2020 INTERIM REPORT

IMPORTANT NOTICE

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

The 2020 Interim Report of the Company has been approved by the second meeting of the eighth session of the Board. All eleven Directors of quorum attended the meeting.

The financial statements contained in the 2020 Interim Report of the Company Limited have not been audited.

The 2020 Interim Report of the Company has been reviewed by the audit committee of the Board.

Mr. Li Xiyong, Chairman of the Board, Mr. Zhao Qingchun, Chief Financial Officer, and Mr. Xu Jian, head of the finance management department of the Company, hereby warrant the authenticity, accuracy and completeness of the financial statements contained in this interim report.

The Company does not distribute profit in the first half of 2020. There is no capital reserve transferred to share capital in the reporting period.

The forward-looking statements contained in this interim report regarding the Company's future plans do not constitute any substantive commitment to investors and investors are reminded of the investment risks.

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

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

The Company has disclosed the main risks faced by the Group, their influences and the countermeasures in this interim report. For details, please refer to the relevant content in "Chapter 4 Board of Directors' Report", to which the investors' attention are drawn.

Yanzhou Coal Mining Company Limited Interim Report 2020 i

CONTENTS

Chapter 1

DEFINITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1

Chapter 2

GROUP PROFILE AND MAJOR FINANCIAL INDICATORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4

Chapter 3

BUSINESS HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7

Chapter 4

BOARD OF DIRECTORS' REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9

Chapter 5

SIGNIFICANT EVENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30

Chapter 6

CHANGES IN ORDINARY SHARES AND SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

82

Chapter 7

DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

88

Chapter 8

CORPORATE BONDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

95

Chapter 9

CONSOLIDATED FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

104

Chapter 10

DOCUMENTS AVAILABLE FOR INSPECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

142

ii Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 1 DEFINITION

In this interim report, unless the context requires otherwise, the following expressions have the following meanings:

DEFINITIONS

"Yanzhou Coal", "Company" or

means

Yanzhou Coal Mining Company Limited, a joint stock limited company

"the Company"

incorporated under the laws of the PRC in 1997 and the H Shares and

A Shares of which are listed on the Hong Kong Stock Exchange and the

Shanghai Stock Exchange, respectively;

"Group" or "the Group"

means

The Company and its subsidiaries;

"Yankuang Group" or

means

Yankuang Group Company Limited, a company with limited liability

"the Controlling Shareholder"

reformed and established under the laws of the PRC in 1996, being the

controlling shareholder of the Company directly and indirectly holding

56.01% of the total share capital of the Company as at the end of the

reporting period;

"Yulin Neng Hua"

means

Yanzhou Coal Yulin Neng Hua Company Limited, a company with limited

liability incorporated under the laws of the PRC in 2004 and a wholly-

owned subsidiary of the Company which is mainly engaged in the

production and operation of the methanol project in Shaanxi Province;

"Heze Neng Hua"

means

Yanmei Heze Neng Hua Company Limited, a company with limited liability

incorporated under the laws of the PRC in 2004 and a 98.33% owned

subsidiary of the Company as at the end of the reporting period, which is

mainly engaged in the development and operation of coal resources and

electric power business in Juye coalfield, Heze City, Shandong Province;

"Shanxi Neng Hua"

means

Yanzhou Coal Shanxi Neng Hua Company Limited, a company with

limited liability incorporated under the laws of the PRC in 2002 and a

wholly-owned subsidiary of the Company, which is mainly engaged in the

management of projects invested in Shanxi Province by the Company;

"Hua Ju Energy"

means

Shandong Hua Ju Energy Company Limited, a joint stock limited

company incorporated under the laws of the PRC in 2002 and a 95.14%

owned subsidiary of the Company as at the end of the reporting period,

which is mainly engaged in the thermal power generation with gangue

and coal slurry and heating supply business;

"Ordos Neng Hua"

means

Yanzhou Coal Ordos Neng Hua Company Limited, a company with

limited liability incorporated under the laws of the PRC in 2009 and a

wholly-owned subsidiary of the Company, which is mainly engaged in the

development and operation of coal resources and coal chemical projects

of the Company in the Inner Mongolia Autonomous Region;

Yanzhou Coal Mining Company Limited Interim Report 2020 1

CHAPTER 1 DEFINITION

"Haosheng Company"

means

Inner Mongolia Haosheng Coal Mining Company Limited, a company

with limited liability incorporated under the laws of the PRC in 2010 and a

59.38% owned subsidiary of the Company as at the end of the reporting

period, which is mainly engaged in the production and operation of

Shilawusu coal mine in Ordos, Inner Mongolia Autonomous Region;

"Donghua Heavy Industry"

means

Yankuang Donghua Heavy Industry Company Limited, a company with

limited liability incorporated under the laws of the PRC in 2013 and a

wholly-owned subsidiary of the Company, which is mainly engaged in

the design, manufacture, installation, repair and maintenance of mining

equipment, electromechanical equipment and parts;

"Zhongyin Financial Leasing"

means

Zhongyin Financial Leasing Company Limited, a company with limited

liability incorporated under the laws of the PRC in 2014 and a wholly-

owned subsidiary of the Company, which is mainly engaged in the

financial leasing, leasing, leasing trade consultation and guarantees,

commercial factoring related to main business, etc;

"Yankuang Finance Company"

means

Yankuang Group Finance Co., Ltd., a company with limited liability

incorporated under the laws of the PRC in September 2010 and a 95%

owned subsidiary of the Company as at the end of the reporting period;

"Yancoal Australia"

means

Yancoal Australia Limited, a company with limited liability incorporated

under the laws of Australia in 2004 and a 62.26% owned subsidiary

of the Company as at the end of the reporting period, the shares of

which are traded on the Australian Securities Exchange and the HKEX

respectively;

"Yancoal International"

means

Yancoal International (Holding) Company Limited, a company with limited

liability incorporated under the laws of Hong Kong in 2011 and a wholly-

owned subsidiary of the Company;

"Yancoal International Resources"

means

Yancoal International Resources Development Company Limited, a

company with limited liability incorporated under the laws of Hong Kong

in 2011 and a wholly-owned subsidiary of Yancoal International;

"Railway Assets"

means

The railway assets specifically used for coal transportation of the

Company, which are located in Jining City, Shandong Province;

"H Shares"

means

Overseas listed foreign invested shares in the ordinary share capital of the

Company, with nominal value of RMB1.00 each, which are listed on the

HKEX;

"A Shares"

means

Domestic shares in the ordinary share capital of the Company, with

nominal value of RMB1.00 each, which are listed on the Shanghai Stock

Exchange;

2 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 1 DEFINITION

"PRC"

means

The People's Republic of China;

"Hong Kong"

means

The Hong Kong Special Administrative Region of the PRC;

"CASs" or "ASBEs"

means

Accounting Standards for Business Enterprises and the relevant

regulations and explanations issued by the Ministry of Finance of the

PRC;

"IFRS"

means

International Financial Reporting Standards issued by the International

Accounting Standards Board;

"CSRC"

means

China Securities Regulatory Commission;

"Hong Kong Listing Rules"

means

The Rules Governing the Listing of Securities on The Stock Exchange of

Hong Kong Limited;

"HKEX" or "Hong Kong

means

The Stock Exchange of Hong Kong Limited;

Stock Exchange"

"Shanghai Stock Exchange"

means

The Shanghai Stock Exchange;

"Company Law"

means

Company Law of the PRC;

"Securities Law"

means

Securities Law of the PRC;

"Articles"

means

The Articles of Association of the Company;

"Shareholders"

means

The shareholders of the Company;

"Directors"

means

The directors of the Company;

"Board"

means

The board of directors of the Company;

"Supervisors"

means

The supervisors of the Company;

"RMB"

means

Renminbi, the lawful currency of the PRC, unless otherwise specified;

"AUD"

means

Australian dollars, the lawful currency of Australia;

"USD"

means

United States dollars, the lawful currency of the United States;

"HKD"

means

Hong Kong dollars, the lawful currency of Hong Kong.

Yanzhou Coal Mining Company Limited Interim Report 2020 3

CHAPTER 2 GROUP PROFILE AND MAJOR FINANCIAL INDICATORS

  1. INFORMATION OF THE COMPANY

Statutory Chinese Name:

兗州煤業股份有限公司

Abbreviation of Chinese Name:

兗州煤業

Statutory English Name:

Yanzhou Coal Mining Company Limited

Legal Representative:

Li Xiyong

Authorized Representatives of HKEX:

Zhao Qingchun, Jin Qingbin

  1. CONTACT DETAILS

Secretary to the Board/Company Secretary

Representative of Shanghai Stock Exchange

Name:

Jin Qingbin

Shang Xiaoyu

Address:

Office of the Secretary to the Board,

Office of the Secretary to the Board,

298 Fushan South Road, Zoucheng City,

298 Fushan South Road, Zoucheng City,

Shandong Province, PRC

Shandong Province, PRC

Tel:

(86 537)538 2319

(86 537)538 4451

Fax:

(86 537)538 3311

(86 537)538 3311

E-mail:

yzc@yanzhoucoal.com.cn

xyshang.yzc@163.com

III. GENERAL INFORMATION

Registered Address:

298 Fushan South Road, Zoucheng City, Shandong Province, PRC

Postal Code:

273500

Office Address:

298 Fushan South Road, Zoucheng City, Shandong Province, PRC

Postal Code:

273500

Official Website:

http://www.yanzhoucoal.com.cn

E-mail:

yzc@yanzhoucoal.com.cn

IV. INFORMATION DISCLOSURE AND PLACE FOR DOCUMENT INSPECTION

Newspapers for information disclosure

China Securities Journal, Shanghai Securities News, Securities Times

in the PRC:

Websites designated by the CSRC for

Website for publishing A shares interim report: http://www.sse.com.cn

publishing interim report:

Website for publishing H shares interim report: http://www.hkexnews.hk

The interim reports are available at:

Office of the Secretary to the Board, Yanzhou Coal Mining Company

Limited, 298 Fushan South Road, Zoucheng City, Shandong,

the PRC

4 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 2 GROUP PROFILE AND MAJOR FINANCIAL INDICATORS

  1. CORPORATE STOCKS

Class of Shares

Place of Listing

Stock Abbreviation

Stock Code

A share

The Shanghai Stock Exchange

Yanzhou Mei Ye

600188

H share

HKEX

N/A

01171

VI. OTHER INFORMATION

Certified Public Accountants (Domestic)

Name

Shine Wing Certified Public Accountants

Office Address:

9/F, Block A, Fuhua Mansion, 8 Chaoyangmen Beidajie,

Dongcheng District, Beijing, PRC

Certified Public Accountants (Overseas)

Name

SHINEWING (HK) CPA Limited

Office Address:

43/F, Lee Garden One, 33 Hysan Avenue, Causeway Bay,

Hong Kong

VII. MAJOR ACCOUNTING DATA AND FINANCIAL INDICATORS

(Prepared in accordance with the IFRS)

(I)

Operating Results

For the year

ended 31

For the six months ended 30 June

December

Changes as

compared

with the

corresponding

2020

2019

period of the

2019

(RMB'000)

(RMB'000)

previous year

(RMB'000)

(unaudited)

(unaudited)

(%)

(audited)

Sales income

35,324,830

33,237,425

6.28

67,804,644

Gross profit

7,776,395

11,936,174

-34.85

21,029,486

Financing expenses

-1,405,248

-1,562,027

-10.04

-2,751,234

Income before income tax

7,941,200

9,155,089

-13.26

14,986,842

Net income attributable to equity holders of the

Company for the reporting period

4,548,656

5,809,977

-21.71

9,388,645

Earnings per Share

RMB0.94

RMB1.18

-21.19

RMB1.91

Note: During the reporting period, the Company newly consolidated the financial statements of Qingdao Duanxin Assets Management Co., Ltd. and Yankuang Intelligent Ecology Co., Ltd.

Yanzhou Coal Mining Company Limited Interim Report 2020 5

CHAPTER 2 GROUP PROFILE AND MAJOR FINANCIAL INDICATORS

(II) Assets and Liabilities

30 June

31 December

2020

2019

2019

(RMB'000)

(RMB'000)

(RMB'000)

(unaudited)

(unaudited)

(audited)

Current assets

67,531,906

68,577,137

62,949,044

Current liabilities

78,686,925

65,984,271

67,001,890

Total assets

219,702,959

204,696,127

210,760,571

Equity attributable to equity holders of the Company

55,496,738

55,512,390

54,119,800

Net assets value per share

RMB11.32

RMB11.30

RMB11.02

Return on net assets (%)

8.20

10.47

17.35

(III) Summary of Cash Flow Statement

For the year

ended 31

For the six months ended 30 June

December

Changes as

compared

with the

corresponding

2020

2019

period of the

2019

(RMB'000)

(RMB'000)

previous year

(RMB'000)

(unaudited)

(unaudited)

(%)

(audited)

Net cash flow from operating activities

5,884,727

8,378,922

-29.77

16,411,202

Net increase (decrease) in cash

and cash equivalents

-4,572,196

-4,600,233

-

-4,885,829

Net cash flow per share from operating

activities

RMB1.20

RMB1.71

-29.82

RMB3.34

6 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 3 BUSINESS HIGHLIGHTS

  1. MAIN BUSINESS, BUSINESS MODEL AND INDUSTRY SITUATION OF THE COMPANY DURING THE REPORTING PERIOD
    1. Main Business and Business Model
      1. Coal business
        As one of the main coal producers and coal traders in China and Australia, the main products of the Group include thermal coal and PCI coal, which are used in electric power, metallurgy and chemical industry, etc.; the Company's coal products are mainly sold to East China, North China, South China, Northwest China and other regions of China as well as Australia, Singapore, Japan, South Korea and other countries.
      2. Coal chemicals business
        The Group's coal chemical business is mainly distributed in Shaanxi Province and Inner Mongolia Autonomous Region. The main product of methanol is mostly sold to North China, East China and Northwest China.
      3. Mechanical and electrical equipment manufacturing business
        The Group's chemical and electrical equipment manufacturing industry is mainly engaged in manufacturing, sales, leasing, repair, and maintenance of mechanical and electrical equipment including hydraulic supports, heading machines, shearers and others. The products are mostly sold to East China.
      4. Power generation and heat business

The Group owns and operates seven power plants with a total installed capacity of 482 MW. In addition to the part for satisfying the demand of the Group itself, the rest of the generated electricity and heat are sold to Yankuang Group.

  1. Industry Situation Analysis

Impacted by the worldwide COVID-19 epidemic, the first half year of 2020 has witnessed a continuous slowdown in the macro economy and a drastic fluctuation in the coal market. As the economy resumes steadily, the supply and demand in coal market regained overall balance compared with the slightly tight supply at the beginning of 2020. However, regional and structural imbalance between supply and demand still exist as certain periods were affected by factors such as the epidemic, transportation constraint, safety and environmental protection. In addition, as the supply-side structural reform is deepening, the coal production capacity remained basically balanced with the expansion of efficient production capacity and the accelerated reduction of inefficient one, and the coal price moved in a fluctuated way generally.

Yanzhou Coal Mining Company Limited Interim Report 2020 7

CHAPTER 3 BUSINESS HIGHLIGHTS

  1. STATEMENTS OF SIGNIFICANT CHANGES OF MAJOR ASSETS DURING THE REPORTING PERIOD

(All financial data contained in this section is calculated under CASs)

For the details of significant changes of major assets of the Group during the reporting period and the cause analysis, please refer to "Chapter 4 Board of Directors' Report".

Including: Overseas assets of RMB73.422 billion, representing 33.6% of total assets, did not have significant changes compared with the corresponding period of last year. Since 2004, the Group has set up related overseas investment management platforms (mainly Yancoal Australia and Yancoal International) through various ways, such as overseas assets or equity acquisition, company establishment, stock swap and merger etc. For the details in relation to the production and operation of Yancoal Australia and Yancoal International, please refer to "Chapter 4 Board of Directors' Report".

III. CORE COMPETITIVENESS ANALYSIS DURING THE REPORTING PERIOD

During the first half of 2020, the Group, by seizing policy opportunities, continuously improved its core competitiveness in various ways, such as deepening innovations in mechanisms, optimizing the industrial structure and strengthening lean management. The coal business acquired 10% equity of Moolarben coal mine in Australia and increased its coal resources and reserves with high quality. Its operating risk was reduced by divestiture of non- coal trading companies. The marketing distribution and overall layout had been pushed forward by construction of a group of logistics parks with characteristic and freight stations, coal transportation network became more complete. The coal chemical business realized the operation of "safe, stable, long-term,full-load and high-quality", and the two Phase II high-end fine chemical projects in Ordos Neng Hua and Yulin Neng Hua were put into a trial production, which amplified the scale effect. The technical innovation of the Company made new breakthroughs and the Company completed the building of 7 intelligent coal mining workfaces and 9 smart developing workfaces, which took the lead in the coal industry for intelligent coal mine construction. The Company accelerated the construction of the comprehensive rehabilitation for the coal mined subsidence area, and set a green leading trend in the industry.

8 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 4 BOARD OF DIRECTORS' REPORT

  1. MANAGEMENT DISCUSSION AND ANALYSIS
    Main business

Six months

Six months

Increase/

ended 30

ended 30

Increase/

Decrease

Item

June 2020

June 2019

Decrease

(%)

1. Coal Business (Kiloton)

Saleable coal production

50,108

46,991

3,116

6.63

Saleable coal sales volume

67,620

55,288

12,333

22.31

2. Railway Transportation Business (Kiloton)

Transportation volume

8,900

10,394

-1,493

-14.37

3. Coal Chemicals Business (Kiloton)

Methanol production

935

846

90

10.59

Methanol sales volume

934

834

100

11.97

4. Power Generation Business (KWh)

Power generation

141,701

132,089

9,612

7.28

Electricity sold

89,437

79,327

10,110

12.74

Note: There were significant differences between production volumes and sales volumes of related products of power generation business in the above table, which was mainly due to the fact that related products of the Group are sold externally after satisfying its internal operating requirements.

During the reporting period, the Group sold 67.62 million tons of saleable coal, including: 48.22 million tons of self- produced coal, accounting for 48.2% of annual self-produced coal sales plan.

Yanzhou Coal Mining Company Limited Interim Report 2020 9

CHAPTER 4 BOARD OF DIRECTORS' REPORT

  1. MAIN BUSINESS DURING THE REPORTING PERIOD
    1. The Operation of Business Segments
      1. Coal Business
      1. Coal Production
        During the first half of 2020, the Group produced 50.11 million tons of saleable coal, representing an increase of 3.2 million tons or 6.6% as compared with the corresponding period of last year.
        The following table sets out the salable coal production volume of the Group for the first half of 2020:

Six months

Six months

ended 30 June

ended 30 June

Increase/

Increase/

2020

2019

Decrease

Decrease

(kiloton)

(kiloton)

(kiloton)

(%)

The Company

15,731

15,660

70

0.45

Shanxi Neng Hua

750

839

-89

-10.58

Heze Neng Hua

1,596

1,235

361

29.25

Ordos Neng Hua

7,441

7,443

-2

-0.03

Haosheng Company

3,477

1,189

2,287

192.38

Yancoal Australia

18,428

17,849

578

3.24

Yancoal International

2,686

2,776

-90

-3.25

Total

50,108

46,991

3,116

6.63

Note: The saleable coal production of Haosheng Coal Company was increased as compared with the corresponding period of the previous year mainly due to restrictions on coal production in Haosheng Coal Company's Shilawusu Coal Mine in the first half of 2019 affected by safety and environmental protection policies.

10 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 4 BOARD OF DIRECTORS' REPORT

  1. Coal prices and sales
    The sales volume of coal for the first half of 2020 was 67.62 million tons, representing an increase of 12.33 million tons or 22.3% as compared with the corresponding period of the previous year.
    The sale income of the Group for the first half of 2020 was RMB33.498 billion, representing an increase of RMB2.278 billion or 7.3% as compared with the same period of the previous year.

The following table sets out the Group's production and sales of saleable coal by coal types for the first half of 2020:

For the six months ended 30 June 2020

For the six months ended 30 June 2019

Production

Sales

Sales

Production

Sales

Sales

volume

volume

price

Revenue

volume

volume

price

Revenue

(RMB per

(million

(RMB per

(kiloton)

(kiloton)

ton)

RMB)

(kiloton)

(kiloton)

ton)

(million RMB)

1.The Company

15,731

15,847

525.78

8,332

15,660

16,144

655.65

10,584

No.1 clean coal

389

413

777.94

321

589

599

948.30

569

No.2 clean coal

4,174

4,375

701.26

3,068

4,870

5,129

902.98

4,631

No.3 clean coal

1,781

1,809

537.24

972

1,403

1,494

684.95

1,023

Lump coal

1,137

1,271

585.45

744

1,223

1,310

756.32

991

Sub-total of clean coal

7,482

7,869

648.86

5,106

8,085

8,532

845.47

7,214

Screened raw coal

8,250

7,978

404.38

3,226

7,575

7,612

442.82

3,370

2.Shanxi Neng Hua

750

734

280.91

206

839

851

317.71

270

Screened raw coal

750

734

280.91

206

839

851

317.71

270

3.Heze Neng Hua

1,596

1,588

878.70

1,395

1,235

828

1,146.62

949

No.2 clean coal

1,230

1,355

969.73

1,314

1,044

828

1,146.62

949

Screened raw coal

366

233

349.98

81

191

-

-

-

4.Ordos Neng Hua

7,441

6,164

228.31

1,407

7,443

6,522

269.18

1,756

Screened raw coal

7,441

6,164

228.31

1,407

7,443

6,522

269.18

1,756

5.Haosheng Company

3,477

3,481

278.81

971

1,189

1,173

329.59

387

Screened raw coal

3,477

3,481

278.81

971

1,189

1,173

329.59

387

6.Yancoal Australia

18,428

17,748

464.78

8,249

17,849

16,586

584.43

9,694

Semi-hard coking coal

88

85

752.67

64

30

28

1,035.71

29

Semi-soft coking coal

757

729

675.56

492

1,611

1,497

828.99

1,241

PCI coal

1,092

1,051

703.12

739

1,415

1,315

885.93

1,165

Thermal coal

16,492

15,883

437.80

6,954

14,793

13,746

528.08

7,259

7.Yancoal International

2,686

2,663

359.68

958

2,776

2,762

384.42

1,062

Thermal coal

2,686

2,663

359.68

958

2,776

2,762

384.42

1,062

8.Traded coal

-

19,396

617.64

11,980

-

10,422

625.43

6,518

9.Total of the Group

50,108

67,620

495.38

33,498

46,991

55,288

564.68

31,220

Yanzhou Coal Mining Company Limited Interim Report 2020 11

CHAPTER 4 BOARD OF DIRECTORS' REPORT

The following table sets out the factors affecting the changes in sales income of coal.

Impact of

Impact of

Changes on

Changes on

the Sales

the Sales

Volume of Coal

Price of Coal

(RMB million)

(RMB million)

The Company

-194

-2,058

Shanxi Neng Hua

-37

-27

Heze Neng Hua

871

-425

Ordos Neng Hua

-96

-252

Haosheng Company

761

-177

Yancoal Australia

679

-2,124

Yancoal International

-38

-66

Traded Coal

5,612

-151

The Group's coal products are mainly sold in markets of China, Japan, South Korea, Singapore, Australia, etc.

The following table sets out the Group's coal sales by geographical regions for the first half of 2020:

For the six months ended

For the six months ended

30 June 2020

30 June 2019

Sales Volume

Sales Income

Sales Volume

Sales Income

(kiloton)

(RMB million)

(kiloton)

(RMB million)

1. China

50,659

25,642

39,182

22,175

East China

24,808

14,906

17,302

11,942

South China

9,363

3,843

9,885

4,540

North China

7,143

3,668

4,600

2,961

Northwest China

6,242

1,656

5,922

1,673

Other regions

3,103

1,569

1,473

1,059

2. Japan

3,878

2,045

4,475

3,120

3. South Korea

2,011

1,062

1,641

1,143

4. Singapore

4,588

1,702

2,728

1,147

5. Australia

3,745

1,498

4,811

2,337

6. Others

2,739

1,549

2,451

1,298

7. Total for the Group

67,620

33,498

55,288

31,220

Most of the Group's coal products were sold to industries such as power generation, metallurgy, chemicals and trade, etc.

12 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 4 BOARD OF DIRECTORS' REPORT

The following table sets out the Group's coal sales volume by industries for the first half of 2020:

For the six months ended

For the six months ended

30 June 2020

30 June 2019

Sales Volume

Sales Income

Sales Volume

Sales Income

(kiloton)

(RMB million)

(kiloton)

(RMB million)

1. Power

25,126

10,676

25,592

12,414

2. Metallurgy

3,116

2,709

3,978

3,608

3. Chemical

4,381

2,505

4,594

3,884

4. Trade

32,353

16,255

20,850

11,153

5. Others

2,644

1,353

274

161

6. Total for the Group

67,620

33,498

55,288

31,220

  1. The Cost of Coal Sales
    The Group's cost of coal sales for the first half of 2020 was RMB24.528 billion, representing an increase of RMB6.395 billion or 35.3% on the corresponding period in 2019. It was mainly due to the increase of coal sales volume as compared with the corresponding period in the previous year.
    The following table sets out the main sales cost of coal by business entities:

For the six

For the six

months

months

ended

ended 30

30 June

Increase/

Increase/

Unit

June 2020

2019

Decrease

Decrease (%)

The Company

Total cost of sales

RMB million

4,223

4,496

-274

-6.09

Cost of sales per ton

RMB/ton

265.94

276.66

-10.71

-3.87

Shanxi Neng Hua

Total cost of sales

RMB million

148

182

-34

-18.76

Cost of sales per ton

RMB/ton

201.44

213.82

-12.39

-5.79

Heze Neng Hua

Total cost of sales

RMB million

777

536

241

44.87

Cost of sales per ton

RMB/ton

451.29

560.62

-109.32

-19.50

Ordos Neng Hua

Total cost of sales

RMB million

1,058

1,060

-3

-0.25

Cost of sales per ton

RMB/ton

171.59

162.56

9.02

5.55

Haosheng Company

Total cost of sales

RMB million

650

446

205

45.94

Cost of sales per ton

RMB/ton

186.78

379.81

-193.03

-50.82

Yancoal Australia

Total cost of sales

RMB million

5,479

4,659

820

17.58

Cost of sales per ton

RMB/ton

308.70

280.92

27.78

9.89

Yancoal International

Total cost of sales

RMB million

709

622

87

13.99

Cost of sales per ton

RMB/ton

266.27

225.19

41.07

18.24

Traded Coal

Total cost of sales

RMB million

11,634

6,312

5,321

84.30

Cost of sales per ton

RMB/ton

599.81

605.67

-5.86

-0.97

The change in the sales cost of coal per ton of Haosheng Company was mainly due to the increase in sales of saleable coal as compared with the corresponding period of the previous year, which affected the decrease in the cost of coal sales per ton as compared with the corresponding period of the previous year.

Yanzhou Coal Mining Company Limited Interim Report 2020 13

CHAPTER 4 BOARD OF DIRECTORS' REPORT

  1. Railway Transportation Business
    For the first half of 2020, the transportation volume of the Company's Railway Assets was 8.9 million tons, representing a decrease of 1,493 thousand tons or 14.4% as compared with the corresponding period of the previous year. As a result, the income from railway transportation services of the Company was RMB184 million for the first half of 2020, representing a decrease of RMB30.947 million or 14.4% as compared with the corresponding period of the previous year. The cost of railway transportation business was RMB80.204 million, representing a decrease of RMB1.273 million or 1.6%.
  2. Coal Chemicals Business

The following tables set out the Group's methanol business for the first half of 2020:

Methanol Production Volume (kiloton)

Methanol Sales Volume(kiloton)

For the six

For the six

For the six

For the six

months

months

months

months

ended

ended

Increase/

ended

ended

Increase/

30 June

30 June

Decrease

30 June

30 June

Decrease

2020

2019

(%)

2020

2019

(%)

1.Yulin Neng Hua

387

371

4.58

381

373

2.14

2.Ordos Neng Hua

548

475

15.28

553

461

19.91

Sales Income (RMB'000)

Sales Cost (RMB'000)

For the six

For the six

For the six

For the six

months

months

months

months

ended

ended

Increase/

ended

ended

Increase/

30 June

30 June

Decrease

30 June

30 June

Decrease

2020

2019

(%)

2020

2019

(%)

1.Yulin Neng Hua

497,399

639,321

-22.20

403,680

519,728

-22.33

2.Ordos Neng Hua

718,550

774,797

-7.26

451,855

581,632

-22.31

14 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 4 BOARD OF DIRECTORS' REPORT

4. Power Generation Business

The following tables set out the operation of the Group's power business for the first half of 2020:

Power Generation (10,000kWh)

Power Output Dispatch (10,000kWh)

For the six

For the six

For the six

For the six

months

months

months

months

ended

ended

Increase/

ended

ended

Increase/

30 June

30 June

Decrease

30 June

30 June

Decrease

2020

2019

(%)

2020

2019

(%)

1.

Hua Ju Energy

41,288

39,746

3.88

14,478

12,267

18.03

2.

Yulin Neng Hua

16,642

14,806

12.40

748

983

-23.90

3.

Heze Neng Hua

83,772

77,537

8.04

74,211

66,077

12.31

Sales Income (RMB'000)

Sales Cost (RMB'000)

For the six

For the six

For the six

For the six

months

months

months

months

ended

ended

ended

ended

30 June

30 June

Increase/

30 June

30 June

Increase/

2020

2019

Decrease (%)

2020

2019

Decrease (%)

1.Hua Ju Energy

59,456

49,031

21.26

51,954

48,112

7.99

2.

Yulin Neng Hua

1,445

1,870

-22.73

2,508

3,864

-35.10

3.

Heze Neng Hua

260,617

232,484

12.10

181,542

193,162

-6.02

Note: During the reporting period, the sales, revenue, and cost of electricity belonging to Yulin Neng Hua decreased significantly, mainly due to the decrease in external electricity sales as compared with the corresponding period of the previous year.

  1. Heat Business
    Hua Ju Energy generated heat energy of 650 thousand steam tons and sold 200 thousand steam tons for the first half of 2020, realizing the sales income of RMB20.818 million, with the sales cost of RMB18.938 million.
  2. Electrical and Mechanical Equipment Manufacturing Business
    For the first half of 2020, the Group's electrical and mechanical equipment manufacturing business realized sales income RMB85.065 million, with sales cost of RMB66.332 million.
  3. Equity Investment Business
    For the first half of 2020, the Group's gained profit before tax of RMB616 million from equity investment.

Yanzhou Coal Mining Company Limited Interim Report 2020 15

CHAPTER 4 BOARD OF DIRECTORS' REPORT

  1. Analysis of Main Business
    1. Analysis on changes of items in the financial statements

For the six

For the six

months ended

months ended

Increase/

30 June 2020

30 June 2019

Decrease

Items

(RMB million)

(RMB million)

(%)

Costs from sales and services

24,632

18,239

35.05

Income from other business

4,794

1,403

241.67

Net cash flow from operating activities

5,885

8,379

-29.77

Net cash flow out from investment activities

5,957

2,090

185.02

Net cash flow from financing activities

4,500

10,889

-58.68

  1. Analysis on changes of items in Condensed Consolidated Income Statement
    Explanations on reasons for changes in costs from sales and services: During the reporting period, traded coal sales increased as compared with the same period of last year.
    Explanations on reasons for changes in other Business income: During the reporting period, with the 10% equity acquisition of Moolarben Coal Joint Venture, the Group gained control of Moolarben Coal Joint Venture and confirmed RMB3.183 billion of other business income in fair value all at once.
  2. Analysis on changes of items in Condensed Consolidated Cash Flow Statement
    Analysis on changes of net cash flow from operating business: During the reporting period, the Group's coal sale price dropped as compared with that of the corresponding period of the previous year, which caused the decrease in the net cash from operating business.
    Analysis of reasons for changes in net flow out from investment business: ① Deposits of the deposited bills and letter of credit caused net cash flow out increased by RMB1.467 billion as compared with the corresponding period of the previous year. ② The withdrawal regular deposits affecting cash inflow of RMB1.703 billion in the same period of the previous year, while no such business occur red during the reporting period. ③ The net cash flow out increased by RMB507 million as compared with the corresponding period of the previous year due to the acquisition of additional equity from joint operations.
    Analysis on changes of net cash flow from financing activities: ① The proceeds from bank loans increased by RMB14.497 billion as compared with that of the corresponding period of the previous year. ② During the reporting period, Yankuang Finance Company provided loans and deposits and other financial services to the other companies except the Group, which caused the net cash outflow increased by RMB9.078 billion.

16 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 4 BOARD OF DIRECTORS' REPORT

  1. 2. Others

    1. Elaboration on significant changes in the profit structure or source of profit of the Company Not applicable.
    2. Source and use of fund
      For the first half of 2020, the Group's source of fund was mainly from operating cash flow, bond issuance and bank loans. And the fund was mainly used for operating expenses, purchasing of property, machinery and equipments, dividends payment to shareholders, bank loans repayment, assets and equity purchasing payment, etc.
  2. Elaboration of Significant Changes of Profit Due to Non-core Business

During the reporting period, with the 10% equity acquisition of Moolarben Coal Joint Venture, the Group gained control of Moolarben Coal Joint Venture and confirmed RMB3.183 billion of other business income in fair value all at once.

(IV) Analysis on Assets and Liabilities

1. Assets and liabilities

Unit: RMB million

Percentage

Percentage

to the total

Percentage to

of increase/

Closing

assets as at

Closing

the total assets

decrease in

amount as at

30 June 2020

amount as at

as at 30 June

closing amount

Items

30 June 2020

(%)

30 June 2019

2019(%)

(%)

Notes

Restricted cash

6,691

3.05

4,274

2.03

56.56

Deposit from bills and letter of credit

increased as compared with the same

period of last year.

Notes receivable and

10,283

4.68

7,598

3.61

35.33

(1)

The company's notes receivable

accounts receivable

and accounts receivable increased

by RMB422 million;

(2)

Yancoal International's receivables and

accounts receivable increased

by RMB1.154 billion;

(3)

Receivable notes and accounts

receivable of Shandong Zhongyin

International Trade Co., LTD. Increased

by RMB376 million;

(4)

Notes receivable and accounts

receivable of Qingdao Zhongyin Ruifeng

International Trade Co., LTD. ("Qingdao

Zhongyin Ruifeng") increased by

RMB821 billion.

Yanzhou Coal Mining Company Limited Interim Report 2020

17

CHAPTER 4 BOARD OF DIRECTORS' REPORT

Percentage

Percentage

to the total

Percentage to

of increase/

Closing

assets as at

Closing

the total assets

decrease in

amount as at

30 June 2020

amount as at

as at 30 June

closing amount

Items

30 June 2020

(%)

30 June 2019

2019(%)

(%)

Notes

Inventory

8,415

3.83

6,007

2.85

40.08

(1)

Inventory of Qingdao Zhongyan Trading

Co., LTD. ("Qingdao Zhongyan")

increased by RMB206 million;

(2)

Inventory of Donghua Heavy Industry

increased by RMB587 million;

(3)

Inventory of Yankuang (Hainan)

Intelligent Logistics Science and

Technology Co., Ltd. ("Intelligent

Logistics") increased by RMB560

million;

(4)

Inventory of Ordos Neng Hua increased

by RMB266 million.

Contractual liabilities

3,570

1.62

2,717

1.29

31.38

(1)

the Company's contractual liability

increased by RMB255 million;

(2)

Contractual liability of Ordos Neng Hua

increased by RMB103 million;

(3)

Contractual liability of Qingdao Zhongyin

Ruifeng increased by RMB233 million;

(4)

Contractual liability of Intelligent

Logistics increased by RMB314 million.

Loans due within a year

27,462

12.50

16,207

7.69

69.44

(1) The Company s borrowings due w ithin

one year increased by RMB2.316 billion.

(2)

Yancoal Australia s borrowings due

within one year increased by RMB1.937

billion.

(3)

Yancoal International s borrowings due

within one year increased by RMB1.982

billion.

(4)

Zhongyin Financial Leasing s borrowing

s due within one year increased by

RMB1.118 billion.

(5)

Qingdao Vast Lucky s borrowings due

within one year increased by RMB595

million.

(6)

Intelligent Logistics borrowings due

within one year increased by RMB833

million.

Deferred tax liabilities

4,315

1.96

3,414

1.62

26.38

(1)

Yancoal Australia's deferred tax liability

increased by RMB1.21 billion;

(2)

Yancoal International's deferred tax

liability decreased by RMB239 million.

18 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 4 BOARD OF DIRECTORS' REPORT

  1. Major asset subject to restrictions as at the end of this reporting period (Relevant data are prepared under CASs)
    As at 30 June 2020, the Group's asset subject to restriction was RMB56.85 billion, which mainly includes restricted monetary funds, account receivables financing and related assets secured by borrowing. For details, please refer to the Note "Assets Subject to Restriction on Ownership or Right of Use" to the financial statements prepared under CASs.
  2. Other information
    1. Debt to equity ratio
      As at 30 June 2020, the equity attributable to the shareholders of the Company and the borrowings amounted to RMB55.497 billion and RMB74.088 billion respectively, representing a debt to equity ratio of 133.5%. For detailed information on borrowings, please refer to the Note "Borrowings" to the financial statements prepared under the IFRS.
    2. Contingent liabilities
      For details of the contingent liabilities, please see Note "Contingent liabilities" to the financial statements prepared under the IFRS.
    3. Pledge of assets
      For details of pledge of assets, please refer to Note "Notes to The Consolidated Financial Statements Assets Subject to Restriction on Ownership or Right of Use" to the financial statements prepared under the CASs.

Yanzhou Coal Mining Company Limited Interim Report 2020 19

CHAPTER 4 BOARD OF DIRECTORS' REPORT

  1. Analysis of Investment

(Financial data in this section are all prepared under CASs)

1. Analysis on the Group's external equity investment during the reporting period

  1. Significant equity investment
    During the reporting period, the Group acquired 10% of the interests of Moolarben Coal Joint Venture held by Sojitz. For details, please refer to related transactions of asset purchase or equity purchase and sale in Chapter 5 Significant Events of this interim report.
    Not applicable.
  2. Major non-equity investment Not applicable.
  3. Financial assets measured at fair value
    As at the end of the reporting period, the Group's financial assets measured at fair value and recorded in current profit and loss mainly include Middle Mount's special right to earnings, Wuxi Dingye investment property and equity investment. The initial investment was RMB2.425 billion and the balance as at the end of the reporting period is RMB1.841 billion. The liabilities measured at fair value and recorded in current profit and loss mainly are interest rate swap agreement and non- contingent royalty, and the balance as at the end of the reporting period is RMB155 million.
    As at the end of the reporting period, the Group's financial assets measured at fair value and recorded in other comprehensive income mainly is other equity instrument investment. The initial investment is RMB5.058 million, and the balance as at the end of the reporting period is RMB4.578 million.
    For details of the amount of the financial assets measured at fair value and its changes, please refer to the notes headed Tradable Financial Assets, Other Equity Instrument Investment, Other Non- Current Financial Assets and Other Non-Current Liabilities to the consolidated financial statements prepared in accordance with CASs.

20 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 4 BOARD OF DIRECTORS' REPORT

(VI) Disposal of Material Assets and Equity

During the reporting period, the Group's 100% equity in Yancoal International Trading Co., Ltd. and Yancoal International (Singapore) Co., Ltd. was sold to Yankuang Electricity Aluminum (Hong Kong) Co., Ltd. For details, please refer to related content of connected/related transactions arising from the assets acquisition or the acquisition and sale of shares" in "Chapter 5 Significant Events" of this interim report.

Yancoal International Trading Co., LTD and Yancoal International (Singapore) Co., LTD are mainly engaged in non-coal trade business. Compared with coal business, non-coal trading business brings lower gross margin and less cash flow contribution. This transaction is conducive to the Company to further focus on the main industry of coal, improve the core competitiveness, and has relatively little impact on the Company's total profits before tax.

(VII) Analysis on Major Controlled Companies and Joint Stock Companies

(Financial data in this section are all prepared under CASs)

1. Major controlled companies

For the first half of 2020, the controlled companies having relative significant impacts on the net profit attributable to the shareholders of the listed company are as follows.

Unit: RMB million

As at 30

June 2020

Net profit for

the first half

Name of company

Registered capital

Total assets

Net assets

of 2020

Yancoal Australia

AUD6,027 million

56,032

31,559

3,646

Note: For detailed information on the main business and main financial data of the Group's major controlled subsidiaries, please refer to Note "Interests in Other Entities-Interests in Subsidiaries" to the financial statements prepared under CASs.

Yanzhou Coal Mining Company Limited Interim Report 2020 21

CHAPTER 4 BOARD OF DIRECTORS' REPORT

The main holding companies with significant fluctuations of operating results in the first half of 2020 are as follows.

Yancoal Australia

For the first half of 2020, Yancoal Australia's net profit was RMB3.646 billion, while the net profit of the first half of 2019 was RMB2.746 billion, which was mainly due to ① Yancoal Australia gained the profit from the purchase of the 10% equity interest of Moolarben Coal Joint Venture during the reporting period; ② The coal price fell as compared with the corresponding period of the previous year, resulting in a decrease in operating profit.

Heze Neng Hua

For the first half of 2020, the net profit of Heze Neng Hua was RMB484 million, while that of the first half of 2019 was RMB278 million, which was mainly due to the increase in sales volume of coal.

Ordos Neng Hua

For the first half of 2020, Ordos Neng Hua saw a net loss of RMB38 million, while the net profit of the first half of 2019 was RMB212 million, which was mainly due to the fall of coal price as compared with the corresponding period of the previous year.

Haosheng Coal

For the first half of 2020, the net profit of Haosheng Coal was RMB71 million, while the net loss of the first half of 2019 was RMB187 million, which was mainly due to the increase in sales volume of coal.

For more information on the operation of Yancoal Australia, Heze Neng Hua, Ordos Neng Hua and Haosheng Company, please refer to the section headed "Main Business During the Reporting Period" herein this Chapter.

2. Major joint stock companies

For detailed information on the main business and main financial data of the Group's joint stock companies, please refer to Note "Interests in Other Entities-Interests in Joint Venture or Associated Companies" to the financial statements prepared under CASs.

22 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 4 BOARD OF DIRECTORS' REPORT

3. The operation of Yankuang Finance Company

As at the end of this reporting period, the Company holds 95% equity interest in Yankuang Finance Company.

  1. The balance of bank deposit and bank loan by Yankuang Finance Company during the reporting period

Unit: RMB million

The closing

The opening

balance as

balance as

at the end of

at the end of

Increase/

the reporting

the reporting

decrease

period

period

(%)

Bank deposit

18,133

21,510

-15.70

Bank loan

11,763

11,006

6.87

  1. The main operating indicators of Yankuang Finance Company

Unit: RMB million

The amount

The amount of

of the same

the reporting

period of the

Increase/

period

previous year

decrease (%)

Operating revenue

283

252

12.18

Net profit

118

94

25.53

The amount

The amount of

of the same

the reporting

period of the

Increase/

period

previous year

decrease (%)

Net asset

3,267

3,149

3.73

Total asset

21,496

24,694

-12.95

(VIII) Entities Controlled by the Company

Watagan Company is a SPV company incorporated by Yancoal Australia for purpose of implementing asset securitization. It implemented asset securitization of three coalmines in New South Wales, Australia in 2016. For detailed information, please refer to Note "Other Significant Events-Watagan Event" to the financial statements prepared under CASs.

Yanzhou Coal Mining Company Limited Interim Report 2020 23

CHAPTER 4 BOARD OF DIRECTORS' REPORT

III. DISCLOSURE ON OTHER EVENTS

  1. Warning or Elaboration on Estimated Losses or Significant Changes in Aggregate Net Profit from the Beginning of 2020 to the End of the Next Reporting Period When Compared with that of the Same Period of the Previous Year.

Not applicable.

  1. Possible Risks

Risks arising from safety management

The three main business sectors of the Company, namely coal mining, coal chemicals and power generation, are all of high hazardous nature and of complex uncertainties, and thus the risk of safety management can easily arise.

Counter measures: The Company will improve the safety management and control system, implement hierarchical management and control responsibilities, and promote professional and regional coordinated management in an orderly manner. The Company will promote innovative development through the integration of information, intelligence, automation, and implement intelligent upgrading of production systems of coal mining and roadway development, etc. The Company will strengthen special efforts to address potential safety hazards, focus on safety technology evaluation, strictly focus on formulation, review, supervision and acceptance of rectification plans. The Company will also strengthen accountability in safety assessment and step up investigation and punishment of accidents and accountability.

Risks arising from exchange rate

As an international company, the Company's overseas financing, overseas investment, international trade and other business are all affected by exchange rate fluctuations, which bring many uncertainties on the Group's economic benefits and strategic development.

Counter measures: The Company will strengthen research and judgment on the trend of the exchange rate, and use a variety of financial instruments to reduce the risk of exchange rate fluctuations. According to the trend of the exchange rate of the trading currency, the Company will establish appropriate hedging clauses in the trading contract. And the Company will flexibly use foreign exchange derivatives, sign of forward foreign exchange transaction contracts, and lock the exchange rate fluctuations.

24 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 4 BOARD OF DIRECTORS' REPORT

Risks arising from credit risks

Due to the slowdown of domestic economic growth, some partners of the Group have insufficient working fund, solvency decline, etc., which bring some certain impacts on the collection of receivables to the Group.

Counter measures: The Company will strengthen access management for clients, carry out prior due diligence, and prudently grant credit quotas based on the nature, scale, credit qualifications and other conditions of the partners. The Company will monitor the situation of credit granting business dynamically, strictly implement the credit line and credit term constraint mechanism. In case of credit risks, the response mechanism shall be activated timely, and the rights and interests of the group shall be protected by legal means if necessary.

Risks arising from geopolitics

The Group's business spans across different regions and countries, and overseas business will be affected by policies, economic and international relationship changes and other factors of the local governments. In the event of any material adverse changes in these factors, the Group's business, financial position and operating performance may be adversely affected.

Counter measures: First, pay close attention to international developments, strengthen the analysis of political, economic and other development situations where the business is located, identify and predict geopolitical risks that may be faced by overseas businesses in a timely manner, and formulate countermeasures. Second, continue to adhere to the localization strategy, abide by local laws and regulations, actively integrate into local economic and social development.

Yanzhou Coal Mining Company Limited Interim Report 2020 25

CHAPTER 4 BOARD OF DIRECTORS' REPORT

(III) Other Disclosures

(All financial data in this section are prepared in accordance with the CASs)

1. Capital Expenditure Plan

The capital expenditure for the first half of 2020 and the capital expenditure plan of 2020 of the Group (grouped by entity) are set out in the following table:

Unit: RMB10 thousand

For the first half

For the year

of 2020

2020

The Company

4,992

257,515

Ordos Neng Hua

23,248

177,485

Yulin Neng Hua

7,467

41,874

Heze Neng Hua

14,896

140,692

Hua Ju Energy

1,075

1,961

Haosheng Company

6,386

53,454

Donghua Heavy Industry

5,283

32,489

Shanxi Neng Hua

92

3,573

Yancoal Australia

76,397

264,419

Yancoal International

2,376

15,425

Other subsidiaries

26

1,543

Total

142,238

990,430

The capital expenditure for the first half of 2020 and the capital expenditure plan of 2020 of the Group (grouped by fund application purpose) are set out in the following table:

Unit: RMB10 thousand

For the first half

For the year

of year 2020

2020

Infrastructure Project

52,404

490,618

Coal mine infrastructure

21,425

307,643

Infrastructure for chemical projects

17,670

56,853

Infrastructure for logistics and warehouse

10,971

103,384

Infrastructure for machinery and equipment fabrication

-

4,156

Other infrastructures

2,338

18,582

Maintenance of simple reproduction

58,816

368,712

Safety production plan expenditure

6,166

86,172

Technology revamp plan

24,852

44,928

Total

142,238

990,430

The Group possesses relatively sufficient cash and financing sources currently, which are expected to meet the operation and development demand.

26 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 4 BOARD OF DIRECTORS' REPORT

  1. Coal exploration, development and mining during the reporting period
    For the first half of 2020, the Group's coal exploration expenditure was approximately RMB3.93 million, mainly including exploration expenditure of Moolarben Coal Mine and Cameby Downs Coal Mine; while the relevant capital expenditure for coal development and mining was about RMB980 million, mainly including mine property, machinery and equipment investment of existing coal mines, as well as the development and mining expenditure by Wanfu coal mine.
  2. Operation strategy of the second half of 2020
    In the second half of 2020, affected by the International public health event, uncertainties and destabilizing factors in economic and social development have increased significantly, and so the macroeconomic situation remained complex and challenging. The State continues to enhance the supervision to safe mining production, ecological and environmental protection governance and other policies regulation, which brings far-reaching impact to coal industry. In the second half of the year, actively seizing strategic opportunities such as the transformation of old and new driving forces, the joint and restructuring of Yankuang Group and Shandong Energy Group, the Group will continuously optimize the industrial structure and regional layout, tap potentials to improve efficiency, accelerate reform and innovation, turn challenges into opportunities and potential advantages into real productive forces, and promote leapfrog development of enterprises.
    1. Grasp the development opportunities and improve the competitive strength. Focus on the main industrial segment of coal business and related upstream and downstream industries, the Company will implement regional distribution and industrial extension, and enhance the sustainability of enterprise's development. For target enterprises with high degree of marketization, strong profitability potentials and prominent synergy effect, the Company will resolutely carry out mergers and reorganizations, raise the concentration ratio and the efficiency of resource allocation, and enhance the core competitiveness of the enterprise.
    2. Optimize production organization to ensure stable production volume and increase efficiency. The Company will give coal industry prominence to the development of safety and efficiency, and full play to the role of benefit support. The Company will scientifically organize the continuities of production in local mines, promote the constant operation of intelligent working faces, and maximize steady mining and high effiency. For coal mines in Inner Mongolia, the Company will completely complete the procedure settlements release the increment potential to the maximum extent, so as to increase the increment to raise the efficiency. For Australian mines, the Company will fully release the superior production capacity, reduce the inefficient production capacity steadily, and enhance the operation quality and the economic efficiency continuously. For coal chemical industries, the Company will concentrates on high-end fine products, strengthen production and operation management, promoting the coordination and integration of Phase I and II projects between Rongxin Chemical and Yulin Methanol Plant, to ensure stable and high yield in the first phase and high production and performance in the second phase.

Yanzhou Coal Mining Company Limited Interim Report 2020 27

CHAPTER 4 BOARD OF DIRECTORS' REPORT

  1. Deepening lean management, tapping potential, decreasing costs and increasing profits. Adhere to cost-winning,co-ordinate"volume-cost-benefit", implement product cost reduction, management cost reduction, procurement inventory reduction, and promote cost reduction in a systematic and accurate manner. Cost reduction: Strengthen lean management of the whole life cycle of cost, expand the cost control from production activities to investment, procurement and other aspects of operation management through comprehensive budget management and benchmarking management; build an all-round cost control system covering all employees and the entire production cycle. Expenses reduction: The Company will take measures such as decreasing stock of interest-bearing liabilities, replacing high interest rates with low interest rates and others to reduce leverage and reduce debt actively. And the Company will work hard to reduce administrative expenses, sales expenses and non-productive expenses, and resolutely put an end to expenditures exceeding standards and budgets. Inventory reduction: the Company will strengthen the management of the transfer and use of materials, step up the efforts to conduct a checkup of warehouses and make a better use of the stored goods, repair the old and utilize the wastes, and liquidize the remnant assets.
  2. Optimize the product structure, increase quality and improve efficiency. Adhere to the benefit first, optimize product structure, explore market potentials, improve the overall quality and level of marketing work. The Company will carry out refinement upgrading of products, implement the strategy of "Winning with clean coal", increasing the added value of products and profitability. Implement customized production, according to the "fixed coal mine, fixed variety, fixed quantity, fixed time" model to organize production, to meet the needs of different customers for products. Grasp the market demand, subdivide of product types, when selling products, focus on areas with high market prices, low logistics costs and good sales returns. Promote high-carbon energy to low-carbon energy, coal to anthracite, black coal to green coal. The Group will carry out product- cleaning transformation, explore new ways for the clean and efficient use of coal, accelerate the extension and expansion of the industrial chain, vigorously promote the conversion of low-end fuel to high-end raw materials.
  3. Stimulate synergy and improve the quality of development. Improve the corporate governance of the controlled company continuously, make the model of the listed company in standard operation. The Company will intensify its efforts to implement the big data project, and create a digital, sharing and wisdom Yanzhou Coal Mining Company, to upgrade the mechanism of operation, management and risk management. Adhering to the principle of market mechanism, supplemented by administrative management. Fully implement the construction of complete marketization and realize the complete link between internal operation factors and external market factors. The Company will carry forward the reform of "double-hundred enterprises" in depth, explore the establishment of a professional manager system, promote the tenure system and contractual reformation vigorously, and fully stimulate the internal impetus of the enterprise.

28 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 4 BOARD OF DIRECTORS' REPORT

4. The Impact of Exchange Rate Changes

The exchange rate changes mainly impact:

  1. The overseas coal sales income, as the overseas coal sales of the Group are denominated in USD and AUD, respectively;
  2. The exchange gains and losses of the foreign currency deposits and borrowings;
  3. The cost of imported equipment and accessories of the Group.

Affected by the changes in foreign exchange rates, the Group had book exchange gain of RMB120 million during the reporting period.

To manage foreign currency risks arising from the expected sales revenue, Yancoal Australia has entered into foreign exchange hedging contracts with banks.

To hedge the exchange losses of USD loan arising from the fluctuation of foreign exchange, Yancoal Australia and Yancoal International have taken foreign exchange hedging measures to such debt on the accounting basis, which effectively mitigated the impact of exchange loss on the current profit.

Save as disclosed above, the Group did not take foreign exchange hedging measures on other foreign currencies during the reporting period.

5. Taxation

For the first half of 2020, except that some subsidiaries incorporated in PRC enjoyed favorable income tax rate of 15% on their taxable profits, the Company and the remaining subsidiaries incorporated in the PRC were subject to an income tax rate of 25% on their taxable profits. Yancoal Australia was subject to a tax rate of 30% on its taxable profits, and Yancoal International was subject to a tax rate of 16.5% on its taxable profits from Australian asset.

For details of favorable income tax policy and tax rate for the above subsidiaries incorporated in the PRC, please refer to Note "Taxation Favorable Tax" to the financial statements prepared in accordance with the CASs.

Yanzhou Coal Mining Company Limited Interim Report 2020 29

CHAPTER 5 SIGNIFICANT EVENTS

  1. INFORMATION ON GENERAL MEETINGS OF SHAREHOLDERS

Query index of the designated

Date of disclosure

Session of meeting

Date of meeting

websites for publishing resolutions

of resolutions

The 2019

Annual General Meeting

19 June 2020

The website of Shanghai Stock Exchange

19 June 2020

of Shareholders

(http://www.sse.com.cn)

The 2020

First Class Meeting

19 June 2020

The website of Hong Kong Stock Exchange

19 June 2020

of the Holders of A Shares

(http://www.hkexnews.hk)

The 2020

First Class Meeting

19 June 2020

The Company's website

19 June 2020

of the Holders of H Shares

(http://www.yanzhoucoal.com.cn)

Note: The date of disclosure indicates the date when the resolutions were published.

The Explanation on Shareholders General Meeting

Not Applicable.

  1. PROFIT DISTRIBUTION SHCEME OR CAPITAL RESERVE TRANSFERRED TO SHARE CAPITAL SCHEME
    1. Proposed Profit Distribution Scheme or Capital Reserve Transferred to Share Capital Scheme for the First Half of 2020

Whether distributed or transferred

No

  1. PERFORMANCE OF UNDERTAKINGS
    1. Undertakings of the Actual Controller of the Company, the Shareholders, the Related Parties, the Buyer, the Company and Other Related Parties During the Reporting Period or Extended to the Reporting Period.

Date of

Undertaking

With

Reasons

Measures in

and

Performance

Perform

for Failure

Case of Failure

Performance

Deadline or

Timely and

of Timely

of Timely

Background

Type

Undertaker

Undertakings

Period

Not

Strictly or Not

Performance

Performance

Undertakings

Resolve

Yankuang Group

Avoidance of horizontal competition:

Year 1997

None

Yes

Under normal

None

Related to IPO

horizontal

Yankuang Group and the Company

Long-term

performance

competition

entered into the restructuring

effective

agreement when the Company was

carrying out the restructuring in 1997,

pursuant to which Yankuang Group

undertook that it would take various

effective measures to avoid horizontal

competition with the Company.

30 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 5 SIGNIFICANT EVENTS - CONTINUED

Date of

Undertaking

With

Reasons

Measures in

and

Performance

Perform

for Failure

Case of Failure

Performance

Deadline or

Timely and

of Timely

of Timely

Background

Type

Undertaker

Undertakings

Period

Not

Strictly or Not

Performance

Performance

Other undertakings

Other

Yankuang Group

Yankuang Group has made

27 July 2018

None

Yes

Under normal

None

undertakings in relation to its finance

Long-term

performance

business with Yankuang Finance

effective

Company as follows.

1. In view of the independence of

Yanzhou Coal in assets, business,

personnel, finance, organizations

and other aspects from Yankuang

Group, Yankuang Group will continue

to maintain the independence of

Yanzhou Coal and fully respect its

right of management; while Yanzhou

Coal and its subsidiary Yankuang

Finance Company will decide

the financial business between

Yankuang Finance Company and

Yankuang Group on their own based

on the requirements of business

development in compliance with

relevant supervisory regulations and

the rules of procedures for decision-

making as stipulated in the laws and

regulations, Articles and the articles

of association of Yankuang Group

Finance Co., Ltd.;

Yanzhou Coal Mining Company Limited Interim Report 2020 31

CHAPTER 5 SIGNIFICANT EVENTS - CONTINUED

Date of

Undertaking

With

Reasons

Measures in

and

Performance

Perform

for Failure

Case of Failure

Performance

Deadline or

Timely and

of Timely

of Timely

Background

Type

Undertaker

Undertakings

Period

Not

Strictly or Not

Performance

Performance

  1. To ensure the safety of the Company's fund managed by Yankuang Finance Company, Yankuang Group and its controlled enterprises undertake to carry out financial business with Yankuang Finance Company in accordance with relevant rules and regulations, and will not misappropriate the Company's fund through Yankuang Finance Company in any other forms.
  2. In case that Yankuang Group

or its controlled enterprises misappropriated any capital fund of Yanzhou Coal through Yankuang Finance Company and caused any loss to Yanzhou Coal, Yankuang Group and its controlled enterprises will make full amount compensation in cash.

4. Yankuang Group undertook to strictly abide by the relevant rules and regulations of CSRC, Shanghai Stock Exchange and the Articles, exercise the shareholder's rights and perform the shareholder's obligations as equally as other Shareholders, and neither seek unfair interest by use of the position of Controlling Shareholder, nor impair the legal interests of Yanzhou Coal and other public Shareholders.

32 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 5 SIGNIFICANT EVENTS - CONTINUED

Date of

Undertaking

With

Reasons

Measures in

and

Performance

Perform

for Failure

Case of Failure

Performance

Deadline or

Timely and

of Timely

of Timely

Background

Type

Undertaker

Undertakings

Period

Not

Strictly or Not

Performance

Performance

Other

Yankuang Group

Undertaking made as to increasing

From 30 July

Yes

Yes

Completed

None

and Yankuang

shareholding of the H Shares of

2019 to 30

Group (Hong

the Company: Except that the

January 2020

Kong) Limited,

exchangeable corporate bonds

the person acting

issued by Yankuang Group

in concert

may affect Yankuang Group's

shareholding of the Company,

they undertook not to decrease

shareholding of the Company

on their own accord before

the announcement in relation

to completing the increase of

shareholding and the relevant

statutory period.

Other

Yankuang Group

Undertaking made as to increasing

11 June

Yes

Yes

Under normal

None

and Yankuang

shareholding of the H Shares of

2020 to 11

performance

Group (Hong

the Company: Except that the

December

Kong) Limited,

exchangeable corporate bonds

2020

the person acting

issued by Yankuang Group

in concert

may affect Yankuang Group's

shareholding of the Company,

they undertook not to decrease

shareholding of the Company

on their own accord before

the announcement in relation

to completing the increase of

shareholding and the relevant

statutory period.

Yanzhou Coal Mining Company Limited Interim Report 2020 33

CHAPTER 5 SIGNIFICANT EVENTS - CONTINUED

IV. APPOINTMENT AND DISMISSAL OF ACCOUNTANTS

The explanation on the appointment and dismissal of accountants

As approved by the 2019 annual general meeting held on 19 June 2020, the Company engaged Shine Wing Certified Public Accountants (special general partnership) and SHINEWING (HK) CPA Limited as its domestic and overseas accountants for the year 2020, respectively, with an engagement term from the conclusion date of the 2019 annual general meeting to the conclusion date of the 2020 annual general meeting. The accountants are responsible for the financial statements auditing, examination and internal control audit evaluation of the Company.

The Company shall pay RMB8.85 million for the domestic and overseas audit services of 2020, including RMB6.85 million to Shine Wing Certified Public Accountants (special general partnership) for domestic service (Shine Wing Certified Public Accountants (special general partnership) needs to audit the internal control of the big data project of the Company, service fee are increased by RMB250,000) and RMB2.0 million to SHINEWING (HK) CPA Limited for overseas service. The Company is responsible for accountants' on-site accommodation and meal expenses, but not for any other related expenses such as travelling expenses. The Board was authorized to decide the fees paid for increased follow-up audit, internal control audit and other services due to the Company's new subsidiaries or changes of regulations.

The Board considered that except for the annual financial audit service (including domestic and overseas audit services) fees, other service expenses paid to the accountants by the Company would not have impact on accountant's independent opinions.

The explanation on the change of accountants during the auditing period

Not applicable.

The Company's explanation on the non-standard audit report issued by the accountants

Not applicable.

The Company's explanation on the non-standard audit report issued by the CPA to the financial report in the 2019 annual report

Not applicable.

  1. RELATED MATTERS ON BANKRUPTCY AND REORGANIZATION

Not applicable.

34 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 5 SIGNIFICANT EVENTS - CONTINUED

VI. SIGNIFICANT LITIGATION AND ARBITRATION EVENTS

  1. Litigation and Arbitration Events Disclosed in the Extraordinary Announcements and with No Subsequent Progress

Item Overview

Query Index

Arbitration involving Inner Mongolia New Changjiang Mining &

For details, please refer to

Investment Co., Ltd. ("New Changjiang") and Yanzhou coal

the arbitration announcement

dated 9 April 2018. The above

In April 2018, New Changjiang submitted an arbitration application to China

announcement was also

International Economic and Trade Arbitration Commission ("CIETAC") for

posted on the websites of the

the violation of the relevant equity transfer agreements by Yanzhou Coal and

Shanghai Stock Exchange, the

requested Yanzhou Coal to pay a total of approximately RMB1.435 billion,

HKEX and the Company and/

comprising the consideration for the equity transfer of RMB749 million,

or China Securities Journal,

liquidated damages of RMB656 million, and the legal fees, arbitration fees

Shanghai Securities News and

and preservation fees involved in this case.

Securities Times.

CIETAC held two hearings on the case in October 2018 and December

2018, respectively, and no ruling was issued.

In April 2019, New Changjiang changed its arbitration request to the

termination of the equity transfer agreement and obtained the permission of

CIETAC.

CIETAC held the third and fourth hearings on the case in August 2019 and

December 2019 respectively. Currently, there is no ruling issued yet.

As the case is undergoing the arbitration procedure, the Company is unable

to accurately estimate the impact of the arbitration on the current profit and

post-period profit.

Yanzhou Coal Mining Company Limited Interim Report 2020 35

CHAPTER 5 SIGNIFICANT EVENTS - CONTINUED

Item Overview

Query Index

China Huarong Asset Management Co., Ltd. Inner Mongolia

For details, please refer to the

Autonomous Region Branch ("China Huarong") Sued Ordos Jinchengtai

announcement in relation to

Chemical Co., Ltd.("Jinchengtai") and Others for Contract Dispute that

the Company participation in

the Company Involved as Third Party

the lawsuit as third party dated

11 June 2020. The above

In June 2020, China Huarong submitted two complaints to Hohhot

announcement was also

Intermediate People's Court ("Hohhot Intermediate Court") suing Jinchengtai

posted on the websites of the

for sales contract disputes, requiring Jinchengtai to repay debt principal

Shanghai Stock Exchange, the

and relevant interests of RMB451 million and RMB680 million, respectively.

HKEX and the Company and/

Since Jinchengtai has made a pledge to China Huarong through its account

or China Securities Journal,

receivables of RMB2.1 billion by Yanzhou Coal, China Huarong sued the

Shanghai Securities News and

Company as a third party to Hohhot Intermediate Court, requiring the

Securities Times.

Company to bear the liability of repayment within the amount of the account

receivables.

Hohhot Intermediate Court has not issued a judgement yet.

As the case is in the progress of the first-instance court, the Company is

unable to estimate the impact of the arbitration on the current profit and

post-period profit.

36 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 5 SIGNIFICANT EVENTS - CONTINUED

  1. Litigation and Arbitration Not Disclosed in Extraordinary Announcements or with Subsequent Progress

Unit: RMB

During the reporting period:

Whether

caused

Joint and

estimated

Plaintiff

several liable

liabilities

Judgment

(applicant)

Respondent

party

Type

Background

Amount involved

and amount

Progress

Judgment and impact

execution

Weihai Commercial

Yanzhou Coal

Shandong

Litigation

In October 2015, citing the financial loan contract

RMB99.119 million

No

In the retrial

The case is currently in the

-

Bank Co.,

Hengfeng

dispute, Weihai Commercial Bank appealed to Jining

procedure at

progress of retrial procedure

Ltd ("Weihai

Power Fuel Co.,

Intermediate People's Court ("Jining Intermediate

the second

at the second instance,

Commercial Bank")

Ltd. ("Hengfeng

Court") against 8 defendants including Hengfeng

instance

the Company is unable to

Company") and

Company and Yanzhou Coal, requiring Hengfeng

estimate the impact of the

6 other persons

Company to repay the loan principal of RMB99.119

litigation on and post-period

with joint and

million and corresponding interest. Because Hengfeng

profit currently.

several liabilities

Company made a pledge to the plaintiff on its account

receivables of RMB103.42 million by Yanzhou Coal

(suspected of counterfeiting), Weihai Commercial Bank

required Yanzhou Coal bear the liability of repayment

within the amount of the account receivables.

In October 2018, the Company received the first- instance judgment and lost the case. And the Company lodged an appeal to Shandong High People's Court ("Shandong High Court").

In May 2019, it was the ruling of the second instance of the Shandong High Court that the case shall be reheard to Jining Intermediate Court for re-trial.

In January 2020, Jining Intermediate Court reheard and rejected Weihai Commercial Bank's claims, and Weihai Commercial Bank appealed to Shandong High Court.

Currently, Shandong High Court has not ruled yet.

Yanzhou Coal Mining Company Limited Interim Report 2020 37

CHAPTER 5 SIGNIFICANT EVENTS - CONTINUED

During the reporting period:

Whether

caused

Joint and

estimated

Plaintiff

several liable

liabilities

Judgment

(applicant)

Respondent

party

Type

Background

Amount involved

and amount

Progress

Judgment and impact

execution

China Construction

Yanzhou Coal

Chai Tao and

Litigation

In November 2015, CCB Jining Dongcheng Sub-

RMB59.669 million

No

In the retrial

The case is currently in the

-

Bank Jining

other 4 persons

branch sued 7 defendants, including Hengfeng

procedure at

progress of retrial procedure

Dongcheng Sub-

with several and

Company and Yanzhou Coal, to Jining Intermediate

the second

at the second instance, and

branch ("CCB

joint liability

Court on the grounds of financial loan contract

instance

the Company is unable to

Jining Dongcheng

disputes, requesting Hengfeng Company to repay the

estimate the impact of the

Sub-branch")

loan principal of RMB59.669 million and corresponding

suit on its post-period profit.

interest. As Hengfeng Company pledged its account receivables by Yanzhou Coal of RMB79.1312 million (suspected of counterfeiting) to CCB Jining Dongcheng Sub-branch, CCB Jining Dongcheng Sub-branch requested Yanzhou Coal to repay as per the pledged accounts receivable of RMB79.1312 million.

In April 2018, Jining Intermediate Court ruled that Yanzhou Coal should bear the priority liability of repayment in an amount within the pledged accounts receivable of RMB79.1312 million. Yanzhou Coal lodged an appeal to Shandong High Court.

In December 2018, Shandong High Court ruled at the second instance that the case shall be reheard by Jining Intermediate Court.

In July 2020, Jining Intermediate Court reheard the case and ruled at the first instance that the Company shall bear part liability. The Company lodged an appeal to Shandong High Court.

38 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 5 SIGNIFICANT EVENTS - CONTINUED

During the reporting period:

Whether

caused

Joint and

estimated

Plaintiff

several liable

liabilities

Judgment

(applicant)

Respondent

party

Type

Background

Amount involved

and amount

Progress

Judgment and impact

execution

Yanzhou Coal

Rizhao Shanneng

No

Litigation

In November 2016, citing the coal sales contract

RMB80 million

No

In the retrial

The case is currently in

-

International

dispute, the Company sued to Rizhao City Intermediate

procedure at the

the progress of the retrial

Logistics Co.,

People's Court ("Rizhao Intermediate Court"),

first instance.

procedure at the first

Ltd. ("Shanneng

requesting Shanneng International to repay RMB80

instance. The Company has

International")

million to the Company as goods payment and

fully recognized impairment

corresponding interest.

for the fund in relation to the

case in previous period, so

In November 2018, the Company received the

the litigation will not impact

judgment of Rizhao Intermediate Court at the first trial

post-period profit.

that Yanzhou Coal won the suit. Shanneng International

lodged an appeal to Shandong High Court

In June 2019, Shandong High Court ruled at the second instance that the case shall be reheard by Rizhao Intermediate Court for retrial.

Currently, Rizhao Intermediate Court has not ruled yet.

Yanzhou Coal Mining Company Limited Interim Report 2020 39

CHAPTER 5 SIGNIFICANT EVENTS - CONTINUED

During the reporting period:

Whether

caused

Joint and

estimated

Plaintiff

several liable

liabilities

Judgment

(applicant)

Respondent

party

Type

Background

Amount involved

and amount

Progress

Judgment and impact

execution

China Construction

Yanzhou Coal

Jining Liaoyuan

Litigation

In June 2017, citing the financial loan contract dispute,

RMB90.52 million

No

In the retrial

The case is currently in

-

Bank Jining

Trade Co.,

CCB Jining Guhuailu Branch, as the plaintiff, sued 8

procedure at

the retrial procedure at

Guhuailu Branch

Ltd. ("Jining

defendants including Jining Liaoyuan and Yanzhou

the second

the second instance, the

("CCB Jining

Liaoyuan") and

Coal to Jining Intermediate Court, requiring Jining

instance

Company is unable to

Guhuailu Branch")

6 other persons

Liaoyuan to repay loan principal of RMB95.8596 million

estimate the impact of the

with joint and

and corresponding interest. Since Jining Liaoyuan

litigation on its post-period

several liability

pledged accounts receivables of RMB90.52 million by

profit currently.

Yanzhou Coal (suspected of counterfeiting) to CCB Jining Guhuailu Branch, CCB Jining Guhuailu Branch required the Company to bear the liability of repayment within the amount of the account receivables.

In January 2018, Jining Intermediate Court heard the case. The Company applied for judicial authentication of the seals and signatures in relevant evidences at the court. The judicial authentication verified that the signatures were real and the seals were forged.

In November 2018, the Company lost the suit at the first trial and the Company lodged an appeal to Shandong High Court.

In August 2019, Shandong High Court ruled that the case shall be reheard by Jining Intermediate Court for retrial.

In April 2020, Jining Intermediate Court rejected the plaintiff's claims on the Company, and the Company bear no liability. The plaintiff appealed to Shandong High Court.

Currently, Shandong High Court has not ruled yet.

40 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 5 SIGNIFICANT EVENTS - CONTINUED

During the reporting period:

Whether

caused

Joint and

estimated

Plaintiff

several liable

liabilities

Judgment

(applicant)

Respondent

party

Type

Background

Amount involved

and amount

Progress

Judgment and impact

execution

Xiamen Xinda

Shandong Zhongyin

Yanzhou Coal

Litigation

In March 2020, citing the sales contract dispute,

RMB232.6609 million

No

In the retrial

The case is currently in the

-

Co., Ltd. ("Xiamen

Logistics Co.,

Xiamen Xinda sued Zhongyin Logistics and the

procedure at the

retrial procedure at the first

Xinda")

Ltd. ("Zhongyin

Company to Xiamen Intermediate People's Court

first instance.

instance, the Company

Logistics")

("Xiamen Intermediate Court"), requiring Zhongyin

is unable to estimate the

Logistics to return goods principal and corresponding

impact of the litigation on its

interest totaling RMB232.6609 million and requiring the

post-period profit currently.

Company to bear joint liability.

Currently, Xiamen Intermediate Court has not ruled yet.

Yanzhou Coal

Shandong

Wang Fu'en and

Litigation

In December 2018, citing the coal sales contract

RMB56.3893 million

No

Concluded

The case is concluded,

-

Changjinhao Coal

other 2 persons

dispute, the Company sued Changjinhao at Jining

and the Company has fully

Mining Co., Ltd.

with joint and

Intermediate Court, requiring Changjinhao to

recognized impairment for

("Changjinhao")

several liabilities

pay RMB56.3893 million of goods payment and

the fund in relation to the

corresponding interests, and requiring Wang Fuen, Ji

case in previous period, so

Jianyong and Wu Zhaobin to bear joint and several

the litigation will not impact

liabilities.

post-period profit.

In September 2019, Jining Intermediate Court ruled in the first instance that the Company won the case. Given the verdict in the first instance did not achieve the Company's goal, the Company lodged an appeal to Shandong High Court.

In May 2020, Shandong High Court rejected the Company's appeal and affirmed the original judgement in the first instance.

In July 2020, the Company lodged an application to

Jining Intermediate Court for compulsory enforcement.

Yanzhou Coal Mining Company Limited Interim Report 2020 41

CHAPTER 5 SIGNIFICANT EVENTS - CONTINUED

During the reporting period:

Whether

caused

Joint and

estimated

Plaintiff

several liable

liabilities

Judgment

(applicant)

Respondent

party

Type

Background

Amount involved

and amount

Progress

Judgment and impact

execution

Shanghai Jiaorun

Qingdao Zhongyan

Zhongyuan

Litigation

In December 2018, citing coal sales contract dispute,

RMB80 million

No

Concluded

The Company paid

Completed

International Trade

Huijin Logistics

Shanghai Jiaorun lodged a lawsuit to Qingdao

RMB68.16 million to

Co., Ltd ("Shanghai

(Tianjin) Co., Ltd

Intermediate People's Court ("Qingdao Intermediate

Shanghai Jiaorun in

Jiaorun")

("Zhongyuan

Court") against Qingdao Zhongyan, a wholly-owned

accordance with the court's

Huijin")

subsidiary of the Company, and Zhongyuan Huijin as a

judgement.

party to bear joint and several responsibilities, requiring

Qingdao Zhongyan and Zhongyuan Huijin to refund

goods payment, to bear liquidated damages and

related losses accrued totaling RMB80 million.

In November 2019, Qingdao Intermediate Court of

the first instance rejected Shanghai Jiaorun's lawsuit

against Qingdao Zhongyan, and Qingdao Zhongyan

bear no responsibility. Shanghai Jiaorun appealed to

Shandong High Court.

In June 2020, Shandong High Court ruled at the

second instance that Qingdao Zhongyan to refund

Shanghai Jiaorun goods payment of RMB60.13 million

and corresponding interest.

Yanzhou Coal

Bill debtors including

Other bill

Litigation

In January 2019, citing the bills dispute, the Company

RMB272.1 million

No

Relevant cases

As at the end of the reporting

-

Baota Shenghua

debtors

sued in 89 cases against related bills debtors to

have started

period, the Company has

Trading Group Co.,

including Baota

Liangshan People's Court, claiming to exercise its

hearing, some

fully recognized impairment

Ltd, Inner Mongolia

Petrochemical

rights of recourse to the bills. The Company holds 150

of which has

for fund in relation to the

Yanmeng Coal

Group Finance

pieces of acceptance bills issued by Baota Finance

been judged.

cases, so the litigation will

Transportation and

Co., Ltd.

Company as the drawee, with a total amount of

not impact post-period profit.

Sales Co. Ltd.

("Baota Finance

RMB272.1 million. As Baota Finance Company cannot

Company"),

meet the due payment, the Company exercises the

Baota

right of recourse to safeguard its legitimate rights and

Petrochemical

interests.

Group Co., Ltd.

Currently, the Company has recovered RMB3 million in

two cases, which were settled; the remaining 87 cases

have been transferred to Yinchuan Intermediate Court.

Currently, the Company has received the Court's ruling in first instance in favor of for 85 cases.

42 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 5 SIGNIFICANT EVENTS - CONTINUED

During the reporting period:

Whether

caused

Joint and

estimated

Plaintiff

several liable

liabilities

Judgment

(applicant)

Respondent

party

Type

Background

Amount involved

and amount

Progress

Judgment and impact

execution

CRRC Shijiazhuang

Yanzhou Coal

Beijing Baota

Litigation

From December 2018, citing the bill dispute, the

RMB47.1 million

No

Relevant cases

The Company had paid

-

Vehicle Co., Ltd.,

International

holders of the acceptance bills of exchange of Baota

have started

RMB21.4 million pursuant to

Shijiazhuang

Economic and

Finance Company sued Yanzhou Coal in 40 cases one

hearing, some

the judgement.

Gongbei Heavy

Technological

after another respectively, demanding to exercise the

of which has

Machinery Co.,

Cooperation

right of recourse for bills, involving a total amount of

been judged.

Ltd. and other bill

Co., Ltd., Baota

RMB50.5 million.

holders

Finance Co.,

Ltd. and other

Up to present, the Company has lost 22 cases and

bill debtors

paid RMB21.4 million; and 8 cases are immune from

liabilities with value of RMB8.5 million. Other cases are

still under trial and no judgement has yet been given.

Shandong Zikuang

Yanzhou Coal

No

Litigation

In May 2019, citing the sales contract dispute, Zikuang

RMB33.956 million

No

Concluded

The case is concluded, and

-

Coal Transport and

Transport and Marketing Company sued Yanzhou Coal

the litigation will not impact

Marketing Co., Ltd.

to Jining Intermediate Court, requiring Yanzhou Coal to

the Company's post-period

("Zikuang Transport

repay coal prepayment of RMB25.478 million, interest

profit.

and Marketing

loss of RMB7.042 million, the loss of anticipated

Company")

benefits of RMB0.936 million and the expenses for

realizing creditor's rights of RMB0.5 million, adding up

to RMB33.956 million.

In October 2019, Jining Intermediate Court ruled to

reject the appeal of Zikuang Transport and Marketing

Company, and Yanzhou Coal won the lawsuit. Zikuang

Transport and Marketing appealed to Shandong High

Court.

In March 2020, Shandong High Court ruled at the

second instance that the Company won the lawsuit.

Yanzhou Coal

Inner Mongolia

No

Litigation

In May 2020, citing the loan contract dispute, Yanzhou

RMB1,070 million

No

In the retrial

The case is currently in the

-

Mining (Group) Co.,

Coal sued Inner Mongolia Mining to Ordos Intermediate

procedure at the

retrial procedure at the first

Ltd. ("Inner Mongolia

People's Court ("Ordos Intermediate Court"), requiring

first instance.

instance, the Company

Mining")

Inner Mongolia Mining to repay loan principal of

is unable to estimate the

RMB1,070 million, and corresponding interest and

impact of the litigation on its

penalty for late payment.

post-period profit currently.

Currently, Ordos Intermediate Court has not ruled yet.

Yanzhou Coal Mining Company Limited Interim Report 2020 43

CHAPTER 5 SIGNIFICANT EVENTS - CONTINUED

During the reporting period:

Whether

caused

Joint and

estimated

Plaintiff

several liable

liabilities

Judgment

(applicant)

Respondent

party

Type

Background

Amount involved

and amount

Progress

Judgment and impact

execution

Yanzhou Coal

Linyi Mengfei

Huasheng

Litigation

In July 2020, citing the coal sales contract dispute,

RMB140.9408 million

No

In the retrial

The case is currently in the

-

Tradeing Co., Ltd.

Jiangquan

Yanzhou Coal sued Linyi Mengfei to Jining Intermediate

procedure at the

retrial procedure at the first

("Linyi Mengfei")

Group Co., Ltd.

Court, requiring Linyi Mengfei to refund the payment for

first instance.

instance, the Company

("Jiangquan

goods of RMB140.9408 million and accrued interests

is unable to estimate the

Group"), Zhang

and expenses, and Jiangquan Group, Zhang Yinlong,

impact of the litigation on its

Yinlong, Wang

Wang Wentao, Wang Wensheng to bear joint and

post-period profit currently.

Wentao, Wang

several responsibilities for abovementioned payment.

Wensheng

Currently, Jining Intermediate Court has not ruled yet.

Note: The Company won and concluded three cases, i.e. the arbitration on dispute between Shanxi Neng Hua and Shanxi Jinhui Coking Chemical Co., Ltd., the sales contract dispute between Shandong Yanmei Rizhao Port Coal Storage and Blending Co., Ltd. ("Rizhao Coal Storage and Blending") and Wuxi City Shengluda Power Fuel Co., Ltd., and the sales contract dispute between Rizhao Coal Storage and Blending and Rizhao Tengtu Investment Co., Ltd., and currently the Company is implementing the enforcement of the judgement. The Company has fully recognized impairment for the fund in relation to abovementioned cases in previous period, so the cases will not impact the Company's post-period profit.

(III) Other Explanation

Not applicable.

VII. PUNISHMENT AND RECTIFICATION ON THE LISTED COMPANY, ITS DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT, CONTROLLING SHAREHOLDER, ACTUAL CONTROLLERS AND THE BUYER

During the reporting period, the Company and its Directors, Supervisors, senior management, Controlling Shareholder and actual controllers were not subject to investigation by competent authorities, or imposed any compulsory measures by judicial and discipline inspection departments, or transferred to judicial organs or prosecuted for criminal liability, inspected or imposed administrative penalty by the CSRC prohibited from entry into the securities market, publicly criticized, identified as inappropriate candidates, given major administrative penalties by other administrative departments and reprimanded by stock exchanges publicly.

VIII. THE EXPLANATION ON THE CREDIT CONDITIONS OF THE COMPANY, CONTROLLING SHAREHOLDER AND ACTUAL CONTROLLERS

During the reporting period, the Company, its Controlling Shareholder and the actual controllers do not have any dishonest behaviors, such as failure to perform the effective judgment of the court and the large amount of debt due but unliquidated.

44 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 5 SIGNIFICANT EVENTS - CONTINUED

IX. CIRCUMSTANCE AND IMPACT OF THE SHARE INCENTIVE SCHEME AND EMPLOYEE STOCK OWNERSHIP PLAN OR OTHER INCENTIVE SCHEME TO EMPLOYEES

  1. Share Incentive Scheme Disclosed in Extraordinary Announcement with no Progress or Changes

Overview

Inquiry Index

As reviewed and approved at the 2019 first

For details, please refer to the announcements dated

extraordinary general meeting, the 2019 first class

12 February 2019 in relation to resolutions passed at

meeting of holders of A Shares and the 2019

the 2019 first extraordinary general meeting, the 2019

first class meeting of holders of H Shares on 12 first class meeting of holders of A Shares, the 2019 first

February 2019, the Company implemented the

class meeting of holders of H Shares, and the resolution

2018 A Share Option Scheme. On the same day, as

passed at the twenty-third meeting of the seventh

reviewed and approved at the twenty-third meeting

session of the Board in relation to the adjustment and

of the seventh session of the Board, the Company

granting of the Share Options Scheme, as well as the

adjusted the grantees under the 2018 A Share

announcement in relation to the completion of the

Option Scheme and granted 46.32 million share

granting registration of the Share Option Scheme on

options to 499 eligible participants. On 21 February

21 February 2019. The above announcements were

2019, the Company completed the granting

also posted on the websites of the Shanghai Stock

registration of the share options for the Share

Exchange, the HKEX and the Company and/or China

Incentive Scheme.

Securities Journal, Shanghai Securities News and

Securities Times.

Abstract of the Share Option Scheme (the "Share Option Scheme")

  1. The purpose of the Share Option Scheme
    The Share Option Scheme is to further establish and improve the long-term incentive mechanism of the Company, attract and retain talents, fully motivate the Directors, senior management, mid-level management and core employees of the Company, effectively align the interests of Shareholders, the interest of the Company and the personal interests of the management, and enable all parties to take interest in the long-term development of the Company.
  2. The scope of participants of the Share Option Scheme
    The participants include the Directors, senior management, mid-level management and core employees of the Company, excluding external Directors (including independent Directors), Supervisors, Shareholders or actual controllers that individually or jointly hold 5% or above shares of the Company and their spouses, parents and children.

Yanzhou Coal Mining Company Limited Interim Report 2020 45

CHAPTER 5 SIGNIFICANT EVENTS - CONTINUED

  1. The number of underlying shares to be granted under the Share Option Scheme
    The number of A share options to be granted under the Share Option Scheme is 46.68 million, representing approximately 0.95% of the total issued share capital of the Company as at the disclosure date of the Share Option Scheme (i.e. 4,912,016 million shares). The Board then adjusted the number to 46.32 million, representing approximately 0.94% of the total share capital of the Company as at the disclosure date of the Share Option Scheme.
  2. The maximum amount of share options for each Participant under the Share Option Scheme
    There is no Participant to whom the aggregate number of A Shares to be issued upon exercise of the share options may exceed 1% of the Company's total share capital as at the date of consideration and approval of the Share Option Scheme at the extraordinary general meeting, and shall not exceed 1% of the Company's total number of issued A Shares on the same day.
  3. The vesting period of the share options granted under the Share Option Scheme
    The vesting period is a period from the date of granting the share options to the exercise date of the share options. The vesting periods under the Share Option Scheme can be 24 months, 36 months and 48 months commencing from the date of granting, respectively.
  4. The date of exercise under the Share Option Scheme
    The share options granted under the Share Option Scheme, shall be exercised on any trading day, except during the following periods, upon expiry of 24 months since the date of grant.
    1. Within thirty (30) days before the announcement of periodic report, or from thirty (30) days before the scheduled date of announcement of periodic report to the day before actual date of periodic report in case of postponed announcement due to certain reasons;
    2. Within ten (10) days before the announcement of the Company's results forecast and performance news;
    3. A period commencing from the date of significant events occurred or proposed for review and approval, which may have severe impacts on the trading price of the shares and its derivatives of the Company, till two (2) trading days after the announcement disclosed in pursuant to relevant laws.
    4. Any other period as stipulated by CSRC and Shanghai Stock Exchange.

46 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 5 SIGNIFICANT EVENTS - CONTINUED

The above-mentioned "significant events" refer to transactions or other significant events shall be disclosed in accordance with Rules Governing the Listing of Stocks of the Shanghai Stock Exchange.

The exercise period of the options granted under the Share Option Scheme and its arrangement are shown in the following table.

Proportion of

exercisable Share

Options to the total

Arrangement for

number of granted

the exercise

Exercise Period

Share Options

First Exercise Period

Commencing from the first trading day after the

33%

expiry of the 24th month from the date of grant,

and ending on the last trading day of the 36th

month from the date of granting the share options

Second Exercise Period

Commencing from the first trading day after the

33%

expiry of the 36th month from the date of grant,

and ending on the last trading day of the 48th

month from the date of granting the share options

Third Exercise Period

Commencing from the first trading day after the

34%

expiry of the 48th month period from the date of

grant, and ending on the last trading day of the

60th month period from the date of granting the

share options

The Participants must exercise their share options during the validity period of the share options. If preconditions for exercising are not fulfilled, the share options for the corresponding period shall not be exercised. If the preconditions for exercising are fulfilled, the options not exercised during the corresponding period shall be cancelled by the Company.

7. The exercise price of the share options granted under the Share Option Scheme

The exercise price of each option granted under the Share Option Scheme is RMB9.64. During the period commencing from the date of announcement of the Share Option Scheme to the expiry of the exercise period of the participants, the exercise price shall be subject to adjustment in the event of capitalization of capital reserves, share bonus distribution, share split or drawn back, right issue or dividend distribution of the Company.

Yanzhou Coal Mining Company Limited Interim Report 2020 47

CHAPTER 5 SIGNIFICANT EVENTS - CONTINUED

  1. The basis of determination of exercise price of the share options granted under the Share Option Scheme The Exercise Price shall not be less than the nominal value of the Company's A Shares or the higher of:
    1. the average trading price of A Shares quoted on the trading day immediately preceding the date of announcement of the Share Option Scheme, being RMB8.92 per A Share;
    2. the average trading price of A Shares for the 20 trading days immediately preceding the date of announcement of the Share Option Scheme, being RMB9.58 per A Share;
    3. the closing price of A Shares on the trading day immediately preceding the date of announcement of the Share Option Scheme, being RMB8.75 per A Share; and
    4. the average closing price of A Shares for the 30 trading days immediately preceding the date of announcement of the Share Option Scheme, being RMB9.64 per A Share.
  3. The validity period of the Share Option Scheme
    The Share Option Scheme comes into effect since the approval by the shareholders' meetings. The validity period of the share options granted under the Share Option Scheme shall not exceed 60 months commencing from the date of granting the share options.
  4. Granting, eexercise and cancellation of share options during the reporting period
    On 21 February 2019, the Company completed the granting registration under the Share Option Scheme, and a total of 46.32 million share options were granted. The name list of the participants and number of options granted are identical with that of the resolution as approved at the twenty third meeting of the seventh session of the Board of the Company. None of the share options granted under the Share Option Scheme is in the exercising period.
    For details, please refer to the Announcement on Granting of Share Options to the Participants under the 2018 A Share Option Scheme of Yanzhou Coal Mining Company Limited, and the Announcement on the Name list of the Participants as of the Granting Day of the 2018 A Share Option Scheme of Yanzhou Coal Mining Company Limited dated 12 February 2019. The above announcements were also posted on the websites of the Shanghai Stock Exchange, the HKEX and the Company and/or China Securities Journal, Shanghai Securities News and Securities Times.

48 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 5 SIGNIFICANT EVENTS - CONTINUED

Long-term Incentive Scheme of Yancoal Australia

In order to attract and retain the talents, combined the compensation of the management with the shareholders' interests to ensure that employees focus on the middle and long-term goals of Yancoal Australia, as approved at the Yancoal Australia 2018 annual general meeting, Yancoal Australia implemented an incentive scheme in 2018.

For details, please refer to the resolution announcement of Yancoal Australia 2018 Annual General Meeting dated 30 May 2018, the results announcement of the year ended 31 December 2018 dated 25 February 2019, the results announcement of the year ended 31 December 2019 dated 28 February 2020 and the announcement of the rights to issuing performance shares dated 15 June 2020. The above announcements were also posted on the websites of Yancoal Australia, the Australia Stock Exchange and/or the HKEX.

  1. Share Option Incentives Not Disclosed in Extraordinary Announcements or with Subsequent Progress

Share Option Incentive Schemes

Not applicable.

Other Explanation

Not applicable.

Employee Shareholding Scheme

Not applicable.

Other Incentive Schemes

Not applicable.

  1. MAJOR CONNECTED/RELATED TRANSACTIONS

(The data below in this section are prepared in accordance with the CASs)

The Group's connected/related transactions were mainly continuing connected/related transactions entered into with the Controlling Shareholder of the Company, i.e., Yankuang Group and its subsidiaries except the Group, Qingdao Century Ruifeng Group Co., Ltd ("Century Ruifeng"), Glencore Coal Pty Ltd ("Glencore") and its subsidiaries, Sojitz Corporation ("Sojitz") and its subsidiaries.

  1. Connected/Related Transactions Performance in relation to Daily Operation
    1. Matters disclosed in extraordinary announcements but without subsequent progress or change Not applicable.

Yanzhou Coal Mining Company Limited Interim Report 2020 49

CHAPTER 5 SIGNIFICANT EVENTS - CONTINUED

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

  1. Approval and implementation of continuing connected/related transactions entered with Yankuang Group during the reporting period
    • Continuing connected/related transaction of materials and services provision and insurance fund
      As approved at the 2018 first extraordinary general meeting of the Company held on 26 January 2018, five continuing connected/related transaction agreements were entered into by the Company with Yankuang Group, namely, the "Provision of Material Supply Agreement", "Mutual Provision of Labor and Services Agreement", "Provision of Insurance Fund Administrative Services Agreement", "Provision of Products, Materials and Equipment Leasing Agreement" and "Bulk Commodities Sales and Purchase Agreement", each of which defines the annual cap of transaction within a period from 2018 to 2020.
      Except for "Provision of Insurance Fund Administrative Services Agreement", the pricing of the transactions was mainly determined on basis of state price, market price, as well as the actual cost. The charge for transaction can be settled in one lump sum or by installments. The payment payable to the other party or receivable from the other party due in a calendar month shall be recorded on the last business day of the calendar month. The continuing connected/related transactions made in a calendar month shall be settled in the following month, except for incomplete transactions or where the transaction amounts are in dispute.
      The sales of goods and provision of services by the Group to its Controlling Shareholder amounted to RMB1.611 billion in the first half of 2020. The goods and services provided by the Controlling Shareholder to the Group amounted to RMB1.191 billion.
      The following table sets out the continuing connected/related transactions of the supply of materials and services between the Group and the Controlling Shareholder in the first half of 2020:

For the six months

For the six months

Increase/

ended 30 June 2020

ended 30 June 2019

decrease of

Percentage

Percentage

connected/

of operating

of operating

related

Amount

revenue

Amount

revenue

Transactions

(RMB'000)

(%)

(RMB'000)

(%)

(%)

Sales of goods and provision of services by

the Group to its Controlling Shareholder

1,611,140

1.47

1,967,987

1.86

-18.13

Sales of goods and provision of services by

the Controlling Shareholder to the Group

1,190,596

1.09

688,478

0.65

72.93

50 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 5 SIGNIFICANT EVENTS - CONTINUED

The table below shows the effect on the Group's profits from sales of coal by the Group to the Controlling Shareholder for the six months ended 30 June 2020:

Sales income

Sales cost

Gross profit

(RMB'000)

(RMB'000)

(RMB'000)

Coal sold to the Controlling

Shareholder

1,035,437

767,482

267,955

Pursuant to the Provision of Insurance Fund Management Services Agreement, the Controlling Shareholder shall provide free management and transferring services for the Group employees' basic pension insurance fund, basic medical insurance fund, supplementary medical insurance fund, unemployment insurance fund, maternity insurance fund and industrial injury fund (the "Insurance Fund"). The actual amount of the Insurance Fund paid by the Group for the six months ended 30 June 2020 was RMB357 million.

  • Continuing connected/related transaction of entrusted management of chemical projects
    As reviewed and approved at 2018 first extraordinary general meeting held on 26 January 2018, the Company entered into the Entrusted Management Agreement of Chemical Projects with Yankuang Group for a period from 2018 to 2020, which defines the annual transaction cap and the price is mainly determined on basis of the actual cost.
    Pursuant to the Entrusted Management Agreement of Chemical Projects, Yankuang Group shall provide Chemicals project entrusted management service and sales agency services to the Group, while the payment of the chemical entrusted management fee is made after the annual assessment.
    The Group did not pay entrusted management fee to Yankuang Group for the first half of 2020.
  • Continuing connected/related transaction of entrusted management of the subsidiaries of Yankuang Group
    As considered and approved at the twentieth meeting of the seventh session of the Board held on 5 December 2018, the Company entered into the Entrusted Management Agreement with Yankuang Group, which defines the annual caps for a period from 2019 to 2020. The price was mainly determined based on the actual cost plus reasonable profit.
    Pursuant to the Entrusted Management Agreement, the Group will provide professional management to 8 subsidiaries of Yankuang Group. Yankuang Group will pay entrusted management fee of RMB7.3 million to Yanzhou Coal within one month since the audited annual reports of the above 8 companies were issued.
    As at the end of reporting period, the conditions of payment have not yet been met.

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CHAPTER 5 SIGNIFICANT EVENTS - CONTINUED

  • Continuing connected/related transaction of financial services
    As approved at the 2019 second extraordinary general meeting of shareholders held on 1 November 2019, the Financial Services Agreement between Yankuang Finance Company and Yankuang Group were renewed, pursuant to which Yankuang Finance Company shall provide deposit services, comprehensive credit facility services and other miscellaneous financial services to Yankuang Group from 2020 to 2022 within the annual caps for the transactions (if applicable). And the relevant deposit interest rate, loan interest rate and service charges shall be determined in accordance with relating regulations of People's Bank of China or China Banking and Insurance Regulatory Commission and with reference to normal commercial terms.

As at 30 June 2020, the comprehensive credit balance of Yankuang Group in Yankuang

Finance Company was RMB4.361 billion, and the financial service fee occurred in 2020 was

RMB631,000.

  • Continuing connected/related transaction of financial leasing
    As reviewed and approved at the thirtieth meeting of the seventh session of the Board held on 30 December 2019, the Financial Leasing Agreement was entered into between Zhongyin Financial Leasing and Yankuang Group, which defines the transaction cap for the year 2020. And the interest rate for financial leasing shall be no less than 5% higher than the quoted loan market rate for the corresponding period published by the National Inter-bank Lending Center, and the highest rate shall not exceed 7.5%.
    In according to the Financial Leasing Agreement, Zhongyin Financial Leasing shall provide financial leasing services to Yankuang Group and its subsidiaries excluding Yanzhou Coal and its subsidiaries, and a one-time commission fee or consulting fee shall be charged on or before the day when Zhongyin Financial Leasing pays the consideration for the leased asset, and a quarterly rental shall be charged.
    In the first half of 2020, Zhongyin Financial Leasing has not provided financial leasing services to Yankuang Group and its subsidiaries (not including Yanzhou Coal and its subsidiaries) yet.

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  • Continuing connected/related transaction of rental housing
    As considered and approved at the thirty-first meeting of the seventh session of the Board dated 7 February 2020, Shanghai Dongjiang Real Estate Development Co., Ltd, ("Dongjiang Company"), a wholly-owned subsidiary of the Company, entered into the Lease Agreement in relation to Shanghai Dongjiang Pearl Square with Shanghai Yankuang Xinda Hotel Co., Ltd. ("Shanghai Xinda"), a subsidiary of Yankuang Group. The rent standard shall be determined based on the market price of similar rental premises in Shanghai.
    In accordance with the Lease Agreement, Dongjiang Company leased the real estate located at No. 303, Mingzhu Road, Xujing County, Qingpu District, Shanghai to Shanghai Xinda. The rent will be paid in installments before use each year with half of the rent payable in January and the other half in July of each year.
    In according to the Lease Agreement, Shanghai Xinda is free of rent charge for 10 months of decoration period (from 1 March 2020 to 31 December 2020). Therefore, Shanghai Xinda need not pay rent to Dongjiang Company for the first half year of 2020.
    The following table sets out the details of the annual transaction caps and actual transaction amounts for the first half of 2020 for the above continuing connected/related transactions.

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CHAPTER 5 SIGNIFICANT EVENTS - CONTINUED

Annual

Annual

Transaction

Transaction

Type of connected/related

Cap for the

Amount for

No.

transaction

Agreement

Year 2019

the Year 2019

(RMB'000)

(RMB'000)

1

Material and facilities provided by Yankuang Group

Provision of Materials Supply

300,000

104,750

Agreement

2

Labor and services provided by Yankuang Group

Mutual Provision of Labor and

2,768,270

646,094

Labor and services provided to Yankuang Group

Services Agreement

179,100

26,630

3

Insurance fund management and payment services

Provision of Insurance Fund

1,669,080

357,237

provided by Yankuang Group (free of charge) for the

Administrative Services

Group's staff

Agreement

4

Sale of products, material and equipment lease provided

Provision of Products, Material and

4,876,700

1,528,880

to Yankuang Group

Equipment Leasing Agreement

5

Procurement of bulk commodities from Yankuang Group

Bulk Commodities Sales and

5,140,000

439,751

Sale of bulk commodities to Yankuang Group

Purchase Agreement

4,281,000

55,629

6

Financial services to

Comprehensive Credit

Financial Services Agreement

9,400,000

4,361,220

Yankuang Group

Financial service fee

4,000

631

7

Commissioned management service of chemical projects

Chemical Projects Entrusted

5,500

0

by Yankuang Group

Management Agreement

Marketing and sales agent service by Yankuang Group

34,500

0

8

Provision of entrusted management services to the

Entrusted Management Special

7,300

0

controlling shareholder

Agreement

9

Provision of financial leasing

Total amount of financing

Financial Leasing Agreement

814,000

0

services to the controlling

Interests and expenses

64,000

0

shareholder

10

Rental housing services to the controlling shareholder

Lease Agreement

0

0

54 Yanzhou Coal Mining Company Limited Interim Report 2020

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  1. Approval and implementation of continuing connected/related transactions with Century Ruifeng during the reporting period
    At the 2018 first extraordinary general meeting of the Company held on 26 January 2018, the Bulk Commodities Mutual Supply Agreement between the Company and Century Ruifeng (a substantial shareholder of the Company's subsidiary and a connected person of the Company), together with the annual caps for such transactions for a period from 2018 to 2020 were approved. The transaction price is determined on basis of the market price. The charge for transaction can be settled in one lump sum or by installments. The continuing connected/related transaction payable to another party or that of receivable from another party due in the current month shall be recognized on the last business day of each corresponding calendar month. The continuing connected/related transactions made in each calendar month shall be settled in the following month, except for incomplete transactions or where the transaction amounts are in dispute.
    The 2020 annual cap for sales of commodities by the Group to Century Ruifeng was RMB2.195 billion and that by Century Ruifeng to the Group was RMB1.1 billion.
    In the first half of 2020, the aggregate amount of commodity sold by the Group to Century Ruifeng was RMB135.8267 million. Century Ruifeng did not sell any commodity to the Group.
  2. Approval and implementation of continuing connected/related transactions with Glencore during the reporting period
    • Continuing connected/related transaction of coal sales
      At the fifteenth meeting of the seventh session of the Board of the Company held on 29 June 2018, Coal Sales Framework Agreement (the "Agreement") between Yancoal Australia and Glencore (a substantial shareholder of the Company's subsidiary and a connected person of the Company), together with the annual caps for such transaction for a period from 2018 to 2020 were approved. The transaction price determined on basis of the market price, together with adjustment according to related industry benchmarks and indexes. The payment time for transaction shall be determined by both parties in accordance with international practices and applicable laws and regulations in this agreement and be specified in details in the specific coal sales agreement.
      The 2020 annual cap for coal sales of the Group to Glencore and its subsidiaries was USD350 million. In the first half of 2020, the Group did not sell coal to Glencore and its subsidiaries.

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  • Continuing connected/related transaction of coal purchase
    At the 2018 second extraordinary general meeting of the Company held on 24 August 2018, the HVO Sales Contract between Yancoal Australia and Glencore, together with the estimated maximum annual transaction amounts for such transaction from 2018 to 2020 had been approved. It was stipulated in HVO Sales Contract that HVO Coal Sales Pty Ltd, a subsidiary of Yancoal Australia, shall pay the corresponding transaction amount to Yancoal Australia and Glencore respectively according to the total amount and corresponding product quota collected in each sales agreement with the client and HVO Coal Sales Pty Ltd shall pay the transaction amount to Yancoal Australia and Glencore no later than 3 business days after receiving payment from clients.
    The 2020 annual transaction amount for coal purchase (on equity basis) of the Group from Glencore under HVO Sales Contract was USD750 million. For the first half of 2020, the connected transaction amount between the Group and Glencore was approximately USD218 million.
    At the 2018 second extraordinary general meeting of the Company held on 24 August 2018, the Coal Purchase Framework Agreement between Yancoal Australia and Glencore, together with the annual caps for such transaction for the years of 2018 to 2020 were approved. The final transaction price adopted under the Coal Purchase Framework Agreement will be finally determined based on fair negotiation, in accordance with normal commercial terms and with reference to the market price of relevant type of coal at the time. The time of payment for the transaction shall be determined by both parties in accordance with international practices and applicable laws and regulations in the agreement and be specified in details in the specific coal sales agreement.
    The 2020 annual cap for coal purchase of the Group from Glencore and its subsidiaries under the Coal Purchase Framework Agreement was USD350 million. In the first half of 2020, the connected transaction amount between the Group and Glencore was approximately USD45 million.

56 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 5 SIGNIFICANT EVENTS - CONTINUED

  • Continuing connected/related transaction of coal sales service

    1. At the 2018 second extraordinary general meeting of the Company held on 24 August 2018, the HVO Services Agreement between Yancoal Australia and Glencore, together with the estimated maximum annual transaction amounts for such transaction for the years of 2018 to 2020 were approved. According to this agreement, HV Operations Pty Ltd.(the "HV Operations"), a controlled subsidiary of Yancoal Australia, shall pay the follows to Glencore:
    2. all costs, charges and expenses incurred in providing services to HVO Joint Venture or HVO Coal Sales Pty Ltd; (ii) all off-site costs, charges and expenses ("general expenses") incurred by Glencore in providing services. The determination of general expenses is based on the principle of fairness and reasonableness and with reference to all costs, charges and expenses incurred by Glencore in providing similar services without particularities. Both parties agreed that Glencore provide monthly invoice to HV Operations and HV Operations shall finish the payment within 5 business days after receiving such invoice.

The Group's annual cap of service purchase from Glencore in 2020 was USD18 million. In the first half of 2020, this connected/related transaction involved approximately USD6.47 million.

  • Continuing connected/related transactions in relation to diesel fuel supply
    At the twenty-eighth meeting of the seventh session of the Board held on 25 October 2019, the Diesel Fuel Supply Agreement between HV Operations and Glencore Australia Oil Pty Ltd (the "GAO"), a subsidiary of Glencore plc, as well as the annual caps for such transaction for the years from 2019 to 2021 were approved. The Diesel Fuel Supply Agreement stipulates that: (i) HV Operations shall provide a purchase order before the delivery month; (ii)GAO shall deliver the amount of fuel before the date specified in the purchase order, and HV Operations shall pay after the fuel is delivered; and (iii) the payment is calculated based on the amount delivered and the price determined after the bidding process.
    The 2020 annual cap for diesel fuel purchase of HV Operations from GAO was AUD180 million. In the first half of 2020, the connected transaction amount was approximately AUD58 million.

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      1. Approval and implementation of continuing connected/related transactions with Sojitz during the reporting period
        At the 2018 second extraordinary general meeting of the Company held on 24 August 2018, it was reviewed and approved that: ① Yancoal Australia - Sojitz Coal Sales Agreement between Yancoal Australia and Sojitz (Sojitz is a substantial shareholder of the Company's subsidiary and a connected person of the Company), together with the annual caps for such transaction for the years of 2018 to 2020. ② Syntech - Sojitz Coal Sales Agreement between Syntech Holding Pty Ltd ("Syntech"), a wholly-owned subsidiary of the Company, and Sojitz, together with the annual caps for such transaction for the years of 2018 to 2020. The final transaction prices for the above two agreements will be finally determined on the basis of fair negotiation, in accordance with normal commercial terms and with reference to the market price of relevant type of coal at the time. The payment time for transaction shall be determined by both parties in accordance with international practices and applicable laws and regulations in this agreement and be specified in details in the specific coal sales agreements.
        The annual cap for the above-mentioned two transactions was USD100 million and USD150 million, respectively, totaling USD250 million. In the first half of 2020, the Group has sold coal to Sojitz and its subsidiaries amounting approximately USD28 million.
    2. Undisclosed events in extraordinary announcements Not applicable.
  2. Connected/Related Transactions in relation to Assets or Equity Acquisition and Sale Matters
    1. Matters disclosed in extraordinary announcements and with no subsequent progress or change Not applicable.
    2. Matters disclosed in extraordinary announcements but with subsequent progress or change
      1. Connected/Related Transaction in Relation to Acquiring 10% Equity Interests of Moolarben Coal Joint Venture
        As considered and reviewed at the thirty-second meeting of the seventh session of the Board dated 27 March 2020, the Joint Venture Interest Sale Deed was entered into between Yancoal Australia and its wholly-owned subsidiary, Yancoal Moolarben Pty Ltd ("Yancoal Moolarben") with Sojitz Moolarben Resources Pty Ltd ("Sojitz"), a wholly-owned subsidiary of Sojitz Corporation. Yancoal Moolarben purchased 10% equity interests of Moolarben Coal Joint Venture held by Sojitz at a consideration of AUD300 million.

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As of the date of this report, Yancoal Moolarben and Sojitz have completed the 10% equity interest transfer in relation to Moolarben Coal Joint Venture.

For details, please refer to the announcements dated 27 March 2020 in relation to resolutions passed at the thirty-second meeting of the seventh session of the Board and the connected/related transaction in relation to acquisition of equity interests, and the updating announcement dated 31 March 2020 in relation to acquisition of equity interest, which were posted on the websites of the Shanghai Stock Exchange, the HKEX, the Company's website and/or China Securities Journal and Shanghai Securities News and Securities Times.

    1. Connected/related transaction of disposal of 100% equity interests of non-coal trading companies
      As considered and reviewed at the thirty-second meeting of the seventh session of the Board dated 27 March 2020, an equity purchase agreement was entered into between Yancoal International and Yankuang Aluminum (Hong Kong) Company ("Aluminum Hong Kong Company"), a wholly-owned subsidiary of Yankuang Group. Yancoal International sold the 100% equity interests of Yancoal International Trade Co., Ltd and Yancoal International (Singapore) Co., Ltd. to Aluminum Hong Kong Company at a consideration of RMB150.6712 million.
      As of the date of this report, Yancoal International and Aluminum Hong Kong Company have completed the 100% equity interest transfer in relation to Yancoal International Trade Co., Ltd and Yancoal International (Singapore) Co., Ltd.
      For details, please refer to the announcements dated 27 March 2020 in relation to resolutions passed at the thirty-second meeting of the seventh session of the Board and the connected/ related transaction announcement of sale of equity interest, which were posted on the websites of the Shanghai Stock Exchange, the HKEX and the Company, and/or on China Securities Journal, Shanghai Securities News and Securities Times in the PRC.
  2. Matters not disclosed in extraordinary announcement Not applicable.
  3. Disclosure of the performance of the results relating to results agreement during the reporting period Not applicable.

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  1. Significant Connected/related Transactions of Cooperative External Investment
    1. Events disclosed in extraordinary announcements and with no subsequent progress or change Not applicable.
    2. Events disclosed in extraordinary announcements and with subsequent progress or change Not applicable.
    3. Matters not disclosed in extraordinary announcement Not applicable.

(IV) Credit and Debt Obligation among Related Parties

  1. Events disclosed in extraordinary announcements and with no subsequent progress or change Not applicable.
  2. Events disclosed in extraordinary announcements with subsequent progress or changes during Implementation Not applicable.
  3. Events not disclosed in extraordinary announcements

Unit: RMB100 million

Fund provided to related parties

Fund provided to the Company

Balance at

Amount

Closing

Balance at

Amount

Closing

Related parties

Relationship

the beginning

occurred

balance

the beginning

occurred

balance

Yankuang Group

Controlling Shareholder

78.12

61.00

86.90

116.49

19.40

140.66

Century Ruifeng

Other related party

0

1.36

0.02

0.83

1.71

1.43

Glencore and its subsidiaries

Other related party

0

0

0

0

22.86

0

Sojitz and its subsidiaries

Other related party

0

2.12

0

0

0

0

Total

78.12

64.48

86.92

117.32

43.97

142.09

Reasons for credit and debt obligation among

Mutual sale of goods and provision of services

related parties

Impact on the operating result and financial conditions of

No significant impact

the Company by credit and debt obligation

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  1. Other significant connected transactions.

Not applicable.

(VI) Others

Pursuant to the Hong Kong Listing Rules, the Group's connected/related transactions set out in Note "Related Party Balances and Transactions" to the consolidated financial statements prepared in accordance with the IFRS constitute continuing connected/related transactions in Chapter 14A of the Hong Kong Listing Rules, and the Company confirmed that such transactions have complied with the relevant disclosure requirements under the Hong Kong Listing Rules.

Other than the material connected/related transactions disclosed in this section, the Group was not a party to any material connected transaction which is required to be disclosed in pursuance to the Hong Kong Listing Rules during the reporting period.

XI. MATERIAL CONTRACTS AND PERFORMANCE

(I)

Trust, Contract or Lease

Not applicable.

(II)

Guarantees

Unit: RMB100 million

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

Total amount of guarantee during the reporting period

(excluding guarantees to the subsidiaries)

0

Total guarantee balance by the end of the reporting

period (A) (excluding guarantees to the subsidiaries)

0

Guarantees to subsidiaries by the Company

Total amount of guarantee to subsidiaries during the

reporting period

68.38

Total balance of guarantee to subsidiaries by the end

of the reporting period (B)

270.02

Total guarantees (including guarantees to subsidiaries)

Total amount of guarantees (A+B)

270.02

Percentage of total amount of guarantee in the net

assets of the Company (%)

41.20

Of which:

Number of guarantees to Shareholders, actual

controllers, and related parties (C)

0

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Amount of guarantees directly or indirectly to

guaranteed parties with a debt-to-assets ratio

exceeding 70% (D)

120.92

Total amount of guarantee exceeding 50% of net

assets (E)

0

Total amount of the above 3 categories guarantees

(C+D+E)

120.92

Explanation on unexpired guarantee that may be

subject to joint and several liability

None

Guarantee explanations

1.

The external guarantee occurred during the

previous period and extended to the reporting

period.

As considered and approved at the 2011 annual general meeting, Yancoal Australia took a bank loan of USD3.04 billion for acquisition of equity interests in Felix. As at 30 June 2020, the balance of the above bank loan was USD975 million. The Company provided the guarantees of USD570 million and RMB3.31 billion to Yancoal Australia.

As considered and approved at the 2012 second extraordinary general meeting, the Company provided guarantees to Yancoal International Resources, for issuing USD1.0 billion corporate bonds in the overseas market. As at 30 June 2020, the balance of the above guarantee was USD104 million.

As considered and approved at the 2016 annual general meeting, the Company provided guarantee in the amount of RMB1.21 billion to Zhongying Financial Leasing; and as considered and approved at the 2017 annual general meeting, the Company provided guarantee in the amount of RMB1.224 billion to Zhongying Financial Leasing; As at 30 June 2020, the balance of the above guarantee was RMB2.434 billion.

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As considered and approved at the 2017 annual general meeting, the Company provided guarantees to Yancoal International Resources, for issuing USD335 million corporate bonds. As at 30 June 2020, the balance of the above guarantee was USD335 million.

As considered and approved at the 2017 annual general meeting, the Company provided guarantee of RMB50 million to Duanxin Commercial Factoring (Shenzhen) Co., Ltd. As at 30 June 2020, the balance of the above guarantee was RMB50 million.

As considered and approved at the 2017 annual general meeting, the Company provided guarantee of RMB30 million to Duanxin Supply Chain (Shenzhen) Co., Ltd. As at 30 June 2020, the balance of the above guarantee was RMB30 million.

As considered and approved at the 2018 annual general meeting, the Company provided guarantee in the amount of RMB1.83 billion to its holding subsidiary, Qingdao Vast Lucky Co., Ltd. ("Qingdao Vast Lucky"). As at 30 June 2020, the balance of the above guarantee was RMB1.83 billion.

As considered and approved at the 2018 annual general meeting, the Company provided guarantee in the amount of RMB1.455 billion to Qingdao Zhongyan. As at 30 June 2020, the balance of the above guarantee was RMB1.445 billion.

As at 30 June 2020, Yancoal Australia and its subsidiaries produced performance deposits and performance guarantees in a total of AUD827 million due to operational necessity.

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2. Guarantees arising during the reporting period

As reviewed and approved at the 2018 annual general meeting of the Company, the Company has provided guarantees to Qingdao Vast Lucky, Zhongyin Financial Leasing, Qingdao Zhongyan, Shandong Zhongyin International Trade, Yancoal International of RMB940 million, RMB857 million, RMB1,26 billion, RMB200 million and USD490 million, respectively.

As approved at the 2019 annual general meeting of the Company, Yancoal Australia and its subsidiaries provided a guarantee in an amount not exceeding AUD1.2 billion per year to its subsidiaries for their daily operation. During the reporting period, Yancoal Australia and its subsidiaries produced performance deposits and performance guarantees totaled AUD23 million due to operational necessity.

Note: The table above was prepared in accordance with the CASs and calculated at USD/RMB exchange rate of 7.0795 and AUD/RMB exchange rate of 4.8657.

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

(III) Other Material Contract

Not applicable.

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(IV) Other Significant Events

  1. Sale of shares the Company held in Dongguan Haichang Industry Co., Ltd. ("Haichang Company")
    As considered and approved at the general manager work meeting of the Company held on 7 January 2019 and in accordance with relevant provisions specified in the Capital Increase Agreement, Supplementary Agreement and Shares Repurchase Agreement between the Company and Dongguan Guantai Industry Co., Ltd. ("Guantai Industry"), the Company sold 20.89% of equity interest in in Haichang Company held by the Company for a consideration of RMB784 million to Guantai Industry. As at the disclosure date of this report, the Company has finished handling the change of business registration procedure upon receipt of the remaining transaction payment.
  2. Sales of 50% shares of Shengdi Fenlei Coal Preparation Engineering Technology (Tianjin) Co., Ltd. ("Shengdi Fenlei")
    As considered and approved at the general manager work meeting of the Company held on 25 November 2019, the Company proposed to sell its 50% equity interests in Shengdi Fenlei through public listing. As at the disclosure date of this report, the project has been suspended because the bidding process expired.
  3. Cancellation of Xinyinlian Co., Ltd.
    As reviewed and approved at general manager work meeting of the Company held on 19 January 2020, Xinyinlian Co., Ltd, a controlled-subsidiary of the Company, proposed to perform the liquidation procedure in accordance with local laws in Singapore and its articles of association. As at the disclosure date of this report, the liquidation procedure of Xinyinlian Co., Ltd. has been finished.
  4. Sales of 100% shares of Yijinhuoluo Anhe Coal Co., Ltd.
    As reviewed and approved at general manager work meeting of the Company held on 17 June 2020, the Company proposed to sell its 100% equity interests in Yijinhuoluo Anhe Coal Co., Ltd through public bidding. Currently, the Company is going through the bidding and transfer procedure of such matter.
  5. Sales of 0.3425% shares of Shaanxi Future Energy & Chemicals Co., Ltd.
    As reviewed and approved at general manager work meeting of the Company held on 17 June 2020, the Company proposed to sell its 0.3425% equity interests in Shaanxi Future Energy & Chemicals Co., Ltd to Yulin Yuyang State-owned Assets Operation Co., Ltd. at the price of RMB18.495 million. As at the disclosure date of this report, the industrial and commercial registration procedure of such equity transfer has been completed.

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XII. PERFORMANCE OF POVERTY ALLEVIATION BY THE COMPANY

1. Accurate poverty alleviation plan

In the first half of 2020, the Company actively fulfilled its social responsibilities in accordance with the national targeted poverty alleviation plan and the actual situation of the Company. The Company has deepened local- enterprise cooperation by formulating various forms of poverty alleviation plans such as political poverty alleviation, material poverty alleviation, industrial poverty alleviation, cultural poverty alleviation, and education poverty alleviation.

2. Summary of accurate poverty alleviation during the reporting period

In the first half of 2020, while realizing the steady development, the Group invested RMB4.38 million in assistance funds to implement the five-in-one poverty alleviation plan of "political poverty alleviation, material poverty alleviation, industrial poverty alleviation, cultural poverty alleviation, and education poverty alleviation" to help poverty alleviation. In terms of political poverty alleviation, the Company implemented a series of Party building leading projects in the three "First Secretary" villages of Huangdian Town, Dingtao District, Heze City. Dawu Village organized the creation of the "Beautiful Dawu Collection: Colorful Party Building". Huaishu Liu Village implemented the "12345" Party Building Work Method named the Soul of Locust Tree. Zhanglou Village explored the establishment of a "three-three" Party Building work method to build characteristic Party Building brand. In terms of material poverty alleviation, the Company provided coal for heating to the kindergartens and mutual happiness hospitals affiliated to Wushen County, Inner Mongolia, and poor villages in Heshun County, Shanxi Province, thus ensuring the warmth of local residents through the winter. The Company has won the coal-to-electricity conversion project for 213 villagers in three villages assisted by Heze City. The Company installed air conditioners, built wells, repaired dilapidated houses, renovated tap water, and installed street lights for the villagers, which greatly improved the production and living conditions of the residents. In terms of industrial poverty alleviation, the Company invested more than RMB1 million to build a medical device assembly workshop in the help village of Heze City, build a demonstration base for the Tianbao melon and honeysuckle industry, and set up a "hat processing" workshop for enrichment. The Company and the large farmers in the village jointly built 200 acres of "vegetable planting industry demonstration base"; invested RMB500,000 in the help village of Yijinhuoluo County, Ordos City to build a greenhouse edible mushroom project, thus helping to solve the unemployment of the village's surplus labor force to drive the villagers out of poverty and become rich. In terms of cultural poverty alleviation, the Company repaired and helped the ancestral halls in the village, built a family culture wall, and compiled a three-character classic of village regulations. The Company organizes the "Good Family Style and Family Style" activity to continue to promote the good folk style and family style. The Company excavated the declared intangible cultural heritage such as bamboo horse performances and local opera Dapingdiao. The Company organizes activities such as the Farmer Culture and Art Festival, so that traditional culture can be inherited and carried forward. In terms of educational poverty alleviation, the Company used the higher-level education poverty alleviation policy to provide compulsory education in the "Xiaohe School" for more than 200 primary school students. On 1 June, the Company launched a celebration activity of "Establishing patriotism, becoming a talent for serving the country, and drawing a colorful life", donating school supplies to more than 900 children.

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Meanwhile, the Company actively cooperated with poor villages and towns to carry out the prevention and control of the COVID-19 pandemic, purchased and donated pandemic prevention and control equipment and materials, medical consumables, and disinfection supplies. Additionally, the Company timely allocated coal to Heze City and other regions to solve the problem of local energy supply shortage and establish good company image. The Company insists on internally carrying out precise assistance and warmth, and extensively carries out activities such as serious illness assistance, unsupported survivor assistance, and heart-warming services. In the first half of the year, it visited 4,481 employees in various difficulties, and effectively delivered the company's care and warmth to the hearts of the needy employees.

3. Achievement on accurate poverty alleviation

Unit: RMB0'000

Indicators

Amount of Investment and Implementation

I. Overview

438

including, 1.

Poverty alleviation fund

370

2.

Materials equivalent in RMB

68

  1. Investment by item
    1. Industrial poverty alleviation

including, 1.1

Types of industrial poverty alleviation projects

√ Agriculture & Forestry

□ Tourist industry

□ E-business

□ Assets income

□ Science & Technology

□ Others

1.2

Number of projects

5

1.3

Amount of investment

150

2. Education poverty alleviation

including, 2.1

Amount of investment in funding poor students

100

3. Other projects

including, 3.1

Number of projects

8

3.2

Amount of investment

188

3.3 Explanation on other projects

Build roads and bridges in villages and towns

in poverty-stricken areas, green villages,

purchase pandemic protection materials,

donate clothing and food, provide pesticides

and fertilizers for spring plowing materials, condolences and help needy old party members in needy families in villages, and provide coal for heating in poor areas, etc.

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4. Periodic progress in performing social responsibility on accurate poverty alleviation

In the first half of 2020, the Company conscientiously implemented the various deployment requirements for targeted poverty alleviation by superiors and corporate locations, based on the actual conditions of poverty- stricken areas, and gave full play to the advantages of the Company. The Company focused on the four dimensions of "caring for the people in need, strength in poverty alleviation funds, depth in poverty alleviation, and breadth in industrial synergy". It has invested a total of RMB4.38 million in various assistance funds, so as to gradually achieve "poverty alleviation of farmers, collective income increase, township development, regional revitalization." The Company has achieved positive results in implementing targeted poverty alleviation.

5. Following targeted poverty alleviation plan

In the second half of 2020, the Company will adhere to the targeted poverty alleviation as a way to fulfill its social responsibilities, enhance the Company's core competitiveness, and build a good corporate image. The Company will continue to implement the various deployment requirements of the national and local governments for poverty alleviation, and actively perform various responsibilities for poverty alleviation. The Company will actively implement the political and social responsibility of "poverty alleviation, state-owned enterprises take the lead", and focus more on the industrial development, livelihood facts, and cultural guidance of enterprises in assisting villages and poverty-stricken villages to ensure to achieve tangible results with higher standards, stricter requirements, and more practical measures in the targeted poverty alleviation.

XIII. CONVERTIBLE CORPORATE BONDS

Not applicable.

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XIV. ENVIRONMENTAL PROTECTION PRACTICES

  1. Explanation on Environmental Protection Practices of the Company and its Subsidiaries in the List of Key Pollutant Discharging Entities Released by the Environmental Protection Authorities
    1. Pollutant discharging
    During the reporting period, no significant environment pollution incidents occur within the Group, who has not received any punishment due to significant violation of environment protection laws from environmental protection regulators. The Group has strictly abided by the laws and regulations, including Environmental Protection Law of the People's Republic of China, Prevention and Control of Atmospheric Pollution Law of the People's Republic of China, Water Pollution Prevention and Control Law of the People's Republic of China, The Environmental Impact Assessment Law of the People's Republic of China, etc. The Group actively engages in pollution control to meet standards and criteria stipulated by relevant regulations, including Emission Standard of Air Pollutants for Thermal Power Plants (GB13223- 2011), Emission Standard of Air Pollutants for Boiler (GB13271-2014), Emission Standard for Pollutants from Coal Industry (GB 20426-2006) and National Comprehensive Working Plan for Energy Conservation and Emission Reduction for the Thirteenth Five-Year Plan Period.
    In the first half of 2020, the coal mines affiliated to the Group equipped with sound facilities for sewage process and dust control at coal stockyards, which operated in a stable manner, and the discharge of main pollutants, such as COD, ammonia nitrogen, PM10 etc. meet all discharging standards. The power plants affiliated to the Group equipped with sound facilities for exhaust gas management, which operated
    in a stable manner, and the discharge of main pollutants, such as smoke dust, SO2, nitrogen oxide etc. meet all discharging standards. The chemical plants affiliated to the Group equipped with sound facilities for industrial sewage processing and boiler fuel gas management, which operated in a stable manner,
    and the discharge of main pollutants, such as COD, ammonia nitrogen, smoke dust, SO2, nitrogen oxide etc. meet all discharging standards. The Group has been improving its environmental protection management system, standardizing its management processes and working procedures for energy conservation and emission reduction, so as to prevent environmental pollution and ecological damage from the beginning and to strive to build itself into a resource-saving and environment friendly company.
    All of the key pollutant discharging entities in the Group have applied for pollutant discharging certificates, and they discharged pollutants accordingly and within the total permitted discharging volume, which meet relevant environment protection requirements. The information of subsidiaries listed key pollutant discharging entities released by the environmental protection authorities are as follows.

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Actual discharging

Annual pollutant

volume in for the six

Key pollutant

Types of

Discharging

discharging permission

months ended 30 June

No. discharging entities

pollutant

Main pollutants method

Discharging standard

volume

2020

1

Nantun Coal Mine (Key

Industrial

Chemical

Discharging to receiving

Pollutant Discharging Standard for Coal

pollutant discharging entity

wastewater

oxygen demand

water body after processing

Industry (GB20426-2006), Shandong Province

in Shandong Province)

(COD), ammonia

in sewage treatment station

Comprehensive Discharging Standard for Water

nitrogen

Pollutant along the route of water transmission

project from the South to the North (DB37/3416.1-

2018)

2

Baodian Coal Mine (Key

Industrial

Chemical

Discharging to receiving

Pollutant Discharging Standard for Coal

pollutant discharging entity

wastewater,

oxygen demand

water body after processing

Industry (GB20426-2006), Shandong Province

in Shandong Province)

sanitary

(COD), ammonia

in sewage treatment station

Comprehensive Discharging Standard for Water

wastewater

nitrogen

Pollutant along the route of water transmission

project from the South to the North (DB37/3416.1-

2018)

3

Yangcun Coal Mine (Key

Industrial

Chemical

Discharging to receiving

Pollutant Discharging Standard for Coal

pollutant discharging entity

wastewater,

oxygen demand

water body after processing

Industry (GB20426-2006), Shandong Province

in Shandong Province)

sanitary

(COD), ammonia

in sewage treatment station

Comprehensive Discharging Standard for Water

wastewater

nitrogen

Pollutant along the route of water transmission

project from the South to the North (DB37/3416.1-

2018)

4

Heze Nenghua Zhaolou

Industrial

Chemical

Discharging to receiving

Pollutant Discharging Standard for Coal

Coal Mine (Key pollutant

wastewater,

oxygen demand

water body after processing

Industry (GB20426-2006), Shandong Province

discharging entity in

sanitary

(COD), ammonia

in sewage treatment station

Comprehensive Discharging Standard for Water

Shandong Province)

wastewater

nitrogen

Pollutant along the route of water transmission

project from the South to the North (DB37/3416.1-

2018)

5

Xinglongzhuang Coal Mine

Industrial

Chemical

Discharging to receiving

Pollutant Discharging Standard for Coal

(Key industrial wastewater

wastewater,

oxygen demand

water body after processing

Industry (GB20426-2006), Shandong Province

discharging entity in

sanitary

(COD), ammonia

in sewage treatment station

Comprehensive Discharging Standard for Water

Shandong Province,

wastewater

nitrogen

Pollutant along the route of water transmission

National key pollutant

project from the South to the North (DB37/599-

discharging entity of

2006), Pollutant Discharging Standard for Urban

sanitary waste water)

Sewage Water Treatment Plant (GB18918-2002)

292 tons of COD,

4.5 tons of COD and 0.1

29.2 tons of ammonia

ton of ammonia nitrogen

nitrogen

103.8 tons of COD,

11.4 tons of COD and 0.1

5.4 tons of ammonia

tons of ammonia nitrogen

nitrogen

33.1 tons of COD,

0.97 tons of COD and 0.04

1.2 tons of ammonia

tons of ammonia nitrogen

nitrogen

95.4 tons of COD,

4.1 tons of COD and 0.02

5.9 tons of ammonia

tons of ammonia nitrogen

nitrogen

109 tons of COD,

0.2 tons of COD, 0.02

5.5 tons of ammonia

tons of ammonia nitrogen

nitrogen

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Actual discharging

Annual pollutant

volume in for the six

Key pollutant

Types of

Discharging

discharging permission

months ended 30 June

No.

discharging entities

pollutant

Main pollutants

method

Discharging standard

volume

2020

6

Dongtan Coal Mine (Key

Industrial

Chemical

Discharging to receiving

Pollutant Discharging Standard for Coal

9.8 tons of COD,

0 tons of COD, 0 tons of

industrial wastewater

wastewater,

oxygen demand

water body after processing

Industry (GB20426-2006), Shandong Province

0.4 tons of ammonia

ammonia nitrogen

discharging entity in

sanitary

(COD), ammonia

in sewage treatment station

Comprehensive Discharging Standard for Water

nitrogen

Shandong Province,

wastewater

nitrogen

Pollutant along the route of water transmission

National key pollutant

project from the South to the North (DB37/599-

discharging entity of

2006), Pollutant Discharging Standard for Urban

sanitary waste water)

Sewage Water Treatment Plant (GB18918-2002)

7

Jining No.2 Coal Mine (Key

Industrial

Chemical oxygen

Discharging to receiving

pollutant discharging entity

wastewater,

demand (COD)

water body after processing

in Shandong Province)

sanitary

in sewage treatment station

wastewater

Pollutant Discharging Standard for Coal

32.4 tons of COD

7.4 tons of COD

Industry (GB20426-2006), Shandong Province

Comprehensive Discharging Standard for Water

Pollutant along the route of water transmission

project from the South to the North (DB37/599-

2006), Pollutant Discharging Standard for Urban

Sewage Water Treatment Plant (GB18918-2002)

8

Jining No.3 Coal Mine (Key

Industrial

Chemical oxygen

Discharging to receiving

pollutant discharging entity

wastewater,

demand (COD)

water body after processing

in Shandong Province)

sanitary

in sewage treatment station

wastewater

Pollutant Discharging Standard for Coal

40.5 tons of COD

12.9 tons of COD

Industry (GB20426-2006), Shandong Province

Comprehensive Discharging Standard for Water

Pollutant along the route of water transmission

project from the South to the North (DB37/599-

2006), Pollutant Discharging Standard for Urban

Sewage Water Treatment Plant (GB18918-2002)

9

Yanzhou Coal Mine

Industrial

Chemical oxygen

Discharging to receiving

Engineering Company

wastewater,

demand (COD)

water body after processing

Limited (Key pollutant

sanitary

in sewage treatment station

discharging entity in

wastewater

Shandong Province)

Pollutant Discharging Standard for Coal

12.5 tons of COD

0 tons of COD

Industry (GB20426-2006), Shandong Province

Comprehensive Discharging Standard for Water

Pollutant along the route of water transmission

project from the South to the North (DB37/599-

2006), Pollutant Discharging Standard for Urban

Sewage Water Treatment Plant (GB18918-2002)

10 Power Generation Plants of

Boiler smoke

PM (particulate

discharged to the air after

Hua Ju Energy (National key

and gas

matter), SO2,

purification

pollutant discharging entity)

NOx

Shandong Province Air Pollutants Discharge Standards for Coal-burned Power Plant (DB37/664-2013)

PM182.1 tons, SO2

PM10.8 tons, SO2 78.5

880.8 tons, NOx 2145

tons, NOx 355 tons

tons

Yanzhou Coal Mining Company Limited Interim Report 2020 71

CHAPTER 5 SIGNIFICANT EVENTS - CONTINUED

Actual discharging

Annual pollutant

volume in for the six

Key pollutant

Types of

Discharging

discharging permission

months ended 30 June

No.

discharging entities

pollutant

Main pollutants

method

Discharging standard

volume

2020

11

Tianchi Coal Mine of Shanxi

Boiler smoke

SO2, NOx, COD

smoke and gas discharged

Air Pollutants Discharge Standards for Boilers

SO2 46.8 tons, NOx

SO2 0 tons, NOx 0.2 tons,

Neng Hua (Key pollutant

and gas,

to the air after purification,

(GB13271-2014), Pollutant Discharging Standard

46.8 tons, COD 25 tons

COD 3.1 tons

discharging entity of

industrial

and the waste water

for Coal Industry (GB20426-2006)

Jinzhong City)

waste water,

recycled for reutilization

sanitary

after treatment in waste

waste water

water treatment station and

not discharged at all

12 Methanol Factory of Yulin

Boiler smoke

PM (particulate

smoke and gas discharged

Neng Hua (National key

and gas,

matter), SO2,

to the air after purification,

pollutant discharging entity)

industrial

NOx, COD,

and the waste water

waste water,

ammonia

recycled for reutilization

sanitary

nitrogen

after treatment in waste

waste water

water treatment station and

not discharged at all

Air Pollutants Discharge Standards for Boilers (GB13271-2014), Comprehensive Waste Water Discharging Standard (GB 8978-1996)

PM 143 tons, SO2

946.6 tons, NOx 473.3 tons, COD 129.2 tons, ammonia nitrogen 31.1 tons

PM 30.2 tons, SO2 84.9 tons, NOx 143.8 tons, COD 20.0 tons, ammonia nitrogen 1.6 tons

13 Rongxin Chemicals of

Boiler smoke

PM (particulate

smoke and gas discharged

Ordos Neng Hua (National

and gas,

matter), SO2,

to the air after purification,

key air pollutant discharging

industrial

NOx, COD,

and the waste water

entity)

waste water,

ammonia

recycled for reutilization

sanitary

nitrogen

after treatment in waste

waste water

water treatment station and

not discharged at all

Air Pollutants Discharge Standards for Boilers (GB13271-2014), Comprehensive Waste Water Discharging Standard (GB 8978-1996)

PM 325.1 tons, SO2 1003.8 tons, NOx 950 tons, COD 80 tons, ammonia nitrogen 14.4 tons

PM 1.8 tons, SO2 72.5 tons, NOx 67.9 tons, COD 0 tons, ammonia nitrogen 0 tons

14 Zhuanlongwan Coal

Boiler smoke SO2, NOx, COD

smoke and gas discharged

Mine of Ordos Neng Hua

and gas,

to the air after purification,

(Ordos City key pollutant

industrial

and the waste water

discharging entity)

waste water,

recycled for reutilization

sanitary

after treatment in waste

waste water

water treatment station and

not discharged at all

Air Pollutants Discharge Standards for Boilers

SO2 94.1 tons, NOx

SO2 2.6 tons, NOx 18.3

(GB13271-2014)

81.2 tons

tons

72 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 5 SIGNIFICANT EVENTS - CONTINUED

2. Construction and operation of pollution control facilities

The coal mines and enterprises affiliated to the Group have built mine water and domestic sewage treatment facilities. Through the construction of silos, closed coal sheds and closed material sheds, the Group finished the complete closure of the coal yard and coal gangue yard. The power plant boilers have all completed ultra-low emission renovation. Chemical enterprises have built industrial sewage treatment plants, and boilers have undergone ultra-low emission modification as required. Currently, VOCs are being treated. The pollution control facilities operate in parallel with the production system to ensure that pollutants are discharged according to relevant standards.

Key pollutant discharging

No.

entities

Construction and operation of pollution control facilities

1

Nantun Coal Mine

A mine water treatment station and a domestic sewage

2

Baodian Coal Mine

treatment station have been established as required, which

3

Jining No. 2 Coal Mine

are all in normal operation. Closed coal sheds and closed

4

Yangcun Coal Mine

material sheds have been built. Baodian Coal Mine has

5

H e z e N e n g h u a Z h a o l o u

completed the high-salt mine water treatment project and is

Coal Mine

already in operation. High-salt mine water treatment projects

in Nantun Coal Mine, Jining No. 2 Coal Mine and Zhaolou

Coal Mine are under construction.

6

Xinglongzhuang Coal Mine

A mine water treatment station and a domestic sewage

7

Dongtan Coal Mine

treatment station have been established as required, which

are all in normal operation. Silos and closed material sheds

have been built. High-salt mine water treatment project in

Dongtan Coal Mine is under construction.

8

Jining No. 3 Coal Mine

A mine water treatment station, a domestic sewage treatment

station and an industrial wastewater treatment station

have been established as required, which are all in normal

operation. Silos and closed material sheds have been built.

Hgh-salt mine water treatment project is under construction.

9

Yanzhou Coal Mine Engineering

A domestic sewage treatment station has been established as

Company Limited

required, which is in normal operation.

10

Power Generation Plants of Hua

Equipped with de-dusting, desulfurization and de-nitration

Ju Energy

facilities, the power plants of Huaju Energy have 18 boilers

of 3,375 steam tons in total, which have completed ultra-low

emission retrofit and are in normal operation.

11

Shanxi Nenghua Tianchi Coal

A mine water treatment station and a domestic sewage

Mine

treatment station have been established as required, which

are all in normal operation. Moreover, the coal mine has a

boiler house and 3 boilers (1 boiler of 10 steam tons and 1

boilers of 6 steam tons), which are equipped with de-dusting,

desulfurization and de-nitration facilities and are in normal

operation. At present, the coal mine is building a natural gas boiler, and after completion, the existing coal-fired boiler will be shut down.

Yanzhou Coal Mining Company Limited Interim Report 2020 73

CHAPTER 5 SIGNIFICANT EVENTS - CONTINUED

Key pollutant discharging

No.

entities

Construction and operation of pollution control facilities

12

Methanol Plant of Yulin Neng

An industrial wastewater treatment station and 3 coal fines

Hua

boilers of 260 steam tons have been established as required,

which are all equipped with de-dusting, desulfurization and

de-nitration facilities and are in normal running. At present,

ultra-low emission renovations were finished.

13

Rongxin Chemicals of Ordos

Rongxin Chemicals has established a mine water treatment

Neng Hua

station and a domestic sewage treatment station as required,

which are all in normal operation. Moreover, Rongxin

Chemicals has three units of 220 steam tons circulating

fluidized bed boilers, which are all equipped with de-dusting,

desulfurization and de-nitration facilities and are in normal

running. At present, ultra-low emission renovations were

finished.

14

Zhuanlongwan Coal Mine of

Zhuanlongwan Coal Mine has established a mine water

Ordos Neng Hua

treatment station and a domestic sewage treatment station as

required, which are all in normal operation. Moreover, the coal

mine has 3 boilers (two units of 20-ton boilers and one 6-ton

boiler), which are all equipped with de-dusting, desulfurization

and de-nitration facilities and are in normal running.

  1. Environmental impact assessment on constructive projects and other administrative licenses for environmental protection
    The Group has carried out environmental impact assessment before commencement of projects construction. The pollution control & ecological preservation projects and the main construction project are designed, constructed and put into use at the same time according to requirements for environmental impact assessment and reply. After the test run is completed, the environmental protection for acceptance will be applied as required. Once obtaining the approval of acceptance, the Group can put into operation and use.
  2. Emergency plan for emergency environmental incidents
    Each production unit of the Group have, on its own or authorized qualified companies to prepare contingency plans for environmental emergencies, which are assessed by the competent environmental protection administration department of the government and relevant experts for the record. At the same time, we have strengthened emergency facilities, carried out regular emergency drills to improve our capacity of preventing and controlling environmental pollution incidents so as to fully meet relevant requirements.

74 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 5 SIGNIFICANT EVENTS - CONTINUED

5. Environmental self-monitoring program

The coal mines affiliated to the Group all are equipped with sewage online monitoring systems and PM10 coal field online monitoring facilities. The boilers of power plants are all equipped with exhaust gas online monitoring facilities. The chemical enterprises are all equipped with industrial waste water and boiler exhaust online monitoring facilities. All these online monitoring facilities are connected to the monitoring platform of the government to realize real-time supervision. Key pollution-discharging units of the Group have prepared self-monitoring plans, carried out self-monitoring regularly, and disclosed monitoring information of key pollution sources to the public as required. The main methods of monitoring are online monitoring and entrusted monitoring.

  1. On-linemonitoring
    • Mine water
      On-line monitoring of COD in the discharge water from the coal mine is carried out by a third party as required with monitoring frequency of every 2 hours and monitoring data connected to government monitoring platform in real time.
  • Domestic sewage

On-line monitoring of COD, ammonia nitrogen, TP and TN in the discharge water is carried out by a third party as required with monitoring frequency of every 2 hours and monitoring data connected to government monitoring platform in real time.

  • Industrial wastewater

On-line monitoring of COD, ammonia nitrogen, TP and TN in the discharge water is carried out by a third party as required with monitoring frequency of every 2 hours and monitoring data connected to government monitoring platform in real time.

  • Boiler smoke
    On-line monitoring of SO2, NOX, smoke and dust is carried out by a third party as required once an hour and monitoring data are connected to government monitoring platform in real time.
  • Online monitoring of PM10 in coal yard
    On-line monitoring of PM10 in coal yard exit is carried out by a third party as required once an hour and monitoring data are connected to Jining Municipal Coal Bureau monitoring platform in real time.

Yanzhou Coal Mining Company Limited Interim Report 2020 75

CHAPTER 5 SIGNIFICANT EVENTS - CONTINUED

  1. Entrusted monitoring
    • Monitoring of pollutants in the discharge water is carried out by a third party as required once a month and the monitoring objectives shall refer to the Standard for the Discharge of Pollutants in Urban Sewage Treatment Plant.
  • The Group has entrusted a third party to implement manual monitoring of ringelman emittance, smoke and dust, SO2 and NOX quarterly.
  • The Group has entrusted the third party to implement plant boundary noise monitoring quarterly.
    • The monitoring of radioactive sources (if any) has been conducted by a third party as required yearly.

    6. Other environmental information that should be disclosed Not applicable.

  2. Environmental protection statement for companies other than the key pollutant discharging entities

The Group implements cleaner production in accordance with the principles of source prevention, process control, and end treatment. The Group conducts pollution prevention and control in order to minimize the impact of production on the environment. The Group actively carried out water and soil conservation, subsided area management, rehabilitation and greening, ecological construction, etc., in order to protect and improve the local ecological environment. Companies other than the key pollutant discharge units have established pollution control facilities in accordance with the requirements of environmental approvals, and they are operating normally without excessive discharge. The total amount of pollutants discharged by the Group meets the total discharge amount approved by the superior authority.

  1. Explanation of reasons for non-disclosure of environmental information by companies other than key pollutant discharging entities

Companies other than key pollutants have less impact on the environment, mainly due to the consumption and emissions of energy resources from daily office operations. In addition, the companies strictly abide by the Environmental Protection Law of the People's Republic of China, the Water Pollution Prevention Law of the People's Republic of China, the Air Pollution Prevention Law of the People's Republic of China, and the Solid Waste Pollution Prevention Law of the People's Republic of China. There was no punishment for violating environmental protection laws and regulations.

76 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 5 SIGNIFICANT EVENTS - CONTINUED

(IV) Description of the follow-up progress or changes in the disclosure of environmental information during the reporting period

Not applicable.

XV. EXPLANATION ON OTHER SIGNIFICANT EVENTS

  1. Information, Reasons and Effects of the Changes in Accounting Policies, Accounting Estimates and Accounting Methods as Compared to the Previous Accounting Period

Not applicable

  1. Significant Accounting Errors Being Subject to Reconsideration, Corrections, Causes and Effects during the Reporting Period

Not applicable.

(III) Others

(Prepared in accordance with the Hong Kong Listing Rules)

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

  1. Repurchase H shares of the Company
    According to the general mandate granted by the annual general meeting of 2018, the second class meeting of holders of A shares and the second class meeting of holders of H shares of 2019, the Company repurchased 52.016 million H Shares in HKEX from 4 May 2020 to 22 May 2020.
    For details, please see Section 6 "Changes in Ordinary Shares and Shareholders".

Yanzhou Coal Mining Company Limited Interim Report 2020 77

CHAPTER 5 SIGNIFICANT EVENTS - CONTINUED

  1. Redemption of 5.75% senior guaranteed perpetual capital securities ("the Securities") at the principal amount of USD500,000,000
    On 13 April 2020, Yancoal International Resources (as the issuer) redeemed all the Securities on the Hong Kong Stock Exchange based at the principal amount of the Securities together with any accumulated distributions up to the redemption date (including any overdue distributions and any additional distribution amounts).
    For details, please refer to the relevant resolutions dated 7 April 2017, 17 April 2017, 9 March 2020 and 15 April 2020, which were posted the websites of Shanghai Stock Exchange, the HKEX, the Company's website and/or China Securities Journal, Shanghai Securities News and Securities Times in the PRC.
    Except for the above disclosure, the Company or any of its subsidiaries did not repurchase, sell or redeem the Company's listed securities.
  2. Mandate granted by the general meeting to issue additional H Shares and repurchase H Shares
    On 19 June 2020, the 2019 Annual General Meeting of Shareholders granted the Board of Directors a general mandate, that is, the Board of Directors shall, in accordance with needs and market conditions, obtain approval from relevant regulatory authorities and comply with laws, administrative regulations and the Articles of Association. Under the relevant authorization period, it will be determined in a timely manner whether to issue additional H shares not exceeding 20% of the total issued H shares on the date of the passage of the relevant resolution.
    As at the annual general meeting of 2019, the first class meeting of holders of A shares and the first class meeting of holders of H shares of 2020 dated 19 June 2020, the Board was granted a general mandate respectively. Under the general mandate, the Company was authorized to repurchase H Shares not exceeding 10% of the aggregate nominal value of H Shares in issue as at the date of passing the resolution according to the needs and market conditions upon obtaining approvals from the relevant regulatory authorities and complying with the relevant laws, regulations and the Articles.
    As at the date of this report, the Company has not yet exercised the above general mandates.

78 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 5 SIGNIFICANT EVENTS - CONTINUED

  1. Remuneration policy
    The remuneration for the Directors, Supervisors and senior management is proposed to the Board by the remuneration committee under the Board. Upon review and approval by the Board, any remuneration proposal for the Directors and Supervisors will be proposed to the general meeting for approval. The remuneration for the senior management is reviewed and approved by the Board.
    The Company adopts a combined award system with annual remuneration, risk control and special contribution as the means for assessing and rewarding the Directors and senior management. The annual remuneration consists of annual basic salary and annual performance salary. The annual basic salary is comprehensively determined according to the operational scale, profitability, operating management difficulty and employees' income of the Company, whereas annual performance salary is determined by the actual operational results of the Company. The annual basic salaries for the Directors and senior management of the Company are pre-paid on a monthly basis and the annual performance salaries are paid after the completion of the audit assessment in the following year.
    The Group adopts a performance salary system for employees other than Directors, Supervisors and senior management based on the duty of the posts and quantified evaluation results, The performance- based salary is decided upon assessment of individual post performance while putting the overall economic benefit of the Company into consideration.
  2. Auditors
    The details of auditors are set out in the section headed "Appointment and Dismissal of Auditors" in this chapter.

Yanzhou Coal Mining Company Limited Interim Report 2020 79

CHAPTER 5 SIGNIFICANT EVENTS - CONTINUED

XVI. CORPORATE GOVERNANCE

  1. Corporate Governance

(Prepared according to the listing rules in PRC)

The Company has paid close attention to the securities market standards and legal regulations, and has actively improved its corporate governance structure. During the reporting period, the Company further improved corporate governance. In accordance with Reply of the State Council on Adjusting the Applicability of the Provisions on the Notification Period for Holding Shareholders Meetings of Overseas Listed Companies (Guo Han [2019] No. 97) and the latest requirements of the regulatory rules for domestic and overseas listings, in conjunction with the actual operational needs of the Company and its subsidiaries, the Company amended the relevant provisions of the "Articles of Association" for the notice period and convening procedures of the shareholders meeting, and revised the "Rules of Procedures of the General Meeting of Shareholders" in accordance with the amendments to the "Articles of Association".

Since the listing of the Company, in accordance with the PRC Corporate Law, the PRC Securities Law, foreign and domestic laws and regulations in places where the Company's shares are traded, the Company has set up a relatively regulated and stable corporate governance system and has abided by the corporate governance principles of transparency, accountability and protection of the rights and interests of the Shareholders as a whole. There is no significant difference between the corporate governance system and the requirements in relevant documents detailed by the CSRC.

  1. Compliance with Corporate Governance Code and Model Code

(Prepared in accordance with the Hong Kong Listing Rules)

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

The Board believes that good corporate governance is crucial to the operation and development of the Group. The Group has established the reporting system to all Directors, to ensure all Directors are informed of the Company's business. The Group believes that the periodical Board meetings can provide an effective communication channel for the non-executive directors, thus enabling the non-executive Directors to discuss fully and openly on the Group's business. The Board regularly reviews corporate governance practices to ensure the Company's operation is in compliance with the laws, regulations and supervisory rules of places where the shares of the Company are traded, and consistently endeavors to implement a high standard of corporate governance.

80 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 5 SIGNIFICANT EVENTS - CONTINUED

The corporate governance measures implemented by the Group include, but not limited to the following: the Articles, the Rules of Procedures for Shareholders' General Meeting, the Rules of Procedures for the Board of Directors, the Rules of Procedures for Supervisory Committee, the Work Policy of the Independent Directors, the Rules for Disclosure of Information, the Rules for the Approval and the Disclosure of Connected/ Related Transactions of the Company, the Rules for the Management of Relationships with Investors, Management System of the Company's Shares Held by the Board of Directors, the Board of Supervisors, Senior Management and Internal Information Insiders, the Standard of Conduct and Professional Ethics for Senior Employees, the Measures on the Establishment of Internal Control System and the Measures on Overall Risk Management. As at the date of disclosure of the report, the corporate governance rules and practices of the Group are in compliance with the principles and the code provisions set out in the Corporate Governance Code (the "Code") contained in the Hong Kong Listing Rules. The corporate governance practices of the Group comply with the requirements of the Code.

During the reporting period, the Company has strictly complied with the above corporate governance documents and the Code without any deviation.

For details, please refer to the Report on Corporate Governance of the Company included in 2019 annual report of the Company.

Having made specific enquiries with all the Directors and Supervisors, the Company believed that the Directors and Supervisors have strictly complied with Model Code for Securities Transactions by Directors of Listed Issuers ("the Model Code") set out in Appendix X of Hong Kong Listing Rules headed and the Management System of the Company's Shares Held by the Board of Directors, the Board of Supervisors, Senior Management and Internal Information Insiders and the Code for Securities Transactions of the Management of the Company during the reporting period. The Company has adopted a code of conduct regarding securities transactions of the Directors and Supervisors on terms no less stringent than the required standard set out in the Model Code.

(III) Investor Relations

The Company has been continuously perfecting the system for the management of relationships with Investors, and improved standard management of investor relations through effective information collection, compilation, examination, disclosure, and feedback management procedures. During the reporting period, the Company facilitated its communications with the capital market through face-to-face meetings at international and domestic road-shows, attendance in investment strategy meetings organized by brokers at home and abroad, inviting investors for Company onsite visits as well as many other means such as making full use of "SSE E-interactive Platform", hotlines, faxes and e-mails. The Company has had more than 400 contacts with analysts, fund managers and investors.

Yanzhou Coal Mining Company Limited Interim Report 2020 81

CHAPTER 6 CHANGES IN ORDINARY SHARES AND SHAREHOLDERS

  1. CHANGES IN ORDINARY SHARES
    1. Table of Changes in Ordinary Shares
      1. Table of Changes in Ordinary Shares

Unit: Share

Increase and Decrease

Before the Change

of the Change（＋，－）

After the Change

Quantity

Ratio (%)

Others

Subtotal

Quantity

Ratio (%)

I

Restricted shares

120,500

0.0025

0

0

120,500

0.0025

1.

State shareholding

0

0

0

0

0

0

2.

State-owned legal person holdings

0

0

0

0

0

0

3.

Other domestic shares

120,500

0.0025

0

0

120,500

0.0025

Including: Domestic non-state-owned legal

person holdings

0

0

0

0

0

0

Domestic natural person holdings

120,500

0.0025

0

0

120,500

0.0025

4.

Foreign shareholding

0

0

0

0

0

0

II

Unrestricted shares

4,911,895,500

99.9975

-52,016,000

-52,016,000

4,859,879,500

99.9975

1.

A Shares

2,959,879,500

60.2579

0

0

2,959,879,500

60.9029

2.

Domestically listed foreign shares

0

0

0

0

0

0

3.

Foreign shares listed overseas

1,952,016,000

39.7396

-52,016,000

-52,016,000

1,900,000,000

39.0947

4.

Others

0

0

0

0

0

0

III

Total number of shares

4,912,016,000

100

-52,016,000

-52,016,000

4,860,000,000

100

2. Explanation on changes in ordinary shares

As at the annual general meeting of 2018, the second class meeting of holders of A shares and the second class meeting of holders of H shares of 2019 dated 24 May 2019, the Board was granted a general mandate respectively. Under the general mandate, the Company was authorized to repurchase H Shares not exceeding 10% of the aggregate nominal value of H Shares in issue as at the date of passing the resolution according to the needs and market conditions upon obtaining approvals from the relevant regulatory authorities and complying with the relevant laws, regulations and the Articles.

82 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 6 CHANGES IN ORDINARY SHARES AND SHAREHOLDERS

The Company implemented its first repurchase on 4 May 2020. From 4 May 2020 to 22 May 2020, the Company has repurchased a total of 52,016,000 H shares on the HKEX. The lowest repurchase price is HKD5.63 per share, and the highest repurchase price is HKD6.35 per share. The total amount paid by the Company was HKD310,188,380.00 (excluding commissions and other fees). As at the end of the reporting period, all the repurchased shares have been cancelled. After the industrial and commercial registration changes are completed, the Company's total share capital will be reduced from 4,912,016,000 shares to 4,860,000,000 shares.

For details, please refer to the "Announcement of Yanzhou Coal on the Implementation of H Share Repurchase" dated 6 May 2020, and the "Announcement of Yanzhou Coal on the Implementation of H Share Repurchase in May 2020" on 30 May 2020. Announcements and the disclosure statements on the following days on 7 May, 9 May, 12 May, 13 May, 14 May, 15 May, 16 May, 19 May, 20 May, 21 May, 22 May, 23 May, 29 June, which were posted on the websites of Shanghai Stock Exchange, the HKEX, the Company's website and/or China Securities Journal, Shanghai Securities News and Securities Times in the PRC.

    1. The impact of changes in ordinary shares on financial indicators such as earnings per share, net asset per share during the end of the reporting period to the disclosure date of this Interim Report (if any)
      Not applicable.
    2. Other disclosures the Company considers necessary or required by securities regulatory institutions
      As at the date of this report, according to the information publicly available to the Company and within the knowledge of the Directors, the Directors believe that during the reporting period, the public float of the Company is more than 25% of the Company's total issued shares, which is in compliance with the requirement of the Hong Kong Listing Rules.
  2. Changes in Shares with Restricted Moratorium

Not applicable.

II. SHAREHOLDERS

(I)

Total Number of the Shareholders

Total number of shareholders as to the end of the reporting period (share)

81,403

Total number of preferred shareholders with resumed voting right as to the end

of the reporting period (share)

0

Yanzhou Coal Mining Company Limited Interim Report 2020 83

CHAPTER 6 CHANGES IN ORDINARY SHARES AND SHAREHOLDERS

  1. Top Ten Shareholders and Top Ten Shareholders Holding Tradable Shares of the Company (or Unrestricted Shareholders) As At The End of The Reporting Period

Unit: share

Shareholdings of the top ten Shareholders

Number of

Increase/

shares

decrease

held at the

Number of

during the

end of the

shares held

Pledged or locked

Name of shareholders

reporting

reporting

Percentage

with trading

Status of

Number of

Class of

(Full Name)

period

period

(%)

moratorium

shares

shares

shareholders

Yankuang Group Co., LTD.

0

2,267,169,423

46.65

0

No

0

State-owned

legal person

Hong Kong Securities Clearing

-52,453,200

1,895,677,203

39.01

0

Unknown

-

Overseas

Company (Nominees) Limited

legal person

Beijing Chengtongjinkong

33,116,200

33,116,200

0.68

0

No

0

Stated-owned

Investment Company Limited

legal person

Hong Kong Securities Clearing

-569,304

27,227,572

0.56

0

No

0

Overseas

Company Limited

legal person

New China Life Insurance Co., Ltd.

0

21,957,897

0.45

0

No

0

Others

-Dividend-Individualdividend-018L

-FH002Shanghai

Central Huijin Assets

0

19,355,100

0.40

0

No

0

State-owned

Management Co., Ltd.

legal person

New China Life Insurance Co., Ltd.

-4,584,554

10,710,153

0.22

0

No

0

Others

-Dividend-Groupdividend-018L

-FH001Shanghai

Bank of China Co., Ltd.

-4,041,600

5,623,951

0.12

0

No

0

Others

-The Belt and Road Exchange-End

Index Securities Investment Fund

National Social Security Fund 412

-6,965,000

5,097,107

0.10

0

No

0

Others

Combination

Shandong Jindun Energy

4,843,685

4,843,685

0.10

0

No

0

Domestic

Company Limited

non-state owned

legal person

84 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 6 CHANGES IN ORDINARY SHARES AND SHAREHOLDERS

Unit: share

Top ten Shareholders holding tradable shares not subject to trading moratorium

Number of tradable

Class and number of shares held

shares held not

subject to trading

Class

Number

Name of Shareholders

moratorium

of shares

of shares

Yankuang Group Co., LTD.

2,267,169,423

A Shares

2,267,169,423

Hong Kong Securities Clearing Company (Nominees) Limited

1,895,677,203

H Shares

1,895,677,203

Beijing Chengtongjinkong Investment Company Limited

33,116,200

A Shares

33,116,200

Hong Kong Securities Clearing Company Limited

27,227,572

A Shares

27,227,572

New China Life Insurance Co., Ltd.-Dividend-Individual

21,957,897

A Shares

21,957,897

dividend-018L-FH002Shanghai

Central Huijin Assets Management Co., Ltd.

19,355,100

A Shares

19,355,100

New China Life Insurance Co., Ltd.-Dividend-Group dividend-

10,710,153

A Shares

10,710,153

018L-FH001Shanghai

Bank of China Co., Ltd.-The Belt and Road Exchange-End

5,623,951

A Shares

5,623,951

Index Securities Investment Fund

National Social Security Fund 412 Combination

5,097,107

A Shares

5,097,107

Shandong Jindun Energy Company Limited

4,843,685

A Shares

4,843,685

Connected relationship or actions

Yankuang Group (Hong Kong) Co., Ltd. ("Yankuang Hong Kong Company"), a wholly-owned

in concert among the above

subsidiary of Yankuang Group incorporated in Hong Kong held 455,000,000 H shares through

Shareholders

HKSCC (Nominees) Limited. New China Life Insurance Co., Ltd.-Dividend-Individual Annuity

Insurance-018L-FH002Shanghai and New China Life Insurance Co., Ltd.-Dividend-Group

Annuity Insurance-018L-FH001Shanghai are both managed by New China Life Insurance Co.,

Ltd. Apart from this, it is unknown whether other shareholders are connected with one another or

whether any of these shareholders fall within the meaning of parties acting in concert.

Illustration of preferred

Not applicable.

shareholders with restored

voting rights and number of

shares held by them

Notes:

  1. All the information above including "Total number of Shareholders" and "Top ten Shareholders and the top ten Shareholders holding tradable shares of the Company which are not subject to trading moratorium (or unrestricted shareholders)" is prepared in accordance with the registers of the Shareholders provided by China Securities Depository and Clearing Co., Ltd. Shanghai Branch and Hong Kong Central Securities Registration Company Limited.
  2. As the clearing and settlement agent for the Company's H shares, HKSCC (Nominees) Limited holds the Company's H shares in the capacity of a nominee. HKSCC Limited is the nominal shareholder of the Company's Shanghai Stock Connect Program.
  3. Yankuang Group, via Yankuang Hong Kong Company, increased its holding of 80,000,000 H shares of the Company on 11 June 2020.

Yanzhou Coal Mining Company Limited Interim Report 2020 85

CHAPTER 6 CHANGES IN ORDINARY SHARES AND SHAREHOLDERS

4. As at 30 June 2020, Yankuang Group held a total of 2,267,169,423 A shares of the Company, including 1,875,662,151 A shares held by its own account, and 391,507,272 A shares held by the guarantees and trust account opened by CITIC Securities Co., Ltd. and itself. The aforementioned guarantees and trust account provide guarantees for the exchangeable corporate bonds issued by Yankuang Group; Yankuang Group, via Yankuang Hong Kong Company, held 454,989,000 H shares of the Company, representing 56.01% (directly and indirectly) of the total share capital of the Company.

The number of shares and restricted conditions of top ten Shareholders holding tradable shares subject to trading moratorium

Not applicable.

  1. Strategic Investors or Ordinary Legal Persons Becoming Top Ten Shareholders through New Shares Allotment

Not applicable.

(IV) Substantial Shareholders' Interests and Short Positions in the Shares and/or Underlying Shares of the Company

As far as the Directors are aware, save as disclosed below, as at 30 June 2020, other than the Directors, Supervisors or chief executives of the Company, there were no other persons who were substantial shareholders of the Company or had interests or short positions in the shares or underlying shares of the Company, which should (i) be disclosed pursuant to Sections 2 and 3 under Part XV of the Securities and Futures Ordinance ("SFO"); (ii) be recorded in the register to be kept pursuant to Section 336 of the SFO; or (iii) notify the Company and the Hong Kong Stock Exchange in other ways.

Percentage in

Percentage in

the H Share

Total Share

Name of Substantial

Number of Shares

Name of

Capital of the

Capital of the

Shareholders

Class of Shares

Capacity

Held (shares)

Interests

Company

Company

Yankuang Group

A Shares (State-owned

Beneficial owner

2,267,169,423

Long position

-

46.65%

legal person shares)

Beneficial owner

391,507,272

Short position

-

8.06%

Yankuang Group (Note1)

H Shares

Interest of controlled

454,989,000

Long position

23.95%

9.36%

corporations

BNP Paribas Investment

H Shares

Investment manager

117,641,207

Long position

6.19%

2.42%

Partners SA

Notes:

  1. Yankuang Group's controlled subsidiary incorporated in Hong Kong holds such H Shares in the capacity of beneficial owner.
  2. The percentage figures above have been rounded off to the nearest second decimal place.
  3. Information disclosed herein is based on the information available on the website of the Hong Kong Stock Exchange at www.hkexnews.hk and information provided by China Securities Depository and Clearing Corporation Limited Shanghai Branch.

86 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 6 CHANGES IN ORDINARY SHARES AND SHAREHOLDERS

III. CHANGES IN CONTROLLED SHAREHOLDERS OR ACTUAL CONTROLLER

Not applicable.

Yanzhou Coal Mining Company Limited Interim Report 2020 87

CHAPTER 7 DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT

  1. CHANGES IN SHAREHOLDING
  1. Changes in Shareholding of Current and Resigned Directors, Supervisors and Senior Management

As at the date of disclosure of the report, except as disclosed below, none of the Directors, Supervisors and Senior Management of the Company have an interest in the shares, or any of its associated body corporate (definition referred to Part XV of the Securities and Futures Ordinance), the interests and short position in relevant shares and bonds. These interests and short position (i) are in accordance with the Section 352 of the Securities and Futures Ordinance, which should be recorded in the register to be kept, or (ii) In accordance with the provisions of the Model Code, shall notice the listed issuers and the Stock Exchange of Hong Kong (The relevant provisions shall be deemed to apply equally to the supervisors of the Company to the same extent as the directors of the Company).

Increase/

Number of Shares

Number of

Decrease of

Held at the

Shares Held at the

Shareholding

Beginning of the

End of the

During the

Name

Title

Reporting Period

Reporting Period

Reporting Period

Li Xiyong

Director

10,000

10,000

0

Li Wei

Director

10,000

10,000

0

Wu Xiangqian

Director

10,000

10,000

0

Liu Jian

Director

0

0

0

Zhao Qingchun

Director

0

0

0

He Jing

Director

0

0

0

Wang Ruolin

Director

0

0

0

Tian Hui

Independent Director

0

0

0

Zhu Limin

Independent Director

0

0

0

Cai Chang

Independent Director

0

0

0

Poon Chiu Kwok

Independent Director

0

0

0

Gu Shisheng

Supervisor

10,000

10,000

0

Zhou Hong

Supervisor

0

0

0

Li Shipeng

Supervisor

0

0

0

Qin Yanpo

Supervisor

0

0

0

Su Li

Supervisor

0

0

0

Zheng Kai

Supervisor

0

0

0

Xiao Yaomeng

Senior Management

0

0

0

Gong Zhijie

Senior Management

0

0

0

Zhang Chuanchang

Senior Management

0

0

0

Wang Peng

Senior Management

0

0

0

Li Wei

Senior Management

0

0

0

88 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 7 DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT

Increase/

Number of Shares

Number of

Decrease of

Held at the

Shares Held at the

Shareholding

Beginning of the

End of the

During the

Name

Title

Reporting Period

Reporting Period

Reporting Period

Wang Chunyao

Senior Management

0

0

0

Jin Qingbin

Senior Management

0

0

0

Zhang Lei

Senior Management

0

0

0

Guo Dechun (resigned)

Director

0

0

0

Guo Jun（resigned）

Director

10,000

10,000

0

Kong Xiangguo（resigned）

Independent director

0

0

0

Qi Anbang（resigned）

Independent director

0

0

0

Meng Qingjian（resigned）

Supervisor

0

0

0

Zhang Ning（resigned）

Supervisor

0

0

0

Jiang Qingquan（resigned）

Supervisor

10,000

10,000

0

Wang Fuqi（resigned）

Senior Management

10,000

10,000

0

Zhao Honggang（resigned）

Senior Management

10,000

10,000

0

Notes:

  1. Mr. Li Wei, director of the Company, and Mr. Li Wei, senior management of the Company, have the same name but are not the same person.
  2. At the end of the reporting period, the current and resigned Directors, Supervisors and Senior Management together held 80,000 A Shares, representing 0.0016% of the Company's total issued share.
  3. Mr. Gu Shisheng increased holding of 2,800 A shares of the Company on 9 July 2020.

Other explanations

Not applicable.

Yanzhou Coal Mining Company Limited Interim Report 2020 89

CHAPTER 7 DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT

  1. Share Incentive Mechanism to the Directors, Supervisors and Senior Management during the Reporting Period

Number of

options held

Number of

Number of

Number of

at the

options new

options

options

Number of

beginning

granted

exercisable

exercised

options held

of the

during the

during the

during the

at the end of

reporting

reporting

reporting

reporting

the reporting

Name

Title

period

period

period

period

period

Wu Xiangqian

Director

320,000

0

0

0

320,000

Liu Jian

Director

260,000

0

0

0

260,000

Zhao Qingchun

Director

260,000

0

0

0

260,000

He Jing

Director

260,000

0

0

0

260,000

Wang Ruolin

Director

150,000

0

0

0

150,000

Qin Yanpo

Supervisor

120,000

0

0

0

120,000

Su Li

Supervisor

150,000

0

0

0

150,000

Xiao Yaomeng

Senior

150,000

0

0

0

150,000

Management

Gong Zhijie

Senior

260,000

0

0

0

260,000

Management

Wang Peng

Senior

150,000

0

0

0

150,000

Management

Li Wei

Senior

150,000

0

0

0

150,000

Management

Wang Chunyao

Senior

150,000

0

0

0

150,000

Management

Jin Qingbin

Senior

260,000

0

0

0

260,000

Management

Total

/

2,640,000

0

0

0

2,640,000

Note: As Mr. Qin Yanpo and Mr. Su Li are now the Supervisors of the Company, the Company will forfeit and cancel the share options held by them in due course according to the share option incentive scheme.

  1. Restricted Share Incentive Mechanism to the Directors, Supervisors and Senior Management during the Reporting Period

Not applicable.

90 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 7 DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT

  1. CHANGES OF MEMBERS OF DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT

Name

Title

changes

He Jing

Director

Elected

Wang Ruolin

Employee director

Elected

Tian Hui

Independent director

Elected

Zhu Limin

Independent director

Elected

Li Shipeng

Supervisor

Elected

Qin Yanpo

Supervisor

Elected

Su Li

Employee supervisor

Elected

Liu Jian

General manager

Appointed

Xiao Yaomeng

Deputy general manager

Appointed

Zhang Chuanchang

Deputy general manager

Appointed

Wang Peng

Deputy general manager

Appointed

Wang Chunyao

Chief engineer

Appointed

Zhang Lei

Chief Investment officer

Appointed

Guo Dechun

director

Resigned

Guo Jun

Employee director

Resigned

Kong Xiangguo

Independent director

Resigned

Qi Anbang

Independent director

Resigned

Meng Qingjian

Supervisor

Resigned

Zhang Ning

Supervisor

Resigned

Jiang Qingquan

Employee supervisor

Resigned

Wu Xiangqian

General manager

Resigned

Zhao Honggang

Deputy general manager

Resigned

Wang Fuqi

Chief engineer

Resigned

Explanations of members of directors, supervisors, senior management

  1. Changes of Directors

As considered and approved at the 2019 annual general meeting held on 19 June 2020, Mr. Li Xiyong, Mr. Li Wei, Mr. Wu Xiangqian, Mr. Liu Jian, Mr. Zhao Qingchun, Mr. He Jing, Mr. Tian Hui, Mr. Zhu Limin, Mr. Cai Chang and Mr. Pook Chiu Kwok were elected as the non-employee representative directors of the eighth session of the Board of the Company, with the term from the end of the 2019 annual general meeting to the end of the general meeting for election of directors of the ninth session of the Board of the Company.

At the joint meeting of employee representatives and heads of delegation held on 17 June 2020, Mr. Wang Ruolin was democratically elected as an employee representative director with term of office the same as the eighth session of the Board of the Company.

Mr. Guo Dechun, Mr. Guo Jun, Mr. Kong Xiangguo and Mr. Qi Anbang ceased to serve as directors of the Company upon expiration of the seventh session of the Board.

Yanzhou Coal Mining Company Limited Interim Report 2020 91

CHAPTER 7 DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT

As considered and approved at the first meeting of the eighth session of the Board of the Company held on 19 June 2020, Mr. Li Xiyong and Mr. Li Wei were elected as chairman and vice chairman of the eighth session of the Board of the Company, respectively.

  1. Changes of Supervisors

As considered and approved at the 2019 annual general meeting held on 19 June 2020, Mr. Gu Shisheng, Mr. Zhou Hong, Mr. Li Shipeng and Mr. Qin Yanpo were elected as the non-employee representative supervisors of the eighth session of the Board of Supervisors of the Company, with the term from the end of the 2019 annual general meeting to the end of the general meeting for election of supervisors of the ninth session of the Board of Supervisors of the Company.

At the joint meeting of workers' congress and heads of delegation held on 17 June 2020, Mr. Su Li and Mr. Zheng Kai were democratically elected as employee representative supervisors with term of office the same as the eighth session of the Board of Supervisors of the Company.

Mr. Meng Qingjian, Mr. Zhang Ning and Mr. Jiang Qingquan ceased to serve as supervisors of the Company upon expiration of the seventh session of the Supervisory Committee.

As considered and approved at the first meeting of the eighth session of the Board of Supervisors of the Company held on 19 June 2020, Mr. Gu Shisheng and Mr. Zhou Hong were elected as chairman and vice chairman of the eighth session of the Supervisory Committee of the Company.

  1. Changes of Senior Management
    1. Changes during the seventh session of the Board
    As considered and approved at the 32nd meeting of the seventh session of the Board of the Company held on 27 March 2020, Mr. Zhang Lei was appointed as the Chief Investment Officer with term of office the same as the other senior management appointed by the seventh session of the Board of the Company.
    As considered and approved at the 33rd meeting of the seventh session of the Board of the Company held on 22 April 2020, Mr. Liu Jian was appointed as the general manager, Mr. Xiao Yaomeng, Mr. Zhang Chuanchang and Mr. Wang Peng served as deputy general managers, and Mr. Wang Chunyao as chief engineer, with term of office the same as the other senior management appointed by the seventh session of the Board of the Company. On the same day, due to work needs, Mr. Wu Xiangqian submitted a written resignation report to the Company and resigned as the general manager of the Company, Mr. Zhao Honggang and Mr. Wang Fuqi resigned from the posts of deputy general manager and chief engineer, respectively.

92 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 7 DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT

  1. 2. Changes during the eighth session of the Board

    As considered and approved at the first meeting of the eighth session of the Board of the Company held on 19 June 2020, Mr. Liu Jian was appointed as the general manager, Mr. Xiao Yaomeng, Mr. He Jing, Mr. Gong Zhijie, Mr. Zhang Chuanchang, Mr. Wang Peng and Mr. Li Wei were appointed as deputy general managers, Mr. Zhao Qingchun appointed as Chief Financial Officer, Mr. Wang Chunyao as chief engineer, Mr. Jin Qingbin as secretary to the Board as well as company secretary, and Mr. Zhang Lei as Chief Investment Officer.

  2. OTHER EXPLANATIONS
    1. Changes in the current positions of the Company's directors, supervisors, and senior management in the Company's subsidiaries

(Prepared in accordance with the Hong Kong Listing Rules)

Title in the Company

Name

Before Changes

After Changes

Time of Changes

Director, general manager

Liu Jian

Executive director of

-

4

April 2020

Yankuang Donghua

Heavy Industry Co., Ltd.

Chairman of Yanzhou Coal

-

4

April 2020

Shanxi Neng Hua Co.,

Ltd.

Deputy general manager

Zhang Chuanchang

-

Chairman and general manager of

4

May 2020

Yanzhou Coal Ordos Neng Hua

Co., Ltd.

-

Chairman of Inner Mongolia

4

May 2020

Haosheng Coal Mining Co., Ltd.

Deputy general manager

Wang Peng

Chairman and general

-

4

April 2020

manager of Yanzhou

Coal Ordos Neng Hua

Co., Ltd.

Chairman of Inner Mongolia

-

4

April 2020

Haosheng Coal Mining

Co., Ltd.

-

Executive director of Yankuang

4

April 2020

Donghua Heavy Industry Co.,

Ltd.

Yanzhou Coal Mining Company Limited Interim Report 2020 93

CHAPTER 7 DIRECTORS, SUPERVISORS, SENIOR MANAGEMENT

Title in the Company

Name

Before Changes

After Changes

Time of Changes

Chief Investment Officer

Zhang Lei

CFO of Yancoal Australia

-

20

March 2020

Ltd.

-

General manager of Yancoal

10

April 2020

International (Holding) Co., Ltd.

Supervisor

Qin Yanpo

Director, CFO and general

-

4 April 2020

counsel of Yanzhou Coal

Ordos Neng Hua Co.,

Ltd.

2. Mr. Poon Chiu Kwok, an independent non-executive director of the Company, has tendered his resignation as an independent non-executive director of TUS International Limited on 17 July 2020.

94 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 8 CORPORATE BONDS

(The financial data listed in this chapter are filled out in accordance with the CASs)

  1. BASIC INFORMATION OF CORPORATE BONDS

Unit: RMB 100 million

Interest

Way to repay capital

Trade

Name

Abbreviation Code

Issue date

Maturity date

Balance

rate (%)

and interest

place

2012 Corporate Bond of

12 Yanzhou

122168

2012/7/23

2022/7/23

40

4.95

Interest paid once a year,

Shanghai

Yanzhou Coal (first tranche)

Coal 02

the entire principal repaid

Stock

at one time at maturity,

Exchange

the final interest paid

together with the principal

2012 Corporate Bond of

12 Yanzhou

122272

2014/3/3

2024/3/3

30.50

6.15

Interest paid once a year,

Shanghai

Yanzhou Coal (second

Coal 04

the entire principal repaid

Stock

tranche)

at one time at maturity,

Exchange

the final interest paid

together with the principal

2017 Renewable Corporate

17 Yanzhou

143916

2017/8/17

2020/8/17

50

5.70

If the Company does not

Shanghai

Bond of Yanzhou Coal (first

Coal Y1

exercise the right of

Stock

tranche)

deferred payment of

Exchange

interest, the interest will

be paid once a year

2018 Renewable Corporate

18 Yanzhou

143959

2018/3/26

2021/3/26

50

6.00

If the Company does not

Shanghai

Bond of Yanzhou Coal (first

Coal Y1

exercise t he right of

Stock

tranche)

deferred payment of

Exchange

interest, the interest will

be paid once a year

2020 Corporate Bond of

20 Yanzhou

163234

2020/3/12

2023/3/12

3

2.99

Interest paid once a year,

Shanghai

Yanzhou Coal (first tranche)

Coal 01

the entire principal repaid

Stock

at one time at maturity,

Exchange

the final interest paid

together with the principal

2020 Corporate Bond of

20 Yanzhou

163235

2020/3/12

2025/3/12

27

3.43

Interest paid once a year,

Shanghai

Yanzhou Coal (first tranche)

Coal 02

the entire principal repaid

Stock

at one time at maturity,

Exchange

the final interest paid

together with the principal

2020 Corporate Bond of

20 Yanzhou

163236

2020/3/12

2030/3/12

20

4.29

Interest paid once a year,

Shanghai

Yanzhou Coal (first tranche)

Coal 03

the entire principal repaid

Stock

at one time at maturity,

Exchange

the final interest paid

together with the principal

Yanzhou Coal Mining Company Limited Interim Report 2020 95

CHAPTER 8 CORPORATE BONDS

(The financial data listed in this chapter are filled out in accordance with the CASs)

Note: For 2017 Renewable Corporate Bond of Yanzhou Coal (first tranche) and 2018 Renewable Corporate Bond of Yanzhou Coal (first tranche), every three interest-bearing years are regarded as one cycle. At the end of each cycle, the Company has the right to choose to extend the term of the current bond by one cycle (that is, by three years) or to repay the principal and interest of the current bond due at maturity in full at the end of the cycle.

Principal and interest payment of corporate bonds

During the reporting period, the Company paid the interest of the relevant bonds on schedule without default. Other explanation of corporate bond issues

Not applicable.

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

Bond trustee

Name

BOC International China Limited ("BOC International")

Office address

7/F, No.110 Xidan North Avenue, Xicheng District, Beijing, PRC

Contact person

He Yinhui

Contact number

021-20328000

Bond trustee

Name

Ping An Securities Co., Ltd. ("Ping An Securities")

Office address

(16-20)/F, Rongchao Building No. 4036 Jintian Road, Futian

District, Shenzhen, PRC

Contact person

Zhou Ziyuan

Contact number

010-66299579

Bond trustee

Name

Hai Tong Securities Co., Ltd. ("Hai Tong Securities")

Office address

No. 689 Guangdong Road, Shanghai, PRC

Contact person

Du Xiaohui, Geng Yun

Contact number

010-88027267

Credit rating agency

Name

Dagong Global Credit Rating Co., Ltd.("Dagong Global")

Office address

29/F, A Tower, Eagle Run Plaza, No. 26 Xiaoyun Road, Chaoyang

District, Beijing, PRC

Credit rating agency

Name

China Chengxin Ratings Securities Co., Ltd.("China Chengxin")

Office address

21/F, An Ji Plaza, No. 760 Xizang South Road, Shanghai, PRC

Credit rating agency

Name

Golden Credit Rating International Co., Ltd.("Golden Credit")

Office address

11th,12th Floor, South Tower, 1 building, No.3 Chaowai Xijie,

Chaoyang District, Beijing, PRC

96 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 8 CORPORATE BONDS

(The financial data listed in this chapter are filled out in accordance with the CASs)

Other explanation:

The bond trustee for the 2012 corporate bond of Yanzhou Coal Mining Company Limited (first tranche) and the 2012 corporate bond of Yanzhou Coal Mining Company Limited (second tranche) is BOC International, and the credit rating agency is Dagong Global Credit Rating Co., Ltd.

The bond trustee for the 2017 Renewable Corporate Bond of Yanzhou Coal Mining Company Limited (first tranche) and the 2018 Renewable Corporate Bond of Yanzhou Coal Mining Company Limited (first tranche) is Ping An Securities, and the credit rating agency is China Chengxin Securities Rating Co., Ltd.

The bond trustee for the 2020 corporate bond of Yanzhou Coal Mining Company Limited (first tranche) is Hai Tong Securities, and the credit rating agency is Golden Credit Rating International Co., Ltd.

III. USE OF PROCEEDS FROM CORPORATE BONDS

The 12 Yanzhou Coal 02 and the 12 Yanzhou Coal 04 raised proceeds of RMB4 billion and RMB3.05 billion (before deducting issuing expenses), respectively, with RMB7.05 billion funds raised in total. The whole proceeds were used to replenish working capital. The actual use of the proceeds is consistent with the plan of the prospectus.

The bond balance of 12 Yanzhou Coal 02 was RMB4 billion. The bond balance of 12 Yanzhou Coal 04 was RMB3.05 billion.

The 17 Yanzhou Coal Y1 and the 18 Yanzhou Coal Y1 raised proceeds of RMB5 billion (before deducting issuing expenses), respectively, with RMB10 billion funds raised in total. The whole proceeds were used to repay the debts due, replenish working capital. The actual use of the proceeds is consistent with the plan of the prospectus.

The bond balance of 17 Yanzhou Coal Y1 was RMB5 billion. The bond balance of 18 Yanzhou Coal Y1 was RMB5 billion.

The 20 Yanzhou Coal 01, the 20 Yanzhou Coal 02 and the 20 Yanzhou Coal 03 raised proceeds of RMB300 million, RMB2.7 billion and RMB2 billion (before deducting issuing expenses), respectively, with RMB5 billion funds raised in total. The whole proceeds were used to repay the interesting-bearing debts, replenish working capital. The actual use of the proceeds is consistent with the plan of the prospectus.

The bond balance of 20 Yanzhou Coal 01 was RMB300 million. The bond balance of 20 Yanzhou Coal 02 was RMB2.7 billion. The bond balance of 20 Yanzhou Coal 03 was RMB2 billion.

Yanzhou Coal Mining Company Limited Interim Report 2020 97

CHAPTER 8 CORPORATE BONDS

(The financial data listed in this chapter are filled out in accordance with the CASs)

IV. CREDIT RATINGS OF CORPORATE BONDS

    1. On 21 May 2020, the track ratings made by Dagong Global Credit Rating Co., Ltd. based on the conditions of the Company during the reporting period were as follows: the long-term credit rating of the Company remains AAA and the rating is expected to remain stable; the credit ratings to 12 Yanzhou Coal 02 and 12 Yanzhou Coal 04 remain AAA. The relevant information was published on the website of the Shanghai Stock Exchange on 22 May 2020. The credit ratings remain unchanged, which indicates that the risk of bonds unable to repay at maturity is very low.
    2. On 18 June 2020, China Chengxin Securities Ratings Co., Ltd. issued the following track ratings for 2017 Renewable Corporate Bond of Yanzhou Coal (first tranche) and 2018 Renewable Corporate Bond of Yanzhou Coal (first tranche) according to the Company's conditions: the main credit rating to the Company remains AAA and the rating is expected to remain stable; the credit ratings to 17 Yanzhou Coal Y1 and 18 Yanzhou Coal Y1 remain AAA. The relevant information was published on the website of the Shanghai Stock Exchange on 22 June 2020. The credit ratings remain unchanged, which indicates that the risk of failure to repay at maturity is very low.
    3. On 16 June 2020, Golden Credit Rating International Co., Ltd. issued the following track ratings for 2020 Corporate Bond of Yanzhou Coal (first tranche) according to the Company's conditions: the main credit rating to the Company remains AAA and the rating is expected to remain stable; the credit ratings to 20 Yanzhou Coal 01, 20 Yanzhou Coal 02 and 20 Yanzhou Coal 03 remain AAA. The relevant information was published on the website of the Shanghai Stock Exchange on 22 June 2020. The credit ratings remain unchanged, which indicates that the risk of failure to repay at maturity is very low.
  2. CREDIT ENHANCEMENT MECHANISM, DEBT REPAYMENT SCHEME AND OTHER RELEVANT INFORMATION OF CORPORATE BONDS DURING THE REPORTING PERIOD

During the reporting period, credit enhancement mechanism, debt payment scheme and other debt payment supporting measures of corporate bonds have not changed.

1. Guarantee

On 2 January 2012, the board of directors of Yankuang Group approved Yankuang Group, to provide an irrevocable and unconditional guarantee with joint liability for the full amount of 2012 corporate bond (first tranche) and 2012 corporate bond (second tranche) of Yanzhou Coal.

98 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 8 CORPORATE BONDS

(The financial data listed in this chapter are filled out in accordance with the CASs)

Key financial data and indicators of Yankuang Group (unaudited financial data on 30 June 2020) are as follows:

Unit: RMB 10 thousand

30 June

31 December

2020

2019

Net assets

10,497,014

10,073,479

Liability to asset ratio

68.49%

68.38%

Return rate on net assets

3.71%

9.35%

Current ratio

1.15

1.06

Liquidity ratio

0.84

0.77

Credit status of guarantor

AAA

AAA

Accumulative balance of external guarantee

28,900

28,900

Accumulative balance of external guarantee to net assets ratio

0.28%

0.29%

Note: The "Accumulative balance of external guarantee" in the above table does not include the guarantee amount of Yankuang Group provided to its holding subsidiaries.

As at the end of the reporting period, the other main assets owned by Yankuang Group other than the equity of Yanzhou Coal Mining are: (1) 100% equity interest in Yankuang Lunan Chemical Co., Ltd. (2) 50% equity interest in Shaanxi Future Energy Chemical Co., Ltd. (3) 51.37% equity interest in Yankuang Guizhou Energy and Chemical Co., Ltd. (4) 100% equity interest in Yankuang Xinjiang Energy and Chemical Co., Ltd. and (5) 100% equity interest in Zhongyin Estate Co., Ltd.

2. Debt repayment scheme

The value date of 12 Yanzhou Coal 02 is on 23 July 2012. Bond interest will be paid once a year within the duration from the value date. The payment date of 12 Yanzhou Coal 02 for the previous interest year from 2013 to 2022 is on 23 July (extended accordingly to the next business day when it is official holiday or rest day). The maturity date of 12 Yanzhou Coal 02 is on 23 July 2022. The principal and the interest for the final tranche should be paid on the maturity date.

The value date of 12 Yanzhou Coal 04 is on 3 March 2014. Bond interest will be paid once a year within the duration from the value date. The payment date of 12 Yanzhou Coal 04 for the previous interest year from 2015 to 2024 is on 3 March (extended accordingly to the next trading day when it is official holiday or rest day). The maturity date of 12 Yanzhou Coal 04 is on 3 March 2024. The principal and the interest for the final tranche should be paid on the maturity date.

Yanzhou Coal Mining Company Limited Interim Report 2020 99

CHAPTER 8 CORPORATE BONDS

(The financial data listed in this chapter are filled out in accordance with the CASs)

The value date of 17 Yanzhou Coal Y1 is on 17 August 2017. If the Company does not exercise the right of deferred payment of interest, the bond pays interest once a year for the duration of the bond, and on 17 August of each year during the duration (extended accordingly to the next business day when it is official holiday or rest day) is the interest payment date of the last interest-bearing year; if the Company chooses to extend the term of the bond during the renewal option exercise year, the term of the bond is extended from the interest payment date of the year within one cycle, if the Company chooses to pay the bond in full during the renewal option exercise year, the interest payment date of the interest-bearing year is the date on which the bond is redeemed.

The value date of 18 Yanzhou Coal Y1 is on 26 March 2018. If the Company does not exercise deferred payment of interest, the bond pays interest once a year for the duration of the bond, and on 26 March of each year during the duration(extended accordingly to the next business day when it is official holiday or rest day) is the interest payment date of the last interest-bearing year; if the Company chooses to extend the term of the bond during the renewal option exercise year, the term of the bond is extended from the interest payment date of the year within one cycle, if the Company chooses to pay the bond in full during the renewal option exercise year, the interest payment date of the interest-bearing year is the date on which the bond is redeemed.

The value date of 20 Yanzhou Coal 01 is on 12 March 2020. Bond interest will be paid once a year within the duration from the value date. The payment date of 20 Yanzhou Coal 01 for the previous interest year from 2020 to 2023 is on 12 March (extended accordingly to the next business day when it is official holiday or rest day). The maturity date of 20 Yanzhou Coal 01 is on 12 March 2023. The principal and the interest for the final tranche should be paid on the maturity date.

The value date of 20 Yanzhou Coal 02 is on 12 March 2020. Bond interest will be paid once a year within the duration from the value date. The payment date of 20 Yanzhou Coal 02 for the previous interest year from 2020 to 2025 is on 12 March (extended accordingly to the next business day when it is official holiday or rest day). The maturity date of 20 Yanzhou Coal 02 is on 12 March 2025. The principal and the interest for the final tranche should be paid on the maturity date.

The value date of 20 Yanzhou Coal 03 is on 12 March 2020. Bond interest will be paid once a year within the duration from the value date. The payment date of 20 Yanzhou Coal 03 for the previous interest year from 2020 to 2030 is on 12 March (extended accordingly to the next business day when it is official holiday or rest day). The maturity date of 20 Yanzhou Coal 03 is on 12 March 2030. The principal and the interest for the final tranche should be paid on the maturity date.

The principal and the interest of the 12 Yanzhou Coal 02, 12 Yanzhou Coal 04, 17 Yanzhou Coal Y1, 18 Yanzhou Coal Y1, 20 Yanzhou Coal 01, 20 Yanzhou Coal 02 and 20 Yanzhou Coal 03 will be paid by bond registration trustee agency and relevant agency. The details of the payment will be explained by the Company in the announcement published in the designated media by the CSRC in accordance with the relevant regulations.

100 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 8 CORPORATE BONDS

(The financial data listed in this chapter are filled out in accordance with the CASs)

3. Debt repayment supporting plan

During the reporting period, the plans and measures for debt repayment supporting were consistent with the prospectus, including:

  1. establish specialized team for debt payment;
  2. ensure that the fixed fund is used for its specified purpose only;
  3. give full play to the role of bond trustee;
  4. formulate the rules for bondholders meeting;
  5. disclose the information strictly;
  6. in case that the Company cannot pay back the principal and interests of this bond in time, the Company undertakes to take the following measures to effectively protect the interest of bondholders: ① don't distribute profits to shareholders; ② postpone the implementation of significant external investment, merge and acquisition and other capital expenditure projects; ③ reduce or suspend the salaries and bonuses for directors and senior management; and ④ main responsibility person cannot be transferred.

4. Special account for debt payment

The Company didn't set up the special account for debt repayment.

VI. BONDHOLDERS' MEETING

During the reporting period, there was no bondholders' meeting.

VII. PERFORMANCE OF DUTIES BY BOND TRUSTEE

  1. The Company and BOC International entered into the Agreement on Bond Entrusted Management in January 2012, according to which, BOC International was appointed as the trustee of the 2012 Corporate Bond (first tranche) and 2012 Corporate Bond (second tranche) issued by the Company. Reports on entrusted management businesses of 2019 have been disclosed by BOC International and posted on the website of the Shanghai Stock Exchange.
  2. The Company and Ping An Securities entered into the Agreement on Bond Entrusted Management in August 2017, according to which, Ping An Securities was appointed as the trustee of the 2017 Renewable Corporate Bond (first tranche). Reports on entrusted management businesses of 2019 have been disclosed by Ping An Securities and posted on the website of the Shanghai Stock Exchange.

Yanzhou Coal Mining Company Limited Interim Report 2020 101

CHAPTER 8 CORPORATE BONDS

(The financial data listed in this chapter are filled out in accordance with the CASs)

  1. The Company and Ping An Securities entered into the Agreement on Bond Entrusted Management in August 2017, according to which, Ping An Securities was appointed as the trustee of the 2018 Renewable Corporate Bond of Yanzhou Coal (first tranche). Reports on entrusted management businesses of 2019 have been disclosed by Ping An Securities and posted on the website of the Shanghai Stock Exchange.
  2. The Company and Hai Tong Securities entered into the Agreement on Bond Entrusted Management in June 2019, according to which, Hai Tong Securities was appointed as the trustee of the 2020 Corporate Bond of Yanzhou Coal (first tranche). Provisional reports on first entrusted management businesses of 2020 have been disclosed by Hai Tong Securities and posted on the website of the Shanghai Stock Exchange.

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

Increase/decrease

at the end of the

Reporting Period

as compared

As at the end

with the end of

of the

As at the end of

previous year

Main Indicators

Reporting Period

previous year

（%）

Current ratio

0.87

0.87

0.00

Liquidity ratio

0.69

0.72

-4.17

Increased by 2.09

Liability to asset ratio (%)

61.90

59.81

percentage points

Loan repayment rate (%)

100

100

0.00

Increase/decrease

during the

Reporting Period

as compared

with the same

During the

The same

period of the

Reporting Period

period of the

previous year

(Jan-June)

previous year

（%）

EBITDA Interest cover ratio

9.78

8.89

10.01

Interest cover ratio

100

100

0.00

102 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 8 CORPORATE BONDS

(The financial data listed in this chapter are filled out in accordance with the CASs)

IX. EXPLANATION ON OVERDUE DEBTS

During the reporting period, the Company did not have an overdue debt.

  1. PRINCIPAL AND INTEREST PAYMENT OF OTHER BONDS AND FINANCING INSTRUMENTS OF THE GROUP

The Company paid the principal and interest of the USD bonds for a term of 10 years in 2012, the USD perpetual bonds issued in 2017, the USD bonds for a term of 3 years in 2018, the medium term note issued in 2018 and ultra- short term financing bonds issued in 2020 on schedule without default.

XI. BANK CREDIT STATUS OF THE GROUP DURING THE REPORTING PERIOD

As at 30 June 2020, the total bank credit limit of the Company was RMB139.901 billion, of which, RMB51.956 billion has been used, RMB87.945 billion remained unused. In the first half of 2020, the Company repaid the principal and interest of bank loan amounting to RMB8.222 billion on schedule.

Save as disclosed above, there were no other extension, drawdown and default during the reporting period.

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

The Company strictly performed the relevant agreement and fulfilled the commitment of prospectus without any default. There was no matter occurred that may affect the safety of investor's funds.

XIII. SIGNIFICANT EVENTS AND THEIR IMPACTS ON OPERATIONS AND DEBT REPAYMENT ABILITY OF THE COMPANY

For the information on significant events and latest progress of the Company, please refer to the Significant Events of Chapter 5 in this report.

The above mentioned significant events had no major impacts on the Company's operation and didn't influence the Company's debt payment ability to investors as the Company maintains stable operation and sufficient financing sources.

Yanzhou Coal Mining Company Limited Interim Report 2020 103

CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2020

Six months ended 30 June

NOTES

2020

2019

RMB'000

RMB'000

(unaudited)

(unaudited)

Gross sales of coal

33,497,673

31,219,590

Railway transportation service income

183,807

214,754

Gross sales of electricity power

321,518

283,385

Gross sales of methanol

1,215,949

1,414,118

Gross sales of heat supply

20,818

12,072

Gross sales of equipment manufacturing

85,065

93,506

Total revenue

35,324,830

33,237,425

Transportation costs of coal

(1,745,601)

(1,620,036)

Cost of sales and service provided

(24,632,046)

(18,239,166)

Cost of electricity of power

(236,004)

(245,139)

Cost of methanol

(855,535)

(1,101,360)

Cost of heat supply

(12,917)

(8,435)

Cost of equipment manufacturing

(66,332)

(87,115)

Total cost of sales

(27,548,435)

(21,301,251)

Gross profit

7,776,395

11,936,174

Selling, general and administrative expenses

(3,839,730)

(3,616,512)

Share of profits of associates

793,323

947,282

Share of (losses) profits of joint ventures

(177,656)

47,040

Other income and gains

4,794,116

1,403,132

Finance costs

5

(1,405,248)

(1,562,027)

Profit before tax

6

7,941,200

9,155,089

Income taxes expenses

7

(1,585,800)

(1,662,712)

Profit for the period

6,355,400

7,492,377

Attributable to:

Equity holders of the Company

4,548,656

5,809,977

Owners of perpetual capital securities

295,750

299,153

Non-controlling interests

- Perpetual capital securities

58,997

99,391

- Other

1,451,997

1,283,856

6,355,400

7,492,377

Earnings per share, basic and diluted

9

RMB0.93

RMB1.18

104 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME - CONTINUED

FOR THE SIX MONTHS ENDED 30 JUNE 2020

Six months ended 30 June

NOTES

2020

2019

RMB'000

RMB'000

(unaudited)

(unaudited)

Profit for the period

6,355,400

7,492,377

Other comprehensive income (expense) (after income tax)

Items that will not be reclassified subsequently to profit or loss:

Fair value change on equity investments at fair value through other

comprehensive income ("FVTOCI")

(46)

154

Income tax relating to item that will not be reclassified subsequently

12

(39)

(34)

115

Items that may be reclassified subsequently to profit or loss:

Cash flow hedges:

Cash flow hedge reserve recognised in other comprehensive income

(112,938)

(252,070)

Reclassification adjustments for amounts transferred to income

statement (included in revenue)

237,577

247,398

Deferred taxes

(35,095)

81,945

89,544

77,273

Share of other comprehensive income of associates

24,879

51,339

Exchange difference arising on translation of foreign operations

(258,364)

199,169

Total comprehensive income for the period

6,211,425

7,820,273

Attributable to:

Equity holders of the Company

4,474,080

6,087,519

Owners of perpetual capital securities

295,750

299,153

Non-controlling interests

- Perpetual capital securities

58,997

99,391

- Other

1,382,598

1,334,210

6,211,425

7,820,273

Yanzhou Coal Mining Company Limited Interim Report 2020 105

CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2020

30 June

31 December

NOTES

2020

2019

RMB'000

RMB'000

(unaudited)

(audited)

Current assets

Bank balances and cash

10

17,573,349

22,789,951

Pledged term deposits

10

210,000

210,000

Restricted cash

10

6,690,976

4,273,655

Bills and accounts receivables

11

10,282,606

7,598,163

Long term receivables - due within one year

1,418,204

1,355,851

Royalty receivable

93,596

120,538

Inventories

8,414,754

6,007,309

Prepayments and other receivables

12

22,590,844

20,339,819

Derivative financial instruments

40,761

36,114

67,315,090

62,731,400

Assets classified as held for sale

216,816

217,644

67,531,906

62,949,044

Non-current assets

Intangible assets

55,964,430

51,958,569

Property, plant and equipment

13

44,179,688

44,995,450

Right-of-use assets

14

1,789,942

1,739,438

Construction in progress

16,573,250

16,288,401

Prepayment for property, plant and equipment

1,891,525

1,860,196

Goodwill

1,653,873

1,655,090

Investments in securities

157,218

156,720

Interests in associates

17,728,977

17,115,439

Interests in joint ventures

339,982

518,956

Long term receivables - due after one year

9,420,245

8,762,200

Royalty receivable

1,019,617

1,022,552

Deposits made on investments

117,926

117,926

Deferred tax assets

1,334,380

1,620,590

152,171,053

147,811,527

Total assets

219,702,959

210,760,571

106 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION - CONTINUED

AS AT 30 JUNE 2020

30 June

31 December

NOTES

2020

2019

RMB'000

RMB'000

(unaudited)

(audited)

Current liabilities

Bills and accounts payables

15

21,541,025

19,116,658

Other payables and accrued expenses

23,585,563

26,798,374

Contract liabilities

3,570,108

2,717,475

Provision for land subsidence, restoration,

rehabilitation and environmental costs

16

26,563

50,940

Amounts due to Parent Company and its subsidiary

1,333,320

1,093,707

Borrowings - due within one year

17

27,462,467

16,207,455

Long term payables - due within one year

-

4,070

Provision

59,697

54,368

Derivative financial instruments

154,601

148,554

Lease liabilities

14

146,184

156,852

Tax payable

807,397

653,437

78,686,925

67,001,890

Non-current liabilities

Borrowings - due after one year

17

46,625,735

49,168,036

Deferred tax liabilities

4,314,786

3,414,196

Provision for land subsidence, restoration,

rehabilitation and environmental costs

16

2,209,174

1,991,782

Provision

996,819

1,091,640

Lease liabilities

14

274,355

328,072

Long term payables - due after one year

2,445,471

2,416,350

56,866,340

58,410,076

Total liabilities

135,553,265

125,411,966

Capital reserves

Share capital

18

4,860,000

4,912,016

Reserves

18

50,636,738

49,207,784

Equity attributable to equity holders of the Company

55,496,738

54,119,800

Owners of perpetual capital security

19

10,307,375

10,311,611

Non-controlling interests

- Perpetual capital securities

19

-

3,417,351

- Others

18,345,581

17,499,843

84,149,694

85,348,605

Total liabilities and equity

219,702,959

210,760,571

Yanzhou Coal Mining Company Limited Interim Report 2020 107

CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 JUNE 2020

Attributable to equity holders of the Company

Non-controlling interests

Perpetual

Capital

Perpetual

Statutory

Securities

Capital

Future

common

Investment

Cash flow

issued by the

Securities

Share

Share

Capital

development

reserve

Translation

revaluation

hedge

Retained

Company and

issued by a

capital

premium

reserve

fund

fund

reserve

reserve

reserve

earnings

Total

a subsidiary

subsidiary

Others

Total

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

(note 18)

(note 18)

(note 18)

(note 19)

(note 19)

At 1 January 2019 (audited)

4,912,016

2,967,947

393,273

969,450

6,276,768

(6,983,697)

208,225

(1,301,987)

44,635,365

52,077,360

10,316,444

3,417,351

21,233,834

87,044,989

Profit for the period (unaudited)

-

-

-

-

-

-

-

-

5,809,977

5,809,977

299,153

99,391

1,283,856

7,492,377

Other comprehensive income

(expenses)

- Fair value change of financial

assets at FVTOCI

-

-

-

-

-

-

115

-

-

115

-

-

-

115

- Share of other comprehensive

income of associates

-

-

-

-

-

-

51,339

-

-

51,339

-

-

-

51,339

- Cash flow hedge reserve recognised

-

-

-

-

-

-

-

53,409

-

53,409

-

-

23,864

77,273

- Exchange differences arising on

translation of foreign operations

-

-

-

-

172,679

-

-

172,679

-

-

26,490

199,169

Total comprehensive income for

the period (unaudited)

-

-

-

-

-

172,679

51,454

53,409

5,805,723

6,087,519

299,153

99,391

1,334,210

7,820,273

Transactions with owners (unaudited)

- Distribution paid to holders of

perpetual capital securities

-

-

-

-

-

-

-

-

-

-

(300,000)

(99,391)

-

(399,391)

- Acquisition of additional interests

in subsidiaries

-

-

-

-

-

-

-

-

-

-

-

-

(4,046,586)

(4,046,586)

-Dividends

-

-

-

-

-

-

-

-

(2,652,489)

(2,652,489)

-

-

(873,967)

(3,526,456)

Transactions with owners (unaudited)

-

-

-

-

-

-

-

-

(2,652,489)

(2,652,489)

(300,000)

(99,391)

(4,920,553)

(7,972,433)

At 30 June 2019 (unaudited)

4,912,016

2,967,947

393,273

969,450

6,276,768

(6,811,018)

259,679

(1,248,578)

47,792,853

55,512,390

10,315,597

3,417,351

17,647,491

86,892,829

108 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - CONTINUED

FOR THE SIX MONTHS ENDED 30 JUNE 2020

Attributable to equity holders of the Company

Non-controlling interests

Perpetual

Capital

Perpetual

Statutory

Cash

Securities

Capital

Share

Future

common

Investment

flow

issued

Securities

Share

Share

Capital

option

development

reserve

Translation

revaluation

hedge

Retained

by the

issued by a

capital

premium

reserve

reserve

fund

fund

reserve

reserve

reserve

earnings

Total

Company

subsidiary

Others

Total

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

(note 18)

(note 18)

(note 18)

(note 19)

(note 19)

At 1 January 2020 (audited)

4,912,016

2,967,947

(213,259)

32,553

969,450

6,857,167

(6,652,427)

392,248

(1,025,001)

45,879,106

54,119,800

10,311,611

3,417,351

17,499,843

85,348,605

Profit for the period (unaudited)

- Other comprehensive income (expenses)

-

-

-

-

-

-

-

-

-

4,548,656

4,548,656

295,750

58,997

1,451,997

6,355,400

- Fair value change of financial assets at

FVTOCI

-

-

-

-

-

-

-

(34)

-

-

(34)

-

-

-

(34)

- Share of other comprehensive income of

associates

-

-

-

-

-

-

-

24,879

-

-

24,879

-

-

-

24,879

- Cash flow hedge reserve recognised

-

-

-

-

-

-

-

-

55,750

-

55,750

-

-

33,794

89,544

- Redemption of perpetual capital securities

-

-

-

-

-

-

(26,135)

-

-

-

(26,135)

-

26,135

-

-

- Exchange differences arising on translation of

foreign operations

-

-

-

-

-

-

(155,171)

-

-

-

(155,171)

-

-

(103,193)

(258,364)

Total comprehensive income for the period

(unaudited)

-

-

-

-

-

-

(181,306)

24,845

55,750

4,548,656

4,447,945

295,750

85,132

1,382,598

6,211,425

Transactions with owners (unaudited)

- Distribution paid to holders of perpetual

capital securities

-

-

-

-

-

-

-

-

-

-

-

(299,986)

(58,997)

-

(358,983)

- Recognition of share based payment

expenses

-

-

-

6,257

-

-

-

-

-

-

6,257

-

-

-

6,257

- Share repurchased

(52,016)

(232,583)

-

-

-

-

-

-

-

-

(284,599)

-

-

-

(284,599)

- Redemption of perpetual capital securities

-

-

-

-

-

-

26,135

-

-

-

26,135

-

(3,443,486)

-

(3,417,351)

- Capital contribution

-

-

-

-

-

-

-

-

-

-

-

-

-

12,614

12,614

- Dividend

-

-

-

-

-

-

-

-

-

(2,818,800)

(2,818,800)

-

-

(549,474)

(3,368,274)

Transactions with owners (unaudited)

(52,016)

(232,583)

-

6,257

-

-

26,135

-

-

(2,818,800)

(3,071,007)

(299,986)

(3,502,483)

(536,860)

(7,410,336)

At 30 June 2020 (unaudited)

4,860,000

2,735,364

(213,259)

38,810

969,450

6,857,167

(6,807,598)

417,093

(969,251)

47,608,962

55,496,738

10,307,375

-

18,345,581

84,149,694

Yanzhou Coal Mining Company Limited Interim Report 2020 109

CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 30 JUNE 2020

2020

2019

RMB'000

RMB'000

(unaudited)

(unaudited)

NET CASH FROM OPERATING ACTIVITIES

5,884,727

8,378,922

INVESTING ACTIVITIES

(Placement) withdrawal of restricted cash

(2,417,321)

(950,542)

Withdrawal of term deposits

-

1,703,231

Investment in associate

(4,800)

-

Purchase of intangible assets

(916,070)

(667,838)

Purchase of property, plant and equipment and construction in progress

(2,074,214)

(2,848,612)

Proceeds on disposal of property, plant and equipment

1,288,490

1,133,130

Proceeds on disposal of right-of-use assets

22,143

-

Decrease (increase) in deposit for acquisition of property, plant and equipment

(31,329)

324,075

Dividend income received from associates

283,074

-

Increase in long term receivables

(1,600,456)

(380,888)

Settlement of payables for acquisition of assets

-

(890,321)

Payment on acquisition of additional interest in a joint operation

(506,651)

-

Other investing activities

-

487,697

NET CASH USED IN INVESTING ACTIVITIES

(5,957,134)

(2,090,068)

110 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - CONTINUED

FOR THE SIX MONTHS ENDED 30 JUNE 2020

2020

2019

RMB'000

RMB'000

(unaudited)

(unaudited)

FINANCING ACTIVITIES

Distribution paid to holders of perpetual capital securities

(358,983)

(399,391)

Dividend paid to non-controlling shareholders

(549,474)

(873,967)

Dividends paid

(1,917,482)

(583,470)

Interest expenses on lease liabilities

(11,435)

(8,481)

Payment of lease liabilities

(271,349)

(144,589)

Payment of repurchase of shares

(298,757)

-

Proceeds from bank borrowings

21,696,836

7,199,768

Repayments of borrowings

(13,133,691)

(10,937,011)

Proceeds from issuance of guaranteed notes

-

3,013,799

Repayment of guaranteed notes

-

(6,948,783)

Redemption of perpetual capital securities

(3,443,486)

-

Payment for acquisition of additional interests in subsidiaries

-

(4,046,586)

(Decrease) increase in customers' deposits for financing business received

(6,238,740)

2,839,624

Contribution from non-controlling interests

26,772

-

NET CASH USED IN FINANCING ACTIVITIES

(4,499,789)

(10,889,087)

NET INCREASE IN CASH AND CASH EQUIVALENTS

(4,572,196)

(4,600,233)

CASH AND CASH EQUIVALENTS, AT BEGINNING OF THE PERIOD

22,789,951

27,372,942

Effect of foreign exchange rate

(644,406)

4,723

CASH AND CASH EQUIVALENTS, AT END OF THE PERIOD,

represented by bank balances and cash

17,573,349

22,777,432

Yanzhou Coal Mining Company Limited Interim Report 2020 111

CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL INFORMATION

FOR THE SIX MONTHS ENDED 30 JUNE 2020

1. GENERAL

Yanzhou Coal Mining Company Limited (the "Company") is established as a joint stock company with limited liability in the People's Republic of China (the "PRC"). In April 2001, the status of the Company was changed to that of a Sino-foreign joint stock limited company. The Company's A shares are listed on the Shanghai Stock Exchange ("SSE") and its H shares are listed on The Stock Exchange of Hong Kong Limited (the "HKEX"). The Company's parent and ultimate holding company is Yankuang Group Corporation Limited (the "Parent Company"), a state-owned enterprise in the PRC. The addresses of the registered office and principal place of business of the Company are disclosed in the Group Profile and General Information section of the interim report.

The principal activities of the Company are investment holdings, coal mining and coal railway transportation. The subsidiaries of the Company are principally engaged in methanol, coal mining, electricity and heat supply and equipment manufacturing.

The condensed consolidated financial information is presented in Renminbi ("RMB"), which is also the functional currency of the Company.

2. BASIS OF PREPARATION

The condensed interim consolidated financial information of the Company and its subsidiaries (collectively as the "Group") for the six months ended 30 June 2020 has been prepared in accordance with International Accounting Standards ("IAS") 34 "Interim Financial Reporting" issued by the International Accounting Standards Board ("IASB") as well as with the applicable disclosure requirements of Appendix 16 of the Rules Governing the Listing of Securities on the HKEX. They do not include all of the information required in annual financial statements in accordance with International Financial Reporting Standards ("IFRSs"), and should be read in conjunction with the consolidated financial statements for the year ended 31 December 2019. The interim financial information is unaudited.

112 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

3. SIGNIFICANT ACCOUNTING POLICIES

The condensed interim consolidated financial information has been prepared on the historical basis except for certain properties and financial instruments, which are measured at fair values or revalued amounts, as appropriate.

The accounting policies used in the condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 December 2019, except as described below.

In the current interim period, the Group had applied, for the first time, amendments to references to the conceptual framework in International Financial Reporting Standards ("IFRS") and the following new amendments to "IFRSs' issued by the IASB, which are effective for the financial year beginning on 1 January 2020.

Amendments to IFRS 3

Definition of a Business

Amendments to IAS 1 and IAS 8

Definition of Material

Amendments to IFRS 9, IAS 39 and IFRS 7

Interest Rate Benchmark Reform

The application of the amendments to IFRSs in the current interim period has had no material effect on the Group's financial performance and position for the current and prior periods and/or on the disclosures set out in these condense consolidated financial statements.

4. SEGMENT INFORMATION

The Group is engaged primarily in the mining business. The Group is also engaged in the coal railway transportation business. The Group does not currently have direct export rights in the PRC and all of its export sales is made through China National Coal Group Corporation ("China Coal Corporation"), Minmetals Trading Co., Ltd. ("Minmetals Trading") or Shanxi Coal Imp. & Exp. Group Corp. ("Shanxi Coal Corporation"). The exploitation right of the Group's foreign subsidiaries is not restricted. Certain of the Company's subsidiaries and associates are engaged in manufacturing and trading of mining machinery and the transportation business via rivers and lakes and financial services in the PRC. No separate segment information about these businesses is presented in these financial statements as the underlying gross sales, results and assets of these businesses, which are currently included in the mining business segment, are insignificant to the Group. Certain of the Company's subsidiaries are engaged in production of methanol and other chemical products, and invest in heat and electricity. Upon the acquisition of Yankuang Donghua Heavy Industry Limited ("Donghua") in 2016, the Group is also engaged in the manufacturing of comprehensive coal mining and excavating equipment.

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CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

4. SEGMENT INFORMATION - CONTINUED

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

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

Principal activities are as follows:

Coal mining

-

Underground and open-cut mining, preparation and sales of coal and

potash mineral exploration

Coal railway transportation

-

Provision of railway transportation services

Methanol, electricity and heat supply

-

Production and sales of methanol and electricity and related heat

supply services

Equipment manufacturing

-

Manufacturing of comprehensive coal mining and excavating

equipment

Segment results represents the results of each segment without allocation of corporate expenses and directors' emoluments, share of results of associates and joint ventures, interest income, finance costs and income tax expenses. This is the measure reported to the board, being the chief operating decision maker for the purposes of resources allocation and assessment of segment performance.

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CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

4. SEGMENT INFORMATION - CONTINUED

  1. Segment revenues and results

Segment information about these businesses is presented below:

For the six months ended 30 June 2020

Methanol,

electricity

Coal

Coal railway

and heat

Equipment

mining

transportation

supply

manufacturing

Unallocated

Eliminations

Consolidated

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

(unaudited)

(unaudited)

(unaudited)

(unaudited)

(unaudited)

(unaudited)

(unaudited)

SEGMENT REVENUE

External

33,497,673

183,807

1,558,285

85,065

-

-

35,324,830

Inter-segment

2,814,028

27,075

192,891

32,975

-

(3,066,969)

-

Total

36,311,701

210,882

1,751,176

118,040

-

(3,066,969)

35,324,830

RESULTS

Segment results

8,322,569

72,677

365,083

18,734

-

-

8,779,063

Unallocated corporate

expenses

-

-

-

-

-

-

(1,168,004)

Unallocated corporate

income

-

-

-

-

-

-

662,538

Interest income

-

-

-

-

-

-

457,184

Share of profits of

associates

294,931

23,548

5,123

-

469,721

-

793,323

Share of losses of

joint ventures

(177,656)

-

-

-

-

-

(177,656)

Finance costs

-

-

-

-

-

-

(1,405,248)

Profit before tax

7,941,200

Income taxes expenses

(1,585,800)

Profit for the period

6,355,400

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

Yanzhou Coal Mining Company Limited Interim Report 2020 115

CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

4. SEGMENT INFORMATION - CONTINUED

  1. Segment revenues and results - Continued

For the six months ended 30 June 2019

Methanol,

Coal railway

electricity and

Equipment

Coal mining

transportation

heat supply

manufacturing

Unallocated

Eliminations

Consolidated

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

(unaudited)

(unaudited)

(unaudited)

(unaudited)

(unaudited)

(unaudited)

(unaudited)

SEGMENT REVENUE

External

31,219,590

214,754

1,709,575

93,506

-

-

33,237,425

Inter-segment

2,405,950

27,083

192,891

107,399

-

(2,733,323)

-

Total

33,625,540

241,837

1,902,466

200,905

-

(2,733,323)

33,237,425

RESULTS

Segment results

9,247,700

96,915

467,543

6,391

-

-

9,818,549

Unallocated corporate

expenses

-

-

-

-

-

-

(1,195,105)

Unallocated corporate

income

-

-

-

-

-

-

668,991

Interest income

-

-

-

-

-

-

430,359

Share of profits of

associates

294,141

91,780

43,084

-

518,277

-

947,282

Share of profits

of joint ventures

47,040

-

-

-

-

-

47,040

Finance costs

-

-

-

-

-

-

(1,562,027)

Profit before tax

9,155,089

Income taxes expenses

(1,662,712)

Profit for the period

7,492,377

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

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CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

5. FINANCE COSTS

Six months ended 30 June

2020

2019

RMB'000

RMB'000

(unaudited)

(unaudited)

Interest expenses on:

- Bank and other borrowings

1,635,628

1,683,861

- Lease liabilities

11,435

8,481

1,647,063

1,692,342

Less: interest expenses capitalised into construction in progress

(241,815)

(130,315)

1,405,248

1,562,027

6. PROFIT BEFORE TAX

Six months ended 30 June

2020

2019

RMB'000

RMB'000

(unaudited)

(unaudited)

Profit before tax has been arrived at after charging (crediting):

Amortisation of intangible assets

972,157

751,699

Depreciation of property, plant and equipment

2,817,989

2,369,998

Depreciation of right-of-use assets

113,113

103,489

Interest income

(457,184)

(430,359)

Gain on acquisition of additional interest in a joint operation

(3,183,312)

-

Fair value gain on financial assets at fair value through profit or loss

(10,150)

-

Loss on disposal of property, plant and equipment, net

1,287

23,504

Impairment loss recognised in respect of inventories

53,148

1,163

Exchange gain, net

(120,310)

(37,695)

Provision of impairment loss on accounts and other receivables

588,888

32,902

Yanzhou Coal Mining Company Limited Interim Report 2020 117

CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

7. INCOME TAX EXPENSES

Six months ended 30 June

20202019

RMB'000 RMB'000

(unaudited) (unaudited)

Income taxes:

Current taxes

1,852,354

1,756,222

Deferred taxes

(266,554)

(93,510)

1,585,800

1,662,712

8. DIVIDEND

Six months ended 30 June

20202019

RMB'000 RMB'000

(unaudited) (unaudited)

Final dividend approved, RMB0.58 (2019: RMB0.54) per share

2,818,800

2,652,489

Pursuant to the annual general meeting held on 19 June 2020, a final dividend of RMB0.58 per share in respect of the year ended 31 December 2019 was approved.

9. EARNINGS PER SHARE

The calculation of the earnings per share attributable to equity holders of the Company for the six months ended 30 June 2020 is based on the profit for the period of approximately RMB4,548,656,000 (2019: approximately RMB5,809,977,000) and on the weighted average of 4,901,760,000 shares (2019: 4,912,016,000 shares) in issue during the six months ended 30 June 2020 and 30 June 2019 respectively.

For the purpose of computation of diluted earnings per share for the six months ended 30 June 2020, the Company had taken into consideration the dilutive effects of the share options issued by the Company and shares issuable under share incentive schemes of a non-wholly owned listed subsidiary (2019: shares issuable under share incentive schemes). The diluted earnings per share for the six months ended 30 June 2020 and 2019 approximate the basic earnings per share.

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CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

10. BANK BALANCES AND CASH/TERM DEPOSITS AND RESTRICTED CASH

At the reporting date, the restricted cash mainly represents the bank acceptance bill deposits paid for safety work as required by the State Administrative of work safety. Pledged term deposits were pledged to certain banks as security for loans and banking facilities granted to the Group.

11. BILLS AND ACCOUNTS RECEIVABLES

At 30 June At 31 December

2020

2019

RMB'000

RMB'000

(unaudited)

(audited)

Accounts receivables

8,037,555

4,976,900

Less: Impairment loss

(510,106)

(481,503)

7,527,449

4,495,397

Bills receivables

2,756,363

3,103,594

Less: Impairment loss

(1,206)

(828)

Total bills and accounts receivables, net

10,282,606

7,598,163

Bills receivable represents unconditional orders in writing issued by or negotiated from customers of the Group for completed sale orders which entitle the Group to collect a sum of money from banks or other parties. The bills are non-interest bearing and have a maturity of six months.

At as 30 June 2020, the gross amount of bills and accounts receivable arising from contracts with customers amounted to approximately RMB10,793,918,000 (31 December 2019: RMB8,080,494,000).

According to the credit rating of different customers, the Group allows a range of credit periods to its trade customers not exceeding 180 days.

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CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

11. BILLS AND ACCOUNTS RECEIVABLES - CONTINUED

The following is an aged analysis of bills and accounts receivables, net of allowance for impairment, presented based on the invoice dates, which approximates the respective revenue recognition dates, at the end of the reporting period:

At 30 June At 31December

2020

2019

RMB'000

RMB'000

(unaudited)

(audited)

0-90 days

6,084,257

4,352,677

91-180 days

1,974,251

1,625,634

181-365 days

1,900,015

1,365,969

Over 1 year

324,083

253,883

10,282,606

7,598,163

The Group does not hold any collateral over these balances.

An analysis of the impairment loss on bills and accounts receivables for the period/year ended 30 June 2020 and 31 December 2019 are as follows:

At 30 June At 31 December

2020

2019

RMB'000

RMB'000

(unaudited)

(audited)

At the beginning of the period/year

482,331

401,648

Amounts written off as uncollectible

-

(38,207)

Provided for the period/year

29,809

223,230

Impairment loss reversed

(828)

(104,340)

At the end of the period/year

511,312

482,331

The Group measures the loss allowance for bills and accounts receivables at an amount equal to lifetime ECL. As part of the Group's credit risk management, the Group uses debtors' ageing to assess the impairment on a collective basis for part of its customers which consist of large number of small customers with common risk characteristics that are representative of the customers' abilities to pay all amounts due in accordance with the contractual terms.

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CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

12. PREPAYMENTS AND OTHER RECEIVABLES

At 30 June At 31 December

2020

2019

RMB'000

RMB'000

(unaudited)

(audited)

Advance to suppliers

5,522,175

4,063,775

Less: Impairment loss on advance to suppliers

(645,061)

(579,506)

4,877,114

3,484,269

Prepaid relocation costs of inhabitants

2,318,361

1,962,913

Other taxes

1,176,481

1,310,821

Dividend receivables

201,673

-

Loan receivables

10,388,363

9,504,131

Interest receivable

194,978

118,464

Others

4,698,005

4,729,000

Less: Impairment loss on other receivables

(1,264,131)

(769,779)

22,590,844

20,339,819

  1. An analysis of the impairment loss on advances to suppliers for the period/year ended 30 June 2020 and 31 December 2019 are as follows:

At 30 June At 31 December

2020

2019

RMB'000

RMB'000

(unaudited)

(audited)

At the beginning of the period/year

579,506

614,343

Amounts written off as uncollectible

-

(34,837)

Provided for the period/year

65,555

-

At the end of the period/year

645,061

579,506

Advances will be written off, if aged over 4 years and considered irrecoverable by the management after considering the credit quality of the individual party and the nature of the amount overdue. During the six months ended 30 June 2020, no advance was written-off (year ended 31 December 2019: approximately RMB34,837,000).

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CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

12. PREPAYMENTS AND OTHER RECEIVABLES - CONTINUED

  1. An analysis of the impairment loss on other receivables for the period/year ended 30 June 2020 and 31 December 2019 are as follows:

At 30 June At 31 December

20202019

RMB'000 RMB'000

(unaudited) (audited)

At the beginning of the period/year

769,779

423,134

Provided for the period/year

544,110

404,042

Impairment loss reversed

(49,758)

(57,397)

At the end of the period/year

1,264,131

769,779

13. PROPERTY, PLANT AND EQUIPMENT

During the six months ended 30 June 2020, the Group acquired items of property, plant and equipment with a cost of approximately RMB1,035,115,000 (year ended 31 December 2019: approximately RMB3,603,365,000). Items of property, plant and equipment with a net book value of approximately RMB745,440,000 were disposed of during the six months ended 30 June 2020 (year ended 31 December 2019: approximately RMB882,115,000), resulting in a loss on disposal of approximately RMB1,287,000 (year ended 31 December 2019: approximately RMB50,237,000).

14. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES

  1. Right-of-useassets

As at 30 June 2020, the carrying amounts of right-of-use assets were approximately RMB7,561,000, RMB1,455,658,000 and RMB326,723,000 (31 December 2019: approximately RMB8,479,000, RMB1,332,910,000 and RMB398,049,000) in respect of the properties leased under operating leases, prepaid lease and plant and equipment under finance leases.

During the six months ended 30 June 2020, the Group entered into a number of lease agreements for the properties leased under operating leases, prepaid lease and plant and equipment under finance leases and on lease commencement, the Group recognised right-of-use assets of RMB165,271,000.

  1. Lease liabilities

As at 30 June 2020, the carrying amount of lease liabilities was approximately RMB420,539,000 (31 December 2019: RMB484,924,000). During the six months ended 30 June 2020, the Group entered into a number of new lease agreements and recognised lease liability of RMB165,271,000.

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CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

14. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES - CONTINUED

  1. Amounts recognised in profit or loss

Six months

Six months

ended

ended

30 June 2020

30 June 2019

RMB'000

RMB'000

Depreciation expense on right-of-use assets

113,113

103,489

Interest expense on lease liabilities

11,435

8,481

(iv) Total cash outflow for lease

During the six months ended 30 June 2020, the total cash outflow for leases amount to approximately RMB282,784,000 (2019: approximately RMB153,070,000).

15. BILLS AND ACCOUNTS PAYABLES

At 30 June At 31 December

2020

2019

RMB'000

RMB'000

(unaudited)

(audited)

Accounts payables

11,531,295

10,024,399

Bills payables

10,009,730

9,092,259

21,541,025

19,116,658

The following is an aged analysis of bills and accounts payables based on the invoice dates at the reporting date:

At 30 June At 31 December

2020

2019

RMB'000

RMB'000

(unaudited)

(audited)

0 - 90 days

19,197,544

15,611,872

91 - 180 days

408,768

1,377,383

181 - 365 days

1,139,127

1,285,558

Over 1 year

795,586

841,845

21,541,025

19,116,658

The average credit periods for bills and accounts payables are 90 days. The Group has financial risk management policies in place to ensure that all payables are within the credit timeframe.

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CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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

At 30 June At 31 December

2020

2019

RMB'000

RMB'000

(unaudited)

(audited)

At the beginning of the period/year

2,042,722

3,752,230

Exchange re-alignment

(6,226)

74,128

Additional provision in the period

275,120

492,872

Utilisation of provision

(75,879)

(2,276,508)

At the end of the period/year

2,235,737

2,042,722

Presented as:

Current portion

26,563

50,940

Non-current portion

2,209,174

1,991,782

2,235,737

2,042,722

Provision for land subsidence, restoration, rehabilitation and environmental costs has been determined by the directors of the Company based on their best estimates. However, in so far as the effect on the land and the environment from current mining activities becomes apparent in future periods, the estimate of the associated costs may be subject to change in the near term.

17. BORROWINGS

At 30 June At 31 December

2020

2019

RMB'000

RMB'000

(unaudited)

(audited)

Current liabilities

Bank borrowings

- Unsecured borrowings (i)

13,071,706

8,750,202

- Secured borrowings (ii)

11,390,761

4,458,453

Guaranteed notes (iii)

3,000,000

2,998,800

27,462,467

16,207,455

Non-current liabilities

Bank borrowings

- Unsecured borrowings (i)

21,190,427

16,711,000

- Secured borrowing (ii)

5,846,287

17,889,763

Guaranteed notes (iii)

19,589,021

14,567,273

46,625,735

49,168,036

Total borrowings

74,088,202

65,375,491

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CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

17. BORROWINGS - CONTINUED

  1. Unsecured borrowings are repayable as follows:

At 30 June At 31 December

2020

2019

RMB'000

RMB'000

(unaudited)

(audited)

Within one year

13,071,706

8,750,202

More than one year, but not exceeding two years

4,256,585

2,828,000

More than two years, but not more than five years

7,933,842

4,883,000

More than five years

9,000,000

9,000,000

34,262,133

25,461,202

(ii)

Secured borrowings are repayable as follows:

At 30 June At 31 December

2020

2019

RMB'000

RMB'000

(unaudited)

(audited)

Within one year

11,390,761

4,458,453

More than one year, but not exceeding two years

124,688

9,573,642

More than two years, but not more than five years

5,602,085

8,206,921

More than five years

119,514

109,200

17,237,048

22,348,216

(iii)

Guaranteed notes are detailed as follows:

At 30 June At 31 December

2020

2019

RMB'000

RMB'000

(unaudited)

(audited)

Guaranteed notes denominated in RMB repayable within one year

3,000,000

2,998,800

Guaranteed notes denominated in RMB repayable within one to two years

4,494,000

-

Guaranteed notes denominated in RMB repayable within two to five years

10,017,167

11,518,666

Guaranteed notes denominated in RMB repayable within over five years

1,980,500

-

Guaranteed notes denominated in USD repayable within one to two years

3,097,354

-

Guaranteed notes denominated in USD repayable within two to five years

-

3,048,607

22,589,021

17,566,073

Yanzhou Coal Mining Company Limited Interim Report 2020 125

CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

18. SHAREHOLDERS' EQUITY

Share capital

The Company's share capital structure at the reporting date is as follows:

Domestic invested

Foreign invested

shares A shares

shares H shares

Total

Number of shares

At 1 January 2019 (audited) and

31 December 2019 (audited)

2,960,000,000

1,952,016,000

4,912,016,000

Shares repurchased (note)

-

(52,016,000)

(52,016,000)

At 30 June 2020 (unaudited)

2,960,000,000

1,900,000,000

4,860,000,000

Domestic invested

Foreign invested

shares A shares

shares H shares

Total

RMB'000

RMB'000

RMB'000

Registered, issued and fully paid

At 1 January 2019 (audited) and

31 December 2019 (audited)

2,960,000

1,952,016

4,912,016

Shares repurchased (note)

-

(52,016)

(52,016)

At 30 June 2020 (unaudited)

2,960,000

1,900,000

4,860,000

Each share has a par value of RMB1.

Note: During the period ended 30 June 2020, the Company repurchased 52,016,000 of its own shares. The total amount paid was approximately RMB298,757,000.

126 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

18. SHAREHOLDERS' EQUITY - CONTINUED

Reserves

Future Development Fund

Pursuant to regulation in the PRC, the Company, Shanxi Heshun Tianchi Energy Co., Ltd. ("Shanxi Tianchi") and Yanmei Heze Neng Hua Company Limited ("Heze") are required to transfer an annual amount to a future development fund at RMB6 per tonne of raw coal mined (Inner Mongolia Xintai Coal Mining Co., Ltd. ("Xintai") and Yanzhou Coal Ordos Neng Hua Company Limited ("Ordos"): RMB6 per tonne of raw coal mined). The fund can only be used for the future development of the coal mining business and is not available for distribution to shareholders.

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

Pursuant to the regulations of the Shandong Province Finance Bureau, State-owned Assets Supervision and Administration Commission of Shandong Province and the Shandong Province Coal Mining Industrial Bureau, the Company is required to transfer an additional amount at RMB5 per tonne of raw coal mined from 1 July 2004 to the reform specific development fund for the future improvement of the mining facilities and is not distributable to shareholders. No further transfer to the reform specific development fund is required from 1 January 2008.

In accordance with the regulations of the State Administration of Work Safety, the Company's subsidiaries, Shandong Hua Ju Energy Company Limited ("Hua Ju Energy"), Shanxi Tianhao Chemical Corporation ("Shanxi Tianhao") and Yanzhou Coal Yulin Neng Hua Company Limited ("Yulin"), have a commitment to incur Work Safety Cost at the rate of: 4% of the actual sales income for the year below RMB10 million; 2% of the actual sales income for the year between RMB10 million and RMB100 million (included); 0.5% of the actual sales income for the year between RMB100 million and RMB1 billion (included); 0.2% of the actual sales income for the year above RMB1 billion.

Retained earnings

In accordance with the Company's Articles of Association, the profit for the purpose of appropriation will be deemed to be the lesser of the amounts determined in accordance with (i) PRC accounting standards and regulations and (ii) IFRS or the accounting standards of the places in which its shares are listed.

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

The Company's distributable reserve as at 30 June 2020 is the retained earnings computed under IFRS which amounted to approximately RMB47,608,962,000 (31 December 2019: approximately RMB45,879,106,000).

Yanzhou Coal Mining Company Limited Interim Report 2020 127

CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

19. PERPETUAL CAPITAL SECURITIES

Non-

controlling

interests

Perpetual

Perpetual

capital

capital

securities

securities

issued by

issued by

the Company

a subsidiary

Total

RMB'000

RMB'000

RMB'000

(note i to ii)

(note iii)

At 1 January 2019 (audited)

10,316,444

3,417,351

13,733,795

Dividend to holders of perpetual capital security

580,181

200,566

780,747

Distribution paid to holders of perpetual capital security

(585,014)

(200,566)

(785,580)

At 31 December 2019 and 1 January 2020 (audited)

10,311,611

3,417,351

13,728,962

Profit attributable to holders of perpetual capital security

295,750

58,997

354,747

Distribution paid to holders of perpetual capital security

(299,986)

(58,997)

(358,983)

Redemption of perpetual capital security

-

(3,417,351)

(3,417,351)

At 30 June 2020 (unaudited)

10,307,375

-

10,307,375

  1. The Company issued 5.75% perpetual capital securities with par value of RMB5,000,000,000 on 18 August 2017. Coupon payments of 5.7% per annum, which will be reset every 3 years, on the perpetual capital securities are paid in arrears and can be deferred at the discretion of the Group. These perpetual capital securities have no fixed maturity and are redeemable at the discretion of the Group at their principal amounts together with any accrued, unpaid or deferred coupon interest payments. In addition, while any coupon payments are unpaid or deferred, the Company undertakes not to declare, pay any dividends nor to make any distributions or similar periodic payments in respect of, or repurchase, redeem or otherwise acquire any securities of lower or equal rank. Since the perpetual capital security does not include any payment of cash or other contractual obligation of financial instrument, it is categorised as equity under IFRS.
  2. The Company issued 6% perpetual capital securities with par value of RMB5,000,000,000 on 26 March 2018. Coupon payments of 6% per annum on the perpetual capital securities are paid in once a year. The perpetual capital securities has no fixed maturity and are redeemable at the discretion of the Group at their principal amounts together with any accrued, unpaid or deferred coupon interest payments. In addition, while any coupon payments are unpaid or deferred, the Company undertakes not to declare, pay any dividends nor to make any distributions or similar periodic payments in respect of, or repurchase, redeem or otherwise acquire any securities of lower or equal rank. Since the perpetual capital security does not include any payment of cash or other contractual obligation of financial instrument, it is categorised as equity under IFRS.

128 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

  1. PERPETUAL CAPITAL SECURITIES - CONTINUED
    1. On 13 April 2017, Yancoal International Resources Development Co., Limited, a wholly owned subsidiariy of the Company, issued 5.75% perpetual capital securities with par value of USD500,000,000, which is guaranteed by the Company. Coupon payments of 5.75% per annum on the perpetual capital securities are paid semi- annually in arrears and can be deferred at the discretion of the Group. These perpetual capital securities have no fixed maturity and are redeemable at the discretion of the Group at their principal amounts together with any accrued, unpaid or deferred coupon interest payments. In addition, while any coupon payments are unpaid or deferred, the Company undertakes not to declare, pay any dividends nor to make any distributions or similar periodic payments in respect of, or repurchase, redeem or otherwise acquire any securities of lower or equal rank. Since the perpetual capital security does not include any payment of cash or other contractual obligation of financial instrument, it is categorised as equity under IFRS. During the six months ended 30 June 2020, the Company has redeemed those perpetual securities at their principal amount.
  3. FAIR VALUES

The fair value of investment in securities is determined with reference to quoted market price and where market prices are not available, fair values are estimated using appropriate valuation technique. The fair values of the forward foreign exchange contracts are estimated based on the discounted cash flows between the contract forward rate and spot forward rate. The fair values of interest rate swap contracts are estimated based on the discounted cash flows between the contract floating rate and contract fixed rate. The fair value of other financial assets and financial liabilities are determined in accordance with generally accepted pricing models based on discounted cash flow analysis. Fair values of investments in securities are determined with reference to the available market values. If quoted market prices are not available, then fair values are estimated on the basis of policy models or discounted cash flows.

The directors of the Company consider that the carrying amounts of financial assets and financial liabilities recorded at amortised cost in the condensed consolidated financial information approximate their fair values.

Fair values of financial assets and financial liabilities are determined as follows:

The following table presents the carrying value of financial instruments measured at fair value across the three levels of the fair value hierarchy. The levels of fair value are defined as follows:

Level 1: fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets and liabilities;

Level 2: fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

Level 3: fair value measurements are those derived from valuation techniques that include inputs for the assets or liability that are not based on observable market data (unobservable inputs).

Yanzhou Coal Mining Company Limited Interim Report 2020 129

CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

20. FAIR VALUES - CONTINUED

At 30 June

2020

Level 1

Level 2

Level 3

Total

RMB'000

RMB'000

RMB'000

RMB'000

(unaudited)

(unaudited)

(unaudited)

(unaudited)

Assets

Fiancial assets at FVTPL

- Unlisted equity investments

-

-

152,642

152,642

- Royalty receivables

-

-

1,113,213

1,113,213

- Derivative financial instruments

40,761

-

-

40,761

Financial assets at FVTOCI

- Investments in securities listed

on the SSE

303

-

-

303

- Unlisted equity securities

-

-

4,273

4,273

41,064

-

1,270,128

1,311,192

Liabilities

Financial assets at FVTPL

- Derivative equity securities

-

85,598

69,003

154,601

130 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

20. FAIR VALUES - CONTINUED

At 31 December

2019

Level 1

Level 2

Level 3

Total

RMB'000

RMB'000

RMB'000

RMB'000

(audited)

(audited)

(audited)

(audited)

Assets

Investments in securities -

Fiancial assets at FVTPL

- Unlisted equity investments

-

-

152,097

152,097

- Royalty receivables

-

-

1,143,090

1,143,090

- Derivative financial instruments

32,016

4,098

-

36,114

Financial assets at FVTOCI

- Investments in securities listed

on the SSE

350

-

-

350

- Unlisted equity securities

-

-

4,273

4,273

32,366

4,098

1,299,460

1,335,924

Liabilities

Financial assets at FVTPL

- Derivative equity securities

-

85,598

62,956

148,554

During the six months ended 30 June 2020 and the year ended 31 December 2019, there are no changes in categories between level 1 and level 2 and no movement from or into level 3.

  1. The fair value of the royalty receivables is determined using the discounted future cash flows that are dependent on the following unobservable inputs: forecast sales volumes, coal prices and fluctuations in foreign exchange rates. The forecast sales volumes are based on the internally maintained budgets, five year business plan and life of mine models. The forecast coal prices and long term exchange rates are based on external data consistent with the data used for impairment assessments. The risk-adjustedpost-tax discount rate used to determine the future cash flows is 10.5%. The estimated fair value would increase if the sales volumes and coal prices were higher and if the AUD weakens against the US$. The estimated fair value would also increase if the risk adjusted discount rate was lower.

Yanzhou Coal Mining Company Limited Interim Report 2020 131

CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

21. MAJOR ACQUISITIONS

  1. Acquisition of 10% of Moolarben

On 31 March 2020, Yancoal Moolarben Coal Mine Pty Ltd, a 100% owned subsidiary of Yancoal Australia acquired an additional 10% interest in Moolarben Coal Joint Venture ("Moolarben JV") previously owned by Sojitz Corporation ("Sojitz"). The Moolarben JV is accounted for as a joint operation. Following the acquisition Yancoal Australia holds an 95% interest in the Moolarben JV. The cash consideration paid and payable was AUD300 million (equivalent to approximately RMB1,433,221,000), split over four instalments over a period of 12 months plus a AUD8 million effective date adjustment whereby the cash consideration was increased by 10% of the Moolarben JV's net cash inflow from 1 January 2020 to completion date.

RMB'000

Consideration transferred

Purchase price

1,433,221

Effective date adjustment

39,000

1,472,221

Deemed acquisition of 95% interest

15,536,533

Deemed disposal of previously held 85% interest

(10,881,000)

Net fair value from deemed disposal and acquisition below

4,655,533

Gain on acquisition and remeasurement of 95% interest

31,833,312

Additional assets acquired and liabilities recognised at the date of acquisition are as follows:

RMB'000

Bank balances and cash

19,500

Bills and accounts receivables

102,373

Inventories

29,249

Property, plant and equipment, net

940,856

Intangible assets

5,084,525

Prepayments and other receivables

9,750

Bills and accounts payables

(58,500)

Lease liabilities

(29,249)

Provisions

(38,999)

Deferred tax liabilities

(1,403,972)

Net assets acquired

4,655,533

Consideration transferred

1,472,221

132 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

21. MAJOR ACQUISITIONS - CONTINUED

  1. Acquisition of 10% of Moolarben - Continued

RMB'000

Net cash outflow arising on acquisition:

Cash paid on acquisition

1,472,221

Less: Bank balance and cash acquired

(19,500)

1,452,721

22. RELATED PARTY BALANCES AND TRANSACTIONS

Transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed. Related parties transactions, that are also continuing connected transactions under Main Board Listing Rules Chapter 14A, continuing connected transactions are disclosed below:

Balances and transactions with related parties

At 30 June At 31 December

2020

2019

RMB'000

RMB'000

(unaudited)

(audited)

Nature of balances (other than those already disclosed)

Bills and accounts receivables

- Parent Company and its subsidiaries

917,978

584,454

- Joint ventures

114,824

362,167

- Associates

18,807

-

Prepayments and other receivables

- Parent Company and its subsidiaries

91,610

327,392

- Joint ventures

294,340

122,107

- Associates

70,519

72,819

Long-term receivables (note i)

- Parent Company and its subsidiaries

1,520

8,689

- Joint ventures

1,011,956

989,901

- Associates

4,696,051

4,398,756

Bills and accounts payables

- Joint ventures

-

-

- Associates

15,693

8,151

- Parent Company and its subsidiaries

1,317,627

1,093,259

Other payables and accrued expenses

- Parent Company and its subsidiaries

11,628,674

10,599,970

- Joint ventures

142,720

-

- Associates

982,938

17,272

Yanzhou Coal Mining Company Limited Interim Report 2020 133

CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

22. RELATED PARTY BALANCES AND TRANSACTIONS - CONTINUED

Balances and transactions with related parties - Continued

Save for those stated in note i below, the amounts due from/to the Parent Company, joint ventures and its subsidiaries are non-interest bearing, unsecured and repayable on demand.

Note:

  1. Long-termreceivables from associates are unsecured and interest bearing at Bank Bill Swap Rate ("BBSY") +7.06% with a maturity date of 1 April 2025. The remaining are non-interest bearing, unsecured and with no fixed repayment terms.

During the periods, the Group had the following significant transactions with the Parent Company and/or its subsidiary companies, associates, joint ventures and non-controlling interest:

Six months ended 30 June

2020

2019

RMB'000

RMB'000

(unaudited)

(unaudited)

Income

Sales of coal

1,091,066

1,546,929

Sales of heat and electricity

15,115

17,241

Sales of auxiliary materials

441,584

346,691

Sales of methanol

1,891

1,728

Expenditure

Utilities and facilities

3,425

23,758

Purchases of supply materials and equipment

544,958

416,885

Repair and maintenance services

1,819

1,566

Social welfare and support services

497,117

928,901

Construction services

119,116

140,136

Coal train convoy services

24,567

60,358

As at 30 June 2020, the Parent Company and its subsidiaries (other than the Group) had deposited approximately RMB10,460,561,000 (31 December 2019: approximately RMB10,129,682,000) to Yankuang Group Finance Co., Limited ("Yankuang Finance Company"). During the period, interest income and interest expense to the Parent Company and its subsidiaries (other than the Group) by Yankuang Finance Company, amounted to approximately RMB12,080,400 and RMB60,469,500 respectively (year ended 31 December 2019: approximately RMB207,191,000 and RMB105,623,000 respectively).

In addition to the above, the Company participates in a retirement benefit scheme of the Parent Company in respect of retirement benefits.

134 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

22. RELATED PARTY BALANCES AND TRANSACTIONS - CONTINUED

Balances and transactions with other state-controlled entities in the PRC

The Group operates in an economic environment currently predominated by entities directly or indirectly owned or controlled by the PRC government ("state-controlled entities"). In addition, the Group itself is part of a large group of companies under the Parent Company which is controlled by the PRC government. Apart from the transactions with the Parent Company and its subsidiaries disclosed above, the Group also conducts business with other state- controlled entities. The directors consider those state-controlled entities are independent third parties so far as the Group's business transactions with them are concerned.

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

Six months ended 30 June

2020

2019

RMB'000

RMB'000

(unaudited)

(unaudited)

Trade sales

170,285

3,525,326

Trade purchases

-

1,530,787

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

At 30 June At 31 December

2020

2019

RMB'000

RMB'000

(unaudited)

(audited)

Amounts due to other state-controlled entities

49,774

712,270

Amounts due from other state-controlled entities

500

49,211

Amounts due to and from state-controlled entities are trade nature of which terms are not different from other customers and suppliers.

In addition, the Group has entered into various transactions, including deposits placements, borrowings and other general banking facilities, with certain banks and financial institutions which are state-controlled entities in its ordinary course of business. In view of the nature of those banking transactions, the directors of the Company are of the opinion that separate disclosure would not be meaningful.

Except as disclosed above, the directors are of the opinion that transactions with other state-controlled entities are not significant to the Group's operations and no other transaction, arrangement or contract of significance to which the Company was a party and in which a director of the Company or a connected entity of the director of the Company had a material interest, whether directly or indirectly, subsisted at the end of the period or at any time during the year.

Yanzhou Coal Mining Company Limited Interim Report 2020 135

CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

22. RELATED PARTY BALANCES AND TRANSACTIONS - CONTINUED

Balances and transactions with a joint venture and an associate

At 30 June At 31 December

20202019

RMB'000 RMB'000

(unaudited) (audited)

Due from a joint venture and an associate

6,136,057

5,388,657

The amount due from a joint venture is unsecured and interest is calculated at commercial rate.

Compensation of key management personnel

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

Six months ended 30 June

2020

2019

RMB'000

RMB'000

(unaudited)

(unaudited)

Directors' fee

1,473

1,241

Salaries, allowance and other benefits in kind

2,774

1,219

Retirement benefit scheme contributions

506

375

4,753

2,835

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

136 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

23. COMMITMENTS

At 30 June At 31 December

20202019

RMB'000 RMB'000

(unaudited) (audited)

Capital expenditure contracted for but not provided in the condensed consolidated financial information

  1. Acquisition of property, plant and equipment

- the Group

7,021,824

8,397,556

- share of joint operations

187,988

215,197

- others

4,605

26,234

(b)

Intangible assets

- share of joint operations

18,357

9,764

- others

3,994

-

(c)

Exploration and evaluation

- share of joint operations

30,202

22,766

- others

-

9,156

7,266,970

8,680,673

Yanzhou Coal Mining Company Limited Interim Report 2020 137

CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

24. CONTINGENT LIABILITIES

(i)

Guarantees

At 30 June At 31 December

2020

2019

RMB'000

RMB'000

(unaudited)

(audited)

(a)

The Group

- Performance guarantees provided to daily operations

665,577

736,989

- Guarantees provided in respect of the cost of restoration

of certain mining leases, given to government departments

as required by statute

303,276

661,600

(b)

Joint operations

- Performance guarantees provided to external parties

772,108

780,700

- Guarantees provided in respect of the cost of restoration

of certain mining leases, given to government departments

as required by statute

1,478,952

1,390,318

(c)

Related parties

- Performance guarantees provided to external parties

492,320

515,714

- Guarantees provided in respect of the cost of restoration

of certain mining leases, given to government departments

as required by statute

316,269

411,710

4,028,502

4,497,031

138 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

24. CONTINGENT LIABILITIES - CONTINUED

  1. Yancoal Australia has issued a letter of support dated 27 February 2015 to Middlemount, a joint venture confirming:
    • It will not demand the repayment of any loan due from Middlemount, except to the extent that Middlemount agrees otherwise or as otherwise provided in the loan agreement; and
    • It will provide financial support to Middlemount to enable it to meet its debts as and when they become due and payable, by way of new shareholder loans in proportion to its share of the net assets of Middlemount.

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

25. SUBSEQUENT EVENTS

  1. On 27 March 2020, the Company and its wholly-owned subsidiary, Yancoal International (Holding) Company Limited (the "Seller"), entered into the Equity Interest Transfer Agreements with ALYK (H.K.) Limited ("the Buyer"), a wholly-owned subsidiary of the Parent, pursuant to which Yancoal International (Holding) Company Limited agreed to sell and ALYK (H.K.) Limited agreed to purchase 100% equity interests of Yancoal International Trading Co., Limited and Yancoal International (Singapore) Pte. Ltd. at a cash consideration of RMB78,630,500 and RMB72,040,700, respectively (the "Proposed Transactions"). Details of which are set out in the announcements of the Company on 27 March 2020. The proposed transaction were completed in July 2020. The Proposed Transactions were completed in July 2020.
  2. The novel Coronavirus continues to spread widely after the six months ended 30 June 2020 and it is a fluid and challenging situation facing all the industries of the society. The Group has already assessed the overall impact of the situation on the operation of the Group and taken all possible effective measures to limit and keep the impact in control. The Group will keep continuous attention on the change of situation and make timely response and adjustments in the future.

Yanzhou Coal Mining Company Limited Interim Report 2020 139

CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

SUPPLEMENTAL INFORMATION

  1. SUMMARY OF DIFFERENCES BETWEEN CONDENSED CONSOLIDATED FINANCIAL INFORMATION PREPARED UNDER INTERNATIONAL FINANCIAL REPORTING STANDARDS ("IFRS") AND THOSE UNDER THE PRC ACCOUNTING RULES AND REGULATIONS ("PRC GAAP")

The Group has also prepared a set of condensed consolidated financial information in accordance with relevant accounting principles and regulations applicable to PRC enterprises.

The condensed consolidated financial information prepared under IFRS and those prepared under PRC GAAP have the following major differences:

  1. Future development fund and work safety cost

(1a) Appropriation of future development fund is charged to profit before taxes under PRC GAAP. Depreciation is not provided for plant and equipment acquired by utilising the future development fund under PRC GAAP but charged to expenses when acquired.

(1b) Appropriation of the work safety cost is charged to profit before taxes under PRC GAAP. Depreciation is not provided for plant and equipment acquired by utilising the provision of work safety cost under PRC GAAP but charged to expenses when acquired.

  1. Consolidation using acquisition method under IFRS and using common control method under PRC GAAP

(2a) Under IFRS, the acquisitions of Jining II, Railway Assets, Heze, Shanxi Group, Hua Ju Energy, Beisu and Yangcun and Donghua have been accounted for using the acquisition method which accounts for their assets and liabilities at their fair value at the date of acquisition. Any excess of the purchase consideration over the fair value of the net assets acquired is capitalised as goodwill.

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

  1. Deferred taxation due to differences between the financial statements prepared under IFRS and PRC GAAP
  2. Reversal of impairment loss on intangible assets in Yancoal Australia

(4a) Under IFRS, the reversal of impairment loss on mining reserves was classified as other income in income statement.

Under PRC GAAP, no reversal of impairment loss on mining reserves was recognised.

140 Yanzhou Coal Mining Company Limited Interim Report 2020

CHAPTER 9 CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

  1. SUMMARY OF DIFFERENCES BETWEEN CONDENSED CONSOLIDATED FINANCIAL INFORMATION PREPARED UNDER INTERNATIONAL FINANCIAL REPORTING STANDARDS ("IFRS") AND THOSE UNDER THE PRC ACCOUNTING RULES AND REGULATIONS ("PRC GAAP") - CONTINUED
    1. Classification of perpetual capital security due to differences between the financial statements prepared under IFRS and PRC GAAP

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

Under PRC GAAP, the perpetual capital security issued by the Company was classified as owners' equity.

The following table summarises the differences between condensed consolidated financial information prepared under IFRS and those under PRC GAAP:

Net income

attributable to

Net assets

equity holders

attributable to

of the Company

equity holders

For the six months

of the Company

ended 30 June

As at 30 June

2020

2020

RMB'000

RMB'000

(unaudited)

(unaudited)

As per condensed consolidated financial information on prepared

under IFRS

4,548,656

55,496,738

Impact of IFRS adjustments in respect of:

- future development fund charged to income before income taxes

(817,278)

-

- reversal of provision of work safety cost

4,905

(43,427)

- fair value adjustment and amortization

5,000

(225,052)

- goodwill arising from acquisition of Jining II, Railway Assets, Heze,

Shanxi Group, Hua Ju Energy, Beisu and Yangcun

-

(899,403)

- acquisition of Donghua

1,021

(419,653)

- Goodwill arising from Yankuang Finance

-

(16,966)

- deferred tax

200,060

778,526

- perpetual capital security

-

10,307,375

- impairment loss and related amortisation on intangible assets

of Yancoal Australia

5,099

(745,160)

- others

-

647,646

- Acquisition of 10% additional interest in Moorlaben JV

652,404

652,404

As per condensed consolidated financial information prepared

under PRC GAAP

4,599,867

65,533,028

Yanzhou Coal Mining Company Limited Interim Report 2020 141

CHAPTER 10 DOCUMENTS AVAILABLE FOR INSPECTION

Documents available for inspection

The financial statements sealed and signed by the Chairman of the Company, the Chief Financial Officer and the Minister of Financial Department, respectively.

The original copies of all documents and announcements published during the reporting period in websites designated by the CSRC.

The interim report released in other securities markets.

Li Xiyong

Chairman

Approved by the Board for the submission on 28 August 2020

142 Yanzhou Coal Mining Company Limited Interim Report 2020

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Yanzhou Coal Mining Co. Ltd. published this content on 28 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 August 2020 10:13:03 UTC