other enterprises under control of the same controlling	Sales of goods
Co., Ltd.	shareholder and ultimate controlling party
Yankuang Group	Other enterprises under control of the same controlling	Sales of goods
Co., Ltd. (Aluminium)	shareholder and ultimate controlling party
Yankuang Group Donghua	Other enterprises under control of the same controlling	Sales of goods, purchase of materials,
Construction Co., Ltd.	shareholder and ultimate controlling party	acceptance of labour service
Yankuang Group Zoucheng	Other enterprises under control of the same controlling	Purchase of materials, acceptance
Jintong Rubber Co., Ltd.	shareholder and ultimate controlling party	of labour service
Yankuang Meihua Gongxiao Co., Ltd	Other enterprises under control of the same controlling	Sales and purchase of goods
	shareholder and ultimate controlling party
Shandong Yankuang Jisan Electricity	Other enterprises under control of the same controlling	Sales of goods
Co., Ltd.	shareholder and ultimate controlling party
Yankuang Group Electrical and	Other enterprises under control of the same controlling	Sales and purchase of materials,
Machinery Equipment Co., Ltd.	shareholder and ultimate controlling party	acceptance of labour service
Yankuang Group Hailu Construction	Other enterprises under control of the same controlling	Acceptance of labour service
Co., Ltd.	shareholder and ultimate controlling party
Yankuang Donghua 37 Chu	Other enterprises under control of the same controlling	Sales of materials, acceptance
	shareholder and ultimate controlling party	of labour service
Yankuang Donghua Construction	Other enterprises under control of the same controlling	Sales of materials, acceptance
Co., Ltd., Geological and	shareholder and ultimate controlling party	of labour service
Mining Branch
Yankuang Donghua Construction	Other enterprises under control of the same controlling	Acceptance of labour service
Co., Ltd., Building and	shareholder and ultimate controlling party
Installation Branch

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CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

X. RELATIONSHIP OF RELATED PARTIES AND TRANSACTIONS – CONTINUED

I. Relationship of Related Parties – continued

4. Other related parties – continued

Related parties	Type of related relationship	Transactions
Yankuang Group Zoucheng	Other enterprises under control of the same controlling	Acceptance of labour service
Huajiang Design and	shareholder and ultimate controlling party
Research Co., Ltd.
Yankuang Boyang Foreign	Other enterprises under control of the same controlling	Sales of goods
Economic and Trading Co., Ltd.	shareholder and ultimate controlling party
Yankuang Donghua Zoucheng	Other enterprises under control of the same controlling	Purchase of materials
Haitian Trading Co., Ltd.	shareholder and ultimate controlling party
Yankuang Group Changlong	Other enterprises under control of the same controlling	Purchase of materials
Cable Co., Ltd.	shareholder and ultimate controlling party
Yankuang Group Fuxing Shiye	Other enterprises under control of the same controlling	Purchase of materials
Co., Ltd.	shareholder and ultimate controlling party
Yankuang Group Labour	Other enterprises under control of the same controlling	Purchase of materials, acceptance
Service Co., Ltd.	shareholder and ultimate controlling party	of labour service
Yankuang Group Zoucheng	Other enterprises under control of the same controlling	Purchase of materials
Dehailan Rubber Co., Ltd.	shareholder and ultimate controlling party
Zoucheng Shuangye Clothing	Other enterprises under control of the same controlling	Purchase of materials
Co., Ltd.	shareholder and ultimate controlling party
Yanzhou Dongfang Jidian Co., Ltd.	Other enterprises under control of the same controlling	Sales of goods, purchase of materials,
	shareholder and ultimate controlling party	acceptance of labour service
Yankuang Group Finance Co., Ltd	Other enterprises under control of the same controlling	Deposit, f nancial service
	shareholder and ultimate controlling party
Other entities with common	Other enterprises under control of the same controlling	Sales and purchase of materials,
controlling party	shareholder and ultimate controlling party	acceptance of labour service
Noble Group	Other related parties	Dealing accounts, sales of goods,
		rendering of service, acceptance
		of service

Yanzhou Coal Mining Company Limited Interim Report 2015 223

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

X. RELATIONSHIP OF RELATED PARTIES AND TRANSACTIONS – CONTINUED

II. Related Party Transactions

1. Goods purchasing & sales, rendering & acceptance of labour service

(1). Goods purchasing/acceptance of labour service

Related parties Transaction	Current year Last year
Controlling shareholder Goods purchasing and entities it controls Associates Acceptance of labour service-port fee Joint venture Acceptance of labour service-coal preparation Other related parties Acceptance of labour service-marketing service commission Total	254,948 514,039 – 142,501 21,390 – 5,961
	276,338 662,501

(2) Goods sales/rendering of labour service

Related parties
Transaction

Current year
Last year

Controlling shareholder
Goods sales-coal
and entities it controls
Other related parties
Goods sales-coal
Joint venture
Goods sales-coal
Controlling shareholder
Goods sales-methanol
and entities it controls
Controlling shareholder
Goods sales-material
and entities it controls
Controlling shareholder
Goods sales-electricity, heat
and entities it controls
Joint venture
Provision of labour-management service
Joint venture
Provision of royalty services
Other related parties
Provision of labour-off port service
Associates
Goods sales-material
Associates
Provision of labour-project service
Total

595,201
1,388,034
695,453
981,964
–
373,738
5,304
100,862
246,289
191,002
58,194
60,906
29,831
–
49,135
–
1,359
–
4,854
2,156

1,680,766
3,103,516

224 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

X. RELATIONSHIP OF RELATED PARTIES AND TRANSACTIONS – CONTINUED

II. Related Party Transactions – continued

2. Guarantee

Securing	Secured	Amount	Guarantee	Guarantee
party	party	guaranteed	starting date	maturity date	Completion
Yankuang Group	The Company	RMB1.71444 billion	2011-9-29	2016-9-28	No
Yankuang Group	Heze Neng Hua	RMB10 million	2012-5-28	2022-5-23	No
The Company	Yancoal International	RMB1.4 billion	2013-8-29	2016-8-28	No
The Company	Yancoal International	RMB2.1 billion	2013-8-29	2016-10-20	No
The Company	Yancoal International	RMB675.9 million	2013-12-23	2016-12-23	No
The Company	Yancoal International	RMB2 billion	2013-6-24	2016-6-20	No
The Company	Yancoal International	RMB1 billion	2013-12-16	2015-12-11	No
The Company	Yancoal International	RMB1.36 billion	2014-1-9	2017-1-8	No
The Company	Yancoal Australia	USD869.66 million	2012-12-16	2017-12-16	No
The Company (note)	Yancoal Australia	USD45 million	2012-12-16	2017-12-16	No
The Company	Yancoal Australia	RMB6.22 billion	2013-12-16	2018-12-16	No
The Company	Yancoal Australia	RMB325 million	2013-12-16	2018-12-16	No
The Company	Yancoal Australia	USD860.68 million	2014-12-16	2019-12-16	No
The Company	Yancoal Australia	USD50 million	2014-12-16	2019-12-16	No
Yankuang Group	The Company	RMB140 million	2014-6-20	2019-6-20	No
Yankuang Group (Note 1)	The Company	RMB1 billion	2012-7-23	2017-7-22	No
Yankuang Group (Note 1)	The Company	RMB4 billion	2012-7-23	2022-7-22	No
Yankuang Group (Note 1)	The Company	RMB1.95 billion	2014-3-5	2019-3-4	No
Yankuang Group (Note 1)	The Company	RMB3.05 billion	2014-3-5	2024-3-4	No
The Company (Note 2)	Yancoal International	USD450 million	2012-5-16	2017-5-15	No
The Company (Note 2)	Yancoal International	USD550 million	2012-5-16	2022-5-15	No
The Company (Note 3)	Yancoal Trading	USD300 million	2014-5-22	N/A	No

Note1: The Company’s controlling shareholder, Yankuang Group, provides guarantee for the Company, for issuance of corporate bond of RMB10 billion.

Note 2: The Company provides guarantee for its subsidiary, Yancoal International, for issuance of corporate bond of USD1 billion.

Note 3: The Company provides guarantee for its subsidiary, Yancoal Trading, for issuance of perpetual bond of USD300 million.

3. Free use of trademark

The trademark of the Company registered and owned by the controlling shareholder, is used by the Company for free.

Yanzhou Coal Mining Company Limited Interim Report 2015 225

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X. RELATIONSHIP OF RELATED PARTIES AND TRANSACTIONS – CONTINUED

II. Related Party Transactions – continued

4. Transactions with Yankuang Group Finance Company Limited and Middlemount Mine

As at the end of this reporting period, the balance of deposits of the Company in Yankuang Group Finance Company Limited was RMB1.17352 billion and the interest income during this reporting period was RMB2.16 million.

As at the end of this reporting period, the amount of long-term loans of the Company from Yankuang Group Finance Company Limited was RMB222.77 million, including: USD5.36 million and RMB195 million. And the interest expense was RMB5.70 million. The amount of short-term loans was RMB100 million and RMB195 million. The interest expense was RMB5.70 million. The amount of short-term loans was RMB100 million and the interest expense was RMB2.73 million.

As at the reporting date, carrying amount of the loan provided to Middlemount Joint Venture by Yancoal Australia, the subsidiary of the Company is AUD349.87 million including the interest receivable is AUD9.9 million.

5. Remuneration of key management

Key management	Current year Last year
Independent non-executive director Executive director Supervisor Other management Total	260 260 2,697 1,795 421 613 643 1,459
	4,021 4,127

226 Yanzhou Coal Mining Company Limited Interim Report 2015

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X. RELATIONSHIP OF RELATED PARTIES AND TRANSACTIONS – CONTINUED

II. Related Party Transactions – continued

6. Other transactions

Pursuant to an agreement signed between the Company and Yankuang Group, Yankuang Group manages staff social insurance for the company. Such expenses of the Company for 1 January 2015 to 30 June 2015 and 1 January 2014 to 30 June 2014 are RMB488.27 million and RMB619.08 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 1 January 2015 to 30 June 2015 and 1 January 2014 to 30 June 2014 are RMB269.94 million and RMB270 million respectively.

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, transaction price determined based on market price, government pricing or negotiated price. Details are as followings:

Items	Current year Last year (RMB’0000) (RMB’0000)
Services received from the Company Construction service Transportation Gas and heating expenses Buildings management Maintenance and repair service Employees’ benef ts Communication Services Subtotal	78,482 16,063 4,671 610 28,289 2,335 58,310 6,856 84,824 8,351 4,899 872 2,009 2,286
	261,484 37,373

Yanzhou Coal Mining Company Limited Interim Report 2015 227

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

X. RELATIONSHIP OF RELATED PARTIES AND TRANSACTIONS – CONTINUED

III. Amount due to or from related party

1. Receivables

Items
Related parties

At 30 June 2015
At 1 January 2015
Carrying
Bad debt
Carrying
Bad debt
amount
provision
amount
provision

Notes receivable
Other enterprises under control
of the same controlling shareholder
and ultimate controlling party
Accounts receivable
Other enterprises under control
of the same controlling shareholder
and ultimate controlling party
Accounts receivable
Other related parties
Accounts receivable
Joint venture
Advances to suppliers
Controlling shareholder and
ultimate controlling party
Advances to suppliers
Other enterprises under control
of the same controlling shareholder
and ultimate controlling party
Other receivables
Controlling shareholder and
ultimate controlling party
Other receivables
Other enterprises under control
of the same controlling shareholder
and ultimate controlling party
Other receivables
Associates
Total

324,400
–
245,968
–
84,979
–
59,809
–
–
–
239,552
–
195,668
–
160,660
–
2,303
–
2,888
–
9,267
–
26,080
–
11,000
–
16,994
–
119,387
–
178,189
–
112,770
–
116,883
–

859,774
–
1,047,023
–

228 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

X. RELATIONSHIP OF RELATED PARTIES AND TRANSACTIONS – CONTINUED

III. Amount due to or from related party – continued

2. Payables

Amount due to or from related party – continued 2. Payables	unt due to or from related party – continued Payables
Payables Related parties Notespayable Controlling shareholder and ultimate controlling party Notespayable Other enterprises under control of the same controlling shareholder and ultimate controlling party Accounts payable Controlling shareholder and ultimate controlling party Accounts payable Other enterprises under control of the same controlling shareholder and ultimate controlling party Accounts payable Associates Advance from Other enterprises under control of the same controlling customers shareholder and ultimate controlling party Advance from Associates customers Other payable Controlling shareholder and ultimate controlling party Other payable Other enterprises under control of the same controlling shareholder and ultimate controlling party Other payable Associates Total TINGENCY Australian subsidiaries and joint ventures Items	Payables Related parties	At 30 June 2015 At 1 January 2015
		2,206 18,956 – 15,816 4,857 4,677 219,494 150,949 – 10 62,471 24,913 325 – 336,398 352,197 506,019 660,066 12,297 17
		1,144,067 1,227,601
		As at 30 As at 1 June 2015 January 2015
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 Guarantees provided to deposits Guarantees provided to land requisition Total		1,571,136 1,650,678 247,412 218,380 144,087 – – 182,282
		1,962,635 2,051,340

XI. CONTINGENCY

1. Australian subsidiaries and joint ventures

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CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

XI. CONTINGENCY – CONTINUED

Zhongxin Daxie Fuel Co., Ltd. (“Zhongxin Daxie”), as the plaintiff, brought a civil litigation against the Company, as the defendant, at the Shandong Provincial Higher People’s Court, alleging a failure by the Company to perform its delivery obligations under Coal Sales Contract between the parties. Zhongxin Daxie sued for the termination of the coal sales contract, return of payments for goods and damage in an amount of RMB163.6 million. It was the fi rst instance judgment of the Shandong Provincial Higher People’s Court that: Zhongxin Daxie’s claim was rejected. On 30 June 2014, the Company received the Notice of the Decision on Appeal from the Supreme People’s Court of the People’s Republic of China. As at the disclosure date of this report, the case has not yet been heard.
Except for the contingencies stated above and included in Note “X, ii, 2”, as at 30 June 2015, the Company does not have any other signifi cant contingencies.

XII. 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. 19). 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 during 2010-2012 to acquire 74.82% equity interests of Inner Mongolia Haosheng Coal Mining Company Limited. According to several capital increase resolutions of the board of Inner Mongolia Haosheng Coal Mining Company Limited during 2011-2012, the Company needed to pay RMB7.361 billion for equity transfer and capital increase. As at the end of the reporting period, RMB4.84303 billion has been paid by the Company and RMB2.51797 billion was still unpaid.

2. Ongoing lease agreements and related fi nancial infl uence

As at 30 June 2015 (T), the amount shall be carried by the Company for irrevocable operating lease and fi nancing lease of machinery and equipments, buildings, etc. are stated as follows:

Terms	Operating lease Financing lease (RMB’0000) (RMB’0000)
T+1 year T+2 years T+3 years T+3 years later Total	22,879 5,090 16,980 5,105 8,838 4,570 276 2,175
	48,973 16,940

230 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

XII. COMMITMENTS – CONTINUED

As at 30 June 2015, the Company’s other commitments which have not been recognized in the fi nancial statements are as follows:

Commitments	At 30 June 2015 At 1 January 2015 (RMB’0000) (RMB’0000)
Capital expenditure-purchase and construction of assets Total	218,935 273,192
	218,935 273,192

Except for the above stated commitments, the Company has no other signifi cant commitments to claim by 30 June 2015.

XIII. EVENTS AFTER BALANCE SHEET DATE

Acquisition of 100% equity interests of Yankuang Donghua Heavy Industry Co., Ltd. In July 2015, The “Resolution on the Discussion and Consideration of the Acquisition of 100% of Equity Interest of Yankuang Donghua Heavy Industry Co., Ltd.” was approved at the ninth meeting of the sixth session of the Company’s board and the Company was approved to acquire 100% of equity interest in Yankuang Donghua Heavy Industry Co., Ltd. (“Donghua Heavy Industry”) held by Yankuang Group Co., Ltd. (“Yankuang Group”) with the consideration of RMB676,045,800.
Except for the above stated events, the Company has no other signifi cant events after balance sheet day to claim.

XIV. OTHER IMPORTANT EVENTS

Leases
(1) At 30 June 2015, the carrying amount of fi xed assets leased by the Company through leaseback fi nancing lease was RMB 1.67769 billion. See Note VI.14. (2) for fi xed assets by fi nancial leases.
(2) At 30 June 2015, minimum fi nance lease payment was RMB 206.64 million. See Note XII.2 for the minimum fi nance lease payment.
(3) At 30 June 2015, minimum payment of signifi cant operating leases was RMB 285.52 million. See Note XII.2 for the minimum payment of signifi cant operating leases.

Yanzhou Coal Mining Company Limited Interim Report 2015 231

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XIV. OTHER IMPORTANT EVENTS – CONTINUED

2. Deposit of Environment Restoration

Pursuant to “Temporary Management Measurements for Deposit of Shandong Province Mine Geological Environment Restoration” with the code of Lucaizheng (2005) No.81 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 RMB1.73284 billion and RMB903.19 million before the expiration of mining rights. By the end of the reporting period, the Company and the subsidiary Heze Neng Hua have handed in RMB1 billion and RMB52 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 RMB43.49 million.

3. Tax audit of Yancoal Australia Limited

Since 2013, Australian Tax Offi ce (ATO) has conducted a tax review of Yancoal Australia, a subsidiary of the Company. This tax review has been continued till this reporting period and part of the tax issues have been rechecked by ATO. As at 30 June 2015, Yancoal Australia Limited and ATO were discussing the outstanding events. It is expected that the tax review conclusion will be fulfi lled at the fi rst half of 2015 and it will not have signifi cant effect on fi nancial position of Yancoal Australia.

4. Financial support to Middlemount Joint Venture Pty Ltd.

Yancoal Australia, the subsidiary of the Company, submitted the document of offering fi nancial support to Middlemount Joint Venture in 2014, commitment:

(1) Yancoal Australia will not require Middlemount Joint Venture repay any debts, except Middlemount Joint Venture agrees to repay or otherwise specifi ed in the loan agreement.
(2) Yancoal Australia provides fi nancial support to Middlemount Joint Venture, making it be able to repay the due debts. The borrowing amount will be determined on Yancoal Australia’s equity holdings and the required amount of the loan.

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CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

XIV. OTHER IMPORTANT EVENTS – CONTINUED

5. Segment report

(1) Segment report for the period from 1 January 2015 to 30 June 2015

Unit: RMB’000

Items

Railway
Methanol,
Coal mining
transportation
Electricity
Undistributed
Inter-segment
business
business
power and heat
items
eliminations
Total

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

20,827,207
156,455
1,998,058
3,270,838
1,109,152
25,143,406
20,330,676
156,455
1,541,650
3,114,625
–
25,143,406
496,531
–
456,408
156,213
1,109,152
–
20,420,793
152,235
1,747,274
3,247,268
1,092,177
24,475,393
15,428,156
110,836
1,461,572
3,215,026
–
20,215,590
749,705
–
80,713
–
830,418
–
4,242,932
41,399
204,988
32,242
261,759
4,259,802
406,414
4,220
250,784
23,570
16,975
668,013
182,122,498
390,795
7,524,804
3,293,854
61,340,930
131,991,021
108,620,345
260,207
3,900,997
2,649,233
28,632,692
86,798,090

645,971
–
380,024
4,756
–
1,030,751
137,060
–
–
–
–
137,060
2,181,480
–
139,355
114,513
–
2,435,348

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CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

XIV. OTHER IMPORTANT EVENTS – CONTINUED

5. Segment report – continued

(2) Segment report for the period from 1 January 2014 to 30 June 2014

Unit: RMB’000

	Unit: RMB’000
Items	Railway Methanol, Coal mining transportation Electricity Undistributed Inter-segment business business power and heat items eliminations Total
Operating revenue – External – Inter-segment Operating cost and expenses – External – Inter-segment – Operating expense during the period Total operating prof t Total assets Total liabilities Complementary information Depreciation and amortization Non-cash expenses excluding depreciation and amortization Capital expenditure	32,163,143 245,550 1,220,784 130,320 1,331,185 32,428,612
	31,463,656 215,413 739,355 10,188 – 32,428,612 699,487 30,137 481,429 120,132 1,331,185 –
	31,690,353 208,977 1,085,098 131,974 978,641 32,137,761
	25,909,872 134,193 803,766 5,264 – 26,853,095 697,441 17,989 135,901 115,162 966,493 – 5,083,040 56,795 145,431 11,548 12,148 5,284,666
	472,790 36,573 135,686 -1,654 352,544 290,851
	172,511,622 526,496 7,665,942 2,570,152 46,556,568 136,717,644 116,097,701 176,676 4,515,280 220,395 31,036,290 89,973,762 1,796,364 32,310 220,762 1,097 – 2,050,533 130,676 – – – – 130,676 1,513,049 322 78,036 53,245 – 1,644,652

234 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

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

1. Accounts receivable

(1) Classifi cation of accounts receivable

Items	At 30 June 2015 At 1 January 2015 Book value Bad debt provision Book value Bad debt provision Accrued Book Accrued Book Amount Proportion Amount proportion value Amount proportion Amount proportion value (%) (%) (%) (%)
Accounts receivables accrued bad debt provision as per portfolio Accounting aging portfolio Risk-free portfolio The subtotal of portfolio Total	– – – – – – – – 1,084,851 90 44,754 4 1,040,097 305,105 56 13,588 4 291,517 121,106 10 121,106 237,059 44 – – 237,059 1,205,957 100 44,754 4 1,161,203 542,164 100 13,588 3 528,576
	1,205,957 – 44,754 – 1,161,203 542,164 – 13,588 – 528,576

1) Accounts receivables in the portfolio accrued the bad debt provisions as per accounting aging analysis method:

Item	At 30 June 2015 Accounts Bad debt % Bad debt receivable provision provision
Within 1 year 1-2 years 2-3 years Over 3 years Total	1,083,434 43,337 4 – – 30 – – 50 1,417 1,417 100 1,084,851 44,754 –

2) Accounts receivables in the portfolio accrued the bad debt provision under other method:

Item	At 30 June 2015 Accounts Bad debt Accrued receivable provision proportion (%)
Risk-free portfolio Total	121,106 – – 121,106 – –

(2) There was no bad debt provision accrual, reversal (or recover) during the reporting period.
(3) There were no accounts receivables written off during the reporting period.

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

2. Other receivables

(1) Classifi cation of other receivables

		At 30 June 2015	At 30 June 2015				At 1 January 2015	At 1 January 2015
	Carrying amount		Bad debt provision			Carrying amount		Bad debt provision
				Accrued	Book				Accrued	Book
Items	Amount Proportion		Amount proportion		value	Amount	proportion	Amount	proportion	value
		(%)		(%)			(%)		(%)
Accounts receivables accrued
bad debt provision as per portfolio	–	–	–	–		–	–	–	–
Accounting aging portfolio	26,678	–	14,631	55	12,047	15,112	–	13,968	92	1,144
Risk-free portfolio	7,217,810	100			7,217,810	3,996,573	100	–	–	3,996,573
The subtotal of portfolio	7,244,488	100	14,631		7,229,857	4,011,685	100	13,968	–	3,997,717
The receivables without individual
signif cant amount accruing
bad debts provisions	3,163	–	3,163	100	–	3,163	–	3,163	100	–
Total	7,247,651		17,794		7,229,857	4,014,848	–	17,131	—	3,997,717

1) Other receivables in the portfolio accrued the bad debt provisions as per aging analysis method:

At 30 June 2015 Other accounts Bad debt % Bad debt Item receivable provision provision	At 30 June 2015 Other accounts Bad debt % Bad debt Item receivable provision provision
Within 1 year 1-2 years 2-3 years Over 3 years Total	12,029 481 4 – – 30 1,000 500 50 13,649 13,649 100 26,678 14,631 –

2) Other receivables in the portfolio accrued the bad debt provision under other method:

Item	At 30 June 2015 Other Bad debt Accrued receivable provision proportion (%)
Risk-free portfolio Total	7,217,810 – – 7,217,810 – –

Note: Risk-free portfolio includes balance between the Company and its subsidiary with the amount of RMB 3.62813 billion.

236 Yanzhou Coal Mining Company Limited Interim Report 2015

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

2. Other receivables – continued

(1) Classifi cation of other receivables – continued
3) Other receivables without individual signifi cant amount accruing bad debt provision as at 30 June 2015

Company	Carrying Bad debt Accrued Reason amount amount proportion (%) for accrual
Guoneng Head off ce Total	3,163 3,163 100 Non-recoverable
	3,163 3,163 – –

(2) There was no bad debt provision accrual, reversal (or recover) during the reporting period.
(3) There were no other receivables written off during the reporting period.
(4) Other receivable categorized by nature

Nature	Carrying amount Carrying amount at 30 June 2015 at 1 January 2015
Current accounts Petty cash Security deposit Receivable of materials Receivable of investment Receivable of advance payment Deductible tax Total	5,906,969 3,745,030 23,540 11,710 49,440 170,479 142,100 63,633 1,125,000 – 602 518 23,478
	7,247,651 4,014,848

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

3. Long-term equity investment

(1) Classifi cation of long-term equity investment

Items	At 30 June 2015 At 1 January 2015 Carrying Provision for Carrying Carrying Provision for Carrying amount impairment amount amount impairment amount
Investment on subsidiaries Investment on joint ventures and associates Total	29,791,871 – 29,791,871 29,791,871 – 29,791,871 3,318,049 – 3,318,048 2,958,980 – 2,958,980
	33,109,920 – 33,109,919 32,750,851 – 32,750,851

(2) Investment on subsidiaries

						Provision for
					Current-year	impairment
					accrual for	as at 30
Investees	1 January 2015	Increase	Decrease	30 June 2015	impairment	June 2015
Qingdao Free Trade Zone
Zhongyan Trade Co., Ltd.	2,710	–	–	2,710	–	–
Shandong Yanmei Shipping Co., Ltd.	10,576	–	–	10,576	–	–
Yanmei Heze Neng Hua Co., Ltd.	2,924,344	–	–	2,924,344	–	–
Yancoal Australia Limited	3,781,600	–	–	3,781,600	–	–
Yanzhou Coal Mining Yulin
Neng Hua Co., Ltd	1,400,000	–	–	1,400,000	–	–
Yanzhou Coal Shanxi Neng Hua Co., Ltd	508,206	–	–	508,206	–	–
Yanzhou Coal Ordos Neng Hua Co., Ltd	8,100,000	–	–	8,100,000	–	–
Shandong Hua Ju Energy Co., Ltd	599,523	–	–	599,523	–	–
Yancoal International (Holding) Co., Ltd.	4,212,512	–	–	4,212,512	–	–
Zoucheng Yankuang Beisheng
Industry and Trade Co., Ltd.	2,404	–	–	2,404	–	–
Shandong Coal Trading Centre Co., Ltd.	51,000	–	–	51,000	–	–
Inner Mongolia Haosheng
Coal Mining Co., Ltd.	7,360,996	–	–	7,360,996	–	–
Shandong Yanmei Rizhao
Port Coal Storage and
Blending Co., Ltd.	153,000	–	–	153,000	–	–
Zhongyin Logistic	300,000	–	–	300,000	–	–
Zhongyin Financing Lease Co., Ltd.	375,000	–	–	375,000	–	–
Duanxin Investment Holding
(Beijing) Co., Ltd	10,000	–	–	10,000	–	–
Total	29,791,871	–	–	29,791,871	–	–

238

Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

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

3. Long-term equity investment – continued

(3) Investment on joint ventures and associates

Investees	Increase/Decrease in the period ended 30 June 2015 Investment Adjustment Cash or Provision for income on other Movement share impairment 1 January under equity comprehensive of other dividends Impairment At 30 June as at 30 June 2015 Increase Decrease method income equity declared accrual Others 2015 2015
I. Joint venture Shengdi Fenlei Coal Preparation and Engineering Technology (Tianjin) Co., Ltd. II. Associates China HD Zouxian Co., Ltd. Yankuang Group Finance Co., Ltd. Shaanxi Future Energy Chemical Co., Ltd. Shanghai CIFCOO Futures Co., Ltd. Shandong Shengyang Wood Co., Ltd. Jining Jiemei New Wall Materials Co., Ltd. Total	3,351 7,000 – 3,116 – – – – – 13,467 – 1,188,757 – – 168,378 – – 165,873 – – 1,191,262 – 310,308 – – 18,590 – – – – – 328,898 – 1,456,564 – – 40,661 22,637 – – – – 1,519,862 – – 264,560 – – – – – – – 264,560 – – – – – – – – – – – – – – – – – – – – – – –
	2,958,980 271,560 – 230,745 22,637 – 165,873 – – 3,318,049 –

4. Operating revenue and operating cost

Items	Current year Last year Operation Operation Operation Operation revenue cost revenue cost
Principal operations Other operations Total	8,047,338 4,725,818 21,372,741 17,164,847 3,802,358 3,749,008 1,441,747 1,411,293
	11,849,696 8,474,826 22,814,488 18,576,140

Yanzhou Coal Mining Company Limited Interim Report 2015 239

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

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

5. Investment income

Items	Current year Last year
Held-to-maturity investment income Investment income for long-term equity investment under equity method Investment income from disposal of f nancial liabilities at fair value through prof t or loss Investment income of available-for-sale f nancial assets during holding period Total	318,759 483,449 230,745 100,182 2,375 – 60 85
	551,939 583,716

XVI. APPROVAL OF FINANCIAL STATEMENTS

The fi nancial statements have been approved by board of directors on 28 August 2015.

240 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

SUPPLEMENT

1. Extraordinary gain

Pursuant to Explanation to Information Disclosure and Presentation Rules for Companies Making Public Offering No.1 Extraordinary Gain (2008), extraordinary gains of the Company for the reporting period are as follows:

Items

Current year
Remark

Gain and loss from disposal of non-current assets
Government subsidies included in the gains
and losses of the period
Income from the difference between the fair value
of the identif able net assets receivable from
the investees and investment cost of subsidiaries,
associates and joint ventures acquired
Gain and loss from changes in fair value of
tradable f nancial assets and liabilities,
and investment income from disposal
of tradable f nancial assets and liabilities
as well as available for sales f nancial assets except
the hedging business related to normal operations
Fair value changes of CVR
Other non-operating revenues and
expenses excluding the above items
Other gain/loss that meets the def nition
of extraordinary gain/loss
Subtotal
Extraordinary gain or loss excluding income tax effect
Minority interest effect (after tax)
Impact attributable to the Parent (after tax)

-11,074
190,988
38,083
305,289
83,073
606,359
157,602
9,694
439,063

Note: Other items that meet the defi nition of extraordinary gain or loss is the interest occupied by the fund of the Company and its subsidiaries, which is relieved by Finance Department of Inner Mongolia Autonomous Region and Bureau of Territorial Resources.

Yanzhou Coal Mining Company Limited Interim Report 2015 241

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

SUPPLEMENT – CONTINUED

2. 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 (revised in 2010) issued by China Securities Regulatory Commission, the weighted average return on net assets and earnings per share of the Company during the reporting period are as follows:

	Weighted	Earnings per	share
	average	Basic	Diluted
	return on	Earnings	earnings
Prof t during the report period	net assets (%)	per share	per share
Net prof t attributable to shareholders
of the parent company	1.64	0.1009	0.1009
Net prof t attributable to shareholders of the parent
company, excluding extraordinary gain or loss	0.50	0.0116	0.0116

3. Accounting fi gures differences under CASs and IFRS

(1) Differences of net profi t and net assets in the fi nancial statements under CASs and IFRS.

	Net prof t attributable to	Net prof t attributable to	Equity attributable to	Equity attributable to
	shareholders of	the Company	shareholders of the Company
Items	Current year	Last year	At 30 June 2015	At 1 January 2015
Under IFRS	-50,626	587,235	36,834,550	38,725,846
Difference adjustment
1. Adjustments under common control (Note 1)	5,288	5,966	-1,394,006	-1,399,295
2. Special Reserves (Note 2)	734,528	326,257	-475,433	-530,805
3. Deferred tax (Note 5)	-181,651	-86,307	101,502	274,031
4. Perpetual capital notes (Note 3)	132,897	–	6,618,316	2,521,456
5. Impairment of intangible assets (Note 4)	–	–	-657,901	-702,435
6. Other	-11,223	2,401	250,972	309,880
Under CAS	629,213	835,552	41,278,000	39,198,678

242 Yanzhou Coal Mining Company Limited Interim Report 2015

CHAPTER 7 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

SUPPLEMENT – CONTINUED

Accounting fi gures differences under CASs and IFRS – continued (1) Differences of net profi t and net assets in the fi nancial statements under CASs and IFRS. – continued
Note 1: According to CAS, related assets and subsidiaries acquired from Yankuang Group are belonged to business combination under common control. The assets and liabilities of acquirees are measured at carrying amount at the acquisition date. The difference of net assets acquired and the consolidated consideration shall adjust capital reserves. In accordance with IFRS, however, the identifi able assets, liabilities and contingent liabilities at the acquisition date are measured in fair value by acquirees. The difference of consolidated cost over the fair value of acquirees’ identifi able net assets at the acquisition date is recognized as goodwill.
Note 2: As mentioned in Note II.25, according to the requirements of related regulation by Chinese government, enterprises in coal industry should accrual safety production fees and similar fees, and recognized in profi t and loss for the current period and individually refl ected in special reserves in owner’s equity. Where there are fi xed assets arising from the use of special reserves in required range, the amount should be recognized in related cost and the accumulated depreciation should be fully transferred out. In accordance with IFRS, however, these fees should be recognized when they occurred. Fixed assets are recognized when related capital expenditure occurs and provided for depreciation using related method.
Note 3: In accordance CAS, the perpetual capital notes issued by the parent company are presented in fi nancial statements as owner’s equity attributed to the parent company, while the perpetual capital notes issued by the subsidiaries are presented as minority interest. Under IFRS, however, these notes should be individually presented.
Note 4: In accordance with CAS, the provision of impairment on long-term assets cannot be reversed once it is recognized. Under, IFRS, however, the provision for impairment on long-term assets can be reversed.
Note 5: There are differences of tax and minority interest arising from the above differences of standards.

Yanzhou Coal Mining Company Limited 28 August 2015

Yanzhou Coal Mining Company Limited Interim Report 2015 243

CHAPTER 8 DOCUMENTS AVAILABLE FOR INSPECTION

The following documents are available for inspection at the offi ce of the secretary to the Board at 298 Fushan Road South, 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 on websites designated by the CSRC;
The full text of the Interim Report released in other securities markets.

On behalf of the Board

Li Xiyong Chairman Yanzhou Coal Mining Company Limited

28 August 2015

244 Yanzhou Coal Mining Company Limited Interim Report 2015

AI assistant

CStone Pharmaceuticals — Interim / Quarterly Report 2015

50715_rns_2015-09-02_076f5983-6c56-4f01-a942-6214f9efcfb6.pdf

CONTENTS

DEFINITION – CONTINUED

CHAPTER 1 GROUP PROFILE AND GENERAL INFORMATION

I. REVIEW OF OPERATIONS

II. FINANCIAL HIGHLIGHTS

(I) Operating Results

For the six months ended 30 June

(II) Assets and Liabilities

(III) Summary Statement of Cash Flows

I. MANAGEMENT DISCUSSION AND ANALYSIS

(I) Operational Analysis by Industries, Products or Regions

1) Coal Production

3) Cost of coal sales

(2) Railway transportation business

(3) Coal chemicals business

(4) Power generation business

(5) Heat business

3. Main business by regions

(II) Analysis of Main Business

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

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

(3) Others

2) Implementation status of the Group’s operating scheme

(III) Assets and Liabilities

1. Analysis of changes in the consolidated assets and liabilities items

2. Other information

(1) Debt to equity ratio

(2) Contingent liabilities

(3) Pledge of assets

(IV) Analysis of Core Competitiveness

(V) Analysis of Investment

(2) Entrusted loan

3. Use of fund raised

II. CHANGES IN ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES OR AMENDMENTS TO SIGNIFICANT ACCOUNTING ERRORS

III. PROFIT DISTRIBUTION OR CAPITAL RESERVES TRANSFERRED TO SHARE CAPITAL

(I) Implementation of Cash Dividend Plan during the Reporting Period

(II) Interim Profi t Distribution for the First Half of 2015

IV. CAPITAL EXPENDITURE PLAN

V. OUTLOOK

(I) Operating Strategies for the Second Half of 2015

(II) Major Risks Faced by the Group, Impact and Measures

Risks arising from macro-economy downturn

Risks arising from product price volatility

Risks arising from product trade

Risks arising from safe production

Risks arising from debt fi nancing

Risks arising from project implementation

VI. OTHER DISCLOSURES

(I) The Impact of Exchange Rate Fluctuation

(II) Taxation

I. CORPORATE GOVERNANCE

(I) Corporate Governance

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

II. SIGNIFICANT LITIGATION, ARBITRATION AND EVENTS CALLED INTO QUESTION BY THE MEDIA EXTENDED TO THE REPORTING PERIOD

(II) Update on the litigation on Coal Sales Contract between Zhongxin Daxie Fuel Co., Ltd. and the Company

III. SHARE INCENTIVE SCHEME

IV. ASSET ACQUISITION, SALES AND MERGERS

Subscription of the Placing Shares of Qilu Bank

V. CONNTECTED TRANSACTIONS

(I) Continuing Connected Transactions

2. Continuing connected transaction of insurance fund

(II) Temporary Connected Transactions

3. Repayment by Shaanxi Future Energy of an Entrusted Loan

(III) As at 30 June 2015, 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. PERFORMANCE OF THE UNDERTAKINGS

IX. OTHER SIGNIFICANT EVENTS DISCLOSURES

(I) Establishment of Organizations and Subsidiaries

(II) Other Events

Remuneration policy

CHAPTER 4 SIGNIFICANT EVENTS – CONTINUED

Auditors

I. CHANGES IN SHARE CAPITAL

II. SECURITIES ISSUANCE

III. SHAREHOLDERS

CStone Pharmaceuticals Interim / Quarterly Report 2015