CStone Pharmaceuticals — Proxy Solicitation & Information Statement 2018

Jul 25, 2018

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt about any of the contents of this circular or as to what action to take in relation to this circular, you should consult your licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Yanzhou Coal Mining Company Limited , you should at once hand this circular and the enclosed form of proxy and reply slip to the purchaser(s) or transferee(s) or to the bank, or a licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or transferee(s).

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular.

This circular is for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities in the Company.

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)

(1) PROPOSED EXTENSION OF THE VALIDITY PERIOD OF THE RESOLUTION AND THE VALIDITY PERIOD OF THE AUTHORISATION RELATING TO THE NON-PUBLIC ISSUANCE OF A SHARES; AND (2) PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

The notices convening the EGM, the A Shareholders Class Meeting and the H Shareholders Class Meeting to be held at the headquarter of the Company at 298 South Fushan Road, Zoucheng, Shandong Province 273500, the PRC at 8:30 a.m., 9:30 a.m. and 10:00 a.m. respectively on Friday, 24 August 2018 were published on Friday, 6 July 2018.

Whether or not you are able to attend the respective meetings in person, you are strongly advised to complete and sign the form of proxy in accordance with the instructions printed thereon. The form of proxy shall be lodged with the Company’s H Share Registrar, Hong Kong Registrars Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong (for holders of H Shares) or the Office of the Secretary to the Board at 298 South Fushan Road, Zoucheng, Shandong Province 273500, the PRC (for holders of A Shares) as soon as possible but in any event not later than 24 hours before the time appointed for the holding of the relevant meeting(s) or any adjourned meeting(s) (as the case may be).

Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting(s) or any adjourned meeting(s) should you so wish.

25 July 2018

CONTENTS

		Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
**LETTER **	FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
I.	INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
II.	DETAILS OF EXTENSION OF THE VALIDITY PERIOD
	OF THE RESOLUTION AND THE VALIDITY PERIOD
	OF THE AUTHORISATION RELATING TO THE NON-PUBLIC
	ISSUANCE OF A SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
**III. **	EFFECT OF THE NON-PUBLIC ISSUANCE OF A SHARES ON THE
	COMPANY’S SHAREHOLDING STRUCTURE. . . . . . . . . . . . . . . . . .	6
IV.	DETAILS OF PROPOSED AMENDMENTS TO THE ARTICLES
	OF ASSOCIATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
V.	EGM, A SHAREHOLDERS CLASS MEETING AND
	H SHAREHOLDERS CLASS MEETING . . . . . . . . . . . . . . . . . . . . . . .	9
VI.	CLOSURE OF H SHARE REGISTER OF MEMBERS
	OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
**VII. **	RECOMMENDATION OF THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . .	10
**VIII. **	RESPONSIBILITY STATEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
APPENDIX I: DETAILS OF THE NON-PUBLIC ISSUANCE OF
A SHARE (REPRODUCED). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		11

– i –

DEFINITIONS

In this circular, unless the context requires otherwise, the following expressions have the following meaning:

• “A Shareholders”

• holders of A Shares;

• “A Shareholders Class Meeting”

• the 2018 second class meeting of A Shareholders to be held at the headquarter of the Company at 298 South Fushan Road, Zoucheng, Shandong Province 273500, the PRC at 9:30 a.m. on Friday, 24 August 2018 to consider and, if thought fit, approve the extension of the validity period of the resolution relating to the Non-public Issuance of A Shares;

• “A Shares”

• domestic shares in the ordinary share capital of the Company, with a nominal value of RMB1.00 each, which are subscribed for and fully paid in RMB and are listed on the Shanghai Stock Exchange;

• “Articles of Association”

• the articles of association of the Company;

• “Benchmark Price Determination Date”

• the first day of the period of the Non-public Issuance of A Shares;

• “Board”

• the board of Directors of the Company;

• “Company”

• 兗州煤業股份有限公司, Yanzhou Coal Mining Company Limited, a joint stock limited company incorporated in the PRC and the H Shares and A Shares of which are listed on the Hong Kong Stock Exchange and the Shanghai Stock Exchange, respectively;

• “CSRC”

• China Securities Regulatory Commission;

• “Director(s)” directors of the Company;

• “EGM”

• the 2018 second extraordinary general meeting of the Company to be held at the headquarter of the Company at 298 South Fushan Road, Zoucheng, Shandong Province 273500, the PRC at 8:30 a.m. on Friday, 24 August 2018 to consider and, if thought fit, approve, among other things, the extension of the validity period of the resolution and the validity period of the authorisation relating to the Non-public Issuance of A Shares;

• “H Shareholders”

holders of H Shares;

– 1 –

DEFINITIONS

• “H Shareholders Class Meeting” the 2018 second class meeting of H Shareholders to be held at the headquarter of the Company at 298 South Fushan Road, Zoucheng, Shandong Province 273500, the PRC at 10:00 a.m. on Friday, 24 August 2018 to consider and, if thought fit, approve the extension of the validity period of the resolution relating to the Non-public Issuance of A Shares;

• “H Shares” overseas listed foreign invested shares in the ordinary share capital of the Company with a nominal value of RMB1.00 each, which are listed on the Hong Kong Stock Exchange;

• “HK$” Hong Kong dollars, the lawful currency of Hong Kong;

• “Hong Kong”

• The Hong Kong Special Administrative Region of the PRC;

• “Hong Kong Listing Rules” Rules Governing the Listing of Securities on the Stock Exchange;

• “Hong Kong Stock Exchange”

• The Sock Exchange of Hong Kong Limited;

• “Latest Practicable Date”

• 17 July 2018, being the latest practicable date of ascertaining certain information contained in this circular before the issuing of this circular;

• “Price Determination Period”

• the period of 20 A Shares trading days on the Shanghai Stock Exchange immediately prior to the Benchmark Price Determination Date;

• “PRC”

• The People’s Republic of China excluding, for the purpose of this circular only, Hong Kong, Macau Special Administrative Region and Taiwan;

• “Non-public Issuance of A Shares” or “Additional A Shares Issue”

• the proposed non-public issuance of not more than 647,000,000 new A Shares to specific subscribers in the PRC, which shares are proposed to be listed and traded on the Shanghai Stock Exchange, which has been considered and approved at the 2017 Meetings on 25 August 2017;

• “Shareholders”

• the shareholders of the Company;

• “Shares”

A Shares and H Shares

– 2 –

DEFINITIONS

“Yankuang Group” 兗礦集團有限公司, Yankuang Group Company Limited, a state-controlled limited liability company, is the controlling shareholder of the Company holding directly and indirectly approximately 51.81% of the total issued share capital of the Company as at the Latest Practicable Date; “2017 Meetings” the 2017 second extraordinary general meeting, the 2017 third class meeting of the holders of A shares and the 2017 third class meeting of the holders of H shares of the Company held on 25 August 2017; “%” cent.

per cent.

– 3 –

LETTER FROM THE BOARD

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)

Directors: Li Xiyong Li Wei Wu Xiangqian Wu Yuxiang Guo Dechun Zhao Qingchun Guo Jun

Independent non-executive Directors: Kong Xiangguo Cai Chang Poon Chiu Kwok Qi Anbang

Registered office: 298 South Fushan Road Zoucheng Shandong Province PRC Postal Code: 273500

Principal place of business in Hong Kong: 18th Floor, Tesbury Centre 28 Queen’s Road East Wanchai, Hong Kong

25 July 2018

To the Shareholders

Dear Sir or Madam,

(1) PROPOSED EXTENSION OF THE VALIDITY PERIOD OF THE RESOLUTION AND THE VALIDITY PERIOD OF THE AUTHORISATION RELATING TO THE NON-PUBLIC ISSUANCE OF A SHARES; AND (2) PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

I. INTRODUCTION

Reference is made to the announcements of the Company dated 29 June 2018 in relation to the proposed extension of validity period of the resolutions of the Non-public Issuance of A Shares and the extension of validity period of authorisation to the Board granted by the general meeting of Shareholders to deal with, in its absolute discretion, matters relating to the Non-public Issuance of A Shares, and the proposed amendments to the Articles of Association.

– 4 –

LETTER FROM THE BOARD

The purpose of this circular is to provide you with the details of (1) the proposed extension of the validity period of the resolution and the validity period of the authorisation relating to the Non-public Issuance of A Shares; and (2) the proposed amendments to the Articles of Association.

II. DETAILS OF EXTENSION OF THE VALIDITY PERIOD OF THE RESOLUTION AND THE VALIDITY PERIOD OF THE AUTHORISATION RELATING TO THE NON-PUBLIC ISSUANCE OF A SHARES

Reference is made to the announcement dated 31 March 2017, the circular dated 2 June 2017 supplemented by the supplementary circular dated 30 June 2017, the announcements dated 25 August 2017 in relation to the resolutions passed at the 2017 Meetings and the announcement dated 24 April 2018 of the Company in relation to, among other things, the Non-public Issuance of A Shares.

The Company convened the 2017 Meetings on 25 August 2017, at which the “Proposal in relation to the Company’s non-public issuance of shares to specific persons”, the “Proposal in relation to submission to the general meetings to authorise the Board to deal with matters relating to the non-public issuance of shares at its discretion” and other resolutions were considered and approved, thereby approving the Non-public Issuance of A Shares and authorising the Board of the Company to deal with matters relating to the Non-public Issuance of A Shares at its discretion. The validity period of the resolution relating to the Non-public Issuance of A Shares and the validity period of the authorisation are both twelve months from the passing of the relevant resolutions at the 2017 Meetings (i.e., the validity period will expire on 24 August 2018).

As at the Latest Practicable Date, the application of the Company for the Non-public Issuance of A Shares is still under the reviewing process of CSRC. With consideration that the validity period of the resolution relating to the Non-public Issuance of A Shares and the validity period of the authorisation are both about to expire, in order to ensure the smooth progress of the Issuance, the Company held the fifteenth meeting of the seventh session of the Board on 29 June 2018, at which the “Proposal in relation to submission to the general meetings to extend the validity period of the resolution of the non-public issuance of shares of the Company” and the “Proposal in relation to submission to the general meetings to extend the validity period of the authorisation to the Board to deal with matters relating to the non-public issuance of shares at its discretion” were considered and approved, thereby approving the submission to the EGM, the A Shareholders Class Meeting and the H Shareholders Class Meeting to approve to extend the validity of the resolution of the Non-public Issuance of A Shares to 24 August 2019; and approving the submission to the EGM to approve to extend the validity of the authorisation to the Board to deal with matters relating to the Non-public Issuance of A Shares to 24 August 2019.

Saved as above, the other terms of the proposal of the Non-public Issuance of A Shares remain unchanged. Certain information on the Non-public Issuance of A shares as set out in the circular of the Company dated 2 June 2017 and supplemented by the supplementary circular dated 30 June 2017 and the announcement of the Company dated 24 April 2018 is reproduced in the Appendix I to this circular.

– 5 –

LETTER FROM THE BOARD

III. EFFECT OF THE NON-PUBLIC ISSUANCE OF A SHARES ON THE COMPANY’S SHAREHOLDING STRUCTURE

The following table sets out the shareholding structure of the Company as at the Latest Practicable Date and immediately after completion of the Non-public Issuance of A Shares, assuming that 647,000,000 new A Shares in aggregate will be issued under the Non-public Issuance of A Shares and no other change to the shareholding structure of the Company before completion of the Non-public Issuance of A Shares:

Name of Shareholder Yankuang Group and its associates_(Note 1) Including: A Shares H Shares Other Shareholders Including: A Shares H Shares Total _Notes:	As at the Latest Practicable Date Number of Shares in issue % (Note 2) (approx.) 2,545,158,423 51.81% 2,267,169,423 46.16% 277,989,000 5.66% 2,366,857,577 48.19% 692,830,577 14.10% 1,674,027,000 34.08% 4,912,016,000 100%	Immediately following completion of the Non-public Issuance of A Shares Number of Shares in issue % (Note 2) (approx.) 2,545,158,423 45.78% 2,267,169,423 40.78% 277,989,000 5.00% 3,013,857,577 54.22% 1,339,830,577 24.10% 1,674,027,000 30.11% 5,559,016,000 100%	Immediately following completion of the Non-public Issuance of A Shares Number of Shares in issue % (Note 2) (approx.) 2,545,158,423 45.78% 2,267,169,423 40.78% 277,989,000 5.00% 3,013,857,577 54.22% 1,339,830,577 24.10% 1,674,027,000 30.11% 5,559,016,000 100%
			100%

1. As at the Latest Practicable Date, Yankuang Group directly held 2,267,169,423 A Shares, representing 46.16% of the total issued share capital of the Company; the wholly-owned subsidiary of Yankuang Group incorporated in Hong Kong held 277,989,000 H Shares, representing 5.66% of the total issued share capital of the Company. Yankuang Group and its wholly-owned subsidiary incorporated in Hong Kong held in aggregate 2,545,158,423 Shares, representing 51.81% of the total issued share capital of the Company.

2. The percentages are subject to rounding differences, if any.

The Non-public Issuance of A Shares will not lead to any change in the control over the Company and Yankuang Group will remain as the controlling Shareholder of the Company upon completion of the Non-public Issuance of A Shares.

IV. DETAILS OF PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION

The proposal in relation to the proposed amendments to the Articles of Association was approved in the fifteenth meeting of the seventh session of the Board, and the Board agreed submit the same to the EGM for consideration and approval.

– 6 –

LETTER FROM THE BOARD

The Company proposed to amend the Articles of Association in accordance with the revision made by the Hong Kong Stock Exchange to the calculating method of total market capitalisation for PRC “A+H shares” listed companies in determining the consideration ratio pursuant to Article 14.07(4) of the Hong Kong Listing Rules, and with the actual operating conditions of the Company taken into account.

Details of the proposed amendments to the Articles of Association are set out as follows:

1. The original Paragraph 2 of Article 12 of the Articles of Association

“The business scope of the company includes: selection and sale of coal (among others, the export of coal should be made through companies with coal export right according to the existing state regulations); transportation of goods through self-owned railway within the mining area; transportation of goods through highway; operation of ports; manufacture, sale, lease, repair, installation and dismantlement of machinery and equipments in the mining area; production and sale of other mining materials; sale and lease of electronic equipments and sale of parts; sale of metallic materials, electronic products, construction materials, timber, rubber products and methanol; composition of mining, science and technological services; property development within the mining areas, property leasing and provision of services such as dining and accommodation; production and sale of coal residual stones as construction materials; sale of coke and iron ore; import and export of goods and technology; warehousing; automobile repairs; labour dispatch; property management service, landscaping, sewage treatment; heat supply.”

The above paragraph is proposed to be amended as follows:

“The business scope of the company includes: selection and sale of coal (among others, the export of coal should be made through companies with coal export right according to the existing state regulations); outbound investment, management and operation using the company’s own fund; investment consulting; commission business; transportation of goods through self-owned railway within the mining area; transportation of goods through highway; operation of ports; manufacture, sale, lease, repair, installation and dismantlement of machinery and equipments in the mining area; production and sale of other mining materials; sale and lease of electronic equipments and sale of parts; leasing of construction mechanical equipment; sale of metallic materials, electronic products, construction materials, timber, rubber products and methanol; production and sale of cold patch, soap, anchoring agent and coat; composition of mining, science and technological services; mining rescue technology services; property development within the mining areas, property leasing and provision of services such as dining and accommodation; production and sale of coal residual stones as construction materials; sale of coke, iron ore and nonferrous metals; import and export of goods and technology; warehousing; automobile repairs; labour dispatch; property management service, landscaping, sewage treatment; heat supply; industrial tourism; corporate training (skills training for first aid team members, manufacturing technology training, safety training); school running for technician education and adult continuing education; measurement examination, physical and chemical inspection, non-destructive testing, analytical testing, manufacturing safety testing and inspection;

– 7 –

LETTER FROM THE BOARD

project investment; asset management; corporate management; investment management; corporate management consulting; corporate planning and design; market investigation; economic and trade consulting; technology promotion, technology services; sale of lubricating oil, lubricating grease, chemical raw material and chemical engineering products (excluding dangerous chemical products), coat, labour protection products, spinning products, cultural and educational products, plastic products, instruments and apparatuses, cement and fire-resistant materials and products.”

2. The original Subparagraph 2, Paragraph 1 of Article 171 of the Articles of Association

“a single transaction of which the completion consideration (including liabilities and expenses) accounts for more than 10% and below 50% of the Company’s latest audited net asset value prepared in accordance with the PRC GAAP; or more than 5% and less than 25% of the total market capitalization of the Company (which is calculated by the average closing price of the Company’s shares as stated in the Hong Kong Stock Exchange’s daily quotations sheets for the five business days immediately preceding the date of a transaction);”

The above paragraph is proposed to be amended as follows:

“a single transaction of which the completion consideration (including liabilities and expenses) accounts for more than 10% and below 50% of the Company’s latest audited net asset value prepared in accordance with the PRC GAAP; or more than 5% and less than 25% of the total market capitalization of the Company (which is calculated by the respective average closing price of the Company’s relevant class shares for the five business days immediately preceding the date of the transaction);”

3. The original Subparagraph 2, Paragraph 1 of Article 190 of the Articles of Association

“a single transaction of which the completion consideration (including liabilities and expenses) accounts for less than 10% of the Company’s latest audited net asset value prepared in accordance with the PRC GAAP; or less than 5% of the total market capitalization of the Company (which is calculated by the average closing price of the Company’s shares as stated in the Hong Kong Stock Exchange’s daily quotations sheets for the five business days immediately preceding the date of the transaction);”

The above paragraph is proposed to be amended as follows:

“a single transaction of which the completion consideration (including liabilities and expenses) accounts for less than 10% of the Company’s latest audited net asset value prepared in accordance with the PRC GAAP; or less than 5% of the total market capitalization of the Company (which is calculated by the respective average closing price of the Company’s relevant class shares for the five business days immediately preceding the date of the transaction);”

– 8 –

LETTER FROM THE BOARD

V. EGM, A SHAREHOLDERS CLASS MEETING AND H SHAREHOLDERS CLASS MEETING

The Company will convene the EGM, the A Shareholders Class Meeting and the H Shareholders Class Meeting. The “Proposal in relation to submission to the general meetings to extend the validity period of the resolution of the non-public issuance of shares of the Company” will be submitted to the EGM, the A Shareholders Class Meeting and the H Shareholders Class Meeting for consideration and approval by way of a special resolution. The “Proposal in relation to submission to the general meetings to extend the validity period of the authorisation to the Board to deal with matters relating to the non-public issuance of shares at its discretion” will be submitted to the EGM for consideration and approval by way of a ordinary resolution, and the “Proposal in relation to the amendments of the Articles of Association of Yanzhou Coal Mining Company Limited” will be submitted to the EGM for consideration and approval by way of a special resolution.

The notices of the EGM, the A Shareholders Class Meeting and the H Shareholders Class Meeting containing, among others, details of the above resolutions have been despatched to the Shareholders on 6 July 2018.

The forms of proxy and the reply slips for the EGM, the A Shareholders Class Meeting and the H Shareholders Class Meeting have been despatched to the Shareholders on 6 July 2018. Whether or not you intend to attend the EGM, the A Shareholders Class Meeting and the H Shareholders Class Meeting, you are requested to complete and return the appropriate form(s) of proxy in accordance with the instructions printed thereon as soon as possible and in any event not less than 24 hours before the time appointed for holding such meeting(s) (or any adjournment thereof).

To the best knowledge and belief of the Directors, none of the Shareholders would be required to abstain from voting on the proposed resolutions at the EGM, the A Shareholders Class Meeting and the H Shareholders Class Meeting.

It should be noted that in addition to the approvals being sought from the Shareholders at the EGM, the A Shareholders Class Meeting and the H Shareholders Class Meeting, the Non-public Issuance of A Shares is also subject to approval by CSRC. There is no assurance that the Non-public Issuance of A Shares will proceed. Investors are advised to exercise caution in dealing in H Shares. Further details of the Non-public Issuance of A Shares will be disclosed by the Company when the Non-public Issuance of A Shares materializes according to the Hong Kong Listing Rules and other applicable laws and regulations. This circular is for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities in the Company.

VI. CLOSURE OF H SHARE REGISTER OF MEMBERS OF THE COMPANY

The H Share register of members of the Company will be closed from Thursday, 26 July 2018 to Friday, 24 August 2018 (both days inclusive), during which period no transfer of the Company’s H Shares will be registered for the purpose of ascertaining the eligibility of Shareholders to attend the EGM and the H Shareholders Class Meeting. In order to attend

– 9 –

LETTER FROM THE BOARD

the EGM and the H Shareholders Class Meeting, all share transfers, accompanied by the relevant share certificates, must be lodged for registration with the Company’s H Share Registrar, Hong Kong Registrars Limited, at shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong, no later than 4:30 p.m. on Wednesday, 25 July 2018 for registration. H Shareholders whose names appear on the H Share register of members of the Company maintained by Hong Kong Registrars Limited at the close of business on Wednesday, 25 July 2018 will be eligible to attend the EGM and the H Shareholders Class Meeting.

VII. RECOMMENDATION OF THE BOARD

The Board considers that the resolutions regarding extension of the validity period of the resolution and the validity period of the authorisation relating to the Non-public Issuance of A Shares and the proposed amendments to the Articles of Association are in the interest of the Company and the Shareholders as a whole. Accordingly, the Board recommends the Shareholders to vote in favour of such resolutions to be proposed at the EGM, the A Shareholders Class Meeting and/or the H Shareholders Class Meeting.

VIII. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Hong Kong Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

By order of the board of directors Yanzhou Coal Mining Company Limited Li Xiyong Chairman

– 10 –

DETAILS OF THE NON-PUBLIC ISSUANCE OF A SHARE (REPRODUCED)

APPENDIX I

The following information is reproduced from the circular of the Company dated 2 June 2017 and supplemented by the supplementary circular dated 30 June 2017 and the announcement of the Company dated 24 April 2018.

ADDITIONAL A SHARES ISSUE

The Company proposes to issue not more than 647,000,000 new A Shares, representing approximately 21.86% and 13.17% of the total number of A Shares and the total number of shares of the Company respectively, assuming that no other change occurs to the shareholding structure of the Company before completion of the Additional A Shares Issue. The Company will seek an extension of specific mandate in respect of the Additional A Shares Issue from the Shareholders which will be valid for 12 months from the passing of the relevant resolutions at the EGM, A Shareholders Class Meeting and H Shareholders Class Meeting. The proceeding of the Additional A Shares Issue is subject to, among other things, the necessary approval from the CSRC being obtained. Specific terms of the Additional A Shares Issue will be determined in accordance with the approval from the CSRC.

The new A Shares under the Additional A Shares Issue are proposed to be issued to not more than ten specific investors, including securities investment fund management companies, securities companies, trust investment companies, finance companies, insurance institutional investors, qualified foreign institutional investors, other local legal entity institutional investors and individual investors that satisfy the requirements stipulated by the CSRC. A securities investment fund management company subscribing through more than one fund managed by it will be regarded as one subscriber. Subscribers who are trust investment companies may only pay the subscription money with their own funds. To the best knowledge, information and belief of the Directors, the target subscribers are third parties independent of the Company and its connected persons.

The final list of target subscribers will be determined under the principle of price priority based on the offers made by the subscribers after the Company obtains the approval in respect of the Additional A Shares Issue from the CSRC. A proposal will be submitted to the general meeting to authorize the Board to determine the specific target subscribers.

1. Class and nominal value of shares to be issued

The shares of the Company to be issued under the Additional A Shares Issue are A Shares with the nominal value of RMB1.00 per A Share.

2. Method and time of the issue

All new A Shares under the Additional A Shares Issue will be offered to specific investors by way of non-public issuance, which shall be implemented as appropriate within six months from the date of obtaining the approval from the CSRC in respect of the Additional A Shares Issue.

– 11 –

DETAILS OF THE NON-PUBLIC ISSUANCE OF A SHARE (REPRODUCED)

APPENDIX I

3. Issue price and pricing principle

The Benchmark Price Determination Date of the new A Shares under the Additional A Shares Issue is the first day of the issue period of the Additional A Shares Issue.

The issue price of the new A Shares under the Additional A Shares Issue will be no less than 90% of the average trading price per A Share as quoted on the Shanghai Stock Exchange during the Price Determination Period (which is calculated by dividing the total turnover of the A Shares during the Price Determination Period by the total trading volume of the A Shares during the same period).

The base issue price of the new A Shares to be issued under the Additional A Shares Issue will be adjusted in case of any other ex-rights or ex-dividend matters during the period from the Benchmark Price Determination Date to the date of issuing such new A Shares. After necessary approvals for the Additional A Shares Issue from the CSRC are obtained and in accordance with the provisions of relevant laws and regulations and the requirements from the regulatory authorities, the final actual issue price will be determined by the Board pursuant to the authorization to be granted by the Shareholders in consultation with the sponsor (lead underwriter) and having regard to the offers made by the subscribers.

The net price to the Company of each new A Share to be issued under the Additional A Shares Issue will be determined and disclosed in accordance with the requirements of the Hong Kong Listing Rules upon completion of the Additional A Shares Issue and the determination of the relevant expenses incurred or to be incurred in relation to the Additional A Shares Issue. As at 31 March 2017, being the date of announcement of the Company in relation to the Additional A Shares Issue, the closing price of H Shares was HK$6.04 per H Share and the closing price of A Shares was RMB11.40 per A Share. As at 26 May 2017, being the latest practicable date of the circular of the Company dated 2 June 2017, the closing price of H Shares was HK$6.04 per H Share and the closing price of A Shares was RMB10.6 per A Share.

Besides the abovementioned average trading price during the Price Determination Period, the final issue price is also subject to the requirement under the Company Law in the PRC, which stipulates that issue price of Shares cannot be less than its nominal value (i.e. RMB1.00); for reference only, the 2016 audited net asset value per Share of the Company was RMB7.56 (calculated based on the audited net asset value of the Company as at 31 December 2016 as disclosed in the 2016 annual report of the Company and rounded to the nearest two decimal places).

The Company expects that the final issue price of the new A Shares under the Additional A Shares Issue will not be less than 20% discount to the closing price of H shares as at 26 May 2017, being the latest practicable date of the circular of the Company dated 2 June 2017, (i.e. HK$4.832). Further announcement regarding the final issue price will be made by the Company as and when appropriate.

– 12 –

DETAILS OF THE NON-PUBLIC ISSUANCE OF A SHARE (REPRODUCED)

APPENDIX I

4. Number of new A shares to be issued

The Company proposes to issue not more than 647,000,000 new A Shares (inclusive) with an aggregate nominal value of not more than RMB647,000,000, representing (i) approximately 13.17% and 21.86% of the total number of shares and the total number of A Shares of the Company respectively as at the Latest Practicable Date, assuming that no other change occurs to the shareholding structure of the Company before completion of the Additional A Shares Issue and (ii) approximately 11.64% and 17.94% of the total number of shares and the total number of A Shares as enlarged by the number of new A Shares to be issued pursuant to the Additional A Shares Issue (assuming that the maximum number of 647,000,000 new A Shares are issued and subscribed for and no other change occurs to the shareholding structure of the Company before completion of the Additional A Shares Issue).

The maximum number of new A Shares to be issued under the Additional A Shares Issue will be adjusted in case of ex-rights matters such as distribution of dividends and issue of shares by conversion of capital reserve during the period from the date of the board resolutions approving the Additional A Shares Issue (i.e. 31 March 2017) to the date of issuance. Within the abovementioned scope, the actual number of new A Shares to be issued will be determined by the Board pursuant to the authorization to be granted by the Shareholders and in consultation with the sponsor (lead underwriter) and having regard to the market conditions at the time of issue.

5. Use of proceeds

The amount of gross proceeds from the Additional A Shares Issue is expected to be not more than RMB6,350,000,000. The Company intends to use such proceeds (after deducting the expenses for the issuance) for the following purpose:

		Proposed
	Total amount	amount of
	of capital	proceeds to be
Intended use of proceeds	required	applied
	(RMB)	(RMB)
Acquisition of 100% of the share capital of
Coal & Allied Industries Limited (“C&A”)	15,557,500,000	6,350,000,000
	(Note)

Note: The total investment amount for the acquisition of 100% of the share capital of C&A will be US$2.45 billion. The total amount of capital required in this table is calculated based on an exchange rate of US$1.00 = RMB6.35.

The net proceeds will not exceed the amount of capital required by the abovementioned project. In the event that the actual amount of proceeds is less than the amount of capital required by the Project, the Company will fund the shortfall with its self-raised funds. In the event that the availability of the proceeds is inconsistent with implementation schedule of the Project, the Company may fund the project with other

– 13 –

DETAILS OF THE NON-PUBLIC ISSUANCE OF A SHARE (REPRODUCED)

APPENDIX I

funds according to actual situation in advance, which capital shall then be exchanged with the proceeds when they are available in compliance with the requirements and procedures as prescribed by the relevant laws and regulations.

As disclosed in the announcement of the Company dated 24 January 2017 in relation to the Acquisition and the announcement of the Company dated 24 April 2018, the abovementioned project of the acquisition of 100% of the share capital of C&A was implemented by Yancoal Australia, a subsidiary controlled by the Company. The Company subscribed for the rights issue undertaken by Yancoal Australia and injected the funds into Yancoal Australia.

6. Lock-up period

The subscribers who subscribe for the new A Shares under the Additional A Shares Issue shall not dispose any of such A Shares within a period of 12 months from the date of completion of the issuance (the “Lock-up Period”). The Company will apply for listing of and permission to deal in the new A Shares under the Additional A Shares Issue on the Shanghai Stock Exchange after the expiration of the Lock-up Period.

7. Arrangement relating to the accumulated undistributed profits

Upon completion of the Additional A Shares Issue, holders of the new A Shares, together with all existing Shareholders, will be entitled to all undistributed profits of the Company accumulated prior to completion of the Additional A Shares Issue.

8. Validity of resolution

The resolution regarding the Additional A Shares Issue will be valid for 12 months following the approval of the Additional A Shares Issue at the EGM, A Shareholders Class Meeting and H Shareholders Class Meeting.

9. Place of listing

The new A Shares to be issued under the Additional A Shares Issue will be listed and traded on the Shanghai Stock Exchange upon expiration of the Lock-up Period.

10. Method of subscription

All new A Shares to be issued under the Additional A Shares Issue shall be subscribed for in cash.

– 14 –