Annual Report 2017 2017 201 7 年度報 告 Annua L Repor T
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年度報告 Annual Report 2017 2017 201 7 年度報 Annua l Repor 告 t (於開曼群島註冊成立的有限公司) (Incorporated in the Cayman Islands with limited liability) 股份代號 : 03788 Stock Code: 03788 MISSION As Emerging Key Player VALUE Always Beyond Expectations CONTENTS 2 CORPORATE INFORMATION 5 FINANCIAL HIGHLIGHTS 6 CHAIRMAN’S STATEMENT 10 MANAGEMENT DISCUSSION AND ANALYSIS 37 REPORT OF THE DIRECTORS 55 CORPORATE GOVERNANCE REPORT 70 BIOGRAPHIES OF DIRECTORS AND SENIOR MANAGEMENT 75 INDEPENDENT AUDITOR’S REPORT 80 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 82 CONSOLIDATED STATEMENT OF FINANCIAL POSITION 84 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 86 CONSOLIDATED STATEMENT OF CASH FLOWS 88 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 180 DEFINITIONS 2 CHINA HANKING HOLDINGS LIMITED ANNUAL REPORT 2017 CORPORATE INFORMATION China Hanking Holdings Limited was incorporated in the Cayman Islands on 2 August 2010, and was listed on the Hong Kong Stock Exchange on 30 September 2011 (stock code: 03788). Hanking is a fast-growing international mining and metals group of companies, mainly engaging in exploitation, mining and processing of mineral resources and marketing of mineral products. With its principal operations of precious metals that supplemented by nickel and other strategic metals, Hanking has invested and developed mine operation projects with long life cycle, low operating costs and scalable operating scope in the most attractive regions around the world. Upholding the core value of “people-first and business integrity” and adhering to the principles of “safety, community harmony and green mine”, the Group actively performs the enterprises’ social responsibilities. Shareholding Structure of the Group Note China Hanking Holdings Limited (incorporated in the Cayman Islands) 97% 100% 70% Hanking Au stralia China Hanking Investment Limited Hanking (Indonesia) Mining Limited Investment Pty Ltd (incorporated in the BVI) (incorporated in the BVI) (incorporated in Australia) 100% 100% 100% 100% China Hanking (BVI) City Globe Limited Denway Development Limited Marvel Loch Hotel Pty Ltd International Limited (incorporated in HK) (incorporated in HK) (incorporated in Australia) (incorporated in the BVI) 100% 75% 75% 75% 75% 75% KP KS KKU China Hanking (Hong Kong) Limited HMNS Harvest Globe Limited (incorporated (incorporated (incorporated (incorporated (incorporated in HK) (incorporated in HK) in Indonesia) in Indonesia) in Indonesia) in Indonesia) 100% 100% 100% Hanking Industry Harvest Globe (Shenyang) (Shenzhen) Limited Shenyang Toyo Steel Utility Co., Ltd Trading Co., Ltd. (incorporated in the PRC) (incorporated in the PRC) (incorporated in the PRC) 100% 100% Shenyang Yuanzheng Industry Co., Ltd 99% Liaoning Hanking Green Building Materials Co., Ltd. (incorporated in the PRC) (incorporated in the PRC) 1% Fushun Hank ing Aoniu Mining Co., Ltd (incorporated in the PRC) 100% 100% 100% 100% Fushun Hanking Fushun Hanking Fushun Hanking Fushun Hanking Forest Farm Co., Ltd. Shangma Mining Co., Ltd. Xingzhou Maogong (incorporated in the PRC) (incorporated in the PRC) Mining Co., Ltd. Mining Co., Ltd. (incorporated in the PRC) (incorporated in the PRC) Note This shareholding structure chart reflects the Group’s shareholding structure as at 31 December 2017. 3 CORPORATE INFORMATION COMPANY’S STATUTORY CHINESE NAME AUTHORIZED REPRESENTATIVES 中國罕王控股有限公司 Mr. Zheng Xuezhi Ms. Mok Ming Wai COMPANY’S STATUTORY ENGLISH NAME China Hanking Holdings Limited JOINT COMPANY SECRETARIES Mr. Xia Zhuo Ms. Mok Ming Wai STOCK CODE 03788 AUDITOR Deloitte Touche Tohmatsu REGISTERED OFFICE Certified Public Accountants Cricket Square 35/F, One Pacific Place Hutchins Drive 88 Queensway P.O. Box 2681 Hong Kong Grand Cayman KY1-1111 Cayman Islands HONG KONG LEGAL ADVISOR Loeb & Loeb LLP 21/F, CCB Tower HEADQUARTERS IN THE PRC 3 Connaught Road Central 22nd Floor, Hanking Tower Central No. 227, Qingnian Street Hong Kong Shenhe District Shenyang 110016 Liaoning Province PRINCIPAL SHARE REGISTRAR IN THE CAYMAN ISLANDS PRC Codan Trust Company (Cayman) Limited Cricket Square PRINCIPAL PLACE OF BUSINESS IN HONG KONG Hutchins Drive 36/F, Tower Two, Times Square P.O. Box 2681 1 Matheson Street Grand Cayman Causeway Bay KY1-1111 Hong Kong Cayman Islands 4 CHINA HANKING HOLDINGS LIMITED ANNUAL REPORT 2017 CORPORATE INFORMATION HONG KONG SHARE REGISTRAR AUDIT COMMITTEE Computershare Hong Kong Investor Services Limited Mr. Wang Ping (Chairman) Shops 1712–1716, 17th Floor, Hopewell Centre Dr. Wang Anjian 183 Queen’s Road East Mr. Kenneth Jue Lee Wanchai Hong Kong REMUNERATION COMMITTEE Mr. Wang Ping (Chairman) INVESTOR INQUIRIES Mr. Kenneth Jue Lee Investor Hotline: +852 3158 0506 Mr. Ma Qingshan Facsimile: +852 3158 0508 Website: www.hankingmining.com NOMINATION COMMITTEE E-mail: [email protected] Mr. Yang Jiye (Chairman) Dr. Wang Anjian DIRECTORS Mr. Ma Qingshan Executive Directors Mr. Yang Jiye HEALTH, SAFETY, ENVIRONMENTAL (Chairman, Chief Executive Officer and President) PROTECTION AND COMMUNITY COMMITTEE Mr. Zheng Xuezhi (Chief Financial Officer) Dr. Pan Guocheng (Chairman) Dr. Qiu Yumin Mr. Yang Jiye Mr. Xia Zhuo Dr. Wang Anjian Non-executive Directors Dr. Pan Guocheng Mr. Kenneth Jue Lee Independent Non-executive Directors Mr. Wang Ping Dr. Wang Anjian Mr. Ma Qingshan 5 FINANCIAL HIGHLIGHTS CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 2017 2016 2015 2014 2013 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Continuing Operations: Revenue 1,091,034 812,217 927,219 1,368,652 1,455,505 Cost of sales (591,149) (573,717) (721,459) (887,981) (663,501) Gross Profit 499,885 238,500 205,760 480,671 792,004 Other income 6,493 11,415 28,562 23,153 15,176 Other expense (3,008) – – – – Other gains and losses (5,965) (139,674) (277,258) (26,894) (32,904) Selling and distribution expenses (42,193) (37,603) (38,386) (44,678) (50,726) Administrative expenses (158,625) (163,168) (216,662) (252,409) (277,469) Finance costs (118,739) (122,666) (158,737) (112,229) (121,941) Profit (loss) before tax 177,848 (213,196) (456,721) 67,614 324,140 Income tax (expense) credit (77,889) (6,954) 5,657 (56,102) (123,919) Profit (loss) for the year from continuing operations 99,959 (220,150) (451,064) 11,512 200,221 Discontinued operation: Profit (loss) for the year from discontinued operation 765,028 6,273 49,386 (34,401) (46,632) Profit (loss) for the year 864,987 (213,877) (401,678) (22,889) 153,589 Owners of the Company 877,163 (207,408) (381,596) 8,990 192,661 Non-controlling interests (12,176) (6,469) (20,082) (31,879) (39,072) CONSOLIDATED STATEMENT OF FINANCIAL POSITION 2017 2016 2015 2014 2013 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Current assets 2,157,215 1,159,656 1,965,913 1,594,903 1,522,613 Non-current assets 1,775,435 2,720,706 2,956,871 2,849,963 2,792,162 Current liabilities 1,829,455 1,904,910 3,399,258 2,179,767 1,903,451 Non-current liabilities 701,357 1,170,283 555,191 865,365 911,107 Equity attributable to owners of the Company 1,215,457 602,076 764,163 1,171,276 1,240,943 Non-controlling interests 186,381 203,093 204,172 228,458 259,274 SELECTED FINANCIAL RATIOS FROM CONTINUING OPERATIONS 2017 2016 2015 2014 2013 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Gross profit margin 45.82% 29.36% 22.19% 35.12% 54.41% Net profit margin 9.16% -27.10% -48.65% 0.84% 13.76% Gearing ratio 64.35% 79.25% 80.33% 68.51% 65.23% Return ratio of total asset 7.59% -2.06% -6.36% 4.11% 20.68% 6 CHINA HANKING HOLDINGS LIMITED ANNUAL REPORT 2017 CHAIRMAN’S STATEMENT Dear Shareholders, The year of 2017 witnessed the business rebirth of China Hanking. During this year, China Hanking has achieved remarkable results in production, operation and capital operation, laying a solid foundation for the sustainable development of the Company. On behalf of the Board, I am pleased to present the business performance of the Group for 2017. Mr. Yang Jiye Chairman of the Board 7 CHAIRMAN’S STATEMENT Focusing on the exploration, construction, mining, processing and marketing of mining projects, China Hanking has taken various implements to create and enhance the value of every mining project, including rational planning, resource acquisition, technology improvement, output increase, efficiency enhancement and cost cutting. On 20 April 2017, the disposal of all the shares in Hanking Australia (which held the SXO Gold Project and its assets) was completed at an enterprise value of AUD330 million, representing a relatively substantial increase in the project value as compared with the consideration of AUD19.7 million paid for the acquisition of the SXO Gold Project by the Company in 2013. The disposal demonstrated our commitment to value enhancement of mining projects. Through our efforts over the past years, the resources of the SXO Gold Project increased from 2.4 million ounces to 4.6 million ounces, and the project officially commenced production in February 2015, leading to a significant increase in the value of the SXO Gold Project. The aforesaid disposal well demonstrated our capability in value creation for mining projects, attracting more and more mine business owners, mining companies and financial institutions to seek cooperation opportunities with the Company. The disposal also offered the Company with more resources to develop new mining projects, creating favorable conditions for the sustainable development of the Company. As to iron ore business, Maogong Mine of the Group invested only RMB1.5 million to further increase the capacity of its processing plant through optimization of production process and replacement of certain equipment. In 2017, the output of iron ore concentrates from Maogong Mine amounted to 1.13 million metric tons, representing a year-on-year increase of 33%. With the completion of the underground mining works of Maogong Mine, the output of iron ore concentrates from Maogong Mine is expected to increase in 2018 and 2019.