CStone Pharmaceuticals — Interim / Quarterly Report 2016

Aug 26, 2016

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

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

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

(Stock Code: 1171)

ANNOUNCEMENT ON INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2016

The board of directors (the “ Board ”) of Yanzhou Coal Mining Company Limited (the “ Company ”) is pleased to announce the unaudited interim results of the Company and its subsidiaries for the six months ended 30 June 2016. The interim results have been reviewed by the audit committee of the Board. This announcement, containing the full text of the Interim Report of the Company for 2016, complies with the relevant requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited in relation to information to accompany preliminary announcements of interim results. The 2016 interim results of the Company is available for viewing on the websites of The Stock Exchange of Hong Kong Limited at www.hkexnews.hk and of the Company at www.yanzhoucoal.com.cn.

As at the date of this announcement, the directors of the Company are Mr. Li Xiyong, Mr. Li Wei, Mr. Wu Xiangqian, Mr. Wu Yuxiang, Mr. Zhao Qingchun, Mr. Guo Dechun and Mr. Guo Jun, and the independent nonexecutive directors of the Company are Mr. Wang Lijie, Mr. Jia Shaohua, Mr. Wang Xiaojun and Mr. Qi Anbang.

CHAPTER 1 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, the 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 56.59% of the total share capital of the Company as at the end of this reporting period;

• 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 production operation of the 0.6 million tonnes methanol project in Shaanxi province;

• “Yulin Neng Hua”

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• “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 coal resources of the 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;

• “Tianchi Energy” Shanxi Heshun Tianchi Energy Company Limited, a company with limited liability incorporated under the laws of the PRC in 1999 and a 81.31% owned subsidiary of the Shanxi Neng Hua, mainly engages in the production and operation of Tianchi Coal Mine;

• “Tianhao Chemicals“ Shanxi Tianhao Chemicals Company Limited, a joint stock limited company incorporated under the laws of the PRC in 2002 and a 99.89% owned subsidiary of Shanxi Neng Hua, mainly engages in the production and operation of 0.1 million tonnes methanol project in Shanxi province.

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

Yanzhou Coal Mining Company Limited Interim Report 2016 1

CHAPTER 1 DEFINITION – CONTINUED

“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 77.75% owned subsidiary of the Company, mainly engages in the project development of Shilawusu coal fi eld located in Ordos, Inner Mongolia Autonomous Region;

• “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 mining equipment, electromechanical equipments and parts, etc.;

• “Zhongyin Financial Leasing” Zhongyin Financial Leasing Company Limited, a company with limited liability incorporated under the laws of the PRC in 2014 and a controlled subsidiary of the Company, mainly engages in the fi nancial leasing, leasing, leasing transaction advisory and guarantee, commercial factoring business related to the main business, etc.;

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• “Duanxin Beijing” Duanxin Investment Holding (Beijing) Company Limited, a company with limited liability incorporated under the laws of the PRC in 2014 and a wholly-owned subsidiary of the Company, mainly engages in the project investment, enterprise management, investment management, enterprise management consultation, investment consultation, etc.;

• “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 Resources” Yancoal Resources Limited, a limited company incorporated under the laws of Australia and a wholly-owned subsidiary of Yancoal Australia, mainly engages in coal mining, sales and exploration;

• “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 specifi 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;

2 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 1 DEFINITION – CONTINUED

“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;
“Directors”	the directors of the Company;
“Board”	the board of directors of the Company;
“Supervisors”	the supervisors of the Company;
“RMB”	Renminbi, the lawful currency of the PRC, unless otherwise specif ed;
“AUD”	Australian dollars, the lawful currency of Australia;
“USD”	the United States dollars, the lawful currency of the United States; and
“HKD”	Hong Kong dollars, the lawful currency of the Hong Kong Special Administrative
	Region of the People’s Republic of China.
	Yanzhou Coal Mining Company LimitedInterim Report 2016	3

CHAPTER 2 GROUP PROFILE AND GENERAL INFORMATION

I. GENERAL INFORMATION OF THE COMPANY

Statutory Chinese Name: 兗州煤業股份有限公司 Abbreviation of Chinese Name: 兗州煤業 Statutory English Name: Yanzhou Coal Mining Company Limited Abbreviation of English Name: Yanzhou Coal Legal Representative: Li Xiyong Authorized Representatives of the Hong Kong Stock Exchange: Zhao Qingchun, Jin Qingbin

II. CONTACT DETAILS

Secretary to the Board/Company Secretary: Jin Qingbin 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: yzc@yanzhoucoal.com.cn Representative of the Shanghai Stock Exchange: Pan Shutian Address: Offi ce of the Secretary to the Board, 298 Fushan Road South, Zoucheng City, Shandong Province, PRC Tel: (86537) 538 5343 Fax: (86537) 5383311 E-mail Address: yzc_panst@163.com

III. GENERAL INFORMATION

Registered Address : 298 Fushan Road South, Zoucheng City, Shandong Province, PRC Postal Code: 273500

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: yzc@yanzhoucoal.com.cn

IV. INFORMATION DISCLOSURE AND DESIGNATED LOCATION

Newspapers for information disclosure in PRC: China Securities Journal, Shanghai Securities News Website designated by the CSRC for publishing interim report: 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

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4 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 2 GROUP PROFILE AND GENERAL INFORMATION – CONTINUED

V. CORPORATE STOCKS

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: 01171

ADRs — Place of listing: The New York Stock Exchange, Inc. Ticker Symbol: YZC

VI. REGISTRATION CHANGES OF CORPORATE IN REPORTING PERIOD

Registration Date: 28 June, 2016

Registration Address: 298 Fushan Road South, Zoucheng City, Shandong Province, PRC Business License Registration Number of Legal Person: 91370000166122374N Tax Registration Certifi cate Number: 91370000166122374N Organization Code: 91370000166122374N

VII. OTHER INFORMATION

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

5

Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 3 ACCOUNTING AND FINANCIAL HIGHLIGHTS (PREPARED IN ACCORDANCE WITH THE IFRS)

I. OPERATING RESULTS

For the six months ended 30 June

			Changes as	For the year
			compared with	ended 31
	2016	2015 the corresponding		December 2015
	(RMB’000)	(RMB’000) period of last year		(RMB’000)
	(unaudited)	(unaudited)	(%)	(audited)
Sales income	12,580,714	18,143,958	-30.66	36,404,086
Gross prof t	2,931,886	3,222,131	-9.01	6,153,611
Interest expenses	(1,132,759)	(1,502,540)	-24.61	(2,484,411)
Income before income tax	429,217	244,077	75.85	622,257
Net income attributable to equity
holders of the Company for the
reporting period	375,236	(50,626)	–	164,459
Earnings per share	RMB0.08	RMB(0.01)	–	RMB0.03

II. ASSETS AND LIABILITIES

	For the year For the six months ended 30 June ended 31 2016 2015 December 2015 (RMB’000) (RMB’000) (RMB’000) (unaudited) (unaudited) (audited)
	Current assets 36,997,485 40,288,743 48,811,065 Current liabilities 45,446,876 31,283,229 42,056,295 Total assets 142,396,311 134,393,916 142,471,875 Equity attributable to equity holders of the Company 36,300,071 36,834,550 35,369,901 Net assets value per share RMB7.39 RMB7.49 RMB7.20 Return on net assets (%) 1.03 -0.14 0.46

6 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 3 ACCOUNTING AND FINANCIAL HIGHLIGHTS – CONTINUED (PREPARED IN ACCORDANCE WITH THE IFRS)

III. SUMMARY STATEMENT OF CASH FLOWS

	For the	six months ended 30 June	six months ended 30 June
			Changes as	For the year
			compared with	ended 31
	2016	2015 the corresponding		December 2015
	(RMB’000)	(RMB’000) period of last year		(RMB’000)
	(unaudited)	(unaudited)	(%)	(audited)
Net cash used in operating activities	(77,417)	(2,042,466)	—	4,347,210
Net (decrease)/increase in cash and
cash equivalents	(5,280,273)	71,952	-7,438.60	7,217,642
Net cash f ow per share used in
operating activities	RMB(0.02)	RMB(0.42)	—	RMB0.88

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Note: The Company repurchased H shares in 2015. Pursuant to relevant repurchase laws and regulations, earnings per share, dividend per share, net cash fl ow per share generated in business activities, net assets per share, the shareholding ratio and other related indexes were calculated based on the total equity after deduction of repurchased shares.

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7

Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 4 BOARD OF DIRECTORS’ REPORT

I. MANAGEMENT DISCUSSION AND ANALYSIS

(I) MAIN BUSINESS BY INDUSTRIES

Increase/ Increase/ decrease in decrease in gross prof t ratio sales income as compared For the six For the six as compared with the same months ended months ended with the same period of 2015 30 June, 2016 30 June, 2015 period of 2015 (%) (percentage point)

1. Coal business Raw coal production kilotonne 31,590 34,933 -3,343 -9.57 Saleable coal production kilotonne 29,249 31,995 -2,746 -8.58 Sales volume kilotonne 32,557 42,992 -10,435 -24.27 2. Railway transportation business Transportation volume kilotonne 4,867 7,526 -2,659 -35.33 3. Coal chemical business Methanol production kilotonne 801 834 -33 -3.96 Methanol sales volume kilotonne 800 829 -29 -3.50 4. Electrical power business Power generation 10,000kWh 135,118 124,987 10,131 8.11 Electricity sold 10,000kWh 86,941 74,613 12,328 16.52 5. Heat business Heat generation 10,000 steam tonnes 87 90 -3 -3.33 Sales volume of heat 10,000 steam tonnes 4 4 0 0 6. Electromechanical equipment manufacturing Output of electromechanical equipment (1) hydraulic support kilotonne 22 – – – (2) road header set 4 – – – (3) chain/belt conveyor kilotonne 11 – – – (4) frequency converter and switchbox set 1,617 – – – Sales volume of electromechanical equipment (1) hydraulic support kilotonne 20 – – – (2) road header set 1 – – – (3) chain/belt conveyor kilotonne 6 – – – (4) frequency converter and switchbox set 1,465 – – –

Note: There are considerable differences in above-mentioned production and sales volumes of related products in business of electric power, heat generation and electromechanical equipment manufacturing, mainly due to that relative products are sold externally after satisfying its internal operation requirements.

8 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 4 BOARD OF DIRECTORS’ REPORT – CONTINUED

II. THE OPERATION OF BUSINESS SEGMENTS

1. Coal business

1) Coal Production

In the fi rst half of 2016, the raw coal production of the Group was 31.59 million tonnes, representing a decrease of 3.34 million tonnes or 9.6% as compared with that of the fi rst half of 2015. Salable coal production of the Group for the reporting period was 29.25 million tonnes, representing a decrease of 2.75 million tonnes or 8.6% as compared with that of the fi rst half of 2015.

The following table sets out the coal production of the Group for the fi rst half of 2016:

	For the six	For the six
	months ended	months ended	Increase/	Increase/
	30 June 2016	30 June 2015	decrease	decrease
	(kilotonne)	(kilotonne)	(kilotonne)	(%)
I. Raw coal production	31,590	34,933	-3,343	-9.57
1. The Company	17,314	17,745	-431	-2.43
2. Shanxi Neng Hua	857	667	190	28.49
3. Heze Neng Hua	1,649	1,965	-316	-16.08
4. Ordos Neng Hua	751	1,816	-1,065	-58.65
5. Yancoal Australia	7,772	9,258	-1,486	-16.05
6. Yancoal International	3,247	3,482	-235	-6.75
II. Salable coal production	29,249	31,995	-2,746	-8.58
1. The Company	17,308	17,735	-427	-2.41
2. Shanxi Neng Hua	847	656	191	29.12
3. Heze Neng Hua	1,643	1,963	-320	-16.30
4. Ordos Neng Hua	751	1,813	-1,062	-58.58
5. Yancoal Australia	5,749	6,694	-945	-14.12
6. Yancoal International	2,951	3,134	-183	-5.84
Note: 1. Raw coal and salable coal production and sales of Shanxi Neng Hua increased as compared with
that of the f rst half	of 2015, mainly due to less production because of workface			relocation and
maintenance in the f rst half of 2015.
2. Raw coal and salable coal production		of Ordos Neng Hua	decreased as compared with that
of the f rst half of 2015 due to active maintenance and production reduction activities of coal
mines belonging to	Ordos Neng Hua in responses to the national policies of industrial production
capacity reduction.
	Yanzhou Coal	Mining Company LimitedInterim Report 2016			9

CHAPTER 4 BOARD OF DIRECTORS’ REPORT – CONTINUED

2) Coal prices and sales

In the fi rst half of 2016, the average coal price of the Group decreased as compared with that of the fi rst half of 2015. The average price of the Group’s self-produced coal increased within a narrow range QoQ due to the national policies of production capacity reduction and side reform of supply, etc..

The Group sold 32.56 million tonnes of coal in the fi rst half of 2016, representing a decrease of 10.44 million tonnes or 24.3% as compared with that of the fi rst half of 2015. The decrease of coal sales was mainly due to (1) the decrease in sales by 7.54 million tonnes of externally purchased coal as compared with that of the fi rst half of 2015; (2)1.12 million tonnes and 1.97 million tonnes of sales decrease of Ordos Neng Hua and Yancoal Australia respectively as compared with that of the fi rst half of 2015.

In the fi rst half of 2016, the Group realized a sales income of RMB10.6190 billion for its coal business, representing a decrease of RMB5.8534 billion or 35.5% as compared with that of the fi rst half of 2015.

The following table sets out the Group’s sales of coal for the fi rst half of 2016:

For the six months ended 30 June 2016 For the six months ended 30 June 2015 Coal production Sales volume Sales price Sales incomeCoal production Sales volume Sales price Sales income (kilotonne) (kilotonne) (RMB/tonne) (RMB’000) (kilotonne) (kilotonne) (RMB/tonne) (RMB’000)

1. The Company 17,308 16,524 335.24 5,539,694 17,735 16,317 358.57 5,850,700 No. 1 clean coal 75 58 463.48 26,849 66 112 517.56 57,832 No. 2 clean coal 5,450 5,152 421.60 2,172,072 4,119 3,521 475.45 1,674,029 No. 3 clean coal 1,278 1,206 366.74 442,438 2,091 2,136 414.58 885,630 Lump coal 1,169 1,109 385.05 427,138 1,065 1,112 419.75 466,863 Sub-total of clean coal 7,972 7,525 407.74 3,068,497 7,341 6,881 448.23 3,084,354 Screened raw coal 8,438 8,339 288.20 2,403,147 6,812 5,866 321.67 1,886,810 Mixed coal & Others 898 660 103.07 68,050 3,582 3,570 246.39 879,536 2. Shanxi Neng Hua 847 821 177.12 145,312 656 658 167.89 110,448 Screened raw coal 847 821 177.12 145,312 656 658 167.89 110,448 3. Heze Neng Hua 1,643 1,479 425.56 629,400 1,963 1,279 415.78 531,816 No. 2 clean coal 1,198 1,294 459.44 594,647 1,052 911 511.56 465,961 Mixed coal & Others 445 185 187.85 34,753 911 368 178.95 65,855 4. Ordos Neng Hua 751 773 220.41 170,413 1,813 1,893 187.06 354,138 Screened raw coal 751 773 220.41 170,413 1,813 1,893 187.06 354,138 5. Yancoal Australia 5,749 5,518 339.82 1,875,153 6,694 7,484 406.35 3,041,023 Semi-hard coking coal 272 261 481.89 125,686 478 535 510.42 273,010 Semi-soft coking coal 435 418 445.78 186,206 557 623 524.22 326,499 PCI coal 1,485 1,425 398.82 568,501 1,039 1,161 511.95 594,621 Thermal coal 3,557 3,414 291.37 994,760 4,620 5,165 357.61 1,846,893 6. Yancoal International 2,951 2,800 265.73 744,035 3,134 3,182 285.56 908,658 Thermal coal 2,951 2,800 265.73 744,035 3,134 3,182 285.56 908,658 7. Externally purchased coal — 4,642 326.37 1,514,963 — 12,179 465.98 5,675,542 8. Total for the Group 29,249 32,557 326.17 10,618,970 31,995 42,992 383.15 16,472,325

10

Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 4 BOARD OF DIRECTORS’ REPORT – CONTINUED

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

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	Impact of	Impact of
	change in	change in
	coal sales	the sales
	volume	price of coal
	(RMB’000)	(RMB’000)
The Company	74,499	-385,505
Shanxi Neng Hua	27,286	7,578
Heze Neng Hua	83,119	14,465
Ordos Neng Hua	-209,505	25,780
Yancoal Australia	-798,757	-367,113
Yancoal International	-109,099	-55,524
Externally purchased coal	-3,512,509	-648,070

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 2016:

		For the six	months ended	For the six months ended	For the six months ended
		30 June 2016		30 June 2015
		Sales volume	Sales income	Sales volume	Sales income
		(Kilotonne)	(RMB’000)	(Kilotonne)	(RMB’000)
1.	China	23,497	7,779,886	32,969	12,817,883
	Eastern China	19,555	6,516,882	27,987	10,943,784
	Northern China	1,951	603,822	2,117	638,594
	Southern China	1,802	587,399	1,391	621,771
	Other regions	189	71,783	1,474	613,734
2.	Japan	1,321	472,028	1,157	521,222
3.	South Korea	1,659	583,583	2,474	1,055,098
4.	Australia	2,551	672,438	2,625	706,471
5.	Others	3,529	1,111,035	3,767	1,371,651
6.	Total for the Group	32,557	10,618,970	42,992	16,472,325

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

11

Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 4 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 2016:

		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		2016	30 June 2015
		Sales volume	Sales income		Sales volume	Sales income
		(Kilotonne)		(RMB’000)	(Kilotonne)	(RMB’000)
1.	Electricity	10,739		3,033,546	15,005	5,793,385
2.	Metallurgy	2,468		1,036,244	2,689	1,395,189
3.	Chemical	3,368		1,416,364	3,705	1,653,691
4.	Trades	14,818		4,820,715	18,029	6,675,824
5.	Others	1,164		312,101	3,564	954,236
6.	Total for the Group	32,557		10,618,970	42,992	16,472,325

3) Cost of coal sales

The Group’s cost of coal sales in the fi rst half of 2016 was RMB7.3458 billion, representing a decrease of RMB5.4095 billion, or 42.4% as compared with that of the fi rst half of 2015. This was mainly due to RMB4.1496 billion decrease of the sales cost of externally purchased coal as compared with that of the fi rst half of 2015.

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 2016 30 June 2015 decrease decrease (%)
	The Company Total cost of sales RMB’000 3,470,123 3,789,555 -319,432 -8.43 Cost of sales per tonne RMB 202.35 224.02 -21.67 -9.67 Shanxi Neng Hua Total cost of sales RMB’000 91,889 90,595 1,294 1.43 Cost of sales per tonne RMB 112.00 137.72 -25.72 -18.68 Heze Neng Hua Total cost of sales RMB’000 507,365 453,652 53,713 11.84 Cost of sales per tonne RMB 296.44 264.53 31.91 12.06 Ordos Neng Hua Total cost of sales RMB’000 106,539 279,348 -172,809 -61.86 Cost of sales per tonne RMB 137.79 147.56 -9.77 -6.62 Yancoal Australia Total cost of sales RMB’000 1,411,430 2,299,911 -888,481 -38.63 Cost of sales per tonne RMB 255.78 307.32 -51.54 -16.77 Yancoal International Total cost of sales RMB’000 643,577 645,988 -2,411 -0.37 Cost of sales per tonne RMB 224.09 203.01 21.08 10.38 Externally purchased coal Total cost of sales RMB’000 1,501,481 5,651,060 -4,149,579 -73.43 Cost of sales per tonne RMB 323.47 463.97 -140.50 -30.28

12 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 4 BOARD OF DIRECTORS’ REPORT – CONTINUED

2. Railway transportation business

In the fi rst half of 2016, the transportation volume of the Railway Assets was 4.87 million tonnes, representing a decrease of 2.66 million tonnes or 35.3% as compared with that of the fi rst half of 2015, mainly due to the volume decrease of coal outward transportation. 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 RMB100.1 million in the fi rst half of 2016, representing a decrease of RMB56.369 million or 36.0% as compared with that of the fi rst half of 2015. The cost of railway transportation services was RMB55.829 million, representing a decrease of RMB53.442 million or 48.9% as compared with that of the fi rst half of 2015.

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 2016:

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		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 endedmonths ended		of increase/	months ended	months ended	of increase/
		30 June	30 June	decrease	30 June	30 June	decrease
		2016	2015	(%)	2016	2015	(%)
	1.Yulin Neng Hua	347	351	-1.14	342	357	-4.20
	2.Ordos Neng Hua	454	483	-6.00	458	472	-2.97
		Sales income (RMB’000)			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 ended	months ended	of increase/
		30 June	30 June	decrease	30 June	30 June	decrease
		2016	2015	(%)	2016	2015	(%)
	1.Yulin Neng Hua	465,106	526,458	-11.65	363,071	396,424	-8.41
	2.Ordos Neng Hua	605,334	691,919	-12.51	369,017	472,754	-21.94

13

Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 4 BOARD OF DIRECTORS’ REPORT – CONTINUED

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 2016:

		Power	generation (10,000 kW/h)	generation (10,000 kW/h)	Electricity sold (10,000 kW/h)	Electricity sold (10,000 kW/h)	Electricity sold (10,000 kW/h)
		For the 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
		2016	2015	(%)	2016	2015	(%)
1.Hua Ju Energy		45,616	48,796	-6.52	16,120	15,472	4.19
2.Yulin Neng Hua		14,391	13,160	9.35	1,383	594	132.83
3. Heze Neng Hua		75,111	63,031	19.17	69,438	58,547	18.60
		Sales income (RMB		’000)	Cost of sales (RMB ’000)
		For the six	For the six		For the six	For the six
		months endedmonths ended		Increase/	months endedmonths ended		Increase/
		30 June	30 June	decrease	30 June	30 June	decrease
		2016	2015	(%)	2016	2015	(%)
1.Hua Ju Energy		64,281	76,425	-15.89	49,954	51,509	-3.02
2.Yulin Neng Hua		2,817	1,348	108.98	3,891	1,872	107.85
3. Heze Neng Hua		209,205	208,868	0.16	171,831	196,529	-12.57

==> picture [109 x 503] intentionally omitted <==

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

Increase/
decrease
(%)
-3.02
107.85
-12.57
----- End of picture text -----

5. Heat business

Hua Ju Energy generated heat energy of 870 thousand steam tonnes and sold 40 thousand steam tonnes in the fi rst half of 2016, realizing a sales income of RMB10.084 million, with a cost of sales of RMB4.29 million.

==> picture [237 x 208] intentionally omitted <==

==> picture [253 x 208] intentionally omitted <==

14 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 4 BOARD OF DIRECTORS’ REPORT – CONTINUED

6. Electromechanical equipment business

The following table sets out the summary of operation of the Group’s electromechanical equipment business for the fi rst half of 2016:

			Production Volume	Production Volume		Sales volume
		For the six	For the six	Percentage	For the six	For the six	Percentage
		months ended	months ended	of increase/	months endedmonths ended		of increase/
		30 June	30 June	decrease	30 June	30 June	decrease
		2016	015	(%)	2016	2015		(%)
(1) hydraulic support (kilotonne)		22	–	–	20	–		–
(2) road header (unit)		4	–	–	1	–		–
(3) chain/belt conveyor (kilotonne)		11	–	–	6	–		–
(4) frequency converter and switchbox (unit)		1,617	–	–	1,465	–		–
		Sales income (RMB		’000)	Cost of sales (RMB		’000)
		For the six	For the six		For the six	For the six
		months ended	months ended	Increase/	months endedmonths ended		Increase/
		30 June	30 June	decrease	30 June	30 June	decrease
		2016	2015	(%)	2016	2015		(%)
(1) hydraulic support		372,162	–	–	292,557	–		–
(2) road header		3,019	–	–	2,566	–		–
(3) chain/belt conveyor		96,413	–	–	89,336	–		–
(4) frequency converter and switchbox		33,237	–	–	23,522	–		–
		Yanzhou Coal Mining Company LimitedInterim Report						2016	15

CHAPTER 4 BOARD OF DIRECTORS’ REPORT – CONTINUED

III. ANALYSIS OF MAIN BUSINESS

1. 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 2016	30 June 2015	decrease
	(RMB’000)	(RMB’000)	(%)
Sales income	12,580,714	18,143,958	-30.66
Cost of sales	8,771,677	13,987,677	-37.29
Cost of coal transportation	877,151	934,150	-6.10
Selling, general and administrative expenses	3,083,733	2,844,697	8.40
Investment losses from Joint Ventures	28,239	77,646	-63.63
Interest expenses	1,132,759	1,502,540	-31.00
Income tax	72,466	242,546	-70.12
Net cash outf ow from operating activities	77,417	2,042,466	-96.21
Net cash outf ow from investing activities	5,056,410	3,764,468	34.32
Net cash (outf ow)/inf ow from f nancing activities	-146,446	5,878,886	-102.49
R&D Expenditure	30,557	19,418	57.36

==> picture [109 x 503] intentionally omitted <==

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

-63.63
-31.00
-70.12
-96.21
34.32
57.36
----- End of picture text -----

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

Sales income: the Group’s sales income in the fi rst half of 2016 was decreased by 30.7% as compared with that of the fi rst half of 2015. 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 RMB932.5 million and RMB760.3 million, respectively, compared with that of the fi rst half of 2015; (2) the sales income was decreased by RMB4.1606 billion as compared with that of the fi rst half of 2015; (3) the newly increased sales income of RMB504.8 million of electromechanical equipment manufacturing business was included compared with that of the fi rst half of 2015.

Cost of sales: the Group’s cost of sales in the fi rst half of 2016 was decreased by 37.3% as compared with that of the fi rst half of 2015. This was mainly due to: (1) the sales cost of selfproduced coal was decreased by RMB1.2599 billion compared with that of the fi rst half of 2015; (2) the sales cost of self-produced coal was decreased by RMB4.1496 billion compared with that of the fi rst half of 2015; (3) the newly increased sales cost of RMB408 million of electromechanical equipment manufacturing business was included compared with that of the fi rst half of 2015.

Joint Venture investment loss: the Group’s Joint Venture investment loss in the fi rst half of 2016 was decreased by 63.6% as compared with that of the fi rst half of 2015. This was mainly due to the fact that the investment losses of Yancoal Australia was decreased by RMB43.633 million as compared with that of the fi rst half of 2015.

16 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 4 BOARD OF DIRECTORS’ REPORT – CONTINUED

Income tax: the Group’s income tax in the fi rst half of 2016 was decreased by 70.1% as compared with that of the fi rst half of 2015. This was mainly due to the fact that: (1) income tax of Yancoal Australia was decreased by RMB207.5 million as compared with that of the fi rst half of 2015; (2) the newly increased income tax of RMB31.082 million of Donghua Heavy Industry was included as compared with the fi rst half of 2015.

R&D expenditure: the Group’s R&D expenditure in the fi rst half of 2016 was increased by 57.4% as compared with that of the fi rst half of 2015. This was mainly due to the fact that the newly increased R&D expenditure of RMB7.824 million of Donghua Heavy Industry.

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

==> picture [108 x 503] intentionally omitted <==

Net cash fl ow from operating activities: in the fi rst half of 2016, net cash outfl ow from operating activities of the Group was decreased by 96.2% as compared with that of the fi rst half of 2015, which was mainly due to: (1) movement of prepaid notes payable and fund resulted in a decrease of cash outfl ow by RMB1.8426 billion as compared with that of the fi rst half of 2015; (2) the decrease of income tax resulted in a decrease of cash outfl ow by RMB186.2 million as compared with that of the fi rst half of 2015.

Net cash fl ow from investing activities: in the fi rst half of 2016, net cash outfl ow from investing activities of the Group was increased by 34.3% as compared with that of the fi rst half of 2015, which was mainly due to: (1) during the reporting period, the increase of net cash payment for external investment by RMB1.8734 billion as compared with that of the fi rst half of 2015; (2) during the reporting period, cash received from investment income increased by RMB205.1 million as compared with that of the fi rst half of 2015.

Net cash fl ow from fi nancing activities: in the fi rst half of 2016, net cash fl ow from fi nancing activities of the Group was decreased by 102.5% as compared with that of the fi rst half of 2015, which was mainly due to the fact that: (1) during the reporting period, cash expenditure for debt repayment increased by RMB8.6257 billion as compared with that of the fi rst half of 2015; (2) cash received from issuance of bonds increased by RMB3.4973 billion as compared with that of the fi rst half of 2015.

17

Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 4 BOARD OF DIRECTORS’ REPORT – CONTINUED

2. Others

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

In the fi rst half of 2016, affected by the weak global economic recovery and China’s economic structure adjustment, the product sales volume of the Group’s main business such as coal and methanol was decreased, and profi ts of the main business was decreased as well compared to the fi rst half of 2015. Facing complicated and grim economic situation, the Group adhered the “two-wheel driven” strategy of industrial operations and capital operations, accelerating the fi nancial industry layout and improving profi tability level of industries and fi nance. Through a series of capital operations including equity investment in China Zheshang Bank Co., Ltd. (“Zheshang Bank”), investment in Haichang Industry Co., Ltd. of Dongguan City (“Haichang Industry”) and establishment of funds and insurances, etc., the Group realized investment returns of RMB385.1 million in the fi rst half of 2016, representing an increase of RMB188.4 million or 95.7% as compared with that of the fi rst half of 2015.

==> picture [109 x 503] intentionally omitted <==

2) Implementation status of the Group’s operating scheme

In the fi rst half of 2016, the Group sold 32.56 million tonnes coal, of which 27.92 million tonnes of self-produced coal was sold, accounting for 40.9% of the planned coal sales volume for the year 2016. This was mainly attribute to that the Group has taken the initiative to reduce sales of low energy effi ciency and low quality coal to respond to the side reform of supply by the Chinese government. The Group sold 800 thousand tonnes methanol, which accounts for 53.3% of the planned methanol sales volume for the year 2016.

3) Capital Sources and Use

In the fi rst half of 2016, 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, repayment of bank loans bonds and interests.

The Group’s capital expenditure for the purchase of property, machinery and equipment for the fi rst half of 2016 was RMB2.4673 billion, representing an increase of RMB142 million or 6.1% as compared with RMB2.3253 billion in the fi rst half of 2015.

18 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 4 BOARD OF DIRECTORS’ REPORT – CONTINUED

IV. OPERATIONAL ANALYSIS BY INDUSTRIES, PRODUCTS OR REGIONS

1. 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 2015	period of 2015	period of 2015
		(RMB’000)	(RMB’000)	(%)	(%)	(%)	(percentage point)
1.	Coal business	10,618,970	7,345,812	30.82	-35.53	-42.41	8.25
2.	Railway transportation business	100,086	55,829	44.22	-36.03	-48.91	14.06
3.	Coal chemicals business	1,070,440	732,088	31.61	-12.14	-15.77	2.95
4.	Electric power business	276,303	225,677	18.32	-3.61	-9.70	5.51
5.	Heat business	10,084	4,290	57.46	-0.75	6.00	-2.71
6.	Electromechan-ical equipment
	business	504,831	407,981	19.18	–	–	–

==> picture [108 x 503] intentionally omitted <==

1. Main business by products

						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 2015	period of 2015	period of 2015
			(RMB’000)	(RMB’000)	(%)	(%)	(%)	(percentage point)
1.		Coal	10,618,970	7,345,812	30.82	-35.53	-42.41	8.25
2.		Railway transportation	100,086	55,829	44.22	-36.03	-48.91	14.06
3.		Coal chemicals	1,070,440	732,088	31.61	-12.14	-15.77	2.95
4.		Electric power	276,303	225,677	18.32	-3.61	-9.70	5.51
5.		Heat	10,084	4,290	57.46	-0.75	6.00	-2.71
6.		Electromechan-ical equipment	504,831	407,981	19.18	–	–	–

19

Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 4 BOARD OF DIRECTORS’ REPORT – CONTINUED

3. Main business by regions

		Increase/
		decrease in
		sales income
		as compared
	Sales income	with that of the
	(RMB’000)	f rst half of 2015 (%)
Domestic	9,741,631	-32.77
Overseas	2,839,083	-22.31
Total	12,580,714	-30.66

V. ASSETS AND LIABILITIES

==> picture [109 x 503] intentionally omitted <==

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

Increase/
decrease
(%)
-41.39
175.02
-100.00
154.81
51.48
2,678.80
-100.00
-100.00
204.39
----- End of picture text -----

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

	As at 30 June 2016	As at 30 June 2016	As at 31	December 2015
		Percentage to		Percentage to	Increase/
		total assets		total assets	decrease
	RMB’000	(%)	RMB’000	(%)	(%)
Bank guarantee	1,755,548	1.23	2,995,066	2.10	-41.39
Restricted cash	1,121,301	0.79	407,711	0.29	175.02
Assets held for sale	–	–	7,740,520	5.43	-100.00
Security investment	2,406,421	1.69	944,410	0.66	154.81
Investment in associated enterprises	4,944,020	3.47	3,263,764	2.29	51.48
Long-term receivables	6,873,060	4.83	247,339	0.17	2,678.80
Liabilities held for sale	–	–	1,520,831	1.07	-100.00
Non-controlling interests-perpetual capital security	–	–	1,854,837	1.30	-100.00
Non-controlling interests-other	5,820,405	4.09	1,912,131	1.34	204.39

Bank guarantee

As at the end of the reporting period, the bank guarantee reduced by 41.4% as compared with that of the beginning of this year. This was mainly due to the change of fi xed deposit for the reporting period.

Restricted cash

As at the end of this reporting period, the restricted cash increased by 175.0% as compared with that of the beginning of this year. This was mainly due to the facts that: (a) the guarantee fund of RMB916.1 million for environmental control and management refunded by the government is changed from “longterm receivables” to “restricted fund” in accounting calculation; (b) the guarantee fund for bank loan reduced by RMB202.5 million.

20 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 4 BOARD OF DIRECTORS’ REPORT – CONTINUED

Assets held for sale

As at the end of this reporting period, the assets held for sale reduced by 100.0% as compared with that of the beginning of this year. This was mainly due to the fact that Yancoal Australia sold “assets held for sale” to Watagan Mining Company Pty. Ltd (“Watagan Company”) in respect of implementation of asset securitization during this reporting period.

Security investment

==> picture [108 x 503] intentionally omitted <==

As at the end of this reporting period, the security investment increased by 154.8% as compared with that of the beginning of this year. This was mainly due to the facts that: (a) the Group contributed HKD1.9316 billion in purchasing shares of Zheshang Bank during this reporting period; (b) the Group invested RMB663.2 million in NCFS Ruixin No.1 Asset Management Scheme during the reporting period; (c) during the reporting period, the Company appointed a board director in Qilu Bank Co., Ltd. (“Qilu Bank”), which constitutes a signifi cant impact to Qilu Bank. As a result, the investment in Qilu Bank was changed from “security investment” to “investment in associated enterprises” in accounting calculation, which contributing a decrease of RMB797.7 million in “security investment”.

Investment in associated enterprises

As at the end of this reporting period, the investment in associated enterprises increased by 51.5% as compared with that of the beginning of this year. This was mainly due to the fact that: (a) during this reporting period, the Company invested RMB550 million in purchasing equity shares of Haichang Industry; (b) during this reporting period, the share investment in Qilu Bank was changed from “security investment” to “investment in associated enterprises” in accounting calculation, which contributing an increase of RMB892.6 million in “investment in associated enterprises”.

Long-term accounts receivable

As at the end of this reporting period, the long-term accounts receivable increased by 2,678.8% as compared with that of the beginning of this year. This was mainly due to the fact that Yancoal Australia implemented assets securitization and sold the assets and liabilities held for sale to Watagan Company during the reporting period, which contributing an increase in the long-term accounts receivable.

Liabilities held for sale

As at the end of this reporting period, the liabilities held for sale reduced by 100% as compared with that of the beginning of the year. This was mainly due to the fact that Yancoal Australia implemented the asset securitization and sold the “liabilities for sale” to Watagan Company.

Perpetual capital securities of non-controlling interests

As at the end of this reporting period, the perpetual capital securities of non-controlling interests reduced by 100.0% as compared with that of the beginning of the year. This was mainly due to the fact that the Group redeemed USD300 million perpetual capital securities during the reporting period.

21

Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 4 BOARD OF DIRECTORS’ REPORT – CONTINUED

Other non-controlling interests

As at the end of the reporting period, other non-controlling interests increased by 204.4% as compared with that of the beginning of the year. This was mainly due to the fact that during the reporting period, Duanxin Beijing and Shenzhen NCFS Assets Management Co., Ltd. invested and established a partnership enterprise, which increased RMB4 billion to non-controlling interests.

2. Other information

• (1) Debt to equity ratio

As at 30 June 2016, the equity attributable to the equity holders of the Company and interestbearing debt amounted to RMB36.3001 billion and RMB68.9774 billion respectively, representing a debt to equity ratio of 190.0%. For detailed information on interest-bearing debt, please refer to Note 21 of the fi nancial statements prepared under IFRS or the Note VII 31, 42-46 of the fi nancial statements prepared under CASs.

• (2) Contingent liabilities

For details of the contingent liabilities, please see Note 33 of the fi nancial statements prepared under IFRS.

• (3) Pledge of assets

For details of pledge of assets, please see Note 16-17of the fi nancial statements prepared under IFRS or the Note VII 20, 73 of the fi nancial statements prepared under CASs.

VI. ANALYSIS OF CORE COMPETITIVENESS

In the first half of 2016, actively complying with situations of macro economic structure adjustments, environmental policy tightening and coal production capacity reduction, the Group positively promoted “Volume Reduction and Quality Increasing” in coal production, increased production of benefi cial mines and products, realizing the transformation of coal production from “Benefi t Improvement through Quantity Increasing” to “Benefi t Improvement through Quality Increasing”. Benefi t supporting advantages were maintained due to the continuous improvement of marketing abilities through scientifi c market positioning, product structure optimization, marketing layout expansion and fl exible sales strategies. The synergy value of industrial chain was activated through synergy operating of regional coal industry and coal chemical industry. The steady and healthy operation of the Group was strongly supported by the gradually realized performance of fi nancial services to entities and synergistic benefi ting through further implementation of the strategy of “Integration of Finance and Industries, Two-Wheel Driven”. The Group continued to focus on “Three Reductions and Three Enhancements” to strengthen the resource sharing confi guration, further improving the operating cost controls and the factor resources effi ciency. The Group speeded up the exploration of research, development and comprehensive applications of coal clean utilization technologies, and comprehensively started the “Blue Sky Project”; Through active implementation of scientifi c and technological innovation and major technical breakthroughs, a series of new equipments and new technologies were successfully developed. Under running low conditions of coal industry, the Group continued to maintain a good profi table situation, and the core competitiveness of the Group was continuously enhanced.

22 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 4 BOARD OF DIRECTORS’ REPORT – CONTINUED

VII. ANALYSIS OF INVESTMENT

1. Overall analysis of the external equity investment during the reporting period

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

In the fi rst half of 2016, the external equity investment of the Company was RMB1.5524 billion in total, representing an increase of RMB504.9 million or 49.2% as compared with the same period last year. The relevant information of external equity investment projects invested is set out as follows:

							The	The
			Total				Company’s
			investment	Company’s			equity
			amount of	investment			interest in
			projects	amount			the invested
		Projects of external	(RMB100	(RMB100	Name of the		company
	No.	equity investment	million)	million)	invested company	Main business	(%)
	1	Investment contribution to	5.500	5.500	Haichang Industry Co.,	Port service	20.89
		Haichang Industry			Ltd. of Dongguan City
	2	Increase investment to Duanxin	25.000	10.000	Duanxin Investment	Project investment,	100.00
		Beijing			Holding (Beijing) Co.,	investment
					Ltd.	management, etc.
	3	Acquisition of 47.62% equity	0.024	0.024	Zhongyan Trading	International trade,	100.00
		interest in Zhongyan Trading			Co., Ltd. of Qingdao	transit trade
		Co., Ltd. of Qingdao Bonded			Bonded Area
		Area (“Qingdao Zhongyan”)
	Total		30.524	15.524	–	–	–
			Yanzhou Coal		Mining Company	LimitedInterim	Report 2016		23

CHAPTER 4 BOARD OF DIRECTORS’ REPORT – CONTINUED

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

RMB’000

								Changes in
							Gains or	shareholders’
				Equity held	Equity held	Book value	losses during	equity during
Stock	Stock	Cost of initial	at 1 January	at 30 June	at 30 June	the reporting	the reporting	Accounting
code	abbreviation	investment	2016 (%)	2016 (%)	2016	period	period	items
601008	Lianyungang	1,760	0.0089	0.0089	428	0	-137	Available-for-sale f nancial assets
02016	Zheshang Bank	1,665,140	0	2.72	1,605,754	63,440	18,901	Available-for-sale f nancial assets
Total		1,666,900	—	—	1,606,182	63,440	18,764	—

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

Source of Lianyungang shares: subscription of shares as a founder upon establishment of the company and shares dividend in 2007 and 2011. In 2015, the Company reduced its stocks of 1,703,699 shares in Lianyungang in batches.

Source of Zheshang Bank shares: In the fi rst half of 2016, the Group subscribed 400 million H shares of Zheshang Bank which was initial public offered in the Hong Kong Exchange and acquired its 88 million H shares by the way of block trade.

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

Unit:RMB’000

	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 2016 (%) 2016 (%) 2016 period period items of shares
	Yankuang Group Finance 250,000 25.00 25.00 377,151 19,740 19,740 Long-term equity Investment to Company Limited investment set up Shandong Zoucheng Jianxin Rural 9,000 9.00 9.00 9,566 566 566 Available-for-sale Investment to Bank Co., Ltd. asset set up Qilu Bank Co., Ltd. 782,948 8.67 8.67 892,599 148,381 128,117 Long-term equity Share purchase investment Shanghai CIFCO Futures Co., Ltd. 264,560 33.33 33.33 284,547 12,635 12,635 Long-term equity Share purchase investment
	Total 1,306,508 — — 1,563,863 181,322 161,058 — —

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

24 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 4 BOARD OF DIRECTORS’ REPORT – CONTINUED

1. Entrusted wealth management in nonfi nancial corporations and investment in derivatives

2. (1) Entrusted wealth management

Unit: RMB

							Either Connected/
		Product type of					Amount of passed legal related	Lawsuit
		entrusted wealth			Maturity	Yield	actual principal procedure or transactions	involved
	Trustee	management	Amount	Valid from	date	determination	taken back Actual income not or not	or not
	Jining branch of Guangdong	Principal and income	1,500,000,000	5 Feb 2016	9 March	3.40%	1,500,000,000 4,610,958.90 Yes No	No
	Development Bank	guaranteed			2016
	Jinan Yanshan sub-branch of	Principal and income	2,000,000,000	5 Feb 2016	7 March	3.71%	2,000,000,000 6,389,444.44 Yes No	No
	Qilu Bank Co., Ltd.	guaranteed			2016
	Zoucheng Jining sub-branch of	Principal and income	1,500,000,000	6 Feb 2016	7 March	3.90%	1,500,000,000 4,808,219.18 Yes No	No
	Bank of Communications	guaranteed			2016
	Total	—	5,000,000,000	—	—	/	5,000,000,000 15,808,622.52 — —	—
	Amount of principal and income unrecovered but overdue(RMB)							0
	Explanations on entrusted wealth management						The above-mentioned entrusted wealth management businesses are not
							connected/related transactions with principal all from self-owned fund and the
							Company has not made provision for impairment loss of asset for these. As
							at the disclosure date of this report, the Company has taken back all principal
							and income occurring in the reporting period.
							For details, please refer to the announcements in relation to the purchase
							of wealth management product dated 5 February 2016.	The above
							announcement was 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.
			Yanzhou Coal Mining Company LimitedInterim Report					2016

25

CHAPTER 4 BOARD OF DIRECTORS’ REPORT – CONTINUED

(2) Entrusted loan

										Fund
										source
	Amount						Connected/			and state		Interest income
	of loan				Collateral		related	Extend	Lawsuit	whether it	Connected/	during the
	(RMB100	Term of	Interest		or	Overdue	transaction	the period	involved	is raised	related	reporting period
Borrower	million)	loan(year)	rate	Purpose	guarantor	(yes/no)	(yes/no)	(yes/no)	or not	fund or not	relationship	(RMB’000)
Yanzhou Coal Yulin	2.5	8	4.90%	Methanol project	No	No	No	Yes	No	No	Wholly-owned	9,864
Nenghua Co., Ltd.				construction							subsidiary
Shanxi Tianhao Chemicals	1.9	5	4.90%	Methanol project	No	Yes	No	No	No	No	Controlled	No
Co., Ltd.				construction							subsidiary
Yanmei Heze Neng Hua	8.9	5	4.90%	Construction of	No	No	No	Yes	No	No	Controlled	21,605
Co., Ltd.				Zhaolou coal mine							subsidiary
				power plant
Yanzhou Coal Ordos Neng	28	5	4.75%	Acquisition of Wenyu	No	No	No	No	No	No	Wholly-owned	67,608
Hua Co., Ltd.				coal mine							subsidiary
Yanzhou Coal Ordos Neng	19	5	4.75%	Methanol project	No	No	No	No	No	No	Wholly-owned	45,877
Hua Co., Ltd.				construction							subsidiary
Yanzhou Coal Ordos Neng	18.82	5	4.75%	Consideration of	No	No	No	No	No	No	Wholly-owned	45,442
Hua Co., Ltd.				Zhuanlongwan							subsidiary
				mining right
Yanzhou Coal Ordos Neng	6.3	3	4.75%	Acquisition of equity	No	No	No	No	No	No	Wholly-owned	15,212
Hua Co., Ltd.				interests in Xintai							subsidiary
				Company

Note: As considered and approved at the twentieth meeting of the fourth session of the Board held on 25 March 2011 and at the eighth meeting of the fi fth session of the Board held on 23 March 2012, the Company accrued a total amount of impairment asset provision for the RMB190 million entrusted loan provided to Tianhao Chemicals.

• (3) Other investment & fi nancing and derivative products investment

Unit:RMB’000

	Investment				Futures	Spot	Investment	Involved
	amount	Investment	Product	investment	quotation	investment	prof t	in lawsuit
Investment type	(lot)	period	type		prof t/loss	prof t/loss	/loss	or not
Commodity futures	230	Jan 2016-June 2016	Thermal coal 1609		-267	460	193	No
Commodity futures	1,500	Jan 2016-June 2016	Thread 1610		-1173	1870	697	No
Commodity futures	228	Jan 2016-June 2016	Coking coal 1609		-125	140	15	No
Commodity futures	3,500	Jan 2016-June 2016	Methanol 1609		-565	1300	735	No

26 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 4 BOARD OF DIRECTORS’ REPORT – CONTINUED

Explanation on other investment & fi nancing and derivative products investment

1. The abovementioned “investment profit/loss” refers to the total profit/loss of futures investment profi t/loss and spot investment profi t/loss after the hedging business carried out by the Company.

2. As at 30 June 2016, the abovementioned commodity futures contracts have closed position by the Company.

For details of the derivative products investment by the Group during the reporting period, please see Note 26 of the fi nancial statements prepared under the IFRS or Note XI of the fi nancial statements prepared under CASs.

3. Use of fund raised

==> picture [108 x 503] intentionally omitted <==

For details of other bonds the Group issued in domestic market during the reporting period, please refer to “Chapter 8 CORPORATE BONDS”.

4. Analysis of major subsidiaries and associated companies

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	Net prof t for
			Nature of	Main products	the f rst half of
		Name of company	business	or services	2016 (RMB’000)
I.		Controlled subsidiaries
		Heze Neng Hua	Energy	Coal		103,175
		Ordos Neng Hua	Energy chemical	Coal, methanol		122,388
		Yancoal Australia	Energy	Coal		-871,621
		Yulin Neng Hua	Energy chemical	Methanol		41,183
		Hua Ju Energy	Electric power	Electric power,		47,928
				heating power
		Zhongyin Financial Leasing	Financial leasing	Lease and f nancing lease		94,049
II.		Associated companies
		Huadian Zouxian Power	Electric power	Electric power, heating	power	327,088
		Generation Co., Ltd.
		Shaanxi Future Energy	Energy chemical	Coal, coal-to-liquid		277,863
		Chemical Co., Ltd.
		Qilu Bank	Finance	Financial services for		818,016
				commercial bank

27

Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 4 BOARD OF DIRECTORS’ REPORT – CONTINUED

II. PROFIT DISTRIBUTION OR CAPITAL RESERVES TRANSFERRED TO SHARE CAPITAL

(I) IMPLEMENTATION OF CASH DIVIDEND PLAN DURING THE REPORTING PERIOD

The 2015 annual general meeting of the Company held on 3 June 2016 approved the Company’s dividend distribution plan, which allowed the Company to distribute 2015 cash dividends of RMB49.12 million (tax inclusive) to the Shareholders, i.e., RMB0.01 per share (tax inclusive). As at the disclosure date of this report, the fi nal cash dividends for the year 2015 have been distributed to the Shareholders.

(II) INTERIM PROFIT DISTRIBUTION FOR THE FIRST HALF OF 2016

The Company will not distribute any interim dividend, nor will the Company increase its capital from capital reserve in the fi rst half of 2016.

==> picture [109 x 503] intentionally omitted <==

• III. STATEMENTS ON THE WARNINGS AND REASONS FOR THE EXPECTED ACCUMULATED NET INCOME MAY BE NEGATIVE FROM THE BEGINNING OF 2016 TILL THE END OF THE NEXT REPORTING PERIOD OR THERE MIGHT BE SIGNIFICANT CHANGES TO

ACCUMULATED NET PROFIT AS COMPARED WITH THE SAME PERIOD OF LAST YEAR

Not Applicable.

• IV. EXPLANATION ON “NON-STANDARD AUDITOR’S REPORTS” OF CERTIFIED PUBLIC ACCOUNTANTS BY THE BOARD AND THE SUPERVISORY COMMITTEE

==> picture [253 x 208] intentionally omitted <==

Not Applicable.

28 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 4 BOARD OF DIRECTORS’ REPORT – CONTINUED

V. CAPITAL EXPENDITURE PLAN

The capital expenditure for the fi rst half of 2016 and the capital expenditure plan for the second half of the Group are set out in the following table:

		The second		2016
	The f rst half	half of 2016	(RMB’0000)
	of 2016	(Estimated)	Present	Previous
	(RMB’0000)	(RMB’0000)	estimate	estimate
The Company	58,928	120,879	179,807	99,847
Shanxi Neng Hua	3,737	13,113	16,850	12,970
Yulin Neng Hua	156	4,530	4,686	4,686
Heze Neng Hua	30,120	64,844	94,964	91,362
Hua Ju Energy	115	8,831	8,946	8,946
Ordos Neng Hua	26,591	242,869	269,460	269,460
Haosheng Company	31,350	60,768	92,118	92,118
Yancoal Australia	84,661	74,139	158,800	158,800
Yancoal International	5,410	30,817	36,227	35,550
Donghua Heavy Industry	5,665	70,743	76,408	75,303
Zhongyin Financial Leasing	0	260	260	600
Shandong Duanxin Supply Chain
Management Co., Ltd.	0	1,070	1,070	0
Total	246,733	692,863	939,596	849,642

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

VI. OUTLOOK

(I) OPERATING STRATEGIES FOR THE SECOND HALF OF 2016

In the second half of 2016, benefi ting from the uninterrupted implementation of side reform of the supply policy formulated by Chinese government, decrease in the supply of coal from the world’s other major coal producers and stable coal demand from Asia-Pacifi c countries such as India, it is anticipated that the global coal market will maintain the stable recovery from the bottom.

The Group will closely monitor the market trends, formulate schemes in advance and implement more fl exible and effi cient operation strategies to ensure smooth achievement of operation target for the year of 2016.

29

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CHAPTER 4 BOARD OF DIRECTORS’ REPORT – CONTINUED

For the second half of 2016, the Group will primarily focus on the implementation of the following operating measures:

For coal production and operation. Firstly, the Group will implement production strategy of decrease in coal production along with achievement in effi ciency enhancement. Regarding the coal production decrease policy of Chinese government as an opportunity to improve the comprehensive utilization effi ciency, the Group will decrease the coal volume production of mines with high cost but low quality of coal, and increase coal production of well-performed mines with the coal products of good quality and high price. Secondly, the Group will continue to expand market for the coal we produce, namely: focused on the existing stable market, the Group will keep accelerating coal from Shaanxi and Inner Mongolia to East China market, coal from headquarters to Central China and coal from Yancoal Australia to South China to ensure our salable coal resources concentrate in regions where the price is high. Thirdly, the Group will optimize products structure to improve profi tability. The Group will intensify coal sales of clean coal and lump coal with high price, enlarge blended coal and customized products to uplift the comprehensive coal price. The Group will exploit the advantages of our various markets in East China, Shaanxi and Inner Mongolia and Australia to the full play, subtly monitor regional price fl uctuation, fl exibly adjust sales price and make great effort to achieve maximum achievement.

==> picture [109 x 503] intentionally omitted <==

For industrial synergy. In the second half of 2016, the Group will enhance the synergic operation of related business, including coal, chemicals, electric power, equipment manufacturing, etc. to improve the value creation capability of industrial value chains. Firstly, the Group will strengthen synergic operation of methanol and coal in Shaanxi and Inner Mongolia base and enhance profi tability of methanol industry to make profi t concentrate in advantageous industries. Secondly, the Group will reinforce integration of equipment manufacturing industry and fi nancial leasing business, rely on fi nance and lease to expand product’s sales market, enhance and enlarge business scale of fi nance and lease by means of equipment manufacturing ability improvement and cultivate new industrial competitive advantages. Thirdly, the Group will implement optimization of power supply and consumption, study for the coal clean and effi cient combustion technologies to ensure maximum profi t achievement of power business. At last, the Group will promote resources distribution effi ciency through specialized management of business-type resources in various industries, platform sharing of managerial resources and marketarization operation of service-oriented resource market.

For operation cost control. Firstly, the Group will carry out comprehensive economic benefi t assessment to existing industries and take responding measures: enlarge advantages of enterprises with continuous profi tability; dig potentials of businesses with profi t-increase ability to continuously improve assets quality. Secondly, the Group will continue to deepen “Three Reductions and Three Enhancements”, focus on “3 key links” in purchase, production and sales, formulate and take rigorous and systematic cost control measures, carry out unifi ed storage and distribution on materials and equipment in a comprehensive way, fully vitalize remnant assets and further dig space for cost reduction and effi ciency enhancement. Thirdly, the Group will stringently control various capital plans, orderly release input within budget, enhance input process management in a strict manner, rigorously control expenditure out of budget and enhance cost input service effi ciency. Fourthly, the Group will utilize fi nance sharing platform, enhance internal control and decrease operation cost to speed up capital collection and distribution.

30 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 4 BOARD OF DIRECTORS’ REPORT – CONTINUED

For industrial layout adjustment. On the basis of entity industry, the Group will continue to accelerate the industry expansion to fi nancial investment and logistics trade and establish the new strategic industrial layout with the support of “entity industry, fi nancial investment, logistics trade” and industry & fi nance synergy. Regarding to the fi nance industry, it will be stably developed in accordance with the thought of investment and fi nancing integration. Firstly, the Group will intensify all kinds of fi nancing channels, fi nancing mode study and application to provide substantial fund guarantees for entity industry. Secondly, the Group will discuss multiple operational forms including the establishment of industrial merger & acquisition fund with the cooperation of government, positively seek for new industry and equity merger and acquisition opportunities to promote the entity industry extension to up-down stream. Thirdly, the Group will strengthen the development and integration of current fi nance industry, implement steady fi nancial investment strategy to improve the profi tability of fi nance industry. Regarding to the logistics trade, it will be scaled up pursuant to the risk-controlled principle. Firstly, the Group will focus on both business expansion and team construction and cultivate a quantity of professional teams different from the main products of current logistics trade team to realize professional operation. Secondly, the Group will take advantage of the corporate brand, fund, goodwill, etc., to explore to build the integration platform for logistics trade resources and promote the upgrading and transformation of logistics trade business to trade & fi nancing synergy and innovation & appreciation. Thirdly, the Group will set up strict risk management and control mechanism for logistics trade, promote the institutionalization, standardization and normalization management on trade work to avoid trade risks to the greatest extent.

==> picture [108 x 503] intentionally omitted <==

(II) MAJOR RISKS FACED BY THE COMPANY, IMPACT AND MEASURES

Risks arising from macro-economy

The world economy is still weak in recovery and structural contradiction of domestic market is prominent. Thus the macro-economy’s continuous downturn pressure remains high. The coal market presents recovery as a result of coal production capacity reduction policy formulated by state government. However, the foundation is still unstable, fl uctuation risk still exists.

Counter measures: The Group grasps state policy orientation, optimizes and adjusts structures in regions, industries, products and investment to promote transformation from high-carbon industry to low-carbon industry, from traditional industry to new type of traditional industry, to emerging industry with high effi ciency and thus adapts new normal in development. The Group sticks to the “Two Engines” strategy and strengthens coordinated development of entity, fi nance and trade industry, promotes the company to achieve transformation to innovation-driven, quality and profi tability and connotative development to unleash innovation and profi tability vigor in a maximum way. The Group lays emphasis on taking advantage of the two markets at home and abroad and pluralistic industry and products to enhance mastery and initiative of responding to market fl uctuation

Risks arising from safety production

Although the entire management level of safety production is above the industry average, coal mining, coal chemical and power generation, the three main business sectors of the Company are of high hazardous nature and of complex uncertainties caused by production environment, natural disaster, etc.. Safety production is signifi cant to the sustainable and stable development of the Company.

31

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CHAPTER 4 BOARD OF DIRECTORS’ REPORT – CONTINUED

Counter measures: The Group stringently enhances implementation of safety responsibility at all levels, intensifi es regulation execution process assessment and supervision on key positions. Strengthens technical management and input in safety to promote systematic safety assurance level. The Group reinforces construction of safety supervision team, devotes great effort to safety supervision inspection and executes safety responsibility accountability system in a strict way; increases comprehensive management and precontrol in key areas and signifi cant hidden dangers, prevents occurrence of signifi cant safety accidents to ensure safety production of the company.

Risks arising from trade business

In recent years, the Group’s trade volume has continuously presented substantial growth. Affected by the market demand change and price fl uctuation, trade profi tability is relatively low. Moreover, with the unceasing development of diversifi ed trade projects of the Company, business staff are not familiar with the new trade mode and incompetent to catch up with the fast pace of trade work.

==> picture [109 x 503] intentionally omitted <==

Counter measures: The Group focuses on both social recruitment and self training and expedites the construction and cultivation for professional team in terms of trade business, legal affairs and risk control to improve specialized operation capability. The Group reinforces the risk management and control on procedures of trade service, contract, fund approval, etc., formulates unifi ed standard for trade contracts and promotes the institutionalization, standardization and normalization management on trade work to avoid trade risks to the greatest extent.

Risks arising from accounts receivable

In recent years, the accounts receivable of the Company keep increasing tendency. The decelerated macro economic growth and declined operating performance of some customers results in the ability to repay debts decreased and turnover time prolonged, which increases the diffi culty in the collection of accounts receivable.

Counter measures: The Group strictly examines and approves the credit line and term of customers, ensure the matching guarantee or pledge provided by credit-granting customers to control the accounts receivable effectively and cut down occupying funds. The Group pays more attention to clearing up the debts repayment of accounts receivable and strictly put the responsibility investigation into practice. The Group strengthens the prevention and control to risk sources and improves dynamic supervisory mechanism to reduce the risk of accounts receivable effectively.

Risks arising from project implementation

The construction projects of the Group cover wide areas with a great investment amount. Several projects have more diffi culties in obtaining approval. We face the risk in approval and long construction cycle.

Counter measures: The Group sets up a work team regarding projects procedure, formulates time schedule for procedures of these construction projects and accelerates progress of procedures to ensure smooth construction of these projects. The Group strictly carries out three controls, namely: investment control, time schedule control and quality control, implements responsibility appraisal of main construction player and main operator in a stringent manner to ensure the commercial production on schedule and the achievement in the anticipated income of the projects.

32 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 4 BOARD OF DIRECTORS’ REPORT – CONTINUED

VII. OTHER DISCLOSURES

(I). 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.

(II) THE IMPACT OF EXCHANGE RATE FLUCTUATION

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

1. the overseas sales income as the overseas product sales of the Group are denominated in USD and AUD;

==> picture [108 x 503] intentionally omitted <==

1. the exchange gains and losses of the foreign currency deposits and borrowings;

2. the cost of imported equipment and accessories of the Group.

Affected by the changes in foreign exchange rates, the Group had the exchange loss of RMB222.5 million during the reporting period. For details of the exchange gain or loss, please see Note 9 of the fi nancial statement 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.

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.

(III) TAXATION

During this reporting period, save Anyuan Coal Mine of Yanzhou Coal Ordos Neng Hua Co., Ltd. and Inner Mongolia Xintai Coal Mining Co., Ltd., the Company and all its subsidiaries incorporated in the PRC are subject to income tax rate of 25% on its taxable profi ts. In accordance with Notice on Tax Preference for the Western Development issued by Local Taxation Bureau of Ejin Horo Banner on 16 April 2013, both Anyuan Coal Mine of Yanzhou Coal Ordos Neng Hua Co., Ltd. and Inner Mongolia Xintai Coal Mining Co., Ltd, meet tax preference requirements for western development and are subject to income tax rate of 15% 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.

Yanzhou Coal Mining Company Limited Interim Report 2016 33

CHAPTER 5 SIGNIFICANT EVENTS

• I. SIGNIFICANT LITIGATION, ARBITRATION AND EVENTS WIDELY CALLED INTO QUESTION BY THE MEDIA

• (I) Litigation, Arbitration and Events Widely Called into Question by the Media Disclosed in the Interim Announcements and with No Subsequent Progress

Overview and type Query index

The Litigation on Coal Sales Contract Dispute between Zhongxin Daxie Fuel Co., Ltd. (“Zhongxin Daxie”) and Yanzhou Coal

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 compensation for damage in an amount of RMB163.6 million.

It was the judgment of the Shandong Provincial Higher People’s Court at fi rst instance that: Zhongxin Daxie’s appeal was rejected and the litigation fee of RMB0.8602 million shall be borne by Zhongxin Daxie, as the plaintiff of the litigation. On 30 June 2014, the Supreme People’s Court of the PRC (the “Supreme Court”) accepted Zhongxin Daxie’s appeal of judgment of the fi rst instance of the litigation.

In January 2016, the Company received the Civil Verdict from the Supreme Court. It was the judgment of the Supreme Court at second instance that: Zhongxin Daxie’s appeal was rejected and the fi rst instance judgment was upheld. Litigation fee of the fi rst instance shall be enforced in accordance with the original judgment and litigation fee of the second instance of RMB0.8602 million shall be borne by Zhongxin Daxie. The judgment is fi nal.

In August 2016, the Company received the Acceptance Notice from the Supreme Court, which has accepted Zhongxin Daxie’s retrial application for this case and the fi ling review procedure is undertaken.

As this case is performing retrial procedure, the Company is currently unable to estimate the impact of the litigation on the profi t of the reporting period and afterwards of the Company.

For details, please refer to the announcements in relation to the litigation update and litigation result dated 29 April 2014, 30 June 2014 and 22 January 2016. 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.

==> picture [109 x 503] intentionally omitted <==

34 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 5 SIGNIFICANT EVENTS – CONTINUED

==> picture [108 x 503] intentionally omitted <==

Overview and type

The Bills Dispute between Jinan Branch of China Minsheng Banking Corp. Ltd. (“Jinan Branch of Minsheng Bank”) and Yanzhou Coal

From May to August 2015, the Company has received four pleadings from Jinan Branch of Minsheng Bank, who brought civil litigations against the Company at the Jinan Municipal Intermediate People’s Court and Jinan Shizhong District People’s Court, alleging the breach of Bills Discounted Agreement by the Company. Jinan Branch of Minsheng Bank sued Yanzhou Coal to require Yanzhou Coal to undertake settlement liability amounting to approximately RMB149 million principal and related interests in accordance with the Bills Discounted Agreement.

1. Hearing by Jinan Municipal Intermediate People’s Court and Shandong Provincial Higher People’s Court

2. (1) case involving amount of RMB29.439 million principal

On 11 January 2016, the Jinan Municipal Intermediate People’s Court made the judgment of the fi rst instance for this case and ruled that the Company shall pay RMB29.439 million principal and the relevant interest in accordance with the Bills Discounted Agreement to Jinan Branch of Minsheng Bank; In February 2016, the Company brought a civil litigation at Shandong Provincial Higher People’s Court for the above case; On 12 June 2016, Shandong Provincial Higher People’s Court made the fi nal judgment of the second instance regarding this case. The appeal was rejected and the original judgment was upheld. On 25 July 2016, the Company paid a total amount of RMB31.6919 million for the involving principal, interests and fees for conservatory measures and enforcement fees in relation to this case to the designated bank account according to the enforcement notifi cation issued by the Jinan Municipal Intermediate People’s Court.

• (2) case involving amount of RMB49.9998 million principal

On 12 January 2016, the Jinan Municipal Intermediate People’s Court made the judgment of the fi rst instance for this case and ruled that the Company shall pay RMB49.9998 million principal and the relevant interest in accordance with the Bills Discounted Agreement to Jinan Branch of Minsheng Bank; In February 2016, the Company brought a civil litigation at Shandong Provincial Higher People’s Court for the above case; On 27 June 2016, Shandong Provincial Higher People’s Court made the fi nal judgment of the second instance regarding this case. The appeal was rejected and the original judgment was upheld.

Query index

For details, please refer to the announcements in relation to the litigation involving Yanzhou Coal dated 23 March 2016 and update on the litigation dated 27 June, 8 July and 26 July 2016, 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.

35

Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 5 SIGNIFICANT EVENTS – CONTINUED

	Overview and type	Overview and type	Query index
	(3)	case involving amount of RMB50 million principal
		On 12 January 2016, the Jinan Municipal Intermediate People’s
		Court made the judgment of the f rst instance for this case and
		ruled that the Company shall pay RMB50 million principal and the
		relevant interest in accordance with the Bills Discounted Agreement
		to Jinan Branch of Minsheng Bank; In February 2016, the Company
		brought a civil litigation at Shandong Provincial Higher People’s
		Court for the above case; On 27 June 2016, Shandong Provincial
		Higher People’s Court made the f nal judgment of the second
		instance regarding this case. The appeal was rejected and the
		original judgment was upheld.
		Although the three litigations received the final judgment, the
		Company will continue to protect the legitimate interests of the
		Company and the shareholders of the Company through legal
		means including applying for appeal against Shandong Dongda
		Energy Company. The Company is currently unable to accurately
		estimate the impact of the litigation regarding the contract dispute
		on the prof t of the period and afterwards of the Company.
	2.	Hearing by Jinan Shizhong District People’s Court
		On 29 June 2016, Jinan Shizhong District People’s Court made
		the judgment of the f rst instance for this case and ruled that the
		Company shall pay RMB20 million principal and related interest to
		Jinan Branch of Minsheng Bank and rejected other claims of Jinan
		Branch of Minsheng Bank and the litigation fee of RMB145,000
		and the property preservation fee of RMB5,000 shall be borne
		by Yanzhou Coal. On 14 July 2016, the Company brought a civil
		litigation at Jinan Municipal Intermediate People’s Court for the
		above case.
		As this case is performing the trial procedure of the second
		instance, the Company is unable to accurately estimate the impact
		of the litigation regarding the contract dispute on the prof t of the
		period and afterwards of the Company.
36	Yanzhou Coal	Mining Company LimitedInterim Report 2016

CHAPTER 5 SIGNIFICANT EVENTS – CONTINUED

==> picture [108 x 503] intentionally omitted <==

Overview and type

The Litigation on Contract Disputes involving Shandong Hengfeng Power Fuel Co., Ltd. (“Hengfeng Company”)

1. Financial Loan Contract Dispute with Jining High-Tech Zone Branch of Agricultural Bank of China Co., Ltd. (“Jining High-Tech Branch of Agricultural Bank”)

On 14 July 2015, based the fi nancial loan contract dispute, Jining High-Tech Branch of Agricultural Bank sued the Company’s whollyowned subsidiary-Shandong Zhongyin Logistics and Trade Co., Ltd. (“Zhongyin Logistics”) to Jining Intermediate People’s Court. As Hengfeng Company made a pledge to the plaintiff through its accounts receivables of RMB61.1696 million to Zhongyin Logistics, the plaintiff asked Zhongyin Logistics to perform payment obligations amounting to RMB31.4398 million of principal and related interest within scope of accounts payable.

1. Financial Loan Contract Dispute with Weihai Commercial Bank Co., Ltd. (“Weihai Commercial Bank”)

On 9 October 2015, based on the financial loan contract dispute, Weihai Commercial Bank appealed the Company to Jining Intermediate People’s Court. As Hengfeng company made a pledge to the plaintiff through its accounts receivables of RMB103.42 million of Yanzhou Coal, the plaintiff asked the Company to perform payment obligations amounting to RMB99.119 million of principal and related interest within scope of accounts payable.

1. Financial Loan Contract Dispute with Jining Dongcheng Branch of China Construction Bank Co., LTD. (“Jining Dongcheng Branch of Construction Bank”)

On 3 November 2015, based on the financial loan contract dispute, Jining Dongcheng Branch of Construction Bank sued the Company to Jining Intermediate People’s Court. As Hengfeng company made a pledge to the plaintiff through its accounts receivables of RMB79.1312 million of Yanzhou Coal, the plaintiff asked the Company to perform payment obligations amounting to RMB59.669 million of principal and related interest within scope of accounts payable.

Query index

For details, please refer to the announcement in relation to the litigation regarding Yanzhou Coal dated 23 March 2016. The above announcement was 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.

37

Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 5 SIGNIFICANT EVENTS – CONTINUED

	Overview and type	Overview and type	Query index
	4.	Factoring Contract Dispute with the Zhonghuixintong Business
		Factoring Company Limited (“Zhonghuixintong”)
		On 26 November 2015, based on the factoring contract
		dispute, Zhonghuixintong sued the Company to Beijing Third
		Intermediate People’s Court. As Hengfeng company transferred
		its accounts receivables of RMB145 million of Yanzhou Coal to
		Zhonghuixintong, Zhonghuixintong asked the Company to perform
		the relevant payment obligations within scope of accounts payable
		and interests.
		In accordance with the investigation and verification of the
		Company, Yanzhou Coal and Zhongyin Logistics have never
		made any accounts receivable pledges to the above four f nancial
		institutions. It was the opinion of the Company that: Hengfeng
		company was suspected to forage the seals of Yanzhou Coal and
		made pledges of accounts receivable f nancing business in f nancial
		institutions. Yanzhou Coal has submitted identif cation application
		for seals authenticity to the trial court and relative identif cation is on
		going. Given the criminal offences suspicious existed in Hengfeng
		Company, Yanzhou Coal has reported to public security organs
		while responding actively to the court. The above case is currently
		performing the trial procedure of the f rst instance, the Company
		is unable to accurately estimate the impact of the litigations on the
		current prof t and future prof t of the period and afterwards of the
		Company.
	Sales	Contract Dispute between Jinan Railway Coal Trade Group	For details, please refer to the
	Co., LTD. (“Jinan Railway Trade”) and Yanzhou Coal		announcement in relation to the
			litigation involving Yanzhou Coal
	On 29 October 2015, based on the sales contract dispute, Jinan Railway		dated 23 March 2016. The above
	Trade	sued Yanzhou Coal to Jinan Railway Transportation Court,	announcement was also posted
	requiring Yanzhou Coal to repay RMB19.9498 million loan.		on the websites of the Shanghai
			Stock Exchange, the Hong
	According to the investigation and verification of the Company, the		Kong Stock Exchange and the
	Company never signed sales contract involving in the case with Jinan		Company and/or China Securities
	Railway Trade and the Company has dissent on reasons of appeal of		Journal and Shanghai Securities
	Jinan Railway Trade.		News.
	As this case is currently performing the trial procedure of the f rst instance,
	the Company is unable to accurately estimate the impact of the litigation
	on the current prof t and future prof t.
38	Yanzhou Coal Mining Company LimitedInterim Report 2016

CHAPTER 5 SIGNIFICANT EVENTS – CONTINUED

• (II) Litigation or Arbitration not Disclosed in Extraordinary Announcements or with Subsequent Progress

Unit: RMB10 thousand

During the reporting period:

						Whether caused
		Jointly and				estimated
Prosecution		severally			Amount	liabilities
(applicant)	Respondent	liability party	Type	Background	involved	and amount	progress
Yanzhou Coal	Jinan Railway Coal	No	lawsuit	On 16 April 2016, the Company, as the plaintiff,	8,000.00	No	The case is under
	Trade Group			brought a civil litigation against Jinan Railway			the trial of the
	Co., LTD.			Trade., as the defendant, at Jining Intermediate			second instance
	(“Jinan Railway			People’s Court, alleging a breach of Coal Sales			presently.
	Trade”)			Contract signed with the Company, suing
				Jinan Railway Trade to return loan of RMB80
				million and related fund occupancy fees to the
				Company.
				On 1 January 2014, the Company entered into
				Coal Sales Contract with Jinan Railway Trade,
				according to which, Jinan Railway Trade shall
				provide coal to the Company. Once execution
				of the contract, both parties shall immediately
				perform their obligations. As at 31 October
				2014, coals of a value amounting to RMB80
				million has not yet been delivered by Jinan
				Railway Trade, even after several expediting
				notices from the Company, Jinan Railway Trade
				had neither delivered the coals nor returned the
				loan.
				Yanzhou Coal Mining Company LimitedInterim Report 2016				39

CHAPTER 5 SIGNIFICANT EVENTS – CONTINUED

							Whether caused
			Jointly and				estimated
	Prosecution		severally			Amount	liabilities
	(applicant)	Respondent	liability party	Type	Background	involved	and amount	progress
	China Construction	Shandong Coal	No	lawsuit	On 14 January 2016 China Construction Sixth	5,745.70	No	The trial procedure
	Sixth	Trade Center			Engineering, as the plaintiff, brought a civil			of the second
	Engineering Division Civil	Co., LTD. (“Coal Trade			litigation against Coal Trade Center, a controlled subsidiary of the Company, as the defendant, at Jining Intermediate Court, alleging a failure			instance is undergoing.
	Engineering Co.,	Center”)			by the Company to completely perform its
	LTD. (“China				obligation in Contract Transfer Agreement and
	Construction				Engineering Construction Contract, suing Coal
	Sixth				Trade Center to pay arrears of project fund of
	Engineering “)				RMB57.457 million and related interest.
					On 28 July 2016 Jining Intermediate People’s
					Court made the judgment of the f rst instance
					for this case and ruled that Coal Trade Center
					shall pay RMB52.8769 million of project
					construction fund and the relevant interest
					to China Construction Sixth Engineering and
					litigation fee, fees for conservatory measures
					amounting to RMB344,300 and RMB5,000,
					respectively, shall be borne by Coal Trade
					Center. On 25 August 2016 the Company
					brought a civil litigation at Shandong Provincial
					Higher Court for this case.
					It is opinion of the Company that: according
					to the Contract Transfer Agreement signed
					by Coal Trade Center, Jining Hi-tech Urban
					Construction Investment Co., LTD. and China
					Construction Sixth Engineering, the transfer
					price of the project will be calculated according
					to the actual work done upon completion and
					settlement. As the above project involved in
					lawsuit has not been completed yet and cannot
					be settled, thus project price has not been
					determined. Meanwhile, it is agreed that Coal
					Trade Center shall pay the balance within ten
					days upon the whole project completion and
					acceptance of inspection. While the project
					here involved in lawsuit has not been checked
					and accepted yet, China Construction Sixth
					Engineering has no right to claim Coal Trade
					Center to pay the balance. As this case is
					currently performing the trial procedure of the
					second instance, the Company is unable to
					estimate the impact of the litigation on the prof t
					of the reporting period and afterwards of the
					Company.
40	Yanzhou Coal Mining Company LimitedInterim Report 2016

CHAPTER 5 SIGNIFICANT EVENTS – CONTINUED

						Whether caused
		Jointly and				estimated
Prosecution		severally			Amount	liabilities
(applicant)	Respondent	liability party	Type	Background	involved	and amount	progress
Rizhao Bank Co.,	Yanzhou Coal	Shandong	lawsuit	On 24 July 2015, based on import and export	3,742.51	No	Final judgment
Ltd. (“Rizhao		Yabin Energy		bills documentary dispute, Rizhao Bank brought			of the second
Bank”)		Co., Ltd.,		a civil litigation at Rizhao Municipal Intermediate			instance has made.
		Shandong		People’s Court and applied to rule that Rizhao
		Lingtong		Tengtu Investment Company Limited (“Tengtu
		International		Company”) repay bills documentary fund of
		Trade Co.,		RMB37.4251 million and relevant interest,
		Ltd., natural		Shandong Yabin Energy Co., Ltd., Shandong
		persons,		Lingtong International Trade Co., Ltd., natural
		namely: Peng		persons, namely: Peng Haiying, Liu Ya and
		Haiying, Liu		Sun Chunguang shall bear the joint and several
		Ya and Sun		liabilities, and Shandong Yanmei Rizhao Port
		Chunguang		Coal Storage and Blending Co., Ltd. (“Rizhao
				Port Coal Storage and Blending”), a controlled
				subsidiary of the Company shall bear joint and
				settlement liability of Tengtu Company.
				On 29 December 2015, Rizhao Municipal
				Intermediate People’s Court made the
				judgment of the f rst instance and ruled that
				Tengtu Company shall pay bills documentary
				fund of RMB37.4251 million and relevant
				interest, Shandong Yabin Energy Co., Ltd.,
				Shandong Lingtong International Trade Co.,
				Ltd., natural persons, namely: Peng Haiying,
				Liu Ya and Sun Chunguang shall bear the joint
				and several liabilities; on condition that Tengtu
				Company does not perform its repayment
				obligation according to the judgment, Rizhao
				Bank has the right to ask Rizhao Port Coal
				Storage and Blending to pay the fund under
				commercial acceptance bill. Rizhao Port Coal
				Storage and Blending made an appeal as it did
				not accept the judgment.
				Yanzhou Coal Mining Company LimitedInterim Report 2016				41

CHAPTER 5 SIGNIFICANT EVENTS – CONTINUED

						Whether caused
			Jointly and			estimated
	Prosecution		severally		Amount	liabilities
	(applicant)	Respondent	liability party Type	Background	involved	and amount	progress
				On 28 June 2016, Shandong Provincial
				Supreme Court made the judgment of the
				second instance that Rizhao Port Coal Storage
				and Blending’s appeal was rejected and the
				original judgment was upheld. Litigation fee
				of the second instance of RMB235,800 shall
				be borne by Rizhao Port Coal Storage and
				Blending.
				Although this litigation has received the f nal
				judgment, the Company will continue to protect
				the legitimate interests of the Company through
				means including urging Tengtu Company and
				relevant persons with joint and several liabilities
				to perform their obligations, applying for appeal
				against Tengtu Company for a recourse action.
				The Company is currently unable to accurately
				estimate the impact of the litigation dispute on
				the prof t of the period and afterwards of the
				Company.
42	Yanzhou Coal Mining	Company	LimitedInterim	Report 2016

CHAPTER 5 SIGNIFICANT EVENTS – CONTINUED

• (III) Litigation or arbitration not disclosed in extraordinary announcements or with subsequent progress called into questions by the media

No.

II. BANKRUPTCY AND REORGANIZATION

Not applicable.

III. ASSET ACQUISITION, SALES AND MERGER

• (I) Asset acquisition, sales and merger disclosed in the extraordinary announcements and with no subsequent progress

==> picture [108 x 503] intentionally omitted <==

Overview and Type	Query Index
Purchased shares of Zheshang Bank	For detailed information, please

For detailed information, please refer to the announcement in relation to the subscription of shares of Zheshang Bank dated 8 March 2016, 29 March 2016 and 18 April 2016, which were 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.

As considered and approved at the sixteenth meeting of the sixth session of the Board held on 17 February 2016, Yancoal International (Holding) Company Limited (“Yancoal International”), a wholly-owned subsidiary of the Company, purchased 400,000,000 shares of China Zheshang Bank through an initial public offering for a consideration of HKD1,584,000,000.

On 18 April 2016, Yancoal International acquired additional 88,000,000 H Shares of Zheshang Bank through block trade from an independent third party for a total consideration of approximately HKD347.6 million. After that, Yancoal International holds 488,000,000 H shares of Zheshang Bank in total, representing 14.79% of the total number of issued H shares and 2.79% of the share capital of Zheshang Bank.

On 19 April 2016, the 488,000,000 H shares of Zheshang Bank benefi cially owned by Yancoal International dropped to 12.86% over the total H shares of Zheshang Bank and 2.72% over the total share capital of Zheshang Bank due to the exercise of the over-allotment option of an aggregate of 495,000,000 H Shares.

The total consideration for the above purchase is HKD1,931.6 million, representing 109.28% of the total profi t of RMB 1510.7 million of the Group for year 2015, which was audited under CASs.

43

Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 5 SIGNIFICANT EVENTS – CONTINUED

Overview and Type Query Index

Acquisition of Equity Interests of Jiutai Energy Inner Mongolia Co., Ltd (“Jiutai Energy”)

As considered and approved at the twenty-fi rst meeting of the sixth session of the Board, Ordos Neng Hua, a wholly-owned subsidiary of the Company, totally acquired 52% equity interests of Jiutai Energy from its twelve shareholders, including Shandong Jiutai Energy Co., Ltd, at a total consideration of RMB1,840.24 million. As at the reporting period, the equity transfer and necessary registration procedures have not been completed.

For detailed information, please refer to the announcement in relation to the acquisition of equity interests of Jiutai Energy Inner Mongolia Co., Ltd dated 13 June 2016, which were 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.

The purchase price for the equity interest of Jiutai Energy is of RMB1,840.24 million, representing 121.81% of the total profit of RMB1510.7 million of the Group for year 2015, which was audited under CASs.

(II) Events not disclosed in extraordinary announcement or with subsequent progress

1. Asset Acquisition

Unit: RMB

					Whether
					connected/				The proportion
				Net prof t	related		Whether the		of net prof t
				contributed to the	transaction		asset ownership		contributed by the
				Company from the	or not (If yes,		transferred and	Whether the	asset acquired
Transaction				date of acquisition	please explain		registered in	relevant credits	over the total prof t
counterparty or the f nal		Date of	Consideration of Asset	till the end of the	the pricing	Pricing principle for	the name of	and liabilities all	of the Company
controlling holder	Asset Acquired	Acquisition	Acquisition	reporting period	principle)	asset acquisition	purchaser	transferred	(%)
China National Coal	47.62% of Qingdao	31 May 2016	2,402,564.79	54,445.98	No	in accordance with	Yes	Yes	0.0076
Development Co., Ltd	Zhongyan					the results of asset
						evaluation report

Explanation on asset acquisition

The above fi nancial data are prepared in accordance with the CASs. Upon completion of the above acquisition, Qingdao Zhongyan will be a wholly-owned subsidiary of the Company.

2. Corporate Merger

Not applicable.

44 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 5 SIGNIFICANT EVENTS – CONTINUED

IV. CIRCUMSTANCE AND IMPACT OF THE SHARE INCENTIVE SCHEME OF THE COMPANY

Not applicable.

V. MAJOR CONNECTED/RELATED TRANSACTION

(I) Connected/related transactions performance in relation to daily operation

1. Matters disclosed in extraordinary announcements but with subsequent progress or change

==> picture [108 x 503] intentionally omitted <==

At the 2014 second extraordinary general meeting of the Company held on 12 December 2014, fi ve continuing connected/related 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/related transactions made in a calendar month shall be settled in the following month, except for incomplete transactions or where the transaction amounts are in dispute.

As considered and approved at the twelfth meeting of the sixth session of the Board held on 26 October 2015, the Company signed the “Investment Consulting Contract” and the “the Supplementary Agreement to Investment Consulting Contract” with Shangqi Capital Management Co., Ltd. (“Shangqi Capital”), which agreed the annual cap for such transaction service fees in a period from 1 November 2015 to 31 October 2016, applying market price as the main way of pricing.

As considered and approved at the sixteenth meeting of the sixth session of the Board held on 17 February 2016, the Company entered into Coal Train Convoy Service Contract with Shandong Yankuang Security Service Co., Ltd (“Yankuang Security Company”), which agreed the annual caps for the transactions for the period from 1 January 2016 to 31 December 2017, applying main way of pricing in consideration of actual cost price plus reasonable profi t.

As considered and approved at the seventeenth meeting of the sixth session of the Board held on 29 March 2016, the Company entered into the Supplementary Agreement to Financial Services Agreement (“the Supplementary Agreement”) with Yankuang Group Finance Co., Ltd. (“Yankuang Finance Company”). In accordance with the Supplementary Agreement, the period of the amended Financial Services Agreement and annual transaction cap is from 1 April 2016 to 31 March 2017, applying benchmark interest rate of the People’s Bank of China for corresponding period or the fee standards as prescribed by the Chinese authorities as main way of pricing.

Yanzhou Coal Mining Company Limited Interim Report 2016 45

CHAPTER 5 SIGNIFICANT EVENTS – CONTINUED

• (1) Continuing connected/related transaction of the supply of materials and services

(The data below are calculated in accordance with the CASs)

The sales of goods and provision of services by the Group to its controlling shareholder amounted to RMB906.9 million for the fi rst half year of 2016. The goods and services provided by the controlling shareholder to the Group amounted to RMB839.1 million.

The following table sets out the continuing connected/related transactions of the supply of materials and services between the Group and the Controlling Shareholder for the fi rst half year of 2016:

					Increase/
					decrease of
	For the f rst half	year of 2016	For the f rst half	year of 2015	connected/
		Percentage		Percentage	related
	Amount	of operating	Amount	of operating	transaction
	(RMB’000)	income (%)	(RMB’000)	income (%)	(%)
Sales of goods and provision
of services by the Group to
its Controlling Shareholder	906,947	3.68	908,734	3.61	-0.20
Sales of goods and provision
of services by the Controlling
Shareholder to the Group	839,128	3.41	786,371	3.10	6.71

==> picture [109 x 503] intentionally omitted <==

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

related
(%)
-0.20
6.71
----- End of picture text -----

The table below shows the effect on the Group’s profi ts from sales of coal by the Group to the Controlling Shareholder for the fi rst half year of 2016:

	Operating income (RMB’000) Operating cost (RMB’000) Gross prof ts (RMB’000)
	Coal sold to the Controlling Shareholder 456,710 290,650 166,060

46 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 5 SIGNIFICANT EVENTS – CONTINUED

• (2) Continuing connected/related transaction of insurance fund

Pursuant to the Provision of Insurance Fund Administrative Services Agreement, the Controlling Shareholder shall provide free management and handling services for the Group’s pension insurance fund, basic medical insurance fund, supplementary medical insurance fund, unemployment insurance fund and maternity insurance fund (the “Insurance Fund”). The actual amount of the Insurance Fund paid by the Group for the fi rst half year of 2016 was RMB437.3 million.

• (3) Continuing connected/related transaction of fi nancial services

Pursuant to the Financial Services Agreement and the Supplementary Agreement, as at 30 June 2016, the balance of deposit of the Group in Yankuang Group Finance Company Limited was RMB791.5 million and the outstanding loan was RMB184.8 million.

==> picture [108 x 503] intentionally omitted <==

Save as disclosed above, no other continuing connected/related transactions of fi nancial services occurred between the Group and Yankuang Group Finance Company Limited for the fi rst half of 2016.

• (4) Continuing connected/related transaction of coal train escort services

Pursuant to the Coal Train Escort Services Agreement, Yankuang Security Co., provided coal train escort services to the Group. For the fi rst half year of 2016, the Group paid settlement service fees of RMB13.159 million to Yankuang Security Co..

• (5) Continuing connected/related transaction of entrusted wealth management services

Pursuant to the Investment Consulting Agreement and the Supplementary Agreement to Investment Consulting Agreement, the Company invests RMB500 million as entrusted funds and engages Shangqi Capital to carry out low-risk hedge businesses such as spreads arbitrage, gold lease and basis trading arbitrage and other businesses such as agency delivery and cooperative hedging. During the fi rst half year of 2016, the Group invested RMB70 million for entrusted wealth management.

The following table sets out the details of the annual transaction caps for 2016 and actual transaction amounts for the fi rst half year of 2016 for the above continuing connected/related transactions.

47

Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 5 SIGNIFICANT EVENTS – CONTINUED

No. Type of connected/ related transaction Agreement Annual transaction cap for 2016 (RMB’000) Actual transaction amounts for the f rst half year of 2016 (RMB’000)

1 Material and facilities provided by Yankuang Group Provision of Materials Supply Agreement 1,544,000 401,618 2 Labor and services provided by Yankuang Group Provision of Labor and Services Agreement 2,641,900 424,351 3 Insurance fund management and payment services provided by Yankuang Group (free of charge) for the Group’s staff Provision of Insurance Fund Administrative Services Agreement 1,576,905 437,277 4 Sale of products, material and equipment lease provided to Yankuang Group Provision of Products, Material and Equipment Leasing Agreement 6,560,700 844,956 5 Power and heat provided to Yankuang Group Provision of Electricity and Heat Agreement 143,700 55,646 6 Professional services including coal washing and processing, operation management of coal mine and training provided to Yankuang Group Provision of Specif c Labor and Services Agreement 414,700 6,345 note 7 Financial services provided by Yankuang Group Deposit balance Comprehensive credit facility services Settlement services fees Provision for Financial Service Agreement, the Supplementary Agreement 800,000 400,000 14,000 791,484 184,830 0 8 Train escort services provided by Yankuang Group Coal Train Escort Services Agreement 30,000 13,159 9 Entrusted wealth management services provided by Yankuang Group Total amount of entrusted wealth Service fee Coal Train Escort Services Agreement Provision of Investment Consulting Agreement and The Supplementary Agreement to Investment Consulting Agreement 500,000 31,250 70,000 0

Note:

The amount of connected/related transactions in relation to the professional services provided by the Group to the controlled shareholder was RMB6.345 million for the fi rst half year of 2016, of which, Shengdi Fenlei Coal Preparation Engineering Technology (Tianjin) Co., Ltd. (“the company”) provides coal washing and processing services for the connected/related parties of the Company with the connected amount of RMB4.152 million.

In accordance with applicable fi nancial reporting standards, the company is not included in the consolidated fi nancial statements. However, as the number of appointed directors by the Company was in the majority in the company’s board of directors, the company was recognized as the subsidiary of the Company in accordance with the applicable Hong Kong laws and regulations and the stock listing rules of the Shanghai Stock Exchange.

48 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 5 SIGNIFICANT EVENTS – CONTINUED

2. Events Undisclosed in extraordinary announcements

Not applicable.

(II) Connected/Related Transactions in relation to Assets or Equity Acquisition and Sales

1. Events disclosed in extraordinary announcement with subsequent progress or change

• (1) Acquisition of the mining right of Wanfu Coal Mine

As considered and approved at the 2015 annual general meeting held on 3 June 2016, the Company acquired the mining right of Wanfu coal mine held by Yankuang Group for consideration of RMB1.25 billion. As at the date of this report, the Company is going through relevant registration procedures.

==> picture [108 x 503] intentionally omitted <==

For details, please refer to the announcement in relation to the resolution and announcement on connected/related transactions passed at the seventeenth meeting of the sixth session of the Board and the announcement in relation to resolutions passed at the 2015 annual general meeting dated 3 June 2016. 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 Equity Interest of Yankuang Group Finance Co., Ltd.

At the seventeenth meeting of the sixth session of the Board, the Company proposed to acquire 65% equity interests of Yankuang Group Finance Co., Ltd. held by Yankuang Group with consideration of RMB1.242 billion. The proposal was considered but not approved at the general meeting of the Company.

For details, please refer to the announcement in relation to connected/related transactions dated 29 March 2016 and the announcement in relation to resolutions passed at the 2015 annual general meeting dated 3 June 2016. 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. Events not disclosed in extraordinary announcement

Not applicable.

49

Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 5 SIGNIFICANT EVENTS – CONTINUED

(III) Credit and debt obligation among connected/related parties

For the six months ended 30 June 2016, neither the Controlling Shareholder nor its subsidiaries had occupied for the Group’s fund for non-operating purpose.

The connected/related transactions set out in Note 27 to the consolidated fi nancial statements prepared in accordance with IFRS also constitute continuing connected transactions as defi ned in Chapter 14 A 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.

Save the material connected/related transactions disclosed in this section, the Group was not a party to any material connected/related transactions that should be disclosed in this report in accordance with the Hong Kong Listing Rules during this reporting period.

VI. MATERIAL CONTRACTS AND PERFORMANCE

(I) Trust, Contract or Lease

Not applicable.

(II) Guarantee

Unit: RMB100 million

External guarantees of the Company (excluding guarantees to the controlled subsidiaries)

External guarantees of the Company (excluding guarantees to the controlled subsidiaries)
Total amount of guarantee during the reporting period
(excluding guarantees to the controlled subsidiaries)	0
Total guarantee balance by the end of the reporting period (A)
(excluding guarantees to the controlled subsidiaries)	0
Guarantees to controlled subsidiaries
Total amount of guarantee to controlled subsidiaries during the reporting period	14.74
Total balance of guarantee to controlled subsidiaries by the end of the reporting period (B)	320.75
Total guarantees (including guarantees to controlled subsidiaries)
Total amount of guarantees (A+B)	320.75
Percentage of total amount of guarantee in the net asset of the Company (%)	78.82
Including:
Amount of guarantees to Shareholders, actual controllers and related parties (C)	0
Amount of guarantees directly or indirectly to guaranteed parties
with a asset-liability ratio exceeding 70% (D)	315.75
Total amount of guarantee exceeding 50% of net asset (E)	117.24
Total amount of the above three categories guarantees (C+D+E)	432.99

Note: The above table is prepared based on CASs and calculated on the formula of USD1 = RMB6.6312 and AUD1 = RMB4.9452.

50 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 5 SIGNIFICANT EVENTS – CONTINUED

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

==> picture [108 x 503] intentionally omitted <==

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 5 years for the repayment the remaining principle of USD45 million to 16 December 2017, 7.5 years extension for USD300 million to 16 June 2020, and 8 years extension for USD570 million to 16 December 2020. Another tranche of USD1.015 billion were mature on 17 December 2013. After the repayment of USD100 million, Yancoal Australia extended 5 years for the repayment the remaining principal of USD45 million to 16 December 2018; 7.5 years extension for USD300 million to 16 June 2021; and 8 years extension for USD570 million 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 5 years for repayment the remaining principal of USD50 million to 16 December 2019; 7.5 years extension for USD300 million to 16 June 2022; and 8 years extension for USD560 million to 16 December 2022. As at 30 June 2016, 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 guarantees to its wholly-owned subsidiary, Yancoal International Resources Development Co., Ltd., for issuing USD1.0 billion corporate bonds in the overseas market. As at 30 June 2016, the balance of the guarantee is USD584.417 million and extended to this reporting period.

As approved at the 2012 annual general meeting, the Company provided guarantees of RMB5,536 million to its wholly-owned subsidiary, Yancoal International (Holding) Company Limited, for a bank loan of USD800 million.

As approved at the 2014 annual general meeting, the Company issued a bank guarantee to its whollyowned subsidiary, Yancoal International (Holding) Company Limited, for a bank loan of USD100 million.

As approved at the fi rst 2014 extraordinary general meeting, the Company provided fi nancing guarantee to Yancoal Australia for a credit of AUD187 million. As at 30 June 2016, the balance of above-mentioned guarantee AUD100 million was extended to this reporting period.

A total of AUD280 million performance deposits and performance guarantees, which were needed for operation of Yancoal Australia and its subsidiaries, have been extended to the reporting period.

51

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2. Information on guarantees arising during the reporting period:

As approved at the 2015 annual general meeting of the Company, Yancoal Australia and its subsidiaries can provide guarantee to their subsidiaries in an amount not exceeding AUD500 million for their daily operation every year. During the reporting period, the performance deposits and performance guarantees incurred by daily operation of Yancoal Australia and its subsidiaries were AUD170 million in total.

At the 2015 annual general meeting, the Company was approved to provide guarantee to Qingdao ZhongyinRuifeng International Trade Co., Ltd. During the reporting period, the Company provided a guarantee of RMB500 million to Qingdao ZhongyinRuifeng International Trade Co., Ltd.

At the 2015 annual general meeting, the Company was approved to provide guarantee to Yancoal International Trading Company Limited, During the reporting period, the Company provided a guarantee of USD20 million to Yancoal International Trading Company Limited.

==> picture [109 x 503] intentionally omitted <==

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

(III) Explanation on other material contracts and transactions

• 1 Entrusted Wealth Management

For details, please refer to the section headed “Entrusted Wealth Management” of “Chapter IV the Board of Directors’ Report” herein this report.

2 Other Signifi cant Events

• (1) Increase Registered Capital of Zhongyin Financial Leasing Co., Ltd

As reviewed and approved at the 2015 annual general meeting held on 3 June 2016, the Company will invest RMB3.735 billion and Yancoal International, a wholly-owned subsidiary of the Company, will invest an amount equivalent to RMB1.265 billion to increase capital contribution in Zhongyin Financial Leasing Co., Ltd. Upon completion, the registered capital of Zhongyin Financial Leasing Co., Ltd will increase from RMB2.06 billion to RMB7.06 billion, of which, Yanzhou Coal, Yancoal International and Shandong Yongzheng Investment Development Co., Ltd hold 74.15%, 25% and 0.85% in equity interest, respectively. As at the date of this report, the company is undergoing necessary business registration procedures.

• (2) Increase Investment in Duanxin Investment Holding (Beijing) Co., Ltd.

As reviewed and approved at the twenty-second meeting of the sixth session of the Board held on 16 June 2016, the Company increased its capital contribution of RMB2.5 billion in Duanxin Investment Holding (Beijing) Co., Ltd (“Duanxin Beijing”). Upon completion, the registered capital of Duanxin Beijing will increase from RMB810 million to RMB3.31 billion. As at the reporting date, the company is undergoing necessary business registration procedures.

52 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 5 SIGNIFICANT EVENTS – CONTINUED

(3) Increase in Registered Capital of Donghua Heavy Industry Co., Ltd

As considered and approved at the general manager working meeting of the Company, the Company increased its capital contribution of RMB907.32 million in Donghua Heavy Industry (“Donghua Heavy Industry”). Upon completion, the registered capital of Donghua Heavy Industry will increase from RMB370.568 million to RMB1,277.888 million. As at the date of this report, the company is undergoing necessary business registration procedures.

(4) Increase in registered capital of Qingdao Zhongyan

As considered and approved at the general manager working meeting of the Company, the Company increased its capital contribution of RMB47.9 million in Qingdao Zhongyan, a whollyowned subsidiary of the Company. Upon completion, the registered capital of Qingdao Zhongyan will increase from RMB2.1 million to RMB50 million.

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(5) Establishment of Duanxin Investment Holding (Shenzhen) Company Limited

As considered and approved at the eighteenth meeting of the sixth session of the Board held on 28 April 2016, the Company established Duanxin Investment Holding (Shenzhen) Company Limited, a wholly-owned subsidiary of the Company with registered capital of RMB10 billion. Its main scope covers equity investment, entrusted assets and investment management and corporate management and investment consulting, etc.

• (6) Establishing Shandong Yancoal Property Service Company Limited

As reviewed and approved at the general manager working meeting of the Company, the Company established a wholly-owned subsidiary, Shandong Yancoal Property Service Company Limited on 18 April 2016, with registered capital of RMB12 million. Its main business scope covers property management service, garden greening, sewage treatment, house rental brokerage services, etc.

• (7) Establishment of Qingdao Duanxin Asset Management Company Limited

As reviewed and approved at the general manager working meeting of the Company, the Company established a wholly-owned subsidiary, Qingdao Duanxin Asset Management Company Limited on 3 August 2016, with registered capital of RMB500 million. Its main business scope covers entrusted management of equity investment fund, entrusted management of enterprise asset, foreign investment by use of its own fund, importation and exportation of goods and technology on its self or as an agent, international trade and transit trade.

Yanzhou Coal Mining Company Limited Interim Report 2016 53

CHAPTER 5 SIGNIFICANT EVENTS – CONTINUED

(8) Establishment of Jinan DuanxinMingli Financial Consulting Partnership (LP)

As reviewed and approved at the twenty-second meeting of the sixth session of the Board held on 16 June 2016 and the general manager working meeting, the Company will contribute RMB1 billion, Duanxin Beijing will contribute RMB1 billion and China Great Wall Securities Co., Ltd will contribute RMB3 billion to jointly establish Jinan DuanxinMingli Financial Consulting Partnership (LP), which mainly undertakes fi nancial management and consulting, enterprise assets management consulting, business consulting, conference and exhibition services, market information consulting and survey and etc.. The Company and China Great Wall Securities Co., Ltd are partners of limited liability of the partnership and Duanxin Beijing is a general partner of the partnership.

(9) Establishment of Jinan DuanxinMingren Financial Consulting Partnership (LP)

As reviewed and approved at the twenty-second meeting of the sixth session of the Board held on 16 June 2016, Duanxin Beijing will contribute RMB1 billion, Shenzhen NCFS Asset Management Co., Ltd will contribute RMB4 billion to jointly establish Jinan DuanxinMingren Financial Consulting Partnership (LP), which mainly involves financial management consulting, enterprise asset management consulting, business consulting, conference and exhibition services, market information consulting and survey and etc.. Of which, Shenzhen NCFS Asset Management Co., Ltd is a partner of limited liability of the partnership and Duanxin Beijing is a general partner of the partnership.

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(10) Participating in the Establishment of Mutual Life Insurance Head Offi ce

As considered and approved at the twenty-second meeting of the sixth session of the Board held on 16 June 2016, Yanzhou Coal, acting as a substantial promotion member, loans self-owned fund of not more than RMB60 million to participate in establishing Jingxi Life Mutual Insurance Head Offi ce (a temporary name which will be subject to the review and approval by Industrial and Commercial Bureau) by way of promotion. Yanzhou Coal shall contribute capital not exceeding 30% of the initial operating capital of Jingxi Mutual Life Insurance Head Offi ce. As at the reporting date, Jingxi Mutual Life Insurance Head Offi ce is going through preparatory works.

(11) Participating in Establishing a Securities Investment Fund Management Company

As considered and approved at the twenty-second meeting of the sixth session of the Board held on 16 June 2016, Yanzhou Coal invests not more than RMB60 million and participates in establishing ZhongjiaoLongcheng Fund Management Co., Ltd. (a temporary name which will be subject to the review and approval by the Industrial and Commercial Bureau) by way of promotion. Yanzhou Coal will hold not more than 30% equity interest. As at the reporting date, preparatory works for ZhongjiaoLongcheng Fund Management Co., Ltd. is in progress.

(12) Participating in Establishing a Financial Leasing Company Limited by Way of Promotion

As considered and approved at the twenty-second meeting of the sixth session of the Board held on 16 June 2016, Yanzhou Coal invests not more than RMB750 million and participates in establishing CRRC Financial Leasing Co., Ltd. (a temporary name which will be subject to the review and approval by Industrial and Commercial Bureau,) by way of promotion. Yanzhou Coal will hold not more than 25% equity interest. As at the reporting date, preparatory works for CRRC Financial Leasing Co., Ltd. are in progress.

54 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 5 SIGNIFICANT EVENTS – CONTINUED

(13) Non-public Issuance of A Shares

As considered and approved at the 2016 fi rst extraordinary general meeting held on 19 August 2016, the 2016 second class meeting of holders of A shares and the 2016 second class meeting of holders of H shares, the Company will issue A shares not exceeding 538,000,000 (inclusive) to specifi c target subscribers by way of non-public issuance. The A Shares are ordinary RMB share with a nominal value of RMB1.00 per share. The issue price shall be not less than RMB8.32 per A Share. The issuance will raise a fund not exceeding RMB6 billion, which will be used for acquiring 52% equity interest of Jiutai Energy, increase contribution of registered capital in Zhongyin Financial Leasing and repayment of bank loan. The non-public issuance of A shares will be issued after obtaining the approval from CSRC.

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For details, please refer to the announcement and information in relation to non-public issuance of A shares dated 16 June 2016, the documents in relation to the 2016 fi rst extraordinary general meeting, the 2016 second class meeting of holders of A shares and the 2016 second class meeting of holders of H shares held on 12 August 2016, and the announcements of resolutions passed at the 2016 fi rst extraordinary general meeting, the 2016 second class meeting of holders of A shares and the 2016 second class meeting of holders of H shares held on 19 August 2016. The above announcements and documents 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.

• (14) Establishment of Measurement and Detection Center

As reviewed and approved at the eighteenth meeting of the sixth session of the Board held on 28 April 2016, the Company establishes Measurement and Detection Center, which will be in charge of overall management of the Company’s measurement and detection business.

• (15) Adjustment to the headquarter organization and relevant functions of the Company

As reviewed and approved at the twenty-third meeting of the sixth session of the Board held on 8 August 2016, the Company made certain adjustments to the headquarter organization and relevant functions: reorganize the Production Technology Department and the Ventilation and Gas Monitoring Department as Production Technology Department (Ventilation and Gas Monitoring Department); reorganizing the Safety Inspection Department and the Central Dispatching Offi ce as Safety Inspection Department (Central Dispatching Offi ce); reorganizing Shandong Coal Technology Research Institute and the Measurement and Detection Center as Shandong Coal Technology Research Institute (the Measurement and Detection Center); establishing accounting service center and removing the Futures and Finance Department.

55

Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 5 SIGNIFICANT EVENTS – CONTINUED

VII. PERFORMANCE OF THE UNDERTAKINGS

• (I) Undertakings of the Company, shareholders of 5% and above, controlling shareholders and actual controller during the reporting period or extended to the reporting period.

								Perform
						Undertaking Date and	Performance	timely and
	Background	Type	Undertaker	Undertakings		Deadline for performance	deadline	strictly or not
	Undertakings related	Resolve	Yankuang Group	Avoidance of horizontal competition		Year 1997	No	Yes
	to IPO	horizontal		Yankuang Group and the Company entered into the Restructuring		Long-term effective
		competition		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.
	Undertaking related to	Other	Yankuang Group	Certain commitments on dilution of immediate return and return recovery		16 June, 2016	No	Yes
	ref nancing			in relation to non-public issuance of A shares:		Long-term effective
				(i)	To commit not to intervene the operation and management
					activities of the Company or unlawfully occupy the Company’s
					interests.
				(ii)	To commit to make supplemental commitments according to the
					latest regulations of the CSRC if such new regulations regarding
					return recovery measures and the commitments introduced by
					the CSRC cause the above commitments unable to satisfy the
					regulatory requirements from the day of making this commitment
					until the completion of the non-public issuance.
		Other	Directors,	Certain commitments on dilution of immediate return and return recovery		16 June, 2016	No	Yes
			and Senior	in relation to non-public issuance of A shares:		Long-term effective
			Management of	(i)	To commit not to transfer benef ts to other entities or individuals
			the Company		with no payment or under unfair terms and shall not damage the
					Company’s interests in any other ways.
				(ii)	To commit to constrain the duty-related consumption behavior.
				(iii)	To commit not to use the Company’s assets for investments and
					consumption activities unrelated to the performance of my duties.
				(iv)	To commit that remuneration system formulated by the Board or
					the remuneration committee is in line with implementation of the
					return recovery measures of the Company.
				(v)	To commit to support the vesting conditions of share incentive
					formulated by the Company to be in line with implementation of
					the return recovery measures of the Company if the Company is to
					make such share incentive plan in the future.
56	Yanzhou Coal Mining	Company	LimitedInterim		Report 2016

CHAPTER 5 SIGNIFICANT EVENTS – CONTINUED

						Perform
				Undertaking Date and	Performance	timely and
Background	Type	Undertaker	Undertakings	Deadline for performance	deadline	strictly or not
			(vi) To commit to actually perform the return recovery measures
			formulated by the Company as well as any commitment made by
			them for such return recovery measures. If failing to perform the
			commitment and causing losses to the Company or the investors,
			the Directors and senior management will be liable for indemnifying
			the Company or the investors for their losses.
			(vii) To commit to make supplemental commitments according to the
			latest regulations of the CSRC if such new regulations regarding
			return recovery measures and the commitments introduced by
			the CSRC cause the above commitments unable to satisfy the
			regulatory requirements from the day of making this commitment
			until the completion of the non-public issuance.
				Year 2015
Other undertaking	Other	Yankuang Group	Transfer of the mining right of Wanfu coal mine	Within 12 months since	Yes	Yes
			In 2005, the Company acquired equity interests of Heze Nenghua held by	Wanfu coalmine obtain
			Yankuang Group. At that time, Yankuang Group made such undertaking	mining right
			that: the Company had the right to acquire the mining right of Wanfu coal
			mine within 12 months since such mining right is obtained.
	Other	Yankuang Group	Not reducing shareholding in the Company	10 July 2015	Yes	Yes
			The Controlling Shareholder of the Company, Yankuang Group,	10 July 2015 –
			undertook that it would not reduce its shareholding in the Company within	10 January 2016
			6 months.
	Other	Directors,	Not reducing shareholding in the Company.	10 July 2015 during the	Yes	Yes
		Supervisors,	The Directors, Supervisors and Senior Management of the Company	period of their increase
		and Senior	undertook that they would not reduce their respective shareholding in the	holding of A shares of the
		Management of	Company during the period of their increase holding of A shares of the	Company and within 6
		the Company	Company and within 6 months after completion of further increase.	months after completion of
				the increase.
Note: “Proposals in relation to certain commitments by the controlling shareholders, directors and senior management of the
Company relating to recovery of			immediate return” was reviewed and passed	at the 2016 f rst extraordinary general
meeting of the Company convened on 19 August 2016. The issuance of non-public A shares will be carried						out once
approved by the CSRC.
			Yanzhou Coal Mining Company LimitedInterim Report 2016				57

CHAPTER 5 SIGNIFICANT EVENTS – CONTINUED

VIII. APPOINTMENT AND DISMISSAL OF AUDITORS

(I) The explanation on the appointment and dismissal of auditors

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

As reviewed and approved at the 2015 annual general meeting on 3 June 2016, the Company engaged Shine Wing Certifi ed Public Accountants and Grant Thornton as its domestic and international auditors of the Company for the year 2016, respectively.

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During the reporting period, Shine Wing Certifi ed Public Accountants was responsible for the examination and appraisal of the effi ciency of internal control of the fi nancial statements of the Company; Grant Thornton was responsible for the examination and appraisal of whether the internal control system of the Company was in compliance with the requirements of the US Sarbanes-Oxley Act.

During the reporting period, as approved at the general meeting, the Board was authorized to determine and pay the auditors’ remuneration. The Company was responsible for auditors’ on-site audit accommodation and meal expenses, but not for any other related expenses, such as travelling expenses.

The Board is of the view, other than the annual auditing fees, the other services fee paid by the Company to the reporting accountants will not have any impact on the independency of the auditors’ opinion.

(II) The explanation on the change of auditors during the auditing period

The Company has not changed or dismissed the auditors during the auditing period

• IX. PUNISHMENT AND RECTIFICATION ON THE LISTED COMPANY, ITS DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT, SHAREHOLDERS 5% AND ABOVE, ACTUAL CONTROLLERS AND THE BUYER

Not applicable.

X. EXPLANATION ON CONVERTIBLE COMPANY BOND

Not applicable.

58 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 5 SIGNIFICANT EVENTS – CONTINUED

XI. CORPORATE GOVERNANCE

(I) Corporate Governance

(Prepared in accordance with PRC securities law)

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

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As reviewed and approved at the 2015 annual general meeting held on 3 June 2016, the Company made amendments to terms in relation to share capital in the Articles of the Company based on H shares repurchased in year 2015.For details, please refer to the announcement in relation to Reduction of Registered Capital and Amendments to the Articles dated 29 March 2016 and the announcement of the documents in relation to the 2015 annual general meeting dated 27 May 2016. 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.

As reviewed and approved at the 2016 First Extraordinary General Meeting of the Company dated on 19 August 2016, the company made further amendments to the articles in relation to distribution of profi ts of the Articles in accordance with the Notice on the Further Implementation of Matters Related to the Listed Company’s Cash Dividends, the Regulatory Guideline No.3 on Listed Company – Listed Company’s Cash Dividends promulgated by CSRC and the Guideline on Listed Company’s Cash Dividends promulgated by the Shanghai Stock Exchange. For details, please refer to the announcement in relation to amendments to the Articles dated 16 June 2016 and the announcement in relation to resolutions passed at 2016 fi rst extraordinary general meeting held on 12 August 2016. The above announcements were also posted on the websites of the Shanghai Stock Exchange and Hong Kong Stock Exchange, and the Company and/or China Securities Journal and Shanghai Securities News.

As reviewed and approved at the fi fteenth meeting of the sixth session of the Board dated on 6 January 2016, the Company made amendments to the “Terms of Reference for the Audit Committee of the Board” to include risk management as duties of the Audit Committee of the Board. For details, please refer to the announcement on the resolutions passed at the fi fteenth meeting of the sixth session of the board of directors dated 16 January 2016. The above announcement was also posted on the websites of the Shanghai Stock Exchange and Hong Kong Stock Exchange, and the Company and/or China Securities Journal and Shanghai Securities News.

As reviewed and approved at the twenty-second meeting of the sixth session of the Board of the Company, the Company made amendments to the Working Scheme of the Secretary of the Board of Yanzhou Coal Mining Company Limited in accordance with relevant amendment made in Listing Rules of the Shanghai Stock Exchange and Regulations on Board Secretary of Listed Company of Shanghai Stock Exchange.

59

Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 5 SIGNIFICANT EVENTS – CONTINUED

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 traded, the Group has set up a relatively regulated and stable corporate governance system and has abided by the corporate governance principles of transparency, accountability and protection of the rights and interests of the Shareholders as a whole. There is no signifi cant difference between the corporate governance system and the requirements in relevant documents detailed by the CSRC.

(II) Compliance with corporate governance code and model code

(Prepared in accordance with the Hong Kong Listing Rules)

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

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The Board believes that good corporate governance is important to the operation and development of the Group. The Board regularly reviews corporate governance practices to ensure the Company’s operation is in compliance with the laws, regulations and supervisory rules of places where the shares of the Company are listed, and consistently endeavors to implement a high standard of corporate governance.

The corporate governance rules implemented by the Group include, but not limited to the following: the Articles, the Rules of Procedures for Shareholders’ General Meeting, the Rules of Procedures for the Board of Directors, the Rules of Procedures for Supervisory Committee, the Work Policy of the Independent Directors, the Rules for Disclosure of Information, the Rules for the Approval and the Disclosure of Connected/Related Transactions of the Company, the Rules for the Management of Relationships with Investors, Internal Reporting System for Signifi cant 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. During the six months ended 30 June 2016, the corporate governance rules and practices of the Group are in compliance with the principles and the code provisions set out in the Corporate Governance Code (the “Code”) contained in the 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 above corporate governance practices without any deviation. For details, please refer to the Report on Corporate Governance of the Company included in 2015 annual report of the Company.

Having made specifi c enquiries with all the Directors and Supervisors, the Directors and Supervisors have strictly complied with codes set out in Appendix X of Hong Kong Listing Rules headed Model Code for Securities Transactions by Directors of Listed Issuers (“the Model Code”) and the Code for Securities Transactions by Management of the Company during the reporting period. 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.

60 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 5 SIGNIFICANT EVENTS – CONTINUED

(III) Investor Relations

The Company has continuously modifi ed the Rules for the Management of Relationships with Investors, and improved standard management of investor relations through effective information collection, compilation, examination, disclosure, and feedback management procedures. During the reporting period, the Company facilitated its bidirectional communications with the capital market through face-to-face meetings at international and domestic road-shows, attendance in investment strategy meetings organized by brokers at home and abroad, inviting investors for Company site visits as well as many other means like making full use of “SSE e-interactive platform”, hotlines, faxes and e-mails. The company has had 260 contacts with analysts, fund managers and investors.

XII. EXPLANATIONS ON OTHER SIGNIFICANT EVENTS

• (I) Analysis and Explanation of the Board on Reasons and Impacts on Changes in Accounting Policies, Accounting Estimates or Accounting Methods

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Not applicable.

• (II) Analysis and Explanation of the Board on Reasons and Impacts on Amendments to Previous Signifi cant Errors

Not applicable.

(III) Other Events

(Prepared in accordance with Hong Kong Listing Rules)

1. Repurchase, sale or redemption of listed shares of the Company

On 15 May 2014 (New York Time), Yancoal International Trading Co., Ltd., a wholly-owned subsidiary of the Company, issued USD300 million 7.2% senior perpetual capital securities (the “Securities”) and the Company provided an irrevocable and unconditional guarantee for the Securities. On 23 May 2016 (the “Redemption Date”), Yancoal International Trading Co., Ltd. redeemed and cancelled all its outstanding USD300 million Securities previously listed on the Hong Kong Stock Exchange (stock code: 5753) at the redemption price equal to the principal amount of the Securities, together with all distributions accrued to (but not including the Redemption Date). The total redemption price paid by Yancoal International Trading Co., Limited on the Redemption Date is USD310,080,000.There are no outstanding Securities in issue. As at the date of this interim report, its listed position has been cancelled.

For details, please refer to the announcements dated 15 and 16 May 2014, 22 May 2014, 21 April 2016 and 24 May 2016, 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.

61

Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 5 SIGNIFICANT EVENTS – CONTINUED

On 9 May 2012 (New York Time), Yancoal International Resources Development Co., Ltd., a whollyowned subsidiary of the Company, issued USD450 million in principal with interest rate of 4.461% guaranteed notes due in year 2017 (the “2017 Notes”) and USD550 million in principal with interest rate of 5.730% guaranteed notes due in year 2022 (the “2022 Notes”) and the Company has provided irrevocable and unconditional guarantees for the 2017 Notes and 2022 Notes with these notes listed on the Hong Kong Stock Exchange (stock code: 4551 and 4552, respectively). On 4 May 2016, Yancoal International Resources Development Co., Ltd. offered to repurchase for cash up to a total of the aggregate principal amount of the outstanding 2022 Notes and 2017 Notes. In June 2016, Yancoal International Resources Development Co., Ltd. repurchased a total of USD206,783,000 in principal amount of the 2022 Notes and USD93,203,000 in principal amount of the 2017 Notes, which were subsequently cancelled during the reporting period. The aggregate amount of consideration paid by Yancoal International Resources Development Co., Ltd. in relation to the repurchase of such 2022 and 2017 Notes pursuant to the offer was USD286,444,899.30. As at 20 June 2016, the outstanding aggregate principal amount of the 2022 Notes after such cancellation is USD227,620,000 and the outstanding aggregate principal amount of the 2017 Notes after such cancellation is USD356,797,000.

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For details, please refer to the announcements dated 10 May 2012, 4 May 2016, 18 May 2016 and 2 June 2016, 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.

At the 2014 annual general meeting, the 2015 fi rst class meeting of holders of A shares and the 2015 fi rst class meeting of holders of H shares held on 22 May 2015, the Board was granted a general mandate 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 during the relevant authorized period according to needs and market conditions upon obtaining approvals from the relevant regulatory authorities and complying with the relevant laws, regulations and the Articles. In accordance with the general mandate, the Company made three tranches of H shares repurchase in December 2015, with 6,384,000 shares purchased back totally. As at the reporting date, the above H shares has completed relevant paper stock cancellation in Computershare Hong Kong Investor Services Limited, and the necessary domestic registration procedures are still in progress.

At the 2015 annual general meeting dated on 3 June 2016, the Board was granted a general mandate 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 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.

As at the 2015 annual general meeting, the 2016 fi rst class meeting of holders of A shares and the 2016 fi rst class meeting of holders of H shares dated on 3 June 2016, the Board was granted a general mandate separately. Under the general mandate, the Company was authorized 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 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.

62 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 5 SIGNIFICANT EVENTS – CONTINUED

As at the date of this report, the Company has not exercised the above 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.

2. Remuneration policy

The remuneration for the Directors, Supervisors and senior management is proposed to the Board by the remuneration committee under the Board. Upon review and approval by the Board, any remuneration proposal for the Directors and Supervisors will be proposed to the general meeting for approval. The remuneration for the senior management is reviewed and approved by the Board.

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The Company adopts a combined annual remuneration, risk control and special contribution award system as the means for assessing and rewarding the Directors and senior management. The annual remuneration consists of annual basic salary and annual performance salary. The annual basic salary is comprehensively determined according to the operational scale, profi tability, operating management diffi culty and employees’ income of the Company, whereas annual performance salary is determined by the actual operational results of the Company. The annual basic salaries for the Directors and senior management of the Company are pre-paid on a monthly basis and the annual performance salaries are cashed after the audit assessment to be carried out in the following year.

The Group adopts a post performance salary system for employees other than Directors, Supervisors and senior management, which consists of basic salary and performance-based salary. The performancebased salary is cashed upon assessment of individual post performance while putting the overall economic benefi t of the Company into consideration.

3. Auditors

The details of auditors are set out in the section headed “ VIII. Appointment and Dismissal of Auditors” in this chapter.

63

Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 6 CHANGES IN SHARES AND SHAREHOLDERS

I. CHANGES IN SHARES

(I) Changes in Shares

1. Table of changes in shares

Unit: shares

			Before	change	Increase/	After change	After change
			Shares Percentage (%)		decrease (+, -)	Shares Percentage (%)
	I.	Shares with restricted trading	170,500	0.0035	10,000	180,500	0.0037
		moratorium
		1. State shareholding	0	0	0	0	0
		2. Shareholding by state-	0	0	0	0	0
		owned legal person
		3. Other domestic	170,500	0.0035	10,000	180,500	0.0037
		shareholding
		Including: shareholding	0	0	0	0	0
		by domestic
		non-state-
		owned legal
		person
		shareholding by	170,500	0.0035	10,000	180,500	0.0037
		domestic
		natural person
		4. Foreign shareholding	0	0	0	0	0
	II.	Shares without trading	4,911,845,500	99.9965	-10,000	4,911,835,500	99.9963
		moratorium
		1. A Shares	2,959,829,500	60.2569	-10,000	2,959,819,500	60.2567
		2. Foreign shares domestically-	0	0	0	0	0
		listed
		3. H shares	1,952,016,000	39.7396	0	1,952,016,000	39.7396
	III.	Total number of shares	4,912,016,000	100	0	4,912,016,000	100
64	Yanzhou Coal Mining Company LimitedInterim		Report 2016

CHAPTER 6 CHANGES IN SHARES AND SHAREHOLDERS – CONTINUED

2. Explanation on changes in shares

• (1) Explanation on changes in total share capital and its structure

Mr. Li Wei was appointed as the vice chairman of the Company on 3 June 2016. He increased his shareholding by acquiring 10,000 A shares in July 2015 which formed the shares with restricted trading moratorium of the Company. For details, please refer to “changes in shares with restricted trading moratorium” in this chapter.

• (2) The Company repurchased H shares in 2015. The matter of capital reduction after the repurchase has been approved by shareholders’ meeting and is now going through business registration change procedures. The nominal total share capital of the Company is still 4.9184 billion shares.

• (3) The shareholding proportion of shareholders of the Company in this interim report is calculated on the basis of 1,952,016,000 H shares that were deducted after repurchase and total share capital of 4,912,016,000 shares.

==> picture [108 x 503] intentionally omitted <==

3. The impact of share changes on fi nancial indicators such as earnings per share, net asset value per share from the end of the reporting period to the disclosure date of interim report (if any)

Not applicable.

4. Other disclosures the Company thinks necessary or required by securities regulatory institutions

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

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65

Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 6 CHANGES IN SHARES AND SHAREHOLDERS – CONTINUED

(II) Changes in Shares with Restricted Trading Moratorium

Unit: shares

	Number of			Number of
	shares with		Increase in	shares with
	restricted trading	Number of	number of	restricted trading
	moratorium at the	shares released	shares with	moratorium at	Reasons
Name of	beginning of the	from trading	restricted trading	the end of the	for trading
shareholder	reporting period	moratorium	moratorium	reporting period	moratorium
Li Wei	0	0	10,000	10,000	Held by Directors,
					Supervisors
					and Senior
					Management	note
Total	0	0	10,000	10,000	–

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

51,486
52,281
0
0
----- End of picture text -----

Note: In accordance with the relevant laws, Directors, Supervisors and senior management can only sell up to 25% of the total number of shares held by them during each year of their employment. If the above persons sold any shares held by them within six months after the purchase, or made any purchase within six months after disposal, any gain from such transactions will be attributable to the Company.

II. SHAREHOLDERS

(I) Total Number of the Shareholders

Total number of shareholders as at 30 June 2016	51,486
Total number of ordinary shareholders at the end of
last month before disclosure date of the interim report	52,281
Total number of preferred shareholders with resumed
voting right by the end of the reporting period	0
Total number of preferred shareholders with resumed voting
right at the end of last month before disclosure date of the interim report	0

As at 30 June 2016, the Company has a total of 51,486 shareholders, of which 16 were holders of A Shares subject to trading moratorium, 51,167 were holders of A Shares without trading moratorium and 303 were holders of H Shares.

66 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 6 CHANGES IN SHARES AND SHAREHOLDERS – CONTINUED

• (II) Shareholding of Top Ten Shareholders and Top Ten Shareholders Holding Tradable Shares not subject to Trading Moratorium as at 30 June 2016

Unit: share

			Shareholding	of top ten shareholders	of top ten shareholders
		Number of
	Increase/	shares held at		Number of
	Decrease during	the end of the		shares held
	the reporting	reporting	Percentage	with trading	Pledge or locked		Nature of
Name of shareholders	period	period	(%)	moratorium	Status	Numbers	shareholders
Yankuang Group Company	0	2,600,000,000	52.93	0	pledged	520,000,000	State-owned
Limited							legal person
Hong Kong Securities Clearing	1,200	1,944,731,099	39.59	0	unknown		Foreign legal
Company (Nominees)							person
Limited
China Securities Finance	-20,461,836	81,434,103	1.66	0	No	0	State-owned
Corporation Limited							legal person
Central Huijin Investment	0	19,355,100	0.39	0	No	0	State-owned
Limited							legal person
Bank of Communications-RT	6,348,264	6,348,264	0.13	0	No	0	Others
Sector Rotation Security
Investment Fund
ICBC-UBS SDIC Core	4,599,716	4,599,716	0.09	0	No	0	Others
Company Security
Investment Balanced
Fund
CBC-RT New Energy Flexible	4,376,522	4,376,522	0.09	0	No	0	Others
Allocation Security
Investment Balanced
Fund
BOC-E Fund Active Growth	3,999,970	3,999,970	0.08	0	No	0	Others
Security Investment Fund
Gao Hua – HSBC –	3,954,729	3,954,729	0.08	0	No	0	Foreign legal
GOLDMAN, SACHS &							person
CO.
BOC-E Fund Resource	3,606,838	3,606,838	0.07	0	No	0	Others
Industry Security
Investment Balanced
Fund
		Yanzhou Coal Mining Company LimitedInterim Report 2016						67

CHAPTER 6 CHANGES IN SHARES AND SHAREHOLDERS – CONTINUED

Shareholding of top ten shareholders holding tradable shares not subject to trading moratorium

	Shareholding of top ten shareholders holding tradable shares not subject to trading moratorium
	Numbers of tradable shares held Class and numbers of shares Name of share Class Numbers
	Yankuang Group Company Limited 2,600,000,000 A shares 2,600,000,000 Hong Kong Securities Clearing Company (Nominees) Limited 1,944,731,099 H shares 1,944,731,099 China Securities Finance Corporation Limited 81,434,103 A shares 81,434,103 Central Huijin Investment Limited 19,355,100 A shares 19,355,100 Bank of Communications-RT Sector Rotation Security Investment Fund 6,348,264 A shares 6,348,264 ICBC-UBS SDIC Core Company Security Investment Balanced Fund 4,599,716 A shares 4,599,716 CBC-RT New Energy Flexible Allocation Security Investment Balanced Fund 4,376,522 A shares 4,376,522 BOC-E Fund Active Growth Security Investment Fund 3,999,970 A shares 3,999,970 Gao Hua – HSBC – GOLDMAN, SACHS & CO. 3,954,729 A shares 3,954,729 BOC-E Fund Resource Industry Security Investment Balanced Fund 3,606,838 A shares 3,606,838 Connected relationship or concerted-party relationship among the above shareholders The subsidiary of Yankuang Group incorporated in Hong Kong held 180,000,000 H shares through HKSCC (Nominees) Limited. The manager of both BOC-E Fund Active Growth Security Investment Fund and BOC-E Fund Resource Industry Security Investment Balanced Fund is E Fund Management Co., Ltd. The manager of both Bank of Communications-RT Sector Rotation Security Investment Fund and CBC-RT New Energy Flexible Allocation Security Investment Balanced Fund is Rongtong Fund Management Co., Ltd. Apart from these, it is unknown whether other shareholders are connected with one another or whether any of these shareholders fall within the meaning of parties acting in concert.

Explanation on the preferred No

shareholders with resumed voting right and their corresponding number of holding held

Notes:

1. The above information regarding “Total number of Shareholders” and “Shareholding of Top Ten Shareholders and Top Ten Shareholders Holding Tradable Shares Not Subject to Trading Moratorium as at 30 June 2016” is based on the register of members provided by the China Securities Depository and Clearing Corporation Limited Shanghai Branch and the Hong Kong Registrars Limited.

2. 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.

3. On 26 November 2015, Yankuang Group pledged its 520,000,000 shares of domestic shares without trading moratorium of the Company in favor of the Export-Import Bank of China as full-amount guarantee by way of share pledge for a USD0.5 billion loan provided by The Export-Import Bank of China to the Company. The pledge is for a term of 24 months.

68 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 6 CHANGES IN SHARES AND SHAREHOLDERS – CONTINUED

1. Yankuang Group pledged its 402,000,000 shares and 378,000,000 shares of domestic shares without trading moratorium of the Company in favor of the Qilu Securities (Shanghai) Assets Management Co., Ltd. on 7 July 2016 and 15 July 2016, respectively, for the fi nancing of shares pledge repurchase. The pledge is for a term of 36 months. As at the disclosure date of this interim report, the accumulative shares of the Company pledged by Yankuang Group are 1,300,000,000 shares, accounting for 26.47% of the total share capital.

(III) Strategic Investors or Ordinary Legal Persons Becoming Top 10 Shareholders through New Shares Allotment

Not applicable.

(IV) Substantial Shareholders’ Interests and Short Positions in the Shares and Underlying Shares of the Company

==> picture [108 x 503] intentionally omitted <==

As far as the Directors are aware, save as disclosed below, as at 30 June 2016, 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 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 in	Percentage in
					the H share	total share
Name of substantial			Number of shares	Nature of	capital of the	capital of the
shareholders	Class of shares	Capacity	held (shares)	interests	Company	Company
Yankuang Group	A Shares (state-	Benef cial owner	2,600,000,000	Long	–	52.93%
	owned legal			position
	person shares)
Yankuang Group�	H shares	Interest of	180,000,000	Long	9.22%	3.66%
		controlled		position
		corporations
Templeton Asset	H Shares	Investment	233,066,800	Long	11.94%	4.74%
Management Ltd.		manager		position
BNP Paribas Investment	H Shares	Investment	117,641,207	Long	6.03%	2.39%
Partners SA		manager		position

Notes:

• Yankuang Group’s wholly-owned subsidiary incorporated 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.

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

69

Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 7 DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEES

I. CHANGES IN SHAREHOLDING

(I) Changes in Shareholding of Current and Resigned Directors, Supervisors and Senior Management during the Reporting Period

As at the disclosure date of this interim report, save as disclosed below, none of the Directors, chief executives 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 (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 is as follows:

Unit: share Number of shares held Increase/ Number of shares held at the at the end of the decrease of the Name Title beginningof the reporting period reporting period reporting period

Li Xiyong Chairman 10,000 10,000 0 Li Wei Vice chairman 10,000 10,000 0 Wu Xiangqian Director, general manager 10,000 10,000 0 Wu Yuxiang Director 30,000 30,000 0 Zhao Qingchun Director, CFO 0 0 0 Guo Dechun Director 0 0 0 Guo Jun Employee director 10,000 10,000 0 Wang Lijie Independent director 0 0 0 Jia Shaohua Independent director 0 0 0 Wang Xiaojun Independent director 0 0 0 Qi Anbang Independent director 0 0 0 Zhang Shengdong Chairman of supervisory committee 10,000 10,000 0 Gu Shisheng Vice chairman of supervisory committee 10,000 10,000 0 Meng Qingjian Supervisor 0 0 0 Xue Zhongyong Supervisor 0 0 0 Jiang Qingquan Employee supervisor 10,000 10,000 0 Chen Zhongyi Employee supervisor 10,500 10,500 0 Shi Chengzhong Deputy general manager 10,000 10,000 0 Liu Chun Deputy general manager 10,000 10,000 0 Ding Guangmu Deputy general manager 10,000 10,000 0 Wang Fuqi Chief engineer 10,000 10,000 0 Zhao Honggang Deputy general manager 10,000 10,000 0 Jin Qingbin Secretary to the Board 0 0 0 Yin Mingde Director (resigned) 10,000 10,000 0 Zhang Baocai Director, deputy general manager, 0 0 0 secretary to the Board (resigned) Xue Youzhi Independent director (resigned) 0 0 0 Zhen Ailan Supervisor(resigned) 10,000 10,000 0

70 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 7 DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEES – CONTINUED

As at 30 June 2016, the current and resigned Directors, Supervisors and senior management together held 180,500 A shares of the Company, representing 0.00367% of the total issued share capital of the Company.

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

Shareholding in associated corporations of the Company:

The shareholding of Yancoal Australia by Directors, Supervisors and senior management of the Company:

		Number of		Increase/decrease
		shares held at	Number of shares	during the reporting
Name	Position	1 January 2016	held at 30 June 2016	period (shares)
Zhang Baocai	Director, deputy general manager,	1,162,790	1,162,790	0
	secretary to the Board (resigned)

==> picture [108 x 503] intentionally omitted <==

Save as disclosed above, none of the Directors, Supervisors or senior management of the Company held any Company’s shares, share options or granted restricted stocks. During the six months ended 30 June 2016, 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.

(II) Share Incentive Mechanism to the Directors, Supervisors and Senior Management During the Reporting Period

Not applicable.

II. CHANGES IN POSITIONS OF DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT OF THE COMPANY

Name	Title	Changes	Reasons for Change
Li Wei	Vice Chairman	Elected	work allocation
Zhao Qingchun	Director, CFO	Elected	work allocation
Guo Dechun	Director	Elected	work allocation
Guo Jun	Employee director	Elected	work allocation
Qi Anbang	Independent director	Elected	work allocation
Meng Qingjian	Supervisor	Elected	work allocation
Xue Zhongyong	Supervisor	Elected	work allocation
Jiang Qingquan	Employee supervisor	Elected	work allocation
Wu Xiangqian	General manager	Appointed	work allocation
Jin Qingbin	Secretary to the Board	Appointed	work allocation
Yin Mingde	Director	Resigned	work allocation
Zhang Baocai	Director, deputy general manager,	Resigned	work allocation
	secretary to the Board
Jiang Qingquan	Employee director	Resigned	work allocation
Xue Youzhi	Independent director	Resigned	work allocation
Zhen Ailan	Supervisor	Resigned	work allocation
Guo Jun	Employee supervisor	Resigned	work allocation
Wu Yuxiang	CFO	Resigned	work allocation

71

Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 7 DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEES – CONTINUED

III. OTHER EXPLANATION

(I) Changes of Members of the Board

At the 2015 annual general meeting held on 3 June 2016, Mr. Li Wei, Mr. Zhao Qingchun and Mr. Guo Dechun were elected as the non-independent Directors, and Mr. Qi Anbang was elected as the independent Director. The term of offi ce starts from the closing of the 2015 annual general meeting and ends up at the closing of the Shareholders’ meeting for the election of members for the seventh session of the Board. Mr. Yin Mingde and Mr. Zhang Baocai resigned from the positions of non-independent Directors, and Mr. Xue Youzhi resigned from the position of independent Director.

At the employee representatives meeting of the Company held on 3 June 2016, Mr. Guo Jun was elected as a employee Director, and Mr. Jiang Qingquan resigned from the position of employee Director.

==> picture [109 x 503] intentionally omitted <==

Mr. Wang Lijie, the independent director of the Company, submitted his resignation on 13 August 2016 and proposed to resign from the independent director and other relevant positions in the special committee of the Board for some physical reasons. And he will continue to perform his duties in pursuant to laws, regulations, and the Articles before a new independent director elected and appointed in shareholders’ meeting.

(II) Changes of Members of the Supervisory Committee

Due to work allocation, Ms. Zhen Ailan, the former Supervisor of the Company, submitted her resignation on 29 March 2016 and resigned from the position of Supervisor with effect from the same day.

As considered and approved by the 2015 annual general meeting held on 3 June 2016, Mr. Meng Qingjian and Mr. Xue Zhongyong were elected as the non-independent employee Supervisors. The term of offi ce starts from the closing of the 2015 annual general meeting and ends up at the closing of the Shareholders’ meeting for the election of members for the seventh session of the Board.

At the employee representatives meeting of the Company held on 3 June 2016, Mr. Jiang Qingquan was elected as a employee Supervisor, and Mr. Guo Jun resigned from the position of employee Supervisor.

(III) Changes of Members of the Senior Management

As considered and approved at the fi fteenth meeting of the six session of the Board held on 6 January 2016, Mr. Wu Xiangqian was appointed as the general manager of the Company and Mr. Zhao Qingchun was appointed as the CFO of the Company. Mr. Wu Yuxiang resigned from the position of the chief fi nancial offi cer.

Due to work allocation, Mr. Zhang Baocai, the former deputy general manager of the Company and the secretary to the Board, submitted his resignation and resigned from the position of the deputy general manager and the secretary to the Board with effect from 29 March 2016.

As considered and approved by the seventeenth meeting of the sixth session of the Board held on 29 March 2016, Mr. Jin Qingbin was appointed as the secretary to the Board and the company secretary, and Ms. Leung Wing Han Sharon was appointed as the joint company secretary.

72 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 7 DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT AND EMPLOYEES – CONTINUED

IV. CHANGES IN POSITIONS OF CURRENT DIRECTORS, SUPERVISORS AND SENIOR MANAGEMENT IN SUBSIDIARIES OF THE COMPANY

(Prepared in accordance with the Hong Kong Listing Rules)

Title	Name	Before change	After change	New employment
Director, general	Wu Xiangqian	Chairman and general manager of	—	Since 5 January 2016
manager		Ordos Neng Hua
		Chairman of Haosheng Company	—	Since 5 January 2016
		—	Chairman of Duanxin Investment	Since 22 March 2016
			Holding (Shenzhen) Co., Ltd.
Director	Wu Yuxiang	Chairman of Supervisory Committee of	—	26 April 2016
		Huadian Zouxian Power Generation Co., Ltd.
Director, CFO	Zhao	—	Director, general manager of Duanxin	22 March 2016
	Qingchun		Investment Holding (Shenzhen) Co., Ltd.
		—	Chairman of Supervisory Committee of	26 April 2016
			Huadian Zouxian Power Generation Co., Ltd.
		—	Executive director of Qingdao Duanxin	3 August 2016
			Assets Management Co., Ltd.

V. EMPLOYEES

As at 30 June 2016, the Group had a total of 64,599 employees, of whom 5,052 were administrative personnel, 4,270 were technicians, 40,193 were involved in production and 15,084 were other supporting staff.

During the six months ended 30 June 2016, the total wages and allowances of the staff of the Group for the reporting period amounted to RMB2.5954 billion.

73

Yanzhou Coal Mining Company Limited Interim Report 2016

(The fi nancial data listed in this section were calculated in accordance with the CASs)

CHAPTER 8 CORPORATE BONDS

I. BASIC INFORMATION OF CORPORATE BONDS

Unit: RMB100 million

						Interest	Way to repay
Name	Abbreviation	Code	Issue date	Maturity date	Balance	rate	capital and interest	Trade place
2012 Corporate Bond of	12 Yanzhou	122272	2014/3/3	2024/3/3	30.50	6.15%	Interest paid once a	Shanghai
Yanzhou Coal (second	Coal 04						year, the entire	Stock
tranche)							principal repaid	Exchange
2012 Corporate Bond of	12 Yanzhou	122271	2014/3/3	2019/3/3	19.50	5.92%	at one time at
Yanzhou Coal (second	Coal 03						maturity, the
tranche)							f nal interest paid
2012 Corporate Bond of	12 Yanzhou	122168	2012/7/23	2022/7/23	40	4.95%	together with the
Yanzhou Coal (f rst tranche)	Coal 02						principal.
2012 Corporate Bond of	12 Yanzhou	122167	2012/7/23	2017/7/23	10	4.20%
Yanzhou Coal (f rst tranche)	Coal 01

==> picture [109 x 503] intentionally omitted <==

II. CONTACT INFORMATION OF CORPORATE BOND TRUSTEE AND CREDIT RATING AGENCY

Bond trustee Name BOC International China Limited (“BOC International”) Offi ce address 7/F, No. 110 Xidan North Avenue, Xicheng District, Beijing, PRC Contact person He Yinhui Contact number (8621) 20328000 Credit rating agency Name Dagong Global Credit Rating Co., Ltd. Offi ce address 29/F, Unit A, Eagle Run Plaza, No.26 Xiaoyun Road, Chaoyang District, Beijing, P.R.China Other explanation:

As at the disclosure date of this interim report, Yanzhou Coal Mining Co., Ltd. has paid the interests of 2012 corporate bond (fi rst tranche) and 2012 corporate bond (second tranche) on schedule.

74 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 8 CORPORATE BONDS – CONTINUED

(The fi nancial data listed in this section were calculated in accordance with the CASs)

III. USE OF PROCEEDS BY CORPORATE BONDS

The 2012 corporate bond (fi rst tranche) and the 2012 corporate bond (second tranche) of Yanzhou Coal Mining Co., Ltd. issued proceeds of RMB5 billion (before deducting issue expenses), respectively, with RMB10 billion funds raised in total. The whole proceeds were used to replenish working capital including technical improvement for old mines, construction on new mines, coal mining, procurement and repair for preparation equipments, and the continuous input to ensure the safety production of coal mines. The utilization and use plan keep consistent with the prospectus.

As at the disclosure date of this interim report, the bond balance of 2012 corporate bond (fi rst tranche) of Yanzhou Coal Mining Co., Ltd. was RMB5 billion. The bond balance of 2012 corporate bond (second tranche) of Yanzhou Coal Mining Co., Ltd. was RMB5 billion.

IV. INFORMATION ON CREDIT RATING AGENCY OF CORPORATE BOND

==> picture [108 x 503] intentionally omitted <==

1. On 28 April 2016, the track rating made by Dagong Global Credit Rating Co., Ltd. according to the condition during the reporting period was as follows: the long-term credit rating to the Company remains AAA; the credit rating to 12 Yanzhou Coal 01, 12 Yanzhou Coal 02, 12 Yanzhou Coal 03, 12 Yanzhou Coal 04 remains AAA. The relevant information was published on the websites of Shanghai Stock Exchange, the Hong Kong Stock Exchange and the Company, respectively, on 3 May 2016.

2. During the reporting period, the bond rating of 2012 corporate bond (fi rst tranche) and 2012 corporate bond (second tranche) of Yanzhou Coal Mining Co., Ltd. remain AAA without any change, which indicates that the risk of bonds unable to repay at maturity is lowest.

V. CREDIT ENHANCEMENT MECHANISM, DEBT PAYMENT SCHEME AND OTHER RELEVANT INFORMATION OF CORPORATE BONDS DURING THE REPORTING PERIOD

During the reporting period, credit enhancement mechanism, debt payment scheme and other debt payment supporting measures has not changed.

1. Guarantee

Yankuang Group provided an irrevocable and joint liability guarantee for the full amount of 2012 corporate bond (fi rst tranche) and 2012 corporate bond (second tranche) of Yanzhou Coal Mining Co., Ltd. unconditionally and irrevocably. The guarantee was approved by the board of directors of Yankuang Group on 2 January 2012.

Yanzhou Coal Mining Company Limited Interim Report 2016 75

CHAPTER 8 CORPORATE BONDS – CONTINUED

(The fi nancial data listed in this section were calculated in accordance with the CASs)

Key fi nancial data and indicators of Yankuang Group (unaudited fi nancial data) are as follows:

Unit: RMB10 thousand

	30 June 2016	31 December 2015
Net assets	5,380,855	5,061,598
Liability to asset ratio	74.9%	74.8%
Return rate on net assets	0.16%	0.35%
Current ratio	1.19	1.35
Liquidity ratio	0.87	1.01
Credit status of guarantor	AAA	AAA
Accumulative balance of external guarantee	510,000	510,000
Accumulative balance of external guarantee to net assets ratio	9.48%	9.64%

==> picture [109 x 503] intentionally omitted <==

2. Debt repayment plan

The value date of 12 Yanzhou Coal 01 is on 23 July 2012. Bond interest will be paid once a year within the duration from the value date. The payment date of 12 Yanzhou Coal 01 for the previous interest year from 2012 to 2017 is in 23 July (the date will be extended to the next banking day in case it is not banking day, hereinafter inclusive). The maturity date of 12 Yanzhou Coal 01 is on 23 July 2017. The principal and the fi nal interest should be paid in the maturity date.

The value date of 12 Yanzhou Coal 02 is on 23 July 2012. Bond interest will be paid once a year within the duration from the value date. The payment date of 12 Yanzhou Coal 02 for the previous interest year from 2012 to 2022 is in 23 July. The maturity date of 12 Yanzhou Coal 02 is on 23 July 2022. The principal and the fi nal interest should be paid in the maturity date.

The value date of 12 Yanzhou Coal 03 is on 3 March 2014. Bond interest will be paid once a year within the duration from the value date. The payment date of 12 Yanzhou Coal 03 for the previous interest year from 2015 to 2019 is in 3 March. The maturity date of 12 Yanzhou Coal 03 is on 3 March 2019. The principal and the fi nal interest should be paid in the maturity date.

The value date of 12 Yanzhou Coal 04 is on 3 March 2014. Bond interest will be paid once a year within the duration from the value date. The payment date of 12 Yanzhou Coal 04 for the previous interest year from 2015 to 2024 is in 3 March. The maturity date of 12 Yanzhou Coal 04 is on 3 March 2024. The principal and the fi nal interest should be paid in the maturity date.

The payment of principal and interest for 2012 corporate bond (fi rst tranche) and 2012 corporate bond (second tranche) of Yanzhou Coal Mining Co., Ltd. will be conducted by bond registration & depository institution and relevant organizations. The payment detail will be explained in the announcement issued through the media designated by the Company in CSRC according to relevant requirements.

76 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 8 CORPORATE BONDS – CONTINUED

(The fi nancial data listed in this section were calculated in accordance with the CASs)

3. Debt payment supporting plan

During the reporting period, the plan and measures for debt payment supporting is coincident with the prospectus, including:

(1) establish specialized team for debt payment; (2) ensure that the fi xed fund is used for its specifi ed purpose only; (3) give full play to the role of bond trustee; (4) formulate the rules for bondholder’s meeting; (5) disclose the information strictly; (6) when the Company cannot pay back the principal and interests of this bond in time, the Company undertakes to take the following measures to effectively protect the interest of bondholders: ① don’t distribute profi ts to shareholders; ② postpone the implementation of signifi cant external investment, merger and acquisition and other capital expenditure projects; ③ reduce or suspend the salaries and bonuses for directors and senior management; ④ main responsibility person cannot be transferred.

4. Special account for debt payment

The Company didn’t set up the special account for debt payment.

VI. BONDHOLDER’S MEETING

During the reporting period, there was no bondholder’s meeting.

VII. PERFORMANCE OF DUTIES BY BOND TRUSTEE

The Company and BOC International (China) Limited (“BOC International”) entered into the Agreement on Bond Entrusted Management in January 2012, according to which, BOC International was appointed as the trustee of this bond. During the reporting period, reports on entrusted management businesses have been disclosed by BOC International and posted in the website of Shanghai Stock Exchange.

==> picture [252 x 208] intentionally omitted <==

==> picture [238 x 208] intentionally omitted <==

77

Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 8 CORPORATE BONDS – CONTINUED

(The fi nancial data listed in this section were calculated in accordance with the CASs)

VIII. ACCOUNTING DATA AND FINANCIAL INDICATORS AS AT THE END OF THE REPORTING PERIOD AND PREVIOUS YEAR (OR DURING THE REPORTING PERIOD AND THE CORRESPONDING PERIOD OF PREVIOUS YEAR)

		As at	As at
		30 June	31 December	Increase/
		2016	2015	decrease (%)
	Current ratio	0.86	1.17	-26.50
	Liquidity ratio	0.61	0.75	-18.67
	Liability to asset ratio	67.06%	69.08%	decrease 2.02
				percentage point
Loan repayment rate		100%	100%	0
		January-June,	January-June,	Increase/
		2016	2015	decrease (%)
EBITDA interest cover ratio		1.63	1.65	-1.21
Interest cover ratio		100%	100%	0

IX. ASSETS STATUS OF THE COMPANY AT THE END OF THE REPORTING PERIOD

As at 30 June 2016, assets mortgage and pledge status of the Company are as follows:

Unit: RMB’000

	Items Book value at 30 June 2016 Restricted reason
	Cash and cash equivalents 1,107,940 Environment management guarantee deposit, other deposit Notes receivable 567,858 Note pledging Inventories 1,583,546 Mortgage loan Fixed Assets 17,683 Mortgage loan Total assets of Premier coal mine 1,311,535 Mortgage loan Total 4,588,562 –

78 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 8 CORPORATE BONDS – CONTINUED

(The fi nancial data listed in this section were calculated in accordance with the CASs)

X. INTEREST PAYMENT OF OTHER BONDS AND DEBT FINANCING INSTRUMENTS

(I) The Issuance of Other Bonds and Financing Instruments

From 1 January 2016 to the disclosure date of this interim report, details on other bonds and fi nancing instruments issued by the Group in the PRC are as follows:

		2016 f rst tranche	2016 second tranche	2016 third tranche	2016 forth tranche	2016 f fth tranche
		of super-short term	of super-short term	of super-short term	of super-short term	of super-short term
		notes	notes	notes	notes	notes
Examination and		Considered and	Considered and	Considered and	Considered and	Considered and
approval procedures		approved at the 2014	approved at the 2014	approved at the 2014	approved at the 2014	approved at the 2014
		annual general meeting	annual general meeting	annual general meeting	annual general meeting	annual general meeting
		of the Company held	of the Company held	of the Company held	of the Company held	of the Company held
		on 22 May 2015	on 22 May 2015	on 22 May 2015	on 22 May 2015	on 22 May 2015
Issuer		Yanzhou Coal	Yanzhou Coal	Yanzhou Coal	Yanzhou Coal	Yanzhou Coal
Issue date		22 February 2016	3 March 2016	25 March 2016	25 March 2016	29 June 2016
Value date		24 February 2016	4 March 2016	28 March 2016	29 March 2016	30 June 2016
Maturity date		20 November 2016	29 November 2016	23 December 2016	24 December 2016	27 March 2017
Interest rate		3.40%	3.29%	3.40%	3.38%	4.39%
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		RMB4 billion	RMB4 billion	RMB2 billion	RMB2 billion	RMB1.5 billion
Net proceeds		RMB3.994 billion	RMB3.994 billion	RMB1.994 billion	RMB1.994 billion	RMB1.49775 billion
Use of proceeds		Replenishment of	Replenishment of	Replenishment of	Replenishment of	Replenishment of
		working capital	working capital	working capital	working capital	working capital
		for operation and	for operation and	for operation and	for operation and	for operation and
		production	production	production	production	production
Total amount of		RMB3.994 billion	RMB3.994 billion	RMB1.994 billion	RMB1.994 billion	RMB1.49775 billion
	proceeds that has
	been used during the
	reporting period
Total accumulated		RMB3.994 billion	RMB3.994 billion	RMB1.994 billion	RMB1.994 billion	RMB1.49775 billion
	amount of proceeds
	that has been used
Whether the principal		No	No	No	No	No
	or interest payment
	breached the contract
Signif cant litigations		Nil	Nil	Nil	Nil	Nil
	affected by
	reimbursement
	schedule of bonds
			Yanzhou	Coal Mining Company Limited		Interim Report 2016	79

CHAPTER 8 CORPORATE BONDS – CONTINUED

(The fi nancial data listed in this section were calculated in accordance with the CASs)

(II) Principal and Interest Payment of Other Bonds and Financing Instruments during the Reporting Period

The Company paid the principal and interest of the short-term note, super-short term note, medium-term note and USD bond due within the reporting period on schedule without the default.

XI. BANK CREDIT STATUS DURING THE REPORTING PERIOD

As at 30 June 2016, the total bank credit limit of the Company was RMB87.579 billion, of which, RMB43.216 billion has been used, RMB44.363 billion remained unused. In the fi rst half of 2016, the Company repaid the principal and interest of bank loan amounting to RMB8.727 billion on schedule without extension, drawdown and default.

XII. PERFORMANCE OF THE RELEVANT AGREEMENT OR COMMITMENT IN BOND PROSPECTUS DURING THE REPORTING PERIOD

==> picture [109 x 503] intentionally omitted <==

The Company strictly performed the relevant agreement and fulfi lled the commitment of prospectus without any default. There was no safety matter to affect investor’s fund.

XIII. EFFECT ON OPERATIONS AND DEBT PAYING ABILITY OF THE COMPANY BY SIGNIFICANT EVENTS

For the information on signifi cant events and latest progress of the Company, please refer to “Chapter 5 Signifi cant Events” in this interim report.

The abovementioned signifi cant events had no great effects on the Company’s operation and didn’t infl uence the debt payment ability to investors as the Company operates stably and has smooth fi nancing channel.

==> picture [237 x 208] intentionally omitted <==

==> picture [253 x 208] intentionally omitted <==

80 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 9 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED INCOME STATEMENT

FOR THE SIX MONTHS ENDED JUNE 30, 2016

		Six months ended June 30,	Six months ended June 30,
	Notes	2016	2015
		RMB’000	RMB’000
		(unaudited)	(unaudited)
Gross sales of coal	5	10,618,970	16,472,325
Railway transportation service income		100,086	156,455
Gross sales of electricity power		276,303	286,641
Gross sales of methanol		1,070,440	1,218,377
Gross sales of heat supply		10,084	10,160
Gross sales of equipment manufacturing		504,831	–
Total revenue		12,580,714	18,143,958
Transportation costs of coal	5	(877,151)	(934,150)
Cost of sales and service provided	6	(7,401,641)	(12,864,543)
Cost of electricity power		(225,677)	(249,910)
Cost of methanol		(732,088)	(869,177)
Cost of heat supply		(4,290)	(4,047)
Cost of equipment manufacturing		(407,981)	–
Gross prof t		2,931,886	3,222,131
Selling, general and administrative expenses		(3,083,733)	(2,844,697)
Share of prof t of associates		217,361	227,629
Share of loss of joint ventures		(28,239)	(77,646)
Other income	7	1,524,701	1,219,200
Interest expenses	8	(1,132,759)	(1,502,540)
Prof t before income taxes	9	429,217	244,077
Income taxes	10	(72,466)	(242,546)
Prof t for the period		356,751	1,531
Attributable to:
Equity holders of the Company		375,236	(50,626)
Owners of perpetual capital securities		209,799	132,896
Non-controlling interests
– Perpetual capital securities		60,848	66,535
– Other		(289,132)	(147,274)
		356,751	1,531
Earnings (Loss) per share, basic and diluted	12	RMB0.08	(RMB 0.01)
Earnings (Loss) per ADS, basic and diluted	12	RMB0.76	(RMB 0.1)
	Yanzhou Coal Mining	Company LimitedInterim Report 2016			81

CHAPTER 9 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED JUNE 30, 2016

		Six months ended June 30,	Six months ended June 30,
		2016	2015
		RMB’000	RMB’000
		(unaudited)	(unaudited)
	Prof t for the period	356,751	1,531
	Other comprehensive income (loss) (after income tax):
	Items that may be reclassif ed subsequently to prof t or loss:
	Available-for-sale investments:
	Change in fair value	(46,417)	132,946
	Reclassif cation adjustments for amounts transferred
	to income statement (included in other income)	(14,773)	–
	Deferred taxes	15,297	(33,237)
		(45,893)	99,709
	Cash f ow hedges:
	Cash f ow hedge reserve recognized in other comprehensive income	199,414	86,983
	Reclassif cation adjustments for amounts transferred to income statement
	(Included in selling, general and administrative expenses)	117,890	(23,565)
	Deferred taxes	(18,553)	(24,262)
		298,751	39,156
	Share of other comprehensive income of associates	15,781	22,637
	Exchange difference arising on translation of foreign operations	539,422	(2,337,288)
	Other comprehensive income (loss) for the period	808,061	(2,175,786)
	Total comprehensive income (loss) for the period	1,164,812	(2,174,255)
	Attributable to:
	Equity holders of the Company	978,023	(1,792,928)
	Owners of perpetual capital securities	209,799	132,896
	Non-controlling interests
	– Perpetual capital securities	60,848	66,535
	– Others	(83,858)	(580,758)
		1,164,812	(2,174,255)
82	Yanzhou Coal Mining Company LimitedInterim Report 2016

CHAPTER 9 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONDENSED CONSOLIDATED BALANCE SHEET

AT JUNE 30, 2016

		At June 30,	At December 31,
	Notes	2016	2015
		RMB’000	RMB’000
		(unaudited)	(audited)
ASSETS
CURRENT ASSETS
Bank balances and cash		14,866,244	20,175,120
Term deposits	13	1,755,548	2,995,066
Restricted cash	13	1,121,301	407,711
Bills and accounts receivable	14	7,181,938	5,976,837
Long term receivables – due within one year		1,683,072	1,565,194
Royalty Receivable	26(i)	83,681	93,083
Inventories		2,029,385	1,852,333
Prepayments and other receivables	15	8,230,693	7,968,818
Prepaid lease payments		24,195	23,407
Derivative f nancial instruments		953	–
Tax recoverable		20,475	12,976
		36,997,485	41,070,545
Assets classif ed as held for sale		–	7,740,520
TOTAL CURRENT ASSETS		36,997,485	48,811,065
NON-CURRENT ASSETS
Intangible assets	16	32,697,886	32,243,310
Prepaid lease payments		888,040	900,942
Property, plant and equipment	17	47,074,879	45,615,970
Goodwill		2,310,316	2,296,083
Investments in securities	18	2,406,421	944,410
Interests in associates		4,944,020	3,263,764
Interests in joint ventures		40,075	57,479
Long term receivables – due after one year		6,873,060	247,339
Royalty Receivable	26(i)	873,792	875,444
Deposits made on investments		118,926	118,926
Deferred tax assets	22	7,171,411	7,097,143
TOTAL NON-CURRENT ASSETS		105,398,826	93,660,810
TOTAL ASSETS		142,396,311	142,471,875
	Yanzhou Coal Mining	Company Limited	83 Interim Report 2016

CHAPTER 9 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONDENSED CONSOLIDATED BALANCE SHEET — CONTINUED

AT JUNE 30, 2016

			At June 30,	At December 31,	At December 31,
		Notes	2016	2015
			RMB’000	RMB’000
			(unaudited)	(audited)
	LIABILITIES AND SHAREHOLDERS’ EQUITY
	CURRENT LIABILITIES
	Bills and accounts payable	19	4,834,757	4,207,366
	Other payables and accrued expenses		7,894,255	9,009,307
	Provision for land subsidence, restoration, rehabilitation
	and environmental costs	20	2,616,427	2,616,998
	Amounts due to Parent Company and its subsidiary companies		78,931	190,150
	Borrowings – due within one year	21	29,237,832	23,903,217
	Long term payable and provision – due within one year		415,205	398,566
	Derivative f nancial instruments		944	5,442
	Tax payable		368,525	204,418
			45,446,876	40,535,464
	Liabilities directly associated with assets classif ed as held for sale		–	1,520,831
	TOTAL CURRENT LIABILITIES		45,446,876	42,056,295
	NON-CURRENT LIABILITIES
	Borrowings-due after one year	21	39,739,568	45,576,588
	Deferred tax liability	22	7,261,787	7,823,565
	Provision for land subsidence, restoration,
	rehabilitation and environmental costs	20	598,309	582,741
	Long term payable and provision – due after one year		608,513	631,032
	TOTAL NON-CURRENT LIABILITIES		48,208,177	54,613,926
	TOTAL LIABILITIES		93,655,053	96,670,221
	CAPITAL AND RESERVES
	Share capital	23	4,918,400	4,918,400
	Reserves	23	31,381,671	30,451,501
	Equity attributable to equity holders of the Company		36,300,071	35,369,901
	Owners of perpetual capital securities	24	6,617,682	6,661,683
	Non-controlling interests
	– Perpetual capital securities	24	–	1,854,837
	– Subordinated capital notes	25	3,102	3,102
	– Others		5,820,403	1,912,131
	TOTAL EQUITY		48,741,258	45,801,654
	TOTAL LIABILITIES AND EQUITY		142,396,311	142,471,875
84	Yanzhou Coal Mining Company LimitedInterim Report 2016

CHAPTER 9 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED JUNE 30, 2016

			Attributable to equity holders of the Company	Attributable to equity holders of the Company	Attributable to equity holders of the Company	Attributable to equity holders of the Company					Non-controlling interests	Non-controlling interests	Non-controlling interests
										Perpetual	Perpetual
										Capital	Capital
			Future	Statutory		Investment	Cash f ow			Securities	Securities	Subordinated
	Share	Share	development	common	Translation	revaluation	hedge	Retained		issued by	issued by	Capital
	capital	premium	fund reserve fund		reserve	reserve	reserve	earnings	Total the Company		a subsidiary	Notes	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	RMB’000	RMB’000
	(note 23)		(note 23)	(note 23)						(note 24a)	(note 24b)	(note 25)
Balance at January 1, 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	1,851,903	3,102	2,896,209	45,998,516
Prof t (loss) for the period (unaudited)	–	–	–	–	–	–	–	(50,626)	(50,626)	132,896	66,535	–	(147,274)	1,531
Other comprehensive income (loss) (unaudited):
– Fair value change of available-for-sale investments	–	–	–	–	–	99,709	–	–	99,709	–	–	–	–	99,709
– Share of comprehensive income from associate	–	–	–	–	–	22,637	–	–	22,637	–	–	–	–	22,637
– Cash f ow hedge reserve recognized	–	–	–	–	–	–	31,384	–	31,384	–	–	–	7,772	39,156
– Exchange difference arising
on translation of foreign operations	–	–	–	–	(1,896,032)	–	–	–	(1,896,032)	–	–	–	(441,256)	(2,337,288)
Total comprehensive income (loss)
for the period (unaudited)	–	–	–	–	(1,896,032)	122,346	31,384	(50,626)	(1,792,928)	132,896	66,535	–	(580,758)	(2,174,255)
Transactions with owners (unaudited)
– Issuance of perpetual capital securities	–	–	–	–	–	–	–	–	–	3,964,000	–	–	–	3,964,000
– Distribution paid to holders of perpetual
capital securities	–	–	–	–	–	–	–	–	–	–	(66,184)	–	–	(66,184)
– Appropriations to and utilization of reserves	–	–	(656,675)	75,959	–	–	–	580,716	–	–	–	–	–	–
– Dividends	–	–	–	–	–	–	–	(98,368)	(98,368)	–	–	–	–	(98,368)
Total transactions with owners (unaudited)	–	–	(656,675)	75,959	–	–	–	482,348	(98,368)	3,964,000	(66,184)	–	–	3,799,448
Balance at June 30, 2015	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	1,852,254	3,102	2,315,451	47,623,709
					Yanzhou Coal Mining Company LimitedInterim								Report	2016		85

CHAPTER 9 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY — CONTINUED

FOR THE SIX MONTHS ENDED JUNE 30, 2016

					Attributable to equity holders	Attributable to equity holders	of the Company	of the Company					Non-controlling interests	Non-controlling interests	Non-controlling interests
												Perpetual	Perpetual
												Capital	Capital
					Future	Statutory		Investment	Cash f ow			Securities	Securities	Subordinated
		Share	Capital	Share	development	common	Translation	revaluation	hedge	Retained		issued by	issued by	Capital
		capital	reserve	premium	fund reserve fund		reserve	reserve	reserve	earnings	Total the Company		a subsidiary	Notes	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	RMB’000	RMB’000	RMB’000
		(note 23)	(note 23)		(note 23)	(note 23)						(note 24a)	(note 24b)	(note 25)
	Balance at January 1, 2016	4,918,400	(19,439)	2,981,002	978,661	5,952,503	(8,380,297)	102,760	(1,357,255)	30,193,566	35,369,901	6,661,683	1,854,837	3,102	1,912,131	45,801,654
	Prof t (loss) for the period (unaudited)	–	–	–	–	–	–	–	–	375,236	375,236	209,799	60,848	–	(289,132)	356,751
	Other comprehensive income
	(loss) (unaudited):
	– Fair value change of available-for-sale investments	–	–	–	–	–	–	(45,893)	–	–	(45,893)	–	–	–	–	(45,893)
	– Share of comprehensive income from associate	–	–	–	–	–	–	15,781	–	–	15,781	–	–	–	–	15,781
	– Cash f ow hedge reserve recognized	–	–	–	–	–	–	–	260,654	–	260,654	–	–	–	38,097	298,751
	– Exchange difference arising on translation
	of foreign operations	–	–	–	–	–	372,245	–	–	–	372,245	–	–	–	167,177	539,422
	Total comprehensive income (loss)
	for the period (unaudited)	–	–	–	–	–	372,245	(30,112)	260,654	375,236	978,023	209,799	60,848	–	(83,858)	1,164,812
	Transactions with owners (unaudited)
	– Distribution paid to holders
	of perpetual capital securities	–	–	–	–	–	–	–	–	–	–	(253,800)	(79,938)	–	–	(333,738)
	– Establishment of Duanxin Mingren	–	–	–	–	–	–	–	–	–	–	–	–	–	4,000,000	4,000,000
	– Appropriations to and utilization of reserves	–	–	–	(195,583)	–	–	–	–	195,583	–	–	–	–	–	–
	– Dividends	–	–	–	–	–	–	–	–	(49,120)	(49,120)	–	–	–	(4,200)	(53,320)
	– Acquisition of non controlling interests	–	–	–	–	–	–	–	–	1,267	1,267	–	–	–	(3,670)	(2,403)
	– Redemption of perpetual capital securities	–	–	–	–	–	–	–	–	–	–	–	(1,835,747)	–	–	(1,835,747)
	Total transactions with owners (unaudited)	–	–	–	(195,583)	–	–	–	–	147,730	(47,853)	(253,800)	(1,915,685)	–	3,992,130	1,774,792
	Balance at June 30, 2016	4,918,400	(19,439)	2,981,002	783,078	5,952,503	(8,008,052)	72,648	(1,096,601)	30,716,532	36,300,071	6,617,682	–	3,102	5,820,403	48,741,258
86	Yanzhou Coal Mining	Company Limited			Interim Report 2016

CHAPTER 9 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2016

	Six months ended June 30,	Six months ended June 30,
	2016	2015
	RMB’000	RMB’000
	(unaudited)	(unaudited)
NET CASH USED IN OPERATING ACTIVITIES	(77,417)	(2,042,466)
NET CASH USED IN INVESTING ACTIVITIES
Purchase of property, plant and equipment	(2,461,185)	(2,157,259)
Purchase of intangible assets	(11,330)	(137,489)
Decrease/(increase) in term deposits	1,239,554	(451,767)
Increase in long term receivables	(528,959)	(56,729)
Reduction of cash balance from transfer of control in a subsidiary	(52,419)	–
Increase in interest in an associate	(550,000)	(264,560)
(Increase)/decrease in restricted cash	(713,046)	176,448
Proceeds on disposal of property, plant and equipment	347,573	7,151
Increase in investment securities	(2,315,139)	(782,948)
Increase in derivative f nancial instruments	944	–
Acquisition of additional interests in a subsidiary	(2,403)	–
Increase in interest in a joint venture	(10,000)	(7,000)
Acquisition of additional interests in joint operation	–	(90,315)
	(5,056,410)	(3,764,468)
NET CASH (USED IN) FROM FINANCING ACTIVITIES
Contribution from non-controlling interests in respect of Duanxin Mingren	4,000,000	–
Dividend paid	(53,320)	(98,368)
Proceeds from bank borrowings	2,394,900	1,863,710
Proceeds from other borrowings	–	8,824
Proceeds from issuance of guaranteed notes	13,488,667	9,982,500
Proceeds from issuance of perpetual capital securities	–	3,964,000
Repayments of bank borrowings	(7,807,208)	(4,775,596)
Redemption of perpetual capital securities	(1,835,747)	–
Repayment of guarantee note	(10,000,000)	(5,000,000)
Distribution paid to perpetual capital security holders	(333,738)	(66,184)
	(146,446)	5,878,886
Net (decrease)/increase in cash and cash equivalents	(5,280,273)	71,952
CASH AND CASH EQUIVALENTS, AT BEGINNING OF THE PERIOD	20,175,120	15,041,928
Effect of foreign exchange rate changes	(28,603)	(17,148)
CASH AND CASH EQUIVALENTS, AT END OF THE PERIOD
REPRESENTED BY BANK BALANCES AND CASH	14,866,244	15,096,732
Yanzhou Coal Mining Company LimitedInterim Report 2016				87

CHAPTER 9 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2016

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 Group Profi le and General Information to the interim report.

==> picture [109 x 503] intentionally omitted <==

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.

88 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 9 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.

==> picture [108 x 503] intentionally omitted <==

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, 2015, 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.

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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 are 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 RMB 7,136,536,000. In 2014, the Company made additional contribution of RMB224,460,000 to registered capital in proportion to its equity interest. As at June 30, 2016, 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.

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In 2014, the Company entered into a co-operative agreement with Yancoal International and contributed RMB500,000,000 to set up Zhongyin Financial Leasing Company Limited (“Zhongyin Financial”) in Shanghai Pilot Free Trade Zone, to provide fi nance lease, lease consultation and guaranteed and commercial insurance service for fi nance lease business. The registration process was completed on May 20, 2014. In 2015, the Company entered additional contribution agreement with Yancoal International and a third party, Shandong Yongzheng Investment development Co., Ltd. The additional contribution of RMB1,560,000,000 was made to registered capital. The registration completed on July 14, 2015 and the shareholding of the Company decreased from 100% to 97%.

In 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.

In 2014, the Company invested RMB100,000,000 to set up a wholly-owned subsidiary of Duanxin Investment Holding (Beijing) Company Limited (“Duanxin”), mainly engaged in the business of consultancy service of operation management and investment management. During 2015, the Company made additional contribution of RMB800,000,000 to registered capital without any change in shareholding. As at the end of the reporting period, Duanxin has not yet commenced any business.

On July 27, 2015, the Company acquired 100% equity interest of Yankuang Donghua Heavy Industry Limited (“Donghua”) at a consideration of RMB676,000,000 from the Parent Company. Donghua owns fi ve subsidiaries, the principal activities of Donghua are manufacturing of comprehensive coal mining and excavating equipment.

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1. GENERAL – CONTINUED

Acquisitions and establishment of major subsidiaries – continued

In August 2015, a subsidiary of Donghua, Yankuang Group Jintong Rubber Company Limited (“Jintong”) entered into a cooperation agreement with a related company, Yankuang Overseas Energy Development Co., Ltd to set up a company, Yankuang Jintong Latin American Co., Ltd (“Jintong Latin”), mainly engaged in the business of international trading of rubber products and the relevant technical advisory services. Upon completion of registration procedures, the Company contributed RMB1,180,000 (US$183,600), which represents 51% equity interest of Jintong Latin.

On July 14, 2015, the Company invested RMB200,000,000 to set up a wholly-owned subsidiary of Shandong Duanxin Supply Chain Management Co., Ltd (“Supply Chain”), mainly engaged in the business of transportation and storage service.

On December 7, 2015, the Company entered into a cooperation agreement with a independent third party, Qingdao Shiji Rui Feng Group Co., Ltd to set up a company, Qingdao Zhongyin Ruifeng International Trading Co., Ltd (“Ruifeng”), mainly engaged in the business of international trading of coal products, steel products and machinery. Upon completion of registration procedures, the Company contributed RMB102,000,000, which represents 51% equity interest of Ruifeng.

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On February 2, 2016, a subsidiary of Donghua, Yankuang Group Mainland Machinery Co. Ltd invested RMB37,585,000 to set up a wholly-owned subsidiary of Yankuang Mainland Benniu Machinery Limited, mainly engaged in the business of manufacturing and sales of coal equipment.

In March 2016, Donghua entered into a co-operation agreement with an independent third party to set up a company, Shandong Donghua Equipment Remanufacturing Limited (“Donghua Equipment Remanufacturing “), mainly engaged in the business of manufacturing and sales of coal equipment. The registration was completed on April 13, 2016. Donghua contributed RMB10,000,000, which represents 50% equity interest of Donghua Equipment Remanufacturing. As at June 30, 2016, Donghua Equipment Remanufacturing has not yet commenced any business.

On March 24, 2016, the Company invested USD1,285,000 to set up a wholly-owned subsidiary of Vast Lucky (HK) Limited (“Vast Lucky”), mainly engaged in the trading business of iron ore and other materials.

On May 25, 2016, the Company entered into a sales and purchases agreement to acquire the remaining 47.62% equity interests in Qingdao Zhongyan at a consideration of RMB2,403,000. Zhongyan is mainly engaged in material trading and storage service in bonded area. The acquisition was completed on June 29, 2016. After the acquisition, it became a wholly-owned subsidiary of the Company.

On June 28, 2016, the Company entered into a co-operative agreement with an independent third party to set up Jinan Duanxin Mingren Financial Advisory Limited Partnership (“Duanxin Mingren”) in Shandong, to provide conference and exhitabition service, assets management and marketing consultancy service. The Company contributed RMB1,000,000,000, which represents 20% equity interest of Duanxin Mingren. However, according to the shareholder agreement, the Company has control over Duanxin Mingren and hence fully consolidate the results of this entity.

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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, 2016 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, 2015. The interim fi nancial statements are unaudited.

The interim fi nancial statements have been approved for issue by the Board of Directors on August 26, 2016.

3. SIGNIFICANT ACCOUNTING POLICIES

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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, 2015.

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, 2015, except a number of accounting policies that are adopted by the Company and effective for annual periods beginning on or after January 1, 2016.

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, 2016. The new IFRSs relevant to these interim fi nancial statements are as follows:

Amendments to IFRS 11 Joint Arrangements

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. Due to the acquisition of Donghua, the Group is also engaged in the manufacturing of comprehensive coal mining and excavating equipment.

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For management purposes, the Group is currently organized into four operating divisions – coal mining, coal railway transportation, methanol, electricity and heat supply and equipment manufacturing. 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
Equipment manufacturing	–	Manufacturing of comprehensive coal mining and
		excavating equipment

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, 2016 Methanol, Coal railway electricity and Equipment Mining transportation heat supply manufacturing Eliminations Consolidated RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
GROSS REVENUE External sales Inter-segment sales Total	10,618,970 100,086 1,356,827 504,831 – 12,580,714 175,026 23,107 309,472 97,122 (604,727) – 10,793,996 123,193 1,666,299 601,953 (604,727) 12,580,714

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

RESULT Segment results Unallocated corporate expenses Unallocated corporate income Share of loss of joint ventures Share of prof t of associates Interest income Interest expenses Prof t before income taxes Income taxes Prof t for the period	1,885,930 14,372 247,899 56,424 –
	(28,239) 119,234 98,127

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4. SEGMENT INFORMATION – CONTINUED

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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5. SALES OF COAL AND TRANSPORTATION COSTS OF COAL

	For the six months ended June 30, 2016 2015 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	7,779,887 12,817,883 (127,225) (254,412)
	7,652,662 12,563,471
	2,839,083 3,654,442 (749,926) (679,738)
	2,089,157 2,974,704
	9,741,819 15,538,175

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 June 30,	For the six months ended June 30,
	2016	2015
	RMB’000	RMB’000
Materials	1,119,137	1,038,941
Wages and employee benef ts	1,859,577	2,586,030
Electricity	240,874	255,308
Depreciation	743,629	1,052,495
Land subsidence, restoration, rehabilitation and environmental costs	611,579	788,181
Environmental protection	–	43,115
Amortization of mining rights	283,328	394,669
Other transportation cost	2,679	4,258
Costs of traded coal	1,501,481	5,651,060
Business tax and surcharges	325,656	372,719
Others	713,701	677,767
	7,401,641	12,864,543

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7. OTHER INCOME

	For the six months ended June 30, 2016 2015 RMB’000 RMB’000
Interest income Government grants Exchange gain, net Dividend income Gain arising from transfer of available-for-sales securities to associate (note 18) Gain on sales of auxiliary materials Rental income Service income Others	358,477 517,589 445,137 190,988 – 80,314 92,985 60 105,168 – 86,632 16,931 57,970 42,391 45,013 52,509 333,319 318,418
	1,524,701 1,219,200

8. INTEREST EXPENSES

		For the six months ended June 30, 2016 2015 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	867,622 1,122,376 394,405 390,120 583 5,649
		1,262,610 1,518,145 (129,851) (15,605)
		1,132,759 1,502,540

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9. PROFIT BEFORE INCOME TAXES

		For the six months ended June 30,	For the six months ended June 30,
		2016	2015
		RMB’000	RMB’000
	Prof t before income taxes has been arrived at after (crediting) charging:
	Depreciation of property, plant and equipment	1,711,821	1,720,231
	Amortization of intangible assets
	– Included in cost of sales and service provided	283,328	394,669
	– Included in selling, general and administrative expenses	12,800	11,344
	Total depreciation and amortization	2,007,949	2,126,244
	Release of prepaid lease payments	12,113	9,572
	Loss (Gain) on disposal of property, plant and equipment	3,034	11,074
	Impairment loss recognised in respect of inventories	18,828	137,060
	Exchange loss (gain), net	222,510	(80,314)
	Provision of impairment loss on accounts receivable and other receivables	74,849	31,829
	INCOME TAXES
		For the six months ended June 30,
		2016	2015
		RMB’000	RMB’000
	Income tax:
	Current taxes	445,272	304,813
	Deferred taxes (note 22)	(372,806)	(62,267)
		72,466	242,546

10. INCOME TAXES

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%.

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11. DIVIDENDS

	For the six months ended June 30, 2016 2015 RMB’000 RMB’000
Final dividend approved, RMB0.01 per share (2015: RMB0.02)	49,120 98,368

Pursuant to the annual general meeting held on June 3, 2016, a fi nal dividend in respect of the year ended December 31, 2015 was approved.

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

The calculation of the earnings/(loss) per share attributable to equity holders of the Company for the six months ended June 30, 2016 and June 30, 2015 is based on the profi t for the period of RMB375,236,000 and loss for the period of RMB50,626,000 and on the weighted average 4,912,016,000 shares in issue during the period excluding the ordinary shares repurchased and held as treasury shares and 4,918,400,000 shares in issue during the period ended June 30, 2015 respectively.

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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 December 31, 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 earnings/(loss) per share for the six months ended June 30, 2016 and 2015 is the same as the basic earnings/ (loss) share as there is no dilutive effect of subordinated capital notes on potential ordinary shares outstanding.

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 were 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, 2016 2015 RMB’000 RMB’000
Accounts receivable Less: Impairment loss Total bills receivable Total bills and accounts receivable, net	4,096,451 2,477,020 (134,272) (59,914)
	3,962,179 2,417,106 3,219,759 3,559,731
	7,181,938 5,976,837

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.

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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, 2016 2015 RMB’000 RMB’000
1-90 days 91-180 days 181-365 days Over 1 year	4,119,405 4,358,793 1,666,520 513,685 405,649 353,227 990,364 751,132
	7,181,938 5,976,837

The aged analysis of the Company’s bills and trade receivables, that were past due but not yet impaired as at the reporting dates, based on due date is as follow:

	At June 30, At December 31, 2016 2015 RMB’000 RMB’000
1-90 days 91-180 days 181-365 days Over 1 year	245,609 149,634 58,927 56,791 83,326 80,974 686,747 605,439
	1,074,609 892,838

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15. PREPAYMENTS AND OTHER RECEIVABLES

	At June 30, At December 31, 2016 2015 RMB’000 RMB’000
Advances to suppliers Prepaid relocation costs of inhabitants Dividend receivable Others	4,165,671 2,707,340 2,104,038 2,104,038 148,440 300,000 1,812,544 2,857,440
	8,230,693 7,968,818

16. INTANGIBLE ASSETS

		Potash mineral Mining Mining exploration Water reserves resources permit Technology licenses Others Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
	Cost At January 1, 2016 Exchange re-alignment Additions for the period At June 30, 2016 Accumulated amortization and impairment At January 1, 2016 Exchange re-alignment Provided for the period At June 30, 2016 Carrying values At June 30, 2016 At December 31, 2015	32,575,803 3,883,018 1,184,711 231,102 124,564 112,625 38,111,823 575,630 184,758 108,591 5,440 – 5,535 879,954 7,466 369 – – – 3,495 11,330
		33,158,899 4,068,145 1,293,302 236,542 124,564 121,655 39,003,107
		5,689,600 118,191 – 5,545 4,641 50,536 5,868,513 132,735 5,440 – – – 2,405 140,580 283,328 – – 3,157 2,492 7,151 296,128
		6,105,663 123,631 – 8,702 7,133 60,092 6,305,221
		27,053,236 3,944,514 1,293,302 227,840 117,431 61,563 32,697,886
		26,886,203 3,764,827 1,184,711 225,557 119,923 62,089 32,243,310

At June 30, 2016, intangible assets with a carrying amount of approximately RMB13,515,232,000 (December 31, 2015: RMB15,350,517,000) have been pledged to secure the Group borrowings (note 21).

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17. PROPERTY, PLANT AND EQUIPMENT

	Freehold				Plant,
	land		Railway	Mining	machinery and	Transportation	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, 2016	727,640	4,096,743	4,906,388	10,293,959	25,282,051	2,198,708	16,956,592	64,462,081
Exchange re-alignment	33,491	20,242	–	109,726	285,852	19	740,635	1,189,965
Additions for the period	–	–	–	–	659,788	17	1,801,380	2,461,185
Transfer	–	2,834	–	29,241	99,135	397	(131,607)	–
Written off	–	–	–	–	–	–	(3,035)	(3,035)
Disposals for the period	–	(12,886)	(9,116)	(8,828)	(353,550)	(12,367)	–	(396,747)
At June 30, 2016	761,131	4,106,933	4,897,272	10,424,098	25,973,276	2,186,774	19,363,965	67,713,449
Accumulated
depreciation
At January 1, 2016	–	1,383,613	2,486,809	3,412,107	9,948,453	1,615,129	–	18,846,111
Exchange re-alignment	–	5,464	–	28,966	95,378	4	–	129,812
Provided for the period	–	88,899	102,418	338,124	1,129,688	52,692	–	1,711,821
Eliminated on disposals	–	(7,092)	(6,006)	(11,070)	(13,502)	(11,504)	–	(49,174)
At June 30, 2016	–	1,470,884	2,583,221	3,768,127	11,160,017	1,656,321	–	20,638,570
Carrying values
At June 30, 2016	761,131	2,636,049	2,314,051	6,655,971	14,813,259	530,453	19,363,965	47,074,879
At December 31, 2015	727,640	2,713,130	2,419,579	6,881,852	15,333,598	583,579	16,956,592	45,615,970

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At June 30, 2016, property, plant and equipment with a carrying amount of approximately RMB3,605,970,000 (December 31, 2015: RMB2,819,351,000) have been pledged to secure bank borrowings of the Group (note 21).

At June 30, 2016, the carrying amount of property, plant and equipment held under fi nance leases of the group was RMB415,040,000 (December 31, 2015: RMB181,539,000).

Yanzhou Coal Mining Company Limited Interim Report 2016 103

CHAPTER 9 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

18. INVESTMENTS IN SECURITIES

The investment in securities represents security investments:

	At June 30, At December 31, 2016 2015 RMB’000 RMB’000
Available-For-Sale Equity Investments Equity security listed on the SSE Equity security listed on the NEEQ Equity security listed on the HKEX Unlisted equity securities Unlisted investment portfolio	428 610 – 797,720 1,605,754 – 137,088 146,080 663,151 –
	2,406,421 944,410

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The investments in equity securities listed on the Shanghai Stock Exchange (“SSE”), National Equities Exchange and Quotations System (“NEEQ”) and Hong Kong Stock Exchange (“HKEX”) 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.

The investment in equity securities listed on the National Equities Exchange and Quotation System (“NEEQ”) included Qilu Bank which is stated at the fair value as of December 31, 2015. The Company’s investments in equity securities listed on the NEEQ, which are stated at fair value through other comprehensive income, are subject to a 5-yearlock-up-period.During the period, the Company classifi ed the investment in Qilu Bank to interest in associates upon appointment of representative to Qilu Bank’s board of directors. The difference between the share of net assets and carrying amount of available-for-sale securities of RMB105,168,000 is included in other income (note 7). The cumulative balance of related investment revaluation reserve amounting to RMB14,773,000 is transferred to income statement.

On March 8, 2016, Yancoal International (as investor), a wholly-owned subsidiary of the Company entered into the Cornerstone Investment Agreement with China Zheshang Bank (as issuer), CMB International Capital Limited (as Underwriter’s Representative) and the Company (as guarantor), pursuant to which Yancoal International has agreed to acquire the Investor Shares of 400,000,000 shares at the offer price of HK$3.96 per shares as part of the International Offering through the Underwriter’s Representative (or its affi liates) in its capacity as an international representative of the international underwriters of the relevant portion of the International Offering.

104 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 9 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

18. INVESTMENTS IN SECURITIES – CONTINUED

On April 18, 2016, Yancoal International acquired additional 88,000,000 China Zheshang Bank H Shares through block trade from an independent third party for a total consideration of approximately HK$347.6 million (excluding stamp duty and related expenses), being HK$3.95 per acquired share.

During the reporting period, the Group invested RMB650 million to subscribe FTSE Xinhua Duanxin No.1 Special Asset Management Plan which include mainly unlisted equity securities, deposit, and other unlisted investments. The fair value is provided by the investment bank with reference to the estimated fair value of underlying investments.

19. BILLS AND ACCOUNTS PAYABLE

	At June 30, At December 31, 2016 2015 RMB’000 RMB’000
Accounts payable Bills payable	4,366,481 3,367,836 468,276 839,530
	4,834,757 4,207,366

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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, 2016 2015 RMB’000 RMB’000
1-90 days 91-180 days 181-365 days Over 1 year	3,505,580 2,815,938 408,006 612,221 612,595 434,315 308,576 344,892
	4,834,757 4,207,366

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.

Yanzhou Coal Mining Company Limited Interim Report 2016 105

CHAPTER 9 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

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

	At June 30, 2016 RMB’000
At the beginning of period Exchange re-alignment Additional provision in the period Utilization of provision At the end of period Presented as: Current portion Non-current portion	3,199,739 26,773 90,380 (102,156) 3,214,736 2,616,427 598,309 3,214,736

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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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106 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 9 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

21. BORROWINGS

		At June 30,	At December 31,
		2016	2015
		RMB’000	RMB’000
Current liabilities
Bank borrowings
	– Unsecured borrowings (i)	7,706,138	8,263,113
	– Secured borrowings (ii)	5,625,077	5,625,915
Finance lease liabilities (iv)		51,932	17,522
Guaranteed note (v)		15,854,685	9,996,667
		29,237,832	23,903,217
Non-current liabilities
Bank borrowings
	– Unsecured borrowings (i)	2,645,797	3,469,900
	– Secured borrowings (ii)	23,524,301	24,501,998
Loans pledged by machineries (iii)		1,800,000	1,800,000
Finance lease liabilities (iv)		319,828	128,183
Guaranteed notes (v)		11,449,642	15,676,507
		39,739,568	45,576,588
Total borrowings		68,977,400	69,479,805
(i)	Unsecured borrowings are repayable as follows:
		At June 30,	At December 31,
		2016	2015
		RMB’000	RMB’000
	Within one year	7,706,138	8,263,113
	More than one year, but not exceeding two years	1,983,797	1,515,972
	More than two years, but not more than f ve years	662,000	1,953,928
	Total	10,351,935	11,733,013
	At June 30, 2016, short-term borrowings of the Company amounting to RMB5,124,984,000 (2015:
	RMB6,099,020,000). Two short-term borrowings of RMB2,030,084,000 (USD309,700,000) are denominated
	in foreign currency with interest rates at three-months LIBOR plus a margin of 1.26%-1.50% per annum,
	approximately 1.91%-2.15% per annum (2015: three-months LIBOR plus a margin of 1.26%-1.50% per annum,
	approximately 1.80%-1.94% per annum). The remaining short-term borrowings of RMB3,094,900,000 carried
	interest at 4.17%-4.35% per annum (2015: 4.35%-6.00% per annum).
	Yanzhou Coal Mining Company LimitedInterim Report 2016			107

CHAPTER 9 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

21. BORROWINGS – CONTINUED

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

Long-term borrowings of the Company amounting to RMB4,258,796,000 (2015: RMB4,679,434,000) with RMB2,567,892,000 payable within one year. Long-term borrowings of RMB2,295,961,000 carried interest at a range of 3.73%-6.40% per annum (2015: 5.54%-6.15% per annum) while the remaining RMB1,962,835,000 carried interest at three-months LIBOR plus a margin of 1.20%-2.40% per annum, approximately 1.86%-3.05% per annum (2015: three-months LIBOR plus a margin of 1.20%-2.40% per annum, approximately 1.74%-2.94% per annum).

The long-term borrowing of Zhongyin Financial, which is denominated in foreign currency, amounting to RMB968,155,000 (USD146,000,000) (2015: RMB954,559,000 (USD147,000,000)), with RMB13,262,000 (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%, approximately 3.25% per annum (2015: three-month LIBOR plus a margin of 2.60%, approximately 3.14% per annum).

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2015
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• (ii) Secured borrowings are repayable as follows:

	At June 30, At December 31, 2016 2015 RMB’000 RMB’000
Within one year More than one year, but not exceeding two years More than two years, but not more than f ve years More than f ve years Total	5,625,077 5,625,915 5,241,850 5,788,326 12,514,901 7,491,494 5,767,550 11,222,178
	29,149,378 30,127,913

As at June 30, 2016, secured borrowings of Yancoal Australia are amounting to RMB18,266,534,000 (2015: RMB17,766,250,000). 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 RMB18,246,496,000 (USD 2,740,000,000). Such borrowings carried interest at three-month LIBOR plus a margin of 2.8% per annum, approximately 3.48% per annum (2015: three-month LIBOR plus a margin of 2.8% per annum, approximately 3.34% per annum).

108 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 9 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

21. BORROWINGS – CONTINUED

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

Part of the borrowings arose from the acquisition of Gloucester with RMB20,038,000 payable within one year. It carried interest at 5.68% (2015: 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.

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At June 30, 2016, secured borrowings of the Company are amounting to RMB3,978,720,000 (2015: RMB5,096,160,000). Such borrowings amounting to RMB663,120,000 (USD100,000,000), were denominated in foreign currency with interest rate at six-month LIBOR plus a margin of 3.20%, approximately 4.14% per annum. It was pledged by bank acceptances of the Company. One of the secured borrowings which amounted to RMB3,315,600,000 (USD 500,000,000) was denominated in foreign currency with interest rate at six-month LIBOR plus a margin of 2.10%, approximately 3.03% per annum. It is pledged by 520,000,000 shares of the Company’s A shares owned by Yankuang Group.

The remaining secured borrowings of RMB900,000,000 (2015: RMB1,200,000,000), with RMB300,000,000 payable within one year, carried interest at 6.98% per annum (2015: 6.98% 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, 2016, secured borrowings of Yancoal International is amounting to RMB5,968,169,000 (USD 900,000,000) (2015: RMB7,240,120,000 (USD 1,115,000,000)), with RMB5,305,039,000 (USD 800,000,000) payable in one year. The remaining secured borrowings amounted to RMB663,130,000 (USD 100,000,000) carried interest rate at three-month LIBOR plus a margin of ranged 1.10%-3.00%, approximately 1.75%-3.65% per annum. These borrowings are 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 8.70%. During the Loan Period, Synergy agrees to loan to Premier a portion of the contract price for every tone of coal supplied by Premier to Synergy under the coal supply agreement during the loan period. It is secured by total assets of Premier Coal Limited including its interest in the Coal Mine. At June 30, 2016, the balance of the loan is RMB35,955,000 (AUD 7,271,000) (2015: RMB25,383,000 (AUD 5,369,000)).

Yanzhou Coal Mining Company Limited Interim Report 2016 109

CHAPTER 9 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

21. BORROWINGS – CONTINUED

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

		At June 30, At December 31, 2016 2015 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	121,472 121,805 104,684 121,805 1,840,602 1,884,050
		2,066,758 2,127,660 (266,758) (327,660)
		1,800,000 1,800,000
		At June 30, At December 31, 2016 2015 RMB’000 RMB’000
	Present value of minimum payments 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	600,000 200,000 1,200,000 1,600,000
		1,800,000 1,800,000 – –
		1,800,000 1,800,000

At June 30, 2016, a loan of RMB1,800,000,000 (2015: RMB1,800,000,000) carried interest at lending rate of 3-5 years loan published by the PBOC plus a margin of 4% per annum, approximately 8.75% per annum (2015: approximately 8.75%) and is pledged by machineries of the Group.

110 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 9 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

21. BORROWINGS – CONTINUED

(iv) Finance lease liabilities are repayable as follows:

	At June 30,	At December 31,
	2016	2015
	RMB’000	RMB’000
Minimum payments
Within one year	91,536	51,733
More than one year, but not exceeding two years	113,436	81,286
More than two years, but not more than f ve years	212,681	50,494
	417,653	183,513
Less: Transfer to assets held for sale	–	(9,378)
Less: Future f nance charges	(45,893)	(28,430)
Present value of payments	371,760	145,705
	At June 30,	At December 31,
	2016	2015
	RMB’000	RMB’000
Present value of minimum payments
Within one year	51,932	17,522
More than one year, but not exceeding two years	111,249	79,107
More than two years, but not more than f ve years	208,579	49,076
	371,760	145,705
Less: amounts due within one year and
included in current liabilities	(51,932)	(17,522)
Amounts due after one year and included
in non-current liabilities	319,828	128,183
Finance lease liabilities of RMB371,760,000 (AUD75,176,000) (2015: RMB145,705,000 (AUD30,820,000)) was
obtained from the acquisition of Gloucester in 2014, which carried interest at 5.52% per annum (2015: 5.16%
per annum).
Yanzhou Coal Mining Company Limited		111 Interim Report 2016

CHAPTER 9 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

21. BORROWINGS – CONTINUED

(v) Guaranteed notes are detailed as follows:

	At June 30, At December 31, 2016 2015 RMB’000 RMB’000
USD repayable within one year RMB repayable within one year RMB repayable within one year to two years 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	2,366,018 – 13,488,667 9,996,667 998,200 – – 2,173,815 1,939,600 2,934,850 1,509,425 3,568,951 7,002,417 6,998,891
	27,304,327 25,673,174

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The above USD guaranteed notes were issued by a subsidiary of the Company in 2012. The 2017 Notes denominated in USD in an aggregate principal amount of USD450,000,000 which will mature on May 16, 2017 and the 2022 Notes denominated in USD in an aggregate principal amount of USD 550,000,000 which will mature on May 16, 2022. The 2017 Notes bear a fi xed interest rate of 4.46% per annum and the 2022 Notes bear a fi xed interest rate of 5.73% per annum. During 2016, USD 93,203,000 principal amount of the 2017 Notes and USD206,783,000 principal amount of the 2022 Notes have been accepted for repurchase by Yancoal Resources.

At June 30, 2016, the remaining USD guaranteed notes amount to RMB3,875,444,000 with par value of USD584,417,000 (2015: RMB5,742,766,000 with par value of USD885,000,000). The notes are irrevocably and unconditionally guaranteed by the Company. The notes are issued and sold in Hong Kong Exchange and Clearing Limited to institutional investors.

In 2012, with the approval from China Securities Regulatory Commission, the Company had issued RMB notes with par value of RMB300,167,000 and RMB4,699,833,000 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, 2016, RMB notes of RMB4,974,000,000 (2015: RMB4,971,000,000) included notes of RMB998,200,000 (2015: RMB997,200,000) with a maturity period of 5 years and interest rate of 4.20% per annum and notes of RMB3,975,800,000 (2015: RMB3,973,800,000) with a maturity period of 10 years and interest rate of 4.95% per annum. During the current period, there was no redemption on the notes.

112 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 9 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

21. BORROWINGS – CONTINUED

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

In 2014, with the approval from China Securities Regulatory Commission, the Company was allowed to issue 5-year RMB notes at RMB1,950,000,000 with interest rate of 5.92% per annum and 10-year RMB notes at RMB3,050,000,000 with interest rate of 6.15% per annum. At June 30, 2016, the 5-year RMB notes and 10year notes are amounted to RMB1,939,600,000 (2015: RMB1,937,650,000) and RMB3,026,617,000 (2015: RMB3,025,092,000) respectively. During the current period, there was no redemption on the notes.

In 2016, the Company had issued 2016 Forth tranche short-term notes at par value RMB13,500,000,000 with 9 month maturity and average interest rate of 3.57% per annum. At June 30, 2016, such RMB short-term note amount to RMB13,488,667,000. As at June 30, 2016, short-term notes of RMB10,000,000,000 in aggregate were redeemed by the Company.

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Yanzhou Coal Mining Company Limited Interim Report 2016 113

CHAPTER 9 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

22. DEFERRED TAXATION

	Fair value Temporary adjustment differences on Available- Accelerated on mining income and Cash f ow for-sale tax rights (mining expenses hedge investment depreciation reserves) recognized Tax losses reserve Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
Balance at January 1, 2015 Exchange re-alignment Acquisition of Donghua (Charge) credit to other comprehensive income Credit (charge) to the consolidated income statement At December 31, 2015 and January 1, 2016 Exchange re-alignment Charge to other comprehensive income Credit (charge) to the consolidated income statement (note 10) At June 30, 2016	(42,592) (165,304) (5,297,198) 779,308 2,180,985 669,996 (1,874,805) – 9,558 184,065 (50,897) (187,310) (71,819) (116,403) – – – 42,158 – – 42,158 38,768 – – – – 16,487 55,255 – (494) (1,189,801) 199,095 2,158,573 – 1,167,373
	(3,824) (156,240) (6,302,934) 969,664 4,152,248 614,664 (726,422) (3,653) (4,187) 109,674 (18,986) 195,742 (12,094) 266,496 15,297 – – – – (18,553) (3,256) – 270,747 (131,078) (556,790) 789,927 – 372,806
	7,820 110,320 (6,324,338) 393,888 5,137,917 584,017 (90,376)

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

1,167,373
(726,422)
266,496
(3,256)
372,806
(90,376)
2015
----- End of picture text -----

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, 2016 2015 RMB’000 RMB’000
Deferred tax assets Deferred tax liabilities	7,171,411 7,097,143 (7,261,787) (7,823,565)
	(90,376) (726,422)

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

114 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 9 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

23. SHAREHOLDERS’ EQUITY

Share capital

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

	Foreign invested shares Domestic H shares invested shares (including H shares A shares represented by ADS) Total
Number of shares At December 31, 2015 and June 30, 2016	2,960,000,000 1,958,400,000 4,918,400,000
	Foreign invested shares Domestic H shares invested shares (including H shares A shares represented by ADS) Total RMB’000 RMB’000 RMB’000
Registered, issued and fully paid At December 31, 2015 and June 30, 2016	2,960,000 1,958,400 4,918,400

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Each share has a par value of RMB1.

There is no movement in share capital during the period.

Capital reserve

During the year ended December 31, 2015, the Company repurchased its own ordinary shares on the Stock Exchange as follows:

					Equivalent
	Number of			Aggregate	aggregate
	shares	Highest price	Lowest price	consideration	consideration
Month of repurchase	repurchased	paid per share	paid per share	paid	paid
		HK$	HK$	HK$	RMB’000
December 2015	6,384,000	3.70	3.47	23,180	19,439

At the 2015 Annual General Meeting, the First H shareholders’ Class Meeting in 2015 convened by the Company on May 22, 2015, a resolution in relation to the proposal of granting a general mandate to the board of directors of the Company to repurchase H shares was approved. As at June 30, 2016, the number of H shares repurchased in 2015 was 6,384,000 (December 31, 2015: 6,384,000) in aggregate. The change of business registration for cancellation of the repurchased H shares has not completed yet.

As at June 30, 2016, the Company’s total registered capital was RMB4,918,400,000 (December 31, 2015: RMB4,918,400,000).

Yanzhou Coal Mining Company Limited Interim Report 2016 115

CHAPTER 9 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

23. SHAREHOLDERS’ EQUITY – CONTINUED

Reserves

Future Development Fund

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

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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In accordance with the regulations of the State Administration of Work Safety, the Company has a commitment to incur RMB8 (Shanxi Tianchi: decreased from RMB50 to RMB30 from October 1, 2013 onwards, 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, 2016 was RMB516,036,000 (December 31, 2015: RMB1,638,445,000).

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.

116 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 9 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

23. SHAREHOLDERS’ EQUITY – CONTINUED

Reserves – continued

Retained earnings

In accordance with the Articles, 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, 2016 is the retained earnings computed under IFRS which amounted to approximately RMB32,662,568,000 (December 31, 2015: RMB31,884,892,000, 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, 2016 Prof t attributable to holders of perpetual capital security Distribution paid to holders of perpetual capital security Redemption of perpetual capital security At June 30, 2016	6,661,683 1,854,837 8,516,520 209,799 60,848 270,647 (253,800) (79,938) (333,738) – (1,835,747) (1,835,747) 6,617,682 – 6,617,682

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.

Yanzhou Coal Mining Company Limited Interim Report 2016 117

CHAPTER 9 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

24. PERPETUAL CAPITAL SECURITIES – CONTINUED

• a) 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.

• 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.

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On May 23, 2016, Yancoal International Trading Co., Limited redeemed all outstanding Perpetual Capital Securities. After redemption of Perpetual Capital Securities, there were no further outstanding Perpetual Capital Securities in issue. Accordingly, the securities were delisted from the Hong Kong Stock Exchange.

25. SUBORDINATED CAPITAL NOTES

On December 31, 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.

118 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 9 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

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.

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:

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• 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
2016
Assets
Available-for-sale investments
– Investments in securities listed on the SSE	428	–	–	428
– Investments in securities listed on the HKEX	1,605,754	–	–	1,605,754
– Unlisted investment portfolio	–	663,151	–	663,151
Derivative f nancial instruments
– Royalty receivable (i)	–	–	957,473	957,473
– Forward foreign exchange contracts	–	953	–	953
	1,606,182	664,104	957,473	3,227,759
Liabilities
Derivative f nancial instruments
– Futures contract	–	944	–	944
	–	944	–	944

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

Yanzhou Coal Mining Company Limited Interim Report 2016 119

CHAPTER 9 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

26. FAIR VALUES – CONTINUED

(i) Royalty receivable

	June 30, 2016 RMB’000
As at beginning of period Cash received Unwinding discount Exchange re-alignment Change in fair value As at end of period Current portion Non-current portion	968,527 (36,523) 52,018 43,350 (69,899) 957,473 83,681 873,792 957,473

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83,681
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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.

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120

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CHAPTER 9 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

27. 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, 2016 2015 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 – Joint ventures – Associates Bills and accounts payable – Parent Company and its subsidiaries – Associates Other payables and accrued expenses – Parent Company and its subsidiaries – Associates

781,020 598,325 294,604 309,219 708,612 127,568 – 3,092 90,556 89,328 78,931 190,150 1 1 406,623 1,344,991 27,244 5,125

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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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Yanzhou Coal Mining Company Limited Interim Report 2016 121

CHAPTER 9 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

27. RELATED PARTY TRANSACTIONS – CONTINUED

Balances and transactions with related party – continued

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

	Six months ended June 30, 2016 2015 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 Coal train convoy service	456,710 595,201 55,646 58,194 373,951 246,289 13,904 5,304 4,139 2,009 1,627,002 254,948 4,959 84,824 100,351 91,498 – 4,671 16,607 78,482 38,393 21,390 13,159 –

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5,304
2,009
84,824
91,498
4,671
78,482
21,390
–
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Expenditures for social welfare and support services (excluding medical and child care expenses) are RMB100,351,000 and RMB91,498,000 for each of the six months period ended June 30, 2016 and 2015. 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 29).

As at June 30, 2016, the Company has deposited RMB1,072,811,000 (December 31, 2015: RMB1,024,277,000) to the Company’s associate, Yan Kuang Group Finance Company Limited. The interest income received during the period amounted to RMB3,626,000 (2015: RMB2,195,000). No fi nance cost paid during the period (2015: 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.

122 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 9 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

27. 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, 2016 2015 RMB’000 RMB’000
Trade sales Trade purchases Material balances with other state-controlled entities are as follows:	904,468 718,148
	198,315 196,948
	At June 30, At December 31, 2016 2015 RMB’000 RMB’000
Amounts due to other state-controlled entities Amounts due from other state-controlled entities	237,256 254,425
	353,774 226,494

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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, 2016 2015 RMB’000 RMB’000
Due from a joint venture	1,683,072 1,565,194

The amount due from a joint venture is unsecured and interest is calculated at commercial rate, the interest of the current period has been waived (note 33(iii)) (six months ended June 30, 2015: RMB55,647,000).

Yanzhou Coal Mining Company Limited Interim Report 2016 123

CHAPTER 9 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

27. 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, 2016 2015 RMB’000 RMB’000
Directors’ fee Salaries, allowance and other benef ts in kind Retirement benef t scheme contributions	260 260 3,867 3,459 228 302
	4,355 4,021

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2015
27,299
53,041
1,249
591
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The remuneration of directors and key executives is determined by the remuneration committee having regard to the performance of individuals and market trends.

28. COMMITMENTS

	At June 30, At December 31, 2016 2015 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 – others Exploration and evaluation expenditure – share of joint operations – others	751,956 5,016,042 514,081 27,299 5,825 53,041 13,230 1,249 – 591
	1,285,092 5,098,222

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, 2016, the Group is committed to further make security deposit of RMB1,584 million (December 31, 2015: RMB1,584 million).

On June 13, 2016, the Company’s wholly-owned subsidiary of Ordos entered into an equity transfer agreement with shareholders of Jiutai Energy Inner Mongolia Co., Ltd. (“Jiutai Energy”), whereby Ordos agreed to acquire a total of 52% of Jiutai Energy’s shareholding from its existing shareholders. The total consideration is RMB 1,840,240,000. As at reporting date, the transaction has not yet been completed.

124 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 9 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

29. 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% (2015: 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 period, 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 period 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.

30. 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, 2016 and 2015. Such expenses, amounting to RMB69,267,000 and RMB58,310,000 for each of the six months ended June 30, 2016 and 2015, have been included as part of the social welfare and support services expenses summarized in note 27.

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.

Yanzhou Coal Mining Company Limited Interim Report 2016 125

CHAPTER 9 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

31. POST BALANCE SHEET EVENTS

On July 22, 2016, the Company, a wholly-owned subsidiary of the Company, Duanxin and Great Wall Securities Company Limited (“Great Wall Securities”) entered into a joint venture agreement to establish a joint venture with the Company and Great Wall Securities being the limited partners and Duanixn being the general partner. The Company and Duanxin together will contribute a total of RMB 2,000,000,000 for 40 % equity interest of the entity. The entity will engage in the provision of consultation services (including, fi nancial management; enterprise asset management; business consulting; convention and conference services market information consultation and investigation).

On August 19, 2016, a shareholders’ resolution to issue not more than 538,000,000 A shares at an issue price of not less than RMB8.32 per share by way of non-public offering was passed in the general meeting of the Company. It is pending and subject to the approval of China Securities Regulatory Commission.

32. OPERATING LEASE COMMITMENTS

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2015
----- End of picture text -----

	At June 30, At December 31, 2016 2015 RMB’000 RMB’000
Within one year More than one year, but not more than f ve years	192,434 164,702 277,030 180,133
	469,464 344,835

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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126 Yanzhou Coal Mining Company Limited Interim Report 2016

CHAPTER 9 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

33. CONTINGENT LIABILITIES

(i)	Guarantees	Guarantees
			At June 30,	At December 31,
			2016	2015
			RMB’000	RMB’000
	(a)	The Group
		Guarantees secured over deposits	98,904	112,673
		Performance guarantees provided to daily operations	381,165	764,966
		Guarantees provided in respect of the cost of
		restoration of certain mining leases, given to
		government departments as required by statute	532,104	477,205
		Guarantees provided in respect of land acquisition	–	236,380
	(b)	Joint ventures
		Guarantees secured over deposits	63,553	1,333
		Performance guarantees provided to daily operations	223,470	–
		Guarantees provided in respect of the cost of
		restoration of certain mining leases, given to
		government departments as required by statute	119,976	–
	(b)	Related parties
		Guarantees secured over deposits	5,267	5,082
		Performance guarantees provided to daily operations	1,179,797	481,549
		Guarantees provided in respect of the cost of
		restoration of certain mining leases, given to
		government departments as required by statute	354,047	86,938
			2,958,283	2,166,126

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• (ii) The Australian Taxation Offi ce (“ATO”) is undertaking an audit of certain matters in Yancoal Australia’s tax fi lings for the year ended December 31, 2012. These matters remain in progress and steps are being taken to fi nalise them.

• (iii) Yancoal Australia has issued a letter of support dated March 4, 2015 to Middlemount, a joint venture of the Group confi rming:

• It will not demand for the repayment of any loan due from Middlemount, except to the extent that Middlemount agrees otherwise or as otherwise provided in the loan agreement; and

• It will 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.

This letter of support will remain in force whilst the Group is a shareholder of Middlemount or until notice of not less than 12 months is provided or such shorter period as agreed by Middlemount.

Yanzhou Coal Mining Company Limited Interim Report 2016 127

CHAPTER 9 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:

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(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 and Donghua 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.

128

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CHAPTER 9 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) Classifi cation of perpetual capital security due to differences between the fi nancial statements prepared under IFRS and PRC GAAP.

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• (5a) Under IFRS, the perpetual capital security issued by the company was classifi ed as equity instrument and separated from net assets attributable to equity holders of the Company.

Under PRC GAAP, the perpetual capital security issued by the Company was classifi ed as owners’ equity.

The following tables 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,
	2016	2016
	RMB’000	RMB’000
As per condensed f nancial statements prepared under IFRS	375,236	36,300,071
Impact of IFRS adjustments in respect of:
– transfer to future development fund which is charged
to income before income taxes	15,713	–
– reversal of work safety cost	258,704	(349,973)
– fair value adjustment and related amortization	6,632	(269,334)
– goodwill arising from acquisition of Jining II,
Railway Assets, Heze, Shanxi Group, Hua Ju Energy,
Yangcun Coal Mine, Beisu Coal Mine and Donghua	–	(1,240,695)
– deferred tax	(74,226)	(163,939)
– perpetual capital security	–	6,617,682
– reversal of impairment loss on intangible assets in Yancoal Australia	6,341	(472,232)
– others	4,022	271,058
As per f nancial statements prepared under PRC GAAP	592,422	40,692,638

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

Yanzhou Coal Mining Company Limited Interim Report 2016 129

CHAPTER 10 DOCUMENTS AVAILABLE FOR INSPECTION

The following documents are available for inspection in the offi ce of the secretary to the Board at 298 Fushan Road South, Zoucheng, Shandong Province, the PRC:

• Financial statements sealed and signed by the persons in charge of the Company, the accounting work and the accounting department, respectively;

• Original copies of all documents and announcements published during the reporting period in websites designated by the CSRC;

• The full text of the Interim Report released in other securities markets.

On behalf of the Board Li Xiyong Chairman Yanzhou Coal Mining Company Limited 26 August 2016

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130

Yanzhou Coal Mining Company Limited Interim Report 2016