Yanzhou Coal Mining : VOLUNTARY ANNOUNCEMENT-THE LEASE AGREEMENT

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兗州煤業股份有限公司

YANZHOU COAL MINING COMPANY LIMITED

(A joint stock limited company incorporated in the PRC with limited liability)

(Stock Code: 1171)

VOLUNTARY ANNOUNCEMENT

THE LEASE AGREEMENT

This announcement is made by the Company on a voluntary basis.

1. Background
   The Board is pleased to announce that on 7 February 2020, Dongjiang Real Estate, a wholly-owned subsidiary of the Company and Yankuang Xinda Hotel entered into the Lease Agreement, pursuant to which Dongjiang Real Estate agreed to lease the Premises to Yankuang Xinda Hotel for a term commencing on 1 March 2020 and ending on 31 December 2029.
2. The Lease Agreement
   The principal terms of the Lease Agreement are set forth as follows:

Date:	7 February 2020
Parties：	i. Dongjiang Real Estate, as lessor, and
ii.Yankuang Xinda Hotel, as lessee
Premises:	Shanghai Dongjiang Mingzhu Plaza (covering an aggregate site area of
28,699.58 m2)
Use:	Hotel / auxiliary commerce / office
Term:	commencing on 1 March 2020 and ending on 31 December 2029 (both
days inclusive)
Renewal and	If Dongjiang Real Estate continues to lease or to sells the Premises,
under similar pricing conditions, Yankuang Xinda Hotel has the right of
Purchase:
first refusal to renew the Lease Agreement and/or purchase the Premises.
	• Dongjiang Real Estate has offered Yankuang Xinda Hotel a
	10-monthrent-free period for interior decoration (from 1
	March 2020 to 31 December 2020) of the Premises. If the
Rent (exclusive of	Premises cannot come into operation as scheduled in 2021, the
rent of the Premises for 2021 will be reduced by 50%. From
value-added tax):
2023, the rent for the Premises will increase by 5% on an
	annual basis. Details of the rent (exclusive of value-added tax)
	for each year during the term of the Lease Agreement are set
	out as follows:
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	•	RMB0
		(From 1 March 2020 to 31 December 2020)
	•	RMB7,381,900 (if the Premises cannot come into operation in
		2021 as scheduled) or RMB14,763,700 (if the Premises come
		into operation in 2021 as scheduled)
		(From 1 January 2021 to 31 December 2021)
	•	RMB14,763,700
		(From 1 January 2022 to 31 December 2022)
	•	RMB15,501,900
		(From 1 January 2023 to 31 December 2023)
	•	RMB16,277,000
		(From 1 January 2024 to 31 December 2024)
	•	RMB17,090,800
		(From 1 January 2025 to 31 December 2025)
	•	RMB17,945,400
		(From 1 January 2026 to 31 December 2026)
	•	RMB18,842,700
		(From 1 January 2027 to 31 December 2027)
	•	RMB19,784,800
		(From 1 January 2028 to 31 December 2028)
	•	RMB20,774,000
		(From 1 January 2029 to 31 December 2029)
Condition	After both parties complete the necessary review and approval
procedures, the Lease Agreement will come into effect at the execution
precedent:	date when the Lease Agreement is signed and sealed by the parties'
	respective legal representative or authorized representative.
Deposit:	At the date of the Lease Agreement, Yankuang Xinda Hotel paid
RMB1,000,000 to Dongjiang Real Estate as deposit.
Payment term:	Yankuang Xinda Hotel will pay 50% of the annual rent in January and
the remaining 50% in July.

The rent payable by Yankuang Xinda Hotel to Dongjiang Real Estate under the Lease Agreement was: (i) determined based on arm's length negotiations between Yankuang Xinda Hotel and Dongjiang Real Estate with reference to the prevailing market rent in the vicinity of where the Premises are located; (ii) not lower than the rent to be paid by independent third parties; and (iii) in compliance with the rules and regulations prescribed by the relevant regulatory authorities within or outside the PRC.

1. Reasons for and benefits of the Lease Agreement
   The Lease Agreement and the transactions contemplated thereunder could help the Company utilize its existing assets, improve the efficiency of asset usage and increase the overall revenue of the Company. The Lease Agreement and the transactions contemplated thereunder will not adversely affect the financial position or operation of the Company at present or in the future. The Board considers that the transactions contemplated under the Lease Agreement are conducted on normal commercial terms and the terms therein are fair and reasonable and in the interest of the Company and its Shareholders.
2. Implications under the Hong Kong Listing Rules
   Yankuang Xinda Hotel is owned by Yankuang Group as to 65% through Shangdong Yankuang Xinda Hotel Co., Ltd* ( 山東兗礦信達酒店有限公司), a wholly-owned subsidiary of Yankuang Group. As at the date of this announcement, Yankuang Group is the controlling

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shareholder of the Company holding directly or indirectly approximately 53.79% of the total issued share capital of the Company. Accordingly, the Lease Agreement and the transactions contemplated thereunder constitute connected transaction of the Company under Chapter 14A of the Hong Kong Listing Rules. As the highest applicable percentage ratio (as defined under the Hong Kong Listing Rules) in respect of the transactions contemplated under the Lease Agreement is lower than 0.1%, the Lease Agreement is fully exempt from shareholders' approval, annual review and all disclosure requirements pursuant to Rule 14A.76 of the Hong Kong Listing Rules.

5. Opinion from Independent Financial Adviser

Donvex Capital Limited has been appointed by the Company as an independent financial adviser to opine on (i) the Lease Agreement and the rent thereunder, and (ii) the duration of the Lease Agreement.

In assessing the reasonableness for the rent under the Lease Agreement, the Independent Financial Adviser have (i) reviewed the the valuation report issued by an independent valuer in relation to the valuation of rent of the Premises; and (ii) discussed with the independent valuer, among others, their valuation methodology, key bases and assumptions adopted for the valuation and basis for selection of the comparable market transactions.

In assessing the reasonableness for the duration of the Lease Agreement to be longer than three years, the Independent Financial Adviser considered the following factors:

1. the long-term duration of the Lease Agreement will mitigate the idle risk of the Premises and improve the efficiency of asset usage of the Group;
2. the long-term duration of the Lease Agreement will allow the Group to secure a stable revenue generated from leasing of the Premises for approximately 10 years;
3. short duration of lease may give rise to uncertainties on the stability of hotel operation. As such, it is a normal business practice that the lessee would require that the duration of lease term relating to lease of hotel is longer than three years;
4. having reviewed a lease agreement of hostel with similar term of duration for 12 years, which was entered into by the Group and independent third parties in 2018; and
5. the duration of the Lease Agreement falls within the range of the lease period of 5 comparable transactions selected within the last 12 months which is based on (a) transaction parties involving at least one of the company listed on the Hong Kong Stock Exchange; (b) publicly available announcement issued pursuant to the Hong Kong Listing Rules; and (c) transactions involving the lease of property, including office premises, hotel or shopping mall.

Taking into account of the above, the Independent Financial Adviser is of the view that (i) the Lease Agreement and the rent thereunder are on normal commercial terms, fair and reasonable; and (ii) the duration of the Lease Agreement is a normal business practice for the Group and in the interest of the Company and its Shareholders as a whole.

6. Definitions

In this announcement, unless the context requires otherwise, the following terms have the meanings set out below:

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	domestic shares in the ordinary share capital of the Company, with a
"A Shares"	nominal value of RMB1.00 each, which are listed on the Shanghai
	Stock Exchange
"Board"	the board of Directors of the Company
	Yanzhou Coal Mining Company Limited*(兗州煤業股份有限公司),
"Company"	a joint stock limited company established under the laws of the PRC
in 1997, and the H Shares and A Shares of which are listed on The
	Stock Exchange of Hong Kong Limited (stock code: 1171) and the
	Shanghai Stock Exchange (stock code 600188), respectively
"Director(s)"	the director(s) of the Company
"Dongjiang Real	Shanghai Dongjiang Real Estate Development Co., Ltd.* (上海東江
房地產開發有限公司), a limited liability company incorporated in
Estate"	the PRC and a wholly owned subsidiary of the Company as at the date
	of this announcement
"Group"	the Company and its subsidiaries
"Hong Kong Listing	the Rules Governing the Listing of Securities on The Stock Exchange
Rules"	of Hong Kong Limited
	overseas listed foreign invested shares in the ordinary share capital of
"H Shares"	the Company with a nominal value of RMB1.00 each, which are listed
	on The Stock Exchange of Hong Kong Limited
	Donvex Capital Limited, a licensed corporation to carry out Type 6
"Independent	(advising on corporate finance) regulated activity under the SFO, being
the independent financial adviser appointed by the Company to opine
Financial Adviser"
on (i) the Lease Agreement and the rent thereunder, and (ii) the
	duration of the Lease Agreement
"Lease Agreement"	the real estate lease agreement entered into between Dongjiang Real
Estate and Yankuang Xinda Hotel on 7 February 2020
	the People's Republic of China, but for the purpose of this
"PRC"	announcement, excluding Hong Kong Special Administrative Region
	of the PRC, Macau Special Administrative Region of the PRC and
	Taiwan
	Shanghai Dongjiang Mingzhu Plaza (covering a site area of 28,699.58
"Premises"	m2), located at No.303, Mingzhu Road, Xujing Zhen, Qingpu District,
	Shanghai, the PRC
"RMB"	Renminbi, the lawful currency of the PRC
"Shareholder(s)"	shareholder(s) of the Company
	Yankuang Group Company Limited*(兗礦集團有限公司), a state-
"Yankuang Group"	controlled limited liability company and the controlling shareholder of
the Company holding directly and indirectly approximately 53.79% of
	the total issued share capital of the Company as at the date of this
	announcement
	Shanghai Yankuang Xinda Hotel Co., Ltd.* (上海兗礦信達酒店有限
"Yankuang Xinda	公司), a limited liability company incorporated in the PRC which as at
Hotel"	the date of this announcement is held as to 65% by Yankuang Group
through Shangdong Yankuang Xinda Hotel Co., Ltd* (山東兗礦信
	達酒店有限公司), a wholly-owned subsidiary of Yankuang Group
"%"	per cent

By order of the Board

Yanzhou Coal Mining Company Limited

Li Xiyong

Chairman

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Zoucheng, Shandong Province, the PRC

7 February 2020

As at the date of this announcement, the directors of the Company are Mr. Li Xiyong, Mr. Li Wei, Mr. Wu Xiangqian, Mr. Liu Jian, Mr. Guo Dechun, Mr. Zhao Qingchun and Mr. Guo Jun, and the independent non-executive directors of the Company are Mr. Kong Xiangguo, Mr. Cai Chang, Mr. Poon Chiu Kwok and Mr. Qi Anbang.

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