CStone Pharmaceuticals — Proxy Solicitation & Information Statement 2000

Aug 7, 2000

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)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of Yanzhou Coal Mining Company Limited (the "Company") will be held at 8:00 a.m. on 22 September, 2000 at 2nd Floor Conference Room, Zong He Building, 40 Fushan Road, Zoucheng, Shandong Province (Postal Code 273500), People's Republic of China ("PRC") to consider and, if thought fit, to pass the following resolution:

ORDINARY RESOLUTIONS

1. "THAT the entry into of the Jining III acquisition agreement (which is described in the announcement of the Company published on 7 August 2000) by the Company with Yankuang (Group) Corporation Ltd. (the "Agreement") be and is hereby approved, AND THAT the Board of Directors of the Company be and is hereby authorised to do all such things for the purpose of acquiring Jining III coal mines and to vary the terms of the Agreement as it may consider necessary or expedient or as the circumstances so require."

2. "THAT the entry into by the Company of any connected transactions of the Company relating to Jining III coal mines after the acquisition of Jining III coal mines be and is hereby approved."

SPECIAL RESOLUTIONS

nos. 3 to 10 relating to the approval for the Company to apply to

the China Securities Regulatory Commission

in respect of A share Issue

1. "THAT the issue of 100 million domestic listed RMB denominated ordinary shares in the Company (the "A Share Issue")."

2. "THAT the use of the proceeds from the A Share Issue for the acquisition of Jining III coal mines be and is hereby approved."

3. "THAT the Board of Directors of the Company be and is hereby authorised to determine the issuing mechanism, issue price, target offerees and all other matters relating to the A Share Issue within the following price range and price determination mechanism as approved by the Shareholders at this Meeting:

(a) Target Offerees and Offering Territory:

The target offerees will be domestic natural persons and institutional investors within the PRC (save as prohibited by PRC state laws or regulations) which have opened shareholder accounts with the Shanghai Stock Exchange. The offering territories will be all the nationwide stock exchange trading systems connected to the Shanghai Stock Exchange trading system.

(b) Issue Price and Price Determination Mechanism:

The issue price for the A Share Issue shall be determined based on the book building process. The lower limit of the bidding price shall be 18 times of the forecasted earnings per share on a fully diluted basis for the year in which the issue is made.

(c) Issuing Mechanism:

(i) approximately 40% of the shares under the A Share Issue shall be placed to institutional investors off the trading system;

(ii) approximately 60% of the shares under the A Share Issue shall be issued through the trading system to holders of publicly held shares of the Company whose names appear on the register of members of the Company after the close of business on the record date (the "Existing Shareholders") and other public investors. Existing Shareholders are entitled to subscribe for new shares on a preferential basis up to a certain proportion. The new shares which are not subscribed by the Existing Shareholders will be offered to the public investors; and

(iii) the number of shares issued through the trading system and the number of shares issued off the trading system will be subject to re-allocations amongst them as determined by the lead underwriter depending on the actual level of subscription."

1. "THAT after completion of the A Share Issue, the entitlement of the Existing Shareholders and the new shareholders of the Company to the accumulated profits of the Company for the year in which the issue is made be and is hereby approved."

2. "THAT the Board of Directors of the Company be and is hereby authorised to make the appropriate amendments to Articles 15, 16 and 19 of the Articles of Association of the Company after completion of the A Share Issue."

3. "THAT the Board of Directors of the Company be and is hereby authorised to do all such things as it may consider necessary or expedient to deal with all other matters relating to the A Share Issue."

4. "THAT the Board of Directors of the Company be and is hereby authorised to determine whether to grant an over-allotment option to the lead underwriter of the A Share Issue, upon the exercise in full of which an additional 15 million shares may be issued under the A Share Issue"

5. "THAT all the resolutions nos.(3) to (9) above relating to the A Share Issue shall be valid for up to 1 year from the date of passing of those resolutions at the Extraordinary General Meeting."

ORDINARY RESOLUTION

1. "THAT the report on the use of proceeds from the previous share offerings by the Company and the report from Deloitte Touche Tohmatsu Shanghai CPA in respect of the use of proceeds from the previous offerings by the Company be and are hereby approved."

By order of the board of Directors of

Yanzhou Coal Mining Company Limited

Zhao Jingche

Chairman of the Board

PRC, Shandong Province, 4 August 2000

Notes:

(A) Holders of the Company's overseas listed foreign invested shares (in the form of H shares) whose names appear on the Company's Register of Members which is maintained by Hong Kong Securities Clearing Company Limited ("HKSCC") at the close of business on 23 August, 2000 are entitled to attend the Extraordinary General Meeting after completing the registration procedures for attending the meeting.

(B) Holders of H shares, who intend to attend the Extraordinary General Meeting, must deliver the written replies for attending the Extraordinary General Meeting to the Office of the Secretary of the Board of Directors of the Company no later than 1 September, 2000. In addition to the foregoing:

(1) Such holders of H shares shall deliver copies of instruments of transfer, share certificates and their own identity cards to the Office of the Secretary to the Board of Directors of the Company.

(2) In case such holders are represented by authorised representatives, they shall also deliver their powers of attorney and copies of the attorney's documents of identity to the Office of the Secretary to the Board of Directors of the Company.

Shareholders can deliver the necessary documents for registration by the Company in person, by post or by facsimile. Upon receipt of such documents, the Company will complete the registration procedures for attending the Extraordinary General Meeting and despatch copies of Extraordinary General Meeting admission cards to shareholders by post or facsimile. When attending the Extraordinary General Meeting, shareholders or their proxies may exchange copies or facsimile copies of the Extraordinary General Meeting admission cards for the original Extraordinary General Meeting admission cards.

(C) Details of the Office of the Secretary to the Board of Directors of the Company are as follows: 40 Fushan Road, Zoucheng, Shandong Province 273500 PRC Tel: 86-537-538-3310 Fax: 86-537-538-3311.

(D) Each holder of H shares who has the right to attend and vote at the Extraordinary General Meeting is entitled to appoint in writing one or more proxies, whether a shareholder or not, to attend and vote on his behalf at the Extraordinary General Meeting. A proxy of a shareholder who has appointed more than one proxy may only vote on a poll. The instrument appointing a proxy must be in writing under the hand of the appointor or his attorney duly authorised in writing. If that instrument is signed by an attorney of the appointor, the power of attorney authorising that attorney to sign, or other documents of authorisation, must be notarially certified. For holders of H shares, the power of attorney or other documents of authorisation and proxy forms must be delivered to HKSCC no less than 24 hours before the time appointed for the holding of the Extraordinary General Meeting in order for such documents to be valid.

(E) The H share register will be closed from 23 August 2000 to 22 September 2000 (both days inclusive), during which time no transfer of H shares will be registered. Holders of H shares who wish to attend the Extraordinary General Meeting must deliver their duly stamped instruments of transfer, accompanied by the relevant share certificates to HKSCC by no later than 4:00 p.m. on 22 August, 2000. HKSCC's address is as follows: 2nd Floor, Vicwood Plaza, 199 Des Voeux Road Central, Hong Kong.

(F) The Extraordinary General Meeting is expected to last half a day, shareholders attending the Extraordinary General Meeting are responsible for their own transportation and accommodation expenses.