2018 Annual Report CONTENTS
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2018 Annual Report CONTENTS Important Notice 2 Section I Definitions 4 Section II Corporate Profile and Main Financial Indicators 6 Section III Corporate Business Summary 13 Section IV Report of the Board of Directors 17 Section V Major Events 45 Section VI Change of Ordinary Shares and Shareholders 77 Section VII Directors, Supervisors, Senior Management and Staff 85 Section VIII Corporate Governance Structure and Governance 98 Report Section IX Environmental, Social and Governance Report 126 Section X Report of the Supervisory Committee 166 Section XI Independent Auditor’s Report and Consolidated 168 Financial Statements Section XII Documents Available for Inspection 273 Appendix 281 ——Information Disclosure Index 274 ——Profile of the Highways 281 ——Vehicles Classification and Toll Rates 284 ——Toll Rates Applicable to Goods Vehicles 285 with Reference to Their Weight ——The Additional Toll Rates Applicable to Lixuan Expressway 286 ——National Trunk Highways 287 ——The Map of the Highway Network of Anhui Province 288 Important Notice 1. The Board of the Directors, the Supervisory Committee and the Directors, Supervisors and the Senior Management of the Company hereby warrant that the contents of the annual report are true, accurate and complete, and that there are no false accounts, misleading statements or significant omissions of information and jointly and severally accept the legal responsibility. 2. Absence of Directors Role of the Name of the Name of absent director absent director Reason of absence alternate director Non-executive director Yang Xudong Business commitment Du Jian Independent non-executive director Jiang Jun Business commitment Kong Yat Fan 3. PricewaterhouseCoopers Zhong Tian LLP (PRC Accountant) and PricewaterhouseCoopers (Hong Kong Accountant) have issued standard unqualified audit opinions on the consolidated financial statements of the Company. 4. Mr. Qiao Chuanfu, the Chairman, Mr. Xu Zhen, responsible person for the accountant work and Mr. Xiao Guangzhuo, manager of the Financial Department of the Company hereby confirm that the financial statements contained in this annual report are true, accurate and complete. 5. The profit appropriation plan or transfers of share capital from capital reserves plan for the period under review approved by the Board of Directors: The Company’s net profit as shown on the 2018 financial statements prepared in accordance with the PRC accounting standards was RMB 1,241,559 thousand. The Company’s net profit as shown on the 2018 financial statements prepared in accordance with the Hong Kong accounting standards was RMB 1,229,354 thousand. As the statutory reserve fund has reached over 50% of the total share capital of the Company, no appropriation is required this year. The profit from year 2018 available for distribution to shareholders was RMB 1,241,559 thousand and RMB 1,229,354 thousand in accordance with the PRC accounting standards and the Hong Kong accounting standards respectively. Pursuant to the relevant PRC regulations, the lower of the two amounts shall be the basis of distribution. Therefore, the profit available for distribution to shareholders for the year 2018 was RMB 1,229,354 thousand. The board of directors of the Company recommended the payment of a final dividend of RMB 414,652.50 thousand on the basis of RMB 2.50 for every 10 shares (tax included) based on the total issued share capital of 1,658,610,000 shares at the end of 2018. In 2018, no transfers of share capital from capital reserves were made. 2 Anhui Expressway Company Limited Important Notice 6. The forward-looking risk statement The major risks have been concretely described in the report, please refer to Section IV “Report of the Board of Directors”. The related future plan, development strategy and other forward-looking descriptions do not constitute commitments to the investors. The investors should invest rationally and pay attention to the investment risk. 7. Was there extraordinary use of funds by the controlling shareholder and its related parties? No 8. Was there provision of guarantees in violation of specified decision-making procedure? No 9. Major Risk Notice The major risks have been concretely described in the report, please refer to Section IV “Report of the Board of Directors” for the possible risk factors and the corresponding tackling measures as set out in the discussion and analysis in respect of the future development of the Company. 10. Other Unless otherwise specified, the amount in this report is RMB. In this report, if the sum of the sub-item value is inconsistent with the total number, it is due to rounding. 2018 Annual Report 3 Section I Definitions 1. Definitions In this report, unless the context otherwise requires, the following terms shall have the meanings set out below. “Articles of Association” the articles of association of the Company as amended from time to time “the Company”,”Company” Anhui Expressway Company Limited “the Group” Collectively the Company, its subsidiaries and associated companies “ATHC” or “Anhui Anhui Transportation Holding Group Company Limited (formerly known Transportation Holding as Anhui Expressway Holding Group Company Limited and Anhui Group” Expressway Holding Corporation) “Board” the board of Directors “China Merchants Highway” China Merchants Highway Network Technology Holding Company Litmited (formerly known as China Merchants Hua Jian Highway Investment Company Limited) “Director(s)” director(s) of the Company “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited “reporting period” the year ended 31 December 2018 “SSE” Shanghai Stock Exchange “SEHK” or “Hong Kong The Stock Exchange of Hong Kong Limited Stock Exchange” “SFO” Securities and Futures Ordinance (Chapter 571, the Laws of Hong Kong) “Supervisor(s)” supervisor(s) of the Company “Supervisory Committee” the supervisory committee of the Company “Xuanguang Company” Xuanguang Expressway Company Limited “Expressway Media” Anhui Expressway Media Company Limited “Xin’an Financial” Anhui Xin’an Financial Group Company Limited “Xin’an Capital” Anhui Xin’an Capital Operation Management Company Limited “Xuancheng Transportation“ Xuancheng Transportation Investment Company Limited(formerly known as Xuancheng Highway Construction Management Company Limited) “Ningxuanhang Company” Anhui Ningxuanhang Expressway Investment Company Limited “Guangci Company” Xuancheng City Guangci Expressway Limited Liability Company “Wantong Pawnshop” or Hefei Wan Tong Pawnshop Co., Limited “Wantong Pawn” “Wantong Micro Credit” Hefei Wantong MicroCredit Company Limited “Huatai Group” Hefei Huatai Group Corporation Limited “HK Subsidiary” Anhui Expressway (H.K.) Limited 4 Anhui Expressway Company Limited Section I Definitions “China Merchants Fund” Anhui Transportation China Merchants Industrial Fund (Limited Partnership) “China Merchants Fund Anhui Transportation China Merchants Investment Fund Management Management Company” Company Limited “Jinshi Merger and Anhui Transportation Jinshi Merger and Acquisition Fund (Limited Acquisition Fund” Partnership) “Jinshi Fund Management Anhui Transportation Jinshi Fund Management Co., Ltd. Company” “Bangning Property” Hefei Bangning Property Management Limited “Expressway Construction” Anhui Expressway Construction Company Limited “Expressway Petrochemical” Anhui Expressway Petrochemical Company Limited “Huanyu Company” Anhui Huanyu Highway Construction Development Company Limited “Xunjie Logistics” Anhui Xunjie logistics Company Limited “Qixing Project” Anhui Qixing Project Testing Company Limited “Zhongxing Construction” Anhui Province Zhongxing Construction Supervision Company Limited “Wangqian Company” Anhui Wangqian Expressway Company Limited “Liguang Company” Anhui Liguang Expressway Company Limited “Yangji Company” Anhui Yangji Expressway Company Limited “Anqing Company” Anhui Anqing Yangtzi Highway Bridge Company Limited “Yida Company” Anhui Province Yida Expressway Service Area Operating Management Company Limited “Anhui Expressway Anhui Expressway Network Operations Company Limited Network Operations” Anhui Transport Planning Anhui Transport Planning and Design Institute Company Limited and Design Institute” “Transportation Capital” Anhui Transportation Capital Investment Management Company Limited “Anlian Expressway” Anhui Anlian Expressway Company Limited 2018 Annual Report 5 Section II Corporate Profile and Main Financial Indicators 1. Company Information Official Chinese name of the Company 安徽皖通高速公路股份有限公司 Abbreviation (in Chinese) 皖通高速 English name of the Company Anhui Expressway Company Limited Abbreviation (in English) Anhui Expressway Legal representative of the Company Qiao Chuanfu 2. Contact Person and Contact Details Secretary to the Board Representative of of the Company Securities Affairs Name Dong Huihui Ding Yu Contact address 520 Wangjiang West Road, 520 Wangjiang West Road, Hefei, Anhui, the PRC Hefei, Anhui, the PRC Telephone 0551-65338697 0551-63738923, 63738922, 63738989 Fax 0551-65338696 0551-65338696 Email Address [email protected] [email protected] 3. Introduction of Basic Information Registered address 520 Wangjiang West Road, Hefei, Anhui, the PRC of the Company Postal code of registered address 230088 Office address of the Company 520 Wangjiang West Road, Hefei, Anhui, the PRC Postal code of office address 230088 Website of the Company http://www.anhui-expressway.net E-mail address of the Company [email protected] 4. Information Disclosure and