Zhengzhou Coal Mining Machinery : PROPOSED ADOPTION OF THE 2019 A SHARE OPTION INCENTIVE SCHEME; PROPOSED AMENDMENT TO THE ARTICLES OF ASSOCIATION IN RELATION TO THE COMPOSITION OF THE BOARD OF DIRECTORS; PROPOSED ELECTION OF A NEW INDEPENDENT NON-EXECUTIVE DIRECTOR; AND NOTICE OF THE SECOND EXTRAORDINARY GENERAL MEETING OF 2019; NOTICE OF THE FIRST H SHAREHOLDERS CLASS MEETING OF 2019

September 20, 2019 at 06:02 am EDT

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or otherwise transferred all your shares in Zhengzhou Coal Mining Machinery Group Company Limited, you should at once hand this circular and the enclosed form of proxy and reply slip to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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 appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities of Zhengzhou Coal Mining Machinery Group Company Limited.

Zhengzhou Coal Mining Machinery Group Company Limited

鄭州煤礦機械集團股份有限公司

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

(Stock Code: 00564)

PROPOSED ADOPTION OF THE 2019 A SHARE OPTION INCENTIVE SCHEME

PROPOSED AMENDMENT TO THE ARTICLES OF ASSOCIATION

IN RELATION TO THE COMPOSITION OF THE BOARD OF DIRECTORS

PROPOSED ELECTION OF A NEW INDEPENDENT NON-EXECUTIVE DIRECTOR

AND

NOTICE OF THE SECOND EXTRAORDINARY GENERAL MEETING OF 2019

NOTICE OF THE FIRST H SHAREHOLDERS CLASS MEETING OF 2019

Zhengzhou Coal Mining Machinery Group Company Limited will convene the EGM and the H Shareholders Class Meeting at Convention Centre, Office Building of Zhengzhou Coal Mining Machinery Group Company Limited, No. 167, 9th Street, Econ-Tech Development Zone, Zhengzhou, Henan Province, the PRC at 9:00 a.m. on Monday, 21 October 2019. Notices of the EGM and the H Shareholders Class Meeting are set out in this circular.

Reply slips and forms of proxy for the use at the EGM and H Shareholders Class Meeting are enclosed to this circular. Both are published on the websites of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the Company (www.zzmj.com). If you intend to attend the EGM and H Shareholders Class Meeting in person or by proxy, please complete the reply slips in accordance with the instructions printed thereon and return the same on or before Tuesday, 1 October 2019 by personal delivery, mail or facsimile, to the Company's H Share registrar, Computershare Hong Kong Investor Services Limited, 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong. Any Shareholder who intends to appoint a proxy to attend the EGM and the H Shareholders Class Meeting shall complete the forms of proxy in accordance with the instructions printed thereon and return the same to the H Share registrar, Computershare Hong Kong Investor Services Limited, 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong not less than 24 hours before the time fixed for holding the EGM and the H Shareholders Class Meeting or any adjournment thereof (as the case may be) (i.e. by 9:00 a.m. on Sunday, 20 October 2019 (Hong Kong time)). Completion and return of the forms of proxy will not preclude you from attending the EGM and the H Shareholders Class Meeting and voting in person if you so wish.

23 September 2019

	CONTENTS
		Page
Definitions . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
APPENDIX I	ADMINISTRATIVE MEASURES FOR
	PERFORMANCE EVALUATION (REVISION)
	UNDER THE 2019 SHARE OPTION INCENTIVE
	SCHEME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	App I-1
APPENDIX II	PARTICIPANT LIST OF THE 2019 SHARE OPTION
	INCENTIVE SCHEME (ADJUSTED) . . . . . . . . . . . . .	App II-1
NOTICE OF THE SECOND EXTRAORDINARY GENERAL
MEETING OF 2019	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	EGM-1
NOTICE OF THE FIRST H SHAREHOLDERS CLASS
MEETING OF 2019	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	SGM-1

- i -

DEFINITIONS

In this circular, the following expressions shall have the following meanings unless the

context otherwise requires:

"2019 Scheme", "Scheme" or	the proposed 2019 share option incentive scheme of A
"Share Option Incentive	Shares of the Company (revised draft)
Scheme"
"A Share(s)"	the ordinary share(s) in the registered share capital of
	the Company with a par value of RMB1.00 each,
	which are listed and traded on the Shanghai Stock
	Exchange
"A Shareholder(s)"	holder(s) of A Shares
"A Shareholders Class Meeting"	the A shareholders class general meeting of the
	Company to be convened at the Convention Centre,
	Office Building of Zhengzhou Coal Mining Machinery
	Group Company Limited, No. 167, 9th Street,
	Econ-Tech Development Zone, Zhengzhou, Henan
	Province, the PRC at 9:00 a.m. on Monday, 21 October
	2019 or any adjournment thereof
"Administrative Measures"	the Administrative Measures for Equity Incentives of
	Listed Companies issued by the CSRC
"Announcements"	the Company's (i) two H share announcements dated
	26 July 2019 and 9 August 2019 relating to, amongst
	others, the proposed adoption of the 2019 A Share
	Option Incentive Scheme and its related amendments;
	(ii) the announcement dated 28 August 2019 in
	relation to the amendment to the articles of
	association in relation to the composition of the board
	of directors; (iii) the announcement dated 28 August
	2019 in relation to the election of a new independent
	non-executive director
"Articles of Association"	the articles of association of the Company
"Board"	the board of directors of the Company
"Class Meetings"	A Shareholders Class Meeting and H Shareholders
	Class Meeting

- 1 -

	DEFINITIONS

"Company" or "ZMJ"	Zhengzhou Coal Mining Machinery Group Company
	Limited (鄭州煤礦機械集團股份有限公司), a joint stock
	limited company incorporated in the PRC with
	limited liability, its H Shares are listed on the Hong
	Kong Stock Exchange (stock code: 00564) and its A
	Shares are listed on the Shanghai Stock Exchange
	(stock code: 601717)
"Company Law"	the Company Law of the People's Republic of China
"connected person(s)"	has the meaning ascribed to it under the Listing Rules
	or the relevant PRC laws and regulations (as the case
	may be)
"controlling shareholder"	has the meaning ascribed to it under the Listing Rules
"CSRC"	China Securities Regulatory Commission
"Date of Grant"	the date on which the Company grants the Share
	Options to the Participants, which must be a trading
	day and must be within 60 days after the 2019 Scheme
	is approved by the Shareholders
"Director(s)"	the directors of the Company
"Exercise Date"	the date on which the Participants are entitled to
	exercise the Share Options, which must be a trading
	day
"Extraordinary General	the extraordinary general meeting of the Company to
Meeting" or "EGM"	be convened at Convention Centre, Office Building of
	Zhengzhou Coal Mining Machinery Group Company
	Limited, No. 167, 9th Street, Econ-Tech Development
	Zone, Zhengzhou, Henan Province, the PRC at 9:00 a.m.
	on Monday, 21 October 2019 or any adjournment
	thereof, the notice of which is set out on pages EGM-1 to
	EGM-3 in this circular
"H Share(s)"	the overseas listed foreign shares in the ordinary share
	capital of the Company with a par value of RMB1.00
	each, denominated in Hong Kong dollar and listed on
	the Main Board of the Hong Kong Stock Exchange
"H Shareholder(s)"	holder(s) of H Shares

- 2 -

	DEFINITIONS

"H Shareholders Class Meeting"	the H shareholders class meeting of the Company to be
	convened at the Convention Centre, Office Building of
	Zhengzhou Coal Mining Machinery Group Company
	Limited, No. 167, 9th Street, Econ-Tech Development
	Zone, Zhengzhou, Henan Province, the PRC at 9:00 a.m.
	on Monday, 21 October 2019 or any adjournment
	thereof, the notice of which is set out on pages SGM-1 to
	SGM-3 in this circular
"Hong Kong"	the Hong Kong Special Administrative Region of the
	PRC
"Hong Kong Stock Exchange"	The Stock Exchange of Hong Kong Limited
"Listing Rules"	Rules Governing the Listing of Securities on The Stock
	Exchange of Hong Kong Limited
"Lock-up Period"	the period in which the transfer of the Shares
	subscribed by the Participants under the Scheme is
	prohibited
"Participant(s)"	person(s) granted the Share Options under the 2019
	Scheme
"Performance Evaluation	the Administrative Measures for Performance
Measures"	Evaluation (Revision) under the 2019 Share Option
	Incentive Scheme of Zhengzhou Coal Mining
	Machinery Group Company Limited
"PRC"	the People's Republic of China
"Proposed Grant"	the proposal to grant no more than 16,030,000 Share
	Options to the Participants under the 2019 Scheme
"RMB"	Renminbi, the lawful currency of the PRC
"Securities Law"	the Securities Law of the People's Republic of China
"Shanghai Listing Rules"	Rules Governing the Listing of Stocks on the Shanghai
	Stock Exchange
"Shanghai Stock Exchange"	the Shanghai Stock Exchange
"Share(s)"	A Shares and H Shares, or one of them (where the
	context so requires)

- 3 -

	DEFINITIONS

"Share Option(s)"	the right granted to the Participants to purchase a
	certain number of A Shares of the Company under
	certain conditions at a predetermined price for a
	specified period of time in accordance with the 2019
	Scheme
"Shareholder(s)"	the holder(s) of Share(s)
"Shareholders' Meetings"	the Extraordinary General Meeting and Class Meetings
	of the Company
"Significant Event(s) With a	transactions or any other significant events that are
Material Impact"	required to be disclosed in accordance with the
	Shanghai Listing Rules or the Listing Rules
"Supervisor(s)"	the supervisor(s) of the Company
"trading day(s)"	a day on which the Shanghai Stock Exchange or the
	Hong Kong Stock Exchange (as the case may be) is open
	for dealing or trading in securities
"Validity Period"	the validity period of the 2019 Scheme
"Vesting Period"	the period from the registration date for the grant of
	Share Options to the first Exercise Date
"%"	per cent

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LETTER FROM THE BOARD

Zhengzhou Coal Mining Machinery Group Company Limited

鄭州煤礦機械集團股份有限公司

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

(Stock Code: 00564)
Members of the Board	Registered Office
Executive Directors:	No. 167, 9th Street,
Mr. JIAO Chengyao	Econ-Tech Development Zone
Mr. JIA Hao	Zhengzhou, Henan Province
Mr. XIANG Jiayu	PRC
Mr. FU Zugang
Mr. WANG Xinying	Principal Place of Business in
Mr. WANG Bin	Hong Kong
	40/F, Sunlight Tower,
Independent Non-executive Directors:	No. 248 Queen's Road East,
Ms. LIU Yao	Wanchai, Hong Kong
Mr. JIANG Hua
Mr. LI Xudong
	23 September 2019
To the Shareholders
Dear Sir or Madam,

PROPOSED ADOPTION OF THE 2019 A SHARE OPTION INCENTIVE SCHEME

PROPOSED AMENDMENT TO THE ARTICLES OF ASSOCIATION

IN RELATION TO THE COMPOSITION OF THE BOARD OF DIRECTORS

PROPOSED ELECTION OF A NEW INDEPENDENT NON-EXECUTIVE DIRECTOR

AND

NOTICE OF THE SECOND EXTRAORDINARY GENERAL MEETING OF 2019

NOTICE OF THE FIRST H SHAREHOLDERS CLASS MEETING OF 2019

INTRODUCTION

References are made to (i) the Announcements relating to, amongst others, the proposed adoption of the 2019 A Share Option Incentive Scheme and its related amendments, the proposed amendment to the articles of association in relation to the composition of the board of directors and the proposed election of a new independent non-executive director; and (ii) the notice of Extraordinary General Meeting and the notice of H Shareholders Class Meeting dated 5 September 2019. Unless otherwise specified, capitalised terms used in this circular shall have the same meanings as those

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LETTER FROM THE BOARD

defined in the Announcements. The purpose of this circular is to provide you with, amongst others, other information so as to enable you to make informed decisions as to whether to vote for or against the following resolutions to be proposed at the EGM and the H Shareholders Class Meeting:

The resolution in relation to the 2019 Share Option Incentive Scheme (Revised Draft) of Zhengzhou Coal Mining Machinery Group Company Limited and its abstract;
The resolution in relation to the Administrative Measures for Performance Evaluation (Revision) under the 2019 Share Option Incentive Scheme of Zhengzhou Coal Mining Machinery Group Company Limited;
The resolution in relation to seeking authorization from the shareholders of the Company in the general meeting to be granted to the Board for handling issues in connection with the 2019 Share Option Incentive Scheme;
The resolution on amendments to the Articles of Association of the Company in relation to the composition of the Board; and
The resolution in relation to the additional appointment of an independent non-executive Director of the fourth session of the Board of the Company.

1. PROPOSED ADOPTION OF THE 2019 A SHARE OPTION INCENTIVE SCHEME

PURPOSE OF THE SHARE OPTION INCENTIVE SCHEME

In order to implement the national policies on deepening the reform of state-owned enterprises and documents such as the Notice by the State Council of Issuing the Plan for Reforming the State-owned Capital Authorized Operation System (Guo Fa [2019] No.9) 《( 關於印發改革國有資本授權經營體制方案的通知》(國發[2019]9號)) and the Notice by the State-owned Assets Supervision and Administration Commission of the State Council on Issuing the "Double-Hundred" Work Plan for the Reform of State-owned Enterprises (Guo Zi Fa Yan Jiu [2018] No.70) 《( 關於印發國企改革「雙百行動」工作方案的通知》國資發研究 [2018]70號), further improve the corporate governance structure of the Company, promote the establishment and perfection of the distribution mechanism that combines incentives and restraints, fully mobilize the Directors, senior management, core management and core technicians and key business personnel of the Company, effectively align the interests of Shareholders and the Company with the personal interests of the management, facilitate the Company in releasing new vitality in sustainable development as well as promote the sustainable development of the Company, the Company has prepared the Scheme in accordance with relevant laws, regulations and administrative and regulatory documents such as the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China, the Administrative Measures for Equity Incentives of Listed Companies 《( 上市公司股權激勵管理辦法》), the Measures for Equity Incentives of State-controlled Listed Companies (Onshore) (Trial) 《( 國有控股上市公司（境內）實施股權激勵試行辦法》), the Notice on Issues concerning Regulating the Implementation of the

- 6 -

LETTER FROM THE BOARD

Equity Incentive System by State-controlled Listed Companies 《( 關於規範國有控股上市公司實施股權激勵制度有關問題的通知》) and the Articles of Association of Zhengzhou Coal Mining Machinery Group Company Limited.

SOURCE OF SHARES UNDER THE SHARE OPTION INCENTIVE SCHEME

The source of the underlying Shares of the Scheme shall be ordinary A Shares in RMB to be directly issued by the listed company to the Participants.

NUMBER OF OPTIONS PROPOSED TO BE GRANTED

The number of Share Options proposed to be granted to the Participants under the Scheme is no more than 16,030,000, amounting to 0.93% of the total share capital of the Company (i.e. 1,732,471,370 Shares) as at the date of announcement of the Scheme.

In the event that the exercise conditions are fulfilled, every Share Option granted to the Participants is entitled to the right to purchase one A Share of the Company at the exercise price during the exercise period.

The total number of Shares of the Company granted to any Participant under the Scheme within the validity periods of all equity incentive schemes of the Company shall in aggregate not exceed 1% of the Company's total share capital and 1% of the Company's total issued A share capital at the date on which the Scheme was approved at the Shareholders' Meetings. The total number of A Shares to be granted within the validity periods of all equity incentive schemes of the Company shall not exceed 10% of the Company's total share capital and 10% of the total issued A share capital of the Company at the date on which the Scheme was approved at the Shareholders' Meetings.

IV. SCOPE OF THE PARTICIPANTS AND RESPECTIVE NUMBERS OF OPTIONS GRANTED

Basis for Determining the Participants
1. Legal Basis for Determining the Participants

The Participants of the Scheme are determined in accordance with relevant laws, regulations and administrative and regulatory documents such as the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China, the Administrative Measures for Equity Incentives of Listed Companies 《( 上市公司股權激勵管理辦法》), the Measures for Equity Incentives of State-controlledListed Companies (Onshore) (Trial) 《( 國有控股上市公司（境內）實施股權激勵試行辦法》), the Notice on Issues concerning Regulating the Implementation of the Equity Incentive System by State-controlledListed Companies 《( 關於規範國有控股上市公司實施股權激勵制度有關問題的通知》) as well as the relevant provisions of the Articles of Association of Zhengzhou Coal Mining Machinery Group Company Limited, taking into account the actual situation of the Company.

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LETTER FROM THE BOARD

2. The Basis of Employment Titles for Determining the Participants

In principle, the Participants of the Scheme are limited to the directors, senior management, core management and core personnel of the listed company (including core personnel for research and development, sales and management), exclusive of any external Directors (including independent Directors) and Supervisors.

Scope of the Participants

There are 333 Participants involved in the Scheme in total, the coverage of which includes:

Directors, and senior management of the Company; and
Core management and core personnel of the Company's headquarters and relevant business segments (including core personnel for research and development, sales and management).

In respect of the abovementioned Participants, any such Directors and senior management must have been elected at the Shareholders' Meetings or appointed by the Board of the Company. The Participants do not include the external Directors (including the independent Directors), the Supervisors and any Shareholders or actual controllers individually or jointly holding more than 5% of the Shares of the Company with their respective spouse, parents and children. All the Participants shall be employed as on-the-job staff by and have entered into a labor contract or an employment contract with the Company or the subsidiaries of the Company upon the grant of the Share Options and during the performance evaluation period of the Scheme.

People with one of the following circumstances shall not be qualified as Participants:

those who held by a stock exchange to be unsuitable for the relevant post(s) in the last 12 months;
those who held by the CSRC or its local bureaus as unsuitable for the relevant post(s) in the last 12 months;
those imposed with administrative penalties or measures by the CSRC or any of its local bureaus prohibiting their market access in the last 12 months over material violation of laws and regulations;
those prohibited from acting as a Director or a member of the senior management of the Company under the Company Law;
those prohibited from participating in any equity incentive of a listed company under laws and regulations; and
such other circumstances as determined by the CSRC.

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LETTER FROM THE BOARD

Verification of the Participants
1. Upon consideration and approval of the Scheme by the Board, the Company shall publish the names and positions of the Participants internally for a period of not less than 10 days.
2. The Board of Supervisors of the Scheme shall verify the list of Participants and thoroughly consider opinions from the public. The Company shall disclose the explanation of review and disclosure of the list of the Participants by the Board of Supervisors 5 days before the Scheme is considered at the Shareholders' Meetings of the Company. The list of Participants adjusted by the Board of the Company shall also be verified by the Board of Supervisors of the Company.
Proposed List of Participants and Distribution of the Options to be Granted

				Percentage	Percentage
				of the	of the
				Number of	Existing
		Number of	Share	Total Share
		Share	Options	Capital of
		Options to	under this	the
Name	Position(s)	be Granted	Grant	Company
		(0'000)
JIA Hao	Vice Chairman and
	General Manager	70		4.37%		0.04%
FU Zugang	Executive Director	60		3.74%		0.03%
FU Qi	Deputy General
	Manager	35		2.18%		0.02%
ZHANG Haibin	Secretary to the Board	35		2.18%		0.02%
HUANG Hua	Chief Financial
	Officer	35		2.18%		0.02%
LI Weiping	Deputy General
	Manager	35		2.18%		0.02%
Core Management and Core Personnel of the
Company's Headquarters and Relevant
Business Segments (327 people in total)	1,333		83.16%		0.77%

Total		1,603		100.00%		0.93%

Notes:

Some figures shown as totals in the above table may not be an arithmetic sum of the figures preceding them due to rounding adjustments. The same applies to the following text.
For a detailed list of the Participants, please refer to the Participant List of the 2019 Share Option Incentive Scheme (Adjusted) of Zhengzhou Coal Mining Machinery Group Company Limited to be issued by the Company on 10 August 2019 on the website of Shanghai Stock Exchange (www.sse.com.cn) and the Participant List of the 2019 Share Option Incentive Scheme (Adjusted) under Appendix II of this circular.

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LETTER FROM THE BOARD

Saved as disclosed above, none of the Participants constitutes a connected person of the Company under the meaning of Chapter 14A of the Listing Rules. If the Participants do not comply with the conditions specified in the requirements including the Administrative Measures for Equity Incentives of Listed Companies during the implementation of the Scheme, their rights of participating in the Scheme shall be terminated and their outstanding Share Options granted shall be cancelled by the Company.

EXERCISE PRICE AND BASIS OF DETERMINATION
1. Exercise Price

The exercise price of the Share Options in the first grant under the Scheme is RMB5.98 per A Share. After meeting the conditions of exercise, the Participants can purchase the additional A Shares of the Company directly issued to them by the Company at the price of RMB5.98 per A Share.

Measures for the Determination of Exercise Price

The exercise price of the Share Options in the first grant under the Scheme shall not be less than the nominal value of A Shares and the higher of the following prices:

the average trading price of the Company's A Shares on the trading day immediately preceding the announcement date of the Scheme, which is RMB5.93 per A Share;
the closing price of the Company's A Shares on the trading day immediately preceding the announcement date of the Scheme, which is RMB5.98 per A Share;
the average closing price of the Company's A Shares for the 30 trading days immediately preceding the announcement date of the Scheme, which is RMB5.80 per A Share; and
the average trading prices of the Company's A Shares for the 60 trading days immediately preceding the date of announcement of the Scheme, which is RMB5.76 per A Share.

Exercise price shall be adjusted accordingly with reference to the occurrence of any ex-rights or ex-dividends events to the Company such as capitalization of capital reserves, bonus issue, share subdivision or consolidation, rights issue and dividend distribution prior to the exercise of Share Options.

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LETTER FROM THE BOARD

VI. ARRANGEMENT FOR THE SHARE OPTION INCENTIVE SCHEME SUCH AS VALIDITY PERIOD, DATE OF GRANT, VESTING PERIOD AND EXERCISE PERIOD

Validity Period

The Validity Period of the Scheme is 10 years, starting from the date of approval at the Shareholders' Meetings. The Validity Period of the Share Options in the first grant under the Scheme shall be no more than 60 months, starting from the date of registration of the grant.

Date of Grant

The Date of Grant is subject to the consideration and approval of the Scheme by the Board of the Company at the Shareholders' Meetings of the Company. The Company shall grant the Share Options and complete the relevant announcement and registration procedures within 60 days upon the approval at the Shareholders' Meetings of the Company. If the Company fails to complete the above procedures within 60 days, the Scheme will be terminated and the Share Options to be granted shall lapse.

The Date of Grant must be a trading day, which is within the permitted period by the relevant rules governing the securities, and shall not fall within the periods including but not limited to the following:

within 30 days prior to the publication of periodic reports of the Company, or in the event of a delay in publishing such reports due to special reasons, the period commencing from 30 days prior to the original date of publication and ending on the first day preceding the publication date;
within 10 days prior to the publication of results forecast and preliminary results of the Company;
from the date of occurrence of Significant Events with a Material Impact on the trading prices of the Shares and their derivatives of the Company, or the date on which the decision-making procedures start, to two trading days after the disclosure thereof in accordance with law; and
other periods as stipulated by the CSRC and the stock exchange.

The abovementioned period during which the Company is not allowed to grant the Share Options is not included in the 60-day period.

There is no consideration to be paid to the Company for the Share Options to be granted to the Participants.

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LETTER FROM THE BOARD

Vesting Period

The vesting period refers to the period from the registration date for the grant of Share Options to the first Exercise Date. The vesting period for the Scheme shall be 24 months.

Exercise Date

The Share Options granted to the Participants are exercisable after the vesting period. The Exercise Date must be a trading day within such periods as permitted under securities regulatory rules, excluding periods which include but are not limited to the following ones:

within 30 days prior to the publication of periodic reports of the Company, or in the event of a delay in publishing such reports due to special reasons, the period commencing from 30 days prior to the original date of publication and ending on the first day preceding the publication date;
within 10 days prior to the publication of results forecast and preliminary results of the Company;
from the date of occurrence of Significant Events with a Material Impact on the trading prices of the Shares and their derivatives of the Company, or the date on which the decision-making procedures start, to two trading days after the disclosure thereof in accordance with law; and
other periods as stipulated by the CSRC and the stock exchange.

If the conditions of exercise stipulated under the Scheme are fulfilled after expiry of the 24-month period from the Date of Grant, the Participants shall exercise their Share Options in stages within the next 36 months.

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LETTER FROM THE BOARD

The exercise period of the Scheme and the time arrangement for each exercise period are set out in the following table:

		Exercisable
Exercise Period	Exercise Time Arrangement	Ratio
First Exercise Period	Commencing on the first trading	33%
	day after expiry of the 24-month
	period from the grant registration
	date, and ending on the last trading
	day of the 36-month period from
	the grant registration date
Second Exercise Period	Commencing on the first trading	33%
	day after expiry of the 36-month
	period from the grant registration
	date, and ending on the last trading
	day of the 48-month period from
	the grant registration date
Third Exercise Period	Commencing on the first trading	34%
	day after expiry of the 48-month
	period from the grant registration

date, and ending on the last trading day of the 60-month period from the grant registration date

The Participants shall complete the exercise of their Share Options within the exercise period. If the conditions of exercise are not fulfilled, the Share Options for that period shall not be exercised or deferred to the next period and shall be cancelled by the Company. If the conditions of exercise are fulfilled but not all the Share Options for that period have been exercised by the Participants, the Share Options that have not been exercised shall be cancelled by the Company.

Not less than 20% of the total Share Options granted to a Director or senior management member can only be exercised after the Participant has passed his or her performance evaluation at the end of his or her term of office. If the term of office of a Participant who is a Director or senior management member has not ended upon expiry of the Validity Period of the Scheme, the conditions of exercise shall be determined with reference to his or her evaluation results of the year during which the Validity Period concerned expires, and the Share Options shall be exercised within the Validity Period.

Lock-upPeriod

A lock-up period refers to the period during which the Shares issued to the Participants upon exercise are restricted from being sold. The lock-up provisions under the Scheme shall be implemented in accordance with the relevant laws,

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LETTER FROM THE BOARD

regulations and administrative and regulatory documents including the Company Law, the Securities Law and the Articles of Association. Details are as follows:

where a Participant is a Director or a member of the senior management of the Company, the number of Shares that may be transferred each year during his or her term of office must not exceed 25% of the total number of Shares held by him or her in the Company. No Shares of the Company being held shall be transferred within six months after his or her termination of office.
where a Participant is a Director or a member of the senior management of the Company, those who leave office prior to the expiry of his or her term of office shall comply with the following restrictive provisions during his or her defined term of office and within six months after the expiry of his or her term of office:
1. the number of Shares that may be transferred each year must not exceed 25% of the total number of Shares held by him or her in the Company;
2. no Shares of the Company being held shall be transferred within six months after his or her termination of office; and
3. other requirements stipulated by laws, administrative regulations, departmental rules, administrative and regulatory documents and the rules of the stock exchange in relation to the transfer of shares by directors, supervisors and senior management of a listed company.
where a Participant is a Director or a member of the senior management of the Company, all gains from the sale of Shares of the Company within six months of acquisition or from the acquisition of Shares within six months of sale by the Participant shall be accounted to the Company and the Board of the Company will collect all such gains.
if, during the Validity Period of the Scheme, there is any amendment to the relevant requirements regarding the transfer of Shares held by Directors and senior management of the Company under the relevant laws, regulations and administrative and regulatory documents including the Company Law and the Securities Law, and the Articles of Association, the transfer of Shares of the Company held by such Participants shall comply with the amended relevant laws, regulations and administrative and regulatory documents including the Company Law, the Securities Law and the Articles of Association.

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LETTER FROM THE BOARD

VII. CONDITIONS OF GRANT AND CONDITIONS OF EXERCISE OF THE SHARE

OPTIONS

Conditions of Grant of the Share Options

The following conditions must be simultaneously satisfied before the Share Options can be granted to the Participants. Accordingly, no Share Option shall be granted if any of the following conditions of grant is not satisfied.

None of the following circumstances has occurred to the Company:
1. a certified public accountant issues an audit report containing an adverse opinion or indicates the inability to give an opinion over the financial and accounting report for the most recent accounting year;
2. a certified public accountant issues an audit report containing an adverse opinion or indicates the inability to give an opinion over the internal control of financial reporting for the most recent accounting year;
3. failure to conduct profit distribution in accordance with laws and regulations, the Articles of Association and public undertakings in the past 36 months after listing;
4. equity incentives shall not be given under laws and regulations; and
5. other circumstances as determined by the CSRC.
None of the following circumstances has occurred to the Participant:
1. he/she has been declared an inappropriate candidate by the stock exchange in the past 12 months;
2. he/she has been declared an inappropriate candidate by the CSRC and its local bureaus in the past 12 months;
3. he/she has been imposed with administrative penalties or prohibited from market entry by the CSRC and its local bureaus in the past 12 months due to material violations of laws and regulations;
4. he/she has been prohibited from serving as a Director or a member of the senior management of the Company under the Company Law;

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LETTER FROM THE BOARD

he/she has been prohibited from participating in any equity incentive of a listed company under laws and regulations; and
other circumstances as determined by the CSRC.

3. Performance evaluation requirements

Performance evaluation requirements at the company level:

The performance evaluation indicators to be selected by the Scheme are the increase rate of economic value added, the growth rate of net profits attributable to shareholders of the listed company after deducting non-recurring gains or losses as compared to 2018 and the ratio of prime operating income to operating income, with performance targets upon the grant stated as follows:

the increase rate of the economic value added (hereinafter "△EVA") of ZMJ for 2018 remained positive;

the growth rate of net profits attributable to shareholders of the listed company after deducting non-recurring gains or losses (hereinafter "net profits attributable to shareholders after deducting non-recurringgains or losses") of ZMJ for 2018 was not less than 20% and did not rank below the 50th percentile of peer benchmark enterprises; and

- in 2018, ZMJ's prime operating income accounted for not less than 85% of its operating income.
Participants' performance evaluation at the individual level:
During the accounting year prior to the announcement of the

Scheme (i.e., 2018), the Participant attained a "Pass" and above level in the evaluation according to relevant measures on performance evaluation of the Company.

Conditions of Exercise of the Share Options

During the exercise period, the Share Options granted to the Participants can only be exercised upon the fulfillment of the following conditions:

1. None of the following circumstances has occurred to the Company:

a certified public accountant issues an audit report containing an adverse opinion or indicates the inability to give an opinion over the financial and accounting report for the most recent accounting year;

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LETTER FROM THE BOARD

a certified public accountant issues an audit report containing an adverse opinion or indicates the inability to give an opinion over the internal control of financial reporting for the most recent accounting year;
failure to conduct profit distribution in accordance with laws and regulations, the Articles of Association and public undertakings in the past 36 months after listing;
equity incentives shall not be given under laws and regulations; and
other circumstances as determined by the CSRC.

In the event of any of the circumstances specified above, all the Share Options granted to the Participants under the Scheme but not exercised shall be cancelled by the Company.

2. None of the following circumstances has occurred to the Participant:

he/she has been declared an inappropriate candidate by the stock exchange in the past 12 months;
he/she has been declared an inappropriate candidate by the CSRC and its local bureaus in the past 12 months;
he/she has been imposed with administrative penalties or prohibited from market entry by the CSRC and its local bureaus in the past 12 months due to material violations of laws and regulations;
he/she has been prohibited from serving as a Director or a member of the senior management of the Company under the Company Law;
he/she has been prohibited from participating in any equity incentive of a listed company under laws and regulations; and
other circumstances as determined by the CSRC.

In the event of any of the circumstances specified above, all the Share Options granted to the Participants under the Scheme but not exercised shall be cancelled by the Company.

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LETTER FROM THE BOARD

3. Performance evaluation requirements of the Company:

Exercise Period	Performance Evaluation Indicators
First Exercise Period	1.	EVA for the year 2020 shall be positive;
	2.	the growth rate of net profits attributable to
		shareholders after deducting non-recurring
		gains or losses for the year 2020 shall not be
		lower than 20% and not rank below 75th
		percentile of the performance of peer
		benchmark enterprises as compared with
		that for 2018;
	3.	during the year 2020, prime operating
		income shall account for not less than 85% of
		operating income
Second Exercise	1.	EVA for the year 2021 shall be positive;
Period
	2.	the growth rate of net profits attributable to
		shareholders after deducting non-recurring
		gains or losses for the year 2021 shall not be
		lower than 25% and not rank below 75th
		percentile of the performance of peer
		benchmark companies as compared with
		that for 2018;
	3.	during the year 2021, prime operating
		income shall account for not less than 85% of
		operating income
Third Exercise	1.	EVA for the year 2022 shall be positive;
Period
	2.	the growth rate of net profits attributable to
		shareholders after deducting non-recurring
		gains or losses for the year 2022 shall not be
		lower than 30% and not rank below 75th
		percentile of the performance of peer
		benchmark companies as compared with
		that for 2018;
	3.	during the year 2022, prime operating
		income shall account for not less than 85% of
		operating income

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LETTER FROM THE BOARD

Note 1: The influence of withdrawal of Zhongan Zhaoshang (中安招商) and CRCI from equity interests in SEG on profit or losses shall be excluded in net profits attributable to shareholders after deducting non-recurring gains or losses.

Note 2: Selection principles for peer benchmark enterprises: As the Company is engaged in two principal businesses, namely, coal mining machinery and auto parts, and there are no similar peer benchmark enterprises listed on Shanghai and Shenzhen exchanges, the Company has selected 103 peer benchmark enterprises from two industries, i.e., special equipment manufacturing and automobile manufacturing where the two principal businesses of ZMJ belong, according to the industry classification regarding listed companies of the CSRC, as the samples for peer benchmark enterprises. If there are significant changes in the principal business of or extreme values with excessive performance variation in the industry samples during the annual evaluation, the Board of the Company will remove such companies and reduce the sample size of peer benchmark enterprises during the year-end evaluation.

Identification of the material changes in the principal business of peer benchmark enterprises is primarily based on the changes in the industry classification regarding listed companies where the principal business of the peer benchmark enterprises belongs (for specific classification, please refer to the Guidelines for the Industry Classification of Listed Companies (2012 Revision) issued by the China Securities Regulatory Commission) (subject to the public information) arising from the business reorganisation and operation strategy adjustment of such enterprises from the base year (i.e. 2018) to the end of the evaluation year corresponding to each exercise period.

Identification of extreme values with overly excessive performance variation in the peer benchmark enterprises mainly depends on whether there is an absolute difference of at least 100% between the growth rate of net profits attributable to shareholders of those enterprises after deducting non-recurring gains or losses and the average levels of the industries (i.e. special equipment manufacturing and automobile manufacturing) where those enterprises belong from the base year (i.e. 2018) to the end of the evaluation year corresponding to each exercise period.

4. Performance evaluation requirements for individual Participants

The Company will evaluate the individual performance of the Participants annually, based on the Performance Evaluation Measures (Revision) approved at the Shareholders' Meetings and relevant evaluation measures. The Participant's performance evaluation result for the previous year shall serve as a precondition to determine the exercisable Share Options of that Participant for the current exercise period. The Participant shall in principle reach a "Pass" or above level in the evaluation.

	Merit	Pass	Fail
	(80-100	(60-80	(60 marks or
Evaluation Results	marks)	marks)	below)
Coefficient of the
Exercisable Ratio	1.0	0.8	0

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LETTER FROM THE BOARD

Actual Individual Exercisable Limit of the current Exercise Period = Individual Exercisable Limit of the current year under the Scheme x Individual Coefficient of the Exercisable Ratio of the current year

5. If the performance has not reached the required standard either at the company level or individual level leading to the failure to meet the conditions of exercise, the relevant Share Options cannot be exercised or deferred to the next exercise period and shall be cancelled by the Company.
Explanation of the Scientific Basis and Rationality of the Performance Indicators
The performance indicators of the Scheme are categorized into two levels,

namely, performance evaluation at the company level and performance evaluation at the individual level.

Based on the Notice on Issues concerning Regulating the Implementation of the Equity Incentive System by State-controlled Listed Companies 《( 關於規範國有控股上市公司實施股權激勵制度有關問題的通知》), a listed company shall select at least one of the following three types of performance evaluation indicators: the comprehensive indicators that reflect the shareholders' returns and the company's value creation such as return on common stockholders' equity (ROE), economic value added (EVA) and earnings per share; the growth indicators that reflect the company's ability to earn and market value such as net profit growth rate, prime operating income growth rate and growth rate of total market capitalization of a company; and the indicators that reflect the quality of the company's income such as ratio of prime operating profits to total profits and ratio of operating cash flow to operating profit.

Based on the above, the performance evaluation indicators proposed to be adopted in the Scheme of the Company were the growth value of EVA, the growth rate of the net profits attributable to shareholders after deducting non-recurring gains or losses as compared to 2018 and the ratio of prime operating income to operating income.

EVA is a measure of the ability of business operators in effectively using capital and creating values for shareholders. It serves as an operating performance evaluation tool that reflects a company's ultimate business objectives; net profits attributable to shareholders after deducting non-recurring gains or losses reflects a company's operating profits. The ratio of prime operating income to total operating income reflects the ability of a company in maintaining sound operation. The indicators above not only give full consideration to and ensure shareholders' benefits, but also are able to reasonably reflect the development demand of a company.

Other than the performance evaluation at the company level, the Company also established a strict performance evaluation system for individuals, which can lead to more accurate and comprehensive evaluation of the performance of the Participants. The Company will determine whether the Participants have reached the conditions of exercise based on their performance evaluation results of the previous year.

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LETTER FROM THE BOARD

In conclusion, the evaluation system of the Scheme is all-rounded, comprehensive and feasible, the performance indicators of which are scientific and rational, not only bringing restraints on the Participants but also meeting the evaluation purpose of the Scheme.

VIII. METHODS AND PROCEDURES FOR ADJUSTMENT TO NUMBER AND PRICE OF SHARE OPTIONS

Adjustment Methods for the Number of Share Options

In the event of capitalization of capital reserves, bonus issue, share subdivision, rights issue or share consolidation of the Company after the announcement of the Scheme and prior to any exercise of Share Options, the number of Share Options shall be adjusted accordingly. The adjustment methods are as follows:

Capitalization of capital reserves, bonus issue or share subdivision
Q= Q0×(1+n)
Where: Q0 represents the number of Share Options prior to adjustment; n represents the ratio of increase per share resulting from capitalization of capital reserves, bonus issue or share subdivision (i.e. the number of increased share(s) per share upon capitalization of capital reserves, bonus issue or share subdivision); and Q represents the number of Share Options after adjustment.
Rights issue
Q = Q0×P1×(1+n)÷(P1+P2×n)
Where: Q0 represents the number of Share Options prior to adjustment; P1 represents the closing price of Share Options on the record date; P2 represents the subscription price in respect of rights issue; n represents the ratio of rights issue (i.e. the ratio of the number of shares to be issued under rights issue to the total share capital of the Company prior to rights issue); and Q represents the number of Share Options after adjustment.
Share consolidation
Q = Q0×n
Where: Q0 represents the number of Share Options prior to adjustment; n represents the ratio of share consolidation (i.e. one share of the Company being consolidated into n shares); and Q represents the number of Share Options after adjustment.

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LETTER FROM THE BOARD

4. Dividend distribution, issue of new Shares

In the event of dividend distribution or issue of new Shares by the Company, the number of Share Options will not be adjusted.

Adjustment Methods for the Exercise Price

In the event of dividend distribution, capitalization of capital reserves, bonus issue, share subdivision, rights issue or share consolidation of the Company after the announcement of the Scheme and prior to any exercise of Share Options, the exercise price of Share Options shall be adjusted accordingly. The adjustment methods are as follows:

Capitalization of capital reserves, bonus issue, share subdivision
P= P0÷(1+n)
Where: P0 represents the exercise price prior to adjustment; n represents the ratio of increase per share resulting from the capitalization of capital reserves, bonus issue or share subdivision; and P represents the exercise price after adjustment.
Rights issue
P= P0×(P1+ P2×n)÷[P1×(1+n)]
Where: P0 represents the exercise price prior to adjustment; P1 represents the closing price of Share Options on the record date; P2 represents the subscription price in respect of rights issue; n represents the ratio of rights issue (i.e. the ratio of the number of shares to be issued under rights issue to the total share capital of the Company prior to rights issue); and P represents the exercise price after adjustment.
Share consolidation
P= P0÷n
Where: P0 represents the exercise price prior to adjustment; n represents the ratio of share consolidation; and P represents the exercise price after adjustment.

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LETTER FROM THE BOARD

Dividend distribution
P = P0-V
Where: P0 represents the exercise price prior to adjustment; V represents the dividend per share; and P represents the exercise price after adjustment. After the adjustment of dividend distribution, P shall remain greater than 1.
Issue of new Shares

In the event of issue of new Shares by the Company, the exercise price of the underlying Shares will not be adjusted.

Procedures for Adjustments to the Share Option Incentive Scheme

The Shareholders' Meetings of the Company authorize the Board of the Company to make adjustments to the number and exercise price of Share Options based on the reasons listed in the Scheme. The Board shall make timely announcements and inform the Participants after adjustments to the granted number and exercise price of Share Options in accordance with the aforementioned requirements. The Company shall engage law firms to issue professional advice to the Board of the Company regarding whether the aforementioned adjustments are in compliance with the requirements under the Administrative Measures, the Articles of Association and the Scheme.

In the event of issue of new Shares by the Company before any exercise of Share Options, the number and price of Share Options will not be adjusted. Any necessary adjustments to the number and exercise price of Share Options owing to matters other than the above circumstances must be subject to a resolution by the Board and proposed at the Shareholders' Meetings for consideration.

IX. PROCEDURES OF GRANT OF OPTIONS BY THE COMPANY AND EXERCISE BY THE PARTICIPANTS

Procedures of Implementation of the Share Option Incentive Scheme
1. The Remuneration and Assessment Committee of the Board shall draft the Scheme and the Performance Evaluation Measures, and submit it to the Board for consideration;
2. The Board shall review and approve the draft of the Scheme for which the Directors who are proposed to be the Participants or related to any of them shall abstain from voting. After the Board reviewed and approved the Scheme and performed the announcement procedure, it should propose the Scheme to the Shareholders' Meetings for review; at

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LETTER FROM THE BOARD

the same time, it shall propose to the Shareholders' Meetings to authorize and execute the grant, exercise and cancellation of the Share Options;

The independent Directors and the Board of Supervisors shall issue opinions as to whether the Scheme is beneficial to the sustainable development of the Company or is detrimental to the interests of the Company and the Shareholders as a whole;
The relevant content of the Scheme shall be reviewed and approved by the relevant regulatory authorities of state-owned assets;
The Scheme shall be reviewed and approved at the Shareholders' Meetings of the Company before the implementation. Before convening the Shareholders' Meetings, the Company shall publish the names and positions of the Participants internally on the Company's website or through other means for a period of not less than 10 days. The Board of Supervisors shall verify the list of Participants and thoroughly consider opinions from the public. The Company shall disclose the explanation of review and disclosure of the list of the Participants by the Board of Supervisors 5 days before the Scheme is considered at the Shareholders' Meetings;
The Company shall carry out self-inquiry on the trading of Shares and derivatives of the Company by insiders during the six-month period prior to the announcement of the draft Scheme to examine whether the behavior of insider trading exists;
During the voting of the Scheme at the Shareholders' Meetings of the Company, the independent Directors shall collect proxy voting rights from all the Shareholders in respect of the Scheme, while the Company will provide the options of voting on site or via the internet. The terms of the Scheme shall be voted at the Shareholders' Meetings, and be approved by more than 2/3 of the attending Shareholders with voting rights. Except for the Directors, Supervisors and senior management of the Company, as well as the Shareholders individually or collectively holding more than 5% of the Company's Shares, the voting by other Shareholders shall be separately counted and disclosed. The Shareholders who are the proposed Participants or related to any of them shall abstain from voting;
The Company shall grant the Share Options to the Participants within the prescribed time upon approval of the Scheme at the Shareholders' Meetings of the Company and the fulfillment of conditions of grant stipulated under the Scheme. The Board shall be responsible for handling matters in relation to the grant, exercise and cancellation of the Share Options in accordance with the mandate granted at the Shareholders' Meetings.

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LETTER FROM THE BOARD

Grant Procedure of the Share Options
1. The Board confirms and publishes the Date of Grant after the Scheme has been considered and approved at the Shareholders' Meetings and conditions of grant have been satisfied. The Board shall consider if the conditions of grant of Participants set by the Scheme have been satisfied, and the independent Directors and the Board of Supervisors shall simultaneously issue clear opinions thereon. A law firm shall issue legal opinion on whether the conditions of grant have been satisfied by the Participants. The Board of Supervisors shall check the list of Participants as at the Date of Grant of the Share Options and express opinions;
2. The Company shall complete the relevant procedures such as the grant of the Share Options, registration and announcement within 60 days after it has been reviewed at the Shareholders' Meetings. The Date of Grant has to be the trading day. After the completion of registration of the Share Options which were first granted, the Board of the Company shall disclose the implementation status thereof timely by way of announcement. If the Company fails to complete the first-grant procedures mentioned above within such 60 days, the Scheme shall be terminated, and the Board shall disclose the reasons for such failure timely, and shall not review the equity incentive scheme in the following three months;
3. Given any discrepancy between the Share Options granted to the Participants by the Company and the arrangement under the Scheme, the independent Directors, the Board of Supervisors (where there is a change of the Participants) and the law firm shall simultaneously issue clear opinions thereon;
4. The Scheme shall be implemented upon review and approval at the Shareholders' Meetings, and the Board of the Company shall enter into the "Share Options Grant Agreement" with the Participants pursuant to the Scheme respectively, under which the rights and obligations of the parties are stipulated; the Board of the Company will handle the granting of the Share Options in accordance with the mandate granted at the Shareholders' Meetings;
5. The Company shall make an application to the stock exchange before the Share Options are granted, and the securities registration and clearing institution will conduct the registration procedure thereof upon confirmation by such stock exchange.

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LETTER FROM THE BOARD

1. Exercise Procedures of the Participants
2. 1. The Board of the Company will confirm the methods of exercise under the Scheme before Exercise Date, and notify the Participants about the particular procedures of operation;
  2. The Board shall consider whether the exercise conditions set out in the Scheme are fulfilled and the independent Directors and the Board of Supervisors shall simultaneously issue clear opinions thereon. A law firm shall issue legal opinion as to whether the exercise conditions are fulfilled by the Participants;
  3. Upon verification of each exercise application made by holders of the Share Options, the Company will issue Shares to the Participants based on the number of Share Options they have applied for, and the security registration and clearing institution will conduct the registration and settlement procedures thereof.
THE RESPECTIVE RIGHTS AND OBLIGATIONS OF THE COMPANY AND THE PARTICIPANTS
1. The Rights and Obligations of the Company
2. 1. The Company has the power of interpretation and execution in respect of the Scheme, and will assess the performance of the Participants based on the requirements of the Scheme. If a Participant fails to fulfill the exercise conditions set out in the Scheme, the Company will cancel the Share options that have not been exercised by the Participant, in accordance with the principles under the Scheme.
  2. If the Participant breaches his or her obligations of loyalty under the Company Law, the Articles of Association and others, or impairs the interests or reputation of the Company due to breach of law, violation of professional ethics, leak of confidential information of the Company, breach of duty or malfeasance, the Company shall cancel the Share Options which have not been exercised; if the breach is serious, the Board of the Company shall have the right to recover all or part of the gains derived from the exercised Share Options.
  3. The Company undertakes not to provide loans and financial assistance in any other form, including providing guarantee for loans, to the Participants in acquiring relevant Share Options under the Scheme.
  4. The Company will withhold and pay on behalf of the Participants any individual income tax and other taxes and fees in accordance with the tax laws and regulations of the PRC.

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LETTER FROM THE BOARD

1. The Company shall discharge its obligations in a timely manner in relation to reporting and information disclosure under the Scheme in accordance with relevant requirements, and undertake that the information disclosure documents regarding the Scheme do not contain any false statement, misrepresentation or material omission.
2. The Company shall actively support the Participants who have fulfilled the exercise conditions to exercise their Share Options in accordance with the relevant requirements including those of the Scheme, the CSRC, the stock exchange, China Securities Depository and Clearing Corporation Limited and others. However, the Company disclaims any liability for any loss suffered by a Participant arising from the inability to exercise as he/she desires due to reasons relating to the CSRC, the stock exchange or China Securities Depository and Clearing Corporation Limited.
3. The Company's determination of the Participants of the Scheme does not mean that they have the right to continue to serve the Company, and does not constitute a commitment by the Company on staff employment duration. The employment relationship between the Company and the employees will comply with the labor contracts or employment contracts signed with the Participants.
4. Other relevant rights and obligations as stipulated by laws and regulations.
Rights and Obligations of the Participants
1. A Participant shall comply with the requirements of his or her position as stipulated by the Company, and shall work diligently and responsibly, strictly observe professional ethics, and make contribution to the development of the Company.
2. A Participant can decide whether to exercise Share Options as well as the number of Share Options to be exercised on a voluntary basis, within the exercisable limit granted to him or her.
3. A Participant guarantees that the source of capital for exercise stipulated under the Scheme shall be legal and self-owned and/or self-financed by the Participant.
4. The Share Options granted to the Participants shall not be transferred, used as guarantee or for repayment of debts.
5. Any gains of the Participants generated from the Scheme are subject to individual income tax and other taxes and fees according to the tax laws and regulations of the PRC.

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LETTER FROM THE BOARD

Other relevant rights and obligations as stipulated by laws and regulations.
The Participants shall undertake, in the event that the Participants become unqualified to be granted or to exercise relevant Share Options due to false statements, misrepresentations or material omissions contained in the information disclosure documents of the Company, they shall return all gains received from the Scheme to the Company after the date of confirmation that there are false statements, misrepresentations or material omissions contained in the relevant information disclosure documents.

XI. AMENDMENTS TO AND TERMINATION OF THE SHARE OPTION INCENTIVE SCHEME

Procedures for Amendments to and Termination of the Share Option Incentive Scheme
1. Procedures for Amendments to the Scheme
1. If the Company proposes to amend the Scheme prior to the review of the Scheme at the Shareholders' Meetings of the Company, such amendments shall be reviewed and approved by the Board.
2. If the Company proposes to amend the Scheme after the review and approval of the Scheme at the Shareholders' Meetings of the Company, such amendments shall be reviewed and decided at the Shareholders' Meetings, and the circumstances set out below shall not be included:
3. 1. that will result in accelerating the exercise; and
  2. that will lower the exercise price.
4. The independent Directors and the Board of Supervisors shall give opinions as to whether the amendments are conducive to the sustainable development of the listed company or are significantly detrimental to the interests of the listed company and the Shareholders as a whole.
5. A law firm shall issue professional opinion as to whether the amendments to the Scheme are in compliance with the requirements of the Administrative Measures and relevant laws and regulations or are significantly detrimental to the interests of the listed company and the Shareholders as a whole.

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LETTER FROM THE BOARD

1. Termination procedures of the Scheme
2. 1. If the Company proposes to terminate the Scheme prior to the review of the Scheme at the Shareholders' Meetings of the Company, such termination shall be reviewed and approved by the Board.
  2. If the Company proposes to terminate the Scheme after the review and approval of the Scheme at the Shareholders' Meetings of the Company, such termination shall be considered and decided at the Shareholders' Meetings.
  3. A law firm shall issue professional opinions as to whether the termination of the Scheme by the Company is in compliance with the requirements of the Administrative Measures and relevant laws and regulations or is significantly detrimental to the interests of the Company and the Shareholders as a whole.
Mechanism for Specific Occurrences to the Company
1. On occurrence of any of the following circumstances to the Company, the Scheme shall be terminated immediately:
2. 1. a certified public accountant issues an audit report containing an adverse opinion or indicates the inability to give an opinion over the financial and accounting report for the most recent accounting year;
  2. a certified public accountant issues an audit report containing an adverse opinion or indicates the inability to give an opinion over the internal control of financial reporting for the most recent accounting year;
  3. failure to conduct profit distribution in accordance with laws and regulations, the Articles of Association and public undertakings in the past 36 months after listing;
  4. equity incentives shall not be given under laws and regulations; and
  5. other circumstances as determined by the CSRC which requires the termination of the Scheme.

Upon occurrence of the above circumstances in respect of the Company that the Scheme shall be terminated, the Share Options granted but not yet exercised by the Participants shall be cancelled by the Company.

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LETTER FROM THE BOARD

1. On occurrence of any of the following circumstances to the Company, the Scheme shall proceed as usual:
2. 1. change of control of the Company; and
  2. merger and spin-off of the Company.
3. Where false statements, misrepresentations in or material omissions from the information disclosure documents of the Company result in non-compliance with conditions of grant or arrangements for exercise of the Share Options, all outstanding Share Options shall be cancelled by the Company. In respect of the Share Options already exercised by the Participants, all the Participants concerned shall return all gains received to the Company. The Participants who bear no responsibility for the aforesaid matters and incur losses as a result of the return of the Share Options granted may seek compensation from the Company or responsible parties in accordance with relevant arrangements under the Scheme.
Mechanism for Specific Occurrences to the Participants
1. Within the Validity Period of the Scheme, the Share Options granted but not yet exercised shall be cancelled by the Company, or had the Share Options been exercised, the Participants can be required to return all gains received to the Company, if one of the following circumstances has occurred to the Participant:

he/she has been declared an inappropriate candidate by the stock exchange in the past 12 months;
he/she has been declared an inappropriate candidate by the CSRC and its local bureaus in the past 12 months;
he/she has been imposed with administrative penalties or prohibited from market entry by the CSRC and its local bureaus in the past 12 months due to material violations of laws and regulations;
he/she has been prohibited from serving as a Director or a member of the senior management of the Company under the Company Law;
during his/her term of office, the Participant is engaged in illegal acts, including bribery, corruption, theft, leak of the Company's trade and technology secrets or related party transactions, which

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impair the Company's benefit and reputation, have a material negative impact on the Company's image and cause losses to the Company;

1. violation of the laws and regulations of the PRC and the Articles of Association of the Company;
2. participation in the equity incentives of listed companies is prohibited by laws and regulations or the CSRC;
3. the Participant has not engaged in negotiations with the Company and discharges or terminates his or her labor contract or employment contract with the Company or its subsidiary, including but not limited to circumstances such as resignation with no legitimate reasons; and
4. the Participant's labor relationship or employment relationship has been terminated by the Company or its subsidiary due to the Participant's fault, violation of disciplines or laws.
If the Participants discharge or terminate the labor relationship or employment relationship with the Company or its subsidiary due to objective reasons such as job transfer, retirement, death or loss of civil capacity, then the Share Options which are vested shall be exercised within six months from the date of cessation of service and the part that has not been exercised for more than six months shall lapse and be cancelled by the Company; the Share Options that are not vested shall no longer be exercised and shall be cancelled by the Company.
In the event of the death of a Participant, the Share Options can be exercised by his/her successor(s) according to the above provisions.
If the Participants become those who cannot hold the Company's Share Options, such as external Directors (including independent Directors) or Supervisors, the Share Options granted but not yet exercised shall be cancelled by the Company.
If the official title of the Participant changes within the Company or its subsidiaries, the exercisable ratio under the Share Options will be adjusted in accordance with his or her latest official title and employment situations at the date of exercise.
If the Participant cannot report his or her duty as usual within a full evaluation period for personal reasons (excluding annual leave), the number of exercisable Share Options will be on par with the actual period in which the Participant has been on duty, or all of the Share Options for the current period will be cancelled.

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LETTER FROM THE BOARD

6. Other unspecified circumstances and ways of handling such circumstances as determined by the Remuneration and Assessment Committee of the Board.

XII. ACCOUNTING METHODS AND PERFORMANCE IMPACT MEASUREMENT

Accounting Methods for the Share Options

According to the "Accounting Standards for Enterprises No. 11 - Share-based Payments" and "Accounting Standards for Enterprises No. 22 - Recognition and Measurement of Financial Instruments", the Company measures and accounts for the cost of its Share Options based on the following accounting methods:

1. Accounting on the Date of Grant: Since the Share Options cannot be exercised on the Date of Grant, no relevant accounting is required. The Company shall determine the fair value of such Share Options on the Date of Grant.
2. Accounting in the Vesting Period: On each balance sheet date during the Vesting Period, the services obtained in the current period shall be included in the cost of relevant assets or expenses and other capital reserves in capital reserves at the fair value of the Share Options on the Date of Grant, based on the best estimate of the number of exercisable Share Options.
3. Accounting after the Exercise Period: No adjustment shall be made to the recognized costs or expenses and the total amount of the owners' equities.
4. Accounting on the Exercise Date: Share capital and Share premium shall be recognized with reference to the actual exercise of the Share Options while transferring "capital reserves - other capital reserves" which are determined in the Vesting Period to "capital reserves - capital premium".
Measures for Determining the Fair Value of Share Options
Pursuant to the relevant requirements in respect of fair value determination

under the Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments, a suitable pricing model is required to be applied to compute the fair value of Share Options. As such, the Company has applied the Black-Scholes Model (B-S Model) to assess the fair value of the Share Options, and the total fair value of the 16,030,000 Share Options to be granted amounted to RMB29,413,900 by applying the model on 26 July 2019 (definitive computation will be completed upon the Date of Grant). Specific parameters are listed as follows:

1. Price of the underlying Shares: RMB5.98 per A Share (assuming that the Date of Grant is 26 July 2019 and the closing price of the Company is RMB5.98 per A Share);

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LETTER FROM THE BOARD

1. Exercise Price: RMB5.98 per A Share;
2. Vesting Periods: Determined by the time of vesting period specified by the Share Option Incentive Scheme (Revised Draft), which are 2 years, 3 years and 4 years, respectively;
3. Volatility: 41.03%, based on the arithmetic average of the annualized volatility rate of the A Shares of ZMJ in the last 60 months;
4. Risk-freeinterest rate: The same treasury rate as in the option vesting period which were announced at chinabond.com.cn on the valuation base date, which are 2.78%, 2.90% and 2.95%, respectively;
5. Dividend rate: If the Scheme adjusts the number and exercise price of Share Options granted over the subject share ex-rights and ex-dividends, the expected dividend payout ratio should be zero.
Expected Impact of the Exercise of Share Options on the Operating Results of the Company for Respective Periods
The Company will apply the relevant valuation instruments to ascertain the

fair value of the Share Options to be granted on the Date of Grant and confirm the expenses caused by the grant of Shares under the Scheme. Such expenses will be amortized in accordance with the Exercisable Ratio throughout the span of the Scheme. The costs arising from the grant of incentive under the Scheme will be shown under the recurrent profit and loss. Shareholders shall be aware that any calculation of the value of the Share Options as at the Latest Practicable Date is uncertain based on a great number of assumptions and is subject to the limitation of the model.

According to relevant requirements under the PRC accounting standards, the impacts on the costs in accounting of different financial periods caused by the Proposed Grant of Share Options are as follows:

Year	2019	2020	2021	2022	2023	Total
Amortized
Cost
(RMB0'000)	253.69	1,014.74	915.85	537.57	219.54	2,941.39

Notes:

1. The results above do not represent the final costs in accounting. The actual accounting costs will take into account the actual numbers of valid and invalid Share Options, in addition to the actual Date of Grant, the share price at the Date of Grant and the number of Share Options granted, and the possible dilutive effects are brought to the attention of Shareholders.

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LETTER FROM THE BOARD

2. For the ultimate impact on the operating results of the Company, please refer to the annual audit report to be issued by the accountants.

Based on the information available, the Company preliminarily estimates that the amortized costs will only have slight impacts over the net profit of different financial years within the Validity Period of the Scheme, without considering the stimulative effects to be brought by the Scheme. Taking into consideration the positive effect of the grant of the Share Option Incentive Scheme on the development of the Company such as motivating the management team, increasing the operational efficiency and reducing agency costs, the improvement in the Company's results arising from the Scheme shall far outweigh the increase in expenses therefrom.

XIII. DISPUTE RESOLUTION BETWEEN THE COMPANY AND THE PARTICIPANT

Any disputes between the Company and the Participants that are caused by the implementation of the Scheme or in relation to the Scheme shall be resolved after amicable negotiation. In the event that such negotiation cannot reach an agreement, either party may lodge a civil lawsuit at the people's court where the Company is operating and resolve the disputes through relevant judicial procedures.

XIV. IMPACT OF THE LISTING RULES

The Share Option Incentive Scheme constitutes a share option scheme under Chapter 17 of the Listing Rules. Accordingly, any grant of Share Options under the Share Option Incentive Scheme to any Participant who is a connected person of the Company will be exempted from all the reporting, announcement and independent shareholders' approval requirements pursuant to Rule 14A.92(3)(a) of the Listing Rules.

Since the Share Option Incentive Scheme involves the issue of new A Shares by the Company, Chapter 17 and certain provisions of the Listing Rules are applicable to the Scheme. At the same time, the PRC laws and regulations relating to establishment of share option schemes and grant of share options are also applicable. Hence, the Company has insofar as possible prepared the terms of the Scheme in line with both the requirements of the relevant PRC laws and regulations as well as the Listing Rules, and has applied to and has received from the Hong Kong Stock Exchange a waiver from strict compliance with Note 1 of Rule 17.03(9) of the Listing Rules.

Note 1 of Rule 17.03(9) of the Listing Rules requires that the exercise price must be at least the higher of: (i) the closing price of the securities on the date of granting the options; and (ii) the average closing price of the securities for the five business days immediately preceding the date of granting the options. However, the relevant PRC laws and regulations require that the exercise price of share options under share option schemes shall be the higher of: (i) the average trading price of the A Shares on the trading day immediately preceding the date of announcement of the share option scheme; (ii) the average trading price of the A Shares for the 20/60/120 trading days immediately preceding the date of announcement of the share option scheme; (iii) the closing price of

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LETTER FROM THE BOARD

the A Shares on the trading day immediately preceding the date of announcement of the share option scheme; and (iv) the average closing price of the A Shares for the 30 trading days immediately preceding the date of announcement of the share option scheme.

Since the Share Options to be granted under the Scheme involves A Shares only and the exercise price must be determined based on the relevant PRC laws and regulations, the Company has applied to and has received from the Hong Kong Stock Exchange a waiver from strict compliance with Note 1 of Rule 17.03(9) of the Listing Rules.

For details of the exercise price and the basis of determination, please refer to the section headed "V. EXERCISE PRICE AND BASIS OF DETERMINATION" above.

XV. APPROVAL AND SOLICITATION OF VOTES BY INDEPENDENT DIRECTORS

The proposed grant to the Directors has been approved by the independent Directors in compliance with Rule 17.04(1) of the Listing Rules. Pursuant to the share option scheme, independent Directors are not eligible Participants and there is no independent Director who is also a Participant.

Pursuant to the Administrative Measures for Equity Incentives, independent Directors of a company whose securities are listed on the Shanghai Stock Exchange ("SSE") should solicit votes publicly from its shareholders on resolutions in relation to the adoption of an equity incentive scheme. The purpose of such arrangement is to encourage the securities holders to participate in the voting on the resolutions on the adoption of equity incentive schemes by providing them with an additional way of participation in the meeting(s) of such securities holders. As the A Shares are listed and tradable on the Shanghai Stock Exchange, the independent Directors have nominated Mr. Jiang Hua to solicit on behalf of Shareholders votes on all special resolutions in relation to the Scheme to be tabled at the EGM and the Class Meetings. No solicitation is made on the other resolutions which are not related to the Scheme. Mr. Jiang Hua has for the abovementioned purpose prepared the proxy forms for appointing himself as a proxy at the EGM and the H Shareholders Class Meeting respectively. Such proxy forms specific to the independent Directors' solicitation of votes (the "INED Proxy Forms") were despatched together with the notices of the EGM and the H Shareholders' Meeting (the "Meeting Notices"), the regular proxy forms (together with the INED Proxy Forms, the "Proxy Forms") and the reply slips in respect of such meetings by the Company, and also published and made available for downloading on the websites of the Hong Kong Stock Exchange at www.hkex.com.hk. Please refer to the Meeting Notices and the instructions imprinted on the Proxy Forms for details of the solicitation arrangement.

XVI. DOCUMENTS AVAILABLE FOR INSPECTION

A copy of the share option scheme is available for inspection at the Hong Kong office of Clifford Chance at 27/F, Jardine House, 1 Connaught Place, Central, Hong Kong during normal business hours from the date hereof up to and including the date of the EGM and Class Meetings.

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LETTER FROM THE BOARD

2. PROPOSED AMENDMENT TO THE ARTICLES OF ASSOCIATION IN RELATION TO THE COMPOSITION OF THE BOARD OF DIRECTORS

The amendment to the articles of association in relation to the composition of the board of directors will be proposed at the extraordinary general meeting.

Reference is made to the announcement of the Company dated 28 August 2019 in relation to the proposed amendment to the articles of association in relation to the composition of the board of directors. The Company intends to adjust the size of the Board by increasing the number of Board members from 9 to 10, and amend the relevant article in the Articles of Association pursuant to relevant requirements under the Company Law of the People's Republic of China, the Articles of Association and the securities regulatory laws and regulations as well as based on the actual conditions and the future development needs of the Company, with a view to further optimizing the Company's governance structure (the "Proposed Amendment"). Details of the amendments are as follows:

Existing Article	Proposed Amendment

Article 163 The Board of Directors shall	Article 163 The Board of Directors shall be
be composed of 9 Directors and shall	composed of 10 Directors and shall have
have one (1) chairman and one (1) vice	one (1) chairman and one (1) vice chairman.
chairman.

Save for the abovementioned amendments, all the other articles in the Articles of Association remain unchanged. The amended Articles of Association will take effect on the date of approval at the Shareholders' Meetings.

3. PROPOSED ELECTION OF A NEW INDEPENDENT NON-EXECUTIVE DIRECTOR

The election of a new independent non-executive Director will be proposed as an ordinary resolution for approval at the Extraordinary General Meeting.

Reference is made to the announcement of the Company dated 28 August 2019 in relation to the proposed election of a new independent non-executive director. Pursuant to relevant requirements of the Company Law of the People's Republic of China, the Articles of Association and the securities regulatory laws and regulations, based on the actual conditions and the future development needs of the Company, and to further optimize the Company's governance structure, the Board intends to elect a new Director by introducing an expert in the automotive industry to act as an independent non-executive Director of the Company.

After the Nomination Committee of the Board examined the qualifications of Mr. Cheng Jinglei to serve as an independent non-executive director of the Company, the Board has approved the nomination of Mr. Cheng Jinglei as a candidate for independent non-executive Director of the Company for a term commencing from the date of approval of his appointment at the shareholders' general meeting and ending at the expiry of the

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LETTER FROM THE BOARD

fourth session of the Board of the Company, with annual remuneration of RMB140,000 (before tax) which is in line with the remuneration standard for independent non-executive directors of the fourth session of the Board.

After the election of the new director, the number of Board members will increase from 9 to 10, with the Board composition in compliance with the requirements of relevant laws and regulations and regulatory documents.

The nomination of Mr. Cheng Jinglei as an independent non-executive Director of the Company, having been reviewed with no objection by the Shanghai Stock Exchange, is hereby submitted for consideration and approval at the extraordinary general meeting and is subject to the consideration and approval of the Resolution on Amendments to the Articles of Association of the Company in relation to the Composition of the Board of Directors at the EGM.

Biographical details of Cheng Jinglei are set out as follows:

Mr. Cheng Jinglei (程驚雷), male, born in September 1967, is a member of the Communist Party of China and a professor-level senior engineer with a master 's degree in business administration. From 1989 to 2001, Mr. Cheng served for SAIC VOLKSWAGEN as an engineer in logistics and industrial engineering, head of the planning and logistics department, head of the production planning department and head of the product engineering department. From 2001 to June 2018, he served at SAIC Motor as the general manager of its technology and quality department, president of the engineering academy, as well as general manager of the strategy and business planning department and chief engineer. Mr. Cheng was also the chairman of SAIC Silicon Valley Venture Capital (上汽矽谷風險投資公司), Dalian Sunrise Power Company (Fuel Cell) (大連新源公司（燃料電池）) and DIAS Automotive Electronic Systems Co., Ltd. (聯創汽車電子有限公司), a director of SAIC VOLKSWAGEN and SAIC GM, the vice president of China Society of Automotive Engineers, and the president of Shanghai Society of Automotive Engineers from 2014 to June 2018. He has been the partner and president of AGRC since June 2018, and the chairman of Yidu Automobile Technology (Shanghai) Company Limited (奕都汽車科技

（上海）有限公司) since October 2018. In addition, Mr. Cheng has been an independent non-executive director of Dah Chong Hong Holdings Limited (01828.HK) since April 2018 and started to serve as an independent director of Shanghai Carthane Co., Ltd. (上海凱眾材料科技股份有限公司) (603037.SH) in August 2019.

Mr. Cheng, a professor-level senior engineer, has over 30 years of experience in the automotive industry, with a wealth of extensive experience particularly in strategic research and planning, product planning and development, production planning as well as improvement of operations efficiency. Having considered his biographical details, skills background, knowledge, experience, independence and the specific needs of the Company, the nomination is proposed by the Board, preliminarily reviewed by the Nomination Committee of the Board and considered by the Board, before being submitted for election at the Shareholders' Meetings in accordance with the Articles of Association. The joining of Mr. Cheng can promote the diversity of the Board composition, and will bring to the Board more enriched knowledge and experience of the automotive industry and facilitate better supervision by the Board over the promotion and implementation of the Company's development strategies.

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LETTER FROM THE BOARD

The aforementioned candidate has met the qualifications and conditions for a Director as required under the relevant laws and regulations as well as the Articles of Association. Both the nominee's and candidate's statements for independent non-executive Director have been submitted to the regulatory authorities concerned.

Save as disclosed in the above biographical details, the aforesaid candidate has no relationship with other Directors, supervisors, senior management or substantial or controlling shareholders of the Company, and holds no equity interest in the Company within the meaning of Part XV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong). There is no information required to be disclosed pursuant to Rules 13.51(2)(h) to 13.51(2)(v) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. The aforesaid candidate held no directorship in any listed company or any position within the Group over the past three years. There is no other matter that needs to be brought to the attention of the Shareholders of the Company.

CLOSURE OF THE REGISTER OF MEMBERS

The register of members of the Company has been closed from Saturday, 21 September 2019 to Monday, 21 October 2019 (both days inclusive), during which period no transfer of Shares of the Company will be effected. Any H Shareholder of the Company who intends to attend the EGM but have not yet registered are required to deposit the transfer documents together with the relevant share certificates at the Company's H Share registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong no later than 4:30 p.m. on Friday, 20 September 2019. H Shareholders whose names appear on the register of members of the Company on Saturday, 21 September 2019 shall be entitled to attend and vote at the EGM.

VOTING AT THE SHAREHOLDERS' MEETINGS

According to Rule 13.39(4) of the Listing Rules, any vote of Shareholders at the EGM of the Company must be taken by poll except where the chairman, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands. As such, the chairman of the EGM will, pursuant to Article 121 of the Articles of Association, demand vote by poll on every resolution proposed at the EGM.

As at the Latest Practicable Date, one of the Participants who are currently the Directors and/or senior management, namely, Mr. FU Zugang is also an A Shareholder of the Company. Mr. FU is entitled to exercise the voting rights of the Company in respect of 2,526,720 A Shares, representing 0.146% of the Company's total share capital. Mr. FU and his associates (to the extent that any of them owns any Shares of the Company as at the date of the EGM and the Class Meetings) shall abstain from voting on all the resolutions in relation to the Share Option Incentive Scheme at the Shareholders' Meetings. In addition, all remaining Participants who own Shares of the Company shall abstain from voting on all the resolutions in relation to the Share Option Incentive Scheme at the EGM and the Class Meetings, regardless of their actual shareholdings of the Company as at the date of the Shareholders' Meetings. Save as disclosed herein, 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 and the Class Meetings.

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LETTER FROM THE BOARD

During a poll, every Shareholder present in person or by proxy (or, in the case of a member being a corporation, by its duly authorized representative) shall have one vote for each Share registered in the Shareholder 's name in the register of members. According to Article 123 of the Articles of Association, a member (including proxy) entitled to two or more votes is under no obligation to cast all his/her votes for or against any resolution.

The above resolution 1-4 constitutes a special resolution to be passed by affirmative votes which represent more than two third of the total number of Shares held by the attending Shareholders with voting rights. The above resolution 5 constitutes an ordinary resolution to be passed by affirmative votes which represent more than half of the total number of Shares held by the attending Shareholders with voting rights.

RECOMMENDATIONS

The Directors (including the independent Directors, while excluding Mr. FU Zugang who shall abstain from voting on all the resolutions) consider that the proposed adoption of the Share Option Scheme including the Grant under the Share Option Scheme and the related matters are in the best interests of the Company and the Shareholders. Accordingly, the Directors (including the independent Directors, while excluding Mr. FU Zugang who shall abstain from voting on all the resolutions) recommend the Shareholders and the H Shareholders to vote in favour of the resolutions set out in the notices of the EGM and the H Shareholders Class Meeting respectively. Furthermore, the Board is of the view that the other resolutions mentioned above are in the best interest of the Company and its Shareholders. Therefore, the Board recommends Shareholders to vote for the relevant resolutions to be proposed at the EGM as set out in the notice of the EGM.

RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the 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

Zhengzhou Coal Mining Machinery Group Company Limited

JIAO Chengyao

Chairman

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APPENDIX I ADMINISTRATIVE MEASURES FOR PERFORMANCE EVALUATION (REVISION) UNDER THE 2019 SHARE OPTION INCENTIVE SCHEME

Below Summarises the Administrative Measures for Performance Evaluation (Revision) under the 2019 Share Option Incentive Scheme of Zhengzhou Coal Mining Machinery Group Company Limited

EVALUATION PURPOSE

This revised version aims to further improve the corporate governance structure of the Company, promote the establishment and perfection of the distribution mechanism that combines incentives and restraints, fully mobilise the Directors, senior management, core management and core technicians as well as key business personnel of the Company, effectively align the interests of Shareholders and the Company with the personal interests of the management, facilitate the Company in releasing new vitality in sustainable development as well as promote the sustainable development of the Company.

EVALUATION PRINCIPLE

The evaluation assessment must adhere to the principle of justice, openness and fairness, under which the performance, ability and attitude of the participants will be evaluated in strict accordance with the Measures so as to closely integrate the Share Option Incentive Scheme into the performance and value contribution of the Participants, thereby improving the management performance, establishing a long-term incentive system and maximising company value and all Shareholders' benefits.

EVALUATION PARTICIPANTS

The Measures are applicable to the Participants identified in the 2019 Share Option Incentive Scheme (Revised Draft) of Zhengzhou Coal Mining Machinery Group Company Limited, including the Directors, senior management, core management and core personnel (including core personnel for research and development, sales and management) of the Company.

IV. EVALUATION INSTITUTIONS AND RESPONSIBILITY DIVISION

The Board of the Company is responsible for the implementation of the Share Option Incentive Scheme, and authorises the Remuneration and Assessment Committee under the Board of the Company to lead and organise the evaluation work;
The human resources department of the Company is responsible for the specific implementation of evaluation, the collection and provision of evaluation-related data together with such departments as the finance department of the Company, as well as the truthfulness and reliability of the data;

- App I-1 -

APPENDIX I ADMINISTRATIVE MEASURES FOR PERFORMANCE EVALUATION (REVISION) UNDER THE 2019 SHARE OPTION INCENTIVE SCHEME

1. The human resources department of the Company is responsible for calculating the Participants' evaluation score, aggregating the materials for evaluation results, while the Remuneration and Assessment Committee of the Board of the Company provides guidance and conducts supervision on the evaluation process; and
2. The Remuneration Committee of the Board of the Company reviews the Participants' evaluation results.
EVALUATION DETAILS

Performance evaluation requirements at the company level
1. Performance targets upon the grant
1. the increase rate of the economic value added ("△EVA") of ZMJ for 2018 remained positive;
2. the growth rate of net profits attributable to shareholders of the listed company after deducting non-recurring gains or losses ("net profits attributable to shareholders after deducting non-recurringgains or losses") of ZMJ for 2018 was not less than 20% and did not rank below the 50th percentile of peer benchmark companies; and
3. in 2018, ZMJ's prime operating income accounted for not less than 85% of its operating income.

- App I-2 -

APPENDIX I ADMINISTRATIVE MEASURES FOR PERFORMANCE EVALUATION (REVISION) UNDER THE 2019 SHARE OPTION INCENTIVE SCHEME

2. Performance targets during the grant

Exercise

Period

Performance Indicators

△EVA for the year 2020 shall be positive;
the growth rate of net profits attributable to shareholders after deducting non-recurring gains or losses for the year

First	2020 shall not be lower than 20% and not rank below 75th
Exercise
percentile	of	the	performance	of	peer	benchmark
Period
enterprises as compared with that for 2018;

3. during the	year 2020, prime operating income shall
	account for not less than 85% of operating income.

1.	△EVA for the year 2021 shall be positive;
2.	the growth rate of net profits attributable to shareholders
Second	after deducting non-recurring gains or losses for the year
2021 shall not be lower than 25% and not rank below 75th
Exercise
percentile	of	the	performance	of	peer	benchmark
Period
companies as compared with that for 2018;

3. during the	year 2021, prime operating income shall
	account for not less than 85% of operating income.

1.	△EVA for the year 2022 shall be positive;
2.	the growth rate of net profits attributable to shareholders
Third	after deducting non-recurring gains or losses for the year
Exercise	2022 shall not be lower than 30% and not rank below 75th
Period	percentile of the performance of peer benchmark
	companies as compared with that for 2018;
3. during the	year 2022, prime operating income shall
	account for not less than 85% of operating income.

Note 2: Selection principles for peer benchmark enterprises: as the Company is engaged in two principal businesses, namely, coal mining machinery and auto parts, and there are no similar peer benchmark enterprises listed on Shanghai and Shenzhen exchanges, the Company has selected 103 peer benchmark companies from two industries, i.e., special equipment manufacturing and automobile manufacturing where the two principal businesses of ZMJ belong, according to the industry classification regarding listed companies of the CSRC, as the samples for peer benchmark companies. If there are significant changes in the principal business of or extreme values with excessive performance variation in the industry samples during the annual evaluation, the Board of the Company will remove such samples and reduce the sample size of peer benchmark companies during the year-end evaluation.

- App I-3 -

APPENDIX I ADMINISTRATIVE MEASURES FOR PERFORMANCE EVALUATION (REVISION) UNDER THE 2019 SHARE OPTION INCENTIVE SCHEME

Securities Regulatory Commission) (subject to the public information) arising from the business reorganisation and operation strategy adjustment of such enterprises from the base year (i.e. 2018) to the end of the evaluation year corresponding to each Exercise Period.

Performance evaluation at the level of individual Participants
1. Performance evaluation upon the grant

The Company will evaluate the individual performance of the Participants based on its relevant evaluation measures. The Participant shall reach a "Pass" or above in the evaluation for the accounting year (i.e., 2018) prior to the announcement of the Share Option Incentive Scheme.

2. Performance evaluation during the exercise

The Company will evaluate the individual performance of the Participants based on its relevant evaluation measures. As to those exercisable Share Options for the current period, the Participant shall in principle reach a "Pass" or above in the evaluation, subject to his/her individual performance evaluation result for the previous year as preconditions.

Evaluation Result	Merit	Pass	Fail
(80-100 marks)	(60-80 marks)	(60 marks or below)

Coefficient of	1.0	0.8	0
the Exercisable Ratio

Actual Individual Exercisable Limit of the current Exercise Period = Individual Exercisable Limit of the current year under the Scheme x Coefficient of the Individual Exercisable Ratio of the current year.

If the performance has not reached the required standard either at the company level or the Participant's level which leads to failure to meet the Conditions of Exercise, the corresponding Share Options cannot be exercised or deferred to the next Exercise Period and shall be cancelled by the Company.

- App I-4 -

APPENDIX I ADMINISTRATIVE MEASURES FOR PERFORMANCE EVALUATION (REVISION) UNDER THE 2019 SHARE OPTION INCENTIVE SCHEME

VI. PERIOD AND NUMBER OF EVALUATION

1. Evaluation period

The evaluation period is a full accounting year, with the accounting year prior to the announcement of the Share Option Incentive Scheme (i.e., the accounting year of 2018) as the evaluation year under the conditions of grant, and the accounting year prior to the year in which the Participant can exercise as the evaluation year under the conditions of each exercise.

2. Number of evaluation

Evaluation will take place once a year during the implementation period of the Share Option Incentive Scheme.

VII. EVALUATION PROCEDURES

The human resources department is responsible for specific evaluation work and retaining evaluation results under the guidance of the Remuneration and Assessment Committee of the Board of the Company, on which the performance evaluation report will be completed and summited to the Remuneration and Assessment Committee of the Board for review.

VIII. MANAGEMENT OF EVALUATION RESULTS

Revision of evaluation indicators and results

In the event of material force majeure or exceptional reasons occurring during the evaluation period and affecting the work performance of the participants under evaluation, the Remuneration and Assessment Committee of the Board of the Company may adjust the evaluation indicators and results with significant deviations.

Feedback of and complaint about evaluation results

Participants under evaluation have rights to be notified of their evaluation results and shall be notified of such results by the Company after the evaluation is completed. If the participants raise objection to the result, they may make a complaint to the human resources department of the Company within five (5) working days after receiving the notification of their evaluation results. The Company shall verify the evaluation results and determine the final evaluation results on the basis of the actual situation.

The final evaluation results shall be considered as the basis for the grant or exercise under this Share Option Incentive Scheme.

- App I-5 -

APPENDIX I ADMINISTRATIVE MEASURES FOR PERFORMANCE EVALUATION (REVISION) UNDER THE 2019 SHARE OPTION INCENTIVE SCHEME

Evaluation results filings
1. After the evaluation is completed, all evaluation records and results related to this Share Option Incentive Scheme shall be filed and saved as confidential information by the human resources department of the Company for a period of no less than ten (10) years.
2. To ensure the effectiveness of performance incentive, evaluation records are not allowed to be altered. If the records are required to be revised or recorded once more, the participants concerned shall sign on the records.

IX. SUPPLEMENTARY PROVISIONS

The Measures are subject to formulation, interpretation and revision by the Board.
The Measures shall be implemented upon consideration and approval by the Shareholders' Meetings of the Company and after the Share Option Incentive Scheme takes effect.
In the event of any conflicts between the Measures and the laws, administrative regulations, department rules and regulatory documents issued by regulatory authorities, then such relevant laws, administrative regulations, department rules and regulatory documents shall prevail.

- App I-6 -

APPENDIX II PARTICIPANT LIST OF THE 2019 SHARE OPTION INCENTIVE SCHEME (ADJUSTED)

Below Sets out the List of Participants of the 2019 Share Option Incentive Scheme of Zhengzhou Coal Mining Machinery Group Company Limited (Adjusted)

I.	General

			Number of	Percentage of	Percentage of
			the Number	the Existing
			Share
			of Share	Total Share
	Name	Position(s)	Options to
	Options	Capital
			be Granted
			under this	of the
			(0'000)
			Grant	Company


	JIA Hao	Vice Chairman and General	70	4.37%	0.04%
		Manager

	FU Zugang	Executive Director	60	3.74%	0.03%

	FU Qi	Deputy General Manager	35	2.18%	0.02%

	ZHANG	Secretary to the Board	35	2.18%	0.02%
	Haibin

	HUANG Hua	Chief Financial Officer	35	2.18%	0.02%

	LI Weiping	Deputy General Manager	35	2.18%	0.02%

	Core Management and Core Personnel of the
	Company's Headquarters and Relevant	1,333	83.16%	0.77%
	Business Segments (327 people in total)

		Total	1,603	100.00%	0.93%

Note: Some figures shown as totals in the above table may not be an arithmetic sum of the figures

preceding them due to rounding adjustments.

- App II-1 -

APPENDIX II PARTICIPANT LIST OF THE 2019 SHARE OPTION INCENTIVE SCHEME (ADJUSTED)

List of Other Personnel

Number	Name	Position

1	YAN Lingyun	Core Management Personnel

2	WANG Jingbo	Core Management Personnel

3	YAN Genfeng	Core Management Personnel

4	GAN Wei	Core Management Personnel

5	NIE Zhiyi	Core Management Personnel

6	ZHOU Dehai	Core Management Personnel

7	LAN Feng	Core Management Personnel

8	ZENG Xiangzhen	Core Management Personnel

9	LIU Wei	Core Management Personnel

10	SU Zhenyu	Core Management Personnel

11	LU Hongyan	Core Management Personnel

12	DONG Xiaonan	Core Management Personnel

13	YANG Nan	Core Management Personnel

14	ZHANG Huaqi	Core Management Personnel

15	MENG Yuanyuan	Core Personnel

16	XI Zhipeng	Core Personnel

17	LI Yunzhe	Core Personnel

18	LIANG Wenmin	Core Personnel

19	LI Xiang	Core Personnel

20	LI Ying	Core Personnel

21	SHAO Yufeng	Core Personnel

22	ZHANG Yanhong	Core Personnel

23	GU Yina	Core Personnel

24	XU Zeting	Core Personnel

25	HU Ying	Core Personnel

26	LI Fen	Core Personnel

27	BAI Yong	Core Personnel

- App II-2 -

APPENDIX II	PARTICIPANT LIST OF THE 2019 SHARE OPTION
			INCENTIVE SCHEME (ADJUSTED)


	Number	Name		Position

	28	NING Hailiang		Core Personnel

	29	CAO Qunqun		Core Personnel

	30	JIA Xun		Core Personnel

	31	ZHOU Jianxin		Core Personnel

	32	ZHAO Nan		Core Personnel

	33	GUO Haofeng		Core Management Personnel

	34	DONG Xin		Core Management Personnel

	35	YANG Mingjie		Core Management Personnel

	36	ZHANG Xinhong		Core Management Personnel

	37	WANG Yongqiang		Core Management Personnel

	38	NI Heping		Core Management Personnel

	39	FU Jinliang		Core Management Personnel

	40	GAO Youjin		Core Management Personnel

	41	ZHANG Minglin		Core Management Personnel

	42	BAO Xueliang		Core Management Personnel

	43	LI Chongqing		Core Management Personnel

	44	LI Yang		Core Management Personnel

	45	LI Lei		Core Management Personnel

	46	LIU Peixing		Core Management Personnel

	47	WANG Zhen		Core Management Personnel

	48	ZHU Zhiyong		Core Management Personnel

	49	ZHANG Zeren		Core Management Personnel

	50	GU Xiaobo		Core Management Personnel

	51	CUI Xiaochong		Core Management Personnel

	52	LI Baochao		Core Management Personnel

	53	WANG Deyin		Core Management Personnel

	54	HUI Jun		Core Management Personnel

	55	PENG Tao		Core Management Personnel

- App II-3 -

APPENDIX II	PARTICIPANT LIST OF THE 2019 SHARE OPTION
			INCENTIVE SCHEME (ADJUSTED)


	Number	Name		Position

	56	XUE Xiuli		Core Management Personnel

	57	ZHENG Faying		Core Management Personnel

	58	YANG Hui		Core Management Personnel

	59	XIA Lixia		Core Management Personnel

	60	WANG Jiaxin		Core Management Personnel

	61	DI Zhihui		Core Management Personnel

	62	LIU Fuying		Core Management Personnel

	63	FAN Jun		Core Management Personnel

	64	ZHANG Dingtang		Core Management Personnel

	65	CHEN Ge		Core Management Personnel

	66	SUN Hongfa		Core Management Personnel

	67	YANG Wenming		Core Management Personnel

	68	SUN Gongzan		Core Management Personnel

	69	JIN Hui		Core Management Personnel

	70	YANG Liu		Core Management Personnel

	71	MENG Hechao		Core Management Personnel

	72	LI Fuyong		Core Management Personnel

	73	CHENG Xiangbang		Core Management Personnel

	74	WANG Chaoyang		Core Management Personnel

	75	QIAN Ziqiang		Core Management Personnel

	76	WANG Lizhi		Core Management Personnel

	77	CHEN Jianting		Core Management Personnel

	78	CHEN Xiang		Core Management Personnel

	79	WANG Zhuanwei		Core Management Personnel

	80	ZHANG Naiyue		Core Management Personnel

	81	GAO Jiaxing		Core Management Personnel

	82	BIAN Yuzhao		Core Management Personnel

	83	ZHAO Xinya		Core Management Personnel

- App II-4 -

APPENDIX II	PARTICIPANT LIST OF THE 2019 SHARE OPTION
			INCENTIVE SCHEME (ADJUSTED)


	Number	Name		Position

	84	XUE Xiaoyuan		Core Management Personnel

	85	WEN Wu		Core Management Personnel

	86	LIU Yisong		Core Management Personnel

	87	ZHANG Enwei		Core Management Personnel

	88	WANG Zhanwei		Core Management Personnel

	89	GONG Yu		Core Management Personnel

	90	YANG Hongfeng		Core Management Personnel

	91	MA Chenglin		Core Management Personnel

	92	XIN Honghao		Core Management Personnel

	93	ZHU Hongbo		Core Management Personnel

	94	ZHANG Junwei		Core Management Personnel

	95	ZHAO Jianzhuang		Core Management Personnel

	96	PAN Lei		Core Management Personnel

	97	WU Song		Core Management Personnel

	98	ZHANG Wei		Core Management Personnel

	99	GUO Junji		Core Management Personnel

	100	HAN Hui		Core Management Personnel

	101	YIN Shengchao		Core Management Personnel

	102	ZHANG Yubao		Core Management Personnel

	103	LI Yikun		Core Management Personnel

	104	WANG Chen		Core Management Personnel

	105	ZHANG Jiao		Core Management Personnel

	106	XIN Tongshuai		Core Management Personnel

	107	ZHANG Jing		Core Management Personnel

	108	WANG Lu		Core Management Personnel

	109	LIU Chao		Core Management Personnel

	110	YANG Faqi		Core Management Personnel

	111	LUO Kaicheng		Core Management Personnel

- App II-5 -

APPENDIX II	PARTICIPANT LIST OF THE 2019 SHARE OPTION
			INCENTIVE SCHEME (ADJUSTED)


	Number	Name		Position

	112	HU Wei		Core Management Personnel

	113	CHANG Yajun		Core Management Personnel

	114	ZHANG Xingfu		Core Management Personnel

	115	WANG Junfu		Core Management Personnel

	116	LI Shusheng		Core Management Personnel

	117	SONG Xuefeng		Core Management Personnel

	118	GONG Hezheng		Core Management Personnel

	119	FENG Laiqing		Core Management Personnel

	120	FU Mingwei		Core Management Personnel

	121	LIU Hangang		Core Management Personnel

	122	SHI Haidong		Core Management Personnel

	123	CHU Zhenling		Core Management Personnel

	124	ZHANG Jinghe		Core Management Personnel

	125	ZHENG Zhao		Core Management Personnel

	126	CHEN Zhong		Core Management Personnel

	127	SHI Yan		Core Management Personnel

	128	FU Ping'an		Core Management Personnel

	129	WEI Hao		Core Management Personnel

	130	LI Pinghui		Core Management Personnel

	131	HOU Shubin		Core Management Personnel

	132	XU Zonglin		Core Management Personnel

	133	TIAN Zhouchao		Core Management Personnel

	134	LI Yingmin		Core Management Personnel

	135	DING Kan		Core Management Personnel

	136	SONG Xiaobing		Core Personnel

	137	ZHANG Yang		Core Personnel

	138	WANG Zifa		Core Personnel

	139	ZHANG Shengtao		Core Personnel

- App II-6 -

APPENDIX II	PARTICIPANT LIST OF THE 2019 SHARE OPTION
			INCENTIVE SCHEME (ADJUSTED)


	Number	Name		Position

	140	LI Hongbin		Core Personnel

	141	TAO Lin		Core Personnel

	142	LIU Zhansheng		Core Personnel

	143	CHENG Yanfeng		Core Personnel

	144	ZHAI Junyi		Core Personnel

	145	HE Cijie		Core Personnel

	146	GAO Yunfei		Core Personnel

	147	ZHONG Ning		Core Personnel

	148	YUAN Xiaopei		Core Personnel

	149	LIU Jinyu		Core Personnel

	150	XIE Yadong		Core Personnel

	151	ZHAO Yang		Core Personnel

	152	FANG Ke		Core Personnel

	153	BAI Jin		Core Personnel

	154	DENG Gaofeng		Core Personnel

	155	FAN Cunhui		Core Personnel

	156	WANG Kefei		Core Personnel

	157	ZHANG Yiduo		Core Personnel

	158	CHEN Xin		Core Personnel

	159	WANG Guanli		Core Personnel

	160	XIE Honglin		Core Personnel

	161	TIAN Long		Core Personnel

	162	HU Dalong		Core Personnel

	163	GUO Wuzeng		Core Personnel

	164	WANG Guangxin		Core Personnel

	165	RAN Yuxi		Core Personnel

	166	BIAN Yansheng		Core Personnel

	167	LI Jitang		Core Personnel

- App II-7 -

APPENDIX II	PARTICIPANT LIST OF THE 2019 SHARE OPTION
			INCENTIVE SCHEME (ADJUSTED)


	Number	Name		Position

	168	ZHANG Jianru		Core Personnel

	169	ZHAO Qi		Core Personnel

	170	LI Shuai		Core Personnel

	171	WANG Xiaozhuo		Core Personnel

	172	ZHANG Jingkui		Core Personnel

	173	SANG Chongfeng		Core Personnel

	174	HUANG Ziyan		Core Personnel

	175	LI Ningning		Core Personnel

	176	ZHANG Xinghui		Core Personnel

	177	ZHANG Jiye		Core Personnel

	178	XU Zuhui		Core Personnel

	179	LIU Guoliang		Core Personnel

	180	SHI Yuchun		Core Personnel

	181	FENG Zhanmiao		Core Personnel

	182	LU Jun		Core Personnel

	183	FAN Naifeng		Core Personnel

	184	YIN Wencai		Core Personnel

	185	LIU Sheng		Core Personnel

	186	LI Chenyang		Core Personnel

	187	ZHANG Weifang		Core Personnel

	188	ZHAO Xu		Core Personnel

	189	GUO Yukun		Core Personnel

	190	ZHENG Fengbo		Core Personnel

	191	LI Zheng		Core Personnel

	192	SUN Manchun		Core Personnel

	193	REN Xindong		Core Personnel

	194	XU Xueliang		Core Personnel

- App II-8 -

APPENDIX II	PARTICIPANT LIST OF THE 2019 SHARE OPTION
			INCENTIVE SCHEME (ADJUSTED)


	Number	Name		Position

	195	TU Hongyun		Core Personnel

	196	DING Bingbing		Core Personnel

	197	ZHANG Weidong		Core Personnel

	198	CHENG Jinying		Core Personnel

	199	PEI Shoukui		Core Personnel

	200	WU Ruifang		Core Personnel

	201	WANG Yongxiang		Core Personnel

	202	LIU Fangxin		Core Personnel

	203	LI Jiang		Core Personnel

	204	CHEN Jianghua		Core Personnel

	205	ZHANG Zhiguo		Core Personnel

	206	JIN Zhilong		Core Personnel

	207	CHU Zhenwei		Core Personnel

	208	ZHAO Haiwei		Core Personnel

	209	GUO Yuepeng		Core Personnel

	210	XIE Lei		Core Personnel

	211	WU Mengwei		Core Personnel

	212	ZHANG Jingquan		Core Personnel

	213	ZHANG Yaping		Core Personnel

	214	CAI Yanwei		Core Personnel

	215	LI Xuhua		Core Personnel

	216	YU Bingfeng		Core Personnel

	217	WANG Huating		Core Personnel

	218	KONG Xiangyu		Core Personnel

	219	WANG Jiandong		Core Personnel

	220	LI Duoqiang		Core Personnel

	221	TAO Chunjin		Core Personnel

	222	SANG Ruilong		Core Personnel

	223	CHEN Ming		Core Personnel

- App II-9 -

APPENDIX II	PARTICIPANT LIST OF THE 2019 SHARE OPTION
			INCENTIVE SCHEME (ADJUSTED)


	Number	Name		Position

	224	WANG Lei		Core Personnel

	225	HUANG Weikang		Core Personnel

	226	ZHU Xiaojiang		Core Personnel

	227	LIU Xiaofei		Core Personnel

	228	XU Baoquan		Core Personnel

	229	WANG Guanghui		Core Personnel

	230	LI Changyan		Core Personnel

	231	XU Wei		Core Personnel

	232	AN Jinmin		Core Personnel

	233	DENG Sanqiang		Core Personnel

	234	LIU Qiankun		Core Personnel

	235	LIU Zhihui		Core Personnel

	236	GUO Zhong		Core Personnel

	237	YUAN Bingbing		Core Personnel

	238	ZHAI Wenfeng		Core Personnel

	239	SONG Guoqi		Core Personnel

	240	YU Chaoqun		Core Personnel

	241	YAN Xinliang		Core Personnel

	242	CHANG Bin		Core Personnel

	243	XU Shuai		Core Personnel

	244	WANG Bin		Core Personnel

	245	KONG Fanhong		Core Personnel

	246	LI Dongjun		Core Personnel

	247	JING Dongmin		Core Personnel

	248	QIN Yongfeng		Core Personnel

	249	WANG Haiyang		Core Personnel

	250	ZHAO Yuhe		Core Personnel

	251	WU Jixu		Core Personnel

	252	LI Yang		Core Personnel

- App II-10 -

APPENDIX II	PARTICIPANT LIST OF THE 2019 SHARE OPTION
			INCENTIVE SCHEME (ADJUSTED)


	Number	Name		Position

	253	XU Rukui		Core Personnel

	254	CHEN Hongwei		Core Personnel

	255	XIA Guoxia		Core Personnel

	256	LIU Shuqiang		Core Personnel

	257	WANG Fumin		Core Personnel

	258	LI Qing		Core Personnel

	259	XIE Weirong		Core Personnel

	260	MA Min		Core Personnel

	261	LV Shanchao		Core Personnel

	262	WANG Yanchao		Core Personnel

	263	LIAN Donghui		Core Personnel

	264	GUI Yanpu		Core Personnel

	265	LIU Shuyong		Core Personnel

	266	DONG Yiwei		Core Personnel

	267	YANG Yanli		Core Personnel

	268	LI Xuefeng		Core Personnel

	269	WANG Haipeng		Core Personnel

	270	ZHANG Ning		Core Personnel

	271	ZHU Jingcheng		Core Personnel

	272	LI Xiangbin		Core Personnel

	273	CUI Jianmin		Core Personnel

	274	LI Guowei		Core Personnel

	275	CUI Kefei		Core Personnel

	276	ZHANG Jinxun		Core Personnel

	277	CUI Xi		Core Personnel

	278	FENG Jingpei		Core Personnel

	279	YANG Weishu		Core Personnel

	280	LI Juling		Core Personnel

- App II-11 -

APPENDIX II	PARTICIPANT LIST OF THE 2019 SHARE OPTION
			INCENTIVE SCHEME (ADJUSTED)


	Number	Name		Position

	281	LU Zhongxiang		Core Personnel

	282	LIU Yingchun		Core Management Personnel

	283	SONG Qianru		Core Management Personnel

	284	YAO Qi		Core Management Personnel

	285	LIU Jun		Core Management Personnel

	286	XIONG Yufang		Core Management Personnel

	287	TIAN Zhaohui		Core Management Personnel

	288	LI Kaishun		Core Management Personnel

	289	LIU Qianxi		Core Management Personnel

	290	Lin Xianghua		Core Management Personnel

	291	SONG Jian'ge		Core Management Personnel

	292	YANG Ming		Core Management Personnel

	293	ZHOU Yueting		Core Management Personnel

	294	QIAN Zhengjin		Core Management Personnel

	295	HU Yuanjun		Core Management Personnel

	296	SHENG Qinglong		Core Management Personnel

	297	GONG Huabing		Core Management Personnel

	298	WU Changfeng		Core Management Personnel

	299	SHU Feng		Core Management Personnel

	300	LI Changchun		Core Management Personnel

	301	LI Zhantao		Core Management Personnel

	302	ZHENG Quanjun		Core Management Personnel

	303	ZHU Xuesong		Core Management Personnel

	304	HU Wenlong		Core Management Personnel

	305	YU Zhiyi		Core Management Personnel

	306	LI Xiang		Core Management Personnel

	307	YANG Qinggong		Core Management Personnel

	308	TIAN Guozhu		Core Management Personnel

- App II-12 -

APPENDIX II	PARTICIPANT LIST OF THE 2019 SHARE OPTION
			INCENTIVE SCHEME (ADJUSTED)


	Number	Name		Position

	309	LIU Wulong		Core Management Personnel

	310	JING Yuanhui		Core Management Personnel

	311	WANG Yuanyuan		Core Management Personnel

	312	JIA Zhaopeng		Core Management Personnel

	313	YAN Xiaohui		Core Management Personnel

	314	LIU Yi		Core Management Personnel

	315	ZHAO Yaping		Core Management Personnel

	316	JIN Peng		Core Management Personnel

	317	ZHANG Jianrong		Core Management Personnel

	318	ZHANG Weiyuan		Core Management Personnel

	319	CHEN Aiguo		Core Management Personnel

	320	ZHOU Quan		Core Management Personnel

	321	DAI Hongxing		Core Management Personnel

	322	JI Youqun		Core Management Personnel

	323	REN Wenyuan		Core Management Personnel

	324	YAO Yilin		Core Management Personnel

	325	QIAN Jun		Core Management Personnel

	326	DU Wenwen		Core Management Personnel

	327	TAO Tao		Core Management Personnel

- App II-13 -

NOTICE OF THE SECOND EXTRAORDINARY GENERAL MEETING OF 2019

Zhengzhou Coal Mining Machinery Group Company Limited

鄭州煤礦機械集團股份有限公司

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

(Stock Code: 00564)

NOTICE OF THE SECOND EXTRAORDINARY GENERAL MEETING OF 2019

NOTICE IS HEREBY GIVEN THAT the second extraordinary general meeting of 2019 (the "EGM") of Zhengzhou Coal Mining Machinery Group Company Limited (鄭州煤礦機械集團股份有限公司) (the "Company") will be held at the Convention Centre, Office Building of Zhengzhou Coal Mining Machinery Group Company Limited, No. 167, 9th Street, Econ-Tech Development Zone, Zhengzhou, Henan Province, the PRC at 9:00 a.m. on Monday, 21 October 2019 for the following purposes:

SPECIAL RESOLUTIONS

The resolution in relation to the 2019 Share Option Incentive Scheme (Revised Draft) of Zhengzhou Coal Mining Machinery Group Company Limited and its abstract;
The resolution in relation to the Administrative Measures for Performance Evaluation (Revision) under the 2019 Share Option Incentive Scheme of Zhengzhou Coal Mining Machinery Group Company Limited;
The resolution in relation to seeking authorization from the shareholders of the Company in the general meeting to be granted to the Board for handling issues in connection with the 2019 Share Option Incentive Scheme; and
The resolution on amendments to the Articles of Association of the Company in relation to the composition of the Board.

ORDINARY RESOLUTION

5. The resolution in relation to the additional appointment of an independent non-executive Director of the fourth session of the Board of the Company.

Closure of the Register of Members

- EGM-1 -

NOTICE OF THE SECOND EXTRAORDINARY GENERAL MEETING OF 2019

EGM but have not yet registered are required to deposit the share certificates together with the relevant transfer documents at the Company's H share registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong no later than 4:30 p.m. on Friday, 20 September 2019. H shareholders whose names appear on the register of members of the Company on Saturday, 21 September 2019, shall be entitled to attend and vote at the EGM.

By order of the Board

Zhengzhou Coal Mining Machinery Group Company Limited

JIAO Chengyao

Chairman

Zhengzhou, PRC, 5 September 2019

As at the date of this announcement, the executive directors of the Company are Mr. JIAO Chengyao, Mr. JIA Hao, Mr. XIANG Jiayu, Mr. FU Zugang, Mr. WANG Xinying and Mr. WANG Bin and the independent non-executive directors of the Company are Ms. LIU Yao, Mr. JIANG Hua and Mr. LI Xudong.

Notes:

All votes of resolutions at the EGM will be taken by poll pursuant to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and the results of the poll will be published on the websites of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the Company (www.zzmj.com) in accordance with the requirements of the Listing Rules.
Any shareholders entitled to attend and vote at the EGM can appoint one or more proxies to attend and vote at the EGM on his/her behalf. A proxy need not be a shareholder of the Company. If more than one proxy is so appointed, the appointment shall specify the number and type of shares in respect of which each proxy is so appointed.
Shareholders shall appoint their proxies in writing. The form of proxy shall be signed by the shareholder or his/her/its attorney who has been authorized in writing. If the shareholder is a corporation, the form of proxy shall be affixed with the corporation's seal or signed by its director, or its attorney duly authorized in writing. If the form of proxy is signed by the attorney of the shareholder, the power of attorney or other authorization document shall be notarized. For shareholders of H shares, the aforementioned documents must be lodged with the H share registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong not less than 24 hours before the time appointed for holding the EGM (i.e. 9:00 a.m. on Sunday, 20 October 2019 (Hong Kong time)) or any adjournment thereof in order for such documents to be valid. Completion and delivery of the form of proxy shall not preclude a shareholder of the Company from attending and voting in person at the meeting and, in such event, the instrument for appointing a proxy shall be deemed to be revoked.
Shareholders who intend to attend the EGM (in person or by proxy) shall complete and deliver the reply slip of EGM to the H share registrar of the Company, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong by personal delivery, mail or fax on or before Tuesday, 1 October 2019.
Shareholders shall produce their identification documents when attending the EGM.
If a proxy attends the EGM on behalf of a shareholder, he/she should produce his/her identification document and the power of attorney or other documents signed by the appointer or his/her attorney, which specifies the date of its issuance. If a representative of a corporate shareholder attends the EGM, such representative shall produce his/her identification document and the notarized copy of the resolution passed by the board of directors or other authority or other notarized copy of any authorization documents issued by such corporate shareholder.

- EGM-2 -

NOTICE OF THE SECOND EXTRAORDINARY GENERAL MEETING OF 2019

Pursuant to the Administrative Measures on Equity Incentives of Listed Companies (上市公司股權激勵管理辦法) issued by the China Securities Regulatory Commission, Mr. Jiang Hua, an independent non-executive Director (the "INED") of the Company, as nominated by other INED, will serve as the soliciting party and will solicit votes on the resolutions in relation to the Share Option Incentive Scheme to be tabled at the EGM and the 2019 first class meeting of the holders of H shares (the "H Shareholders Class Meeting") to be held on 21 October 2019. No solicitation is made on the other resolutions which are not related to the Share Option Scheme.
The INED has for the abovementioned purpose prepared and enclosed herewith the proxy forms for appointing the INED as a proxy at the EGM and the H Shareholders Class Meeting respectively (collectively, the "INED Proxy Forms"). Should you wish to appoint the INED as your proxy to vote for you and on your behalf at the EGM and/or the H Shareholders Class Meeting, please complete and return the relevant INED Proxy Form(s) to Hong Kong Registrars Limited at 17M/F, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong 24 hours prior to the EGM and/or the H Shareholders Class Meeting (i.e. 9:00 a.m. on Sunday, 20 October 2019 (Hong Kong time)).
If the shareholders appoint the INED repetitively in relation to the matters under solicitation while the content of the appointment is inconsistent, the last INED Proxy Form executed by the Shareholder shall be treated as valid; if it is unable to determine the timing of execution, the last INED Proxy Form received shall be treated as valid.
A shareholder may attend a meeting in person or by proxy notwithstanding the appointment of the INED as the proxy in respect of the matters under solicitation.
If a INED Proxy Form verified to be valid falls under any of the following circumstances, the INED may treat the INED Proxy Form in accordance with the following:
1. After appointing the INED as the proxy in relation to the voting rights for matters under solicitation, a Shareholder may expressly revoke in writing the appointment of the INED as the proxy prior to the close of registration for the on-site meeting, in which case the appointment of the INED shall be treated as lapsed automatically;
2. If a shareholder has appointed someone other than the INED as the proxy to exercise the voting rights for matters under solicitation and to attend the meeting, and expressly revokes in writing the appointment of the INED prior to the close of registration of the on-site meeting, the appointment of the INED shall be treated as lapsed automatically;
3. A shareholder shall specify the voting instruction for matters under solicitation in the submitted INED Proxy Form and shall choose either "For" or "Against" or "Abstain" as appropriate. If more than one option have been made, or no option has been indicated, the appointment of the INED shall be treated as lapsed.
The EGM is expected to last for half a day. Shareholders who attend the EGM (in person or by proxy) shall bear their own travelling, accommodation and other expenses.
The contact of the Company:

Address:	Zhengzhou Coal Mining Machinery Group Company Limited,
	No. 167, 9th Street, Econ-Tech Development Zone,
	Zhengzhou, Henan Province, the PRC
Postal Code:	450016
Telephone:	86-371-6789 1199
Contact Person:	Mr. XI Zhipeng
Facsimile:	86-371-6789 1000

- EGM-3 -

NOTICE OF THE FIRST H SHAREHOLDERS CLASS MEETING OF 2019

Zhengzhou Coal Mining Machinery Group Company Limited

鄭州煤礦機械集團股份有限公司

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

(Stock Code: 00564)

NOTICE OF THE FIRST H SHAREHOLDERS CLASS MEETING OF 2019

NOTICE IS HEREBY GIVEN THAT the first H Shareholders Class Meeting of 2019 (the "Meeting") of Zhengzhou Coal Mining Machinery Group Company Limited (鄭州煤礦機械集團股份有限公司) (the "Company") will be held at the Convention Centre, Office Building of Zhengzhou Coal Mining Machinery Group Company Limited, No. 167, 9th Street, Econ-Tech Development Zone, Zhengzhou, Henan Province, the PRC at 9:00 a.m. on Monday, 21 October 2019 for the following purposes:

SPECIAL RESOLUTIONS

The resolution in relation to the 2019 Share Option Incentive Scheme (Revised Draft) of Zhengzhou Coal Mining Machinery Group Company Limited and its abstract;
The resolution in relation to the Administrative Measures for Performance Evaluation (Revision) under the 2019 Share Option Incentive Scheme of Zhengzhou Coal Mining Machinery Group Company Limited; and
The resolution in relation to seeking authorization from the shareholders of the Company in the general meeting to be granted to the Board for handling issues in connection with the 2019 Share Option Incentive Scheme.

Closure of the Register of Members

The register of members of the Company will be closed from Saturday, 21 September 2019 to Monday, 21 October 2019 (both days inclusive), during which period no transfer of shares will be effected. Any H shareholders of the Company who intend to attend the Meeting but have not yet registered are required to deposit the share certificates together with the relevant transfer documents at the Company's H share registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong no later than 4:30 p.m. on Friday,

- SGM-1 -

NOTICE OF THE FIRST H SHAREHOLDERS CLASS MEETING OF 2019

20 September 2019. H shareholders whose names appear on the register of members of the Company on Saturday, 21 September 2019, shall be entitled to attend and vote at the Meeting.

By order of the Board

Zhengzhou Coal Mining Machinery Group Company Limited

JIAO Chengyao

Chairman

Zhengzhou, PRC, 5 September 2019

Notes:

All votes of resolutions at the Meeting will be taken by poll pursuant to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and the results of the poll will be published on the websites of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the Company (www.zzmj.com) in accordance with the requirements of Listing Rules.
Any shareholders entitled to attend and vote at the Meeting can appoint one or more proxies to attend and vote at the Meeting on his/her behalf. A proxy need not be a shareholder of the Company. If more than one proxy is so appointed, the appointment shall specify the number and type of shares in respect of which each proxy is so appointed.
Shareholders shall appoint their proxies in writing. The form of proxy shall be signed by the shareholder or his/her/its attorney who has been authorized in writing. If the shareholder is a corporation, the form of proxy shall be affixed with the corporation's seal or signed by its director, or its attorney duly authorized in writing. If the form of proxy is signed by the attorney of the shareholder, the power of attorney or other authorization document shall be notarized. For shareholders of H shares, the aforementioned documents must be lodged with the H share registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong not less than 24 hours before the time appointed for holding the Meeting (i.e. 9:00 a.m. on Sunday, 20 October 2019 (Hong Kong time)) or any adjournment thereof in order for such documents to be valid. Completion and delivery of the form of proxy shall not preclude a shareholder of the Company from attending and voting in person at the meeting and, in such event, the instrument appointing a proxy shall be deemed to be revoked.
Shareholders who intend to attend the Meeting (in person or by proxy) shall complete and deliver the reply slip of Meeting to the H share registrar of the Company, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong by personal delivery, mail or fax on or before Tuesday, 1 October 2019.
Shareholders shall produce their identification documents when attending the Meeting.
If a proxy attends the Meeting on behalf of a shareholder, he/she should produce his/her identification document and the power of attorney or other documents signed by the appointer or his/her attorney, which specifies the date of its issuance. If a representative of a corporate shareholder attends the Meeting, such representative shall produce his/her identification document and the notarized copy of the resolution passed by the board of directors or other authority or other notarized copy of any authorization documents issued by such corporate shareholder.

- SGM-2 -

NOTICE OF THE FIRST H SHAREHOLDERS CLASS MEETING OF 2019

Pursuant to the Administrative Measures on Equity Incentives of Listed Companies (上市公司股權激勵管理辦法) issued by the China Securities Regulatory Commission, Mr. Jiang Hua, an independent non-executive Director (the "INED") of the Company, as nominated by other INED, will serve as the soliciting party and will solicit votes on the resolutions in relation to the Share Option Incentive Scheme to be tabled at the 2019 second extraordinary general meeting ("EGM") and the Meeting to be held on 21 October 2019. No solicitation is made on the other resolutions which are not related to the Share Option Scheme.
The INED has for the abovementioned purpose prepared and enclosed herewith the proxy forms for appointing the INED as a proxy at the EGM respectively (collectively, the "INED Proxy Forms"). Should you wish to appoint the INED as your proxy to vote for you and on your behalf at the EGM and/or the Meeting, please complete and return the relevant INED Proxy Form(s) to Hong Kong Registrars Limited at 17M/F, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong 24 hours prior to the EGM and/or the Meeting (i.e. 9:00 a.m. on Sunday, 20 October 2019 (Hong Kong time)).
If the shareholders appoint the INED repetitively in relation to the voting rights for matters under solicitation while the content of the appointment is inconsistent, the last INED Proxy Form executed by the Shareholder shall be treated as valid; if it is unable to determine the timing of execution, the last INED Proxy Form received shall be treated as valid.
A shareholder may attend a meeting in person or by proxy notwithstanding the appointment of the INED as the proxy in respect of the voting rights for matters under solicitation.
If a INED Proxy Form verified to be valid falls under any of the following circumstances, the INED may treat the INED Proxy Form in accordance with the following:
1. After appointing the INED as the proxy in relation to the voting rights for matters under solicitation, a Shareholder may expressly revoke in writing the appointment of the INED as the proxy prior to the close of registration for the on-site meeting, in which case the appointment of the INED shall be treated as lapsed automatically;
2. If a shareholder has appointed someone other than the INED as the proxy to exercise the voting rights for matters under solicitation and to attend the meeting, and expressly revokes in writing the appointment of the INED prior to the close of registration of the on-site meeting, the appointment of the INED shall be treated as lapsed automatically;
3. A shareholder shall specify the voting instruction for matters under solicitation in the submitted INED Proxy Form and shall choose either "For" or "Against" or "Abstain" as appropriate. If more than one option have been made, or no option has been indicated, the appointment of the INED shall be treated as lapsed.
The Meeting is expected to last for half a day. Shareholders who attend the Meeting (in person or by proxy) shall bear their own travelling, accommodation and other expenses.
The contact of the Company:

Address:	Zhengzhou Coal Mining Machinery Group Company Limited,
	No. 167, 9th Street, Econ-Tech Development Zone,
	Zhengzhou, Henan Province, the PRC
Postal Code:	450016
Telephone:	86-371-6789 1199
Contact Person:	Mr. XI Zhipeng
Facsimile:	86-371-6789 1000

- SGM-3 -

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Zhengzhou Coal Mining Machinery Group Co. Ltd. published this content on 20 September 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 September 2019 10:01:07 UTC

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