2005 - 2015

ANNIVERSARY Stock Code: 03311 OF LISTING IN HKEX

EXERCISE CAUTION IN DETAILS AND IMPLEMENTATION

BUILD A STRONG FOUNDATION TO SEEK GREATER SUCCESS 2015 Annual Report Vision The Group is dedicated to its core value of “Exercising Caution in Details and Implementation; Building a Strong Foundation to Seek Greater Success”. In strict compliance with the industry standard and dedicating to contribute to the industry, the Group will strive for growth and continuous innovation under China State’s principle of “Good Quality and Value Creation”. With the development of individual staff and strengths of teamwork, the Group will achieve a win-win situation with the shareholders, employees and society and become a new role model in the new era. The Group will insist on developing into a leading corporation with competitive international complex construction and infrastructure investment. CONTENTS

2 Corporate Structure 4 Board of Directors and Committees 5 Corporate Information 6 Financial Highlights 8 Major Events of the Year 2015 14 Chairman’s Statement 24 Management Discussion and Analysis 32 Business Review 50 Awards and Accolades 2015 58 Corporate Citizenship t
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1SPQFSUJFT Corporate Structure 015 0 t 2 por Re al ual Annual Report 2015 Ann 2 d s Limite g ion International Holdin uct str Con te ta S a na hi China State Construction International Holdings Limited C * Operatethroughalistedsubsidiary,FarEastGlobalGroupLimited(StockCode:00830). ** * * *

“PPP” –“Public-Private-Partnership” “BOT” –“Build-Operate-Transfer” “BT” –“Build-Transfer” Construction Construction Building Building (BT, BOT& PPP*) Infrastructure Infrastructure Investment Civil Engineering Civil Engineering Works Works Infrastructure Assets Operation of MAINLAND CHINA Curtain WallSystem** Engineering Works Engineering Works HONG KONG Foundation Foundation OTHERS MACAU Corporate Structure Industrialisation Construction Engineering Works Engineering Works Mechanical and Mechanical and Electrical Electrical Other Construction Related Business (continued) Other Construction Other Construction Related Business Related Business 3 China State Construction International Holdings LimitedLimited Annual Report 2015 Board of Directors and Committees

Board of Directors Committees Executive Directors Audit Committee Zhou Yong (Chairman and Raymond Ho Chung Tai (Chairman) Chief Executive Officer) Adrian David Li Man Kiu Tian Shuchen Raymond Leung Hai Ming Zhou Hancheng Lee Shing See Pan Shujie Hung Cheung Shew Remuneration Committee Wu Mingqing Adrian David Li Man Kiu (Chairman) Raymond Ho Chung Tai Independent Non-executive Directors Raymond Leung Hai Ming Raymond Ho Chung Tai Lee Shing See Adrian David Li Man Kiu Raymond Leung Hai Ming Nomination Committee Lee Shing See Lee Shing See (Chairman) Raymond Ho Chung Tai Adrian David Li Man Kiu

Annual Report 2015 Raymond Leung Hai Ming 4 a onstruction Intern C tate S hina China State Construction International Holdings Limited C Corporate Information

Authorised Representatives Principal Bankers Zhou Yong Agricultural Bank of China Limited Tian Shuchen Bank of China (Hong Kong) Limited Bank of Communications Co., Ltd. Company Secretary BNP Paribas Hong Kong Branch China Construction Bank Corporation Tse Sui Ha China Development Bank Corporation Hang Seng Bank Limited Principal Share Registrar and The Bank of East Asia, Limited The Hongkong and Shanghai Banking Corporation Transfer Office Limited Royal Bank of Canada Trust Company Wing Lung Bank, Limited (Cayman) Limited 4th Floor, Royal Bank House 24 Shedden Road, George Town Listing Information Grand Cayman KY1-1110 Shares Cayman Islands Hong Kong Stock Exchange: 03311

Hong Kong Branch Share Bond (CSC FIN N1804)* Annual Report 2015 Registrar and Transfer Office Hong Kong Stock Exchange: 05916 5 Tricor Standard Limited * US$500,000,000 3.125% Guaranteed Notes due 2018 issued by Level 22, Hopewell Centre China State Construction Finance (Cayman) I Limited, wholly owned 183 Queen’s Road East subsidiary of the Company Hong Kong Website Registered Office www.csci.com.hk Cricket Square Hutchins Drive Financial Calendar P.O. Box 2681 Closure of Register of Members – Annual General Meeting Grand Cayman KY1-1111 30 May 2016 to 1 June 2016 (both days inclusive) Cayman Islands Annual General Meeting Head Office and Principal 1 June 2016

Place of Business in Hong Kong Closure of Register of Members – Final Dividend China State Construction International Holdings Limited 28th Floor, China Overseas Building 10 June 2016 139 Hennessy Road, Wanchai Hong Kong Payment of Proposed Final Dividend 4 July 2016 Auditor PricewaterhouseCoopers

Legal Advisor Mayer Brown JSM Financial Highlights

For the year ended 31 December (Note a) 2011 2012 2013 2014 2015 (restated) (restated) (restated) RESULTS (HK$’000) Revenue 17,510,533 22,059,910 27,285,620 34,439,575 37,913,159 EBITDA (Note b) 2,236,635 2,994,662 3,897,458 4,823,804 5,704,248 Profit attributable to owners of the Company 1,514,514 2,044,337 2,749,551 3,457,410 4,153,072

FINANCIAL RATIOS Net margin (%) 8.6 9.3 10.1 10.0 11.0 Current ratio (times) 1.20 1.56 1.28 1.10 1.05

FINANCIAL INFORMATION PER SHARE Earnings (HK cents) 44.43 54.98 70.71 88.75 103.16 Dividend (HK cents) 13.00 16.00 21.00 26.00 33.00 Net assets (HK$) 2.65 3.45 4.10 4.94 5.24 ual Report 2015

Annual Report 2015 Ann OTHER INFORMATION Value of incomplete contracts 6 at 31 December (HK$ billion) 48.92 57.69 76.48 93.10 127.06

d Notes:

(a) The figures from 2011 to 2013 have been restated for the acquisition of China Overseas Ports Investment Company Limited in 2014.

(b) EBITDA represents Profit before Tax, Finance costs, Depreciation and Amortisation charged to the Income Statement during the year. na State Construction International Holdings Limite China State Construction International Holdings Limited Chi Mainland China 1,500,000 2,250,000 3,000,000 3,750,000 4,500,000 (HK$’000) Owners oftheCompany Profit Attributableto for theyearended31December2015 Breakdown ofSegmentRevenue eut FinancialInformationPerShare Results 750,000 38.6% 14.0% Macau 0 0121 0321 2015 2014 2013 2012 2011 Revenue Company Profit AttributabletoOwnersofthe 4.7% Far EastGlobal 42.7% Hong Kong H$00 (HKcents) (HK$’000) Revenue 0 8,000,000 16,000,000 24,000,000 32,000,000 40,000,000 Financial Highlights Mainland China Excluding lossofOverseasSegment * for theyearended31December2015 Breakdown ofSegmentResults* 100 120 20 40 60 80 0 14.3% Macau 69.0% 0121 0321 2015 2014 2013 2012 2011 Far EastGlobal Earnings Dividend 0.4% (continued) 16.3% Hong Kong 7 China State Construction International Holdings Limited Annual Report 2015 Major Events of the Year 2015

Staff of the Group joined the “Walks for Millions” by Community Chest JAN Nearly 200 staff of the Group and their families joined “Hong Kong and Kowloon Walks for Millions” organised by the Community Chest on 11 January 2015. Fund raised from this event was donated by the Community Chest to “Family and Child Welfare Services” to help those families in need, so as to unite all families by building up close relationships between family members with mutual love and respect. Annual Report 2015 8

Strategic Cooperation Agreement signed between the Group and China Construction Fifth Engineering Division FEB On 6 February 2015, the signing ceremony of Strategic Cooperation Agreement between the Group and China Construction Fifth Engineering Division Co., Ltd. was held in China

o State International Tower (深圳中建國際 大廈) in Shenzhen.

Both parties hoped that the newly China State Construction International Holdings Limited C signed strategic agreement could promote two parties to launch further cooperation, and could complement each other’s edges for mutual benefits. MAR APR Engineering DivisiontodiscusstheHuanghuaComprehensiveBondedZoneProjectinChangsha. Hunan ProvinceandhadacooperationmeetingwiththeleadersofChinaConstructionFifth visited therelevantleadersandresponsiblepersonsofdepartmentstownshipin Officer oftheCompanypaidabusinessvisittoHunanProvince.Duringvisit,delegation From 27Aprilto282015,thedelegationledbyMr.ZhouYong,ChairmanandChiefExecutive relevant leaders Mr. ZhoupaidabusinessvisittoHunanProvinceandmetwiththe of theCompany. Limited; Mr.PanShujie,VicePresident Executive OfficeroftheCompany Mr. ZhouYong,ChairmanandChief Ove Arup&PartnersHongKongLtd; of HKSAR;DrDamanLee,director Lau Ka-Keung,DirectorofHighways attended theceremonyincludingMr. successfully held.Morethan200guests Hong KongLinkRoadProjectwas of HongKong-Zhuhai-MacaoBridge blast sectionoftheScenicHillTunnel breakthrough ceremonyofthedrilland In themorningon30March2015, Project wassuccessfullyheld Tunnel ofHongKong-Zhuhai-MacaoBridgeKongLinkRoad Breakthrough ceremonyofthedrillandblastsectionScenicHill Major EventsoftheYear2015 (continued) 9 China State Construction International Holdings Limited Annual Report 2015 10 China State Construction International Holdings Limited Annual Report 2015 Major EventsoftheYear2015 MAY JUN corporate socialresponsibilityandcontributionsforthepromotionofeco-culturalprotection. Group showeditscontinuoussupporttocorporatesocialdevelopment,determinationfulfill splendid rockandlandformoftheworld-classgeopark.Throughparticipatinginthisevent, a hand-onexperienceoftheenvironmentandeco-system,allowingstafftounderstand Dam ofHighIslandReservoir”.Withatotalnumber34staffparticipated,thisactivityprovided Environmental ProtectionDay”on5Juneandorganizedemployeestojointhe“GeoTourofEast to enhancetheawarenessofenvironmentalprotectionemployees.TheGroupheld“2015 In responsetoWorldEnvironmentDayeachyear,theGroupperformeditssocialresponsibility held The 2015ChinaStateEnvironmentalProtectionDaywassuccessfully sectioned Exercise”PracticeCompetitionandtheInnovativeSafetyInitiativeAward(SilverAward). 2015”, theGrouphasreceivedseveralawards,includinggoldawardin“QigongEight- Award) inthecategoryofPublicWorks–NewWorks.Inaddition,“ConstructionSafetyWeek Award (MeritAward)andOutstandingEnvironmentalManagementPerformance(Bronze Considerate ContractorsSite the Groupwasawarded and environmentalprotection, performance insitesafety its continuousoutstanding May 2015.Attributableto Exhibition Centreon29 Bay InternationalTradeand Council washeldatKowloon the ConstructionIndustry the HKSARgovernmentand the DevelopmentBureauof Scheme” jointlyorganisedby Contractors SiteAward The “21stConsiderate Contractors SiteAwardScheme” The Groupreceivedseveralawardsinthe“21stConsiderate (continued) AUG SEP JUL JUL ceremony asguestsofhonor. Jinming, mayorofBengbuattendedthe party secretaryofBengbuandMr.Bai Limited andMr.ZhouChunyu,municipal Construction InternationalHoldings Chief ExecutiveOfficerofChinaState Province. Mr.ZhouYong,Chairmanand project ininfrastructureAnhui The projectwasthefirstlargePPP Bengbu City,wasofficiallycommenced. Transportation InvestmentGroupof constructed bytheGroupand to Wuhe,aprojectjointlyinvested work ofthehighwayfromBengbu On 21September2015,theconstruction Highway Project Mr. ZhouattendedthecommencementceremonyofBengwu 2016. to becompletedbythesecondhalfof HK$530 million,theprojectisexpected With contractamountofapproximately Chief ExecutiveOfficeroftheGroup. and Mr.ZhouYong,Chairman Yeung, ChairmanofEmperorGroup The guestsofhonorincludedDrAlbert East, HongKongwassuccessfullyheld. Hotel ProjectlocatedatQueen’sRoad ceremony ofEmperorInternational On 10August2015,thecommencement was successfullyheld Commencement ceremonyofEmperorInternationalHotelProject investors hasbeenrecognizedbytheinternationalmarket. securities firms.Thishonordemonstratedthatthecompany’seffortinmaintainingrelationshipwith made by820buyeranalystsandfundmanagersovertheworldaswell625from94 sector, andrankedasNo.1inthe“MostHonoredCompanies”Asia.Theassessmenthasbeen magazine, statingthatthecompanyrankedtopthreeineightrankingsofindustrial On 7July2015,theGroupreceivedanoticefrom award inAsiabythe The GroupwasnamedasNo.1inthe“MostHonoredCompanies“ Major EventsoftheYear2015 Institutional Investor Institutional Investor (continued) , aninternational 11 China State Construction International Holdings Limited Annual Report 2015 12 ChinaChina State Construction International Holdings Limited Annual Report 2015 Major EventsoftheYear2015 NOV OCT well asseniormanagementofMGMResortsInternationalandChinaHoldingsLimited. Chairman andChiefExecutiveofficerofChinaStateConstructionInternationalHoldingsLimitedas Holdings Limited;Mr.ZhouYong,ViceChairmanofChinaOverseasLimitedand President ofChinaOverseasHoldingsLimited;Mr.LiJianbo,ViceChairman Limited, astheofficiatingguest.OtherguestsalsoincludedMr.HaoJianmin,ViceChairmanand State ConstructionEngineeringCorporationLimitedandChairmanofChinaOverseasHoldings Mr. Qing,ChairmanofChinaStateConstructionEngineeringCorporationcum On 6November2015,thetopping-outceremonyofMGMCotaiProjectwassuccessfullyheldwith Topping-out ceremonyofMGMCotaiProjectwassuccessfullyheld city ofNingbowithjointefforts. completion oftheprojectandtobuildabeautiful cooperation subsequentlytoacceleratethe signed, thepartiesagreedtostrengthen Cooperation FrameworkAgreement”previously Last butnottheleast,inrespectof“Strategic development statusandconstructionofNingbo. qualification oftheGroupandintroduced towards thefinancialstrengthandprofessional Mayor Wangexpressedhighlyappreciation introduction abouttheCompany’sconditions. China OverseasBuildingandmadeadetailed Vice MayorofNingbo,andotherofficersat the GrouphadameetingwithMr.WangJianhou, Yong, ChairmanandChiefExecutiveOfficerof In theafternoonof15October2015,Mr.Zhou Mr. ZhoumetwiththeleadersofNingboMunicipalGovernment (continued) DEC the occupationalhealthandsafetymanagement. by thesiteteamduringwholeconstructionprocesswithregardto Safety PerformanceReward”byMTRinrecognitionoftheeffortsmade China OverseasBuildingConstructionLtdwasawardedthe“Excellent development projectatAustinStationSiteD,Kowloonundertakenby safety performanceduringtheconstructionprocess,residential On 14December2015,owingtothecontinuousoutstanding “Excellent SafetyPerformanceAward”byMTR Austin StationSiteD,Kowloonwasawardedthe functional layoutaswelltransportationandmunicipalfacilitiesunderoneroof. a fourdimensionalcityintegratedthespaceaboveandunderground,insideoutside, nature witharchitecture,artistictouchandshoppingcomfort.Inthefuture,projectwillbecome the largestsingleundergroundprojectinworldandfirstcombining Construction ThirdEngineeringDivisionGroup.Uponthecompletionofproject,itwillbecome Underground SpaceProjectisjointlyinvestedandconstructedbytheGroupChina With thetotalgrossfloorareaof526,000squaremeters,WuhanGuangguCenterCity Group; andMr.ZhouWenbin,DeputyGeneralManageroftheGroup. Third EngineeringDivisionGroup;Mr.TianShuchen,ExecutiveDirectorandVicePresidentofthe Third EngineeringDivisionGroup;Mr.LiYong,DeputyGeneralManagerofChinaConstruction officer oftheAdministrativeCommittee;Mr.YiWenquan,GeneralManagerChinaConstruction Committee ofAdministrativeDonghuHi-techDistrict;Mr.YanZhongNing,deputy the Group;Mr.HuLishan,municipalstandingcommitteeofWuhancumsecretaryWork Donghu Hi-techDistrictinWuhan;Mr.ZhouYong,ChairmanandChiefExecutiveOfficerof The guestsofhonorincludedMr.ZhangWentong,OfficertheAdministrativeCommittee axle partofWuhanGuangguCenterCityofficiallycommenced. On 19December2015,theundergroundpublictransportationpathwayandauxiliaryprojectof of WuhanGuangguCenterCityUndergroundSpaceProject Mr. Zhouattendedthecommencementceremonyofconstruction Major EventsoftheYear2015 (continued) 13 China State Construction International Holdings Limited Annual Report 2015 14 China State Construction International Holdings Limited Annual Report 2015 HK$ approximately contract valueof with attributable 41 Group secured In theyear, CHAIRMAN’S billion.

new contracts STATEMENT 70.09 and ChiefExecutiveOfficer Executive Director,Chairman Mr. ZhouYong 15 China State Construction International Holdings Limited Annual Report 2015 Chairman’s Statement

In early 2015, the Group adopted an operation strategy Compliance and Prudent of “compliance and prudent development to support the robust and rapid development of the Company”. Development The Company paid high attention to the compliance with laws and regulations of local governments to Operation Results maintain sound operation. In the face of market changes, the Group leveraged its experiences to maintain the The Group’s audited profit attributable to the owners of sustainability of its operation and cope with the new the Company for the year ended 31 December 2015 was opportunities and challenges under the new economic HK$4,153 million, representing an increase of 20.1% as trends in order to facilitate the healthy and rapid compared to the corresponding period of last year. The development of all lines of business of the Group. revenue was HK$37,913 million, representing an increase of 10.1% as compared with the same period of last year. Earnings per share was HK103.16 cents, representing an Market Conditions increase of 16.2% as compare with the same period of The construction markets in Hong Kong and Macau last year. continued to prosper in both residential and public sectors, resulting in higher pressure of shortage of resources. As entering into a key period for transformation, Dividend Payment the economy of Mainland China was in a position to n n The Board recommends distributing a final dividend of gain new growth momentum. The measures to maintain Annual Report 2015 A HK18.00 cents per share for the year ended 31 December economic growth proved to be effective. Investments in 1616 2015, representing an increase of 20.0% as compared infrastructure projects under such major strategies as “One with the same period of last year. The total dividend to be Belt, One Road”, “Integration of Beijing-Tianjin-Hebei” distributed for the year will be HK33.00 cents per share, d and “Yangtze River Economic Zone” strategy maintained including a special dividend of HK2.00 cents per share for high growth rates. In the overseas market, the curtain wall celebrating the 10th listing anniversary of the Company,

s Limite market in North America recovered in the general. g representing an increase of 26.9% as compared with the same period of last year. 1. Hong Kong and Macau Hong Kong’s overall economy tended to be stable, Review of Operation while the Macau economy experienced a profound consolidation due to flagging gaming industry. The The year of 2015 saw a sluggish recovery in global Group duly optimised its competition strategy to economy. The complex macroeconomic situation and expand operation and successively secured new volatile geopolitics led to a significant slide in international contracts of HK$19,158 million for the whole year in

onstruction International Holdin trade and a dramatic surge in financial risks. Developed

C Hong Kong and Macau. During the year, focusing on countries maintained a moderate and uneven economic the high-end premium projects under the “Ten Mega tate

S pick-up, and U.S. enjoyed a steady economic growth. Infrastructure” Projects in Hong Kong, the Group na The economy of developing countries, however, slowed successfully secured the projects of some sections China State Construction International Holdings Limited Chi down in general due to various challenges arising from of Shatin to Central Link in Hong Kong, including weakness in commodity prices, international capital Exhibition Station and Western Approach Tunnel outflows and structural adjustment. The economy of Project of Shatin to Central Link; Central-Wanchai China experienced a steady growth in general and strived Bypass-Tunnel (West Section in Wanchai); and for a positive momentum in a stable manner although it Construction Project of Cross Harbor Tunnel Railway was under the pressures of slowdown and deflation in the (North South Corridor) of Shatin to Central Link as course of its transformation and upgrading. well as Construction of Public Rental Housing at Anderson Road Site C1 & Ancillary Facilities Block at 2. Mainland China from thestate,andwasawardedforfirst urban undergroundpipelinenetwithkeysupport Group proactivelyintensifiedtheconstructionof Zhengzhou, HenanProvinceetc.Meanwhile,the Relocation HousingProjectswithPPPmodel, Highway Project,Bengbu,AnhuiProvinceand lower operationriskanddecentreturn,including (“PPP”) infrastructureinvestmentprojectswith successively awarded9Public-Private-Partnership its investmentandfinancingmodes,was of nationalpolicies,theGroupactivelyinnovated the wholeyear.Closelyfollowingguidance contracts ofHK$48,249millioninaggregateduring end marketinadvance.TheGroupsecurednew to Headquarter”mode,thustargetingthehigh- cooperation agreementsthrougha“Headquarter actively exploredmajorprojects,andenteredinto increase itsinvestmentininfrastructureprojects, China, theGroupbelievedthatChinawouldfurther Anticipating aslowdownineconomicgrowth general riskresistancecapacityoftheGroup. Hong KongandMacau,effectivelystrengthens integration andstrongcomplementaritybetween good bargainingpowerintender,whichcreatesan a professionalintegratedoperatingsystemwith and regionalcollaboration.TheGrouphasinplace projects throughprofessionalgeographiccoverage integrated developmentinrespectofconstruction The Grouphasgraduallyachievedrationaland making afavorableprofitcontribution. investment inrecentyearsachievedinitialsuccess, completed inadvance.Diversifieddistributionof superstructures ofthetwomaintowershadbeen and Macauwasinprogressasscheduledwhilethe jointly constructedbythesubsidiariesinHongKong contractor oftheproject.TheMGMCotaiProject of theinvestorsandwasappointedasmain Development ProjectofNovaCityPhase5asone the ConstructionofResidentialandCommercial Site C2Phase2.InMacau,theGroupparticipatedin Chairman’s Statement . FarEastGlobalGroupLimited(“FEG”) 3. a stableincome. in Shiwulihe,Hefei,whichwereexpectedtogenerate Project inQingshuihe,Shenzhen,andLand Ludan Village,Shenzhen,CooperativeDevelopment acquired equityinterestinRedevelopmentProject projects inHefei,AnhuiProvince,andsuccessfully participated intheconstructionofaffordablehousing “Construction Industrialisation”,theGroupactively advantages ofstate-leveldemonstrationbase expansion, andcombiningonthecoretechnological Focusing ontheleadingroleofinnovationinbusiness the subsequentimplementationofsimilarprojects. for theGrouptoaccumulateusefulexperience Province. Theawardofsuchprojectservedasaway Space, CentralCityofOpticalValley,Wuhan,Hubei time theConstructionofUndergroundIntegrated Development, HongKong. and CentreofExcellenceinPaediatricsKaiTak Vancouver UrbanResort,Vancouver,Canada including MGMNationalHarbor,Baltimore,USA, brand effect,andwasawardedvariousnewprojects to developmentofprojectswithsoundscaleand Major Client,Large-scaleProject”,FEGgavepriority Adhering toanoperationstrategyof“BigMarket, wall businessopportunitiesincreasedaccordingly. being launchedinHongKongandMacau,curtain curtain walldemand.Withmoreprivatebuildings America contributedtoacontinuousgrowthin A fullrecoveryofconstructionmarketinNorth (continued) 171

ChinaChina State Construction International Holdings LimitedLimited 7 AnnualAnn Report 2015 18 China State Construction International Holdings Limited Annual Report 2015 HK$15,580 million. in 2016,resultinganaggregatecontractvalueof 8 newprojectswereawardedduringthefirsttwomonths for 3.8%. Macau marketaccountedfor7.8%andFEG 19.5%, MainlandChinamarketaccountedfor68.9%,the million, ofwhichtheHongKongmarketaccountedfor aggregate attributablecontractvalueofHK$70,089 The Groupsecured41newprojectsin2015,withan New ProjectsAwarded In 2015,theGroupcompleted24projects. Completed ProjectsduringthePeriod Chairman’s Statement project inprogressismanageable. America arefurtherenhanced,andprogressofeach reorganisation andmanagementcapacityinNorth the progressofmainstructure.Structure well, andcurtainwallinstallationkeepspacewith MGM CotaiandLouisXIII,Macauareprogressing Currently, projectsofWynnPalaceCotai,Macau, (continued) in compliancewithregulations. selection ofcontractorsandprocurementprocedureare regions toensurethedecision-makingofGroupon and procurementcommitteesofdifferentoperation system tooverseethecomplianceofoutsourcing During theyear,Grouphasestablishedasupervisory business unit. and specialisedmanagementcapabilitiesofeach making team.TheGroupalsostrengthenedtheregional on thefunctionandroleofeachdedicateddecision- strategies inlinewithmarketchangestobettercapitalise its businessoperations.TheGroupalsoadjusted system andoptimisedcorporategovernancetoregulate practice. TheGroupestablishedanall-roundcorporate ethics, ahealthycorporatecultureandgood is committedtomaintainahighstandardofbusiness improve thecorporategovernancestandards.TheBoard to enhancethetransparencyofoperation,soas external communication,informationispromptlyreleased With effectivemonitoringbytheBoardandenhanced The Groupstrictlycompliedwiththelawsandregulations. Corporate Governance million. Group hadanattributablecontractvalueofHK$214,288 HK$127,048 million.AttheendofFebruary2016, attributable contractvalueofincompleteworkswas attributable contractvalueofHK$199,788million.The 88 projectsinprogress,amountingtoanaggregate As at31December2015,theGrouphadatotalof Projects inProgress strengthened thefinancingfunctionofMainland,and properly enhancedtheproportionofRMBdebts, and interestrates,timelyoptimisedfinancingstructure, Group paidcloseattentiontothetrendofexchangerates successfully refinancedaloanduewithintheyear.The syndicated loanofHK$3,500millioninHongKongand costs. Atthebeginningofyear,Groupraiseda to broadenfinancingchannelsandreduce the Groupfocusedonfinancialresourcesallocation Adhering toitsprudentfinancialmanagementprinciple, Financial Management environment. ability tocopewithchangesinbusinessandexternal the riskmanagementsystemtoenhanceGroup’s the riskmanagement,aswellconstantlyimproving efficiency ofthesystem,monitoringeffectiveness business segment,reviewingtheperformanceand operation managementandinternalcontrolofeach works focusingonauditingthefinancialmanagement, Department undertheBoardwasinchargeofspecific with significantpotentialrisks.TheIntendanceandAudit management examinationonmajorprojectsand risks oftheGroup,andconductedriskassessment financial risks,marketoperationalrisksandlegal decisions. Italsostrivedtoprevent,controlandsupervise and industrydevelopmentwhichmayaffectstrategic risks inrespectofmacro-economy,regionalmarket conducting timelytrackingandassessingofstrategic control systemoftheGroup,andwasresponsiblefor determine andsuperviseriskmanagementinternal The BoardofDirectorstheGroupcontinuedtoassess, system guarantee. comprehensive riskmanagementwithstandardised excellent riskmanagementcultureandimplement internal controlsystem,theGroupwasabletonurture information system,organisationalfunctionsystemand management unit.Witheffectivecoordinationamongits management proceduresinplaceforeachoperation formulating riskmanagementstrategy,ithasbasic established asoundriskmanagementsystem.Through Based onitsgeneraloperationtarget,theGrouphas Risk Management Chairman’s Statement demand forbusinessdevelopment. of mid-to-high-endspecialtytalentsinrespondtothe Group’s culture,andstrengthenedexternalintroduction and carefullyselectedpromisingtalentsembracingthe improved qualitymodel,controlledrecruitmentscale to its“TheSonoftheSea”campusrecruitmentprogram, organisation abilitycomprehensively.TheGroupadhered allocation andrankingstructureenhancing development paths,optimisingspecialtyposition relying on“management-specialty”bi-directionalcareer internal andexternalrecruitmenttraining, elite-oriented approach,combiningtheadvantagesof specialty managementbysettingupanequalandopen of operationmanagement,projectmanagementand The Groupfocusedonbuildingupthreetalentteams transformation andscientificdevelopment. international talentteamtomeetthedemandofstrategic and establishmentofaprofessional,occupational reasonable andeffectiveallocationofhumanresources human resourcesmanagementsystem,achievementin training andexternalrecruitmentthroughconstructionof invigoration strategywhichincorporatesbothinternal The Grouphasimplementedatalent-basedcorporate Human Resources HK$13,946 million. million, ofwhichavailableRMBloanamountequivalentto and otherbankingfacilitiesamountedtoHK$24,649 million, andcommittedbutunutilisedcreditfacilities of bankloansduringtheyearamountedtoHK$3,115 million, andanetgearingratioof45.9%,drawdown of HK$8,015millionandtotalborrowingsHK$17,773 As of31December2015,theGrouphadbankdeposits of capitalpool. foreign debtsinjection,andkeptthesmoothtwo-wayflow the safetyofprojects’capital,sloweddownpace capital strategiesinatimelymanner,gavepriorityto progressively. TheGroupadjustedforeignexchange contacting withtheseniortofinaliseprojectfinancing the connectivityamongseniormanagementthrough cooperation betweenbanksandtheGroupthrough deepened the“Headquarter-to-Headquarter”strategic (continued) 19 China State Construction International Holdings Limited Annual Report 2015 20 ChinaChina SStatetate CConstructiononstruction InteInternationalr Holdings Limited Annual Report 2015 2015 nationalconstructionmethods. Pre-cast ConcreteStructures”wasapprovedas2014– Overall ProductionofGlassFiberReinforcedCementand Technology FirstClassPrize;“ConstructionMethodof State ConstructionEngineeringCorporationScienceand applied toMainlandChina,wasawarded2015China Hong Kongconstructionindustrialisationpromotedand Construction Industrialisation”,asaresearchresultof Technology ResearchandApplicationofHongKong as anationalhighandnewtechnologyenterprise.“Key Hailong ConstructionIndustrialCo.,Ltd.wasrecognised national highandnewtechnologyenterprisesAnhui Group, hassuccessfullypassedthere-examinationof Construction ProductsCo.,Ltd.,acompanyunderthe patents, including4inventionpatents.ShenzhenHailong for theyearandwasgrantedatotalof24national innovation resultsin“ConstructionIndustrialisation” The Grouphasachievedremarkabletechnology Technology Innovation over profitswithapproximatelyHK$3,200millionremitted. and thePRCthroughreturningforeigndebtsturning realised positivecapitalinteractionbetweenHongKong HK$4,700 millionforeignexchangefundsinjected,and and cross-borderRMBcapitalpoolwithapproximately through injectingforeignexchangecapital,debts requirements oftheinvestmentprojectsinMainlandChina “stable”. During2015,theGrouphasmetfunding raised byFitchfrom“BBB”to“BBB+”withoutlookof and seniorunsecurednoteratingoftheGrouphasbeen grade”. InFebruary2016,thelong-termcreditrating maintained theirratingoftheGroupas“investment the capitalmarket,threeinternationalratingagencies Given theGroup’sexcellentresultsandperformancein Capital Operation Chairman’s Statement (continued) consecutive 5years. logo bytheHongKongCouncilofSocialServicefor recognised andhasbeenawardedthe“CaringCompany” good corporatecitizenship,theGrouphasbeenwidely the sustainabledevelopmentofGroup.Inpursuit communication toenablestakeholdersfullyunderstand every year,strivingtomaintain“openandtransparent” The Groupissuesacorporatesocialresponsibilityreport Social Responsibility value ofresources. reasonably andefficiently,makeprofitsmaximisethe management forvariousprojects,allocateresources decision, theGroupwilloptimisemultiple-layer of businessproceduresandcomparisonanalysis full lifecycleinsubsequentoperation.Bystandardisation construction inmiddlestageandrefinedmanagement the implementationofinvestmentinpreliminarystage, Operate-Transfer (“BOT”)andPPP.Thesystemcovers investment modelssuchasBuild-Transfer(“BT”),Build- emphasis oncontractmanagementcoveringmultiple focuses oncostandcapitalmanagementwithacore by theGrouphasbeenofficiallylaunched.Thesystem The investmentprojectmanagementsystemdeveloped customer satisfactionandincreasemarketshare. inventory, procurementandtransactiontoimprove accuracy ofproductsandefficientlyreducecosts shipments, whichcouldsignificantlyimprovetheforecast requisition andfinishedgoodsinventorytosales application, procurement,stock-in,inventory,material sharing duringthewholeprocessfrommaterial system, andrealisedmanagementinformation “Construction Industrialisation”productionsupplychain The Grouphassuccessfullyimplementedthe award ofInnovativeSafetyInitiativeAward. merit awardin“QigongDisplayCompetition”andasilver same period,theGroupreceivedagoldawardand Safety Week2015”,whichwascarriedoutduringthe safety andenvironmentalprotection.Inthe“Construction – NewWorkscategoryforitsexcellentperformancein Management &PerformanceAwardsinthePublicWorks bronze andtwomeritsoftheOutstandingEnvironmental merits ofConsiderateContractorsSiteAwards;andone Site AwardSchemeAward”.TheGroupreceivedthree jointly organised“The21stConsiderateContractors Government andtheConstructionIndustryCouncil In May,theDevelopmentBureauofHKSAR government authoritiesincludingtheLabourDepartment. Industry SafetyAwardScheme2014/2015”organisedby award ofCivilEngineeringSitesunderthe“Construction Wo HopShekInterchangeoftheGroupreceivedamerit In March2015,WideningofFanlingHighway-TaiHangto Key Awards the promotionofeco-culturalprotection. into asocialcorporateandcontributionsoftheGroupfor to demonstratethedeterminationofGroupdevelop Community Centre,asocialenterprise,in5Juneorder High IslandReservoirEastDam”withSaiKungDistrict Group alsojointlyorganisedthe“GeographicalTourto employees inresponseto“WorldEnvironmentDay”.The enhance theawarenessofenvironmentalprotection Protection Day”forconsecutive10yearsinorderto Group hasalsoorganised“ChinaStateEnvironmental spirit ofactivelyfulfillingitssocialresponsibilities.The Child WelfareServices”,whichdemonstratestheGroup’s by theCommunityChest”toraisefundsfor“Familyand Kong “2014/15HongandKowloonWalkforMillions family membersjoinedthelargestcharitywalkinHong In January2015,over100staffsoftheGroupandtheir Chairman’s Statement Group wasfullyrecognisedbyMTR. safety performance,reflectingmanagementofthe granted thehousingconstructionprojectwithexcellent Performance Award.ItwasthefirsttimethatMTR Kowloon oftheGroupwasawardedExcellentSafety Residential DevelopmentatAustinStationSiteD, In December,MainContractWorksforProposed Presentation Ceremonyof2015”. at Heightin“ConstructionSafetyForumandAward award ofBestSafetyEnhancementProgramforWorking Section inWanchai)oftheGroupwasawardedsilver institution. TheCentral-WanchaiBypass–Tunnel(West Communications Professionals,aworld-renowned Chinese AnnualReports”fromtheLeagueofAmerican consecutive yearandwaselectedasoneofthe“Top40 award” (typesofcommercialservice)forthesecond Group receivedsilverawardofannualreport“Vision governance, investorrelationsandotheraspects.The continual affirmationinrespectoftheGroup’scorporate which isindicativeoftheinternationalcapitalmarket’s in thecategoryof“MostRespectableCompanies”, ranked topthreeineightawardsandwasfirst Asia organisedby“InstitutionalInvestor”,theGroupwas In July,intheannualpollofTheBestListedCompanies management. its excellentperformanceinoccupationalhealthandsafe organised bythepropertyprojectdepartmentofMTRfor in 2014the“SafetyContractorAwardScheme” In June,theGroupwasawardedSafestContractor (continued) 21 China State Construction InternationalInter Holdings Limited Annual Report 2015 22 ChinaChina SStatetate CConstructiononstruction International HoldiHoldingsn Limited Annual Report 2015 opportunities. creating alargenumberofinfrastructureinvestment rail, spongecitiesandundergroundpipelinenetwork, investment inpublictransportation,urbanrail,high-speed weakness ofinfrastructure,sustainedincrease benefit-objected patternwhichemphasisesimproving pulling-based, innovationdriving-orientedandeconomic pattern hasbeenestablished,beingtheinvestment transformed intomoderate-to-highend,andthegrowth economic development.Thestructurewillbe that supplysidereformwillbethenewguidingideologyof moderate-to-high speed.Thenationhasclearlystated Economy inmainlandChinawillretainthegrowthata the mostimportantrole. private investment,thegovernmentinvestmentswillplay downturn ofgamingindustryinrevenueandslowdown In Macau,duetotheconcentratedeconomicstructure, so on.Theconstructionmarketwillmaintainbuoyant. (including design),publicrentalhousingprogramand Architectural ServicesDepartment’shospitalproject the thirdrunwayatairport,seawaterdesalinationplant, will launchmorelivelihoodrelatedprojects,suchas the economyenteringinto“deflation”,government with considerablefoundationandenergy.Foravoiding at alowlevelforsluggishoverseasdemand,butitisstill Hong Kong’seconomyisexpectedtoretainitsgrowth Market Expectation environment. strategy toconfronttheexternalchangesinoperation industrial marketandformulateaprescientoperating will preciselycapturethetrendofmacroeconomyand China’s economicdevelopmentinthefuture.TheGroup urbanisation willcontinuetobethegreatestpotentialof will facebothopportunitiesandchallengesnew and unevendevelopment.However,constructionindustry In 2016,theglobaleconomywillcontinueitsslowgrowth Business Prospects Chairman’s Statement (continued) contracting opportunitiesarisingfromnewinvestments. construction business,theGroupwillcontinuetograsp insufficient resources.Whilestrengtheningitsprincipal project progressandalleviatecostpressureresultingfrom control, theGroupaimstoensurestableandsmooth risk effectively.Byimprovingtheoverallabilityofprojects order toobtainhigherprofitabilityandmanagetendering differentiated competitiveedgesagainstitscompetitorsin refined management,theGroupwillcapitaliseonits initiative planninginintegratedcoretechnologyand strong brandedgesinHongKongandMacau.With strengthen abilityincrisispublicrelationsandconsolidate another breakthroughinbusinessexpansion,continuously competent cooperativepartnersinordertostrivefor and large-scaleprivatecommercialprojectsidentify continue togivepreferencesignificantcivilinfrastructure consolidating thefoundationofexistingprojects.Itwill and Macau,theGroupwillplacegreatemphasison In respectofconstructionprojectsinHongKong enhance itscorporatevalueandmarketcompetitiveness. construction andrelevantinvestments,soastocontinue conglomerate withcomprehensivedevelopmentinboth endeavored tobuilditselfupasanintegratedinternational dedicated tomarketandbrandingoperation”,theGroup and prudentdevelopmentwithpioneeringinnovation, the implementationofoperationpolicy“compliance Competition andHigh-qualitymanagement Committed totheoperationstrategyof“ Operation Strategies curtain walls. high-end residentialprojectsaretendedtouseglass market, itisstillinastateofdisordercompetition,but in HongKongispromising.AsforChina’scurtainwall the marketisshrinking,whileglasscurtainwall launched. HotelsinMacauarenearlycompletedand recovering, Megapropertydevelopmentprojectswillbe With thecurtainwallmarketinNorthAmericacontinuously Cost-effective ” andwith Investment” oftheGroup. Core DrivingStrategyofConstructionEngagementand entirely promotethein-depthimplementationof“Dual the generalbusinessscale,strengthenprofitabilityand mechanism amongdifferentdepartmentssoastoenlarge regional teams.TheGroupwillrefinethecooperation and encourageproactivebusinessmanagementby management andkeysupervisionoftheheadquarters modify businessflowstostrengthentheleadership,risk of duties,clearlydefinethescopeauthoritiesand model, theGroupwillfurtheroptimiseallocation According toitsstrategiccontrolandmanagement Management Model points assoonpossible. transformation, strivingtocultivatenewrevenuegrowth reliable andorderlystudyonbusinessstructuralstrategic traditional curtainwallbusiness,FEGwillconducta design andconstruction.Atthesametimeofstabilising hand projectsandstrengthencorecompetencein Hong KongandMacau,enhancemanagementofin- proactively implementhigh-endprojectsinNorthAmerica, FEG willfurtherpromoteitsbrandandmarketexpansion, development phase. and shiftfrominitialinvestmentphaseintorevolving distributed inbothprojectreserveandcapitalrecovery operated projects,theGroupstrivestomakeinvestments and continuouslyconcerningtherepurchaseofself- improving themarketingcapabilityofhigh-endprojects a wayof“HeadquartertoHeadquarter”,comprehensively key districts,communicatingwiththelocalgovernmentin government, increasinginvestmentsintothekeycitiesand and fundplatformcompaniesestablishedbythe with theinternaldivisionsofChinaStateConstruction Economic Zone”oftheCountry,reinforcingcooperation “Integration ofBeijing-Tianjin-Hebei”and“YangtzeRiver following majorstrategiessuchas“OneBelt,OneRoad”, upgrade theinvestmentandfinancemodel.Bystrictly Reform oftheSupplyFront”tosuccessivelyinnovateand opportunities ininfrastructurearisingfrom“Structural Group willpromptlyseizethewindow-periodinvestment In respectoftheMainlandinvestmentbusiness, Chairman’s Statement Hong Kong,22March2016 Executive Director,ChairmanandChiefOfficer Zhou Yong International HoldingsLimited China StateConstruction By OrderoftheBoard least, toourstafffortheirdedicatedefforts. community fortheirenthusiastichelp,andlastbutnot the shareholdersfortheirstrongsupport,andto gratitude totheBoardforitsbrilliantleadership, I wouldliketotakethisopportunityexpressmy Appreciation It willstrivetoachievea“ efforts toensurestableandsustainabledevelopment. corporate development,theGroupwillputtremendous Incorporating personalaspirationsintoitslong-term its corevalueof“ Greater Success Implementation; BuildaStrongFoundationtoSeek philosophy of“ The Groupisdedicatedtoitslongstandingoperation Company Mission construction andinfrastructureinvestment corporation withcompetitiveinternationalcomplex The Groupwillendeavourtodevelopintoa“ society andbecomeanewrolemodelintheera. employees, cooperativepartners,shareholdersand Exercise CautioninDetailsand Good QualityandValueCreation ”. TheGroupwillproactivelyadhereto win-win situation (continued) ”. ” withthe leading ”. 23 China State Construction International Holdings Limited Annual Report 2015 Management Discussion and Analysis

Profit attributable to owners of the Company was HK$4,153 million, representing a year-on-year increase of 20.1%. Recorded a positive net operating cash flow in the first time over the past five years. Annual Report 2015 244 Overall Performance Under the pressure of global economic slowdown and market fluctuation, the Group managed to record a revenue of HK$37,913 million and a profit attributable to owners of the Company of HK$4,153 million, representing a year-on-year increase of 10.1% and 20.1% respectively. Moreover, the Group began to reap the reward of its investments in Mainland China and generated net cash iinflownflow from operating activities ooff HK$300 million, marked tthehe GGroup’sroup’s first time positive net operating cash flow ssinceince iitsts contcontinuousinuous iincreasingncreasing investment in Mainland CChinahina from 2011. With a proposedprop final dividend per ssharehare ooff HK18.00HK18.00 cents, an iinterimnte dividend per share of HKHK13.0013.00 cents andand a specialspecial dividendd of HK2.00 cents pperer shareshare ppaidaid iinn thethe year,year, tthehe totalto dividends for the year amount to HK33.00HK33.00 cents perper share, representing an China State Construction International Holdings Limited Inter iincreasencrease of 26.9% as comcomparedpared to last year. considered asadistinctbusinessunitoftheGroup. managed byaseparatemanagementteamandthusis Hong KongandMacau.Thislistedsubsidiaryiscurrently focused oncurtainwallbusinessinNorthAmerica, and itssubsidiaries(together,the“FEGGroup”)mainly Industrialisation project.FarEastGlobalGroupLimited Private-Partnership (“PPP”)projectandConstruction investment opportunitiesinthemarkets,suchasPublic- businesses andactivelyexploreddifferentkindof China, theGroupfocusedoninfrastructureinvestment maintained itsleadingpositioninthefield.InMainland business inbothprivateandpublicsectors,has Kong andMacau,theGroupfocusedonconstruction continued tobethecoremarketsofGroup.InHong During 2015,HongKong,MacauandMainlandChina Management DiscussionandAnalysis u b n ed ontheconstruction of theGroup.InHon andMainlandChina li cse agement Discussionan ct r,a ors, nd h as g

) Constructionandrelatedbusiness—HongKong 1) ConstructionandRelatedBusinesses — Hong KongandMacau Revenue, GrossProfitandResult set outinthefollowingparagraphs: An analysisofmajorincomestatementitemsfortheyearis decreased by5.3%and7.3%respectively. gross profitandresultofthissegmenthasslightly case ofexcessleadindrinkingwater,theGroup’s As prudentprovisionhavebeenmadeforthe revenue ofHK$16,184million,anincrease5.9%. stable cashflowtotheGroupanddelivered year, HongKongsegmentcontinuetoprovide years andsatisfiednewcontractawardedforthe With thestrongcontractonhandoverlastfew d Ana l y si s (continued)(continued ) 25 China State Construction International Holdings Limited Annual RReporteport 2015 26 China State Construction International Holdings Limited Annual Reportport 20120155 InfrastructureInvestmentProjectsand — Mainland China Constructionandrelatedbusiness—Macau 2) Management DiscussionandAnalysisan payment receivedbyourjointventureinvestments). million (includingtheattributableshareofsuch Group hasreceivedbuy-backpaymentofHK$6,447 some ofour“Build—Transfer”(“BT”)projects,the respectively. Followingthesuccessfulcompletionof growth ingrossprofitandresultof1.7%6.7% high-end market,thissegmentrecordedslightly China. WiththeGroup’sstrategiestotarget reputation andemployer’ssatisfactioninMainland of HK$14,631million,supportedbyitsstrong the Groupcontinueddeliveringsteadyrevenue slowdown ineconomicgrowthMainlandChina, projects inMainlandChina.Althoughthereis We mainlyfocusoninfrastructureinvestment contribution totheGroup’soperatingcashflow. management, Macausegmenthaveprovidedstable by 122.6%toHK$731million.Withtheeffective healthy increment,thesegmentresultincreased respectively. Therevenuefromallareamaintaina HK$269 millionintermsofrevenueandgrossprofit and 178.8%year-on-yeartoHK$5,314million segment reportedasignificantgrowthof135.6% awarded lastyearandcurrentyear,Macau With thecontributionfrommajorprojects Construction RelatedBusinesses d Ana ) InfrastructureInvestmentProjects 1) l y sis million respectively. 4.5% and4.9%toHK$3,083millionHK$2,998 gross profitandresultforthissectorincreasedby select projectwithhigherprofitability.Overall,the the Group’soveralladvantage,whichenableusto new projectsstillinpreliminarystage.Benefitedfrom projects inprioryear,andtheconstructionofseveral the completionofconstructionsomemajor year-on-year. Thedeclinewasmainlycausedby total revenueofHK$13,008million,drop7.7% In 2015,infrastructureinvestmentsectorreported PPP arrangements. (“BOT”), Transfer—Operate(“TOT”)and projects bywayofBT,Build—OperateTransfer toll bridge.Weparticipatedintheseinfrastructure construction ofaffordablehousing,tollroadand different kindsofbusiness,includinginvestmentand Our investmentsininfrastructureprojectsspanover PPP projectsinMainlandChinaduringtheyear. and stablereturns,successfullyawardedseveral business opportunitieswithbetterpaybackperiods The Grouphasbeencontinuouslysearchingfornew (continued) ( continued ) ) OperatingInfrastructureProjects 2) result ofHK$204million. HK$946 million,grossprofitofHK$231millionand from jointventure,thissectorrecordedrevenueof remained relativelystable,excludingcontribution projects, includingthermoelectricplantandtollroad The contributionfromoperatinginfrastructure in thefuture. continue todelivergoodperformancetheGroup criteria, themanagementenvisagesthissectorwill million. Backedupbyourstringentprojectselection Group reachedarecordheighttoaboutHK$45,830 infrastructure investmentprojectsawardedtothe During theyear,contractvalueofnew revenue frominfrastructureproject. project, toearnconstructionincomeandstable business. TheGroupalsokeeponfosteringPPP momentum totheGroup’sinfrastructureinvestment government indifferentprovinces,tobringstrong by assessingmarketconditionsandabilityofthe launching newinfrastructureinvestmentprojects The Grouphasactivelyreviewedtheplaceof Management DiscussionandAnalysis — Facade Contracting Far EastGlobalGroupLimited Constructionrelatedbusiness 3) review. in termsofrevenueandresultfortheyearunder control, FEGreportedsatisfactoryperformance a resultofeffectiveresourcesallocationandcost business opportunitiesincreasedaccordingly.As construction marketinNorthAmerica,curtainwall Kong andMacau,togetherwiththerecoveryof With moreprivatebuildingsbeinglaunchedinHong HK$677 million. revenue ofthissegmenthaveincreased36.2%to the performanceofthissegment.Asaresult, production duringtheyear,whichhasstimulated Anhui Provinceinlastyearandcommenced a newpre-caststructuresproductionplantin industrialisation products,theGroupsetup With thegrowthofdemandconstruction (continued) 27 China SState Construction International Holdings Limited Annual Report 2015 28 China State Construction International Holdings Limited Annual Report 2015 financial instrumentforcurrencyhedgingpurpose. The bankdepositsoutsideHongKongaremainlyforsubsidiaries invariousregions.Duringtheyear,Grouphasno representing 11.4%ofthetotalassetsGroup.Theportfoliocurrenciesbankdepositsislistedasfollow: At 31December2015,theGrouphadbankbalancesandcashofHK$8,015million(2014:HK$7,452million), Bank BalancesandCash due tothedepreciationofRenminbi. mainly attributabletotheprofitforyearofHK$4,153millionandpartlyoffsetbydecreaseintranslationreserve Shareholders’ equityreachedHK$21,147millionasat31December2015(2014:HK$19,830million).Theincreasewas The Groupdedicatedtomaintainasoundfinancialpositionwithstrongcapitalbasesupportitsstableexpansion. Shareholders’ Equity Financial PositionoftheGroup Corporate Finance HK$4,153 millionandontheweightedaveragenumberof4,026,027,000ordinarysharesinissueduringyear. calculation ofthebasicearningspershareisbasedonprofitforyearattributabletoownersCompany For theyearended31December2015,basicearningspershareincreasedby16.2%toHK103.16cents.The Earnings PerShare mainly duetotheincreaseofborrowingsduringyear. During theyear,financecostschargedtoprofitforyearincreasedby33.2%HK$607million.Theincreasewas Finance Costs the shareofprofitsjointventureshaverecordedamoderategrowthtoHK$424million. full-year profitcontributionfortheyear,togetherwithfromnewjointventuressetupinotherProvince, ventures andfurtherenhancesthisportfoliobyacquiredaportinLaizhouDecember2014,whichdeliveredthefirst The Groupoperatesseveralconstructionprojects,tollbridgeandinfrastructureinvestmentprojectsinformofjoint Share ofProfitsJointVentures the contributionfromaninvestment-drivenconstructionproject. Investment income,otherIncomesandgains,netincreased75.2%toHK$833millionin2015mainlyattributable Investment Income,OtherIncomesandGains,net Management DiscussionandAnalysis Hong KongDollars Others Macao Pataca Renminbi (continued)

2015 16 48 36 % –

2014 13 57 27 % 3 banking facilitieslikeconstructionperformancebond amountedtoHK$24,649million. position) lesscashandequivalents.At31December 2015,committedbutunutilisedcreditfacilitiesandother as totalborrowings(includingcurrentandnon-current asshownintheconsolidatedstatementoffinancial due tothedepreciationofRenminbi.Thisratioiscalculated asnetdebtdividedbytotalequity.Netiscalculated budget capitalexpendituresduetomoresuitableinvestment opportunitiesthanexpectedandthedecreaseintotalequity net gearingratiowas45.9%(2014:36.8%).Theincreaseof the Group’snetgearingratiowasmainlycausedbyovered- At 31December2015,theGrouphadnetborrowingsofHK$9,758million(2014:HK$7,367million)andGroup’s The followingtablesetsoutthematuritiesofGroup’stotalborrowingsasat31December2015and2014: reference rate(overalltheconditionisfavorable)whileNotesbearfixedinterestrate. floating rateswithreferencetoeitherHongKongInter-bankOfferedRate(“HIBOR”)orPeople’sBankofChina(“PBOC”) borrowing weredenominatedinHongKongdollarsandRenminbirespectively.Bankborrowingsbearinginterestat issued bytheGroupinApril2013)wereHK$17,773millionofwhich,approximately73.3%and25.3%bank At 31December2015,thetotalborrowingsofGroup(includingguaranteednotesdenominatedinUSdollars loans ofanaggregateamountHK$3,115million. During theyear,Grouphasnetdrawndownvariousnewtermloans,revolvingprojectloansorsyndicated of fundsbetweenMainlandChinaandHongKonginordertoenhancetheeffectivenesscapitalusage. management ofprojectsandprudentwealthmanagement.Capitalwasfurthercentralisedflexibleuse The Groupcontinuedtostrengthenthemanagementoffinancingandcapitaloperation.Focusingoncashflow Borrowings and thenetcashinflowfromfinancingactivitieswasHK$1,309million(2014:HK$3,172million). million (2014:HK$2,449million).ThenetcashoutflowininvestingactivitieswasHK$935HK$2,091million), of HK$1,396million(2014:HK$4,138million),thenetcashgeneratedfromoperatingactivitiesforyearwasHK$1,696 HK$1,689 million)overthepastfiveyearsofinvestmenttransformation.ExcludingnetexpenditureforBTprojects The GrouprecordeditsfirsttimenetoperatingcashinflowamountingHK$300million(2014:outflowof Cash FlowsAnalysis Bank andotherborrowings Total borrowings Total bankandotherborrowings On demandorwithinoneyear More thanfiveyears More thantwoyearsbutnotmorefive Guaranteed notespayable More thanoneyearbutnotexceedingtwoyears Management DiscussionandAnalysis

HK$’million 17,773 13,894 10,663 3,879 1,607 2015 816 808

(continued) HK$’million 14,819 10,949 3,870 4,901 4,395 1,066 2014 587 29 China State Construction International Holdings Limited Annual Report 2015 30 China State Construction International Holdings Limited Annual Report 2015 Major BusinessDevelopment 7 InOctober2015, theGroupformedajointventureinWuhan,HubeiProvincewithsubsidiaryofChinaState (7) InSeptember2015,theGroupwas awardedaRelocationHousingandHospitalProjectsProjectinZhenjiang, (6) InJuly2015,theGroupwasawardedaResidentialIndustrialisationProjectinHefei,AnhuiProvince.Thisproject is (5) InApril2015,the Group wasawardedaHighwayProjectinBengbu,AnhuiProvincebywayofPPPmodelfor (4) TheGroupwasawardedseveralinfrastructureBTprojectinZhangzhou,FujianProvince,Binzhou,Shandong (3) TheGroupwasawardedthreeAffordableHousingandInfrastructureprojectsinHangzhouJiaxing,Zhejiang (2) TheGroupwasawarded various contractsoftheAffordableHousingprojectsindifferentregions,includingHefei, (1) following significantmilestonesinbusinessexpansion: each majorsegmentandenhancethevalueofCompany.Duringyearunderreview,Grouphasachieved The Groupactivelysearchesforvaluableconstructionandinvestmentprojectsinordertostrengthenitspresence Management DiscussionandAnalysis comprehensive pipegalleryandroadinWuhan. an undergroundtrafficcorridorBTproject,whichincludestheconstructionofspace,railwaystation, Construction EngineeringCorporationLimited,theCompany’sintermediateholdingcompanyandwasawarded Group andZhenjianggovernmentwillinvest90%10%inthisprojectrespectively. Jiangsu ProvincebywayofPPPmodel.TheattributablecontractvaluetheGroupisHK$2,380million. value amountstoHK$400million. the majorpromotionofconstructionindustrialisationprojectforaffordablehousinginHefeiwithattributablecontract Bengbu governmentwillinvest70%and30%inthisprojectrespectively. the firsttimeinMainlandChina.TheattributablecontractvalueofGroupisHK$4,690million.and amounts toHK$8,960million. Province, Shaoxing,ZhejiangProvinceandHechuanDistrict,Chongqing.Theaggregateattributablecontractvalue Province. TheaggregateattributablecontractvalueamountstoHK$7,060million. aggregate attributablecontractvalueamountstoHK$13,140million. Anhui Province,Ziyang,SichuanHuaian,JiangsuProvinceandZhengzhou,HenanProvince.The (continued) significant creditrisk. developers. Therefore,theGroup isnotexposedtoany institutional organisationsand certainreputableproperty governments, government-related entitiesandcertain China oroverseas),themajor customersarethelocal in progress(whetherHongKong,Macau,Mainland position ofthecustomers.Inconnectionwithprojects associates isbasedonthereputationandfinancial recoverability ofcashflows.Creditextendedtobusiness previous experience,isevidenceofareductioninthe where thereisanidentifiedlosseventwhich,basedon is madeaccordingtotheGroup’saccountingpolicyor for doubtfulreceivables.Anallowanceimpairment statement offinancialpositionarenetallowances and otherreceivablespresentedintheconsolidated and cash,tradeotherreceivables.TheGroup’s The Group’sprincipalfinancialassetsarebankbalances Credit Risk tools. as toarrangethemosteffectiveinterestriskmanagement market trendaswellitsbusinessoperation’sneeds,so such financialrisk.TheGroupwillcontinuetoreviewthe procedures totheassessment,bookingandmonitoringall interest raterisk,theGrouphasestablishedpoliciesand In ordertoexerciseprudentmanagementagainst mainly relatedtofixedandvariablerateborrowings. The Group’sfairvalueandcashflowinterestraterisk Interest RateRisk Financial Risk Management Policiesfor Management DiscussionandAnalysis currency rateandadjustthefinancingstructureifneeded. this riskbycloselyreviewingthemovementofforeign exchange ratefluctuationrisk.Themanagementmanages Renminbi andUnitedStateddollar,henceexposuresto in foreigncurrencies,primarilywithrespecttothe The Groupundertakescertaintransactionsdenominated Foreign ExchangeRisk funds. good reputationsoastoensurethesafetyofGroup’s be placedandenteredintowithfinancialinstitutionsof operations, theGroup’sbankbalancesandcashmust With respecttothecreditriskofGroup’streasury y si s (continued)(continued ) 31 China State Construction International Holdings Limited Annual Report 2015 32 China State Construction International Holdings Limited Annual Report 2015 BUSINESS REVIEW has 88 projectsinprogress HK$199.79 At theendof2015,Group attributable contractvalueof withanaggregated billion. 33 China State Construction International Holdings Limited Annual Report 2015 Business Review

MAJOR COMPLETED PROJECTS IN 2015

Government/ Institutional Private No. Project name Public Sector Bodies Sector

Building Construction

1 Proposed Residential Development at TPTL 200 & 201 Pak Shek Kok, Tai Po, New Territories

2 Design and Construction of Fire Services Training School cum Driving Training School at Tseung Kwan O

3 Main Contract Works for Proposed Residential Development at Austin Station Site D, Kowloon

4 Construction of Public Rental Housing at Sha Tin Area 52 Phase 1

Annual Report 2015 5 Lee Tung Street/McGregory Street, Wanchai, 34 Hong Kong, Super-Structure Main Contract (for site A) 6 Main Contract for Residential Development of Nova City, Phase 4, Taipa

Civil Engineering Works

1 Widening of Tolo Highway/Fanling Highway Between Island House Interchange and Fanling (Phase 1)

2 Replacement and Rehabilitation of Water Mains, Stage 3 – Mains in West Kowloon

3 Replacement and Rehabilitation of Water Mains, Stage 3 – Mains in Central and Western District

4 Construction of Yuen Long South Branch Sewers and China State Construction International Holdings Limited Expansion of Ha Tsuen Sewage Pumping Station

5 Kai Tak Development – Kai Tak Approach Channel and Kwun Tong Typhoon Shelter Improvement Work (Phase 1)

6 Hong Kong International Airport – Deep Cement Mixing Trial Works (By Multiple Rigs)

Foundation Works

1 Foundation works for the Home Ownership Scheme Development at Kiu Cheong Road East, Yuen Long and Ngan Kwong Wan Road East & West, Mui Wo

2 Foundation works for the West Rail Tsuen Wan West Station TW5 Cityside Property Development

Infrastructure Investment 34.1%

AffordableHousingProjectPhaseIV, 3 HangzhouXiaoshanBeiganRelocationHousing 2 Mechanical&electricalworksfor 2 Projectname No. ShanxiWuyuExpressway 1 Mechanical&electricalworksfor 1 yCtgre yCsoesByMarket ByCustomers By Categories

Engineering Shushan DistrictIndustrialPark,Hefei,AnhuiProvince Phase 1 Studio MacaoCityHotelB,Macau Infrastructure Investment Studio MacaoCityHotelA,Macau Mechanical andElectricalEngineeringWorks Others 7.8% 13.5% Works Civil 44.6% Construction Building 32.2% Private Sector Public Sector Government/ Business Review 67.8% Public Sector Government/

Mainland China 35.6% Institutional Bodies

Macau 4.3% (continued) Private Sector

60.1% Hong Kong 35 China State Construction International Holdings Limited Annual Report 2015 36 China State Construction International Holdings Limited Annual Report 2015 Infrastructure Investment PROJECTS INPROGRESS2015 8newprojectsawardedatotalattributablecontractvalueofHK$15,580 million • The firsttwomonthsof2016 AttributablecontractvaluefornewprojectsawardedwasHK$70,089million 41newprojectsawarded • • Summary fortheyear Business Review NEW PROJECTSAWARDEDIN2015 aa 83011,169 3,668 18,330 6,387 88,221 5 – 119,498 49 Far EastGlobal Macau Mainland China oa 81978127,048 199,788 88 Total ogKn 45,7 23,990 55,573 34 Hong Kong 65.4% yPoetCtgre yCsoesByMarket ByCustomers By ProjectCategories tes1 ,5 2,828 2,087 5,759 86,134 2,640 6,854 14,308 116,858 13 14,667 35,147 2 47 13 8 Infrastructure Investment Building Construction Others Civil EngineeringWorks Building Construction Others 8.8% Far EastGlobal 3.8% 11.1% Construction Building (continued) Works Engineering Civil 10.9% 14.0% Private Sector 3.8% Far EastGlobal Public Sector Government/ 82.2%

o K’ilo HK$’million HK$’million No. As at31December2015

Attributable Macau 7.8% contract value 3.8% Far EastGlobal

incompleted contract Value of 19.5% Hong Kong Mainland China 68.9% Infrastructure

PROJECTS INPROGRESS2015(continued) Investment ahCntuto eae 17,4 37,246 76,543 41 Cash Construction&related a atGoa ,8 3,668 6,387 – Far EastGlobal oa 81978127,048 199,788 88 Total nrsrcueIvsmn 7168886,134 116,858 47 Infrastructure Investment By ProjectCategories aa 83011,169 23,990 18,330 2,087 55,573 2,640 5 53,528 34 72,484 2 Macau Hong Kong Mainland China Infrastructure Affordable Housing 58.5% Others 4.2% 3.2% Far EastGlobal Construction Building 16.5% 17.6% Works Engineering Civil Private Sector 16.1% yCsoesByMarket By Customers 3.2% Far EastGlobal Business Review 80.7% Public Sector Government/

o K’ilo HK$’million HK$’million No. As at31December2015

Mainland China Attributable Macau 9.2% contract 59.8% 43432,606 44,374 value 3.2% Far EastGlobal (continued)

incompleted contract Value of 27.8% Hong Kong 37 China State Construction International Holdings Limited Annual Report 2015 38

China State ConstructionAirport InternationalInternational H.K. Holdings Limited Annual Report 2015 7 HONG KONG MAJOR PROJECTSINPROGRESS Tung Chung ISLAND LANTAU Business Review & Tuen Mun MACAU (continued) Yuen Long Tsing Yi Tsuen Wan Central NEW TERRITORIES Mei Foo HONG KONGISLAND KOWLOON 12 Lok MaChau 13 11 8 Tai PoMarket Tong Kowloon 1 6 Hung Hom 2 Shatin Quarry Bay Sheung Shui Lo Wu 3 10 Chai Wan 4, 5 Kwan O Tseung 9 2 (continued) 3 MACAU 1 Ma OnShan Major ProjectsinProgress—HongKong o ProjectName No. 2CnrlWnhiBps unl(etScini aca)1,708 2,510 2,876 ConstructionProjectofCrossHarborTunnelRailway(NorthSouthCorridor)Shatinto Central-WanchaiBypassTunnel(WestSectioninWanchai) 13 ExhibitionStationandWesternApproachTunnelProjectofShatintoCentralLink 12 WideningofFanlingHighway—TaiHangtoWoHopShekInterchange 11 10 eta a hiBps unl(lpRa eto)4,792 1,659 5,377 ExpansionofTaiPoWaterTreatmentWorksandTransferFacilities 2,063 Central—WanChaiBypassTunnel(SlipRoad8Section) 9 8 HongKong-Zhuhai-MacaoBridgeKongLinkRoad—SectionbetweenScenicHilland 2,580 Central—WanChaiBypassTunnel(CausewayBayTyphoonShelterSection) 7 DevelopmentatAndersonRoad—SiteFormationandAssociatedInfrastructureWorks 6 1,776 5 ConstructionofPublicRentalHousingatAndersonRoadSiteC1&AncillaryFacilitiesBlock 4 DesignandConstructionofCentreExcellenceinPaediatricsKaiTakDevelopment, ConstructionofPublicRentalHousingatShaTinArea52Phase3and4 3 ConstructionofSuperstructureBlockBforSt.Paul’sHospitalRedevelopment 2 1

Hong KongBoundaryCrossingFacilities Civil EngineeringWorks at SiteC2Phase2 Kowloon Building Construction Central Link Business Review (continued)

Contract Value Attributable HK$’million 8,875 1,044 5,454 2,132 39 China State ConstructionConstructio International Holdings Limited Annual Report 2015 40 China State Construction International Holdings Limited Annual Report 2015 Building Constructionprojectataglance Major ProjectsinProgress—HongKong(continued) Business Review (continued) 1 3 2 Civil engineeringworksprojectataglance Major ProjectsinProgress—HongKong(continued) 5 Business Review (continued) 7 6 41 China State Construction International Holdings Limited Annual Report 2015 42 China State Construction International Holdings Limited Annual Report 2015 Civil engineeringworksprojectataglance(continued) Major ProjectsinProgress—HongKong(continued) Business Review (continued) 8 11 9 Major ProjectsinProgress—Macau o ProjectName No. eto fPbi osn nIh ed,Mcu1,892 5,405 MainContractforResidentialDevelopmentofNovaCityPhase5,Taipa 3 MGMCotaiProject 2 Section1&2ofPublicHousinginIlhaVerde,Macau 1

Building Construction 2 Business Review (continued)

Contract Value Attributable HK$’million 1 10,485 43 ChinaCh State Construction International Holdings Limited Annual Report 2015 44 China State Construction International Holdings Limited Annual Report 2015 CHINA MAINLAND MAJOR PROJECTSINPROGRESS Business Review Yellow River Mainland China (continued) Pearl River 3, 5 Yangtze River 25 20 33 22 23 15, 16 32 26 Highways 10 Bridge 29 27 28 4 Plant 31 6 Port 18, 19 11, 12,13,14,24 30 17 1, 2 Construction 7, 8,9,21 Building Major Businesses—MainlandChina 3AnhuiHailongConstructionProductsPlant ShenzhenHailongConstructionProducts Plant 33 32 LaizhouPort ShenyangHuangguThermalPowerPlant 31 30 o ProjectName No. 29 InfrastructureandRelatedFacilitiesProjects,Binzhou,ShandongProvince 28 HighwayProject,Bengbu,AnhuiProvince 27 InfrastructureProjectPhaseIIinQujiangNewDistrict,Xi’an,Shaanxi Province 26 RelocationHousingandHospitalProjectswithPPPmodel,Zhenjiang, JiangsuProvince 25 TworoadsBTProjectsinZhengzhou,HenanProvince 24 FiveInfrastructureProjectsincludingBinjiangAvenueinWuhan,Hubei Province 23 People’sHospitalandinfrastructureProjectinWuxingDistrictwithPPPmodel,HuzhouCity,ZhejiangProvince 22 InfrastructureProject,HechuanDistrict,Chongqing 21 InfrastructureBTProjectinLonghaiofZhangzhou,FujianProvince 20 BTProjectforReroutingLianjiang–JinansectorofNationalHighwayG104inFuzhou,FujianProvince 19 18 AffordableHousingProjectinChengyangDistrict,Qingdao,ShandongProvince ResidentialIndustrializationProject,Hefei,AnhuiProvince 17 DayangAffordableHousingProjectinLuyangDistrict,Hefei,AnhuiProvince 16 PublicFacilitiesandRelocationHousingProjectswithPPPmodel,Huaian,JiangsuProvince 15 RelocationHousingProjectwithPPPmodel,HuaiyinDistrict,Huaian,JiangsuProvince 14 RelocationHousingBTProjectinNewDistrictofZhenjiang,JiangsuProvince 13 AffordableHousingBTProjectinJingkouDistrict,Zhenjiang,JiangsuProvince 12 RelocationHousingProjectinResidentsPublicServiceCoreDistrictofZhengzhou,HenanProvince 11 AffordableHousingandInfrastructureProjects,Jiaxing, ZhejiangProvince 10 AffordableHousingBTProjectinWuxingDistrictof Huzhou, ZhejiangProvince 9 RelocationHousingBTProjectinPinghuofJiaxing City, ZhejiangProvince 8 HangzhouXiaoshanBeiganRelocationHousingPhase2 7 FinancedConstructionProjectofRelocationHousinginTianfuXinqu,SichuanProvince 6 ZhangzhouEcologicalParkRelocationHousing 5 RelocationHousingProjectinModernIndustryofHyundaiMotor,Ziyang,SichuanProvince 4 RelocationHousingBTProjectinPingyangCounty,WenzhouCity,ZhejiangProvince 3 BTContractofAffordableHousingConstructioninLuchengDistrict,Wenzhou,ZhejiangProvince 2 1

Construction Industrialised Factory 南昌大橋及南昌中海新八一大橋 Nanjing No.2YangtzeRiverBridge Infrastructure Affordable Housing Infrastructure Investment (NanChangBridgeandNanZhongHaiXinBaYiBridge) Business Review (continued) 45 China State Construction International Holdings Limited Annual Report 2015 46 China State Construction International Holdings Limited Annual Report 2015 Infrastructure Investment—Affordablehousingprojectataglance Major Businesses—MainlandChina(continued) Business Review (continued) 2 4 Infrastructure Investment—Affordablehousingprojectataglance(continued) Major Businesses—MainlandChina(continued) Business Review n ued ) (continued) 11 7 7 47 China State Construction International Holdings Limited Annual Report 2015 48 China State Construction International Holdings Limited Annual Report 2015 Infrastructure Investment—projectataglance Major Businesses—MainlandChina(continued) Business Review (continued) 29 31 Construction industrialisedfactoryataglance Major Businesses—MainlandChina(continued) Business Review (continued) 32 33 49 China State Construction International Holdings Limited Annual Report 2015 Awards and Accolades 2015

Comprehensive strength, corporate governance, branding, CSR category Annual Report 2015 50

Award Unit Organisation

Caring Company 2014/15 Logo Far East Global Group Limited The Hong Kong Council of Social Service (HKCSS)

Caring Company 2014/15 Logo CSCI The Hong Kong Council of Social Service (HKCSS)

Outstanding Enterprise of the Safety and Health 瀋陽皇姑熱電有限公司 Shenyang Federation of Trade Cup Competition in Shenyang (2014) Unions Shenyang Administration of Work Safety

Collective Award of Security Work Engaged 瀋陽皇姑熱電有限公司 Shenyang Public Security Bureau by the Municipal-wide Enterprises (2014) China State Construction International Holdings Limited The 2014 annual Wuxi “Taihu Cup” Shenzhen China Overseas Wuxi City Construction Bureau excellent project Construction Company Limited

(Construction/Engineering Sector) Gold Winnerof2015InternationalARCAwards among EightRankingsintheIndustrialSector (The All-AsiaExecutiveTeam)TopThree No. 1ofMostHonoredCompanies Top 40ChineseAnnualReports Organisation Annual Report“VisionAwards”SilverWinner, Infrastructure ShanxiYouthCivilizationSample of NationalKeyProjectsinTransportation RoadAdministrationofYangwu Winning TeamoftheLaborCompetition Shanxi YouthCivilizationSample(2014) Unit Health CupCompetitioninHuangpuDistrict 2015 OutstandingEnterpriseoftheSafetyand Highway ManagementSector(2014) Provincial YouthCivilizationSampleof AAA ofShenyangHeatingEnterprises Corporate CreditQuality(Credit)ratingof Award (Construction/Engineering Sector Go ld W in ne r of 2 01 5 In te rn at io na ) l AR C Aw ar ds Awards andAccolades2015

SIARCAwards LeagueofAmerican CSCI CSCI CSCI Company State InternationalShanxi of WuyuExpresswayChina Project ManagementDepartment Works (Shanghai)Ltd Shanghai NetfortuneAluminium Pingdìng North) East, YuxianYinyingand ((Toll stationsofYangquan Investment ManagementLimited Yangquan YangwuExpressway 瀋陽皇姑熱電有限公司 CS CI

The InstitutionalInvestor Communications Professionals Union China SeamenConstruction Activity OrganisationCommittee Huangpu District,Shanghai Administration ofWorkSafety Huangpu District,Shanghai Federation ofTradeUnions Highway ManagementSector of YouthCivilizationSample Shanxi FoundingCommittee Shenyang HeatingAssociation AR C Aw ar ds (continued) 51 China State ConstructionConstruc International Holdings Limited Annual Report 2015 52 China State Construction International Holdings Limited Annual Report 2015 Technology Category Awards andAccolades2015 Damper DesignResearch Architecture VibrationAssessmentand Seminar PaperAward–LargeHospital Firsr PrizefortheOutstandingTechnical Award fortheSecondHalfof2014” Municipal ClassQualityStructuralEngineering Zhenjiang Districtwasawardedthe“Best # 16ofLandLotA7PyeongchangTown, # 1,5,8,9,10,12,14,15, Housing ProjectsofResettlementCommunity “Sleeve Fastener” Utility ModelPatentAward Organisation Storage Rack” Utility ModelPatentAward“PCFBoard Utility ModelPatentAward“CuttingBoard” Storage System” Aggregate MaterialsandMaterial Unit/Individual Utility ModelPatentAward“Concrete Lifting Device” Utility ModelPatentAward“ATypeof Combined Wallboard” Utility ModelPatentAward“Hanger-type Assembly BindingFrame” Utility ModelPatentAward“Reinforcement Cage AssemblingFrame” Utility ModelPatentAward“Reinforcement Award Liangcheng Xiangbo, KeJianfa,Shi Zhou Yong,ZhangYi,Meng 深圳中海建築有限公司 安徽海龍建築工業有限公司 安徽海龍建築工業有限公司 安徽海龍建築工業有限公司 安徽海龍建築工業有限公司 安徽海龍建築工業有限公司 安徽海龍建築工業有限公司 安徽海龍建築工業有限公司 安徽海龍建築工業有限公司 (continued)

Engineering CorporationLimited China StateConstruction Bureau ofZhenjiangCity Housing andUrbanConstruction of China Office ofthePeople’sRepublic The StateIntellectualProperty of China Office ofthePeople’sRepublic The StateIntellectualProperty of China Office ofthePeople’sRepublic The StateIntellectualProperty of China Office ofthePeople’sRepublic The StateIntellectualProperty of China Office ofthePeople’sRepublic The StateIntellectualProperty of China Office ofthePeople’sRepublic The StateIntellectualProperty of China Office ofthePeople’sRepublic The StateIntellectualProperty of China Office ofthePeople’sRepublic The StateIntellectualProperty

Boardcleaning machine” Utility ModelPatentAward“Walland Capable ofAutomaticallyChangingRail” Utility ModelPatentAward“TransportCart Wall All-in-one SolarWaterHeaterUnitGlassCurtain Curtain Wall All-in-one SemiconductorCoolingUnitGlass (Zhongzhou Huafu) Lu BanAwardofChinaConstruction First AwardoftheCSCECTechnologyAwards Critical TechnologyResearchandApplication First AwardofHongKongBuildingIndustrial Seminar PaperAward Organisation Second PrizefortheOutstandingTechnical Concrete Components used intheFullLife-cycleTrackingofPrecast Seminar PaperAward–RFIDtechnology Second PrizefortheOutstandingTechnical in NewReclamationArea for Large-scaleDeepExcavationandSupport Unit/Individual Seminar PaperAward–CriticalTechnologies Second PrizefortheOutstandingTechnical Deep FoundationSupportingStructure Multi-objective OptimizationforLarge-scale Seminar PaperAward–SingleObjectiveand Second PrizefortheOutstandingTechnical Hong Kong Blasting underComplicatedEnvironmentin Seminar PaperAward–ResearchonTunnel First PrizefortheOutstandingTechnical DBO Model Large-scale SewageTreatmentPlant Management ResearchonHongKong Seminar PaperAward–Designand First PrizefortheOutstandingTechnical Award Technology) Holdings Ltd.(ThreeClassesof Construction Construction AwardfromChina Overseas Performance ContestofChina Construction Gold AwardofYouthInnovation and Awards andAccolades2015 安徽海龍建築工業有限公司 安徽海龍建築工業有限公司 遠東幕牆制品 遠東幕牆制品 中建國際投資 深圳中海建築有限公司 合肥中建國際投資發展有限公司、 安徽海龍建築工業有限公司、 Engineering China StateConstruction 中建國際投資 深圳海龍建築制品有限公司、 CSCI 深圳海龍建築制品有限公司 深圳海龍建築制品有限公司 Xinwei, ZhouGuangxing Jiang Shaojie,QinChongrui,Liu Chen Jinghui,HuoYi Zou Xiaokang,ZhangYi Wang Guanzhong Yu Peizhong,ZhengYuanshuai, Shi Da Pan Shujie,LuXingmin,HeJun,

Method Unilateral Template Construction External Wallof Underground – I-beamSupportSysteminthe (Macau) CompanyLimited China ConstructionEngineering 深圳海龍建築制品有限公司 、

(Hong Kong)Limited （深圳） （深圳） （中國） （中國） 有限公司 有限公司 有限公司 有限公司、 、

Office ofthePeople’sRepublic The StateIntellectualProperty of China Office ofthePeople’sRepublic The StateIntellectualProperty of China Office ofthePeople’sRepublic The StateIntellectualProperty of China Office ofthePeople’sRepublic The StateIntellectualProperty Association China ConstructionIndustry Engineering Corporation China StateConstruction China StateConstruction Corporation Limited State ConstructionEngineering Technical CenterofChina Engineering CorporationLimited of ChinaStateConstruction Management Department Technology andDesign Engineering CorporationLimited China StateConstruction Engineering CorporationLimited China StateConstruction Engineering CorporationLimited China StateConstruction Engineering CorporationLimited China StateConstruction Engineering CorporationLimited China StateConstruction China OverseasHoldingsLtd. Engineering Corporation China StateConstruction of China (continued) 53 China State Construction International Holdings Limited Annual Report 2015 54 China State Construction International Holdings Limited Annual Report 2015 Safety andEnvironmentalProtectionCategory Awards andAccolades2015 Award Scheme MTR SafetyContractor Award MTR SafetyPerformance Secondrunner-up The 8thRegionalSafetyQuiz Fun Day of theOccupationalSafety Health ExerciseCompetition of JiangsuProvincein2014 Demonstration ProjectSites Construction Standardization of theFirstBatchCivilization In relationtotheAssessment ciiyAadUi/niern Organisation Unit/Engineering Award Award Scheme2014/2015 Construction IndustrySafety Activity

Award 2014 SafetyContractor Performance Award Excellent Safety (Construction Enterprise) (Champion) Health ExerciseContest Occupational Safetyand Demonstration Site Standardization Civilization Construction Jiangsu Province Sites(Merit) Civil Engineering (continued)

Development TW5 CitysideProperty Wan WestStation the WestRailTsuen Foundation Worksfor Development Austin SiteD Shelter Section) (Causeway BayTyphoon Wan ChaiBypassTunnel 還遷安置房 無錫職教園新藕苑二期 Hop ShekInterchange Highway-Tai HangtoWo Widening ofFanling BT 項目

MTR MTR Bureau Macau LabourAffairs Victims of IndustrialAccident Association fortheRights Organisations including Construction LaborUnion Jiangsu Province of JiangsuProvince, Construction Department Housing andUrban Hong Kongandother Labour Departmentof

Scheme Contractors SiteAward The 21stConsiderate Scheme Contractors SiteAward The 21stConsiderate Scheme Contractors SiteAward The 21stConsiderate ciiyAadUi/niern Organisation Unit/Engineering Award Scheme Contractors SiteAward The 21stConsiderate Activity

(Bronze) Performance Award Management & Environmental Outstanding Site Award(Merit) Considerate Contractors Site Award(Merit) Considerate Contractors Site Award(Merit) Considerate Contractors Awards andAccolades2015

Road 8Section) Bypass Tunnel(Slip Central –WanChai Tseung KwanO Training Schoolat School CumDriving of FireServicesTraining Design andConstruction Dewatering Facilities Works –Sludge Sewage Treatment Stonecutters Island Upgrading Worksat Road 8Section) Bypass Tunnel(Slip Central –WanChai

Council andother Construction Industry Development Bureau, Council andother Construction Industry Development Bureau, Council andother Construction Industry Development Bureau, Council andother Construction Industry Development Bureau, (continued) 55 ChinaChina State ConstructionConstructio International Holdings Limited Annual Report 2015 56 China State Construction International Holdings Limited Annual Report 2015 Awards andAccolades2015 Promotional Campaign The 16thConstructionSafety 2015 Construction SafetyWeek 2015 Construction SafetyWeek 2015 Construction SafetyWeek Scheme Contractors SiteAward The 21stConsiderate ciiyAadUi/niern Organisation Unit/Engineering Award Scheme Contractors SiteAward The 21stConsiderate Activity

(Silver) for WorkingatHeight Enhancement Program Best Safety (Silver) Initiative Award2015 Innovative Safety Competition (Merit) QiGong Display Competition (Gold) QiGong Display (Merit) Performance Award Management & Environmental Outstanding (Merit) Performance Award Management & Environmental Outstanding (continued)

Chai West Chai BypassatWan Phase IICentral-Wan Wan ChaiDevelopment Transfer Facilities Water andFresh and AncillaryRaw Water TreatmentWorks Expansion ofTaiPo Road 8Section) Bypass –Tunnel(Slip Central –WanChai Shelter Section) (Causeway BayTyphoon Bypass –Tunnel Central –WanChai Tseung KwanO Training Schoolat School CumDriving of FireServicesTraining Design andConstruction Dewatering Facilities Works –Sludge Sewage Treatment Stonecutters Island Upgrading Worksat

and other Safety &HealthCouncil Hong KongOccupational Council andother Construction Industry Development Bureau, Council andother Construction Industry Development Bureau, Council andother Construction Industry Development Bureau, Council andother Construction Industry Development Bureau, Council andother Construction Industry Development Bureau, Environmental Pledge/ParticipationofProtectionPlan ldePoetAtvt ineOrganiser Signee Temperature 2015 EnergySavingCharteronIndoor Pledge/Project/Activity (Permanent Charter) “Let’s Save10LWater”Campaign re ate PraetCatr SIDevelopmentBureau ofHKSAR CSCI (Permanent Charter) Energy SavingCharteron“NoILB” Green Partner(PermanentCharter) Awards andAccolades2015

SIElectricalandMechanicalServices CSCI SIWaterSupplyDepartmentofHKSAR CSCI SIElectricalandMechanicalServices CSCI

Department ofHKSARGovernment Government Government Department ofHKSARGovernment (continued) 57 China State Construction International Holdings LimitedLimite Annual Report 2015 CORPORATE CITIZENSHIP For a successful construction project, other than cost control, safety, quality and progress, environmental protection also plays an important role.

As a socially responsible contractor, the Group must champion green management in construction planning in order to create a pleasant environment for our society. Corporate Citizenship

Staff Development and Personal Growth The Group values the well-being of our employees as a first priority and has persisted in its core thought of “human resources and culture are the most precious wealth” and combines the establishment of a talent team with the creation of a corporate culture. Besides, by inheriting the “people first” principle, it has placed the emphasis of the human resources work on “cultivating and using people” so as to provide its staff with simple and harmonious human relationship, challenging jobs, vast development opportunities and benefits satisfactory to staff.

5 During the year, the Group sustains its leadership position by diversifying the workforce which we consider to be one of the greatest strengths in leveraging both local eport 201 R

l knowledge and international experience. We provide our people with job transfer opportunities among our global nnua Annual Report 2015 A locations. A total of 155 employees had been rotated 6060 worldwide over the last 3 years. As of end of 2015, the Group had a total of 10,889 employees (excluding staff Staff Recruitment Programme of our joint venture projects), of which, 5,062 persons Besides getting seasoned professionals from the open d were in Hong Kong and Macau, 5,142 of them were in market, the Group also organised campus recruitment

Limite Mainland China, and 685 were working overseas. programmes to grasp young engineers from 4 universities

gs in Hong Kong. Not least, hiring graduates with top caliber from well-known universities in Mainland China through its “Recruitment Programme for the Son of the Sea” enabled the Group to recruit outstanding young talents from other establishments in an effective manner. onstruction International Holdin C tate S hina China State Construction International Holdings Limited C the trainingofpeopleforinternationalarena. vision withtheinternationalexposure,therebyeffecting staff tolearninoverseasregionssoasbroadentheir people androtation,selectiondispatchingoftalented for CultivatingTalents”,withthesystemofexchange overseas businesstohammeroutthe“InternationalPlan team. TheGrouphasalsomadeuseofitsadvantagein its staffandtoprovideareserveofcapablepeoplefor capacities, whichhelptoenhancetheoverallqualityof provides opportunitiesforitsstaffexposureindifferent Group formsacomprehensivedevelopmentpathand Programme” andits“ApprenticeTrainingScheme”,the Scheme”, “GraduateEngineerSchemeATraining By meansofitsall-rounded“TalentDevelopment the period. than 4,350participantstookpartinthecoursesduring assurance, team-buildingandcommunicationskills.More system, managementskillsandoccupationalskills,quality needs andinterestsofthestaff,whichcovercorporate professions anddifferentlevelsofstaffaccordingtothe Group hammersouttrainingprogrammesfordifferent international scaleandtheorganizationexpansion, training. Inlinewiththebusinessdevelopmentonan “Study SubsidyandExaminationleave”tofacilitatestaff capital tosetupthe“StaffEducationFund”and learning andselfvalue-adding.TheGrouphasputaside The Groupprovidesthefullsupportforitsstafflifelong Staff TrainingandDevelopment Corporate Citizenship development andstaffsatisfaction. time tosoasstrikeabalancebetweencorporate carries outsalarysurveyandbenefitpolicyreviewfrom and setreasonablepayleveltoitsstaff,theGroup competitive remunerationpositionwithinthemarketplace towards remarkablestaffcontribution.Tomaintaina Award” areimplementedtoextendourrecognition Management Award”and“TechnologyAchievement Various incentivemechanismsincluding“IntegratedSite key basisfortheirrespectiveperformanceassessment. assessment targetpresentedbytheCompanyas and plansaccordingtotheannualfinancialindicator the Grouphavetodeterminetheirbusinessindicators Objectives andResponsibilities”,allthedepartmentsof “System ofDepartmentalOperationandManagement of the“SiteContractingResponsibilitySystem”and allocated onthebasisofmerit.Withimplementation company compensationandbenefitsarecompetitive systems aredesignedandstrictlyexecutedtoensurethat a systemdependsonitsimplementation.Rewards The Groupfullyrecognisesthattheeffectivenessof Incentive Mechanism order tocreateagoodworkingatmosphere. operation standardsandoptimizeinternalmanagementin team buildingactivities.Itcontinuestoimprovethe communication, staffseminars,workshops,clubsand as annualsatisfactionsurvey,halfyearlyperformance staff throughvariouscommunicationchannelssuch collect andadoptopinionsrecommendationfrom harmonious relationshipwithemployeesandtriesto The Groupattachesgreatimportancetobuilda Relationship withEmployees (continued) 616

China State Construction International Holdings LimitedLimited 1 Annual Report 2015 626

ChinaChihina State Construction International HoldingsHoldings Limited 2 AnnualAnnual RReporteport 20120155 responsibilities. to thepolicyandcarryouttheirassignedduties It ismandatorythatallemployeesshallfullyconform attempt toimproveitsoverallperformance. improve theenvironmentalmanagementsysteminan targets. TheCompanyshallcontinuouslyreviewand system andformulatedenvironmentalobjectives The Companyhassetupitsenvironmentalmanagement improvingitsoverallperformance • minimizingtheconsumptionofnaturalresources; • reducingconstructionwastes • preventingenvironmentalpollution • complyingwithstatutory,contractualandother • The Companyiscommittedto: environment likelytobeaffectedbyitsoperations. products. ItistheCompany’spolicytoprotect mechanical &electricalprojects,andconstruction disciplinary projects,includingbuilding,civil,foundation, “the Company”)isthedesignandconstructionofmulti- Engineering (HongKong)Limited(hereinafterreferredtoas The corebusinessofChinaStateConstruction Environmental Policy Corporate Citizenship and requirements inallrespects ou t their assigned ye es shall (continued) f u to becarriedoutduringRestrictedHours.Fortacklingair allows workscoveredbyvalidConstructionNoisePermit Restricted HoursPermit-to-worksystemwhichonly those sitesarestrictlyfollowingtheGroup’sinhouse Surprise Checkswillbeconductedirregularlytoensure identified, thenRestrictedHours(holidaysandnighttime) NCO andthosewithtightworksschedulewillfirstbe example thosefallwithinDesignatedAreasunderthe Control Ordinancecompliances,allhighrisksitesfor are complyingwithstatutoryrequirements.ForNoise supports aswellmonitoringthesitesensuringall (S&EP Department)responsibleforprovidingtechnical Safety andEnvironmentalProtectionDepartment Procedures Manualtooperatetheproject.TheGroup’s procedures stipulatedintheGroup’sStandardOperating commencement thenfollowstrictlytheoperating related significantenvironmentalaspectsatproject environmental laws,allprojectshavetoidentifyproject In ordertopreventprojectsitesviolatingthe reputation andchancesofawardingnewprojects. lead toprosecutionsandinturnaffectingtheGroup’s operation deviatesfromstatutoryrequirementsthatmay from theoperationsofconstructionsites.Ifsite’s The Group’senvironmentalrelatedrisksmainlycome Control Measures Environmental Risksand certification. the ISO50001:2011EnergyManagementSystems State (HongKong)andChinaOverseasBuildinggranted responsibility toimprovetheenvironment.In2014China and helpavertglobalwarming,takeupourcorporate measures andgreenpracticestoreducecarbonfootprint The Grouphasadoptedtechnologicallyinnovative in ordertocreateapleasantenvironmentoursociety. champions greenmanagementinconstructionplanning As asociallyresponsiblecontractor,theGroupalways and Promotion Environmental Protection requirements. take proactiveactiontoavoiddeviatingfromstatutory sites bevigilantonpotentialenvironmentalissuesand “Environmental Alert”regularlytoremindallconstruction control measuresmentioned,S&EPDepartmentissues no substandarddischargefromsites.Inadditiontothe S&EP Departmentuntilsituationimprovedtoensurethat conditions ofthedischargepointonadailybasisto operation ofwastewatertreatmentplantaswellthe concerned willberequiredtoprovidephotosonproper by S&EPDepartmentandPlantsDepartment.Thesites system, technicalassistanceswithbejointlyprovided Regarding siteswithdeficienciesinwastewatertreatment Department onadailybasisuntilsituationimproved. dust suppressiononthedeficienciesspottedtoS&EP the sitewillberequiredtoprovidephotosoncarryingout deficiencies foundduringtheTaskForceSiteInspection, for siteswithextensivedustyprocesses.Shouldany Task ForceSiteInspectionwillbeconductedregularly pollution issuesassociatedwithconstructionactivities, Corporate Citizenship improvement andcostsavinginthelongrun. of theconstructionproject,therebyachievingcontinual to saveenergyandresourcesthroughouttheexecution adopt lowcarbonandinnovativeconstructionmethods saving. Ourstaffwerealsoencouragedtoexploreand on environmentalprotectionandpromoteresources for itsstaffandsubcontractorstoarousetheirawareness organised trainingonenvironmentalmanagementsystems protection relatedissues.Moreover,theGroupalso were heldwithsubcontractorstodiscussenvironmental with ourenvironmentalpolicies.Regularsitemeetings The Groupalsorequiredallsubcontractorstocomply reduced disposalofrecyclablematerial. awareness ofworkersontheexpirysafetyhelmetsand Helmets RecyclingActivityinJune.Theactivityraisedthe the Group’sconstructionsitesparticipatedExpired appreciated theworksongeoparkconservation.All the guidedtour,staffacquiredknowledgeand Tour” co-organizedwithdistrictcommunity.Through participated the“HighIslandReservoirEastDamGuided “China StateEnvironmentalProtectionDay”,theGroup to environmentalpromotionalactivities.Intheyearly Same aspreviousyears,theGroupisactivelycommitted Environmental Excellence”in2014. Construction Industryin“TheHongKongAwardsfor Project wontheMeritAwardinSectoral Bypass Tunnel(CausewayBayTyphoonShelterSection) Award intheawardscheme.TheCentral-WanChai Award Scheme,twootherprojectsalsowontheMerit (Bronze Award)inthe21stConsiderateContractorsSite Environmental ManagementandPerformanceAward (Slip Road8Section)ProjectwontheOutstanding were remarkable.TheCentral-WanChaiBypassTunnel With theconcertedeffortsofGroup,results qualification ofBEAMPro. a numberofourstaffmembershaveobtainedthe professional inputstoprojectmanagement.Currently, and gaintheBEAMProstatustoprovideendless sponsored itsstafftoparticipateinBEAMProTraining construction inHongKong.TheGroupencouragedand Institutional Memberin2015toactivelypromotegreen Kong) jointtheHongKongGreenBuildingCouncilasan clients ongreenbuildingconstruction,ChinaState(Hong building environmentalperformanceandexpectationof In linewiththerisingconcernofcommunityon (continued) 636

China State Construction International Holdings LimitedLimited 3 Annual Report 2015 646

ChinaChina SStatetate ConConstructions International HoldinHoldingsgs Limited 4 AnnualAnnual RReporteport 20120155 for thesociety. community andencourageitsstafftoexpresstheircare Zhi Xing”( organised bytheCommunityChestofHongKong,“Wu such as“HongKongandKowloonWalkforMillions” provides strongsupporttoallkindsofsocialactivities, With theactiveparticipationofitsstaff,Group benefit oftheneededandcommunity. activities andencouragesitsstafftodothesamefor takes theinitiativetoparticipateinallkindsofsocial integral partofthecorevaluesGroup.TheGroup projects. Fulfillingthedutiesofacorporatecitizenisan a corporatecitizenthroughundertakingvariouskindsof The Groupiscommittedtosettingagoodexampleas “Serve theCommunity”isacorporatevalueofGroup. The GroupandCommunity Corporate Citizenship 無止行 ), soastohelpneedypeopleinthe (continued) between familymemberswithmutualloveandrespect. as touniteallfamiliesbybuildingupcloserelationships Child WelfareServices”tohelpthosefamiliesinneed,so raised fromthiseventwillbedonatedto“Familyand and theirfamiliestojointheactivityeveryyear.Fund The Grouphasbeengivingsupportandorganisingstaff is oneofthelargestfundraisingeventsinHongKong. “Walks forMillions”organisedbytheCommunityChest activities andcorporatesocialresponsibilities. activity attestedtothecommitmentofCOHLinpublic Country ParkVisitorCenter.Theirparticipationinthe Link, AberdeenReservoirRoadandfinishedat passed throughWongNaiChungGapRoad,Black’s tracksuit ofCOHLwalkedfromHongKongStadium, of theGroup,dashingstaffintidyandeye-catching the eagernessandenthusiasmofourstaff.Ledbyleaders Despite theoccasionaldrizzleonthatday,itdidnotaffect the openingceremony. HKSAR, andhisspouseattendedtheactivityhosted in theyear.Mr.LeungChun-ying,ChiefExecutiveof activity organisedbytheCommunityChestofHongKong and KowloonWalkforMillions”,thefirstlargefundraising and CSCECtheirfamiliestookpartin“HongKong On 11January2015,morethan250stafffromCOHL Hong Kong Millions” bytheCommunityChestof “Hong KongandKowloonWalksfor between

family

members

with

mutual

love

and

respect . more sustainableruraldevelopment. comfortable, eco-friendlyandaffordablealternativetoa potentials ofeartharchitectureasananti-seismic,safe, improve thelocal’slivelihood,butalsodemonstrate rammed earthtechnology.Theprojectwillnotonly in MachaVillageofGansu,China,usingtheadvanced used tosupporttheVillageCentreConstructionProject raised inthe“WuZhiXingCharityWalk”thisyearwillbe villages intheMainlandwithgreenconcepts.Donation footbridges andvillagefacilitiesinremotepoor Hong KongandMainlandChina,todesignbuild volunteers, especiallyuniversitystudentvolunteersfrom charity registeredinHongKong2007forencouraging Wu ZhiQiao(BridgetoChina)CharitableFoundationisa mainland China. their once-in-a-lifetimeWuZhiQiaoexperienceinremote views. Alongtheroute,studentvolunteersshared Po YuenChauTsaiParkwhichcommandspanoramic Walk tookplacealongPakShekKokPromenadetoTai community andcitizensparticipatedintheevent.The 13 universitiesinHongKong,groupsfrombusiness COHL, teachingfacultyandstudentsalumnifrom of approximately1,000people,includingstafffrom Environment toserveasguestofhonor.Atotalnumber The eventinvitedWongKam-sing,Secretaryforthe in OpenCategory. won thethirdplaceinhighestamountoffundsraised year inarowfortheGrouptosupportactivityandwe by (BridgetoChina)CharitableFoundation.Itisthethird their sitestojointhe“4thWuZhiXingCharityWalk”held nearly 30staffandtheirfamiliesofCOHL,CSCEC On 8February2015, consecutive years Charity Walk”forthree COHL supportsthe“WuZhiXing 中國海外集團婦女聯誼會 organized Corporate Citizenship eco-cultural protection. social responsibilityandcontributionsforthepromotionof social development,itsdeterminationtofulfillcorporate the Groupshoweditscontinuoussupporttocorporate preservation work.Throughparticipatinginthisactivity, fun totheparticipantswhiletakingineco-cultural giving introductionalongthejourney,whichaddedmore Centre, asocialenterprise,withprofessionaltourguide was jointlyorganisedbySaiKungDistrictCommunity rock andlandformoftheworld-classgeopark.Thetour system, allowingthestafftounderstandsplendid a hand-onexperienceoftheenvironmentandeco- to performitssocialresponsibility.Thisactivityprovided awareness ofenvironmentalprotectionemployeesand to WorldEnvironmentDayon5June,enhancethe East DamofHighIslandReservoir”,inordertorespond Environmental ProtectionDay”activity:the“GeoTourof On 5June2015,CSCECorganisedthe“2015 Protection Day Corporate Environmental (continued) 65 ChinaChi SState CConstruction i IInternational Holdings Limited Annual Report 2015 666

ChinaChina SStatetate CConstructiononstruction International HoldinHoldingsgs LimiteLimitedd 6 AnnualAnnual RReporteport 20120155 Investor Relation organised bythemajorinvestmentbanks. participated intheinvestmentconferencesandforums with investmentbanks.Besides,themanagementalso China, Europe,US,Canada,SingaporeandHongKong time, andattendedpost-resultsroadshowsinMainland meetings withanalystsandinvestorsover1,000persons- with thepromotionoflistedcompany,organised manner. In2015,theCompanyactivelypushedforward to themandcommunicateswithinvestorsinatimely latest developmentstrategyandoperatingconditions and investorsregularlyirregularlytopresentthe of theexternalinvestmentpartiesandmeetsanalysts The managementoftheCompanyvaluesfeedback through thewebsiteofCompany. Company canbetransmittedrapidlytothecapitalmarket events duringthecourseofbusinessdevelopment website www.csci.com.hk,toensurethatimportant regularly andirregularlyupdatestheinformationthrough communication withthecapitalmarket,Company meetings organisedbyinvestmentinstitutions.Toenhance information, roadshows,reverseroadshowsand and analystbriefingsessions,disclosureofoperating announcements, pressconferences different channels.Thesechannelsinclude:results of importantinformationtothemarketrapidlythrough community. TheCompanyensuresthedissemination and businessprogressclearlytotheinvestment strategy, businessmanagement,financialinformation provide visibilityontheCompany’slatestdevelopment The Company’smaindutyininvestorrelationsisto Corporate Citizenship (continued) Investor RelationsTeam. Best CFO,InvestorRelationsProfessionaland including BestInvestorRelationsCompany,CEO, first placeforallcategoriesintheinfrastructureindustry, “Institutional Investor”,theCompanywasawarded annual pollofbestexecutiveteamlistedcompaniesby been appreciatedbytheinvestmentcommunity.In The Company’sinvestorrelationsworkshavegradually function. one oftheprioritiescompany’sinvestorrelations service standardandcompanytransparencywillbe its effortsinthisrespect.Toincreaseinvestorrelations enhanced. In2016,theCompanywillfurtherstrengthen Company’s operationandmanagementhasalsobeen transparency ofdifferentbusinessactivitiessuchasthe the capitalmarkethasbeenenhanced.Besides, the managementofCompanyandplayers Through theaboveactivities,communicationbetween and interpretationintime. certain marketrumors,theCompanyprovidesclarification meantime, toavoidconfusionandmisunderstandingon informed ofthelatestupdateaboutCompany.In in ordertoensurethattheinvestmentcommunityis a monthlybasisandconductsfollow-upcommunications, The Companyprovidesoperatinginformationupdateon Major InvestorRelationsActivitiesin2015 December November October September August July June May April March February Activities January Month Citigroup IndustrialCorporate Day CICC InvestmentForum Morgan StanleyAnnualChinaConference The 10thCitibankChinaInvestorConferenceBAMLAnnual Conference The 6thCreditSuisseAnnualChinaInvestmentConference Goldman SachsGreaterChinaSummit Daiwa InvestorConferenceHongKong Guosen SecuritiesCorporateDay Post-interim ResultsRoadShowsinEurope RoadShows inHongKong,Singapore,MalaysiaandMainlandChina • InvestorsandAnalystsBriefing • PressConference • 2015 InterimResultsAnnouncement Citibank MidCapConference CMS InvestmentConference CICC InvestmentConference JP MorganChinaSummit Daiwa AutoandIndustrialLeadersConference HSBC ChinaConference Morgan StanleyChinaSummit BAML IndustrialCorporateDay The 20thCLSAChinaForum Barclays AsiaFinancial&PropertyConference The 6thMacquarieChinaConference Post-annual ResultsRoadShowsinUS,Canada Post-annual ResultsRoadShowsinJapan RoadShowsinHongKongandEurope InvestorsandAnalystsBriefing • • • Press 2014 AnnualResultsAnnouncement Conference The 6thDeutscheBankAsiaConference Barclays PropertyCorporateDay Citi ChinaTopPickCorporateDay Nomura CorporateDay(Properties) The 15thUBSGreaterChinaSeminarNomuraPropertyCorporateDay

Corporate Citizenship (continued) 676

China State Construction International Holdings LimitedLimited 7 Annual Report 2015 Directors and Organisation 5 ual Report 201 Annual Report 2015 Ann 6868 d s Limite g China State Construction International Holdings Limited Holdin

5 3 124 6

1 Mr. Zhou Yong 2 Mr. Tian Shuchen 3 Mr. Zhou Hancheng 4 Mr. Pan Shujie 5 Mr. Hung Cheung Shew 6 Mr. Wu Mingqing operation oftheGroup. strategies forcompanies.Heoverseestheoverall new businessstartup,formulatingandexecuting particular, specialisesininvestmentanddevelopment experience inMainlandChinaandHongKong, years’ construction,projectandcorporatemanagement Institute ofDirectorsin2009.Mr.Zhouhasmorethan23 Non HangSengIndexConstituents)”byTheHongKong Award –ExecutiveDirectorofListedCompanies(SEHK Hong Kong).Hewasawardedthe“DirectorofYear Limited (“FEG”,asubsidiaryoftheCompanyandlistedin and non-executivedirectorofFarEastGlobalGroup Overseas HoldingsLimited(“COHL”)andthechairman since 2001.Currently,Mr.ZhouisadirectorofChina has beenadirectorofcertainsubsidiariestheGroup in 1994andwassecondedtotheGroup1996.He State ConstructionEngineeringCorporation(“CSCEC”) Institution ofCivilEngineers(UK).Mr.ZhoujoinedChina Fellow ofTheCharteredInstituteBuilding(UK)and Engineering andUniversityofSouthAustralia.Heis Zhou graduatedfromChangshaAcademyofMilitary Chairman oftheCompanyon15August2013.Mr. June 2005to14August2013andwasappointed chairman oftheCompanyduringperiodfrom9 Director on1June2005.Mr.ZhouactedasVice- on 21April2004andwasdesignatedasanExecutive Aged 45,wasappointedasaDirectoroftheCompany Chairman andChiefExecutiveOfficer Executive Director, Board ofDirectors Mr. ZHOUYong Directors andOrganisation Mr. ZHOUHancheng in constructionengineeringandprojectmanagement. Group since2003.Mr.Tianhasover28years’experience He hasbeenadirectorofcertainsubsidiariesthe CSCEC in1988andwassecondedtotheGroup1991. the CharteredInstituteofBuilding(UK).Mr.Tianjoined from DalianUniversityofTechnology.Heisamember the Companyon12August2010.Mr.Tiangraduated Aged 50,wasappointedasanExecutiveDirectorof Executive Director,VicePresident Mr. TIANShuchen financial accountingandinvestmentmanagement. Zhou hasover24years’experienceincorporatefinance, of certainsubsidiariestheGroupsince2003.Mr. 1992. Hehasbeenadirectorandthefinancialcontroller Certified Accountants.Mr.ZhoujoinedtheGroupin China. HeisFellowoftheAssociationChartered was awardedthetitleofSeniorAccountantinMainland Administration fromTheUniversityofSheffield(UK)and and Economics,holdsadegreeofMasterBusiness Mr. ZhougraduatedfromShanghaiUniversityofFinance an ExecutiveDirectoroftheCompanyon1June2005. on 21April2004andsubsequentlywasdesignatedas Aged 46,wasappointedasaDirectoroftheCompany Executive DirectorandFinancialController (continued) 69 China State Construction International Holdings Limited Annual Report 2015 70 China State Construction International Holdings Limited Annual Report 2015 management andplanning. Mr. Hunghasover34years’experienceinconstruction director ofFEGfrom17June2011to15August2012. Group since2000.Mr.Hungactedasanon-executive 1996. Hehasbeenadirectorofcertainsubsidiariesthe Structural Engineers(UK).Mr.HungjoinedtheGroupin Hong KongInstitutionofEngineersandthe the PlymouthPolytechnic(UK).Heisamemberof Company on8June2011.Mr.Hunggraduatedfrom Aged 57,wasappointedasanExecutiveDirectorofthe Executive Director,VicePresident Mr. HUNGCheungShew management. 29 years’experienceincivilandconstructionproject subsidiaries oftheGroupsince1999.Mr.Panhasover the Groupin1991.Hehasbeenadirectorofcertain Mr. PanjoinedCSCECin1987andwassecondedto and amemberoftheCharteredInstituteBuilding(UK). He isamemberoftheHongKongInstituteEngineers Institute ofTechnology)andtheUniversityWarwick(UK). the SoutheastUniversity(formerlyknownasNanjing Company on22August2012.Mr.Pangraduatedfrom Aged 51,wasappointedasanExecutiveDirectorofthe Executive Director,VicePresident Directors andOrganisation Mr. PANShujie (continued) project management. construction engineering,infrastructureinvestmentand has over30years’experienceinfinancemanagement, of certainsubsidiariestheGroupsince2002.Mr.Wu seconded totheGroupin2000.Hehasbeenadirector Accountant. Mr.WujoinedCSCECin1986andwas from NankaiUniversityandwasawardedthetitleofSenior a degreeofExecutiveMasterBusinessAdministration Shanxi UniversityofFinanceandEconomicsobtained the Companyon3June2014.Mr.Wugraduatedfrom Aged 51,wasappointedasanExecutiveDirectorof Executive Director,VicePresident Mr. WUMingqing environmental protectionprojects. buildings, slope,reclamation,environmentalstudiesand hotels, incinerators,high-risecommercial/residential bridges, flyovers,roads,dockyards,jetties,hospitals, of 1993,experienceincludingconstructiontunnels, Tseung KwanONewTownfromearly80’stilltheend funded infrastructureworksforShatinNewTownand the mid-70’stillearly80’s;andallgovernment- and ModernisationofKowloon-CantonRailwayfrom responsibility intheHK$3.0billionprojectofElectrification Kong and10yearsintheUnitedKingdom.Hehasdirect mega sizeengineeringprojectsincluding43yearsinHong engineering anddirectprojectmanagementofmany structural, energy,environmentalandgeotechnical Dr. Hohas53years’experienceinthefieldsofcivil, University ofCentralLancashire,UnitedKingdom. of HongKongandHonoraryUniversityFellowThe awarded HonoraryUniversityFellowofThe engineering fromtheUniversityofHongKong;andwas University, UnitedKingdom;andabachelordegreeincivil diploma ingeotechnicalengineeringfromManchester of Manchester,UnitedKingdom;apostgraduate Hong Kong;HonoraryDoctorofLawsfromUniversity of BusinessAdministrationfromtheCityUniversity University ofLondon,UnitedKingdom;HonoraryDoctor a doctoratedegreeincivilengineeringfromtheCity Director oftheCompanyon1June2005.Dr.Hoholds Aged 77,wasappointedIndependentNon-executive Nomination CommitteeMember Remuneration CommitteeMember Chairman oftheAuditCommittee Independent Non-executiveDirector Dr. RaymondHOChungTai SBS, MBE,S.B.St.J.,JP Directors andOrganisation are companieslistedinHongKong. Limited andChinlinkInternationalHoldingsLimited,which Holdings Ltd.,DesonDevelopmentInternational Independent Non-executiveDirectorofGCL-PolyEnergy director ofvariousprivatecompaniesinHongKong;and Nuclear SafetyConsultativeCommittee.Dr.Hoalsoa Nuclear PowerStationandLingAo Currently, Dr.HoisChairmanofGuangdongDayaBay Council, etc. Advisory CommitteeofHongKongTradeDevelopment Committee; andChairmanofInfrastructureDevelopment University; memberoftheBasicLawConsultative the SchoolofChineseMedicineHongKongBaptist of theChineseMedicineConsultativeCommittee the CourtofCityUniversityHongKong;member member oftheHongKongAirportAuthority; member oftheGasSafetyAdvisoryCommittee;board Committee ontheNewAirportandRelatedProjects; Hong KongAffairsAdviser;memberofConsultative Council; ChairmanoftheTransportAdvisoryCommittee; and memberoftheIndustry&TechnologyDevelopment Kong; ChairmanofHongKongTechnologyCommittee Kong; CouncilChairmanoftheCityPolytechnicHong Founding CouncilChairmanoftheCityUniversityHong the HongKongInstitutionofEngineers(1987–1988); Functional Constituency)(1998–2012);Presidentof of the1stto4thtermsLegislativeCouncil(Engineering Kong SpecialAdministrativeRegion(1996–1998);member member oftheProvisionalLegislativeCouncilHong the 10th&11thNationalPeople’sCongressofPRC; to August1993.HewasformerlyHongKongDeputy Maunsell ConsultantsAsiaLimitedfromJanuary1976 Dr. Howasformerlyapartnerandseniordirectorof (continued) 71 China State Construction International Holdings Limited Annual Report 2015 72 China State Construction International Holdings Limited Annual Report 2015 all listedinHongKong,unless statedotherwise. Berhad (listedinMalaysia).The aforesaidcompaniesare Kong LimitedandanAlternate DirectorofAFFINHoldings Non-executive DirectorofSan MiguelBreweryHong in HongKongandShanghai), anAlternateIndependent Shanghai FosunPharmaceutical (Group)Co.,Ltd.(listed previously anIndependentNon-executiveDirectorof Abertis Infraestructuras,S.A.(listedinSpain).Mr.Liwas also amemberoftheInternationalAdvisoryBoard Berkeley GroupHoldingsplc(listedinLondon).Heis Pacific Limited,andisaNon-executiveDirectorofThe Limited, SinoHotels(Holdings)LimitedandCOSCO of SinoLandCompanyLimited,TsimShaTsuiProperties Awards. Mr.LiisanIndependentNon-executiveDirector the JudgingPanelofBAIGlobalBankingInnovation to the12thNationalPeople’sCongress.Healsositson Chief ExecutiveoftheHKSARanddeputies of theElectionCommitteesresponsibleforelecting of Bankers’Council.Furthermore,heservesasamember Business andaVicePresidentofTheHongKongInstitute member oftheHongKongBaptistUniversity’sSchool occupational retirementschemes,anAdvisoryCommittee He isalsoaTrusteeofTheUniversityHongKong’s of theMPFIndustrySchemesCommitteeMPFA. of TheCommunityChestHongKongandamember Kong UnitedYouthAssociation.Mr.Liisaboardmember Beijing YouthFederationandaCounselloroftheHong the All-ChinaYouthFederation,DeputyChairmanof People’s PoliticalConsultativeConference,amemberof the GuangdongProvincialCommitteeofChinese of TheBankEastAsia,Limited.Heisamember Li isExecutiveDirectorandDeputyChief and Wales,TheLawSocietyofHongKong.Mr. Britain. HeisamemberofTheLawSocietyEngland Arts degreeinLawfromtheUniversityofCambridge the US,andaMasterofArtsdegreeBachelor School ofManagement,NorthwesternUniversityin Li holdsaMasterofManagementdegreefromKellogg executive DirectoroftheCompanyon1June2005.Mr. Aged 42,wasappointedasanIndependentNon- Nomination CommitteeMember Audit CommitteeMember Chairman oftheRemunerationCommittee Independent Non-executiveDirector Directors andOrganisation Mr. AdrianDavidLIManKiu JP (continued) Ltd. engagingininvestmentanddisputeresolution. Chairman andChiefExecutiveOfficerofC&LHoldings (listed inHongKongandSingapore).Dr.Leungisalsothe director ofElec&EltekInternationalCompanyLimited companies inHongKongandindependentnon-executive management. Dr.Leungisdirectorofvariousprivate in engineering,investment,constructionandproject Engineers. Hehasmorethan39yearsofexperience Senior MemberofInstituteElectricalandElectronics for CivilEngineers,InstitutionofEngineers(UK)and Institute ofConstructionManagers,AmericanSociety Engineers, HongKongInstituteofArbitrators, Dr. LeungisFellowofTheHongKongInstitution Civil EngineeringandaMasterdegreeinAppliedScience. Applied SciencedegreeinConstructionManagement from ChineseUniversityofHongKong,abachelor Leung holdsdoctoratedegreeinInformationEngineering executive DirectoroftheCompanyon1June2005.Dr. Aged 61,wasappointedasanIndependentNon- Nomination CommitteeMember Remuneration CommitteeMember Audit CommitteeMember Independent Non-executiveDirector Dr. RaymondLEUNGHaiMing Wo DevelopmentHoldingsLimited(listedinHongKong). previously anindependentnon-executivedirectorofChun experience inengineeringandconstruction.Mr.Leewas Initiative VettingCommittee.Mr.Leehasover50years’ on Poverty;andanViceChairmanoftheCreateSmart Employment andTrainingTaskForceofCommission Security CompanyLimited;amemberofYouthEducation, the AirportAuthorityHongKong;aDirectorofAviation as aPermanentSecretary).HeisBoardMemberof of August1999to2002(including2months August 1999andtheSecretaryforWorksfromperiod Territory DevelopmentfromtheperiodofAugust1994to graduated fromtheUniversity.HewasDirectorof Mr. LeejoinedTheHongKongGovernmentsincehe of EngineersandTheInstitutionCivil(UK). 1964. HeisFellowofbothTheHongKongInstitution Mr. LeegraduatedfromtheUniversityofHongKongin executive DirectoroftheCompanyon1September2005. Aged 73,wasappointedasanIndependentNon- Remuneration CommitteeMember Audit CommitteeMember Chairman oftheNominationCommittee Independent Non-executiveDirector Mr. LEEShingSee GBS, OBE,JP Directors andOrganisation (continued) 73 China State Construction International Holdings Limited Annual Report 2015 74 China State Construction International Holdings Limited Annual Report 2015 building industrialisationbusinessinMainlandChina. project management.HeisresponsiblefortheGroup’s 33 years’experienceinconstructionengineeringand subsidiaries oftheGroupsince2003.Mr.Jianghasover the Groupin1991.Hehasbeenadirectorofcertain Mr. JiangjoinedCSCECin1988andwassecondedto Society andamemberofCharteredQualityInstitute. (UK). Mr.JiangisamemberofChinaCivilEngineering Engineering University)andSheffieldHallamUniversity (formerly knownasShenyangArchitecturalandCivil Aged 52.HegraduatedfromShenyangJianzhuUniversity Deputy GeneralManager Mr. JIANGShaojie finance, accountingandinvestmentmanagement. Mr. Zhouhasover27years’experienceincorporate director ofcertainsubsidiariestheGroupsince2005. and wassecondedtotheGroupin2005.Hehasbeena Senior Economist.Mr.ZhoujoinedCOHLGroupin1999 and wasawardedthetitlesofSeniorAccountant from HuazhongUniversityofScienceandTechnology Economics andLaw;obtainedaMasterDegree Aged 49.HegraduatedfromZhongnanUniversityof Deputy GeneralManager Mr. ZHOUWenbin Senior Management Directors andOrganisation (continued) Mr. ZHANGHaipeng Group’s operationsinMacau. engineering management.Heisresponsibleforthe Mr. Zhanghasover16years’experienceinconstruction director ofcertainsubsidiariestheGroupsince2008. and wassecondedtotheGroupin2002.Hehasbeena from NankaiUniversity.Mr.ZhangjoinedCSCECin2000 degree ofExecutiveMasterBusinessAdministration Administration fromHongKongBaptistUniversityanda Technology, andobtainedadegreeofMasterBusiness Aged 40.HegraduatedfromtheHarbinInstituteof Deputy GeneralManager for theGroup’sinformationtechnology management. management andprojectmanagement. Heisresponsible over 28years’experienceininformationtechnology subsidiaries oftheGroupsince2010.Mr.Zhouhas to theGroupin2014.Hehasbeenadirectorofcertain Zhou joinedCOHLGroupin1995andwasseconded is amemberofChinaCivilEngineeringSociety.Mr. the titleofprofessorlevelSeniorEngineer.Mr.Zhou Hong KongPolytechnicUniversityandwasawarded University ofSouthAustraliaandaDoctoratedegreefrom a degreeofMasterBusinessAdministrationfromthe and obtainedaMasterdegreefromZhongnanUniversity, Aged 51.HegraduatedfromtheZhongnanUniversity, Assistant GeneralManager Mr. ZHOUYuguang management. He isresponsiblefortheGroup’shumanresources resources managementandpersonneladministration. 2010. Mr.Zhaohasover19years’experienceinhuman been adirectorofcertainsubsidiariestheGroupsince in 1997andwassecondedtotheGroup2001.Hehas from RenminUniversityofChina.Mr.ZhaojoinedCSCEC obtained adegreeofMasterBusinessAdministration Aged 42.HegraduatedfromTsingHuaUniversityand Assistant GeneralManager Mr. ZHAOXiaoqi Hong Kong. assists inmanagingtheGroup’scontractmanagement construction engineeringandcontractmanagement.He since 2000.Mr.Wonghasover29years’experiencein has beenadirectorofcertainsubsidiariestheGroup Civil Engineers.Mr.WongjoinedtheGroupin1990.He Council (UK)andafellowmemberoftheInstitution of Engineers,aCharteredEngineerTheEngineering Wong isafellowmemberoftheHongKongInstitution Administration fromSouthernIllinoisUniversity(US).Mr. (UK) andobtainedadegreeofMasterBusiness Aged 58.HegraduatedfromthePlymouthPolytechnic Assistant GeneralManager Mr. WONGWingYuk Group’s infrastructureoperationsinMainlandChina. and infrastructuremanagement.Heisresponsibleforthe Mr. Gonghasover34years’experienceinconstruction director ofcertainsubsidiariestheGroupsince1990. and wassecondedtotheGroupin1989.Hehasbeena title ofSeniorEngineer.Mr.GongjoinedCSCECin1982 and CivilEngineeringUniversity),wasawardedthe University (formerlyknownasShenyangArchitectural Aged 59.HegraduatedfromtheShenyangJianzhu Assistant GeneralManager Mr. GONGFanxiang Directors andOrganisation assurance systemandtechnologyfortheGroup. and TechnologyDepartment,hemanagesthequality Kong) Limited,andtheGeneralManagerofQuality Director ofChinaStateConstructionEngineering(Hong Lau isalsoappointedastheChiefEngineerandQuality contract worksformegasizeinfrastructureprojects.Mr. and jointventureprojectsinHongKong,pre- assists inmanagingtheGroup’sbuildingconstruction experience incontractandprojectmanagement.He of theGroupsince1996.Mr.Lauhasover34years’ in 1989.Hehasbeenadirectorofcertainsubsidiaries Panel (BuildingsOrdinance).Mr.LaujoinedtheGroup Development BureauasamemberoftheAppealTribunal is currentlyappointedbyPlanningandLandsBranch, the HongKongSurveyorsRegistrationBoard.Mr.Lau Registered ProfessionalSurveyor(QuantitySurveying)of the HongKongEngineersRegistrationBoardand (UK), theRegisteredProfessionalEngineer(Building)of Chartered Surveyors,theAssociationofCostEngineers Institute ofSurveyors,amembertheRoyalInstitution Kong InstituteofEngineers,amembertheHong of Arbitrators(UK).HeisalsoamembertheHong Incorporated (UK)andanassociateofCharteredInstitute a fellowoftheInstituteClerksWorksGreatBritain (UK), afellowoftheCharteredManagementInstitute Mr. LauisafellowoftheCharteredInstituteBuilding Master degreeofScienceandaLaws. (UK) andCityUniversityofHongKongobtaineda Aged 56.HegraduatedfromtheUniversityofWarwick Assistant GeneralManager Mr. LAUWingShing (continued) 75 China State Construction International Holdings Limited Annual Report 2015 76 China State Construction International Holdings Limited Annual Report 2015 Directors andOrganisation

China State Construction International Investments (China) Limited

China Construction Engineering (Macau) Company Limited

China State Construction Engineering (Hong Kong) Limited

Far East Global Group Limited Chief ExecutiveOfficer Executive Director& Senior Management

President Office Directors Board of (continued) Chairman &

Human Resources Department

Finance and Treasury Department

Information Technology Department Remuneration Nomination

Intendance and Audit Department Committee Committee Committee Audit

Legal Department

Corporate Communications Department Corporate Governance Report

Corporate Governance Practices The Board of Directors (the “Board”) recognises that good corporate governance is essential to the success of the Company and enhances the shareholders’ value. The Board is committed to maintain a high standard of business ethics, a healthy corporate culture and a good corporate governance practice.

Throughout the year ended 31 December 2015, the Company has applied and complied with all the code provisions of the Corporate Governance Code as set out in Appendix 14 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) (the “Listing Rules”), except for the deviation as specified and explained below with considered reason for such deviation:

Under code provision A.2.1 (the roles of chairman and chief executive officer should be separate and should not be performed by the same individual). Mr. Zhou Yong has acted as Executive Director, Chairman and Chief Executive Officer of the Company since August 2013. The Company considered that both positions of chairman and chief executive officer require persons with in-depth knowledge and experience of the Group’s business. If the positions occupied by unqualified persons, the Group’s performance may be affected. At this time, the Company believed that vesting both of the roles in the same person enable more effective and efficient overall strategic planning for the Group; and will not impair the balance of power and authority of the Board. The Company will review the structure from time to time and shall adjust the situation when suitable circumstance arises. Annual Report 2015 Board of Directors 77 The Company and its subsidiaries (the “Group”) is governed by the Board. The Board is responsible for overall management of the Group’s business. The Board focuses on the overall strategies, policies and business plans of the Group, monitors the financial performance, internal controls and risk management of the Group. Executive Director and Senior Management are responsible for the day-to-day operations of the Group.

The composition of the Board and the individual attendance (Board Meetings and 2015 AGM) of each director are set out below:

Attended/Eligible to Attend Board 2015 Name Meetings AGM

Executive Directors Zhou Yong (Chairman & Chief Executive Officer) 4/4 1/1 Tian Shuchen 4/4 1/1 China State Construction International Holdings Limited Zhou Hancheng 4/4 1/1 Pan Shujie 4/4 1/1 Hung Cheung Shew 4/4 1/1 Wu Mingqing 4/4 1/1

Non-executive Director Li Jian (resigned on 19 January 2015) ––

Independent Non-executive Directors Raymond Ho Chung Tai 4/4 1/1 Adrian David Li Man Kiu 4/4 1/1 Raymond Leung Hai Ming 3/4 1/1 Lee Shing See 4/4 1/1 78 China State Construction International Holdings Limited Annual Report 2015 the CompanyandHKEx.Directorscanaccessinformationfrom seniormanagementindependently. information whichcontaintheup-to-dateperformanceand oftheCompanywhichpostedonwebsites Directors atalltimeshavefullaccesstoinformationof the Company.TheBoardisprovidedmonthlyoperating The Companyhasarrangeddirectors’andofficers’liabilityinsuranceinrespectofanylegalactionagainstDirectors. interests shallabstainfromvotingontheresolution. independent directorsparticipatingindiscussingaboutandvotingonthoseresolutions.Thoserelatedtothe would bedealtwithbyaphysicalmeetingratherthanwrittenresolution.TheBoardwillensuretherearesufficient shareholders ordirectorsandtheBoardconsidersthatthoseinterestsareofsignificantinterestconflicts,matter the expenseofCompany.IfsubjectunderdiscussionataBoardmeetinginvolvesinterestssubstantial meetings. Directorscanseekindependentprofessionaladviceforperformingtheirdutiesthroughthechairmanat and dissentingviewsexpressed.AlldirectorsareentitledtoinspecttheminutesofBoardcommittee directors foradvice.Theminutesofthemeetingsarepreparedwithdetailsdecisionsreached,anyconcernsraised meetings, andwillsendthefirstdraftofminuteswithinreasonabletimeaftereachmeetingtoparticipated The companysecretaryisresponsibleforcompilinganddraftingtheminutesofBoardcommittee Board. changes inthegovernanceandcomplianceregulations,companysecretarywillreleaselatestinformationto as toensuretheprocedureofBoardmeetings,allapplicablerulesandregulationsarecompliedwith.Incaseany All directorskeepcontactwiththecompanysecretaryandcanobtainservicesprovidedbyso convened. information fordiscussion,themeetingdocumentswillbesubmittedtoalldirectorsthreedaysbeforeis and havesufficienttimetoincludeitemsthatintheagendafordiscussion.Toensurealldirectors a noticeofnotlessthan14dayssothatdirectorsentitledtoattendthemeetingcansparetimeinperson The Boardconvenesmeetingsregularly.dateforholdingeachmeetingwillbedeterminedinadvancewith comments, considerationandinclusionofanymattersfordeliberationatthemeetings. All directorsaregivendraftnoticeandagendaforallregularBoardmeetingscommittees the companysecretaryatalltimeanswernon-routineissuesenquiriesmadebydirectors. Zhou Yong,chairmanandchiefexecutiveofficer;Mr.Hancheng,thedirectorfinancialcontroller; approval ofnon-routineissuestheCompanybywaycirculatedresolutionswithsupportingexplanatorywrite-up.Mr. During theyear,fourBoardmeetingswereheld.Throughoutdirectorsalsoparticipateinconsiderationand and functiononthewebsitesofHongKongExchangesClearingLimited(the“HKEx”)Company. maintained onthewebsiteofCompany.TheCompanyhasalsoanupdatedlistDirectorsandtheirrole updated listofDirectorscontainingbiographicalinformationandidentifyingtheindependentnon-executivedirectorsis Biographical informationoftheDirectorsaresetoutin“DirectorsandOrganisation”sectionthisAnnualReport.An Corporate GovernanceReport (continued) express theiropinions.Ensuredtheadequatecommunicationbetweendifferentlevelsofmanagement. weakness ontheCompany’swork-in-progressandprovidedsufficienttimeforparticipantstoraisequestions directors reportedtheCompany’soverallworkprogress,deliveredstrategy,reviewedstrengthand management andofoverseassubsidiaries(byvideo-conference).Duringthemeetings,executive regularly convenedmeetingsfortheexecutivedirectors,seniormanagement,middleworksites The Companyisawarethateffectivecommunicationcanincreaseproductivityandimproveteamwork. There isnofamilyorothermaterialrelationshipsamongmembersoftheBoard. training recordsfortheyearunderreview. and furtherenhancementoftheirprofessionaldevelopment.DirectorshadprovidedtheCompanySecretarywith in otherseminarsand/orreadingrelevantmaterialsrelatingtotheroles,functionsanddutiesofalistedcompanydirector seminar, readlegalandregulatoryupdatesarrangedbytheCompany.Inaddition,individualdirectorsalsoparticipated Ho ChungTai,Mr.AdrianDavidLiManKiu,Dr.RaymondLeungHaiMingandLeeShingSeeviewedwebcast Yong, Mr.TianShuchen,ZhouHancheng,PanShujie,HungCheungShew,WuMingqing,Dr.Raymond As partofthecontinuousprofessionaldevelopmentprogramme,allDirectorsCompanynamelyMr.Zhou annual reportandinterimreport. manner andbi-annuallyconfirmtotheCompanyanychangeofsuchinformation.TheBoardreportedchangesinits significant commitmentintheirbiographicalinformation.TheyarealsoremindedtonotifytheCompanyatimely Directors havedisclosedtheirnumberandnatureofofficesheldinpubliccompaniesororganisationsother introduction abouttheGroup’sbusinessesandoperationstoeachnewlyappointeddirector. and experienceappropriatefortherequirementsofbusinessCompany.TheCompanywillgivean directors. TheCompanywillreviewtheBoardcompositionregularlytoensurethatithasabalanceofexpertise,skills Company andtheircommonlawdutyasdirectors.Morethanone-thirdoftheBoardisindependentnon-executive to dealwiththeaffairsofCompany.AllDirectorsarerequiredcomplytheirresponsibilitiesasdirectors Other thannon-executivedirectors,allexecutivedirectorsareappointedonafull-timebasisandhavesufficienttime Corporate GovernanceReport (continued) 79 China State Construction International Holdings Limited Annual Report 2015 80 China State Construction International Holdings Limited Annual Report 2015 risk managementstrategiesandimplementingappropriateactionplanformanagingmonitoringrisk. Mr. ZhoualsoleadstheBoardandseniormanagementindecidingGroup’srisklevelappetite;developinga directors presentandensuresthegoodcorporategovernancepracticesproceduresofCompany.Besidethat of opennessandencouragesdirectorstovoicetheirviews.Healsomeetsnon-executivewithouttheexecutive information beforeBoardmeetingssothatthecanoperateeffectivelyandperformitsduties.Hepromotesculture Mr. ZhouisresponsibleforleadingtheBoardandensuresalldirectorsareprovidedwithappropriatesufficient suitable circumstancearises. and authorityoftheBoard.TheCompanywillreviewstructurefromtimetoshalladjustsituationwhen enable moreeffectiveandefficientoverallstrategicplanningfortheGroup;willnotimpairbalanceofpower performance maybeaffected.Atthistime,theCompanybelievedthatvestingbothofrolesinsameperson knowledge andexperienceoftheGroup’sbusiness.Ifpositionsoccupiedbyunqualifiedpersons, The Companyalsoconsideredthatbothpositionsofchairmanandchiefexecutiveofficerrequirepersonswithin-depth chief executiveofficer. The CompanyconsideredthatitisintheinterestsofGroupMr.Zhouholdsbothofficeschairmanand the managementofboardandday-to-daybusinessisnotconcentratedinanyoneindividual. timely manneronkeyissuesanddevelopments.GiventhatthereisaclearorganisationstructureoftheGroup,so Group’s businessandculture.Heiscapableofguidingthesegmentstomakediscussiondecisionina opportunities oftheirownsegments.Mr.ZhouhasbeenwiththeGroupsince1994andplentifulexperiencein management directly.Theyareresponsibleforoperating,monitoring,strategisinganddevelopingnewbusiness The Groupdividedintofourmajorbusinesssegments.Eachsegmentismanagedbyspecifiedexecutivedirector/senior constitutes adeviationfromcodeprovisionA.2.1. During theyear,Mr.ZhouYong(“Mr.Zhou”)isChairmanandChiefExecutiveOfficerofCompany.This division oftheseresponsibilitiesisinplacetoensureabalancepower. management oftheBoardandchiefexecutiveofficerperformsday-to-daybusiness.Clear Chairman andchiefexecutiveofficeraretwokeyaspectsofthemanagementacompany.performs Corporate GovernanceReport Chairman andChiefExecutiveOfficer (continued) separate resolutiontobeapprovedbyshareholders. If anindependentnon-executivedirectorservesmorethannineyears,hisfurtherappointmentshouldbesubjecttoa Directors andhaveconcludedthatallofthemareindependentwithinthedefinitionListingRules. The BoardaswelltheNominationCommitteehavereviewedindependenceofallIndependentNon-executive Raymond LeungHaiMingandMr.LeeShingSeeremainindependent,notwithstandingthelengthoftheirtenure. independence. TheBoardthereforeconsidersthatDr.RaymondHoChungTai,Mr.AdrianDavidLiManKiu, challenges tothemanagement.Thereisalsonoevidencethatlengthoftenurehavinganadverseimpactontheir independent judgement.Theyhavetherequiredintegritytoexercisejudgementandprovideobjective served theBoardformorethannineyears.Theconsideredthatlongservicewillnotaffecttheirexerciseof Dr. RaymondHoChungTai,Mr.AdrianDavidLiManKiu,LeungHaiMingandLeeShingSeehad Group. policy andperformanceatBoardcommitteemeetings,makingsignificantcontributiontotheaffairsof executive directorsareabletoprovidetheirindependentjudgmentinrespectofmatterssuchastheGroup’sstrategy, the ListingRules.TheCompanyconsidersallindependentnon-executivedirectorstobeindependent.Independentnon- the ListingRulesandhavesubmittedannualconfirmationsoftheirindependencetoBoardpursuantRule3.13 management expertise.Allindependentnon-executivedirectorscomplywiththeIndependenceGuidelineofRule3.13 possess appropriateprofessionalqualificationsandexperienceoraccountingrelevantfinancial During theyear,CompanyhascompliedwithRules3.10and3.10(A)ofListingRules.Non-executivedirectors election. shall besubjecttoretirementbyrotationatleastonceeverythreeyearsandtheretiringdirectoreligibleforre- of theCompany(incaseanadditiontoBoard),andshallbeeligibleforre-electionatthatmeeting.Alldirectors general meetingoftheCompany(incasefillingacasualvacancy)oruntilnextfollowingannual all directors(includingnon-executivedirectors)appointedbytheBoardshallholdofficeonlyuntilnextfollowing Non-executive directorsareappointedonatermofthreeyears.PursuanttothearticlesassociationCompany, Non-executive Directors Corporate GovernanceReport (continued) 81 China State Construction International Holdings Limited Annual Report 2015 82 China State Construction International Holdings Limited Annual Report 2015 the NominationCommittee.ThetermsofreferencearepostedonwebsitesCompanyandHKEx. has adoptedwrittentermsofreferencefortheNominationCommittee,whichdefinedrole,authorityandfunction on mattersrelatingtodirectors’nomination,appointmentorre-appointmentandsuccessionregularbasis.TheBoard Committee includereviewingthestructureandcompositionofBoard,makingrecommendationtoBoard The CompanyhasestablishedaNominationCommitteeon20March2006.majorresponsibilitiesofthe Nomination Committee bonus policyoftheCompany.Theindividualattendanceeachdirectorissetoutbelow: During theyear,aRemunerationCommitteemeetingwasheldtoreviewanddiscussremunerationpolicyannual reference arepostedonthewebsitesofCompanyandHKEx. Remuneration Committee,whichdefinedtherole,authorityandfunctionofCommittee.Theterms participates inthediscussiononhisownremuneration.TheBoardhasadoptedwrittentermsofreferencefor remuneration ofindividualexecutivedirectorsandseniormanagementtheCompany,ensuringthatnodirector Remuneration CommitteeincludeapprovingtheoverallremunerationpolicyofGroup,reviewingand The CompanyhasestablishedaRemunerationCommitteeon9June2005.majorresponsibilitiesofthe Corporate GovernanceReport consolidated financialstatementsof2015annualreport. The remunerationpayabletodirectorsandmembersofseniormanagementbybandweresetoutinthenotes the Group,prevailingeconomicenvironmentandmarkettrend. policy oftheGroupandbasedonindividualskills,knowledge,performancecontribution,overall remuneration ofdirectorsandseniormanagementtheCompanyisdeterminedwithreferenceto policy oftheGroupandthenproposingtoRemunerationCommitteeforconsiderationseekingapproval.The The humanresourcesdepartmentreviewstheremunerationdataofmarketandformulates Remuneration Committee Adrian DavidLiManKiu Name Lee ShingSee Raymond LeungHaiMing Raymond HoChungTai (Chairman) (continued) Eligible toAttend Attended/ 1/1 1/1 1/1 1/1 of theGroup.TheNominationCommitteewillcontinuetoconsiderboarddiversity. membership. However,theappointmentsaremadeonmerit,applications’skillandexperiencedevelopment The NominationCommitteehopestoincreasethelevelofboarddiversitywhenrefreshingandrenewing 15 years. Board below5years;fivehaveservedthebetweento10andtwo11 age groupof40to50;threeareunderthe5160;andover60.Threedirectorshaveserved As at31December2015,theBoardcomprises10directors.Allofdirectorsaremale.Fourunder experience, knowledgeandculture.AllBoardappointmentsarebasedonmeritocracy. its sustainabledevelopment.TheBoardcontainsindividualswhohavediverseeducationalbackground,professional increasing diversityattheBoardlevelasanessentialelementinsupportingattainmentofitsstrategicobjectivesand on theBoard.TheBoardDiversityPolicyispostedwebsiteofCompany.Companyrecognisesthat The BoardhasadoptedaDiversityPolicyinAugust2013whichsetsouttheapproachtoachievediversity independence oftheindependentnon-executivedirectorsandconsideredresignationMr.LiJian. During theyear,NominationCommitteeevaluatedcompositionandstructureofBoard,reviewed below: During theyear,aNominationCommitteemeetingwasheldandindividualattendanceofeachdirectorissetout Lee ShingSee Name Raymond LeungHaiMing Adrian DavidLiManKiu Raymond HoChungTai (Chairman) Corporate GovernanceReport Eligible toAttend (continued) Attended/ 1/1 1/1 1/1 1/1 83 China State Construction International Holdings Limited Annual Report 2015 84 China State Construction International Holdings Limited Annual Report 2015 below: During theyear,fourAuditCommitteemeetingswereheldandindividualattendanceofeachdirectorissetout the websitesofCompanyandHKEx. Committee, whichdefinedtherole,authorityandfunctionofAuditCommittee.Thetermsreferencearepostedon relationship betweentheCompanyandauditor.TheBoardhasadoptedwrittentermsofreferenceforAudit evaluating theinternalcontrolprocedureandriskmanagementsystemofCompany,reviewing include reviewingandoverseeingthefinancialinformationofCompany,regulatingreportingsystem, The CompanyhasestablishedanAuditCommitteeon1June2005.majorresponsibilitiesofthe Audit Committee employees; insideinformationdisclosurepolicyandboarddiversitypolicy. During theyear,Boardreviewedexistingmodelcodeforsecuritiestransactionsbydirectorsandrelevant to reviewtheCompany’scompliancewithcodeanddisclosureinCorporateGovernanceReport. (e) todevelop,reviewandmonitorthecodeofconductcompliancemanual(ifany)applicableemployees (d) to reviewandmonitortheCompany’spoliciespracticesoncompliancewithlegalregulatoryrequirements; (c) toreviewandmonitorthetraining andcontinuousprofessionaldevelopmentofdirectorsseniormanagement; (b) to developandreviewtheCompany’spoliciespracticesoncorporategovernance; (a) written termsofreferenceforitscorporategovernancefunctionswhichincluded: The BoardisresponsibleforperformingthecorporategovernancedutiesofCompany.hasadopted Corporate GovernanceReport Corporate GovernanceFunctions Raymond HoChungTai Name Lee ShingSee Raymond LeungHaiMing Adrian DavidLiManKiu directors; and (Chairman) (continued) Eligible toAttend Attended/ 4/4 3/4 4/4 4/4 year. making enquiriesbytheCompany,alldirectorsconfirmedthattheyhavecompliedwithSecuritiesCodeduring to notifytheCompanyandobtainedadatedwrittenacknowledgementbeforedealinginCompany’ssecurities.After Model Codeandbeforepublishinganyinsideinformationannouncement.Directorsseniormanagementarerequired senior managementthattheyshouldnotdealinthesharesofCompanyduring“black-out-period”specified management oftheCompanyarerequiredtocomplywithSecuritiesCode.Reminderssentdirectorsand by DirectorsofListedIssuerssetoutinAppendix10theListingRules(the“ModelCode”).andsenior Code”) ontermsnolessexactingthantherequiredstandardsetoutinModelCodeforSecuritiesTransactions The Companyhasadoptedamodelcodeforsecuritiestransactionsbydirectorsandrelevantemployees(the“Securities Directors’ SecuritiesTransactions services andotherforadhocprojects. approximately HK$7,152,000andnon-auditservicesfeeofHK$316,000.Thefeesincludedtax services providedtotheGroupamountedapproximatelyHK$7,468,000,includingauditfeeof December 2015,thefeespaidorpayabletoPwCandotherfirmsofworldwidenetworkinrespect The Company’sexternalauditorisPricewaterhouseCoopers,HongKong(“PwC”).Forthefinancialyearended31 Auditor’s Remuneration with therelevantlaws,rulesandregulations. accountants tooverseeitsaccountingandfinancialreportingfunctionotherrelatedissueinaccordance During theyear,Companyconductedareviewandconsideredthatmaintainedadequatequalified various accountingissuesandfindingwiththeAuditCommitteeauditstrategyplanfor2015Groupresults. results meetingand2015unauditedthirdquartermeeting.Duringthemeetings,externalauditordiscussed 30 June2015;andtheGroup’s2015unauditedthirdquarterresults.Theexternalauditorwasinvitedtoattend2014final the internalcontrolreport;Group’s2015unauditedfirstquarterresults;Groupaccountsforsixmonthsended December 2014;theAuditCommitteeReportforyearended31connectedtransactionsreport; During themeetings,AuditCommitteereviewedandconsideredGroupaccountsforyearended31 Corporate GovernanceReport (continued) 85 China State Construction International Holdings Limited Annual Report 2015 86 China State Construction International Holdings Limited Annual Report 2015 of theSchemeisNil.Thetotalnumberordinarysharesavailable forissueundertheSchemeisNil. As atthelatestpracticabledatepriortoprintingofthisannual report,thetotalnumberofoutstandingshareoptions and 42,937,743;HK$12.4690HK$12.1896. Company’s sharesimmediatelybeforeeachoftheexercise datewere21July2015and11September2015;959,247 share options,thetotalnumberofoptionsexercised on eachdateandtheweightedaverageclosingpriceof During theyear,anaggregateof43,896,990shareoptions of theCompanywereexercised.Thedateexercise after 13September2015. Company expiredon8June2015.Thegranted one lotofoptionundertheSchemeandwaslapsed from 14September2010to132015(bothdaysinclusive).Theshareoptionsscheme(the“Scheme”)ofthe the remainingexerciseperiodandwillnotbeincludedincalculatingLimitofrelevantyear.Itcanfullyexercised can beexercisedannually(“Limit”)from14September2006.UnexercisedportionoftheLimit(ifany)in days inclusive)andtheexerciseperiodisfrom14September2006to132015(bothinclusive).20% completion ofrightsissueon16May2011.).Thevestingperiodisfrom14September2005to132010(both completion ofrightsissueon1September2009.TheexercisepricewasadjustedtoHK$0.2254immediatelyafterthe share subdivisionapprovedon12June2008.TheexercisepricewasadjustedtoHK$0.2345immediatelyafterthe completion ofopenofferon10September2007.TheexercisepricewasadjustedtoHK$0.2475immediatelyafterthe per optionon14September2005wasHK$1.03.TheexercisepriceadjustedtoHK$0.99immediatelyafterthe options weregrantedon14September2005andtheexercisepricepershareoptionisHK$0.2254(The of theCompanyundercategorydirectors,employeesandconsultantsareNil;Nilrespectively.Theshare under thecategoryofconsultantsandemployeesrespectively.Asat31December2015,balanceshareoptions share optionswerecancelledunderthecategoryofemployees;4,737,308and3,499,631shareslapsed of theCompanywereexercisedundercategoryconsultantsandemployeesrespectively.Duringyear,45,678 consultants areNil;35,520,224and16,659,383respectively.Duringtheyear,11,922,07531,974,915shareoptions As at1January2015,theoutstandingshareoptionsofCompanyundercategorydirectors,employeesand positions inanyshares,underlyingsharesanddebenturesoftheCompanyoritsassociatedcorporations. Save asdisclosedabove,at31December2015,noneoftheDirectorsnortheirassociateshadanyinterestsorshort of beneficialowner. As at31December2015,Mr.PanShujieheld400,000sharesinFEG.Allthebydirectorcapacity of theCompany).Allsharesheldbydirectorincapacitybeneficialowner. subsidiary oftheCompany);and2,365sharesinChinaOverseasPropertyHoldingsLimited(anassociatedcorporation associated corporationoftheCompany);30,000sharesinFarEastGlobalGroupLimited(“FEG”,anon-whollyowned As at31December2015,Mr.HungCheungShewheld7,095sharesinChinaOverseasLand&InvestmentLimited(an Company respectively.Allthesharesheldbydirectorsincapacityofbeneficialowners. held 3,233,027;3,300,000;2,605,138;167,471;581,584;913,569;913,569andsharesofthe Shew, Dr.RaymondHoChungTai,Mr.AdrianDavidLiManKiu,LeungHaiMingandLeeShingSee As at31December2015,Mr.ZhouYong,TianShuchen,Hancheng,PanShujie,HungCheung notified totheCompanyandStockExchangepursuantModelCodewereasfollows. “SFO”)), asrecordedintheregisterrequiredtobekeptbyCompanyunderSection352ofSFO,orotherwise Company anditsassociatedcorporation(withinthemeaningofPartXVSecuritiesFuturesOrdinance(the As at31December2015,theinterestsofDirectorsandtheirassociatesinsharesunderlying Corporate GovernanceReport (continued)

of TheHongKongInstituteCharteredSecretariesandcompliedwithrule3.29theListingRules. advice andassistanceatanytimeinrespectofherduties.Thecompanysecretaryobtainedapractitioner’sendorsement the Board.Thecompanysecretaryreportstochairmanandchiefexecutiveofficer,alldirectorsmaycalluponherfor Board policyandproceduresarefollowed.ThecompanysecretaryisanemployeeoftheCompanyappointedby The companysecretarysupportsthechairman,Boardandcommitteesbyensuringgoodinformationflow Company Secretary well astoinformationrequiredbedisclosedpursuantstatutoryrequirements. information announcementsandotherfinancialdisclosuresrequiredundertheListingRules,reportstoregulatorsas The Boardwouldpresentabalanced,clearandunderstandableassessmenttoannualinterimreports,otherinside Report oftheCompany’s2015AnnualReport. The reportingresponsibilitiesofPwC,theexternalauditorCompany,arestatedinIndependentAuditor’s that areprudentandreasonable;preparedaccountsonagoingconcernbasis. directors haveselectedappropriateaccountingpoliciesandappliedthemconsistently;madejudgementsestimates and fairviewofthestateaffairsGroup.Inpreparingaccountsforyearended31December2015, The directorsacknowledgethattheyareresponsibleforpreparingaccountseachfinancialperiodwhichgiveatrue assessment ofthefinancialandotherinformationputbeforeBoardforapproval. The ManagementprovidedsufficientexplanationandinformationtotheBoardenablemakeaninformed performance, positionandprospects. It istheresponsibilityofBoardtopresentabalanced,clearandcomprehensibleassessmentCompany’s Accountability andAudit acquire benefitsbymeansofacquisitionsharesin,ordebenturesof,theCompanyanyotherbodycorporate. holding company,oranyofitssubsidiariesfellowsubsidiaries,apartytoarrangementsenabletheDirectors Save astheshareoptionsdisclosedabove,atnotimeduringyearended31December2015wasCompany,its Corporate GovernanceReport (continued) 87 China State Construction International Holdings Limited Annual Report 2015 88 China State Construction International Holdings Limited Annual Report 2015 the generalmeetingsofCompany. time sendtheirenquiriesandconcerns totheBoardinwriting.Shareholdersmayalsomake enquirieswiththeBoardat The annualreportandtheCompany’swebsiteprovide contactdetailsoftheCompany.Shareholdersmayatany Procedures forDirectingShareholders’Enquiries totheBoard the Boardshallbereimbursedtorequisitionist(s)byCompany. may dosointhesamemanner,andallreasonableexpenses incurredbytherequisitionist(s)asaresultoffailure within 21daysofsuchdeposittheBoardfailstoproceedconvene suchmeetingtherequisitionist(s)himself(themselves) specified insuchrequisition;andmeetingshallbeheld withintwomonthsafterthedepositofsuchrequisition.If of theCompany,torequireanextraordinarygeneralmeeting tobecalledbytheBoardfortransactionofanybusiness at generalmeetingsoftheCompanyshallalltimeshave right,bywrittenrequisitiontotheBoardorSecretary date ofdeposittherequisitionnotlessthanone-tenth paidupcapitaloftheCompanycarryingrightvoting The Boardmaywheneveritthinksfitcallextraordinarygeneralmeetings.Anyoneormoreshareholdersholdingatthe Convening ofExtraordinaryGeneralMeetingonRequisitionbyShareholders Shareholders’ Rights review oftheeffectivenessandupdatingitsinternalcontrolsystem;riskmanagementpoliciesatleastonceayear. and budgetoftheCompany’saccountingfinancialreportingfunction.TheCompanywillcontinuetoconducta The Companyconsideredthattheinternalcontrolsystemhasadequacyofresources,staffqualificationsandexperience, periodical reportsweresubmittedtotheRiskManagementControlCommitteeforreview. and buildupariskawarecontrolconsciousculturethroughouttheCompany.Departmentalspecifyreports finance departments.TheCommitteeaimstocontinuallyidentifyandstrengthentheriskmanagementofCompany, is chairedbythechairmanandchiefexecutiveofficerincludesdirectorsseniormanagementfrom Committee focusesonstrategicrisks,financialmarketrisksandoperationaloftheCompany.The The RiskManagementControlCommitteewithwrittentermsofreferencewassetup. Intendance andAuditDepartmentreportedtotheCommittee. agreements; andonnormalcommercialterms.Acontinuingconnectedtransactionsreportwaspreparedbythe December 2015andconfirmedthatthetransactionsconductedinaccordancewithpricingpoliciesframework The IntendanceandAuditDepartmentreviewedtheGroup’scontinuingconnectedtransactionsforyearended31 findings andnosignificantcontrolfailurewhichmightaffectshareholders’interestswasidentified. management. Itstrengthenedtheirsystemandriskmanagementconsciousness.Correctiveactionsweretakenon procurement, operationflow,internalcontrol,financial,contracting,investment,andespeciallythebuild-transferproject deeply inspected,investigatedandassessedfoursubsidiariesoftheGroup.Itreviewedtheirsystemon officer, relevantbusinesssegmentsandAuditCommittee.Duringtheyear,IntendanceDepartment and internalcontrol.Itissuesindependentobjectivecontrolreportwithrecommendationtochiefexecutive Group onarotationalbasis.Itfocusesauditingbusinesssegments’financialmanagement,operationmanagement of control.Itadoptedarisk-basedapproach,operatesonanon-goingbasisandcoversallmajoroperationthe independent ofallbusinesssegmentsandisdirectlyresponsibleforchiefexecutiveofficersoastoensuretheneutrality The IntendanceandAuditDepartmentwithwrittentermsofreferencewassetup.is risk exposuresoastosafeguardtheshareholders’investmentandCompany’sassets. operations andtheexternalenvironmentinrespectoffinance,operationriskmanagement,tomitigateGroup’s The Grouphasastable,soundandeffectiveinternalcontrolsystemtoensurethecanwithstandchangesinits Corporate GovernanceReport Internal ControlandRiskManagement (continued) Company andtheHKEx. copy ofthelatestversionCompany’sMemorandumandArticlesAssociationsispostedonwebsites There arenochangetotheCompany’sMemorandumandArticlesofAssociationsduringfinancialyear2015.A the Companyinatimelymanner.TheCompany’swebsite:www.csci.com.hk. latest dataandinformationoftheGroupsothatshareholders,investorspubliccaninspectabout time toprovidethelatestbusinessinformationofCompanyinvestors.Thewebsitecontains diversified communicationchannels.TheCompanyholdspressconferencesandanalystbriefingsessionsfromtimeto The Companyhasbeenstrivingtomaintainhightransparencyandcommunicatewithshareholdersinvestorsthrough Investor Relations The resultsofthepollwerepostedonwebsitesCompanyandHKExsamedaymeeting. by thechairmaninrespectofeachsubstantiallyseparateissue,andvotingonresolutionwasconductedpoll. available toanswerquestionsfromtheshareholdersatmeeting.Atmeeting,separateresolutionwasproposed days priortothemeeting.Thechairmanandmembersofaudit,remunerationnominationcommitteeswere the circularcontaininginformationonproposedresolutionsweresenttoshareholdersmorethan20clearbusiness The 2015AnnualGeneralMeetingwasheldon2June2015.noticeofmeeting,theCompany’sannualreportand raise questionsandexpresstheiropinions. general meetingduring2015.Atthemeeting,chairmanofgavesufficienttimetoshareholders General meetingisamainchannelofcommunicationbetweendirectorsandshareholders.TheCompanyheldanannual presentations alsouploadedtotheCompany’swebsiteforallstakeholdersperusal. website fromtimetokeeptheshareholdersupdatedinformationofCompany’srecentdevelopment.Investors meeting, annualreportandinterimreport,notice,announcementcircular.Inaddition,theCompanyupdatesits The Companyhasestablishedvarious/awiderangeofcommunicationchannelswithshareholders.Theseincludegeneral Communication withShareholders The proceduresforappointment,electionandremovalofdirectorsaresetoutintheCompany’swebsite. the Companytoconveneageneralmeetingfollowingproceduressetoutinprecedingparagraph. Company LawsortheArticlesofAssociationCompany.Shareholderswhowishtomovearesolutionmayrequest There arenoprovisionsallowingshareholderstomovenewresolutionsatgeneralmeetingsundertheCaymanIslands Procedures forPuttingForwardProposalsatGeneralMeetingsbyShareholders Corporate GovernanceReport (continued) 89 China State Construction International Holdings Limited Annual Report 2015 Directors’ Report

The Directors present their report together with the audited consolidated financial statements for the year Major Risk Management ended 31 December 2015. Under the Group’s internal control and risk management framework, the Risk Management Control Committee identifies major risks in each operation segment, assesses Principal Activities and its likely impact and evaluates the risk in order to develop Geographical Analysis of effective control activities to mitigate the risks. Other than Operations the financial risk management policies of the Group set The principal activity of the Company is investment out in the section headed “Management Discussion and holding and provides corporate management services. Analysis” on pages 24 to 31 of this Annual Report, the The activities of its principal subsidiaries are set out in Group is also exposed to major risk factors including Note 45 to the consolidated financial statements. construction risk, infrastructure investment risk, overseas business risk and compliance risk. An analysis of the Group’s performance for the year by segments is set out in Note 6 to the consolidated financial (1) Construction risk statements. The Group is exposed to construction risk in relation to technology, costs, duration of works, Results and Appropriations environmental protection and safety involved in the construction business. The Group monitored Annual Report 2015 The results of the Group for the year ended 31 December and evaluated the price of key materials regularly, 2015 are set out in the consolidated income statement conducted timely analyses and made bold decisions. 90 and consolidated statement of comprehensive income on With effective cooperation between tender, pages 107 and 108 respectively. procurement, construction and other departments, the Group kept updating the procurement plans and An interim dividend of HK13 cents per share amounting efficiently controlled the scale and procedures of to HK$527,321,000 and a special dividend of HK2 cents procurement in line with construction progress. The per share for celebrating the 10th listing anniversary of Group achieved its profit target of tender projects the Company amounting to HK$81,126,000 was paid through centralised procurement and mitigated to the shareholders during the year. The Board now price risk by setting fixed unit price for auxiliary recommends the payment of a final dividend of HK18 materials. As for special construction process and cents per share to the shareholders whose names appear materials, the construction defects risk and price on the register of members on 10 June 2016, amounting risk have been shifted to the sub-contractors who to approximately HK$730,137,000. is responsible for assigned works with material supply. Materials involving significant safety and Business Review and Performance social influence are managed by the Group directly The business review of the Group for the year ended so as to strictly control the quality risks. Under 31 December 2015 is set out in the sections headed the unique management model of “5+3” (i.e. China State Construction International Holdings Limited “Chairman’s Statement” and “Management Discussion coordinated management by the five elements of and Analysis”. safety, environmental protection, quality, progress and cost, and the three systems of flow guarantee Details regarding the Group’s environmental policies system, procedure guarantee system and liability and performance; compliance with relevant laws and guarantee system), the Group was able to control regulations; and key relationship with its employees, the construction risks efficiently. customers and suppliers, refer to the Company’s Corporate Social Responsibility Report 2015, which will be published in July 2016. on page204. Details ofinvestmentpropertiestheGrouparesetout Investment Properties amounted toHK$62,323(2014:HK$84,400). Charitable DonationsmadebytheGroupduringyear Charitable Donations (4) Compliance risk Overseasbusinessrisk (3) Infrastructureinvestmentrisk (2) added Tax”(the“VATProgram”)inMainlandChina. including “Conversion of Business Tax to Value- the taxationrisksresultingfromreform, Group’s business. The Group also closely monitor operation regionswhichmaycauselegalriskstothe and amendment of laws and regulations of each The Group paid high attention to the enactment political andregulatoryrisks. resources ontheexplorationofcorecities,toavoid restructure theoverseasoperationsandfocusedits control risks. The Group has taken the initiative to hence exposures to overseas political and The Groupundertakescertainprojectsinoverseas, favorable policyterms. communicated with the government authorities for focused on safety management and proactively as planned. For operating project, the Group in advance to ensure the recovery of investments projects, the Group conducted preparation works conditions. In respect of the forthcoming buy-back with the implementation of the buy-back guarantee Group monitoredprojectprogressandquality,along risks from scratch. For projects in progress, the decision-making processestocontroltheinvestment thorough researches, investigation and strict Group adhered to the selection criteria, conducted and operation. For new development projects, the project development, implementation, buy-back risk control regarding the whole cycle towards business, the Group carried out comprehensive In respect of the infrastructure investment 181. premium andreservesoftheGrouparesetoutonpage Details of movements during the year in the share Share PremiumandReserves statements. 2015 aresetoutinNote34totheconsolidatedfinancial Details ofsharesissuedintheyearended31December for theissueisHK$9,895,000. and the total exercise money received by the Company Shares pursuanttotheCompany’sshareoptionscheme During the year, the Company issued 43,896,990 new HK$0.025 each(“Shares”). December 2015 was 4,056,314,622 ordinary shares of The Company’s total issued share capital as at 31 Share IssuedintheYear existing shareholders. Company to offer new shares on a pro-rata basis to Company is incorporated, which would oblige the of Cayman Islands, being the jurisdiction in which the the Company’s Articles of Association and the laws There are no provisions for pre-emptive rights under Pre-emptive Rights and thelotwaslapsedafter13September2015. Company granted one lot of option under the scheme share option scheme expired on 8 June 2015. The result in the Company issuing shares. The Company’s Company to enter into any agreements that will or may result in the Company issuing shares or that require the statements, noequity-linkedagreementsthatwillormay as disclosed in Note 40 to the consolidated financial Other than the share option scheme of the Company Equity-linked Agreement HK$10,125,066,000). 2015 amounted to HK$10,271,648,000 (2014: Distributable reserves of the Company at 31 December Distributable Reserves Directors’ Report (continued) 91 China State Construction International Holdings Limited Annual Report 2015 92 China State Construction International Holdings Limited Annual Report 2015 Financial Summary Mr. LiJian Non-executive Director Mr. WuMingqing Mr. HungCheungShew Mr. PanShujie Mr. ZhouHancheng Mr. TianShuchen Mr. ZhouYong Executive Directors report were: The Directors during the year and up to the date of this Directors Company’s listedsecurities. subsidiaries purchased, sold or redeemed any of the During the year, neither the Company nor any of its the Company’sListedSecurities Purchase, SaleorRedemptionof 202 and203. Group forthepastfivefinancialyearsissetoutonpages A summary of the results, assets and liabilities of the Directors’ Report themselves forre-election. annual general meeting. All the retiring Directors, being eligible, offer and Dr.RaymondLeungHaiMing,willretirebyrotationattheforthcoming Association, Mr.ZhouYong,Hancheng,HungCheungShew In accordancewithArticles87(1)and87(2)oftheCompany’s to bebroughttheattentionofshareholdersCompany. with theBoardandnothingrelatingtoaffairsofCompanyneeded his timeanddedication.Mr.Lihasconfirmedthathenodisagreement director oftheCompanyduetohisexistingengagementrequiringmore Mr. Li Jian (“Mr. Li”) resigned on 19 January 2015 as a non-executive Note: Mr. LeeShingSee Dr. RaymondLeungHaiMing Mr. AdrianDavidLiManKiu Dr. RaymondHoChungTai Independent Non-executiveDirectors (resigned on19January2015) ChiefExecutiveOfficer) (Chairman and (continued) independent. (the “ListingRules”)andstillconsiderssuchdirectorsare Exchange ofHongKongLimited(the“StockExchange”) Governing the Listing of Securities on The Stock his independence pursuant to Rule 3.13 of the Rules Non-executive Directors an annual confirmation of The CompanyhasreceivedfromeachoftheIndependent Confirmation ofIndependence remain unchanged. to HK$187,500. The directors’ fees of other directors Mr. HungCheungShewwaschangedfromHK$178,500 With effect from 1 February 2016, the monthly salary of Note 9totheconsolidatedfinancialstatements. Information regardingdirectors’emolumentsissetoutin section head“DirectorsandOrganisation”ofthisreport. The Directors’ biographical information is set out in the at theendofyearoranytimeduringyear. material interests,whetherdirectlyorindirectly,subsisted was apartyandinwhichdirectoroftheCompanyhad subsidiaries, fellow subsidiaries or its parent company relation totheGroup’sbusinesswhichCompany’s No transaction,arrangementorcontractofsignificancein Contracts Transactions, Arrangementsor Directors’ MaterialInterestsin Company’s ArticlesofAssociation. general meetingoftheCompanyinaccordancewith to retirement from office and re-election at the annual Company are appointed for a fixed period but subject compensation). All the Non-executive Directors of the without payment of compensation (other than statutory is not determinable by the Group within one year annual general meeting has a service contract which No director proposed for re-election at the forthcoming Directors’ ServiceContracts short positionsintheissuedsharecapitalofCompany. Save asdisclosedabove,at31December2015,theCompanyhasnotbeennotifiedofanyotherrelevantinterestsor CSCECLisasubsidiaryofCSCEC,thusCSCECdeemedbytheSFOtobeinterestedin2,336,091,659Sharesindirectlyownedb 4. COHL is a direct wholly-owned subsidiary of CSCECL, thus CSCECL is deemed by the SFO to be interested in 2,336,091,659 Share 3. Amongst the total number of 2,336,091,659 Shares held by COHL, 2,239,953,308 Shares was held as beneficial owner while the b 2. The percentagehasbeenadjustedbasedonthetotalnumberofordinarysharesCompanyinissueasat31December2015 1. Notes: Long positionsofsubstantialshareholdersinthesharesCompany 336 oftheSecuritiesandFuturesOrdinance(the“SFO”) shareholders maintainedbytheCompanyunderSection As at 31 December 2015, the register of substantial Substantial Shareholders aeo hrhle Capacity China OverseasHoldingsLimited Name ofshareholder China StateConstructionEngineering China StateConstructionEngineering (“COHL”) Corporation Corporation Limited owned byCOHL. 96,138,351 Shareswasinterestsofcontrolledcorporations. ordinary shares). 4 (“CSCEC”) 3 (“CSCECL”) 2

Interest ofacontrolledcorporation/ eeiilonr236016957.59 2,336,091,659 Interest ofacontrolledcorporation/ Beneficial owner beneficial owner beneficial owner of theCompany: Company ofrelevantinterestsintheissuedsharecapital shows that the following shareholders had notified the Directors’ Report ,3,9,5 57.59 2,336,091,659 ,3,9,5 57.59 2,336,091,659 shares held Number of ordinary (continued) (i.e. 4,056,314,622 (i.e.4,056,314,622 y CSCECL. in issue shares alance of s directly % of 1 93 China State Construction International Holdings Limited Annual Report 2015 94 China State Construction International Holdings Limited Annual Report 2015 Management Contracts HK$235,169,000. As at 31 December 2015, the Group shared the accumulated losses of these affiliated companies amounted to Total Equity Reserves Net Liabilities Current liabilities Non-current liabilities Current assets Non-current assets companies asat31December2015issetoutbelow: of 8percent.Acombinedbalancesheettheaffiliated to certainaffiliatedcompaniesexceededtheassetsratio As at31December2015,theGroup’sfinancialassistance of theListingRules Disclosure PursuanttoRule13.22 43 totheconsolidatedfinancialstatements. to 104. The related party transactions disclosed in Note Details ofconnectedtransactionsaresetoutonpages96 Transactions Connected andRelatedParty customers orsuppliers. capital) haveaninterestinanyoftheGroup’sfivelargest owns more than 5% of the Company’s issued share of theCompany(whichtoknowledgeDirectors did adirector,anassociateofdirectororshareholder Other than disclosed above, at no time during the year fellow subsidiaries. purchases for the year and all of them are the Group’s accounted for 10.6% (2014: 11.8%) of the Group’s purchases. The five largest suppliers of the Group for approximately 2.8% (2014: 6.7%) of the Group’s venture partner. The Group’s largest supplier accounted joint venture of which a fellow subsidiary was a joint the Group’s revenue and one of them is the Group’s accounted for approximately 46.0% (2014: 43.4%) of revenue. The five largest customers of the Group approximately 20.5% (2014: 14.6%) of the Group’s In 2015, the Group’s largest customer accounted for Major CustomersandSuppliers during theyear. business of the Company were entered into or existed administration ofthewholeoranysubstantialpart No contract concerning the management and Directors’ Report (continued) of thesecompanies. independently of,andatarmslengthfromthebusinesses The Group is capable of carrying on its business independently of the boards of these companies. The board of directors of the Group operates and relatedbusiness. which areengagedinconstruction,propertydevelopment the Company’sholdingcompany,and/oritssubsidiaries date of this report, Mr. Zhou Yong held directorship in Company discloses that during the year and up to the Pursuant to existing Rule 8.10 of the Listing Rules, the Business Directors’ InterestinCompeting Rules. Company’s issued shares as required under the Listing the dateofthisreport,thereissufficientpublicfloat Company andwithintheknowledgeofDirectors,asat Based ontheinformationthatispubliclyavailableto Public Float and Officersliabilityinsuranceduringtheyear. by suchdirector.TheCompanyhasmaintainedDirectors extend toanymatterinrespectoffraudordishonesty in relation thereto, provided that such indemnity do not incur in the execution of his duty, or supposed duty, or losses, damagesandexpenseswhichhemaysustainor profits oftheCompanyagainstallactions,costs,charges, shall be entitled to be indemnified out of the assets and subject to the statues, every director of the Company Pursuant to the Company’s Articles of Association, Permitted IndemnityProvisions (7,249,621) (2,594,982) 3,895,200 4,954,970 (994,433) (994,433) (994,433) HK$’000 future years. schemes isavailabletoreducethecontributionpayablein HK$123 million. No forfeited contribution under these retirement benefit schemes amounting to approximately During the year, the Group made contribution to the to maketherequiredcontributionsundertheseschemes. obligation totheGroupwithrespecttheseschemesis of payrollcoststotheretirementbenefitscheme.Theonly subsidiaries arerequiredtocontributecertainpercentage scheme operated by the PRC government. These required to participate in a state-managed retirement Company’s subsidiaries established in the PRC are at rates specified in the rules. The employees of the required to make contributions to the MPF Scheme Scheme, the employer and its employees are each the control of an independent trustee. Under the MPF separately from those of the Group in funds under Ordinance. The Assets of the MPF Scheme are held Authority undertheMandatoryProvidentFundSchemes registered with the Mandatory Provident Fund Schemes for all employees in Hong Kong. The MPF Scheme is a mandatory provident fund scheme (“MPF Scheme”) With effectfrom1December2000,theGrouphasjoined Retirement BenefitScheme own remuneration. with market practice. No individual should determine his independent non-executivedirectorsarepaidfeesinline and comparable market trend. The emolument of the Company’s operating results, individual performance by the Remuneration Committee, having regard to the The emolument of the executive directors are decided experience, performanceandmarketpaylevel. with individual’s responsibility, competence and skills, Employees remuneration was determined in accordance was approved by the Remuneration Committee. The emolument policy of the employees of the Group Emolument Policy Hong Kong,22March2016 Executive Director,ChairmanandChiefOfficer Zhou Yong China StateConstructionInternationalHoldingsLimited On behalfoftheBoard meeting oftheCompany. will be proposed at the forthcoming annual general A resolutiontore-appointPwCasauditoroftheCompany appointment asauditoroftheCompany. PwC retire and, being eligible, offer themselves for re- as auditor of the Company for the past three years. Messrs. PricewaterhouseCoopers (“PwC”) had acted Auditor Directors’ Report (continued) 95 China State Construction International Holdings Limited Annual Report 2015 Connected Transactions

A. Connected transactions under the Listing Rules

A.1 Formation of Joint Venture with Since the applicable percentage ratios pursuant to the Listing Rules calculated with reference to the China Overseas Land & Investment transaction under the JV Agreement exceed 0.1% Limited in relation to land in but all are less than 5%. The transaction is subject to Shenzhen the reporting and announcement requirements, and On 18 September 2015, an increase in capital is exempted from the independent shareholders’ agreement (“JV Agreement”) was entered into approval requirement. between China Overseas Property Group Co. Ltd. (“CO Property”, a wholly owned subsidiary of China Details of the transaction were disclosed in an Overseas Land & Investment Limited (“COLI”, announcement dated 18 September 2015. an associate of the Company)) and 深圳海龍建 築製品有限公司 (Shenzhen Hailong Construction A.2 Formation of Wuhan JV with 中建三 Products Co., Ltd. (“Shenzhen Hailong”, a wholly 局集團有限公司 owned subsidiary of the Company)), whereby (China Construction Shenzhen Hailong agreed to contribute RMB2.5 Third Engineering Bureau Group million (equivalent to approximately HK$3.0 million, Co., Ltd.)

Annual Report 2015 determined with reference to the existing net On 27 October 2015, a joint venture agreement assets of the 深圳市毅駿房地產開發有限公司 (“JV Agreement”) was entered into between 中建 96 (Shenzhen Yijun Property Development Co. Ltd. 國際投資（中國）有限公司 (China State Construction (the “JV Company”, a wholly owned subsidiary of International Investments (China) Limited (“CSCIICL”, COLI))) for the increase in registered capital of JV a wholly owned subsidiary of the Company)) and Company (“Capital Increase”). Following the Capital 中建三局集團有限公司 (China Construction Third Increase, the JV Company will be owned as to 80% Engineering Bureau Group Co., Ltd. (“CCTEB”, a and 20% by CO Property and Shenzhen Hailong subsidiary of China State Construction Engineering respectively. The JV Company is principally engaged Corporation Limited (“CSCECL”), the intermediate in the property development and owns a parcel holding company of the Company)), whereby of land situated at Guiyuan Street, Luohu District CSCIICL and CCTEB agreed to form a Wuhan of Shenzhen, the PRC (the “Land”). The parties joint venture (the “Wuhan JV”) on a 50:50 basis acknowledge that the JV Company may invite for carrying out financing and investing of the Shenzhen Hailong to tender for the JV Company’s Infrastructure Projects (i.e. engineering works construction works in respect of the Land. relating to the construction of roads, bridges, tunnels and urban infrastructure; water conservation, The estimated total investment of the project is environmental and public utilities; urban landscaping approximately RMB2,100 million (equivalent to and greening works; reconstruction of squatter settlement, affordable housing, urbanisation and

China State Construction International Holdings Limited approximately HK$2,561 million). Other than the Capital Increase amount, Shenzhen Hailong paid construction of facilities; consultancy services) in an amount of RMB177.6 million (equivalent to Wuhan, Hubei Province, the PRC. approximately HK$216.6 million, determined by multiplying the consideration payable for the Land by the 20% equity interest to be held by Shenzhen Hailong in the JV Company) for co-investment in the Land. Any additional funding requirements of the JV Company shall first be satisfied by external fund- raising, otherwise by advance shareholders’ loans to the JV Company in proportional to their respective equity interest in the JV Company. A.3 Formation ofJointVenturewith in Shenzhen Limited fordevelopmentoftheland China OverseasLand&Investment at thedateofannouncement). “Land”, waswhollyownedbyShenzhenHailongas River Zone,LuohuDistrictofShenzhen,thePRC(the at aparceloflandsituatedSungang-Qingshui 50:50 basisforcarryingouturbanrenewalproject venture company(the“ProjectCompany”)ona whereby thepartiesagreedtoestablishajoint between COPropertyandShenzhenHailong, agreement (“JVAgreement”)wasenteredinto On 2December2015,aprojectcooperation announcement dated27October2015. Details ofthetransactionweredisclosedinan approval requirement. is exemptedfromtheindependentshareholders’ the reportingandannouncementrequirements, but allarelessthan5%.Thetransactionissubjectto transaction undertheJVAgreementexceed0.1% the ListingRulescalculatedwithreferenceto Since theapplicablepercentageratiospursuantto PRC. Infrastructure ProjectsinWuhan,HubeiProvince,the to theproposedcapitalrequirementsof negotiations betweenthepartieswithreference the WuhanJVisdeterminedafterarm’slength its registeredcapital.Thecapitalof HK$304,878,049) incashintotheWuhanJVas pay RMB250,000,000(equivalenttoapproximately HK$609,756,098). CSCIICLandCCTEBwilleach RMB500,000,000 (equivalenttoapproximately The registeredcapitaloftheWuhanJVwas Connected Transactions announcement dated2December2015. Details ofthetransactionweredisclosedinan approval requirement. is exemptedfromtheindependentshareholders’ the reportingandannouncementrequirements, but allarelessthan5%.Thetransactionissubjectto transaction undertheJVAgreementexceed0.1% the ListingRulescalculatedwithreferenceto Since theapplicablepercentageratiospursuantto Shenzhen Hailong. be leadedbyCOPropertyandfullysupported the registeredcapital)ofProjectCompanyshall Any additionalfundingrequirements(otherthan reference totheamountofvaluationLand). arm’s lengthnegotiationsbetweenthepartieswith approximately HK$182,926,829,determinedafter consideration ofRMB150,000,000(equivalentto the LandtoProjectCompanyforland Shenzhen Hailongshallprocuretheinjectionof the project.UponformationofProjectCompany, reference totheproposedcapitalrequirementsof arm’s lengthnegotiationsbetweenthepartieswith HK$1,829,268,293), whichwasdeterminedafter RMB1,500,000,000 (equivalenttoapproximately and LandConsideration)oftheprojectwas the registeredcapitalofProjectCompany Company. Thetotalinvestmentamount(including their respectiveequityinterestsintheProject HK$6,097,561), incashproportionto RMB5,000,000 (equivalenttoapproximately Hailong willeachpayintotheProjectCompany HK$12,195,122). COPropertyandShenzhen was RMB10,000,000(equivalenttoapproximately The registeredcapitaloftheProjectCompany (continued) 97 China State Construction International Holdings Limited Annual Report 2015 98 China State Construction International Holdings Limited Annual Report 2015 A.4 Formation ofJointVenturewith Connected Transactions Group Limited China OverseasGrandOceans announcement dated31December2015. Details ofthetransactionweredisclosedinan approval requirement. is exemptedfromtheindependentshareholders’ the reportingandannouncementrequirements, but allarelessthan5%.Thetransactionissubjectto transaction undertheJVAgreementexceed0.1% the ListingRulescalculatedwithreferenceto Since theapplicablepercentageratiospursuantto by wayofbankloans. JV Companyshallbearrangedbythe requirements (otherthantheregisteredcapital)of the Landconsideration.Anyadditionalfunding negotiation betweenthepartieswithreferenceto JV Companywasdeterminedafterarm’slength in theJVCompany.Theregisteredcapitalof to theshareholders’respectiveequityinterests HK$671,225,700) andbepaidincashproportion RMB550,185,000 (equivalenttoapproximately The registeredcapitaloftheJVCompanywas District ofHefei,AnhuiProvincethePRC. to bidanddeveloptheLandsituatedinBaohe joint venture(the“JVCompany”)ona45:45:10basis whereby COGO,CSGWIandSAIFagreedtoforma Investment FundL.P.(indirectwhollyownSAIF)), has approximately4.76%interestsinSAIFXINGHE XINGHE HongKongLimited(“SAIF”,theCompany owned subsidiaryoftheCompany)andSAIF Wealth InvestmentsLimited(“CSGWI”,awholly an associateoftheCompany),ChinaStateGrand Overseas GrandOceansGroupLimited(“COGO”, (“JV Agreement”)wasenteredintobetweenChina On 31December2015,acooperationagreement (continued) B.1 Master SecurityServicesAgreement B.1 B. Continuing connected providers andthenumberofsecurityguards. market rateandcondition,thenumberofservices pricing terms,theGroupwilltakeintoaccount similar transactionsinthemarket.Indetermining commercial negotiationandbyreferencetoother tendering/quotation procedureoronthebasisof The servicesfeewillbedeterminedthrougha Cap). not exceedHK$25million(i.e.theSecurityServices between 1January2015and30Juneshall shall notexceedHK$50million,andfortheperiod each ofthetwoyearsending31December2014 December 2012shallnotexceedHK$25million,for Group fortheperiodbetween1July2012and31 sum thatmaybeawardedbytheGrouptoCOLI Services Agreement,themaximumtotalcontract on 30June2015.PursuanttotheMasterSecurity years commencingfrom1July2012andending Security ServicesAgreement”)foratermofthree into amastersecurityservicesagreement(“Master On 18May2012,COLIandtheCompanyentered Kong fromtimetotime. services totheworksitesofGroupinHong to participateincompetitivetenderforthesecurity licenses toprovidesecurityservicesinHongKong members oftheCOLIGroupwhichholdrelevant It isexpectedthattheGroupwillcontinuetoinvite (for theperiodfrom1July2012to30June2015) (dated 18May2012) Rules transactions undertheListing B.2 Master LeaseAgreement B.2 (dated 18May2012) property inthesamedistrict. into accounttheopenmarketrentofcomparable In determiningthepricingterms,Groupwilltake exceed HK$9million(i.e.theLeaseCap). between 1January2015and30Juneshallnot shall notexceedHK$18million,andfortheperiod each ofthetwoyearsending31December2014 December 2012shallnotexceedHK$9million,for for theperiodbetween1July2012and31 maximum aggregaterentalforleasingofproperties Pursuant totheMasterLeaseAgreement, from 1July2012andendingon30June2015. Agreement”) foratermofthreeyearscommencing into amasterleaseagreement(“MasterLease On 18May2012,COLIandtheCompanyentered properties fromtheCOLIGrouptimetotime. It isexpectedthattheGroupwillcontinuetolease (for theperiodfrom1July2012to30June2015) Agreement wasHK$2,179,631.84. COLI GroupundertheMasterSecurityServices 2015, thetotalcontractsumawardedto For theperiodfrom1January2015to30June 18 May2012. Master SecurityServicesAgreementwasmadeon An announcementcontainingtheparticularsof shareholders’ approvalrequirement. requirements, andisexemptedfromtheindependent to theannualreview,reportingandannouncement the MasterSecurityServicesAgreementissubject calculated pursuanttotheListingRules.Assuch less than5%oftheapplicablepercentageratios Agreement (i.e.theSecurityServicesCap)is year/period undertheMasterSecurityServices of thesecurityservicesbyCOLIGroupforeach The maximumtotalcontractsumfortheprovision Connected Transactions B.3 電有限公司 amounted toHK$6,670,822.50. the COLIGroupunderMasterLeaseAgreement 2015, theaggregateamountmadebyGroupto For theperiodfrom1January2015to30June 2012. Master LeaseAgreementwasmadeon18May An announcementcontainingtheparticularsof approval requirement. and isexemptedfromtheindependentshareholders’ review, reportingandannouncementrequirements, Master LeaseAgreementissubjecttotheannual calculated pursuanttotheListingRules.Assuch is lessthan5%oftheapplicablepercentageratios the MasterLeaseAgreement(i.e.Cap) Group totheCOLIforeachyear/periodunder charges andelectricitycharges)payablebythe conditioning charges,watercleaning government rent,managementfeesandair- The maximumaggregaterental(exclusiveofrates, Services Cap). shall notexceedHK$100million(i.e.theConnection each ofthethreeyearsending31December2015 be awardedbytheCOLIGrouptofor tender, themaximumtotalcontractsumthatmay and endingon31December2015.Uponsuccessful of threeyearscommencingfrom1January2013 (“Master ConnectionServicesAgreement”)foraterm into amasterconnectionservicesagreement On 18May2012,COLIandtheCompanyentered by COLIfromtimetotime. estate project(s)locatedinShenyanganddeveloped connection servicesforheatingpipesthereal of theCompany))toparticipateinprovision Thermoelectricity CompanyLimited invite theCompany(throughShenyangHuanggu It isexpectedthattheCOLIGroupwillcontinueto 2015) (for theperiodfrom1January2013to31December Master ConnectionServicesAgreement (dated 18May2012) (“SHTCL”,awhollyownedsubsidiary (continued) 瀋陽皇姑熱

99 China State Construction International Holdings Limited Annual Report 2015 100

China State Construction International Holdings Limited Annual Report 2015 B.4 Master DesignConsultancyServices B.4 Connected Transactions 藝設計顧問 (dated 19August2013) Agreement HK$32,812,500. Master ConnectionServicesAgreementwas contract sumawardedtotheGroupunder For theyearended31December2015,total on 18May2012. Master ConnectionServicesAgreementwasmade An announcementcontainingtheparticularsof approval requirement. is exemptedfromtheindependentshareholders’ reporting andannouncementrequirements, Services Agreementissubjecttotheannualreview, the ListingRules.AssuchMasterConnection applicable percentageratioscalculatedpursuantto Connection ServicesCap)islessthan5%ofthe Master ConnectionServicesAgreement(i.e.the COLI Grouptotheforeachyearunder The maximumtotalcontractsumsawardedbythe size, developmentstatusandcostoftheconnection. other comparableservicesproviders,thelocation, into accountthecoverageservicesprovided,any In determiningthepricingterms,Groupwilltake Agreement, wherebytheGroupmayengage entered intotheMasterDesignConsultancyServices On 19August2013,theCompanyandCOLI 2016) (for theperiodfrom1September2013to31August RMB130 million(i.e.theAnnual Cap). January 2016and31August 2016 shallnotexceed RMB130 million,andfortheperiodbetween1 years ending31December2015shallnotexceed not exceedRMB85million,foreachofthetwo September 2013and31Decembershall by theGrouptoHuayiforperiodbetween1 value ofthecontractsumthatmaybeawarded Upon successfultender,themaximumaggregate September 2013andendingon31August2016. Mainland Chinafortheperiodcommencingfrom1 to theGroup’sbuildingconstructionworksin COLI)) asproviderofDesignConsultancyServices Consultants (Shenzhen)Ltd(“Huayi”,asubsidiaryof （深圳） 有限公司 (HongKongHuayiDesign (continued) 香港華 B.5 CSCECL Sub-construction construction EngagementCap). not exceedRMB3,000million (i.e.theCSCSub- three financialyearsending31 December2017shall by theCSCECLGroupto Group foreachofthe maximum totalcontractsumthatmaybeawarded 31 December2017.Uponsuccessfultender,the commencing from1January2015andendingon Group asContractorsforatermofthreeyears Cap); and(ii)theCSCECLGroupmayengage (i.e. theCSCECLSub-constructionEngagement December 2017shallnotexceedRMB15,000million Group foreachofthethreefinancialyearsending31 that maybeawardedbytheGrouptoCSCECL successful tender,themaximumtotalcontractsum 2015 andendingon31December2017.Upon a termofthreeyearscommencingfrom1January may engagetheCSCECLGroupasContractorsfor Engagement Agreement,whereby:(i)theGroup entered intotheCSCECLSub-construction On 28October2014,theCompanyandCSCECL 2017) (for theperiodfrom1January2015to31December (dated 28October2014) Engagement Agreement (i.e. AnnualCap). the MasterDesignConsultancyServicesAgreement no contractawardedbytheGrouptoHuayiunder For theyearended31December2015,therewas made on19August2013. Master DesignConsultancyServicesAgreementwas An announcementcontainingtheparticularsof approval requirement. is exemptedfromtheindependentshareholders’ reporting andannouncementrequirements, Services Agreementissubjecttotheannualreview, Rules. AssuchtheMasterDesignConsultancy percentage ratioscalculatedpursuanttotheListing the AnnualCap)islessthan5%ofapplicable Master DesignConsultancyServicesAgreement(i.e. awarded toHuayiforeachyear/periodunderthe The maximumtotalcontractsumthatmaybe providers. services providedandthenumberof take intoaccountthequantityandnatureofdesign In determiningthepricingterms,Groupwill Engagement Cap)wasRMB17,611,389. Agreement (i.e.theCSCSub-construction under theCSCECLSub-constructionEngagement awarded bytheCSCECLGroupto RMB5,062,166,273.43. Thetotalcontractsum CSCECL Sub-constructionEngagementCap)was construction EngagementAgreement(i.e.the the CSCECLGroupunderSub- total contractsumawardedbytheGroupto For theyearended31December2015, on 16December2014. Company atanextraordinarygeneralmeetingheld approved bytheindependentshareholdersof Sub-construction EngagementAgreementwasduly the shareholdersofCompany.TheCSCECL Engagement Agreementhasbeendespatchedto details oftheCSCECLSub-construction A circulardated18November2014containing independent shareholders’approvalrequirements. the annualreview,reporting,announcementand construction EngagementAgreementissubjectto to theListingRules.AssuchCSCECLSub- applicable percentageratioscalculatedpursuant Engagement Agreementexceed5%ofthe each yearundertheCSCECLSub-construction (i.e. CSCSub-constructionEngagementCap)for Sub-construction EngagementCap)andtheGroup awarded totheCSCECLGroup(i.e. The maximumtotalcontractsumthatmaybe associated withtheproject. of previoustendersandthepossibleriskfactors of works,costsinformation,pricinginformation review thetechnicalrequirement,quantityandquality In determiningthepricingterms,Groupwill Connected Transactions B.6 COHL Build-TransferConstruction B.6 shareholders’ approvalrequirement. requirements, andisexemptedfromtheindependent to theannualreview,reportingandannouncement Build-Transfer ConstructionAgreementissubject pursuant totheListingRules.AssuchCOHL 5% oftheapplicablepercentageratioscalculated COHL Build-TransferConstructionCap)islessthan Build-Transfer ConstructionAgreement(i.e.the awarded totheGroupforeachyearunderCOHL The maximumtotalcontractsumthatmaybe associated withtheproject. of previoustendersandthepossibleriskfactors of works,costsinformation,pricinginformation review thetechnicalrequirement,quantityandquality In determiningthepricingterms,Groupwill Transfer ConstructionCap). not exceedRMB1,000million(i.e.theCOHLBuild- three financialyearsending31December2017shall by theCOHLGrouptoforeachof contract sumofBTProjectsthatmaybeawarded 2017. Uponsuccessfultender,themaximumtotal from 1January2015andendingon31December Agreement foratermofthreeyearscommencing entered intotheCOHLBuild-TransferConstruction On 28October2014,theCompanyandCOHL in thePRC(the“BTProjects”)fromtimetotime. Group inrelationtourban-ruralcoordinationprojects the basisof“Build-Transfer”modeforCOHL and constructionofhousinginfrastructureon Group toundertakeprojectsforthefinancing,design of theCompany)Groupwillcontinuetoinvite Holdings Limited(“COHL”,theholdingcompany The DirectorsexpectthattheChinaOverseas 2017) (for theperiodfrom1January2015to31December (dated 28October2014) Agreement (continued) 101

China State Construction International Holdings Limited Annual Report 2015 102

China State Construction International Holdings Limited Annual Report 2015 B.7 FE-CSCECL Sub-construction Connected Transactions (dated 28October2014) Engagement Agreement Construction Cap). Agreement (i.e.theCOHLBuild-Transfer Group undertheCOHLBuild-TransferConstruction no contractawardedbytheCOHLGroupto For theyearended31December2015,therewas made on28October2014. COHL Build-TransferConstructionAgreementwas An announcementcontainingtheparticularsof independent shareholders’approval requirement. announcement requirements, and isexemptedfrom is subjecttotheannualreview,reportingand CSCECL Sub-constructionEngagementAgreement pursuant totheListingRules.AssuchFE- 5% oftheapplicablepercentageratioscalculated Agreement (i.e.theCSCECLWorksCap)islessthan the FE-CSCECLSub-constructionEngagement awarded totheFEGGroupforeachyearunder The maximumtotalcontractsumthatmaybe associated withtheproject. of previoustendersandthepossibleriskfactors of works,costsinformation,pricinginformation review thetechnicalrequirement,quantityandquality In determiningthepricingterms,Groupwill the CSCECLWorksCap). December 2017shallnotexceedHK$800million(i.e. Group foreachofthethreefinancialyearsending31 may beawardedbytheCSCECLGrouptoFEG Upon successfultender,thetotalcontractsumthat January 2015andendingon31December2017. works foratermofthreeyearscommencingfrom1 facade workstotheCSCECLGroup’sconstruction project managementserviceinrelationtoexterior service, supply,projectconsultancyserviceand as itssubcontractorforprovisionofcontracting the CSCECLGroupmayengageFEG construction EngagementAgreement,whereby of theCompany)enteredintoFE-CSCECLSub- Group Limited(“FEG”,anon-whollyownedsubsidiary On 28October2014,CSCECLandFarEastGlobal 2017) (for theperiodfrom1January2015to31December (continued) B.8 CSC GroupEngagementAgreement B.8 independent shareholders’approvalrequirements. to theannualreview,reporting,announcementand the CSCGroupEngagementAgreementissubject calculated pursuanttotheListingRules.Assuch Cap) exceed5%oftheapplicablepercentageratios Group EngagementAgreement(i.e.theCOLIWorks awarded totheGroupforeachyearunderCSC The maximumtotalcontractsumthatmaybe associated withtheproject. of previoustendersandthepossibleriskfactors of works,costsinformation,pricinginformation review thetechnicalrequirement,quantityandquality In determiningthepricingterms,Groupwill (i.e. theCOLIWorksCap). December 2017shallnotexceedHK$3,000million Group foreachofthethreefinancialyearsending31 sum thatmaybeawardedbytheCOLIGroupto Upon successfultender,themaximumtotalcontract January 2015andendingon31December2017. for atermofthreeyearscommencingfrom1 entered intoaCSCGroupEngagementAgreement On 31October2014,COLIandtheCompany to time. works inthePRC,HongKongandMacaufromtime competitive tenderfortheCOLIGroup’sconstruction continue toinvitetheGroupparticipatein The DirectorsexpectthattheCOLIGroupwill 2017) (for theperiodfrom1January2015to31December (dated 31October2014) Cap) wasHK$318,658,326.41. Engagement Agreement(i.e.theCSCECLWorks FEG GroupundertheFE-CSCECLSub-construction contract sumawardedbytheCSCECLGroupto For theyearended31December2015,total Agreement wasmadeon28October2014. the FE-CSCECLSub-constructionEngagement An announcementcontainingtheparticularsof B.9 Master SecurityServicesAgreement B.9 (dated 26June2015) Services Cap). January 2018and30June(i.e.theSecurity not exceedHK$10millionfortheperiodbetween1 of thetwoyearsending31December2017;and December 2015;notexceedHK$20millionforeach million fortheperiodbetween1July2015and31 services capwasadjustedtonotexceedHK$10 of thesecurityservicescap.Thefinalagreed October 2015regardingthedownwardadjustment entered intobetweentheCompanyandCOPLon9 September 2015andasupplementalagreement cap. AsfurtherannouncedbytheCompanyon18 on 30June2018subjecttoasecurityservices years commencingfrom1July2015andending Security ServicesAgreement”)foratermofthree into amastersecurityservicesagreement(“Master COLI asatthedateofannouncement)entered Limited (“COPL”,directwhollyownedsubsidiaryof the CompanyandChinaOverseasPropertyHoldings security servicesinHongKong.On26June2015, provider whichholdstherelevantlicensestoprovide Group willcontinuetorequiresecurityservices The directorsoftheCompanyexpectedthat (for theperiodfrom1July2015to30June2018) HK$2,891,654,200. the CSCGroupEngagementAgreementwas total contractsumawardedtotheGroupunder For theyearended31December2015, held on16December2014. of theCompanyatanextraordinarygeneralmeeting was dulyapprovedbytheindependentshareholders Company. TheCSCGroupEngagementAgreement has beendespatchedtotheshareholdersof details oftheCSCGroupEngagementAgreement A circulardated18November2014containing Connected Transactions i) eitheronnormalcommercialtermsor,ifthere (ii) intheordinaryandusualcourseofbusiness (i) into: Continuing ConnectedTransactionswereentered Directors oftheCompany,whoconfirmedthatthese reviewed bytheIndependentNon-executive been approvedbytheBoardandhave above ContinuingConnectedTransactionshave Pursuant torule14A.55oftheListingRules, Agreement wasHK$5,207,404.44. COLI GroupundertheMasterSecurityServices 2015, thetotalcontractsumawardedto For theperiodfrom1July2015to31December approval requirements. announcement andindependentshareholders’ Agreement areexemptfromannualreview,reporting, contemplated undertheMasterSecurityServices Agreement isonavoluntarybasis.Thetransactions disclosure regardingtheMasterSecurityServices calculated pursuanttotheListingRules.The than 0.1%ofalltheapplicablepercentageratios Agreement (i.e.theSecurityServicesCap)isless year/period undertheMasterSecurityServices of thesecurityservicesbyCOPLGroupforeach The maximumtotalcontractsumfortheprovision providers andthenumberofsecurityguards. market rateandcondition,thenumberofservices pricing terms,theGroupwilltakeintoaccount similar transactionsinthemarket.Indetermining commercial negotiationandbyreferencetoother tendering/quotation procedureoronthebasisof The servicesfeewillbedeterminedthrougha independent thirdparties;and Company thantermsavailabletoorfrom terms, ontermsnolessfavourabletothe judge whethertheywereonnormalcommercial were notsufficientcomparabletransactionsto the Group; (continued) 103

China State Construction International Holdings Limited Annual Report 2015 104

China State Construction International Holdings Limited Annual Report 2015 Connected Transactions 4 fortransactionsinvolvingtheprovisionofgoods (4) therelevantcapamounthavenotbeen (3) nothinghascometotheirattentionthatcauses (2) nothinghascometotheirattentionthatcauses (1) that: The auditorhasconfirmedinalettertotheBoard Accountants. issued bytheHongKongInstituteofCertifiedPublic Transactions undertheHongKongListingRules” 740 “Auditor’sLetteronContinuingConnected Information” andwithreferencetoPracticeNote Other ThanAuditsorReviewsofHistoricalFinancial Engagements 3000“Assurance accordance withHongKongStandardonAssurance the Group’scontinuingconnectedtransactionsin the Company’sauditorwasengagedtoreporton In accordancewithrule14A.56oftheListingRules, (iii) in policies oftheCompany. respects, inaccordancewiththepricing that thetransactionswerenot,inallmaterial to theirattentionthatcausesthembelieve or servicesbytheGroup,nothinghascome December 2015;and exceeded duringthefinancialyearended31 agreements governingsuchtransactions; entered intoinaccordancewiththerelevant them tobelievethatthetransactionswerenot by theBoard; connected transactionshadnotbeenapproved them tobelievethatthedisclosedcontinuing shareholders oftheCompanyasawhole. and reasonableintheinterestsof governing themontermsthatwerefair accordance withtherelevantagreements (continued) defined inChapter14AoftheListingRules. connected/continuing connectedtransactionsas financial statements.Certainitemsalsoconstitute made duringtheyearwasdisclosedinnote43to summary ofsignificantrelatedpartytransactions the HongKongFinancialReportingStandards.A above alsoconstituterelatedpartytransactionunder The continuingconnectedtransactionsdisclosed connected/continuing connectedtransactions. the ListingRulesinrelationtoaforementioned with thedisclosurerequirementsasrequiredby The BoardconfirmsthattheCompanyhascomplied Independent Auditor’s Report

Independent Auditor’s Report To the shareholders of China State Construction International Holdings Limited (incorporated in Cayman Islands with limited liability)

We have audited the consolidated financial statements of China State Construction International Holdings Limited (the “Company”) and its subsidiaries set out on pages 107 to 201, which comprise the consolidated statement of financial position as at 31 December 2015, and the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.

Directors’ Responsibility for the Consolidated Financial Statements The directors of the Company are responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants and the disclosure requirements of the Hong Kong Companies Ordinance, and for such internal Annual Report 2015 control as the directors determine is necessary to enable the preparation of consolidated financial statements that are 105 free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit and to report our opinion solely to you, as a body, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report.

We conducted our audit in accordance with Hong Kong Standards on Auditing issued by the Hong Kong Institute of Certified Public Accountants. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those

risk assessments, the auditor considers internal control relevant to the entity’s preparation of consolidated financial China State Construction International Holdings Limited statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 106

China State Construction International Holdings Limited Annual Report 2015 Hong Kong,22March2016 Certified PublicAccountants PricewaterhouseCoopers disclosure requirementsoftheHongKongCompaniesOrdinance. in accordancewithHongKongFinancialReportingStandardsandhavebeenproperlypreparedcompliancethe and itssubsidiariesasat31December2015,oftheirfinancialperformancecashflowsfortheyearthenended In ouropinion,theconsolidatedfinancialstatementsgiveatrueandfairviewofpositionCompany Opinion (incorporated inCaymanIslandswithlimitedliability) To theshareholdersofChinaStateConstructionInternationalHoldingsLimited Independent Auditor’sReport Independent Auditor’sReport

(continued)

(continued) Consolidated Income Statement FOR THE YEAR ENDED 31 DECEMBER 2015

2015 2014 Notes HK$’000 HK$’000 Revenue 5 37,913,159 34,439,575 Costs of sales (32,883,385) (29,696,483)

Gross profit 5,029,774 4,743,092 Investment income, other income and other gains, net 7 832,800 475,339 Administrative, selling and other operating expenses (995,527) (1,033,140) Share of profits of Joint ventures 423,728 294,345 Associates 72,462 23,787 Finance costs 8 (607,082) (455,829)

Profit before tax 4,756,155 4,047,594 Income tax expenses, net 11 (654,526) (659,716)

Profit for the year 12 4,101,629 3,387,878

Profit/(loss) for the year attributable to: Owners of the Company 4,153,072 3,457,410 Annual Report 2015 Non-controlling interests (51,443) (69,532)

4,101,629 3,387,878 107

Earnings per share (HK cents) 14 Basic 103.16 88.75

Diluted 102.26 87.52

China State Construction International Holdings Limited Consolidated Statement of Comprehensive Income FOR THE YEAR ENDED 31 DECEMBER 2015

2015 2014 HK$’000 HK$’000 Profit for the year 4,101,629 3,387,878

Other comprehensive (loss)/income Items that may be reclassified to profit or loss Release of investment revaluation reserve to income statement upon reclassification to associate/disposal of available-for-sale investments (375,127) (9,954) Gain on fair value changes of available-for-sale investments, net of tax 362,652 4,838 Exchange differences arising on translation of foreign operations (1,641,918) (178,351)

Other comprehensive loss for the year, net of tax (1,654,393) (183,467)

Total comprehensive income for the year, net of tax 2,447,236 3,204,411

Total comprehensive income/(loss) for the year attributable to: Owners of the Company 2,517,035 3,290,828 Non-controlling interests (69,799) (86,417)

Annual Report 2015 2,447,236 3,204,411

108 China State Construction International Holdings Limited Consolidated Statement of Financial Position AS AT 31 DECEMBER 2015

2015 2014 Notes HK$’000 HK$’000 Non-current Assets Property, plant and equipment 15 2,771,990 2,827,300 Investment properties 16 36,991 38,073 Interests in infrastructure project investments 17 1,536,372 1,489,188 Prepaid lease payments 18 269,816 273,022 Interests in joint ventures 19 3,573,662 3,449,034 Interests in associates 20 3,800,193 2,104,943 Concession operating rights 21 6,044,202 6,530,992 Deferred tax assets 38 280,951 187,320 Trademark, project backlogs and licences 22 186,025 200,640 Goodwill 22 577,664 577,664 Available-for-sale investments 23 239,503 453,286 Amounts due from investee companies 24 281,858 411,838 Trade and other receivables 27 17,949,961 12,901,282 Deposit paid for an investment 108,043 – Loan to a joint venture 29 – 804,918

Annual Report 2015 37,657,231 32,249,500 109 Current Assets Interests in infrastructure project investments 17 35,817 17,176 Inventories 25 108,835 160,289 Properties held for sale 418,915 66,544 Amounts due from customers for contract work 26 2,421,715 1,354,148 Trade and other receivables 27 18,170,163 12,542,067 Deposits and prepayments 526,915 461,585 Loan to a joint venture 29 1,104,082 – Amounts due from joint ventures 29 1,564,404 1,342,025 Tax recoverable 41,271 11,559 Bank balances and cash 30 8,015,187 7,452,448

32,407,304 23,407,841 Assets held for sale 33 – 10,921,766

32,407,304 34,329,607

China State Construction International Holdings Limited 110

China State Construction International Holdings Limited Annual Report 2015 On behalfoftheBoard AS AT31DECEMBER2015 Consolidated StatementofFinancialPosition Current Liabilities Total AssetslessCurrentLiabilities Net CurrentAssets Non-current Liabilities Capital andReserves rd aals te aalsadacul 31 Trade payables,otherpayablesandaccruals eerdicm 37 36 Deferred income Guaranteed notespayables 32 Non-controlling interests 28 29 Obligations underfinanceleases Borrowings Amount duetoanassociate Amounts duetojointventures eerdtxlaiiis38 35 Obligations underfinanceleases Deferred taxliabilities Share premiumandreserves Equity attributabletoownersoftheCompany mut u ocsoesfrcnrc ok26 Amounts duetocustomersforcontractwork Liabilities directlyassociatedwithassets Deposits receivedandadvancesfromcustomers Current taxpayables orwns32 34 Borrowings Share capital lsiida edfrsl 33 classified asheldforsale huYn ZhouHancheng Zhou Yong ietrDirector Director

Notes

30,743,970 30,743,970 21,926,222 39,320,565 18,073,587 13,085,694 21,246,978 21,146,716 21,045,308 39,320,565 (continued) 1,663,334 2,015,547 4,669,015 3,879,322 HK$’000 808,197 625,844 698,194 367,242 738,610 100,262 101,408 2,719 2015 951 – –

31,221,072 23,782,937 17,261,318 35,358,035 15,360,373 10,361,804 19,997,662 19,830,096 19,729,786 35,358,035 3,108,535 7,438,135 3,793,052 3,869,804 HK$’000 587,269 930,971 354,111 828,738 389,477 735,808 167,566 100,310 26,480 3,480 2014 998 Consolidated Statement of Changes in Equity FOR THE YEAR ENDED 31 DECEMBER 2015

Attributable to owners of the Company

Share Non- premium controlling Share capital and reserves Total interests Total Equity HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 (Note 34) (Note 35) At 1 January 2014, as restated 97,219 15,836,417 15,933,636 253,237 16,186,873

Profit/(loss) for the year – 3,457,410 3,457,410 (69,532) 3,387,878 Release of investment revaluation reserve to income statement upon disposal of available-for-sale investments – (9,954) (9,954) – (9,954) Gain on fair value changes of available-for-sale investments, net of tax – 4,838 4,838 – 4,838 Exchange differences arising on translation of foreign operations – (161,466) (161,466) (16,885) (178,351)

Total comprehensive income/(loss) for the year – 3,290,828 3,290,828 (86,417) 3,204,411

Issue of ordinary shares upon exercise of share Annual Report 2015 options 160 1,281 1,441 – 1,441 111 Issue of shares upon acquisition of subsidiaries and a joint venture 2,931 1,317,619 1,320,550 – 1,320,550 Contribution from a former shareholder – 178,892 178,892 – 178,892 Contribution from non-controlling interests of a subsidiary – – – 6,338 6,338 Dividend paid to non-controlling shareholders – – – (5,592) (5,592) 2013 final dividend paid – (467,088) (467,088) – (467,088) 2014 interim dividend paid – (428,163) (428,163) – (428,163)

Total transactions with owners, recognised directly in equity 3,091 602,541 605,632 746 606,378

At 31 December 2014 100,310 19,729,786 19,830,096 167,566 19,997,662

China State Construction International Holdings Limited 112

China State Construction International Holdings Limited Annual Report 2015 FOR THEYEARENDED31DECEMBER2015 Consolidated StatementofChangesinEquity

Contribution fromnon-controllinginterests Issue ofordinarysharesuponexercise Total comprehensiveincome/(loss)fortheyear Exchange differencesarisingontranslationof Gain onfairvaluechangesofavailable-for-sale Release ofinvestmentrevaluationreserveto Profit/(loss) fortheyear At 1January2015 At 31December2015 Total transactionswithowners, 2015 specialdividendpaid 2015 interimdividendpaid 2014 finaldividendpaid Dividend paidtonon-controllingshareholders of asubsidiary of shareoptions foreign operations investments, netoftax to associate income statementuponreclassification recognised directlyinequity Share capital

Nt 4 (Note35) (Note 34) K’0 K’0 K’0 K’0 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 Attributable toownersoftheCompany 0,1 979761,3,9 6,6 19,997,662 167,566 19,830,096 19,729,786 100,310 0,0 105382,4,1 0,6 21,246,978 100,262 21,146,716 21,045,308 101,408 ,9 12153 12045 ,9 (1,197,920) 9,895 2,495 – (1,200,415) (1,201,513) 1,098 9,895 8,797 1,098 6,9 6,9 4362,652 2,447,236 (69,799) (375,127) 54 (1,641,918) (18,410) – 2,517,035 (1,623,508) 2,517,035 362,598 4,101,629 (1,623,508) – (375,127) 362,598 (51,443) – (375,127) – 4,153,072 – 4,153,072 – 611 (6,151) (81,126) 8,646 (527,321) (6,151) – (601,863) 8,646 – – – – (81,126) (527,321) (81,126) (601,863) – (527,321) – (601,863) – – – – – n eevsTotal and reserves

premium Share

(continued)

controlling neet Total Equity interests Non-

Consolidated Statement of Cash Flows FOR THE YEAR ENDED 31 DECEMBER 2015

2015 2014 HK$’000 HK$’000 Operating activities Profit before tax 4,756,155 4,047,594 Adjustments for: Finance costs 607,082 455,829 Interest income (201,583) (154,661) Dividend income (15,458) (15,289) Gain on reclassification from available-for-sale investment to associate (375,127) – Gain on disposal of listed available-for-sale investments – (13,992) Gain on disposal of properties held for sale (75,682) (244,166) (Gain)/loss on disposal of property, plant and equipment (1,341) 4,156 Gain on disposal of prepaid lease payment (90,569) – Share of profits of joint ventures (423,728) (294,345) Share of profits of associates (72,462) (23,787) Exchange loss, net 20,126 1,873 Depreciation of property, plant and equipment 139,110 145,084 Depreciation of investment properties 1,003 1,007 Amortisation of concession operating rights 180,863 142,257 Annual Report 2015 Amortisation of trademark and projects backlogs 14,615 25,956 113 Amortisation of prepaid lease payments 5,420 6,077 Allowance for doubtful debts on trade and other receivables 2,800 2,932

Operating cash flows before working capital changes 4,471,224 4,086,525 Increase in concession operating rights (38,263) (253,537) Increase in income receivables from infrastructure project investments (117,091) (178,669) Decrease in inventories 51,454 3,138 Changes in net balances with customers for contract work (64,001) 559,217 Increase in trade and other receivables (7,699,473) (7,661,711) Increase in deposits and prepayments (12,014) (98,284) Increase in trade payables, other payables and accruals 3,993,957 4,278,046 Decrease in deposits received and advances from customers (100,319) (935,685) Changes in net balances with an associate (26,480) (1,134) Changes in net balances with a joint venture – (1,273,675) Increase in deferred income 54,232 100,922

Net cash generated from/(used in) operations 513,226 (1,374,847) Income taxes paid (223,035) (336,944) China State Construction International Holdings Limited Income taxes refunded 9,905 22,853

Net cash generated from/(used in) operating activities (Note) 300,096 (1,688,938)

114

China State Construction International Holdings Limited Annual Report 2015 FOR THEYEARENDED31DECEMBER2015 Consolidated StatementofCashFlows Net cashusedininvestingactivities Interest received Investing activities Capital investmentsinjointventures (Increase)/decrease indepositswithfinancialinstitutions Decrease/(increase) inpledgedbankdeposits Proceeds fromdisposaloflistedavailable-for-saleinvestments Deposit paidforaninvestment Increase ininterestsassociates Dividends receivedfromunlistedavailable-for-saleinvestments Dividends receivedfromassociates Dividends receivedfromjointventures Loan toajointventure Advances fromjointventures Increase ininterestsinfrastructureprojectinvestments Proceeds fromdisposalofprepaidlandlease Payments forprepaidleases Purchases ofproperty,plantandequipment Acquisition oflistedavailable-for-saleinvestments Repayment frominvesteecompany Proceeds frompropertiesheldforsale Proceeds fromdisposalofproperty,plantandequipment

(continued)

HK$’000 (108,043) (959,838) (299,164) (425,478) (935,204) (203,496) 267,135 369,453 130,720 187,465 (36,232) (21,985) 26,325 15,458 16,846 32,818 73,422 2015 (998) 391 (3) –

(1,572,596) (2,091,319) (677,368) (140,746) (514,487) (302,407) (183,061) HK$’000 160,075 338,451 330,502 282,277 15,289 40,197 38,017 94,787 2014 (391) 142 – – – – generated fromoperatingactivitiesfortheyearwasapproximatelyHK$1,696million(2014:HK$2,449million). Excluding theexpenditurefor“build-transfer”(“BT”)projectsamountingtoapproximatelyHK$1,396million(2014:HK$4,138 Note: Finance costspaid Financing activities Bank balancesandcash Analysis ofthebalancescashandequivalents Cash andcashequivalentsattheendofyear Increase/(decrease) incashandequivalents Net cashfromfinancingactivities Effect offoreignexchangeratechanges Cash andcashequivalentsatthebeginningofyear Proceeds fromissueofordinaryshareson Repayment offinanceleases Repayment ofbankloans New bankloansraised Contribution fromnon-controllinginterests Contribution fromaformershareholder Dividends paidtonon-controllinginterests Dividends paidtoownersoftheCompany ahadcs qiaet elsiidt seshl o ae33 Less: Pledgedbankdepositsand Cash andcashequivalentsreclassifiedtoassetsheldforsale exercise ofshareoptions with financialinstitutions Consolidated StatementofCashFlows Note

FOR THEYEARENDED31DECEMBER2015 (4,075,969) (1,210,310) 8,014,873 7,505,128 1,309,448 7,191,039 8,015,187 8,014,873 HK$’000 (606,160) (164,595) 674,340 (1,542) (6,151) 9,895 8,646 2015 (314) – –

(continued) million), thenetcash (1,507,621) 8,161,250 3,172,269 6,249,098 7,505,128 7,452,448 7,505,128 (607,988) (895,251) (853,197) HK$’000 178,892 (48,134) 53,382 (1,839) (5,592) 1,441 6,338 2014 (702) 115

China State Construction International Holdings Limited Annual Report 2015 Notes to the Consolidated Financial Statements FOR THE YEAR ENDED 31 DECEMBER 2015

1 General information China State Construction International Holdings Limited (The “Company”) is a public limited company incorporated in the Cayman Islands and its shares are listed on the Main Board of the Stock Exchange of Hong Kong Limited (the “SEHK”) with effect from 8 July 2005. Its immediate holding company is China Overseas Holdings Limited (“COHL”), a company incorporated in Hong Kong. Its intermediate holding company and its ultimate holding company are China State Construction Engineering Corporation Limited (“CSCECL”), a joint stock company with its shares listed on the Shanghai Stock Exchange, and China State Construction Engineering Corporation (“CSCEC”), respectively, both of which are established in the People’s Republic of China (“PRC”) and controlled by the PRC Government. The addresses of the registered office and principal place of business of the Company are Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111, The Cayman Islands and 28th Floor, China Overseas Building, 139 Hennessy Road, Wanchai, Hong Kong, respectively.

The principal activities of the Company and its subsidiaries (together, the “Group”) are the construction business, project consultancy services, thermoelectricity business, infrastructure project investments, toll road operation and facade contracting business. The principal activities of its principal subsidiaries, joint ventures and associates are set out in Notes 45, 19 and 20, respectively.

The consolidated financial statements are presented in Hong Kong dollar (“HK$’000”), unless otherwise stated. The

Annual Report 2015 consolidated financial statements have been approved for issue by the Board of Directors on 22 March 2016. 116 2 Summary of significant accounting policies The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

2.1 Basis of preparation The consolidated financial statements of the Company have been prepared in accordance with all applicable Hong Kong Financial Reporting Standards (“HKFRS”) issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”). The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of available-for-sale investments, which are carried at fair value.

The preparation of financial statements in conformity with HKFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 4. China State Construction International Holdings Limited Summaryofsignificant accounting policies 2 . Basisofpreparation 2.1 c Newstandards,amendmentsandimprovementstoexistingstandardsnotyeteffective (c) NewHongKongCompaniesOrdinance(Cap.622) (b) Theadoptionofamendmentsandimprovementstoexistingstandards (a) Notes totheConsolidatedFinancialStatements KR 5RevenuefromContractswithCustomers RegulatoryDeferralAccounts FinancialInstruments accounting policiesandpresentationoftheGroup’sconsolidated financialstatements. standards, andisintheassessmentprocesswhetherthere aresubstantialchangestotheGroup’s AnnualImprovements2012–2014Cycle The Grouphasnotearlyadoptedtheabovenewstandards, amendmentsandimprovementstoexisting 3 Accounting forAcquisitionofInterestsinJointOperations 2 1 Annual ImprovementsProject HKFRS 15 HKFRS 14 EquityMethodinSeparateFinancialStatements HKFRS 9 Amendments toHKFRS11 Disclosure Initiative Amendments toHKFRS10, SaleorContributionofAssetsbetweenanInvestorand BearerPlants Amendments toHKFRS10andHKAS28 Amendments toHKAS27 ClarificationofAcceptableMethodsDepreciationand Amendments toHKAS16and41 Amendments toHKAS16and38 Amendments toHKAS1 existing standardsthathavebeenissuedbutarenotyeteffective. The Grouphasnotearlyadoptedthefollowingnewstandards,amendmentsandimprovementsto presentation anddisclosuresofcertaininformationintheconsolidatedfinancialstatements. Ordinance (Cap.622)comeintooperationduringthefinancialyear,asaresult,therearechangesto In addition,therequirementsofPart9“AccountsandAudit”newHongKongCompanies AnnualImprovements2011–2013Cycle AnnualImprovements2010–2012Cycle EmployeeBenefits:DefinedBenefitPlans— results andfinancialposition. The applicationoftheabovenewHKFRSsincurrentyearhashadnomaterialimpactonGroup’s Annual ImprovementsProject Annual ImprovementsProject Amendments toHKAS19 HKFRSs”) issuedbytheHKICPA. Hong KongAccountingStandards(“HKAS(s)”),HKFRS(hereinaftercollectivelyreferencedtoasthe“new In thecurrentyear,Grouphasappliedfollowingamendmentsandimprovementstoexisting Tobedetermined Effectiveforannualperiodsbeginningonorafter1January2018 Effectiveforannualperiodsbeginningonorafter1January2016 HKFRS 12andHKAS28 (continued) Investment Entities:ApplyingtheConsolidationException its AssociateorJointVenture Amortisation Employee Contributions 1 (continued) 1 1 2 FOR THEYEARENDED31DECEMBER2015 1 3

(continued) 1 2 1 1 1 117

China State Construction International Holdings Limited Annual Report 2015 118

China State Construction International Holdings Limited Annual Report 2015 Summaryofsignificant accounting policies 2 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements 2.2 Consolidation (a) Subsidiaries made upto31December2015. The consolidatedfinancialstatementsincludetheofCompanyandallitssubsidiaries under commoncontrol,whicheverisshorter. businesses hadbeencombinedatthebeginningofpreviousreportingperiodorwhentheyfirstcame The comparativeamountsintheconsolidatedfinancialstatementsarepresentedasifentitiesor retained profitofthecombiningentitiesorbusinessistransferredtoprofitsGroup. controlling interestsoftheparty.Uponcompletioncommoncontrolcombinations, The consolidatedincomestatementalsotakesintoaccounttheprofitorlossattributabletonon- combination. under thecommoncontrol,wherethisisashorterperiod,regardlessofdatecontrol from theearliestdatepresentedorsincewhencombiningentitiesbusinessesfirstcame The consolidatedincomestatementincludestheresultsofeachcombiningentitiesorbusinesses party’s interest. over costatthetimeofcommoncontrolcombination,toextentcontinuationcontrolling acquirer’s interestinthenetfairvalueofacquiree’sidentifiableassets,liabilitiesandcontingent from thecontrollingparty’sperspective.Noamountisrecognisedinrespectofgoodwillorexcess The netassetsofthecombiningentitiesorbusinessesareconsolidatedusingexistingbookvalues when thecombiningentitiesorbusinessesfirstcameundercontrolofcontrollingparty. businesses inwhichthecommoncontrolcombinationoccursasiftheyhadbeencombinedfromdate consolidated financialstatementsincorporatetheitemsofcombiningentitiesor Guideline 5“MergerAccountingforCommonControlCombinations”.Inapplyingmergeraccounting,the Business combinationsundercommoncontrolareaccountedforinaccordancewiththeAccounting Business combinations—commoncontrol from thedatethatcontrolceases. are consolidatedfromthedateonwhichcontrolistransferredtoGroup.Theydeconsolidated with theentityandhasabilitytoaffectthosereturnsthroughitspoweroverentity.Subsidiaries controls anentitywhentheGroupisexposedto,orhasrightsvariablereturnsfromitsinvolvement Subsidiaries areentities(includingstructuredentities)overwhichtheGrouphascontrol.The (continued)

(continued) Summaryofsignificant accounting policies 2 2.2 Consolidation (a) Subsidiaries Notes totheConsolidatedFinancialStatements also recordedinequity. assets ofthesubsidiaryisrecordedinequity.Gainsorlosses ondisposalstonon-controllinginterestsare between fairvalueofanyconsiderationpaidandtherelevant shareacquiredofthecarryingvaluenet equity transactions—thatis,aswiththeowners intheircapacityasowners.Thedifference Transactions withnon-controllingintereststhatdonotresult inlossofcontrolareaccountedforas Changes inownershipinterestssubsidiarieswithoutchangeofcontrol adjusted toconformwiththeGroup’saccountingpolicies. impairment ofthetransferredasset.Whennecessary,amountsreportedbysubsidiarieshavebeen are eliminated.Unrealisedlossesalsoeliminatedunlessthetransactionprovidesevidenceofan Intra-group transactions,balances,andunrealisedgainsontransactionsbetweengroupcompanies in theconsolidatedincomestatement. assets ofthesubsidiaryacquiredincaseabargainpurchase,differenceisrecogniseddirectly controlling interestrecognisedandpreviouslyheldmeasuredislessthanthefairvalueofnet the identifiablenetassetsacquiredisrecordedasgoodwill.Iftotalofconsiderationtransferred,non- and theacquisition-datefairvalueofanypreviousequityinterestinacquireeover The excessoftheconsiderationtransferred,amountanynon-controllinginterestinacquiree gains orlossesarisingfromsuchre-measurementarerecognisedinconsolidatedincomestatement. previously heldequityinterestintheacquireeisre-measuredtofairvalueatacquisitiondate;any If thebusinesscombinationisachievedinstages,acquisitiondatecarryingvalueofacquirer’s Acquisition-related costsareexpensedasincurred. acquisition datefairvalue,unlessanothermeasurementbasisisrequiredbyHKFRS. acquiree’s identifiablenetassets.Allothercomponentsofnon-controllinginterestsaremeasuredattheir either fairvalueorthepresentownershipinterests’proportionateshareinrecognisedamountsof holders toaproportionateshareoftheentity’snetassetsineventliquidationaremeasuredat basis. Non-controllinginterestsintheacquireethatarepresentownershipandentitletheir date. TheGrouprecognisesanynon-controllinginterestintheacquireeonanacquisition-by-acquisition liabilities assumedinabusinesscombinationaremeasuredinitiallyattheirfairvaluestheacquisition from acontingentconsiderationarrangement.Identifiableassetsacquiredandliabilities issued bytheGroup.Theconsiderationtransferredincludesfairvalueofanyassetorliabilityresulting the assetstransferred,liabilitiesincurredtoformerownersofacquireeandequityinterests control combinations.Theconsiderationtransferredfortheacquisitionofasubsidiaryisfairvalues The Groupappliestheacquisitionmethodtoaccountforbusinesscombinationsotherthancommon Business combinations—acquisitionmethod (continued) (continued) (continued) FOR THEYEARENDED31DECEMBER2015

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China State Construction International Holdings Limited Annual Report 2015 Summaryofsignificant accounting policies 2 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements 2.2 Consolidation (a) Subsidiaries (b) Associates constructive obligationsormadepaymentsonbehalfoftheassociate. other unsecuredreceivables,theGroupdoesnotrecognise furtherlosses,unlessithasincurredlegalor the Group’sshareoflossesinanassociateequalsorexceeds itsinterestintheassociate,includingany comprehensive incomewithacorrespondingadjustmentto the carryingamountofinvestment.When and itsshareofpost-acquisitionmovementsinothercomprehensive incomeisrecognisedinother The Group’sshareofpost-acquisitionprofitorlossisrecognised intheconsolidatedincomestatement, to consolidatedincomestatementwhereappropriate. proportionate shareoftheamountspreviouslyrecognisedinothercomprehensiveincomeisreclassified If theownershipinterestinanassociateisreducedbutsignificantinfluenceretained,onlya associate’s identifiableassetsandliabilitiesisaccountedforasgoodwill. any differencebetweenthecostofassociateandGroup’ssharenetfairvalue includes goodwillidentifiedonacquisition.Upontheacquisitionofownershipinterestinanassociate, share oftheprofitorlossinvesteeafterdateacquisition.TheGroup’sinvestmentinassociates initially recognisedatcost,andthecarryingamountisincreasedordecreasedtorecogniseinvestor’s are accountedforusingtheequitymethodofaccounting.Undermethod,investmentis accompanying ashareholdingofbetween20%and50%thevotingrights.Investmentsinassociates Associates areallentitiesoverwhichtheGrouphassignificantinfluencebutnotcontrol,generally including goodwill. exceeds thecarryingamountinconsolidatedfinancialstatementsofinvestee’snetassets dividend isdeclaredorifthecarryingamountofinvestmentinseparatefinancialstatements investments ifthedividendexceedstotalcomprehensiveincomeofsubsidiaryinperiod Impairment testingoftheinvestmentsinsubsidiariesisrequireduponreceivingdividendsfromthese accounted forbytheCompanyonbasisofdividendreceivedandreceivable. less impairment.Costalsoincludesdirectattributablecostsofinvestment.Theresultssubsidiariesare In theCompany’sstatementoffinancialposition,investmentsinsubsidiariesareaccountedforatcost Separate financialstatements other comprehensiveincomearereclassifiedtoconsolidatedstatement. directly disposedoftherelatedassetsorliabilities.Thismaymeanthatamountspreviouslyrecognisedin recognised inothercomprehensiveincomerespectofthatentityareaccountedforasiftheGrouphad the retainedinterestasanassociate,jointventureorfinancialasset.Inaddition,anyamountspreviously statement. Thefairvalueistheinitialcarryingamountforpurposesofsubsequentlyaccounting at thedatewhencontrolislost,withchangeincarryingamountrecognisedconsolidatedincome When theGroupceasestohavecontrol,anyretainedinterestinentityisre-measureditsfairvalue Disposal ofsubsidiaries (continued) (continued) (continued)

(continued) Summaryofsignificant accounting policies 2 2.2 Consolidation (c) Joint arrangements (b) Associates Notes totheConsolidatedFinancialStatements been changedwherenecessarytoensureconsistencywiththe policiesadoptedbytheGroup. provides evidenceofanimpairmenttheassettransferred. Accounting policiesofthejointventureshave of theGroup’sinterestinjointventures.Unrealisedlosses arealsoeliminatedunlessthetransaction Unrealised gainsontransactionsbetweentheGroupanditsjointventuresareeliminatedtoextent goodwill. Group’s shareofthenetfairvaluejointventure’sidentifiableassetsandliabilitiesisaccountedfor of theownershipinterestinajointventure,anydifferencebetweencostventureand The Group’sinvestmentsinjointventuresincludegoodwillidentifiedonacquisition.Upontheacquisition losses, unlessithasincurredobligationsormadepaymentsonbehalfofthejointventures. form partoftheGroup’snetinvestmentinjointventures),Groupdoesnotrecognisefurther or exceedsitsinterestsinthejointventures(whichincludesanylong-termthat,substance, movements inothercomprehensiveincome.WhentheGroup’sshareoflossesajointventureequals and adjustedthereaftertorecognisetheGroup’sshareofpost-acquisitionprofitsorlosses Under theequitymethodofaccounting,interestsinjointventuresareinitiallyrecognisedatcost Joint ventures structure ofthejointarrangement. ventures dependingonthecontractualrightsandobligationseachinvestorhasratherthanlegal Under HKFRS11investmentsinjointarrangementsareclassifiedaseitheroperationsor statement. Gains andlossesondilutionofequityinterestinassociatesarerecognisedtheconsolidatedincome where necessarytoensureconsistencywiththepoliciesadoptedbyGroup. evidence ofanimpairmenttheassettransferred.Accountingpoliciesassociateshavebeenchanged investor’s interestsintheassociates.Unrealisedlossesareeliminatedunlesstransactionprovides associate arerecognisedintheGroup’sconsolidatedfinancialstatementsonlytoextentofunrelated Profits andlossesresultingfromupstreamdownstreamtransactionsbetweentheGroupits amount adjacentto“shareofprofitassociates”intheconsolidatedincomestatement. difference betweentherecoverableamountofassociateanditscarryingvaluerecognises in theassociateisimpaired.Ifthiscase,Groupcalculatesamountofimpairmentas The Groupdeterminesateachreportingdatewhetherthereisanyobjectiveevidencethattheinvestment (continued) (continued) (continued) FOR THEYEARENDED31DECEMBER2015

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China State Construction International Holdings Limited Annual Report 2015 Summaryofsignificant accounting policies 2 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements 2.2 Consolidation . Foreigncurrencytranslation 2.4 2.3 Segment reporting (c) Joint arrangements b Transactionsandbalances (b) Functionalandpresentationcurrency (a) Company thatmakesstrategicdecisions. and assessingperformanceoftheoperatingsegments,hasbeenidentifiedasexecutivedirectors operating decision-maker.Thechiefdecision-maker,whoisresponsibleforallocatingresources Operating segmentsarereportedinamannerconsistentwiththeinternalreportingprovidedtochief sale investments,areincludedintheinvestmentrevaluationreserve inothercomprehensiveincome. loss. Translationdifferencesonnon-monetaryfinancialassets, suchasequitiesclassifiedavailable-for- through profitorlossarerecognisedinconsolidatedincome statementaspartofthefairvaluegainor Translation differencesonnon-monetaryfinancialassetsand liabilitiessuchasequitiesheldatfairvalue carrying amountarerecognisedinothercomprehensiveincome. to changesinamortisedcostarerecognisedconsolidated incomestatement,andotherchangesin the securityandotherchangesincarryingamountof the security.Translationdifferencesrelated for-sale areanalysedbetweentranslationdifferencesresulting fromchangesintheamortisedcostof Changes inthefairvalueofmonetarysecuritiesdenominated inforeigncurrencyclassifiedasavailable- income, otherincomeandgains,net’. Foreign exchangegainsandlossesarepresentedintheconsolidatedincomestatementwithin‘investment consolidated incomestatement. exchange ratesofmonetaryassetsandliabilitiesdenominatedinforeigncurrenciesarerecognisedthe gains andlossesresultingfromthesettlementofsuchtransactionstranslationatyear-end prevailing atthedatesoftransactionsorvaluationwhereitemsarere-measured.Foreignexchange Foreign currencytransactionsaretranslatedintothefunctionalusingexchangerates functional andtheGroup’spresentationcurrency. consolidated financialstatementsarepresentedinHongKongdollar(“HK$”),whichistheCompany’s of theprimaryeconomicenvironmentinwhichentityoperates(“thefunctionalcurrency”).The Items includedinthefinancialstatementsofeachGroup’sentitiesaremeasuredusingcurrency operation inaccordancewiththeapplicablestandards. accounts fortheassetsandliabilities,aswellrevenuesexpenses,relatingtoitsinterestinjoint joint operation)anditsexpenses(includingshareofanyincurredjointly).Eachoperator liabilities incurredjointly),itsrevenue(includingshareoffromthesaleoutputby recognises itsassets(includingshareofanyjointlyheld),liabilities of anarrangement.Investmentsinjointoperationsareaccountedforsuchthateachoperator Joint operationsarisewheretheinvestorshaverightstoassetsandobligationsforliabilities Joint operations (continued) (continued) (continued)

(continued) Summaryofsignificant accounting policies 2 . Property,plantandequipment 2.5 Foreigncurrencytranslation 2.4 financial periodinwhichtheyareincurred. derecognised. Allotherrepairsandmaintenancearecharged totheconsolidatedincomestatementduring the Groupandcostofitemcanbemeasuredreliably. Thecarryingamountofthereplacedpartis appropriate, onlywhenitisprobablethatfutureeconomic benefitsassociatedwiththeitemwillflowto Subsequent costsareincludedintheasset’scarrying amount orrecognisedasaseparateasset, expenditure thatisdirectlyattributabletotheacquisitionof items. other property,plantandequipmentisstatedathistorical costlessdepreciation.Historicalincludes Land andbuildingscomprisemainlyfactoriesoffices. Leasehold landclassifiedasfinanceleaseandall Disposal offoreignoperationandpartialdisposal (d) (c) Group companies Notes totheConsolidatedFinancialStatements accumulated exchangedifferenceisreclassifiedtoconsolidatedincomestatement. that donotresultinthegrouplosingsignificantinfluenceorjointcontrol)proportionateshareof other partialdisposal(thatis,reductionsinthegroup’sownershipinterestassociatesorjointventures re-attributed tonon-controllinginterestsandarenotrecognisedinconsolidatedincomestatement.Forall includes aforeignoperation,theproportionateshareofaccumulatedcurrencytranslationdifferencesare In thecaseofapartialdisposalthatdoesnotresultingrouplosingcontroloversubsidiary owners oftheCompanyarereclassifiedtoconsolidatedincomestatement. currency translationdifferencesaccumulatedinequityrespectofthatoperationattributabletothe involving lossofsignificantinfluenceoveranassociatethatincludesaforeignoperation),allthe disposal involvinglossofjointcontroloveraventurethatincludesforeignoperation,or operation, oradisposalinvolvinglossofcontroloversubsidiarythatincludesforeign On thedisposalofaforeignoperation(thatis,Group’sentireinterestin recognised inothercomprehensiveincome. and liabilitiesoftheforeignentitytranslatedatclosingrate.Exchangedifferencesarisingare Goodwill andfairvalueadjustmentsarisingontheacquisitionofaforeignentityaretreatedasassets allresultingexchangedifferencesarerecognisedinothercomprehensiveincome. (iii) incomeandexpensesforeachstatementaretranslatedataverageexchangerates(unless (ii) assetsandliabilitiesforeachbalancesheetpresentedaretranslatedattheclosingrateendof (i) translated intothepresentationcurrencyasfollows: inflationary economy)thathaveafunctionalcurrencydifferentfromthepresentationare The resultsandfinancialpositionofalltheGroupentities(nonewhichhascurrencyahyper- transactions); and transaction datesinwhichcaseincomeandexpensesaretranslatedattherateonof this averageisnotareasonableapproximationofthecumulativeeffectratesprevailingon the reportingperiod; (continued) (continued) FOR THEYEARENDED31DECEMBER2015

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China State Construction International Holdings Limited Annual Report 2015 Summaryofsignificant accounting policies 2 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements . Property,plantandequipment 2.5 . Leaseholdlandandbuilding 2.6 ahnr 3to10years Notdepreciated Overtheshorteroftermrelevantleasesor50years 20years Furniture, fixturesandequipment Machinery Heat andelectricitysupplyfacilities Land andbuildings Freehold land values overtheirestimatedusefullives,asfollows: depreciation onotherassetsiscalculatedusingthestraight-linemethodtoallocatetheircostresidual becomes availableforitsintendeduse.Amortisationonleaseholdlandclassifiedasfinanceleaseand Leasehold landclassifiedasfinanceleasecommencesamortisationfromthetimewheninterest finance leaseandaccountedforasproperty,plantequipment orinvestmentproperties. cannot beallocatedreliablybetweenthelandandbuildingelements, theentireleaseisgenerallyclassifiedasa of financialpositionandisamortisedovertheleasetermon astraight-linebasis.Whentheleasepayments accounted forasanoperatingleaseispresented“prepaid leasepayments”intheconsolidatedstatement To theextentallocationofleasepaymentscanbe madereliably,interestinleaseholdlandthatis element andbuildingoftheleaseatinception thelease. the landandbuildingelementsinproportiontorelativefairvaluesofleaseholdinterests Specifically, theminimumleasepayments(includinganylump-sumupfrontpayments)areallocatedbetween clear thatbothelementsareoperatingleasesinwhichcasetheentireleaseisclassifiedasanlease. risks andrewardsincidentaltoownershipofeachelementhavebeentransferredtheGroup,unlessitis as afinanceoranoperatingleaseseparatelybasedontheassessmenttowhethersubstantiallyall When aleaseincludesbothlandandbuildingelements,theGroupassessesclassificationofeachelement recognised intheconsolidatedincomestatement. Gains andlossesondisposalsaredeterminedbycomparingtheproceedswithcarryingamount are availableforuse. property, plantandequipmentcategoryuponcompletiondepreciationbeginswhentherelevantassets machinery pendinginstallation,andisstatedatcostlessimpairmentlosses.Itwillbereclassifiedtotherelevant Construction inprogressrepresentsbuildingsandheatelectricitysupplyfacilitiesunderconstruction amount isgreaterthanitsestimatedrecoverableamount. An asset’scarryingamountiswrittendownimmediatelytoitsrecoverableifthe reporting period. The assets’residualvaluesandusefullivesarereviewed,adjustedifappropriate,attheendofeach motor vehicles (continued) 3 to8years (continued)

(continued) Summaryofsignificant accounting policies 2 2.9 Intangible assets Interestsininfrastructureprojectinvestments 2.8 2.7 Investment properties (a) Goodwill amount ofsuchinterestsisreducedtorecogniseanyidentifiedimpairmentlossesindividualinvestments. accordance withHKAS39andarestatedatamortisedcostusingeffectiveinterestmethod.Thecarrying The Group’sinterestsintheinfrastructureprojectinvestmentsareclassifiedasloansandreceivables 50years return ispredeterminedinaccordancewiththeprovisionsofrelevantagreements. Interests ininfrastructureprojectinvestmentsrepresentloansadvancedtojointventureswherebytheGroup’s Land andbuildingsonlandunder Buildings onfreeholdland Investment propertiesaredepreciatedonastraight-linebasisasfollows: derecognised. carrying amountoftheasset)isincludedinconsolidatedincomestatementperiodwhichitem on derecognitionoftheassets(calculatedasdifferencebetweennetdisposalproceedsand withdrawn fromuseornofutureeconomicbenefitsareexpecteditsdisposals.Anygainlossarising An investmentpropertyisderecognisedupondisposalorwhenthepermanently properties overtheirestimatedusefullives,usingthestraight-linemethod. and anyaccumulatedimpairmentlosses.Depreciationisrecognisedsoastowriteoffthecostofinvestment to initialrecognition,investmentpropertiesarestatedatcostlesssubsequentaccumulateddepreciation Investment propertiesareinitiallymeasuredatcost,includinganydirectlyattributableexpenditure.Subsequent Investment propertiesareheldforlong-termrentalyieldsand/orcapitalappreciation. Notes totheConsolidatedFinancialStatements medium-term leases monitored attheoperatingsegmentlevel. level withintheentityatwhichgoodwillismonitoredfor internalmanagementpurposes.Goodwillis the combination.Eachunitorgroupofunitstowhich goodwillisallocatedrepresentsthelowest cash-generating units(“CGU(s)”),orgroupsofCGUs,that is expectedtobenefitfromthesynergiesof For thepurposeofimpairmenttesting,goodwillacquired inabusinesscombinationisallocatedto liabilities oftheacquireandfairvaluenon-controllinginterestinacquiree. transferred overtheGroup’sinterestinnetfairvalueofidentifiableassets,liabilitiesandcontingent Goodwill arisesontheacquisitionofsubsidiariesandrepresentsexcessconsideration Over theshorteroftermrelevantleasesor estimated usefullifeofbuildingsrangingfrom20to50years (continued) FOR THEYEARENDED31DECEMBER2015

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China State Construction International Holdings Limited Annual Report 2015 Summaryofsignificant accounting policies 2 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements 2.9 Intangible assets b Trademark,projectbacklogsandlicences (b) (a) Goodwill c Concessionoperatingrights (c) consolidated incomestatementintheperiodwhenasset isderecognised. between thenetdisposalproceedsandcarryingamount oftheassetandarerecognisedin Gains orlossesarisingfromderecognitionofaconcessionoperating rightaremeasuredatthedifference calculated byusingthestraight-linemethodoverconcessionperiods. respective concessionperiodsofthirtyyears.Theannualamortisationoperatingrightsis date ofcommencementcommercialoperationtheunderlyingtollexpresswaystoend Amortisation ofconcessionoperatingrightsiscalculatedtowriteofftheircosts,commencingfromthe accumulated amortisationandanyimpairmentlosses. intangible assetatfairvalueuponinitialrecognition.Theconcessionoperatingrightsiscarriedcostless for providingconstructionservicesinaserviceconcessionarrangement,itrecognises When theGrouphasarighttooperate,andchargeforusageof,tollexpresswayasconsideration the consolidatedstatementoffinancialpositionas“concessionoperatingrights”. respective concessiongrantorstotheGroupchargeusersoftollroadservicesandarerecordedin amounts ofconstructioncostsincurred.Theintangibleassetscorrespondtotherightsgrantedby (the respectivelocalgovernments)havenotprovidedanycontractualguaranteesfortherecoveryof The Groupappliestheintangibleassetmodeltoaccountfortollexpressway.concessiongrantors annually ormorefrequentlyifeventschangesincircumstancesindicateapotentialimpairment. Licences thathaveindefiniteusefullivesarenotamortised.Theysubjecttoimpairmenttesting and projectbacklogsovertheirestimatedusefullivesof20yearsorspecificcontractperiodrespectively. amortisation. Amortisationiscalculatedusingthestraight-linemethodtoallocatecostoftrademarks Trademark andprojectbacklogsthathaveadefiniteusefullifearecarriedatcostlessaccumulated business combinationarerecognisedatfairvaluetheacquisitiondate. Separately acquiredlicencesareshownathistoricalcost.Trademarkandprojectbacklogsina impairment isrecognisedimmediatelyasanexpenseandnotsubsequentlyreversed. recoverable amount,whichisthehighervalueinuseandfairlesscostsofdisposal.Any circumstances indicateapotentialimpairment.Thecarryingvalueofgoodwilliscomparedtothe Goodwill impairmentreviewsareundertakenannuallyormorefrequentlyifeventschangesin (continued) (continued) (continued)

(continued) Summaryofsignificant accounting policies 2 2.10 Financial assets Financial effective interestmethod. subsequently carriedatfairvalue.Loansandreceivablesare subsequentlycarriedatamortisedcostusingthe rewards ofownership.Available-for-saleinvestmentsandfinancial assetsatfairvaluethroughprofitorlossare investments haveexpiredorbeentransferredandtheGrouphassubstantiallyallrisks in theincomestatement.Financialassetsarederecognisedwhenrightstoreceivecashflowsfrom at fairvaluethroughprofitorlossareinitiallyrecognisedvalue,andtransactioncostsexpensed transaction costsforallfinancialassetsnotcarriedatfairvaluethroughprofitorloss.Financial the Groupcommitstopurchaseorsellasset.Investmentsareinitiallyrecognisedatfairvalueplus Regular waypurchasesandsalesoffinancialassetsarerecognisedonthetrade-date–datewhich Recognition andmeasurement (c) Available-for-sale investments Loansandreceivables (b) Financialassetsatfairvaluethroughprofitorloss (a) recognition. the financialassetswereacquired.Managementdeterminesclassificationofitsatinitial and receivables,available-for-saleinvestments.Theclassificationdependsonthepurposeforwhich The Groupclassifiesitsfinancialassetsinthefollowingcategories:atfairvaluethroughprofitorloss,loans Classification Notes totheConsolidatedFinancialStatements matures ormanagementintendstodisposeofitwithin12monthstheendreportingperiod. classified inanyoftheothercategories.Theyareincludednon-currentassetsunlessinvestment Available-for-sale investmentsarenon-derivativesthateitherdesignatedinthiscategoryornot the consolidatedstatementoffinancialposition. ventures”, “tradeandotherreceivables”,“depositsprepayments”“cashcashequivalent”in project investments”,“amountsduefrominvesteecompanies”,anassociateandjoint classified asnon-currentassets.TheGroup’sloansandreceivablescomprise“interestsininfrastructure settled orexpectedtobemorethan12monthsaftertheendofreportingperiod.Theseare not quotedinanactivemarket.Theyareincludedcurrentassets,exceptfortheamountsthat Loans andreceivablesarenon-derivativefinancialassetswithfixedordeterminablepaymentsthat non-current. classified ascurrentassetsifexpectedtobesettledwithin12months;otherwise,theyare are alsocategorisedasheldfortradingunlesstheydesignatedhedges.Assetsinthiscategory is classifiedinthiscategoryifacquiredprincipallyforthepurposeofsellingshortterm.Derivatives Financial assetsatfairvaluethroughprofitorlossarefinancialheldfortrading.Aasset (continued) FOR THEYEARENDED31DECEMBER2015

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China State Construction International Holdings Limited Annual Report 2015 Summaryofsignificant accounting policies 2 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements 2.10 2.11 Impairment offinancialassets assets Financial payments isestablished. recognised intheincomestatementaspartof‘investmentincome’whenGroup’srighttoreceive income statementaspartof‘investmentincome’.Dividendsonavailable-for-saleequityinstrumentsare Interest onavailable-for-salesecuritiescalculatedusingtheeffectiveinterestmethodisrecognisedin recognised inequityareincludedtheincomestatementas‘investmentincome’. When securitiesclassifiedasavailableforsalearesoldorimpaired,theaccumulatedfairvalueadjustments recognised inothercomprehensiveincome. Changes inthefairvalueofmonetaryandnon-monetarysecuritiesclassifiedasavailableforsaleare income” whentheGroup’srighttoreceivepaymentsisestablished. financial assetsatfairvaluethroughprofitorlossisrecognisedintheincomestatementaspartof“investment loss” categoryarepresentedintheincomestatementperiodwhichtheyarise.Dividendfrom Gains orlossesarisingfromchangesinthefairvalueof“financialassetsatthroughprofit Recognition andmeasurement a Assetscarriedatamortisedcost (a) default, insolvencyorbankruptcyofthecompanycounterparty. be contingentonfutureeventsandmustenforceableinthenormalcourseofbusinessevent on anetbasisorrealisetheassetandsettleliabilitysimultaneously.Thelegallyenforceablerightmustnot when thereisalegallyenforceablerighttooffsettherecognisedamountsandanintentionsettle Financial assetsandliabilitiesareoffsetthenetamountreportedinstatementoffinancialposition Offsetting financialinstruments conditions thatcorrelatewithdefaults. is ameasurabledecreaseintheestimatedfuturecashflows, suchaschangesinarrearsoreconomic they willenterbankruptcyorotherfinancialreorganisation,and whereobservabledataindicatethatthere significant financialdifficulty,defaultordelinquencyininterest orprincipalpayments,theprobabilitythat Evidence ofimpairmentmayincludeindicationsthatthedebtors oragroupofdebtorsisexperiencing financial assetsthatcanbereliablyestimated. event (orevents)hasanimpactontheestimatedfuturecashflowsoffinancialassetorgroup of oneormoreeventsthatoccurredaftertheinitialrecognitionasset(a‘lossevent’)andloss impaired andimpairmentlossesareincurredonlyifthereisobjectiveevidenceofasaresult financial assetorgroupofassetsisimpaired.Aa The Groupassessesattheendofeachreportingperiodwhetherthereisobjectiveevidencethata (continued) (continued) (continued)

(continued) Summaryofsignificant accounting policies 2 2.12 2.11 Impairment offinancialassets Impairment ofnon-financial assets a Assetscarriedatamortisedcost (a) impairment attheendofreportingperiod. financial assetsotherthangoodwillthatsufferedanimpairment arereviewedforpossiblereversalofthe assets aregroupedatthelowestlevelsforwhichthere separatelyidentifiablecashflows(CGUs).Non- the higherofanasset’sfairvaluelesscoststoselland inuse.Forthepurposesofassessingimpairment, the amountbywhichasset’scarryingexceedsits recoverableamount.Theamountis circumstances indicatethatthecarryingamountmaynotbe recoverable.Animpairmentlossisrecognisedfor Assets thataresubjecttoamortisationreviewedfor impairmentwhenevereventsorchangesin Assets thathaveanindefiniteusefullifearenotsubjecttoamortisation andaretestedannuallyforimpairment. Assetsclassifiedasavailableforsale (b) Notes totheConsolidatedFinancialStatements statement. consolidated incomestatementonequityinstrumentsarenotreversedthroughthe from equityandrecognisedinconsolidatedincomestatement.Impairmentlossesthe loss onthatfinancialassetpreviouslyrecognisedinconsolidatedincomestatement—isremoved measured asthedifferencebetweenacquisitioncostandcurrentfairvalue,lessanyimpairment are impaired.Ifanysuchevidenceexistsforavailable-for-salefinancialassets,thecumulativeloss— significant orprolongeddeclineinthefairvalueofsecuritybelowitscostisalsoevidencethatassets the consolidatedincomestatement.Incaseofequityinvestmentclassifiedasavailableforsale,a after theimpairmentlosswasrecognisedinprofitorloss,isreversedthrough classified asavailableforsaleincreasesandtheincreasecanbeobjectivelyrelatedtoeventoccurred from equityandrecognisedinprofitorloss.If,asubsequentperiod,thefairvalueofdebtinstrument less anyimpairmentlossonthatfinancialassetpreviouslyrecognisedinprofitor—isremoved the cumulativeloss—measuredasdifferencebetweenacquisitioncostandcurrentfairvalue, financial assetoragroupofassetsisimpaired.Fordebtsecurities,ifanysuchevidenceexists The Groupassessesattheendofeachreportingperiodwhetherthereisobjectiveevidencethata consolidated incomestatement. debtor’s creditrating),thereversalofpreviouslyrecognisedimpairmentlossisin objectively toaneventoccurringaftertheimpairmentwasrecognised(suchasimprovementin If, inasubsequentperiod,theamountofimpairmentlossdecreasesanddecreasecanberelated an observablemarketprice. a practicalexpedient,theGroupmaymeasureimpairmentonbasisofaninstrument’sfairvalueusing for measuringanyimpairmentlossisthecurrenteffectiveinterestratedeterminedundercontract.As income statement.Ifaloanorheld-to-maturityinvestmenthasvariableinterestrate,thediscountrate carrying amountoftheassetisreducedandlossrecognisedinconsolidated losses thathavenotbeenincurred)discountedatthefinancialasset’soriginaleffectiveinterestrate.The asset’s carryingamountandthepresentvalueofestimatedfuturecashflows(excludingcredit For loansandreceivablescategory,theamountoflossismeasuredasdifferencebetween (continued) (continued) (continued) FOR THEYEARENDED31DECEMBER2015

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China State Construction International Holdings Limited Annual Report 2015 Summaryofsignificant accounting policies 2 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements 2.13 2.15 2.14 Construction contracts Construction Properties heldforsale Inventories expenses. represents theestimatedsellingpricelessallcostsofcompletionandtobeincurredin present locationandcondition.Costiscalculatedusingtheweightedaveragemethod.Netrealisablevalue applicable, directlabourcostsandthoseoverheadsthathavebeenincurredinbringingtheinventoriestotheir Inventories arestatedatthelowerofcostandnetrealisablevalue.Costcomprisesdirectmaterialsand,where statement offinancialpositionundertradeandotherreceivables. Amounts billedforworkperformed,butnotyetpaidby thecustomerareincludedinconsolidated performed areincludedintheconsolidatedstatementoffinancial position,asaliability,receiptinadvance. is shownasanamountduetocustomersforcontractwork. Amountsreceivedbeforetherelatedworkis billings exceedcontractcostsincurredtodateplusrecognised profitslessrecognisedlosses,thesurplus the surplusisshownasanamountduefromcustomersforcontractwork.Forcontractswhereprogress Where contractcostsincurredtodateplusrecognisedprofitslesslossesexceedprogressbillings, single packageandaresocloselyinter-relatedthattheyconstituteaprojectwithanoverallprofitmargin. or inacontinuoussequence,istreatedassingleconstructioncontractwhentheywerenegotiated the costsandrevenueofeachassetcanbeseparatelyidentified.Agroupcontracts,performedconcurrently when separateproposalshavebeensubmittedforeachasset,assethasseparatelynegotiatedand When acontractcoversnumberofassets,theconstructioneachassetistreatedasseparate as anexpenseimmediately. When itisprobablethattotalcontractcostswillexceedrevenue,theexpectedlossrecognised expenses intheperiodwhichtheyareincurred. the extentofcontractcostsincurredthatitisprobablewillberecoverable.Contractarerecognisedas Where theoutcomeofaconstructioncontractcannotbeestimatedreliably,revenueisrecognisedto receipt isconsideredprobable. claims andincentivepaymentsareincludedtotheextentthatamountcanbemeasuredreliablyits cost, exceptwherethiswouldnotberepresentativeofthestagecompletion.Variationsincontractwork, the proportionthatcontractcostsincurredforworkperformedtodaterelativeestimatedtotal reference tothestageofcompletioncontractactivityatendreportingperiod,asmeasuredby When theoutcomeofaconstructioncontractcanbeestimatedreliably,revenueandcostsarerecognisedby realisable valueisdeterminedbythemanagementbasedonprevailingmarketconditions. Properties acquiredforsubsequentresalearestatedatthelowerofcostandnetrealisablevalue.Net (continued)

(continued) Summaryofsignificant accounting policies 2 2.20 2.19 2.18 2.17 2.16 Trade andotherreceivables Borrowings Trade payables,otherpayables andaccruals capital Share Cash andcashequivalents the liabilityforatleast12monthsafterendofreporting period. Borrowings areclassifiedascurrentliabilitiesunlesstheGroup hasanunconditionalrighttodefersettlementof facility towhichitrelates. drawn down,thefeeiscapitalisedasapre-paymentforliquidity servicesandamortisedovertheperiodof draw-down occurs.Totheextentthereisnoevidencethat it isprobablethatsomeorallofthefacilitywillbe that itisprobablesomeorallofthefacilitywillbedrawn down.Inthiscase,thefeeisdeferreduntil Fees paidontheestablishmentofloanfacilitiesarerecognised astransactioncostsoftheloantoextent method. value isrecognisedintheincomestatementoverperiodofborrowingsusingeffectiveinterest carried atamortisedcost;anydifferencebetweentheproceeds(netoftransactioncosts)andredemption Borrowings arerecognisedinitiallyatfairvalue,netoftransactioncostsincurred.subsequently at amortisedcostusingtheeffectiveinterestmethod. Trade payables,otherpayablesandaccrualsarerecognisedinitiallyatfairvaluesubsequentlymeasured are presentedasnon-currentliabilities. payment isduewithinoneyearorless(orinthenormaloperatingcycleofbusinessiflonger).Ifnot,they of businessfromsuppliers.Tradepayables,otherpayablesandaccrualsareclassifiedascurrentliabilitiesif Trade payablesareobligationstopayformaterialsorservicesthathavebeenacquiredintheordinarycourse options areshowninequityasadeduction,netoftax,fromtheproceeds. Ordinary sharesareclassifiedasequity.Incrementalcostsdirectlyattributabletotheissueofnewor borrowings incurrentliabilities. and bankoverdrafts.Intheconsolidatedstatementoffinancialposition,overdraftsareshownwithin deposits, bankdepositswithfinancialinstitutionsoriginalmaturitiesofthreemonthsorless,balance, In theconsolidatedstatementofcashflows,andequivalentsincludesinhand,pledgedbank using theeffectiveinterestmethod,lessprovisionforimpairment. Trade andotherreceivablesarerecognisedinitiallyatfairvaluesubsequentlymeasuredamortisedcost non-current assets. operating cycleofthebusinessiflonger),theyareclassifiedascurrentassets.Ifnot,presented course ofbusiness.Ifcollectiontradeandotherreceivablesisexpectedinoneyearorless(orthenormal Trade receivablesareamountsduefromcustomersformerchandisesoldorservicesperformedintheordinary Notes totheConsolidatedFinancialStatements (continued) FOR THEYEARENDED31DECEMBER2015

(continued) 131

China State Construction International Holdings Limited Annual Report 2015 132

China State Construction International Holdings Limited Annual Report 2015 Summaryofsignificant accounting policies 2 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements 2.21 2.23 2.22 Current anddeferredincome tax income Deferred costs Borrowing for capitalisationinpreviousyearsshouldnotbecapitalisedsubsequentyears. interest incurredforforeigncurrencyborrowings.Foreignexchangedifferencesthatdidnotmeetthecriteria difference betweenthehypotheticalinterestamountforfunctionalcurrencyborrowingsandactual exchange differenceseligibleforcapitalisationisdeterminedeachannualperiodandarelimitedtothe When theconstructionofqualifyingassetstakesmorethanoneaccountingperiod,amountforeign estimated basedonforwardcurrencyratesattheinceptionofborrowings. currency, andtheborrowingcostsactuallyincurredonforeigncurrencyborrowings.Suchamountsare differential betweenborrowingcoststhatwouldbeincurrediftheentityhadborrowedfundsinitsfunctional interest costs.Theexchangegainsandlossesthatareanadjustmenttocostsincludetherate differences arisingfromforeigncurrencyborrowingstotheextentthattheyareregardedasanadjustment Borrowing costsincludeinterestexpense,financechargesinrespectofleaseandexchange incurred. All otherborrowingcostsarerecognisedinconsolidatedincomestatementtheperiodwhichthey eligible forcapitalisation. of specificborrowingspendingtheirexpenditureonqualifyingassetsisdeductedfromtheborrowingcosts substantially readyfortheirintendeduseorsale.Investmentincomeearnedonthetemporaryinvestment ready fortheirintendeduseorsale,areaddedtothecostofthoseassets,untilsuchtimeasassets production ofqualifyingassets,whichareassetsthatnecessarilytakeasubstantialperiodtimetoget Relevant generalandspecificborrowingcostsdirectlyattributabletotheacquisition,constructionor i Currentincometax (i) this casethetaxisalsorecognisedinothercomprehensiveincomeordirectlyequity,respectively. except totheextentthatitrelatesitemsrecognisedinothercomprehensiveincomeordirectlyequity.In The taxexpensefortheperiodcomprisescurrentanddeferredtax.Taxisrecognisedinincomestatement, Deferred incomerepresentsconnectionfeenotyetrecognisedinrelationtoheattransmissionservices. authorities. It establishesprovisionswhereappropriateonthebasis of amountsexpectedtobepaidthetax in taxreturnswithrespecttosituationswhichapplicable taxregulationissubjecttointerpretation. associates operateandgeneratetaxableincome.Management periodicallyevaluatespositionstaken at theendofreportingperiodincountrieswhere Company’ssubsidiaries,jointventuresand The currentincometaxchargeiscalculatedonthebasisoflawsenactedorsubstantively (continued)

(continued) Summaryofsignificant accounting policies 2 2.24 2.23 Current anddeferredincometax Provisions expense. risks specifictotheobligation. Theincreaseintheprovisionduetopassageoftimeisrecognised asinterest obligation usingapre-taxrate thatreflectscurrentmarketassessmentsofthetimevalue ofmoneyandthe Provisions aremeasuredatthepresentvalueofexpenditures expectedtoberequiredsettlethe of anoutflowwithrespecttoanyoneitemincludedinthesame classofobligationsmaybesmall. determined byconsideringtheclassofobligationsasawhole. Aprovisionisrecognisedevenifthelikelihood Where thereareanumberofsimilarobligations,thelikelihood thatanoutflowwillberequiredinsettlementis the reportingperiod,takingintoaccountrisksanduncertainties surroundingtheobligation. are measuredatthebestestimateofconsiderationrequired tosettlethepresentobligationatendof service concessionarrangementtomaintainorrestoretheinfrastructure beforeitishandedovertothegranter, has beenreliablyestimated.Provisions,includingthosearising fromthecontractualobligationspecifiedin event, anditisprobablethatanoutflowofresourceswillbe requiredtosettlethatobligation,andtheamount Provisions arerecognisedwhentheGrouphasapresentlegalorconstructiveobligationasresultofpast (iii) Offsetting Deferredincometax (ii) Notes totheConsolidatedFinancialStatements there isanintentiontosettlethebalancesonanetbasis. taxes leviedbythesametaxationauthorityoneithertaxableentityordifferententitieswhere assets againstcurrenttaxliabilitiesandwhenthedeferredincometaxesrelateto Deferred taxassetsandliabilitiesareoffsetwhenthereisalegallyenforceablerighttocurrent temporary differencecanbeutilised. difference willreverseinthefutureandthereissufficienttaxableprofitavailableagainstwhich in subsidiaries,associatesandjointarrangementsonlytotheextentthatitisprobabletemporary Deferred incometaxassetsarerecognisedondeductibletemporarydifferencesarisingfrominvestments reverse intheforeseeablefuture. temporary differenceiscontrolledbytheGroupanditprobablethatwillnot and jointarrangementsexceptfordeferredincometaxliabilitywherethetimingofreversal Deferred incometaxisprovidedontemporarydifferencesarisinginvestmentsinsubsidiaries,associates Outside basisdifference will beavailableagainstwhichthetemporarydifferencescanutilised. Deferred incometaxassetsarerecognisedonlytotheextentthatitisprobablefuturetaxableprofit when therelateddeferredincometaxassetisrealisedorliabilitysettled. have beenenactedorsubstantivelybytheendofreportingperiodandareexpectedtoapply accounting nortaxableprofitorloss.Deferredincometaxisdeterminedusingrates(andlaws)that in atransactionotherthanbusinesscombinationthatatthetimeofaffectsneither the deferredincometaxisnotaccountedforifitarisesfrominitialrecognitionofanassetorliability However, deferredtaxliabilitiesarenotrecognisediftheyarisefromtheinitialrecognitionofgoodwill, the taxbasesofassetsandliabilitiestheircarryingamountsinconsolidatedfinancialstatements. Deferred incometaxisrecognised,usingtheliabilitymethod,ontemporarydifferencesarisingbetween Inside basisdifference (continued) (continued) FOR THEYEARENDED31DECEMBER2015

(continued) 133

China State Construction International Holdings Limited Annual Report 2015 134

China State Construction International Holdings Limited Annual Report 2015 Summaryofsignificant accounting policies 2 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements 2.25 Leases a TheGroupaslessor (a) rewards ofownershiptothelessee.Allotherleasesareclassifiedasoperatingleases. Leases areclassifiedasfinanceleaseswheneverthetermsofleasetransfersubstantiallyallrisksand b TheGroupaslessee (b) (ii) Finance lease (i) Operating lease lease. is recognisedintheconsolidatedincomestatementonastraight-linebasisovertermofrelevant statement offinancialpositionbasedonthenatureassets.Rentalincomefromoperatingleases When assetsareleasedoutunderanoperatinglease,theincludedinconsolidated useful lifeoftheassetandleaseterm. property, plantandequipmentacquiredunderfinanceleasesisdepreciatedovertheshorterof a constantperiodicrateofinterestontheremainingbalanceliabilityforeachperiod.The of thefinancecostischargedtoincomestatementoverleaseperiodsoasproduce obligations, netoffinancecharges,areincludedinotherlong-termpayables.Theinterestelement Each leasepaymentisallocatedbetweentheliabilityandfinancecharges.Thecorrespondingrental the leasedpropertyandpresentvalueofminimumleasepayments. leases. Financeleasesarecapitalisedatthelease’scommencementloweroffairvalue where theGrouphassubstantiallyallrisksandrewardsofownershipareclassifiedasfinance The Groupleasescertainproperty,plantandequipment.Leasesofequipment the timepatterninwhicheconomicbenefitsfromleasedassetareconsumed. expense onastraight-linebasis,exceptwhereanothersystematicbasisismorerepresentativeof recognised asaliability.Theaggregatebenefitofincentivesisreductionrental In theeventthatleaseincentivesarereceivedtoenterintooperatingleases,such benefits fromtheleasedassetareconsumed. except whereanothersystematicbasisismorerepresentativeofthetimepatterninwhicheconomic Operating leasepaymentsarerecognisedasanexpenseonastraight-linebasisovertheterm, (continued)

(continued) Summaryofsignificant accounting policies 2 2.27 2.26 Employee benefits Employee Share-based payments Share-based b Shareoptions grantedtoconsultants (b) Equity-settledshare-basedpaymenttransactions (a) Employeeleaveentitlements (b) (a) Retirement benefits Notes totheConsolidatedFinancialStatements counterparties renderservices,unlesstheservicesqualifyfor recognitionasassets. recognised asexpenseswithacorrespondingincreasein equity(shareoptionsreserve),whenthe by referencetothefairvalueofshareoptionsgranted. Thefairvaluesoftheservicesreceivedare unless thatfairvaluecannotbereliablymeasured,inwhich casetheservicesreceivedaremeasured Share optionsissuedinexchangeforservicesaremeasured atthefairvaluesofservicesreceived, amount previouslyrecognisedinshareoptionreservewillbetransferredtoretainedprofits. When theshareoptionsareforfeitedaftervestingdateorstillnotexercisedatexpirydate, exercised, theamountpreviouslyrecognisedinshareoptionreservewillbetransferredtopremium. revised estimate,withacorrespondingadjustmenttoshareoptionreserve.Whentheoptionsare if any,isrecognisedinconsolidatedincomestatementsuchthatthecumulativeexpensereflects expected toultimatelyvest.Theimpactoftherevisionoriginalestimatesduringvestingperiod, At theendofeachreportingperiod,Grouprevisesitsestimatesnumberoptionsthatare in equity(shareoptionreserve). the grantdateisexpensedonastraight-linebasisovervestingperiod,withcorrespondingincrease The fairvalueofservicesreceiveddeterminedbyreferencetotheshareoptionsgrantedat sick leaveandmaternityarenotrecogniseduntilthetimeofleave. result ofservicesrenderedbyemployeesuptotheendreportingperiod.Employeeentitlements employees. Aprovisionismadefortheestimatedliabilityannualleaveandlongserviceasa Employee entitlementstoannualleaveandlongservicearerecognisedwhentheyaccrue the scheme.TheGroup’scontributionstoschemeareexpensedasincurred. only obligationoftheGroupwithrespecttoschemeispayongoingcontributionsrequiredby the MainlandChinaisresponsibleforentirebenefitobligationspayabletoretiredemployees.The to contributetheschemeforretirementbenefitofeligibleemployees.Themunicipalgovernment China participateinthemunicipalgovernmentcontributionschemewherebysubsidiariesarerequired Pursuant totherelevantregulationsofgovernmentinMainlandChina,subsidiaries scheme areheldseparatelyfromthoseoftheGroupinindependentlyadministeredfunds. contribution plangenerallyfundedthroughpaymentstotrustee-administeredfunds.Theassetsofthe The GroupparticipatesinmandatoryprovidentfundschemesHongKongwhicharedefined (continued) FOR THEYEARENDED31DECEMBER2015 (continued) 135

China State Construction International Holdings Limited Annual Report 2015 136

China State Construction International Holdings Limited Annual Report 2015 Summaryofsignificant accounting policies 2 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements 2.28 Revenue recognition Revenue (a) Construction contracts taxes. receivable forgoodsandservicesprovidedinthenormalcourseofbusiness,netdiscountssalesrelated Revenue ismeasuredatthefairvalueofconsiderationreceivedorreceivable,andrepresentsamounts (c) Thermoelectricity business Projectconsultancycontracts (b) relevant entities. of heatandsteamtransmissiontoberenderedwithreference tothetermofoperatinglicense is recordedasdeferredincomeandamortisedonastraight-line basisovertheexpectedserviceperiod can bemeasuredreliably.Connectionserviceattributableto thecontinuingheatandsteamtransmission completion ofservicesprovidedfortherelevantconnection works andthecorrespondingcostsincurred pipeline constructionandconnectionoftransmissionheatsteam,isrecogniseduponthe Connection serviceincomereceivedandreceivable,totheextentwhichisattributableinitial capacity providedatratesspecifiedundercontractterms. Revenue fromthesupplyofheat,steamandelectricityarerecognisedbaseduponoutputdelivered electricity, andconnectionserviceincome. Revenue fromthermoelectricitybusinessconsistsofrevenuethesupplyheat,steamand services areprovided. Income fromprojectconsultancycontractisrecognisedonanaccrualbasiswhen as expensesintheperiodwhichtheyareincurred. the extentofcontractcostsincurredthatitisprobablewillberecoverable.Contractarerecognised When theoutcomeofaconstructioncontractcannotbeestimatedreliably,revenueisrecognisedonlyto proportion thatcostsincurredtodatebeartheestimatedtotalofcontract. by referencetotherecoverablecostsincurredduringyearplusfeeearned,measured infrastructure underserviceconcessionarrangementscanbeestimatedreliably,revenueisrecognised When theoutcomeofacost-plusconstructioncontractincludingservices its receiptisconsideredprobable. claims andincentivepaymentsareincludedtotheextentthatamountcanbemeasuredreliably Provisions aremadeforanyforeseeablelosseswhentheyidentified.Variationsincontractwork, to datebearestimatedtotalcostsforeachcontract,aftermakingdueallowancescontingencies. on thepercentageofcompletionmethod,measuredbyreferencetoproportionthatcostsincurred When theoutcomeofafixedpriceconstructioncontractcanbeestimatedreliably,revenueisrecognised (continued) (continued) Summaryofsignificant accounting policies 2 2.28 Revenue recognition Revenue l InterestincomegeneratedfromBTprojects (l) (k) Services income (j) Dividend income (i) Interest income (h) Insurance income Leaseofmachinery (g) Salesofgoods (f) (e) Toll revenue Incomefrominterestsininfrastructureinvestmentprojects (d) Notes totheConsolidatedFinancialStatements the interestratespecifiedundercontractterms. Income fromBTprojectsisaccruedonatimebasis,bymaking referencetothecarryingamountandat corresponding servicesarerendered. service income,logisticsincomeandmanagementisrecognisedwhenthe Revenue fromservicesincome,includingconsultancyservicecommissiontechnical amount orrevenuecanbemeasuredreliably). been established(providedthatitisprobabletheeconomicbenefitswillflowtoGroupand Dividend incomefrominvestmentsisrecognisedwhentheshareholders’rightstoreceivepaymenthave effective interestrate. as interestincome.Interestincomeonimpairedloanandreceivablesarerecognisedusingtheoriginal discounted attheoriginaleffectiveinterestrateofinstrument,andcontinuesunwindingdiscount the Groupreducescarryingamounttoitsrecoverableamount,beingestimatedfuturecashflow Interest incomeisrecognisedusingtheeffectiveinterestmethod.Whenaloanandreceivableimpaired, Revenue frominsuranceserviceisrecognisedproportionallyovertheperiodofcoverage. leases. Income fromleaseofmachineryisrecognisedonastraight-linebasisoverthetermsrelevant Revenue fromsalesofgoodsarerecognisedwhendeliveredandtitlehasbeenpassed. Toll revenuefromtheoperationoftollexpresswaysisrecognisedattimeusage. project’s netcarryingamountatinitialrecognition. discounts estimatedfuturecashflowsthroughtheexpectedlifeofinfrastructureprojecttothat reference tothecarryingamountandateffectiveinterestrateapplicable,whichisthatexactly Income frominterestsininfrastructureinvestmentprojectsisaccruedonatimebasis,bymaking (continued) (continued) FOR THEYEARENDED31DECEMBER2015 (continued) 137

China State Construction International Holdings Limited Annual Report 2015 138

China State Construction International Holdings Limited Annual Report 2015 Summaryofsignificant accounting policies 2 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements 2.29 2.32 2.31 2.30 Assets heldforsales distribution Dividend contracts Insurance Contingent liabilitiesandcontingentassets when aninflowofeconomicbenefitsisprobable.Whenvirtuallycertain,assetrecognised. A contingentassetisnotrecognisedbutdisclosedinthenotestoconsolidatedfinancialstatements Group. only bytheoccurrenceornon-occurrenceofonemoreuncertaineventsnotwhollywithincontrol A contingentassetisapossiblethatarisesfrompasteventsandwhoseexistencewillbeconfirmed that outflowisprobable,itwillthenberecognisedasaprovision. the notestoconsolidatedfinancialstatements.Whenachangeinprobabilityofanoutflowoccursso A contingentliability,otherthanthatassumedinabusinesscombination,isnotrecognisedbutdisclosed cannot bemeasuredreliably. because itisnotprobablethatoutflowofeconomicresourceswillberequiredortheamountobligation the controlofGroup.Itcanalsobeapresentobligationarisingfrompasteventsthatisnotrecognised confirmed bytheoccurrenceornon-occurrenceofonemoreuncertainfutureeventsnotwhollywithin A contingentliabilityisapossibleobligationthatarisesfrompasteventsandwhoseexistencewillonlybe continue tobemeasuredinaccordancewiththepoliciesset outelsewhereinNote2. (other thaninvestmentsinsubsidiariesandassociates) investment properties,evenifheldforsale,would and fairvaluelesscoststosell.Deferredtaxassets,assets arisingfromemployeebenefits,financialassets (except forcertainassetsasexplainedbelow)(ordisposalgroups), arestatedatthelowerofcarryingamount recovered principallythroughasaletransactionandisconsideredhighlyprobable.Thenon-currentassets Non-current assets(ordisposalgroups)areclassifiedasheldforsalewhentheircarryingamountistobe shareholders/directors. Company’s financialstatementsintheperiodwhichdividendsareapprovedby Dividend distributiontotheCompany’sshareholdersisrecognisedasaliabilityinGroup’sand only whentheoutflowisprobableandestimatescanbereliablymeasured. period, theGrouprecognisesentiredifferenceinincomestatement.Theseestimatesarerecognised best estimateoftheexpenditurerequiredtosettlerelevantinsuranceliabilitiesatendreporting current estimatesoffuturecashflows.Ifthecarryingamountrelevantinsuranceliabilitiesislessthan The Groupassessesattheendofeachreportingperiodliabilitiesunderitsinsurancecontractsusing (continued) (continued) Financialriskmanagement 3 . Financialriskfactors 3.1 (a) Market risk performance. unpredictability offinancialmarketsandseekstominimisepotentialadverseeffectsontheGroup’s rate risk),creditriskandliquidityrisk.TheGroup’soverallmanagementprogrammefocusesonthe The Group’sactivitiesexposeittoavarietyoffinancialrisks:marketrisk(includingcurrencyandinterest Notes totheConsolidatedFinancialStatements i) Interestraterisk (ii) Foreignexchangerisk (i) securities, tradeandotherreceivablesborrowings. borrowings andtradeotherreceivables.PleaseseeNotes 23,27and32fordetailsofdebt securities andborrowingratesofferedbyThePeople’sBank ofChinaarisingfromitsvariable-rate variable-rate borrowings,LondonInterbankOfferedRate(“LIBOR”)arisingfromitsholdingofdebt concentrated onthefluctuationofHongKongInterbankOfferedRate(“HIBOR”)arisingfromits be takentomanageinterestrateexposure.TheGroup’scashflowriskismainly However, fromtimetotime,ifinterestratefluctuatessignificantly,appropriatemeasureswould sensitivity analysisbelow.TheGroupcurrentlydoesnothaveanyinterestratehedgingpolicy. rate riskonbankdepositsisconsideredimmaterialandthereforehavebeenexcludedfromthe floating ratetradeandotherreceivables,bankborrowingsdeposits.Interest The Groupisexposedtocashflowinterestrateriskinrelationfloatingdebtsecurities, higher/lower (2014:HK$565,000lower/higher),respectively. held constant,theconsolidatedprofitbeforetaxforyearwouldhavebeenHK$29,363,000 At 31December2015,ifHK$hadweakened/strengthened5%againstRMBwithallothervariables having HK$asfunctionalcurrencyonUS$transactionsandbalancesisminimal. In viewofthefactthatHK$ispeggedtoUS$,foreigncurrencyexposureoperatingunits operations ismanagedprimarilythroughborrowingsdenominatedintherelevantforeigncurrencies. currency translationrisk.CurrencyexposurearisingfromthenetassetsofGroup’sforeign The Grouphascertaininvestmentsinforeignoperations,whosenetassetsareexposedto structure ifneeded. currency riskbycloselyreviewingthemovementofforeignrateandadjustfinancing contracts tohedgeagainstitsexposurecurrencyrisk.Themanagementmanagesforeign exchange ratefluctuationarise.TheGroupandtheCompanycurrentlydoesnotuseanyderivative primarily withrespecttotheRenminbi(“RMB”)andUnitedStatesdollar(“US$”),henceexposures The GroupandtheCompanyundertakescertaintransactionsdenominatedinforeigncurrencies, FOR THEYEARENDED31DECEMBER2015 (continued) 139

China State Construction International Holdings Limited Annual Report 2015 140

China State Construction International Holdings Limited Annual Report 2015 Financialriskmanagement 3 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements . Financialriskfactors 3.1 (a) Market risk (b) Credit risk position. engaged inpropertydevelopmentandinvestmentMainland ChinaandMacau,havestrongfinancial The creditriskonamountsduefrominvesteecompaniesislimited becausethecounterparties,whichare assigned byinternationalcredit-ratingagenciesorstate-ownedbanksinMainlandChina. The creditriskonliquidfundsislimitedbecausethecounterpartiesarebankswithhighratings risk issignificantlyreduced. for irrecoverableamounts.Inthisregard,thedirectorsofCompanyconsiderthatGroup’scredit individual debtattheendofeachreportingperiodtoensurethatadequateimpairmentlossesaremade action istakentorecoveroverduedebts.Inaddition,theGroupreviewsrecoverableamountofeach determination ofcreditlimits,approvalsandothermonitoringprocedurestoensurethatfollow-up In ordertominimisethecreditrisk,managementofGrouphasdelegatedateamresponsiblefor position. amount oftherespectiverecognisedfinancialassetsasstatedinconsolidatedstatement to theGroupduefailuredischargeanobligationbycounterpartiesisarisingfromcarrying As at31December2015,theGroup’smaximumexposuretocreditriskwhichwillcauseafinancialloss Interestraterisk (ii) increase byHK$37,071,000(2014:decrease/increaseHK$29,856,000). constant, theconsolidatedprofitbeforetaxforyearended31December2015woulddecrease/ If interestrateshadbeen50(2014:50)basispointshigher/lowerwithallothervariablesheld rates isused. decrease representingmanagement’sassessmentofthereasonablypossiblechangeininterest reporting periodwasoutstandingforthewholeyear.A50(2014:50)basispointsincreaseor The analysisispreparedassumingtheamountofassetandliabilityoutstandingatend floating interestdebtsecuritiesandvariable-ratetradeotherreceivablesbankborrowings. The sensitivityanalysesbelowhavebeendeterminedbasedontheexposuretointerestratesfor need arises. immaterial. Managementwillalsoconsiderhedgingsignificantinterestrateexposureshouldthe and fixeddeposits.Fairvalueinterestrateriskondebtsecuritiesisconsidered The Groupisalsoexposedtofairvalueinterestrateriskinrelationfixeddebtsecurities (continued) (continued) (continued) (continued) (continued) Financialriskmanagement 3 . Financialriskfactors 3.1 (b) Credit risk (c) Liquidity risk Notes totheConsolidatedFinancialStatements amounts disclosedinthetablearecontractualundiscountedcashflows. based ontheremainingperiodatendofreportingtocontractualmaturitydate.The The tablebelowanalysestheGroup’snon-derivativefinancialliabilitiesintorelevantmaturitygroupings maintains sufficientreservesofcashtomeetitsliquidityrequirementsintheshortandlongerterm. The Group’spolicyistoregularlymonitorcurrentandexpectedliquidityrequirementsensurethatit geographical areas. the GroupandCompanyconsistofalargenumberparties,spreadacrossdiverseindustries from investeecompanies,associates,jointventures,subsidiariesandimmediateholdingcompanyof any othersignificantconcentrationofcreditrisk.Tradereceivables,loantoajointventure,amountsdue and amountsduefrominvesteecompanieslongtermtradereceivables,theGroupdoesnothave Other thanconcentrationofcreditriskonliquidfunds,interestsininfrastructureprojectinvestments which aresufficienttocoverthereceivablesforoutstandingbalancesowingGroup. because thecounterpartiesarePRCgovernment-relatedentities,which,inmostcases,providecollateral The creditriskoninterestsininfrastructureprojectinvestmentsandlongtermtradereceivablesarelimited

biain ne iac ess5353982021425,428 1,402 4,296,345 13,323,154 5,652,864 – 2,012 5,330,952 1,385,345 988 4,052,594 481,169 121,875 513 472,824 60,938 513 60,938 26,480 Obligations underfinanceleases Guaranteed notespayables Borrowings Amount duetoanassociate mut u ojitvnue 354,111 Amounts duetojointventures Trade payables,other At 31December2014 Obligations underfinanceleases Guaranteed notespayables Borrowings Amounts duetojointventures Trade payables,other At 31December2015 The Group eerdicm 5191017001153776525617,218,665 596 716,512 1,125,357 177,080 15,199,120 deferred income payables andaccruals,excluding deferred income payables andaccruals,excluding (continued) (continued)

046847548339271,3,5 ,9,0 42,451,076 2,098,200 21,868,301 15,931,357 859 3,309,277 705,418 701,236 20,406,824 1,971,555 129,597 19,065,054 613967970263551,0,7 ,5,6 35,224,183 5,654,862 10,102,070 2,633,565 719,700 16,113,986 Less than 6 months K’0 K’0 K’0 K’0 K’0 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 (continued) 5,9 1,9 ,1,5 138372064215,798,735 2,096,482 11,318,307 1,215,053 514,394 654,499 625,844 0986,3 2,7 ,1,4 4,153,792 – 3,910,041 121,875 60,938 60,938 8 8 9 ,7 5 4,404 859 1,773 794 489 489

and 1year 6 months Between

–––– Between

FOR THEYEARENDED31DECEMBER2015 1 and2 ––––26,480 –––– years

Between 2 and5 (continued) years

er Total 5 years Over 141

China State Construction International Holdings Limited Annual Report 2015 625,844 354,111 142

China State Construction International Holdings Limited Annual Report 2015 Financialriskmanagement 3 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements . Fairvalueestimation 3.3 Capitalriskmanagement 3.2 of Renminbi. more suitableinvestmentopportunitiesthanexpectedandthedecreaseintotalequityduetodepreciation December 2015(2014:36.8%).Theincreasewasmainlycausedbyovered-budgetcapitalexpendituresdueto The Group’soverallstrategyremainsunchangedfromprioryear.netgearingratiois45.9%asat31 equity attributabletoownersoftheCompanyandnon-controllinginterests. the consolidatedstatementoffinancialposition)lesscashandequivalents.Totalcapitalrepresents capital. Netdebtiscalculatedastotalborrowings(includingcurrentandnon-currentshownin The Groupmonitorscapitalonthebasisofgearingratio.Thisratioiscalculatedasnetdebtdividedbytotal shareholders, returncapitaltoissuenewsharesorsellassetsreducedebt. In ordertomaintainoradjustthecapitalstructure,Groupmayamountofdividendspaid optimal capitalstructuretoreducethecostofcapital. concern inordertoprovidereturnsforshareholdersandbenefitsotherstakeholdersmaintainan The Group’sobjectiveswhenmanagingcapitalaretosafeguardtheabilitycontinueasagoing 2015 and2014. The followingtablepresentstheGroup’sassetsandliabilitiesthataremeasuredatfairvalue31December 3). Inputs fortheassetorliabilitythatarenotbasedonobservablemarketdata(thatis,unobservableinputs)(level directly (thatis,asprices)orindirectlyderivedfrom(level2). Inputs otherthanquotedpricesincludedwithinlevel1thatareobservablefortheassetorliability,either Quoted prices(unadjusted)inactivemarketsforidenticalassetsorliabilities(level1). different levelshavebeendefinedasfollows: The tablebelowanalysestheGroup’sfinancialinstrumentscarriedatfairvalue,byvaluationmethod. Unlisted equitysecurities Unlisted investmentfundsand Listed debtsecurities Available-for-sale investments certificate ofdeposits

(continued) K’0 K’0 K’0 HK$’000 HK$’000 HK$’000 HK$’000 0,1 3,9 239,503 107,811 131,692 – – – 107,811 107,811 ee ee ee Total Level3 Level2 Level 1 1,3 112,631 19,061 112,631 19,061 – – – –

31 December2015

(continued)

Financialriskmanagement 3 . Fairvalueestimation 3.3 price. Theseinstrumentsareincludedinlevel1,whichclassified asavailable-for-saleinvestments. the reportingperiod.Thequotedmarketpriceusedforfinancial assetsheldbytheGroupiscurrentbid The fairvalueoffinancialinstrumentstradedinactivemarkets isbasedonquotedmarketpricesattheendof in level3wererecognisedprofitfortheyearandothercomprehensive incomerespectively. The changeinfairvalueoffinancialassetsatthroughprofitorlossandavailable-for-saleinvestments 2014: The followingtablepresentsthechangesinlevel3instrumentsforyearsended31December2015and There werenotransfersbetweenthelevelsduringyear.

Notes totheConsolidatedFinancialStatements At 31December2015 326,922 Change infairvalue Reclassification toassociate 107,511 Additions 326,922 Exchange adjustments At 31December2014 – Change infairvalue – Exchange adjustments At 1January2014 – – 107,511 Unlisted equitysecurities Unlisted investmentfundsand Listed debtsecurities Available-for-sale investments etfct fdpst 88318,853 18,853 – – certificate ofdeposits (continued)

(continued) K’0 K’0 K’0 HK$’000 HK$’000 HK$’000 HK$’000 0,1 4,7 453,286 345,775 – 107,511 ee ee ee Total Level3 Level2 Level 1

31 December2014

FOR THEYEARENDED31DECEMBER2015

Available-for-sale (continued)

investments HK$’000 (577,215) 345,775 350,237 131,692 362,353 (4,448) 1,000 (221) (14) 143

China State Construction International Holdings Limited Annual Report 2015 144

China State Construction International Holdings Limited Annual Report 2015 Financialriskmanagement 3 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements Criticalaccountingestimatesandjudgements 4 addressed below. causing amaterialadjustmenttothecarryingamountsof assets andliabilitieswithinthenextfinancialyearare definition, seldomequaltherelatedactualresults.Theestimates andassumptionsthathaveasignificantriskof The Groupmakesestimatesandassumptionsconcerning the future.Theresultingaccountingestimateswill,by including expectationsoffutureeventsthatarebelievedtobereasonableunderthecircumstances. Estimates andjudgementsarecontinuallyevaluatedbasedonhistoricalexperienceotherfactors, Fairvalueestimation 3.3 — Borrowings Tradepayables,otherpayablesandaccruals,depositsreceived andadvancesfromcustomers — Bankbalancesandcash — Tradeandotherreceivables,depositsprepayments — The fairvalueofthefollowingfinancialassetsandliabilitiesapproximatetheircarryingamount: reasonable alternativeassumptionswouldnotchangesignificantlythefairvaluesrecognised. investments thataresubstantiallythesame.Changingunobservableinputsusedinlevel3valuationto The unobservableinputsofthevaluationincludeestimatedrevenueanddiscountratebyreferencetoother Othertechniques,suchasdiscountedcashflow analysis,areusedtodeterminefairvalueforthe • Marketvalueprovidedbytheissuersasitsbestestimateoffairinvestment. • Specific valuationtechniquesusedtovaluefinancialinstrumentsinclude: level 3. If oneormoreofthesignificantinputsisnotbasedonobservablemarketdata,instrumentincludedin are observable,theinstrumentisincludedinlevel2. rely aslittlepossibleonentityspecificestimates.Ifallsignificantinputsrequiredtofairvalueaninstrument techniques. Thesevaluationtechniquesmaximisetheuseofobservablemarketdatawhereitisavailableand The fairvalueoffinancialinstrumentsthatarenottradedinanactivemarketisdeterminedbyusingvaluation remaining financialinstruments. (continued) (continued) (continued) Criticalaccountingestimates andjudgements 4 . Impairmentofproperty,plantandequipment,trademark,projectbacklogs 4.4 Impairmentofreceivablesandamountsduefromrelatedparties 4.3 Estimationofforeseeablelossesinrespectconstructionworks 4.2 Percentageofcompletionconstructionworks 4.1 and licences,goodwill These calculationsrequiretheuseofestimates,suchasdiscount rates,futureprofitabilityandgrowthrates. have beendeterminedbasedonthehigheroffairvalue lesscoststosellandvalueinusecalculations. impairment forthoseintangibleassetsthathaveanindefinite usefullife,i.e.goodwill.Therecoverableamounts loss ifthecarryingamountofanassetislowerthanitsrecoverableamount.TheGrouptestsannuallyfor The Groupregularlyreviewswhetherthereareanyindicationsofimpairmentandrecognisesan payments, additionalallowancesmayberequired. customers andborrowersoftheGroupweretodeteriorate,resultinginanimpairmenttheirabilitymake creditworthiness andthepastcollectionhistoryofeachcustomerborrower.Iffinancialpositions amount ofjudgementisrequiredinassessingtheultimaterealisationthesereceivables,includingcurrent the evaluationofcollectabilityandaginganalysisaccountsmanagement’sjudgement.Aconsiderable The policyforallowancebadanddoubtfuldebtoftheGroupisdeterminedbymanagementbasedon budgets bycomparingthebudgetedamountstoactualincurred. to keepthebudgetaccurateandup-to-date,managementconductsperiodicreviewon to timeprovidedbythemajorcontractors/suppliers/vendorsinvolvedandexperienceofmanagement.Inorder contracting chargesandcostsofmaterialsarepreparedbymanagementonthebasisquotationsfromtime with thetermssetoutinrelevantcontracts.Budgetedconstructioncostswhichmainlycomprisesub- budgets preparedfortheconstructionworks.Budgetedincomeisdeterminedinaccordance Management estimatestheamountofforeseeablelossesconstructionworksbasedonmanagement contract costinthebudgetpreparedforeachconstructionasprogresses. accounting periods.TheGroupregularlyreviewsandrevisestheestimationofbothcontractrevenue which thecontractactivityisenteredintoanddatewhencompletedusuallyfalldifferent budgeted revenue.Becauseofthenatureactivitiesundertakeninconstructioncontracts,dateat revenue fromcontractworkisalsoestimatedbymanagementbasedonthepercentageofcompletionand budget andactualcostreportpreparedbyinternalquantitysurveyors,whereapplicable.Corresponding Management’s estimationofthecostincurredtodateandbudgetedisprimarilybasedonconstruction individual contractincurredattheendofreportingperiodcomparedwithestimatedbudgetedcost. of constructionworks.Thepercentagecompletionisdeterminedbytheaggregatedcostfor The Grouprecognisestherevenueaccordingtopercentageofcompletionindividualcontract Notes totheConsolidatedFinancialStatements (continued) FOR THEYEARENDED31DECEMBER2015 (continued) 145

China State Construction International Holdings Limited Annual Report 2015 146

China State Construction International Holdings Limited Annual Report 2015 Criticalaccountingestimates andjudgements 4 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements . Impairmentofconcessionoperatingrights 4.5 . Estimateoffairvaluefinancialassets 4.7 Incomeanddeferredtax 4.6 carrying amountsandnoimpairmentwasmadeaccordingly. operating rights.Asaresult,themanagementconsideredthatrecoverableamountsareabovetheir judgement withreferencetotheseRelevantFactorsinestimatingtherecoverableamountsoftollroad In arrivingattherecoverableamountofconcessionoperatingrights,managementexercisedtheir length ofoperatingrights,maintenancecostsanddiscountrate(the“RelevantFactors”). value inusebasedonthefollowingfactors:expectedfuturetrafficvolume,tollfeelevel, amount. Inmeasuringtherecoverableamountofconcessionoperatingrights,Grouphaslookedat Determining whetherconcessionoperatingrightsareimpairedrequiresanestimationoftherecoverable discounted cashflowanalysisforvariousavailable-for-saleinvestments thatarenottradedinactivemarkets. are mainlybasedonmarketconditionsexistingattheend ofeachreportingperiod.TheGrouphasused techniques. TheGroupusesitsjudgementtoselectavariety ofmethodsandmakeassumptionsthat The fairvalueoffinancialinstrumentsthatarenottradedinanactivemarketisdeterminedbyusingvaluation judgement includegrossprofitmargin,overheadandcapitalexpenditureappliedtotheforecasts. judgement regardingthefuturefinancialperformanceofFEGGroup.Thosesignificantestimationsand recognised intheconsolidatedfinancialstatementsarederivedfromGroup’sbestestimationand Islands andlistedontheMainBoardofSEHK,itssubsidiaries(together“FEGGroup”).Theamounts of lossesinFarEastGlobalGroupLimited(“FEG”),alimitedliabilitycompanyincorporatedtheCayman The Grouphasexercisedsignificantaccountingjudgementonrecognitionofdeferredtaxassetsinrespect profits. and relevanttaxlawisconsideredtodeterminetheavailabilityoflossesoffsetagainstfuturetaxable be deducted.Todeterminethefuturetaxableprofits,referenceismadetolatestavailableprofitforecasts suitable taxableprofitswillbeavailableinthefutureagainstwhichreversaloftemporarydifferencescan The recognitionofdeferredtaxassetsisbaseduponwhetheritmorelikelythannotthatsufficientand income taxassetsandliabilitiesintheperiodwhichsuchdeterminationismade. different fromtheamountsthatwereinitiallyrecorded,suchdifferenceswillimpactcurrentanddeferred based onestimatesofwhetheradditionaltaxeswillbedue.Wherethefinaltaxoutcomethesemattersis the ultimatetaxdeterminationisuncertain.TheGrouprecognisesliabilitiesforanticipatedauditissues determining theworldwideprovisionforincometaxes.Therearemanytransactionsandcalculationswhich The Groupissubjecttoincometaxesinnumerousjurisdictions.Significantjudgementrequired (continued) (continued) 6 Segment information 5 Revenue FEG Groupasadistinctreportablesegmentandassessesitsperformancebasedonoverallresult. The FEGGroupiscurrentlymanagedbyaseparatebusinessteam.chiefoperatingdecisionmakerregardsthe (mainly intheUnitedArabEmiratesandIndia). subsidiaries operate,namelyHongKong,MainlandChina(otherthanKongandMacau),MacauOverseas purposes ofresourcesallocationandperformanceassessments,includegeographicallocationswheretheGroup’s The Group’sreportablesegments,basedoninformationreportedtothechiefoperatingdecisionmakerfor Segment information Revenuefromothersmainlycompriseofrevenueprojectconsultancyservices,salesbuilding materials,machineryle (c) Revenuefrominfrastructureoperationcompriseofrevenuethermoelectricitybusinessandtollroadoperation. (b) Revenue frominfrastructureinvestmentprojectscompriseofrevenuegeneratedtheprovisionconstructionservicesu (a) Note: insurance contracts. investment projects,infrastructureoperation,salesofbuildingmaterials,machineryleasing,logisticsservicesand Revenue representstherevenuearisingfromconstructioncontracts,facadecontractingbusiness,infrastructure Revenue fromconstructioncontracts Others (Note(c)) Revenue frominfrastructureoperation(Note(b)) Revenue fromfacadecontractingbusiness Revenue frominfrastructureinvestmentprojects(Note(a)) and thecorrespondinginterestincome. services andinsurancecontracts. Notes totheConsolidatedFinancialStatements

FOR THEYEARENDED31DECEMBER2015 37,913,159 13,008,014 21,676,285 1,784,380 HK$’000 498,449 946,031 2015

(continued) 34,439,575 14,097,918 17,506,644 nder BTmodel 1,382,018 asing, logistics HK$’000 531,026 921,969 2014 147

China State Construction International Holdings Limited Annual Report 2015 148 Finance costs Share ofprofitsjointventures FEG Group Overseas Mainland China Share ofprofitsassociates Non-recurring investmentincome, Macau

China State Construction International Holdings Limited other incomeandgains,net Annual Report 2015 6 Segment information FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements Segment revenueandresultsfortheyearsended31December20152014areasfollows: Segment information reported tothechiefoperatingdecisionmakerforpurposes ofresourceallocationandperformanceassessment. share ofprofitsjointventuresandassociatesunallocated corporateexpenses.Thisisthemeasurementbasis certain acquisitionrelatedcosts,non-recurringinvestmentincome, otherincomeandgains,net,financecosts, Operating andreportablesegmentsresultsrepresenttheprofit/(loss) earnedorincurredbyeachsegmentexcluding Taxation isnotallocatedtoreportablesegments. The revenue,grossprofit/(loss)andresultsoftheGroup are allocatedbasedonoperationsofthesegments. Macau, MainlandChinaandoverseasoperations. Segment revenueoftheFEGGrouprepresentsfromfacadecontractingbusinessderivedHongKong, projects, salesofbuildingmaterialsandlogisticsservices. infrastructure investmentprojects,projectconsultancyservices,thermoelectricitybusiness,operating comprises therevenuefromconstructioncontracts,interestincomeandgenerated and machineryleasing,insurancecontractsotherswhilethesegmentrevenueofregionsinMainlandChina Segment revenueofHongKong,MacauandOverseascomprisesthemainlyfromconstructioncontracts purposes ofresourceallocationandassessmentsegmentperformance. Performance ismeasuredbasedonsegmentresultthatusedbythechiefoperatingdecisionmakerfor Measurement Profit beforetax Unallocated corporateexpenses Hong Kong Reportable segment (continued) (continued)

37,913,159 14,631,020 16,183,532 1,784,380 5,314,227 HK$’000 emn eeu rs rft(os Segmentresult Grossprofit/(loss) Segment revenue 2015 –

34,439,575 15,516,909 15,284,749 1,382,018 2,255,899 HK$’000 2014 –

5,029,774 3,635,761 184,067 268,605 957,560 (16,219) HK$’000 2015

4,743,092 3,575,493 1,010,830 (27,954) 88,389 96,334 (continued) HK$’000

2014 5,083,239 3,528,357 4,756,155 (229,280) (607,082) 730,828 833,437 423,728 (28,386) 13,088 19,003 72,462 HK$’000

4,364,261 3,305,605 4,047,594 2015 (192,962) (114,998) (455,829) 328,282 898,999 294,345 (53,627) 13,992 23,787 HK$’000 2014 Depreciation and Gain ondisposalofprepaid Net gain/(loss)ondisposal amortisation lease payment equipment of property,plantand 6 Segment information and liabilitiesarepresented. operating decisionmakerforperformanceassessmentand resourceallocation.Accordingly,nosegmentassets No assetsandliabilitiesareincludedinthemeasuresof Group’ssegmentreportingthatareusedbythechief Segment assetsandliabilities (including NorthAmerica)inaccordancewiththelocationsthat theFEGGroupoperatedin. The informationoftheFEGGroupwasallocatedtoHong Kong,MainlandChinaandOverseassegments joint venturesandassociates. Non-current assetsexcludefinancialinstruments,available-for-sale investments,deferredtaxassetsandinterestsin Other geographicalinformation Amounts includedinthemeasureofsegmentprofitorloss: Segment information Hong Kong Allowance/(reversal) for Overseas Macau Mainland China and otherreceivables doubtful debtsontrade Notes totheConsolidatedFinancialStatements HK$’000 2015 5,109 ogKn anadCiaMcuOesa E ru Total FEGGroup Overseas Macau MainlandChina Hong Kong (46)

– – 4,758 4,877 (continued) HK$’000

– –

2014 (continued) 307,669 90,569 3,876 1,036

9,886,688 8,550,764 Non-current assets HK$’000 267,638 129,108 939,178 272,640 HK$’000 7,415 943 2015 2015

–

3,954 12

– – HK$’000 10,447,691 2014 6,975 9,010,758 1,034,165 HK$’000 271,357 131,411

– – – 2014 (301) HK$’000

– – –

2015 Additions toproperty,plantand (9,433) FOR THEYEARENDED31DECEMBER2015 36

– – HK$’000 HK$’000 436,353 303,446 119,131 24,279 (2,200) 1,764 8,508 5,268 2015 2014

equipment – 35,853 (4,483)

(424) (continued)

– HK$’000 341,011 90,569 2015 1,341 2,800 HK$’000

525,232 321,402 181,875 10,996 10,959 2014 320,381 (4,156) 2,932 HK$’000

– 2014 149

China State Construction International Holdings Limited Annual Report 2015 HK$’000 2015 HK$’000 2014 HK$’000 2015 HK$’000 2014 150

China State Construction International Holdings Limited Annual Report 2015 Investmentincome, otherincomeandgains,net 7 6 Segment information FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements individually representsmorethan10percentoftheGroup’stotalrevenue. (2014: onecustomerintheHongKongreportablesegmentamountedtoapproximatelyHK$5,021,915,000),which Revenue fromonecustomerintheHongKongreportablesegmentamountedtoapproximatelyHK$7,779,929,000 Major customersinformation

Dividend incomefrom: Interest incomeon: Others Reversal ofotherpayablesandaccruals Gain onreclassificationfromavailable-for-sale Service income Rental ofproperties Gain ondisposalof: Imputed interestonamountsduefrominvesteecompanies Unlisted available-for-saleinvestments Loan toajointventure Debt securities Bank deposits investment toassociate Properties heldforsale Property, plantandequipment,net Listed available-for-saleinvestments Prepaid leasepayments (continued)

HK$’000 832,800 112,647 375,127 15,514 67,865 37,167 26,832 75,682 90,569 15,458 (continued) 5,557 9,041 1,341 2015 – –

HK$’000 475,339 244,166 45,557 14,317 87,876 24,733 13,992 15,289 6,911 3,480 9,420 9,598 2014 – – – Benefitsandinterestsofdirectors 9 8 Finance costs a Directors’andchiefexecutive’semoluments (a) at aweightedaveragerateofitsgeneralborrowings3.5%(2014:3.5%). During theyear,Grouphascapitalisedborrowingcostsonqualifyingassets.Borrowingwere Total financecosts Interest onbankloans Less: Amounts capitalisedinconcessionoperatingrights Less: Others Finance leasecharges Interest onotherloans Interest onguaranteednotespayables

For theyearended31December2015 The emolumentspaidorpayabletoeachoftheelevendirectorswereasfollows: Notes totheConsolidatedFinancialStatements Total emoluments Other emoluments: Fees Amounts capitalisedinamountsduefromcustomersfor Amounts capitalisedinconstructionprogress Emoluments paidorreceivable Remunerations paidor Employer’s contributionto Estimated moneyvalueofother Housing allowance Discretionary bonuses(Note(d)) Salaries contract work retirement benefitscheme benefits subsidiary undertakings affairs ofthecompanyorits the managementof services inconnectionwith in respectofdirector’sother accepting officeasdirector receivable inrespectof Nt a)(oe() (Note(c)) (Note(b)) (Note (a)) K’0 K’0 K’0 K’0 K’0 K’0 K’0 K’0 K’0 K’0 K’0 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 Yong ,8 ,8 ,2 ,0 ,3 ,0 53030203029,172 360 250 360 360 25 4,000 4,331 4,000 4,326 4,580 6,580 ,0 ,3 ,7 ,5 ,0 ,5 17,020 9,889 – – – – – – – – – – 2,753 1,229 2,100 2,213 2,753 1,229 3,079 1,229 3,333 1,229 3,002 2,760 Zhou 0 5303020302,155 360 250 360 360 25 – – – – – 800 81 81 81 108 – – – – – 18 18 18 18 18 18

–––––––––––– –––––––––––– –––––––––––– –––––––––––– Shuchen

Tian

Hancheng

Zhou

Shujie Pan

Cheung

Shew Hung FOR THEYEARENDED31DECEMBER2015 HK$’000 607,082 617,957 133,085 426,683

(10,875) 57,932 2015 igigLiJian Mingqing 257 – – –

Wu (continued)

(313,934) HK$’000 455,829 867,705 133,085 700,730

(10,745) (87,197) 33,544 2014 272 Ho Chung Raymond 74

Tai

151

Man Kiu China State Construction InternationalDavid Li Holdings Limited Annual Report 2015 Adrian Raymond Hai Ming Leung Shing See Lee Total 2015 152

China State Construction International Holdings Limited Annual Report 2015 Benefitsandinterestsof directors 9 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements a Directors’andchiefexecutive’semoluments (a) The fivehighestemolumentindividuals intheGrouparealldirectorsofCompanyboth years. December 2015and2014. or ascompensationforlossofoffice.Nonethedirectors waivedanyemolumentduringtheyearended31 No emolumentwaspaidbytheGrouptoanyofdirectors asinducementtojoinoruponjoiningtheGroup Theperformancerelatedincentivepayment isdeterminedprimarilybasedontheperformanceofeachdirectorandprofita (d) Mr.LiJianresignedasanon-executivedirectoroftheCompanywitheffectfrom19January2015. (c) Mr.WuMingqingwasappointedasanexecutivedirectoroftheCompanyon3 June2014. (b) Mr.ZhouactsasExecutiveDirector,ChairmanandChiefOfficeroftheCompany. (a) Notes: comply withthenewscopeandrequirementsofHongKongCompaniesOrdinance(Cap.622). previously disclosedinaccordancewiththepredecessorCompaniesOrdinancehasbeenrestatedorderto Certain ofthecomparativeinformationdirectors’emolumentsforyearended31December2014 For theyearended31December2014(Restated) oa mlmns650437408384397307303030203027,513 360 250 360 360 300 3,077 3,947 3,884 4,068 4,327 6,580 Total emoluments es80–––––30303020302,430 360 250 360 360 300 – – – – – 800 Other emoluments: Fees osn loac – – – 9,132 – – – – 15,856 – – – – – – – – – 706 – – 2,030 – – 1,212 1,212 2,361 – 1,212 1,900 2,760 – 2,655 2,839 Emoluments paidorreceivable 3,098 Remunerations paidorreceivable Employer’s contributionto 3,003 Estimated moneyvalueof Housing allowance Discretionary bonuses(Note(d)) Salaries the Group. netkns–––––––––––– – – – – – – – – – – – undertakings the companyoritssubsidiary management oftheaffairs services inconnectionwiththe in respectofdirector’sother sdrco – – – – – 95 – – – – – – – – – – – – – – – – – 10 – – 17 – – 17 – – 17 – 17 17 as director in respectofacceptingoffice retirement benefitscheme other benefits K’0 K’0 K’0 K’0 K’0 K’0 K’0 K’0 K’0 K’0 K’0 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 nt a)(oe() (Note(c)) (Note(b)) (note (a)) Yong Zhou

Shuchen

Tian

Hancheng

Zhou (continued)

Shujie (continued) Pan

Cheung Shew Hung

(continued) igigLiJian Mingqing

Wu

bility of Chung Tai Raymond

Ho Man Kiu David Li Adrian Raymond Hai Ming Leung Shing See Lee 2014 Total 1 Incometaxexpenses,net 11 Seniormanagement emoluments 10 Benefitsandinterestsof directors 9

The emolumentsoftheseniormanagementfor2015and2014werewithinfollowingbands: The emolumentsoftheseniormanagementforyearsended31December2015and2014wereasfollows: Directors’materialinterestsintransactions,arrangementsorcontracts (b) Income taxexpensesfortheyear Under/(over)provision inprioryears: Current tax: HK$1,000,000 orless Salaries andotherbenefits Deferred tax,net(Note38) More thanHK$3,000,000 HK$2,500,001 toHK$3,000,000 HK$2,000,001 toHK$2,500,000 HK$1,500,001 toHK$2,000,000 HK$1,000,001 toHK$1,500,000 Contributions toretirementbenefitschemes Other jurisdictions Hong Kong Hong Kong Other jurisdictions indirectly, subsistedattheendofyearoranytimeduringyear. Company wasapartyandinwhichdirectorofthehadmaterialinterest,whetherdirectlyor No significanttransactions,arrangementsandcontractsinrelationtothegroup’sbusinesswhich Notes totheConsolidatedFinancialStatements (continued)

No. ofemployees FOR THEYEARENDED31DECEMBER2015 HK$’000 HK$’000 (116,377) 770,903 761,952 654,526 667,686 23,310 23,166 94,266 8,951 7,845 1,106 2015 2015 2015 144 8 4 1 2 1 – –

(continued) No. ofemployees HK$’000 HK$’000 659,716 705,009 708,539 615,064 (45,293) 24,981 24,830 93,475 (3,530) (2,032) (1,498) 2014 2014 2014 151 9 4 2 2 1 – – 153

China State Construction International Holdings Limited Annual Report 2015 154

China State Construction International Holdings Limited Annual Report 2015 1 Incometaxexpenses, net 11 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements

follows: The taxchargefortheyearcanbereconciledtoprofitbeforeperconsolidatedincomestatementas relevant jurisdictions. Income taxesarisinginotherjurisdictions,mainlyMainlandChina,arecalculatedattheratesprevailing Hong Kongprofitstaxiscalculatedat16.5%oftheestimatedassessableprofitforbothyears. Share ofprofits Tax chargefortheyear Effect ofdifferenttaxratesprofitarisingfromotherjurisdictions Tax atdomesticincometaxrateof16.5%(2014:16.5%) Profit beforetax Others Under/(over)provision inprioryears Deferred taxationonundistributedearningsofMainlandChina Tax effectofutilisationpreviouslyunrecognisedtaxlosses Tax effectoftaxlossesnotrecognised Tax effectofincomenottaxablefortaxpurpose Tax effectofexpensesnotdeductiblefortaxpurpose Joint ventures Associates subsidiaries andjointventures(Note38) (continued)

4,259,965 4,756,155 HK$’000 (423,728) (196,243) 702,894 654,526 (72,462) (35,565) 41,977 41,215 87,392 (continued) (1,342) 8,951 5,247 2015

3,729,462 4,047,594 (294,345) (156,880) HK$’000 615,361 659,716 129,600 (23,787) 72,185 11,250 (3,530) (1,434) (8,180) 1,344 2014 2 Profitfortheyear 12

Rental incomefrominvestmentproperties,netofdirectexpenses Operating leaserentalsinrespectof: Employee benefitsexpenseincludingdirectors’emoluments: Depreciation ofproperty,plantandequipment Profit fortheyearhasbeenarrivedataftercharging/(crediting): (Gain)/loss ondisposalofproperty,plantandequipment,net Allowance forimpairmentlossesoftradeandotherreceivables Exchange loss,net Raw materialsandconsumablesused Contracts inprogresscostsrecognisedasexpense Amortisation ofprepaidleasepayments Amortisation oftrademarkandprojectbacklogs Amortisation ofconcessionoperatingrights(includedincostssales) Depreciation ofinvestmentproperties Less: Amountscapitalisedincontractsprogress Plant andmachinery Staff costs Auditors’ remuneration Less: Amountscapitalisedincontractsprogress Contributions toretirementbenefitplans Less: Amountsincludedincontractsprogresscosts Land andbuildings Notes totheConsolidatedFinancialStatements — currentyear — overprovisioninprioryear

FOR THEYEARENDED31DECEMBER2015 31,967,799 (2,508,371) 3,256,717 HK$’000 (192,710) (424,859) 139,110 467,348 871,463 123,117 331,820 431,940 180,863 409,444 42,489 20,126 14,615 57,904 (1,341) (9,041) 9,157 9,157 2,800 5,420 1,003 2015 –

(continued) 28,591,958 (2,050,941) 2,818,649 (174,890) (347,265) HK$’000 145,084 319,974 375,695 142,257 375,109 340,415 853,140 85,432 25,956 27,844 34,694 (9,598) 7,689 7,719 4,156 2,932 1,873 6,077 1,007 2014 (30) 155

China State Construction International Holdings Limited Annual Report 2015 156

China State Construction International Holdings Limited Annual Report 2015 4 Earningspershare 14 13 Dividends FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements the followingdata: The calculationofthebasicanddilutedearningspershareattributabletoownersCompanyisbasedon shareholders intheforthcominggeneralmeeting. (2014: HK$601,863,000)inaggregate,hasbeenproposedbythedirectorsandissubjecttoapproval The finaldividendofHK18.00cents(2014:HK15.00cents)pershareamountingtoapproximatelyHK$730,137,000 ` Number ofshares Earnings 2015 special,paid—HK2.00centspershare 2015 Interim,paid—HK13.00cents 2014 Final,paid—HK15.00cents Dividends recognisedasdistributionsduringtheyear: Weighted averagenumberofordinarysharesforthepurpose of Effect ofdilutivepotentialordinarysharesinrespectshareoptions Weighted averagenumberofordinarysharesforthepurpose Earnings forthepurposesofbasicanddilutedearningspershare (2014: 2014Interim,paid—HK11.00cents)pershare (2014: 2013Final,paid—HK12.00cents)pershare diluted earningspershare basic earningspershare

1,210,310 4,061,414 4,026,027 4,153,072 HK$’000 HK$’000 527,321 601,863 81,126 35,387 (continued) 2015 2015 2015 ’000

3,950,508 3,895,850 3,457,410 HK$’000 HK$’000 895,251 428,163 467,088 54,658 2014 2014 2014 ’000 – 5 Property,plantandequipment 15 t3 eebr21 3,1 ,5,6 0,8 2533,7 2,9 2,827,300 226,494 (53,243) 38,971 – (6,033) 62,573 1,691,431 319,974 – – (10,213) 404,088 – (8,788) 1,158,262 64,144 936,912 (74) 18,685 (33,321) 112,187 (522) 27,992 (836) At 31December2014 665,556 At 31December2015 154,836 Carrying values (399) 614,919 (1,057) At 31December2015 80,955 234,625 Disposals 525,232 (2,124) Charge fortheyear 37,506 Exchange adjustments At 1January2015 220,474 (14,175) (1,942) 4,518,731 At 31December2014 226,494 14,589 (744) Disposals Charge fortheyear 103,115 23,528 Exchange adjustments (205) At 1January2014, 174,760 Depreciation 184,275 At 31December2015 (1,279) 1,069,644 53,614 1,773,181 (1,761) Reclassification uponthe 1,171,537 28,752 Additions Exchange adjustments (5,223) At 1January2015 At 31December2014 (4,963) Reclassification uponthe Additions Exchange adjustments At 1January2014, Cost Disposals ipsl 2,7)(1)(451 988 1,3)–(95,416) – (12,633) (9,858) (44,541) (813) (27,571) Disposals srsae 9,6 3,1 4,9 3895,4 1,430,733 – 55,746 93,819 545,098 – 536,610 199,460 (245,290) – 4,103,090 252,054 as restated – 101,364 162,369 completion ofconstruction 38,133 893,538 1,599,054 126,549 1,094,711 80,608 completion ofconstruction as restated

Notes totheConsolidatedFinancialStatements ,1,2 ,9,8 4,8 5633,2 3,5 2,771,990 232,250 33,424 55,613 340,187 1,099,987 1,010,529 4,650,060 232,250 106,965 4,518,731 180,945 226,494 1,105,830 103,115 1,756,584 1,267,486 174,760 1,069,644 1,773,181 1,171,537 Land and buildings K’0 K’0 K’0 K’0 K’0 K’0 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 5,5 5,9 6,4 2,3 351–1,878,070 – 1,691,431 – 73,541 125,332 64,144 – 765,643 112,187 656,597 (193,688) 665,556 256,957 – 614,919 234,625 – 12,358 39,970 141,360 1,3)(640 568 420 183 (62,724) – (1,843) (4,200) (5,688) (36,460) (14,533) (191,090) (11,061) (3,607) (7,000) (10,189) (99,258) (59,975)

1337,3 6,1 5371,4 331,820 – 17,646 25,307 169,416 78,138 436,353 41,313 210,505 15,804 25,496 121,651 42,691 20,206 448 6,4)(,6)(,0)–(82,457) – (6,406) (7,962) (63,641) (113,934) – – (4,448) (8,347) (12,311) (87,634) – (5,642)

electricity Heat and aiiisMachinery facilities supply

fixtures and equipment Furniture, FOR THEYEARENDED31DECEMBER2015

vehicles

(continued) Motor Construction in progress

157

China State Construction International Holdings Limited Annual Report 2015 Total 158

China State Construction International Holdings Limited Annual Report 2015 16 Investment properties Property,plantandequipment 15 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements approximately HK$34,944,000(2014:HK$36,137,000). At 31December2015,thecarryingamountofGroup’spropertyandmotorvehiclesheldunderfinanceleaseis banking facilitiesamountedtoapproximatelyHK$14,463,000(2014:HK$17,934,000). At 31December2015,thecarryingamountofGroup’slandandbuildingspledgedassecurityfor The carryingvaluesoflandandbuildingsshownabovearesituatedon: At 31December2014 At 31December2015 Carrying values At 31December2015 Charge fortheyear Exchange adjustments At 31December2014 Charge fortheyear Exchange adjustments At 1January2014 Depreciation At 31December2015 Exchange adjustments At 31December2014 Exchange adjustments At 1January2014 Cost Freehold landintheUnitedStatesofAmerica Freehold landinCanada Freehold landinMacau Other premisesinMainlandChinaundermedium-termleases Heat andelectricityplantsinMainlandChinaunder Land andbuildingsinHongKongundermedium-termleases medium-term leases

(continued)

1,010,529 HK$’000 471,787 310,341 56,427 15,764 72,664 83,546 (continued) 2015

HK$’000 HK$’000 936,912 397,002 313,135 38,073 16,443 15,453 54,516 54,538 42,716 17,934 77,998 88,127 36,991 17,175 54,166 1,007 1,003 2014 (271) (350) (17) (22)

16 Investment properties 7 Interestsininfrastructureprojectinvestments 17 their respectiveoriginaleffective interestrates. 2015 and2014basedonthe present valuesofestimatedfuturecashflowsfromthoseinvestments, discountedat The Directorsreviewedindividually theinfrastructureprojects’operationsandfinancialpositions asat31December and 2014. 31.07%) perannum.Theinterestsininfrastructureprojectinvestments werenotpastdueasat31December2015 The effectiveinterestratesontheinfrastructureprojectinvestments rangefrom10.34%to27.76%(2014:9.40% ranges fromfivetotwenty-twoyears. return ispredeterminedinaccordancewiththeprovisionsof therelevantagreements.Thedurationofprojects responsible toprovidefinancefortheconstructionof infrastructure oftheseprojects,wherebytheGroup’s for BTand“transfer,operatetransfer”infrastructure projectslocatedinMainlandChina.TheGroupis Interests ininfrastructureprojectinvestmentsrepresentfundings denominatedinRMBadvancedtojointventures and areclassifiedaccountedforasinvestmentproperties. All oftheGroup’spropertyinterestsheldunderoperatingleasestoearnrentalsaremeasuredusingcostmodel making referencetocomparablesasavailableintherelevantmarket. estimated netmarketincome,andacapitalisationratederivedfromananalysisofevidence(ii)by valuations werearrivedatusingtheapproachof(i)applyingcapitalisedincomeprojectionsbaseduponaproperty’s The valuationincludedtheuseofinputsthatarenotbasedonobservablemarketdata(level3assets). experience inthevaluationofsimilarpropertiesrelevantlocations. qualified professionalvaluersnotconnectedwiththeGroupandhaveappropriatequalificationsrecent Crowe Horwath(HK)Consulting&ValuationLimitedand The fairvalueoftheinvestmentpropertieshasbeenarrivedatbasedonanopenmarketvaluationperformedby HK$228,876,000). The fairvalueoftheGroup’sinvestmentpropertiesat31December2015isapproximatelyHK$242,866,000(2014: The carryingvalueofinvestmentpropertiesshownabovecomprisessituatedasfollows: Portion dueafteroneyear Interests ininfrastructureprojectinvestments Land andbuildingsinMacau: Less: Portionduewithinoneyearincludedincurrentassets Others Freehold land Medium-term leases

Notes totheConsolidatedFinancialStatements (continued) 珠海立信資產評估事務所

FOR THEYEARENDED31DECEMBER2015 1,536,372 1,572,189 HK$’000 HK$’000 . Bothofthemareindependent (35,817) 36,991 16,820 18,879 1,292 2015 2015

(continued)

1,489,188 1,506,364 HK$’000 HK$’000 (17,176) 38,073 17,246 19,377 1,450 2014 2014

159

China State Construction International Holdings Limited Annual Report 2015 中海港務 160

China State Construction International Holdings Limited Annual Report 2015 （萊州） 9 Interestsinjointarrangements 19 Prepaidleasepayments 18 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements 有限公司 (“ Set outbelowisthesummarisedfinancialinformationforNCSBand of theGroup. opinion ofthedirectors,principallyaffectedresultsyearorformedasubstantialportionnetassets Set outbelowaretheparticularsofprincipaljointventuresat31December2015and2014,which,in Joint ventures Mainland Chinaundermedium-termleases. As at31December2015and2014,theGroup’sprepaidleasepaymentscompriseofleaseholdlandlocatedin 萊州港務 Share ofpost-acquisitionprofitsandothercomprehensiveincome, Nanjing ChangjiangSecond Name ofentity Cost ofinvestments,unlisted (“NCSB”) Bridge CompanyLimited net ofdividends

noprtdPRC Incorporated ”) whichareaccountedforusingtheequitymethod. noprtdPRC Incorporated structure Form ofbusiness operations establishment and Place ofregistration/ 中海港務 60 65

（萊州） 3,573,662 1,003,308 2,570,354 HK$’000 (continued) 有限公司 Percentage ofinterest 2015 edb h ru Principalactivities held bytheGroup 0Operationand 60 Operationand 65 2015 % anditssubsidiaries management ofports bridge management ofatoll

3,449,034 1,082,176 2,366,858 HK$’000 2014 2014 % 9 Interestsinjointarrangements 19 Summarised statementofcomprehensiveincome Summarised statementoffinancialposition Joint ventures Dividends receivedfromjointventures Total comprehensiveincome Profit fortheyear Profit beforetax Revenue Net assets Non-current Current Other comprehensiveloss Income taxexpenses,net Administrative expenses Finance costs Interest income Depreciation andamortisation Non-controlling Interest Total non-currentliabilities Financial liabilities Total non-currentassets Total currentliabilities Financial liabilities Total currentassets Property, plantandequipment Bank balancesandcash Other currentassets Other non-currentliabilities Other non-currentassets Concession operatingrights Other currentliabilities

Notes totheConsolidatedFinancialStatements (continued)

2,156,040 1,389,357 1,025,621 3,267,703 1,928,510 1,339,193 HK$’000 HK$’000 (125,571) (201,103) (151,110) 364,954 191,606 173,348 201,412 144,639 270,210 359,087 778,690 363,736 (88,877) (72,434) (continued) 87,260 48,019 39,241 5,044 2015 2015 NCSB NCSB – –

2,321,265 1,582,134 1,171,833 3,673,650 2,163,361 1,510,289 (195,625) (148,221) HK$’000 HK$’000 323,306 320,103 156,335 299,648 306,929 399,066 821,541 410,301 (92,137) (84,129) 93,557 52,072 41,485 (7,281) 3,203 5,500 2014 2014 – – FOR THEYEARENDED31DECEMBER2015

1,354,997 1,145,310 HK$’000 HK$’000 (123,436) (156,069) 335,454 335,454 545,590 494,668 123,713 148,564 376,829 236,552 908,758 (24,851) (80,889) 50,922 57,723 8,693 2015 2015 277 449 萊州港務 萊州港務 – – – – – – (continued)

1,450,925 1,270,912 1,134,115 HK$’000 HK$’000 309,349 309,349 489,793 116,960 372,833 136,797 2014 2014 431 – – – – – – – – – – – – – – – – 161

China State Construction International Holdings Limited Annual Report 2015 162

China State Construction International Holdings Limited Annual Report 2015 9 Interestsinjointarrangements 19 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements December 2015and2014. There arenocommitmentsorcontingentliabilitiesrelating totheGroup’sinterestsinjointventuresasat31 Set outbelowistheaggregatefinancialinformationofjointventuresthatarenotindividuallymaterial: Aggregate informationofjointventuresthatarenotindividuallymaterial and Reconciliation ofsummarisedfinancialinformationpresentedabovetothecarryingamountinterestsinNCSB Reconciliation ofsummarisedfinancialinformation NCSB and amounts. differences inaccountingpoliciesbetweentheGroupandjointventures,notGroup’sshareofthose The informationabovereflectstheamountspresentedinfinancialstatementsofjointventures,adjustedfor Summarised statementofcomprehensiveincome Joint ventures Total comprehensiveincome Aggregate amountsoftheGroup’sshare: Aggregate carryingvalue Dividend declared Goodwill Acquisition ofajointventure Profit fortheyear Exchange adjustment Carrying valueoftheGroup’sshare Share ofnetassets Closing netassets Opening netassets Post-tax profitfromcontinuingoperations Other comprehensiveincome net assets 萊州港務

萊州港務 areasfollows: (continued) areprivatecompaniesandtherenoquotedmarketpricesavailablefortheirshares.

2,321,265 1,401,426 1,401,426 2,156,040 HK$’000 (309,864) (125,571) 270,210 (continued) 2015 (continued) NCSB – –

2,262,132 1,508,822 1,508,822 2,321,265 (240,515) HK$’000 306,929 (7,281) 2014 – –

1,359,238 HK$’000 173,863

(79,777) 94,086 (continued) 1,450,925 1,354,997 HK$’000 (123,436) 2015 812,998 812,998 123,713 (96,205) 2015 萊州港務 – –

1,069,657 1,450,925 1,450,925 HK$’000 HK$’000 870,555 870,555 91,793 94,841 (3,048) 2014 2014 – – – – – Maeda —ChinaState China State Penta Ocean—ChinaState Leighton —ChinaState Leighton —ChinaState Krueger —ChinaState Consorcio DeKrueger China State China State China OverseasBuilding China State Joint Venture — AtalJointVenture Joint Venture* Joint Venture* — VanOordJointVenture M &EJointVenture — CSME — ShuiOnJointVenture — LeaderJointVenture — BordonJointVenture — AtalJointVenture 9 Interestsinjointarrangements 19 Particulars regardingtheprincipaljointoperationsasat31December2015and2014arefollows: form ofjointoperations. established jointarrangementswithoutsidercontractstoundertakeconstructionandengineeringprojectsinthe In additiontotheconstructionprojectsundertakenbycertainjointventuresaslistedabove,Grouphasalso Joint operations Atal-Degremont —China Name ofentity State JointVenture Notes totheConsolidatedFinancialStatements nnoprtdHongKong Unincorporated nnoprtdHongKong Unincorporated nnoprtdHongKong Unincorporated HongKong Unincorporated HongKong Unincorporated HongKong Unincorporated Macau Unincorporated HongKong Unincorporated HongKong Unincorporated nnoprtdHongKong Unincorporated nnoprtdHongKong Unincorporated nnoprtdHongKong Unincorporated structure Form ofbusiness (continued) operations establishment and Place ofregistration/ 32.5 56.4 50 49 30 49 45 50 55 60 51 51 FOR THEYEARENDED31DECEMBER2015 Percentage ofinterest 25Civilengineeringworks 32.5 64Civilengineeringworks 56.4 0Buildingconstruction 50 0Civilengineeringworks 30 Civilengineeringworks 45 Mechanicalandelectrical 50 Mechanicalandelectrical 55 Buildingconstruction 60 Civilengineeringworks 51 Civilengineeringworks 51 edb h ru Principalactivities held bytheGroup Civil engineeringworks – Civilengineeringworks – 2015 % (continued) engineering works engineering works 2014 % 163

China State Construction International Holdings Limited Annual Report 2015 中建鋼構 164

China State Construction International Holdings Limited Annual Report 2015 —CSHK 0 Interestsinassociates 20 Interestsinjointarrangements 19 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements 合作經營 Joint operations considered bythedirectorstobepartoflongterminterestsinassociates. The amountsduefromassociatesareunsecured,interestfreeandhavenospecificrepaymentterms,but arising fromacquisitionsofassociatesinprioryears. Included inthecostofinvestmentsassociatesisgoodwillapproximatelyHK$494,000(2014:HK$494,000) Newlyformed in2015 * Unlisted companies Penta Ocean—Concentric Name ofentity Alchmex JointVenture Amounts duefromassociates Share ofpost-acquisitionprofits,netdividends Cost ofinvestmentsinassociates

nnoprtdMacau Unincorporated (continued) nnoprtdHongKong Unincorporated structure Form ofbusiness (continued) operations establishment and Place ofregistration/

30 26 3,800,193 3,173,543 3,124,775 HK$’000 626,650 48,768 (continued) 2015 Percentage ofinterest 0Structuralsteelworks 30 Civilengineeringworks 26 edb h ru Principalactivities held bytheGroup 2015 %

2,104,943 1,853,568 1,843,828 HK$’000 251,375 9,740 2014 2014 % 深圳市毅駿房地產 澳門水泥廠 安徽興泰融資租賃 aaor eMcu ..Icroae aa Ordinary Omar PropertyDevelopment Macau Incorporated Fast ShiftInvestmentsLimited Matadouro DeMacau,S.A. Ou On-SociedadeDe 開發有限公司 有限責任公司 Company Limited(Note) (“Fast Shift”) Propriedades Limitada Administracao De * * * 0 Interestsinassociates 20 # Acquiredorincorporatedin2015 * Set outbelowaretheassociatesofGroupasat31December2015and2014. oe Significantinfluence isobtainedbytheGroupthroughparticipationinboardofdirectorsassociate2015. Note: Holderofnon-votingclassBshareFastShift,throughShift’s interestinNovaTaipa–Urbanizações,Limitada(“NTUL” Hong KongConcrete Name ofentity Company Limited 29% oftheeconomicbenefitsinorlossesarisingfromresidentialportionNovaCityPhaseVMacauownedanddevelope Notes totheConsolidatedFinancialStatements noprtdPCOrdinary PRC Ordinary Incorporated PRC Incorporated noprtdMcuOrdinary Macau Incorporated noprtdMcuOrdinary Non-voting Macau Incorporated BVI Incorporated noprtdMcuOrdinary Macau Incorporated noprtdHn ogOrdinary HongKong Incorporated structure business Form of (continued) class B and operations incorporation Place of # 31.34% 29.0% 20.0% 40.0% 31.5% 20.0% 25.0% 15.0% shares held Class of FOR THEYEARENDED31DECEMBER2015 90 Investmentholding 29.0% Operationofslaughterhouse 20.0% Propertymanagement 40.0% Manufactureandsaleof 31.5% Propertydevelopment – Manufactureandsaleof – Loanfinancing – Propertydevelopment – issued sharecapital ready-mixed concrete (continued) edb h ru Principalactivities held bytheGroup nominal valueof ready-mixed concrete Proportion of 2015 ), isentitledto d byNTUL. 2014 165

China State Construction International Holdings Limited Annual Report 2015 166

China State Construction International Holdings Limited Annual Report 2015 0 Interestsinassociates 20 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements Summarised statementoffinancialposition Set outbelowisthesummarisedfinancialinformationforFastShiftwhichaccountedusingequitymethod. Fast Shiftisaprivatecompanyandtherearenoquotedmarketpricesavailableforitsshares. differences inaccountingpoliciesbetweentheGroupandFastShift,notGroup’sshareofthoseamounts. The informationabovereflectstheamountspresentedinfinancialstatementsofFastShift,adjustedfor Summarised statementofcomprehensiveincome Current liabilities Dividends receivedfromassociate Loss andtotalcomprehensivelossfortheyear Revenue Net assets Total liabilities Non-current liabilities Liabilities Total assets Current assets Assets

(continued)

2,706,065 1,849,692 8,983,118 8,983,118 6,277,053 HK$’000 HK$’000 856,373 (continued) (2,019) 2015 2015 Fast Shift Fast Shift – –

2,206,929 1,264,753 8,486,001 8,486,001 6,279,072 HK$’000 HK$’000 942,176 2014 2014 (998) – – 0 Interestsinassociates 20 There arenocontingentliabilitiesrelatingtotheGroup’sinterestsinassociatesasat31December2015and2014. Set outbelowistheaggregatefinancialinformationofassociatesthatarenotindividuallymaterial: Aggregate informationofassociatesthatarenotindividuallymaterial Shift areasfollows: Reconciliation ofsummarisedfinancialinformationpresentedabovetothecarryingamountinterestsinFast Reconciliation ofsummarisedfinancialinformation Aggregate amountsoftheGroup’sshare: Aggregate carryingvalue Amount duefromanassociate Carrying valueoftheGroup’ssharenetassets Share ofnetassets Closing netassets Opening netassets Goodwill Loss fortheyear/period Acquisition ofanassociate Total comprehensiveincome Post-tax profitfromcontinuingoperations Other comprehensiveincome

Notes totheConsolidatedFinancialStatements (continued)

FOR THEYEARENDED31DECEMBER2015 1,820,345 1,820,345 6,277,053 6,279,072 1,353,198 HK$’000 HK$’000 260,075 (16,587) 56,460 73,047 (2,019) 2015 2015 Fast Shift – – (continued)

1,820,931 1,820,931 6,279,072 6,280,070 HK$’000 HK$’000 251,375 24,077 24,077 32,637 2014 2014 (998) – – – 167

China State Construction International Holdings Limited Annual Report 2015 168

China State Construction International Holdings Limited Annual Report 2015 1 Concessionoperating rights 21 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements HK$2,488,002,000). had beenpledgedtosecurethebankloanwithacarrying amountofapproximatelyHK$2,254,197,000(2014: (Yangquan toYuxiansection)withcarryingamountofapproximately HK$3,413,704,000(2014:HK$3,751,314,000) At 31December2015and2014,theconcessionoperating rights relatedtoShanxiYangquanYangwuExpressway payments madetotheGroup. are requiredtobereturnedthelocalgovernmentauthorities whentheoperatingrightsperiodsexpirewithoutany the operatingperiodsareattributabletoGroup.Therelevant concessionoperatingrightsandrelevantassets maintenance andoverhaulofthetollroadsduringapproved operatingperiods.Thetollfeescollectedduring construction ofthetollexpressways,acquisitionrelated facilitiesandequipment,operations,management, the relevantgovernmentauthorities’approvaldocumentsand therelevantregulations,Groupisresponsiblefor 1 HighwayfromYangquantoNiangziquan,ShanxiProvince isfrom22July2015to212045.According Shanxi YangquanYangwuExpressway(YangquantoYuxiansection)isfrom8May201172041andclass to operatetherespectivetollroadsfor30yearsfromdateofapprovalbylocalgovernment.Theoperation undertaken inMainlandChina.TheGrouphasbeengrantedbytherelevantlocalgovernmentauthoritiesrights incurred bytheGroupplusestimatedprofitmargin,whichiscalculatedmakingreferencetosimilarprojects both ofwhicharelocatedinMainlandChina.Thecarryingamountismeasuredbytheconstructionandothercosts HK$3,413,704,000 (2014:HK$3,751,314,000)andHK$2,630,498,000HK$2,779,678,000),respectively, and Class1HighwayfromYangquantoNiangziquan,ShanxiProvincewithcarryingamountsofapproximately The concessionoperatingrightsrelatedtoShanxiYangquanYangwuExpressway(YangquanYuxiansection) At 31December2014 At 31December2015 Carrying values At 31December2015 Charge fortheyear Exchange adjustments At 31December2014 Charge fortheyear Exchange adjustments At 1January2014 Amortisation At 31December2015 Additions Exchange adjustments At 31December2014 Additions Exchange adjustments At 1January2014 Cost

(continued)

6,711,781 6,530,992 6,044,202 7,053,327 6,735,017 (379,809) HK$’000 522,335 142,257 381,184 340,733 667,579 180,863 (35,619) (22,423) 38,263 (1,106) 2 Trademark,projectbacklogs, licencesandgoodwill 22 impairment oftheGroup’sconstructionlicencesandgoodwill. Based ontheimpairmenttestingatendofreporting period,themanagementconsideredthatthereisno market shareprice. recoverable amountoftheFEGGroupisdeterminedbased on fairvaluelesscoststosellbymakingreferenceits Goodwill isallocatedtotheGroup’sCGUcomprisingFEG Group.Forimpairmentassessmentofgoodwill,the rates ofthesectorscoveredbyconstructionlicenses. period approvedbythemanagement,usingzerogrowthrates whichdonotexceedthelong-termaveragegrowth use calculations.Thesecalculationscashflowprojectionspreparedbasedonfinancialbudgetscoveringa5-year For impairmentassessmentoflicences,therecoverableamountlicensesisdeterminedbasedonvalue-in- indication thattheymaybeimpaired. construction licencesarenotamortisedbutinsteadtestedforimpairmentannuallyandwheneverthereisan out bytheWorksBranch,DevelopmentBureauofHKSARthroughoutrelevantperiod.Accordingly, year aslongthesubsidiaryholdinglicencesisabletocomplywithcertainprovisionsandrequirementsset Administration Region(“HKSAR”).Theconstructionlicencesbasicallyhavenolegallifebutarerenewableevery The constructionlicencesweregrantedbytheWorksBranch,DevelopmentBureauofHongKongSpecial of existingcontractsandhistoricaldata. The estimatedusefullivesoftrademarkandprojectbacklogs203yearsrespectivelyarebasedontheterms various acquisitionsofsubsidiariesbytheGroup. The intangibleassetsincludetrademark,projectbacklogs,constructionlicencesandgoodwillrecognisedfrom t3 eebr21 0634,5 85,992 14,615 778,304 71,377 25,956 577,664 – – 45,421 – 9,950 – – – – 3,779 – – – 45,359 186,911 3,779 41,580 15,120 40,633 26,460 10,836 29,797 10,836 18,961 At 31December2014 At 31December2015 Carrying values At 31December2015 Charge fortheyear At 31December2014 Charge fortheyear At 1January2014 Amortisation At 1January2014,31December Cost 04ad3 eebr21 1,0 5399905764849,681 577,664 9,950 45,359 216,708 2014 and31December2015

Notes totheConsolidatedFinancialStatements Trademark

K’0 K’0 K’0 K’0 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 7,7 ,5 7,6 763,689 577,664 9,950 – 176,075

akosLcne odilTotal Goodwill Licences backlogs Project

FOR THEYEARENDED31DECEMBER2015

(continued)

169

China State Construction International Holdings Limited Annual Report 2015 170

China State Construction International Holdings Limited Annual Report 2015 23 Available-for-sale investments FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements Available-for-sale investmentsaredenominatedinthefollowingcurrencies: the securitieshavehighcreditratingsandnodefaultinterestpaymentsoccurredinpast. financial assetsiseitherpastdueorimpaired.Noimpairmentlossondebtsecuritiesrecognisedastheissuersof The maximumexposuretocreditriskatthereportingdateiscarryingvalueofdebtsecurities.Nonethese December 2015and2014asthereisnoobjectiveevidenceofimpairmentloss. consolidated incomestatementinpreviousyears.Noimpairmentwasmadeduringthetwoyearsended31 the equitysecuritiesbelowtheircosts,animpairmentlossamountingtoHK$6,735,000wasrecognisedin For theimpairmentassessmentoflistedequitysecurities,asthereweresignificantdeclinesinfairvalues At31December2015,anamountofHK$49,147,000(2014:HK$49,750,000)includedinthecarryingdebtsecuritiesli (a) Notes: b At31December2015,anamountofHK$65,636,000(2014:HK$280,706,000)includedinthecarryingequitysecurities (b) Available-for-sale investmentscomprise: HK$ Total Unlisted securities: Listed securities: Macao Pataca(“MOP”) US$ RMB — Equitysecurities(Note(b)) — Investmentfundsandcertificateofdeposits — DebtsecuritieslistedinHongKongwithfixedinterest — DebtsecuritieslistedinHongKongwithfixedinterest issued bysubsidiariesofCOLI,afellowsubsidiarytheGroup. Kong, isdebenturesissuedbyasubsidiaryofCOLI,fellowtheGroup.

of 4-6.45%andmaturitydatein2022-2043(Note(a)) of 4.75%andmaturitydatein2018

HK$’000 HK$’000 107,811 239,503 239,503 112,631 126,873 19,061 68,542 39,269 51,480 57,293 (continued) 3,857 2015 2015

HK$’000 HK$’000 sted inHong 453,286 326,922 107,511 453,286 268,568 126,363 18,853 69,111 38,400 54,277 arethose 4,078 2014 2014 6 Amountsduefrom/(to)customersforcontractwork 26 25 Inventories Amountsduefrominvestee companies 24 2014 andhavebeenincludedindepositsreceivedadvance fromcustomersundercurrentliabilities. assets. Noadvancesreceivedfromcustomersforcontract worknotyetcommencedat31December2015and HK$2,577,509,000 (2014:HK$2,025,904,000)andhavebeen includedintradeandotherreceivablesundercurrent At 31December2015,retentionsheldbycustomers forcontractworkamountedtoapproximately to subsidiariesofCOLI,afellowsubsidiarytheGroup. At 31December2015,amountsduefrominvesteecompaniesincludingHK$262,230,000(2014:HK$392,210,000) RMB andMOP). 5.25% to7.83%perannum(2014:annum)andthebalancesaredenominatedinRMB The fairvaluesoftheseamountsoninitialrecognitionaredeterminedbasedeffectiveinterestraterangingfrom repayment isexpectedwithinnexttwelvemonthsfromtheendofreportingperiod. The amountsduefrominvesteecompaniesareunsecured,interest-freeandhavenofixedrepaymentterms.No Amounts duefromcontractcustomers Analysed forreportingpurposesas: Contract costsincurredplusrecognisedprofitless Raw materialsandconsumables Amounts duetocontractcustomers Less: progressbillings Finished goods Work inprogress foreseeable losses

Notes totheConsolidatedFinancialStatements

FOR THEYEARENDED31DECEMBER2015 (87,712,577) 85,465,277 (2,247,300) (2,247,300) (4,669,015) 2,421,715 HK$’000 HK$’000 108,835 94,103 13,920 2015 2015 812 (continued)

(56,580,535) 54,141,631 (2,438,904) (3,793,052) (2,438,904) 1,354,148 HK$’000 HK$’000 124,897 160,289 33,979 1,413 2014 2014 171

China State Construction International Holdings Limited Annual Report 2015 172

China State Construction International Holdings Limited Annual Report 2015 7 Tradeandotherreceivables 27 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements doubtful debts,presentedbasedontheinvoicedateortermofrelatedcontract,isasfollows: The analysisoftradeandotherreceivables,includingtheagingnetallowancefor Thebalancesofnon-currentportionweremainlyattributabletocertaininfrastructureinvestmentprojects(tradingunderB (b) (a) Notes: Non-current portion Trade andotherreceivables Other receivables Trade receivables,netofallowancefordoubtfuldebts,aged: Non-current portion(Note(b)) Current portion Trade andotherreceivables(Note(a)) Less: allowancefordoubtfuldebts Other receivables Less: allowancefordoubtfuldebts Trade receivablesandretention Portion classifiedascurrentassets Retention receivables Over 90days 31–90 days 0–30 days interest freeandrepayableondemand. included balanceswithrelatedcompaniesamountingtoapproximatelyHK$664,313,000(2014:HK$667,206,000),whichwereunsecured HK$181,160,000), whichwereunsecured,interestfreeandrepayableinaccordancewiththetermsofrelevantagreements.Otherr Trade receivablesandretentionincludebalanceswithrelatedcompaniesamountingtoapproximatelyHK$61,332,00

2017, HK$8,146,093,000in2018,HK$1,215,672,0002019to2020.Asaresult,theyareclassifiedasnon-current. contract terms.Theamountisexpectedtobegraduallyandfullyrecoveredfrom20172020,withapproximatelyHK$8,588,196,0 Mainland China.Thebalancesaresecuredbycertainassetsfromemployersascollateralandinterestbearinginaccordancewith

(18,170,163) (18,170,163) 34,953,966 32,376,457 17,949,961 36,120,124 34,975,504 17,949,961 36,120,124 17,230,944 10,695,737 1,166,158 1,167,316 1,166,158 2,577,509 4,449,776 HK$’000 HK$’000 (21,538) (continued) (1,158) 2015 2015

(12,542,067) (12,542,067) 12,901,282 25,443,349 24,490,327 24,510,257 12,901,282 25,443,349 22,464,423 14,059,865 T model)onthe 2,025,904 3,030,702 5,373,856 HK$’000 HK$’000 953,022 954,224 953,022 therelevant (19,930) eceivables (1,202) 0 (2014: 2014 2014 00 in , 7 Tradeandotherreceivables 27 credit limit.Limitsattributedtocustomersarereviewedevery year. Before acceptinganynewcustomer,theGroupwillassess the potentialcustomer’screditqualityandwilldefinea Movement intheallowancefordoubtfuldebts receivables. receivables basedonthemanagement’sevaluationofcreditworthinessandpastcollectionhistorythose debts asat31December2015,noallowancefordoubtfuldebtisconsideredtobenecessarypastduetrade Except fortheamountofapproximatelyHK$22,696,000(2014:HK$21,132,000)whichwasprovideddoubtful follows: The aginganalysisoftheGroup’stradereceivablesbalanceswhicharepastduebutnotimpairedispresentedas retention receivablesarerecoverableupontheexpiryofdefectliabilityperiodconstruction. generally allowsanaveragecreditperiodofnotexceeding90days(2014:days)toitstradecustomersandthe under BTmodelwhicharebilledandpayableinaccordancewiththetermsofrelevantagreements,Group Except forthereceivablearisingfromconstructioncontracts,includinginfrastructureinvestmentprojectstrading recovered aftermorethanoneyearwasapproximatelyHK$1,305,526,000(2014:HK$1,111,393,000). contracts rangingfrom1to2years.At31December2015,theamountofretentionreceivablesexpectedbe Retention receivablesareinterest-freeandrecoverableattheendofretentionperiodindividualconstruction amounts toHK$16,704,856,000(2014:HK$13,690,541,000). Included inthereceivablesagedover90dayswerereceivableattributabletoinfrastructureinvestmentprojects 31 December 1 January Total 91–180 days Impairment lossesrecognisedonreceivables Exchange adjustments Over 365days 181–365 days

Notes totheConsolidatedFinancialStatements (continued)

FOR THEYEARENDED31DECEMBER2015 HK$’000 HK$’000 689,437 438,197 251,240 22,696 21,132 (1,236) 2,800 2015 2015 – (continued)

HK$’000 HK$’000 669,629 549,654 21,132 18,142 86,934 33,041 2,932 2014 2014 58 173

China State Construction International Holdings Limited Annual Report 2015 174

China State Construction International Holdings Limited Annual Report 2015 9 Amountsduefrom/(to)jointventuresandloantoaventure 29 Amountduetoanassociate 28 Tradeandotherreceivables 27 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements Trade andotherreceivablesaredenominatedinthefollowingcurrencies: within twelvemonthsaftertheendofreportingperiod.ThebalancesaredenominatedinRMB. The loantoajointventureisunsecured,carryinginterestat10%12%perannumandexpectedberepaid reporting period. mainly denominatedinRMB.Thebalancesareexpectedtoberepaidwithintwelvemonthsaftertheendof The amountsduefrom/(to)jointventuresareunsecured,interest-freeandrepayableondemand.balances denominated inRMB. Amount duetoanassociatewasunsecured,interest-freeandrepayableondemand.Thebalancemainly US$ RMB Others MOP HK$

(continued)

36,120,124 29,346,885 1,420,993 4,664,747 HK$’000 446,761 240,738 (continued) 2015

25,443,349 19,321,842 1,178,964 3,918,400 HK$’000 846,290 177,853 2014 0 Bankbalancesandcash 30 Sale andPaymentofForeignExchangeRegulations. foreign currenciesissubjecttothePRC’sForeignExchange ControlRegulationsandAdministrationofSettlement, In respectofthebalancedenominatedinRMBGroup’s subsidiariesincorporatedinthePRC,conversioninto following currencies: Pledged bankdeposits,depositswithfinancialinstitutions,balancesandcasharedenominatedinthe original maturityofthreemonthsorless. annum (2014:0.001%to5.1%perannum).BankbalancescomprisefixeddepositsheldbytheGroupwithan Bank balances,excludingbankcurrentaccounts,earninterestatmarketratesrangingfrom0.001%to5.1%per Bank balancesandcash 1 to6months)earninginterestatafixedrateof0.001%perannum(2014:0.00146%0.97498%annum). Deposits withfinancialinstitutionscomprisedepositsoriginalmaturitydatesrangingfrom1to6months(2014: Deposits withfinancialinstitutions and earninterestatfixedratesrangingfrom0.3%to0.35%perannum(2014:0.385%annum). At 31December2015,bankdepositsamountingtoapproximatelyHK$291,000(2014:HK$682,000)arepledged Pledged bankdeposits HK$ Pledged bankdeposits Others MOP RMB Bank balancesandcash Deposit withfinancialinstitutions

Notes totheConsolidatedFinancialStatements

FOR THEYEARENDED31DECEMBER2015 8,015,187 8,015,187 8,014,873 1,297,252 3,810,485 2,850,071 HK$’000 HK$’000 57,379 2015 2015 291 23 (continued)

7,452,448 7,451,746 7,452,448 4,270,081 2,016,188 HK$’000 HK$’000 185,821 980,358 2014 2014 682 20 175

China State Construction International Holdings Limited Annual Report 2015 176

China State Construction International Holdings Limited Annual Report 2015 1 Tradepayables,other payablesandaccruals 31 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements Trade payables,otherpayablesandaccrualsaredenominatedinthefollowingcurrencies: HK$2,673,649,000 (2014:HK$1,842,466,000). December 2015,theamountofretentionpayablesexpectedtobedueaftermorethanoneyearwasapproximately financial riskmanagementpoliciesinplacetoensurethatallpayablesarepaidwithinthecredittime-frame.At31 The averagecreditperiodontradeandconstructioncostpayablesis60days(2014:days).Grouphas HK$573,591,000), whichwereunsecured,interestfreeandrepayableondemand. Other payablesincludedbalanceswithrelatedcompaniesamountingtoapproximatelyHK$660,002,000(2014: with thetermsofrelevantagreements. HK$1,788,869,000 (2014:HK$1,812,070,000),whichwereunsecured,interestfreeandrepayableinaccordance Trade payablesandretentionincludedbalanceswithrelatedcompaniesamountingtoapproximately HK$1,794,661,000), whichcompriseprimarilystaffcost,othertaxandoperatingexpensespayables. Other payablesincludedintheotherandaccrualsamountedtoapproximatelyHK$2,011,899,000(2014: presented basedontheinvoicedate,isasfollows: An analysisoftradepayables,otherpayablesandaccruals,includingtheaging Other payablesandaccruals RMB HK$ Retention payables Trade payables,aged: Others US$ MOP Over 90days 31–90 days 0–30 days

21,926,222 13,869,867 21,926,222 14,107,905 2,069,820 5,986,535 3,740,657 2,056,945 8,072,265 1,182,653 6,364,435 HK$’000 HK$’000 210,325 60,904 (continued) 2015 2015

17,261,318 11,141,228 17,261,318 11,325,294 1,837,314 4,282,776 2,729,907 2,584,934 5,826,387 4,781,162 HK$’000 HK$’000 341,600 736,003 77,259 2014 2014 Bank loans,unsecured 32 Borrowings The effectiveinterestratesofborrowingsareasfollows: The fairvaluesofborrowingsapproximatetheircarryingamountsastheimpactdiscountingisnotsignificant. operating rightsoftheGroup. respective Groupentities.TheGroup’ssecuredbankloansarebylandandbuildingconcession The Group’sbankloansaremainlydenominatedinHK$andRMB,allofwhichfunctionalcurrenciesthe Bank loans,secured Carrying amountrepayable: Amount dueafteroneyear Bank loans,secured Less: Amountduewithinoneyearshownundercurrentliabilities Bank loans,unsecured Within oneyear More thanfiveyears More thantwoyearsbutnotmorefive More thanoneyearbutnotexceedingtwoyears

Notes totheConsolidatedFinancialStatements K RMB HK$ %%%%

.156 .53.11 3.45 5.67 2.41 .662 – 6.26 4.86 –

2015 Canadian “A” US$ (“CAD”)

Dollar

.564 .04.00 4.00 6.45 2.45 FOR THEYEARENDED31DECEMBER2015 .662 – 6.26 6.06 – 13,893,891 13,893,891 10,663,147 13,085,694 11,626,503 1,606,715 2,267,388 HK$’000 (808,197) 815,832 808,197 K M A US$ CAD RMB HK$ 2015 %%%%

(continued)

10,949,073 10,361,804 10,949,073 2014 4,901,381 4,394,662 1,065,761 8,486,321 2,462,752 (587,269) HK$’000 587,269 2014

177

China State Construction International Holdings Limited Annual Report 2015 178

China State Construction International Holdings Limited Annual Report 2015 3 Assetsheldforsale 33 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements c Cumulativeincomerecognisedinothercomprehensiverelatingto (c) Liabilitiesdirectlyassociatedwithassetsheldforsale (b) a Assetsheldforsale (a) assets classifiedasheldforsale Note: Bankloanwassecuredbyanassetprovidedacustomer. Foreign exchangetranslationadjustment Total liabilities Trade payables,otherpayablesandaccruals Total assets Amounts duefromcustomersforcontractworks Bank balancesandcash Trade andotherreceivables Current taxpayables Bank loan(Note) Other currentassets

HK$’000 HK$’000 HK$’000 (continued) 2015 2015 2015 – – – – – – – – – –

10,921,766 9,994,376 7,438,135 5,811,514 1,054,992 HK$’000 HK$’000 HK$’000 798,303 102,330 571,629 75,705 53,382 2014 2014 2014 34 Share capital Assetsheldforsale 33 Note: In December2014,Ever PowerGroupLimited,awholly-ownedsubsidiaryoftheCompany,completedacquisitionChina Note: bank loanwassecuredbyadequatecollateralprovidedacustomer. at theendofyear.Nofinancialexposureisexpectedandthereforenoimpacthasbeenresultedas the transfer.However,Groupisinprocessofnegotiatingwithbankstoreleasecorporateguarantee The Groupprovidedacorporateguaranteeinrespectofthebankloandrawnbydisposedsubsidiarybutbefore by theyearend. transaction wascompletedby31December2015.Therefore,therelevantassetsandliabilitieswerederecognised the Grouphascommittedtotransferitsentireinterestinsubsidiaryanindependentthirdparty.The sales asat31December2014followingthecompletionofaBTconstructioncontractinMainlandChinaand The assetsandliabilitiesrelatedtoawhollyownedsubsidiaryoftheCompany,havebeenpresentedasheldfor Balance at31December2015 Issued andpaidup: Authorised: aac t1Jnay21 ,8,4,5 97,219 3,888,744,651 2,931 160 117,278,000 6,394,981 Acquisition ofsubsidiariesandajointventure(Note) Issue ofordinarysharesuponexerciseshareoptions Balance at1January2014 Ordinary sharesofHK$0.025each aac t3 eebr21 ,1,1,3 100,310 4,012,417,632 Issue ofordinarysharesuponexerciseshareoptions Balance at31December2014

amounted toHK$1,320,550,000(HK$11.26pershare). 117,278,000 sharesoftheCompany.Theordinaryissuedrankparipassuasotherinissue.fairvaluet Ports InvestmentCompany(“COP”)fromCOHL,immediateholdingcompanyoftheCompany,includingashareholder’sloantoCOPfor Notes totheConsolidatedFinancialStatements (continued) 00000001,500,000 60,000,000,000

,5,1,2 101,408 4,056,314,622 FOR THEYEARENDED31DECEMBER2015 Number of 386901,098 43,896,990 hrsAmount shares (continued)

he shares issued he sharesissued HK$’000 Overseas

179

China State Construction International Holdings Limited Annual Report 2015 180

China State Construction International Holdings Limited Annual Report 2015 5 Sharepremiumand reserves 35 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements

rnfrt tttr eev 112(112 – (467,088) (428,163) (467,088) (428,163) (21,172) – – 178,892 21,172 – – – – – – – – – – – – – – – – – – – – – – – – 178,892 – 15,836,417 8,074,587 Transfer tostatutoryreserve 190,051 2014 interimdividendpaid 2013 finaldividendpaid Contribution fromaformershareholder 1,235,920 Issue ofsharesuponacquisition 63,842 3,058 337 Exchange differencesarisingon (1,849,113) 8,117,735 Gain onfairvaluechangesof At 1January2014,asrestated t3 eebr21 ,3,2 16021 3 ,6 8761044421231,1,7 19,729,786 10,615,574 211,223 1,074,454 3,457,410 58,726 3,457,410 3,290,828 – 2,666 3,457,410 – 337 – (161,466) (1,670,221) (5,116) 9,437,027 – – – – At 31December2014 – Total transactionswithowners, – – – – Issue ofordinarysharesuponexercise Total comprehensiveincomefortheyear Release ofinvestmentrevaluation Profit fortheyear hr pin ,7 32 1,281 – 602,541 4,838 (916,423) – – 1,317,619 (9,954) 21,172 – – – – – (161,466) – – – – – – – – (392) (392) – 4,838 – – – (161,466) – (9,954) – – – 178,892 – – 1,319,292 – – – 1,673 – – recognised directlyinequity – – – – – 1,317,619 subsidiaries andjointventure(Note34) share options – translation offoreignoperations net oftax available-for-sale investments, investments disposal ofavailable-for-sale reserve toincomestatementupon K’0 K’0 K’0 K’0 K’0 K’0 K’0 K’0 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 premium Share

Nt a)(oe() Nt c)(Note(d)) (Note(c)) (Note(b)) (Note (a))

reserve Special

redemption reserve Capital

reserve option Share

(continued) Investment revaluation reserve

Translation

reserve

Statutory reserve Retained rft Total profits 5 Sharepremiumand reserves 35 b Capitalredemptionreserverepresentstheamount bywhichtheCompany’sissuedsharecapitalwasdiminishedoncancellation (b) Specialreservearosefrom: (a) Notes: c Statutoryreserveofthe Grouprepresentsgeneralanddevelopmentfundreserveapplicable totheoverseasandMainlandChin (c) (d) In At 31December2015 Total transactionswithowners, Transfer tostatutoryreserve 2015 specialdividendpaid 2015 interimdividendpaid 2014 finaldividendpaid Lapse ofshareoptions Issue ofordinarysharesuponexercise Total comprehensiveincomefortheyear Exchange differencesarisingon Gain onfairvaluechangesof Release ofinvestmentrevaluation Profit fortheyear At 1January2015 recognised directlyinequity of shareoptions translation offoreignoperations available-for-sale investments,netoftax reclassification toassociate reserve toincomestatementupon i) During2012,theGroupobtainedcontroloverFEGwhichthenbecameGroup’ssubsidiary.Subsequenttoacquisition, (ii) ThebalanceofspecialreservebroughtforwardfromprioryearsarosethecombinationsChinaStateConstructionEng (i) shares repurchased. HK$601,863,000). which wereestablishedinaccordance with therelevantregulations. Notes totheConsolidatedFinancialStatements cluded inretained profitsasat31December2015is theproposed2015finaldividendof approximatelyHK$730,137,000(2014: million, wascreditedtothespecialreserve. in FEGofapproximatelyHK$57millionandthecarryingamountattributable shareofnetassetsFEGapproximatelyH approximately HK$34million,representingthedifferencebetweencashconsideration receivedforthedisposalofpartia The partialdisposaldidnotresultinalossofcontrolandwasthusaccounted forasanequitytransaction.Accordingly,the a privateplacingtocertainindependentinvestors.Asresult,theGroup’s shareholding inFEGwasreducedfrom76.2%to74.1 owned subsidiaryoftheCompany,disposedanaggregate45,500,000 sharesofFEGatapriceHK$1.26persharethrough contribution from/(distributionto)theformershareholdersinprioryears. under commoncontrol.Theamountrepresentsexcessofconsiderationspaid overthesharecapitalofacquiredcompaniesnet Holdings Limitedanditssubsidiaries(“COTHL”)undercommoncontrol.In2014, theGroupfurtheracquiredCOPanditssubsidiar Fuller SkyEnterprisesLimited,ValueIdeaInvestments Company Limited, subsidiaries, ChinaOverseasInsuranceLimited,Services Limited,COHL(Macao)CommercialandIndustri (Hong Kong)Limited,ZetsonEnterprisesLimitedanditssubsidiaries,ChinaConstructionEngineering(Macau)Companyan 深圳中海建築有限公司 premium K’0 K’0 K’0 K’0 K’0 K’0 K’0 K’0 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 ,4,8 16021 3 617(4,5)23441,0,8 21,045,308 13,506,581 263,484 (549,054) 46,197 – 337 (1,670,221) 9,447,984 19,729,786 10,615,574 211,223 1,074,454 58,726 2,666 337 (1,670,221) 9,437,027 097––(,6)––5,6 12205 (1,201,513) 8,797 (1,262,065) 52,261 – – – – – (2,666) – – – (2,160) – 10,957 – 10,957 Share

221(221 – (81,126) – (527,321) (81,126) (601,863) (52,261) (527,321) – (601,863) 506 52,261 – – – – – – (1,623,508) 362,598 – – – – – – (375,127) 2,517,035 – – – 4,153,072 – – – 4,153,072 – – – 4,153,072 – – – – (1,623,508) – (1,623,508) – – (506) (12,529) – – – – – – – – 362,598 – – – – (375,127) – – – – – – – – – – – – – – – – – – – – – – – – – anditssubsidiary,ChinaOverseasPublicUtilityInvestmentLimited subsidiaries, Nt a)(oe() Nt c)(Note(d)) (Note(c)) (Note(b)) (Note (a)) reserve

Special (continued)

redemption 陽泉市陽五高速公路投資管理有限公司 reserve Capital

reserve option Share FOR THEYEARENDED31DECEMBER2015

revaluation Investment andChinaOverseasTechnology reserve

(continued) Translation

a subsidiaries reserve ofordinary excess of a wholly- l interest ineering K$23 d its

ies %. of al Statutory reserve 181

China State Construction International Holdings Limited Annual Report 2015 Retained

rft Total profits 182

China State Construction International Holdings Limited Annual Report 2015 37 Deferred income Guaranteednotespayables 36 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements The followingistheanalysisofdeferredincomebalancesforfinancialreportingpurposes: services notyetrecognisedasincome. The deferredincomerepresentedtheconnectionservicereceivedattributabletotransmissionofheat reference tothetermofoperatinglicencerelevantentities. and amortisedonastraight-linebasisovertheexpectedserviceperiodofheattransmissiontoberenderedwith repairs andmaintenanceservicesrelatingtothepipelines.Connectionfeeincomeisrecordedasdeferred Connection feeincomeisattributabletotheconnectingpipelineconstructionforheattransmissionandcontinuing the fairvaluehierarchy. million), whichwasdeterminedbasedontheclosingmarketpriceofNotesatthatdateandiswithinlevel1 fair valueoftheNotesat31December2015wasestimatedapproximatelyHK$3,920million(2014:HK$3,878 given bytheCompanyandsaidsubsidiary.TheNoteswillmatureon2April2018atprincipalamount. to performorobservecertainconditionssetoutintheTrustDeedwhichincludes,interalia,negativepledge guaranteed bytheCompany.TheNotesshallbecomeimmediatelydueandpayableineventoffailure bear fixedinterestattherateof3.125%perannumpayablesemi-annually,areunconditionallyandirrevocably million (equivalenttoapproximatelyHK$3,860million)(the“Notes”)attheissuepriceof99.542%.TheNotes,which In April2013,asubsidiaryoftheCompanyissuedguaranteednoteswithanaggregateprincipalamountUS$500 Deferred incomeduewithinoneyearincludedintradepayables, Deferred incomearosefromthefollowing: Deferred incomedueafteroneyear other payablesandaccrualsundercurrentliabilities Connection services

HK$’000 HK$’000 796,531 796,531 738,610 57,921 (continued) 2015 2015

HK$’000 HK$’000 778,460 778,460 735,808 42,652 2014 2014 38 Deferred taxation The analysisoftheGroup’sdeferredtaxassetsandliabilitiesisasfollows: xhneajsmns–(3)(5 7 157 – 874 202,157 (2,743) – (188,646) 247,293 5,158 – 6,958 37,937 (152,352) – 66,196 5,158 9,324 (85) 42,459 256,314 67,630 (632) 18,617 19,430 At 31December2015 – Charged/(credited) toconsolidated 248,590 Exchange adjustments At 1January2015 9,420 At 31December2014 Charged/(credited) toconsolidated Exchange adjustments At 1January2014,asrestated Deferred taxliabilities: Deferred taxassets: noesaeet(oe1)917836(001 144 452 3,6)(,0)(45,293) (9,701) (37,168) – (4,522) (1,434) (10,021) 8,356 income statement(Note11) 9,197 income statement(Note11) To berecoveredaftermorethantwelvemonths To berecoveredaftermorethantwelvemonths To berecoveredwithintwelvemonths To berecoveredwithintwelvemonths Notes totheConsolidatedFinancialStatements

depreciation Accelerated 76324635007,4 733518(8,7)(,4)86,291 (2,743) 202,157 (282,276) (2,743) 5,158 (188,646) 27,343 5,158 71,443 37,937 5,090 66,196 244,673 9,324 17,603 256,314 18,617 104 342 454 ,4 698 1566 (116,377) – (105,696) – (6,998) 5,247 (4,514) (3,402) (1,014) K’0 K’0 K’0 K’0 K’0 K’0 K’0 K’0 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 829 8 356 206–511 – 12,066 – (3,596) – 280 (8,239) –

tax Concession

operating rights

Deferred income

Undistributed

subsidiaries earnings of Mainland and joint ventures FOR THEYEARENDED31DECEMBER2015 China HK$’000 367,242 280,951 359,451 225,824

55,127 7,791 2015 combination of intangible Recognition

assets on business (continued) HK$’000

389,477 384,724 187,320 154,216 33,104 4,753 2014 Revaluation fln a ossOhr Total Others Taxlosses of land 183

China State Construction International Holdings Limited Annual Report 2015 184

China State Construction International Holdings Limited Annual Report 2015 9 Majornon-cashtransaction 39 38 Deferred taxation FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements contracts. in aserviceconcessionarrangement.Thesameamounthasbeenaccountedforasrevenuefromconstruction HK$38,263,000 (2014:HK$319,247,000)inrespectofconsiderationfortheprovisionconstructionservices During theyearended31December2015,Grouprecognisedconcessionoperatingrightsofapproximately

a Nodeferredtaxassethasbeenrecognisedinrespectofthe unusedtaxlossesduetotheunpredictabilityoffuturetaxable (a) Notes: losses notrecognisedintheconsolidatedfinancialstatements: At theendofreportingperiod,Grouphasfollowingdeductibletemporarydifferencesandunusedtax b Nodeferredtaxassethasbeenrecognised inrelationtosuchdeductibletemporarydifferencesasitisnotprobablethatt (b) The followingistheanalysisofdeferredtaxbalancesforfinancialreportingpurposes: Excess ofdepreciationchargedintheconsolidatedfinancial Unused taxlosses(Note(a)) Deferred taxliabilities Deferred taxassets statements overtaxdepreciationallowances(Note(b)) Other lossesmaybecarriedforwardindefinitely. Included inunrecognisedtaxlossesareofapproximatelyHK$412,660,000(2014:HK$585,292,000)thatwillexpirewithinf available againstwhichthedeductibletemporarydifferencescanbeutilised. (continued)

HK$’000 HK$’000 (367,242) 843,678 843,675 280,951 (86,291) (continued) 2015 2015 3

axable profitwillbe profitstreams. (202,157) (389,477) HK$’000 HK$’000 804,705 187,320 804,816 ive years. 2014 2014 111 40 Share-based payments The followingtabledisclosestheCompany’sshareoptionsheldbyemployees(includingdirectors)andconsultants: 52,180,000 vestedoptionsoutstandingwithanadjustedexercisepriceofHK$0.2544pershare. All theCompany’soutstandingoptionsweregrantedon14September2005.Asat31December2014,there the Company’sshare. price ofthesharesforfivebusinessdaysimmediatelyprecedingdategrant;and(iii)nominalvalue less thanthehighestof(i)closingpriceCompany’ssharesondategrant,(ii)average discretion atthetimeofgrant.TheexercisepriceisdeterminedbydirectorsCompany,andwillnotbe 10 yearsfromthedateofgrantrelevantoption)whichshallbedeterminedbyBoardinitsabsolute qualifying granteeonacceptanceoftheoffer.Optionsmaybeexercisedwithinoptionperiod(mustnotexceed Options grantedmustbetakenupwithin28daysfromthedateofoffer.AnamountHK$1.00ispayablebyeach be approvedinadvancebytheCompany’sshareholders. executive directorsinexcessof0.1%theCompany’ssharecapitalorwithavalueHK$5millionmust approval fromtheCompany’sshareholders.Optionsgrantedtosubstantialshareholdersorindependentnon- one yearisnotpermittedtoexceed1%ofthesharesCompanyinissueatanypointtime,withoutprior of sharesissuedandtobeinrespectoptionsgrantedwhichmayanyindividual the Companyinissueatanypointtime,withoutpriorapprovalfromCompany’sshareholders.Thenumber in respectofwhichoptionsmaybegrantedundertheSchemeisnotpermittedtoexceed30%shares representing approximately1.30%ofthesharesCompanyinissueatthatdate.Thetotalnumber in respectofwhichoptionshadbeengrantedandremainedoutstandingundertheSchemewas52,180,000, No shareoptionremainedoutstandingasat31December2015.At2014,thenumberofshares employees, officersorcontractorsoftheGroup. of DirectorstheCompanymaygrantoptionstoqualifyinggrantees,includingdirectorsCompany, and servicesoftheGroup,maybeterminatedbyresolutioningeneralmeeting.UnderScheme,Board 2005 fortheprimarypurposeofprovidingincentivestodirectors,eligibleemployees,officersandsuppliersgoods The Company’sshareoptionscheme(the“Scheme”),wasadoptedpursuanttoaresolutionpassedon9June

ietr ,1 464 – 35,529 16,651 – (1,781) (4,614) 18,432 4,614 35,529 Consultants Employees Directors Notes totheConsolidatedFinancialStatements

at 1January Outstanding 855(,9)52,180 (6,395) 58,575 2014 00’0 ’000 ’000 ’000

during the Exercised

year Outstanding December

2014 at 31 4)(387 827 – – (8,237) (3,508) (43,897) (31,975) (46) (46) 1,2)(,2)– (4,729) (11,922) – –––– during the Cancelled

FOR THEYEARENDED31DECEMBER2015 year 00’0 00’000 ’000 ’000 ’000

during the Exercised (continued) year

during the Lapsed year

185 Outstanding

China StateDecember Construction International Holdings Limited Annual Report 2015 at 31 2015 186

China State Construction International Holdings Limited Annual Report 2015 40 Share-based payments FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements No shareoptionwasgrantedduringtheyearended31December 2015and2014. estimate thefairvalueofoptions. the servicescannotbeestimatedreliability,Black-Scholes pricingmodel/theBinominalmodelhasbeenusedto Share optionsgrantedtoconsultantsaremeasuredatthe fair valuesoftheservicesreceived.Asvalue The weightedaveragefairvalueoftheoptionsgrantedon14 September2005wasHK$0.245. HK$12.27). In respectoftheshareoptionsexercisedduringyear, weightedaveragesharepricewasHK$11.10(2014:

The followingtabledisclosesmovementsoftheCompany’sshareoptionsbyexercisableperiodduringyear. Exercisable attheendof – withexercisableperiodof – withexercisableperiodof – withexercisableperiodof – withexercisableperiodof – withexercisableperiodof Granted on14September 3Spebr21 904–19,024 – 11,590 – 19,024 11,590 13 September2015 14 September2010to 13 September2015 14 September2009to 3Spebr21 150–11,590 9,523 – – 11,590 9,523 13 September2015 14 September2008to 13 September2015 14 September2007to er5,7 52,180 58,575 year 3Spebr21 ,4 635 453 (6,395) 6,848 13 September2015 14 September2006to 2005

at 1January Outstanding 855(,9)52,180 (6,395) 58,575 2014 00’0 00’ ’000 ’000 ’000

(continued) during the Exercised

year 31 December Outstanding

2014 at 4)(387 827 – (8,237) (43,897) (46) 4)–(0)– (407) – (46) 163 780 – (7,830) (1,693) – 1,2)–– – – – – (19,024) – – (11,590) – (11,590) –

during the Cancelled (continued) year 000

during the Exercised

year ’ 000 – during the Lapsed

year ’

000 31 December Outstanding 2015 ’ 000 at 42 Commitments Operatingleasearrangements 41 consolidated financialstatements. At 31December2015and2014,theGrouphadfollowing commitmentscontractedbutnotprovidedforinthe payments: At 31December2015and2014,theGrouphadcontractedwithtenantsforfollowingfutureminimumlease committed tenantsforthenextonetosevenyearswithoutterminationoptionsgrantedtenants. HK$9,598,000) whichwasderivedfromthelettingofinvestmentproperties.Allpropertiesleasedouthave Property rentalincomeearned,netofdirectexpenses,duringtheyearwasapproximatelyHK$11,139,000(2014: HK$38,073,000) wereletoutunderoperatingleases. At theendofreportingperiod,investmentpropertieswithcarryingamountsHK$36,991,000(2014: The Groupaslessor commitments forfutureminimumleasepaymentsundertheoperatingleasesofplantandmachinery. Leases inrespectofplantandmachineryarenegotiatedbasedonindividualcontractstheGrouphadno Leases inrespectoflandandbuildingsarenegotiatedfixedforanaveragetermtwoyears. land andbuildingsundernon-cancellableoperatingleaseswhichfalldue: At 31December2015and2014,theGrouphadcommitmentsforfutureminimumleasepaymentsinrespectof The Groupaslessee Contracted butnotprovidedfor Within oneyear Within oneyear Over fiveyears In thesecondtofifthyearinclusive In thesecondtofifthyearinclusive — constructioninprogressfor property,plantandequipment Notes totheConsolidatedFinancialStatements

FOR THEYEARENDED31DECEMBER2015 HK$’000 HK$’000 HK$’000 554,885 89,043 36,315 42,543 46,500 17,256 9,627 9,432 2015 2015 2015

(continued) HK$’000 HK$’000 HK$’000 116,671 45,905 13,349 32,556 19,796 10,206 1,685 7,905 2014 2014 2014 187

China State Construction International Holdings Limited Annual Report 2015 188

China State Construction International Holdings Limited Annual Report 2015 3 Relatedpartytransactions 43 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements

Transactions fellow subsidiaries,associatesandjointventuresduringtheyear: The Grouphadthefollowingtransactionswithimmediateholdingcompany,anintermediate the followingtransactionswithrelatedpartiesduringyear: Apart fromthebalancesdueortorelatedpartiessetoutinNotes23,24,27,28,29and31,Grouphad Fellow subsidiaries Intermediate holdingcompany Immediate holdingcompany Joint ventures Associates Insurance premiumincome Purchase ofmaterials Rental incomefromleaseofmachinery Revenue fromconnectionservice Design consultancyfeecharge Construction costs Revenue fromconstructioncontracts Security servicepayment Rental expenses Construction costs Revenue fromconstructioncontracts Management feeincome Gain ondisposalofprepaidleasepayment Consultancy income Construction costs Insurance premiumincome Sales ofbuildingmaterials Revenue fromconstructioncontracts Revenue fromconstructioncontracts Purchase ofconstructionmaterials Project consultancyservicesincome

4,413,982 2,757,716 HK$’000 360,154 473,022 772,012 109,257 618,582 418,905 23,752 14,785 14,684 90,569 27,806 22,322 19,273 (continued) 1,365 1,702 1,112 2015 574 66 –

2,864,093 2,958,048 HK$’000 584,921 111,174 122,969 131,582 132,695 23,382 17,163 14,824 12,000 25,280 14,951 72,042 1,793 4,354 2,099 2014 – – – – 3 Relatedpartytransactions 43 the performanceofindividualsandmarkettrends. The remunerationofdirectorsandkeyexecutivesisdeterminedbythecommitteehavingregardto The remunerationofdirectorsandothermemberskeymanagementduringtheyearwasasfollows: Compensation ofkeymanagementpersonnel opinion thatseparatedisclosurewouldnotbemeaningful. in theirordinarycourseofbusiness.Inviewthenaturethosebankingtransactions,directorsare general bankingfacilitiestransactionswithcertainbanksandfinancialinstitutionswhicharestate-controlledentities, Certain oftheCompany’ssubsidiarieshadenteredintovarioustransactionswithstate-controlledentities,including with otherentitiesthatarenotstate-controlled. These transactionsareconductedintheordinarycourseofGroup’sbusinessontermscomparabletothose • Finance costs • Investment Revenuefromconstructioncontracts income • but notlimitedtothefollowing: associates andjointventuresoftheGroup,Grouphastransactionswithotherstate-controlledentitiesincluding Apart fromtransactionswithitsimmediateholdingcompany,intermediatefellowsubsidiaries, of alargergroupcompaniesunderCSCECwhichiscontrolledbythePRCgovernment. or indirectlyowned,controlledsignificantlyinfluencedbythePRCgovernment.Inaddition,Groupisitselfpart Certain oftheGroup’sbusinessisoperatedinaneconomicenvironmentcurrentlypredominatedbyentitiesdirectly Transactions withotherstate-controlledentitiesinMainlandChina Short-term benefits Post-employment benefits Notes totheConsolidatedFinancialStatements (continued)

FOR THEYEARENDED31DECEMBER2015 HK$’000 52,482 52,230 2015 252

(continued) HK$’000 52,494 52,248 2014 246 189

China State Construction International Holdings Limited Annual Report 2015 190

China State Construction International Holdings Limited Annual Report 2015 4 CompanyStatement ofFinancialPositionandReserveMovement 44 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements

On behalfoftheBoard Non-current Liability Capital andReserves Total AssetslessCurrentLiabilities Net CurrentAssets Current Liabilities Current Assets Non-current Asset Tax recoverable Borrowings Share capital Current taxpayables Other payables Amounts duefromsubsidiaries Deposits, prepaymentsandotherreceivables Interests insubsidiaries Share premiumandreserves(Note) Bank balancesandcash huYn ZhouHancheng Zhou Yong ietrDirector Director

16,509,633 10,373,393 10,396,924 10,271,985 16,509,633 6,123,389 5,519,912 6,136,240 6,112,709 HK$’000 602,583 101,408 10,680 10,680 (continued) 2015 651 243 –

14,828,379 10,228,379 10,128,069 14,828,379 6,237,382 6,198,748 8,602,692 4,600,000 6,225,687 HK$’000 100,310 11,695 10,116 31,520 1,579 7,114 2014 – 4 CompanyStatement ofFinancialPositionandReserveMovement 44 Note: (continued) 04itrmdvdn ad–––(2,6)(428,163) (467,088) 10,128,069 (428,163) (467,088) 688,039 – – 2,666 8,701,425 – – 337 At 31December2015 580,295 2015 specialdividendpaid 2015 interimdividendpaid 9,437,027 – – 3,058 Lapse ofshareoptions Issue ofordinarysharesupon 337 Profit andtotalcomprehensiveincome At 31December2014 8,117,735 2014 interimdividendpaid 2013 finaldividendpaid Issue ofsharesuponacquisition Issue ofordinarysharesupon Profit andtotalcomprehensiveincome At 1January2014 2014 finaldividendpaid o h er–––102951,002,995 1,281 1,317,619 1,002,995 – – – – (392) – – – exercise ofshareoptions – for theyear 1,673 1,317,619 subsidiaries andajointventure exercise ofshareoptions for theyear Notes totheConsolidatedFinancialStatements

,4,8 3 2,6 10,271,985 823,664 – 337 9,447,984 Premium K’0 K’0 K’0 K’0 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 097–(,6)–8,797 – (2,160) – 10,957 Share 8,2)(81,126) – (527,321) (601,863) (81,126) (527,321) (601,863) 506 – 1,345,429 – – 1,345,429 (506) – – – – – – – – – – –

redemption reserve Capital

reserve option Share FOR THEYEARENDED31DECEMBER2015

Retained rft Total profits (continued)

191

China State Construction International Holdings Limited Annual Report 2015 China StateConstruction China StateConstruction China OverseasInsurance esnEtrrssLdBIHn og1 ordinary shareofUS$1 BVI/HongKong 1ordinaryshareofUS$1 Zetson EnterprisesLtd BVI/HongKong Add TreasureHoldingsLimited Engineering CompanyLimited) (formerly knownasXunAn Science andTechnologyLimited Engineering (HongKong)Limited Services Limited 192

China State Construction International Holdings Limited Annual Report 2015 5 Particularsofprincipal subsidiaries 45 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements Particulars oftheCompany’sprincipalsubsidiariesat31December2015and2014areasfollows: Name ofsubsidiary hn vresIsrneLmtdHn og300,000,000ordinarysharesof HongKong China OverseasInsuranceLimited Directly heldbytheCompany: ogKn 100ordinarysharesofHK$100 Hong Kong 655,569,190ordinaryshares Hong Kong 150,000ordinarysharesof Hong Kong HK$844,430,810 voting deferredsharesof and 844,430,810non- shares ofHK$355,569,190) 355,569,190 ordinary of HK$655,569,190(2014: HK$150,000 operations incorporation/ Place of share/registered capital Issued andfullypaidup HK$300,000,000 100 100 100 100 100 100 (continued) 0 Buildingconstruction, 100 Insurancebrokerage 100 Insurancebusiness 100 0 Investmentholding 100 Investmentholding 100 Provisionofrelated 100 investment holding engineering worksand civil andfoundation services maintenance services installation repairsand Attributable equity 2015 neethl Principal activities interest held % 2014 % China Overseas(HongKong) 1ordinaryshareofHK$1 China OverseasBuilding Indirectly heldbytheCompany: HongKong CS InternationalHoldingsLimited China StateFoundation China StateCivilEngineering Limited Construction Limited Engineering Limited Limited 5 Particularsofprincipal subsidiaries 45 China StateConstructionFinance Directly heldbytheCompany: Name ofsubsidiary (Cayman) ILimited Notes totheConsolidatedFinancialStatements ogKn 5,000,000ordinarysharesof Hong Kong 19,999,900ordinaryshares Hong Kong ogKn 99,500,000 ordinaryshares Hong Kong 1,999,900ordinarysharesof Hong Kong HK$50,000,000 HK$1,000 non-voting deferredsharesof of HK$49,999,000)and100 4,999,900 ordinaryshares of HK$199,999,000(2014: HK$500,000 non-voting deferredsharesof HK$46,500,000) and500,000 46,500,000 ordinarysharesof of HK$99,500,000(2014: HK$1,000 voting deferredsharesof HK$19,999,000 and100non- (continued) Cayman Islands/ operations incorporation/ Place of Hong Kong (continued) 1 ordinaryshareofUS$1 share/registered capital Issued andfullypaidup 100 100 100 100 100 100 FOR THEYEARENDED31DECEMBER2015 0 Buildingconstruction, 100 Investmentholding 100 Issuanceofguaranteed 100 0 Foundationengineering 100 Civilengineering 100 Investmentholdingand 100 (continued) holding and investment project management notes management works andproject investment holding management and works, project management services provision of Attributable equity 2015 neethl Principal activities interest held % 2014 % 193

China State Construction International Holdings Limited Annual Report 2015 SE rd akLmtdHn og2ordinarysharesofHK$2 HongKong CSCEC TradeMarkLimited 2ordinarysharesofHK$2 China StateMechanical& HongKong China StateMachineryLimited Treasure Construction 2ordinarysharesofHK$2 HongKong Far EastAluminiumWorks Eastgood InvestmentsLimited rncnec opn iie ogKn 1ordinaryshareofHK$1 HongKong Transcendence CompanyLimited 100ordinarysharesofHK$100 HongKong Speedclass DevelopmentLimited Electrical EngineeringLimited Engineering Limited Company Limited 194

China State Construction International Holdings Limited Annual Report 2015 5 Particularsofprincipal subsidiaries 45 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements China StateGrandWealth Indirectly heldbytheCompany: Name ofsubsidiary Investments Limited ogKn 100,000,000ordinaryshares Hong Kong ogKn 2ordinarysharesofHK$2 Hong Kong 900,000ordinarysharesof Hong Kong HK$10,000,000) 10,000,000 ordinarysharesof of HK$100,000,000(2014: $90,000,000 (continued) operations incorporation/ Place of ogKn 1ordinaryshareofHK$1 Hong Kong (continued) share/registered capital Issued andfullypaidup 74.06 74.06 100 100 100 100 100 100 100 (continued) 40 Buildingconstruction 74.06 Design,manufacture 74.06 0 Mechanicalandelectrical 100 Leaseofplantand 100 Investmentholding 100 0 Salesanddistributionof 100 Projectmanagement 100 Investmentholding 100 Holdingoftrademarks 100 project management engineering worksand machinery construction materials Attributable equity related products windows andother curtain walls,aluminium and installationof 2015 neethl Principal activities interest held % 2014 % China OverseasTechnology China OverseasPortsInvestment China OverseasPublic efc ateLmtdBIHn og1ordinaryshareofUS$1 BVI/HongKong 1ordinaryshareofUS$1 1ordinaryshareofUS$1 BVI/HongKong BVI/HongKong Perfect CastleLimited Fuller SkyEnterprisesLimited 1ordinaryshareofUS$1 BVI/HongKong Ever PowerGroupLimited Citycharm InvestmentsLimited Holdings Limited Company Limited Utility InvestmentLimited 5 Particularsofprincipal subsidiaries 45 akaeEtrrssLmtdBIHn og200ordinarysharesof BVI/HongKong Barkgate EnterprisesLimited Indirectly heldbytheCompany: Name ofsubsidiary Notes totheConsolidatedFinancialStatements V US$64,100,000 1ordinaryshareofUS$1 BVI/Hong Kong BVI 1ordinaryshareofUS$1 BVI/Hong Kong (continued) operations incorporation/ Place of (continued) share/registered capital Issued andfullypaidup US$1 each 100 100 100 100 100 100 100 100 FOR THEYEARENDED31DECEMBER2015 0 Investmentholding 100 Investmentholding 100 Investmentholding 100 0 Investmentholding 100 Investmentholding 100 Investmentholding 100 Investmentholding 100 Investmentholding 100 (continued) Attributable equity 2015 neethl Principal activities interest held % 2014 % 195

China State Construction International Holdings Limited Annual Report 2015 ednItrainlLmtdBIHn og1ordinaryshareofUS$1 BVI/HongKong Gamma Windowsand Weedon InternationalLimited a atFcd U)LmtdUie igo 1ordinaryshareofGBP1 UnitedKingdom Far EastFacade(UK)Limited a atGoa ru iie ii CaymanIslands/ Far EastGlobalGroupLimited(iii) Alchmex International Walls International,Inc. Construction Limited 196

China State Construction International Holdings Limited Annual Report 2015 5 Particularsofprincipal subsidiaries 45 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements au daIvsmnsLmtdBIHn og1ordinaryshare ofUS$1 BVI/HongKong Value IdeaInvestmentsLimited Indirectly heldbytheCompany: Name ofsubsidiary aaa100common sharesof Canada United Kingdom/ Hong Kong Hong Kong 2,155,545,000 ordinary 4,000,000 ordinarysharesof CAD53,362.36 each shares ofHK$0.01each GBP1 each (continued) operations incorporation/ Place of (continued) share/registered capital Issued andfullypaidup 40.73 74.06 74.06 100 100 100 (continued) 07 Design,manufactureand 40.73 40 Installationofcurtainwalls, 74.06 Investmentholding 74.06 0 Investmentholding 100 Investmentholding 100 0 Buildingconstruction, 100 management project andconstruction engineering works, civil andmarine Attributable equity related products windows andother walls, aluminium installation ofcurtain other relatedproducts aluminium windowsand 2015 neethl Principal activities interest held % 2014 % SE(aa)LmtdMcuMOP200,000 MOP200,000 Macau Macau CSME (Macau)Limited CSFE (Macau)Limited COHL (Macao)Commercialand Netfortune Engineering(FEA) ....DbiCnrcigLLC UnitedArab C.S.H.K. DubaiContractingL.L.C. Industrial CompanyLimited Macau Limited 5 Particularsofprincipal subsidiaries 45 China ConstructionEngineering Indirectly heldbytheCompany: Name ofsubsidiary (Macau) CompanyLimited Notes totheConsolidatedFinancialStatements aa MOP200,000 Macau aa MOP25,000 Macau Emirates 1,000 ordinarysharesof AED1,000 each (continued) aa MOP300,000,000 Macau operations incorporation/ Place of (continued) share/registered capital Issued andfullypaidup 74.06 100 100 100 100 100 FOR THEYEARENDED31DECEMBER2015 40 Installationofcurtainwalls, 74.06 0 Foundationengineering 100 Investmentholding 100 Buildingconstructionand 100 0 Buildingconstructionand 100 Mechanicalandelectrical 100 (continued) works investment holding properties holdingand civil engineeringworks, road contracting investment holding engineering worksand Attributable equity other relatedproducts aluminium windowsand 2015 neethl Principal activities interest held % 2014 % 197

China State Construction International Holdings Limited Annual Report 2015 中海監理有限公司 深圳中海建築有限公司 瀋陽皇姑熱電有限公司 中建 am S,Ic UnitedStatesof Gamma USA,Inc. 建設監理有限公司 (formerly knownas （珠海） 198 有限公司 China State Construction International Holdings Limited Annual Report 2015

(i) ) (ii) 深圳市中海 5 Particularsofprincipal subsidiaries 45 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements (i) (i) am ot oprto UnitedStatesof Gamma NorthCorporation Indirectly heldbytheCompany: Name ofsubsidiary R RMB50,000,000 RMB350,000,000 PRC RMB680,660,000 PRC PRC R HK$10,770,000 PRC America 1,000 sharesofUS$0.001each (continued) operations incorporation/ Place of America (continued) share/registered capital Issued andfullypaidup 1 shareofUS$1 40.73 40.73 100 100 100 100 (continued) 07 Design,manufactureand 40.73 Manufactureofcurtain 40.73 0 Provisionofproject 100 Buildingconstructionand 100 Generationandsupplyof 100 Propertyinvestmentand 100 consultant services investment holding investment holding heat andelectricity management Attributable equity related products windows andother walls, aluminium installation ofcurtain related products windows andother walls, aluminium 2015 neethl Principal activities interest held % 2014 % 中建 中海創業投資 陽泉市陽五高速公路投資 中建陽泉基礎設施投資有限公司 安徽海龍建築工業有限公司 重慶海建投資有限公司 中建國際投資 深圳市中海投資有限公司 深圳市中建宏達投資有限公司 （中國） (formerly knownas 管理有限公司 （漳州）

有限公司 建設開發有限公司 （深圳） （中國） (ii) ) (ii) 有限公司 有限公司 中建宏達投資 5 Particularsofprincipal subsidiaries 45 (ii) (ii) (ii) (ii) (i) 深圳海龍建築制品有限公司 Indirectly heldbytheCompany: Name ofsubsidiary (ii) (ii) Notes totheConsolidatedFinancialStatements R US$29,800,000 PRC RMB100,000,000 RMB10,000,000 PRC PRC R RMB10,000,000 PRC RMB500,000,000 RMB200,000,000 PRC PRC R RMB202,000,000 PRC R US$48,000,000 PRC R US$878,000,000 PRC (i) (continued) R RMB50,000,000 PRC operations incorporation/ Place of (continued) share/registered capital Issued andfullypaidup 100 100 100 100 100 100 100 100 100 100 FOR THEYEARENDED31DECEMBER2015 0 Infrastructureconstruction 100 Manufacturingandsalesof 100 Manufacturingandsalesof 100 0 Buildinginvestment 100 Buildinginvestment 100 Investmentholding 100 Investmentholding 100 Investmentholding 100 Investmentholding 100 Infrastructureconstruction 100 (continued) and operation precast structures precast structures and operation Attributable equity 2015 neethl Principal activities interest held % 2014 % 199

China State Construction International Holdings Limited Annual Report 2015 中海物流 中建國際投資 平陽海嘉建設有限公司 溫洲海嘉建設有限公司 鎮江海嘉建設有限公司 無錫海嘉建設有限公司 杭州海嘉建設有限公司 上海力進鋁質工程有限公司 深圳市中海港口物流有限公司 遠東幕牆制品 （深圳） 200 （鎮江） China State Construction International Holdings Limited Annual Report 2015 ( 深圳 有限公司 有限公司 ) 有限公司 5 Particularsofprincipal subsidiaries 45 FOR THEYEARENDED31DECEMBER2015 Notes totheConsolidatedFinancialStatements (ii) (ii) (ii) (ii) (ii) (ii) (ii) (ii) 重慶海勝基礎設施開發有限公司 Indirectly heldbytheCompany: Name ofsubsidiary (ii) (ii) R HK$50,000,000 RMB200,000,000 PRC RMB500,000,000 RMB120,000,000 PRC RMB150,000,000 PRC RMB310,000,000 PRC PRC PRC R RMB10,000,000 RMB10,000,000 PRC PRC R RMB180,000,000 PRC R RMB20,000,000 PRC (ii) (continued) R RMB380,000,000 PRC operations incorporation/ Place of (continued) share/registered capital Issued andfullypaidup 74.06 74.06 100 100 100 100 100 100 100 100 100 (continued) 40 Manufactureofcurtain 74.06 Design,manufactureof 74.06 0 Infrastructureinvestment 100 Infrastructureinvestment 100 Infrastructureinvestment 100 Infrastructureinvestment 100 Infrastructureinvestment 100 0 Provisionoflogistic 100 Provisionoflogistic 100 Infrastructureinvestment 100 Infrastructureinvestment 100 services holding services andproperties Attributable equity related products windows andother walls, aluminium related products windows andother curtain walls,aluminium 2015 neethl Principal activities interest held % 2014 % 中建國際投資 中建國際投資 中建國際投資 中建國際投資 中建國際投資 合肥中建國際投資發展有限公司 淮安海嘉建設有限公司 濱州海嘉建設有限公司 資陽海悅建設有限公司 嘉興海悅建設有限公司 （句容） （淮安） （青島） （杭州） （湖州） 有限公司 有限公司 有限公司 有限公司 有限公司 (ii)(iv) (ii)(iv) (ii)(iv) (ii)(iv) 5 Particularsofprincipal subsidiaries 45 (ii)(iv) (ii)(iv) (ii)(iv) (ii)(iv) (ii)(iv) particulars ofexcessivelength. results orassetsoftheGroup.Togivedetailsothersubsidiaries would,intheopinionofdirectors,result The abovetableliststhesubsidiariesofCompanywhich, intheopinionofdirectors,principallyaffected year. None ofthesubsidiarieshadissuedanydebtsecuritiesoutstanding attheendofyearoranytimeduring Incorporatedin2015 (iv) (iii) Listed LimitedliabilitycompanyregisteredinthePRC company (ii) Registeredasforeignowned enterprise (i) Notes: 龍海海嘉建設有限公司 Indirectly heldbytheCompany: Name ofsubsidiary (ii)(iv) Notes totheConsolidatedFinancialStatements R RMB170,000,000 PRC R RMB100,000,000 RMB250,000,000 RMB100,000,000 PRC RMB100,000,000 PRC RMB100,000,000 PRC RMB150,000,000 PRC RMB100,000,000 PRC RMB100,000,000 PRC RMB100,000,000 PRC PRC PRC (ii)(iv) (continued) R RMB100,000,000 PRC operations incorporation/ Place of (continued) share/registered capital Issued andfullypaidup 100 100 100 100 100 100 100 100 100 100 90 FOR THEYEARENDED31DECEMBER2015 – Infrastructure investment Infrastructure – investment Infrastructure – investment Infrastructure – investment Infrastructure – investment Infrastructure – – Infrastructure investment Infrastructure – investment Infrastructure – investment Infrastructure – investment Infrastructure – investment Infrastructure – investment Infrastructure – (continued) Attributable equity 2015 neethl Principal activities interest held % 2014 % 201

China State Construction International Holdings Limited Annual Report 2015 Five Year Financial Summary

Consolidated Results

For the year ended 31 December 2011 2012 2013 2014 2015 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 (restated) (restated) (restated) Revenue 17,510,533 22,059,910 27,285,620 34,439,575 37,913,159

Operating profit 1,679,150 2,278,536 3,140,029 4,185,291 4,867,047 Share of profits of Joint ventures 359,002 413,284 430,228 294,345 423,728 Associates 13,702 18,255 21,941 23,787 72,462 Finance costs (194,896) (255,601) (418,440) (455,829) (607,082)

Profit before tax 1,856,958 2,454,474 3,173,758 4,047,594 4,756,155 Income tax expense, net (339,670) (405,095) (503,071) (659,716) (654,526)

Profit for the year 1,517,288 2,049,379 2,670,687 3,387,878 4,101,629

Annual Report 2015 Attributable to: Owners of the Company 1,514,514 2,044,337 2,749,551 3,457,410 4,153,072 202 Non-controlling interests 2,774 5,042 (78,864) (69,532) (51,443)

1,517,288 2,049,379 2,670,687 3,387,878 4,101,629

Note: The consolidated results for the years ended 31 December 2011, 2012 and 2013 have been restated for the application of merger accounting for common control combination. China State Construction International Holdings Limited Note: The consolidated netassetsasat31December2011,2012and2013havebeenrestatedfortheapplicationofmergeraccoun Note: Consolidated NetAssets rpi es amns228627752003273,022 38,073 3,449,034 280,063 39,085 2,149,893 277,795 2,630,927 40,044 2,506,098 282,836 2,827,300 41,063 2,672,357 2,523,107 Interests injointventures 2,211,357 Prepaid leasepayments Interests ininfrastructureproject Investment properties Property, plantandequipment NON-CURRENT ASSETS biain ne iac ess–(,3)(,8)(3,480) (735,808) (3,869,804) (389,477) (4,280) (3,860,286) (638,802) (398,320) – (10,361,804) (4,938) (520,791) 804,918 (365,778) (8,600,258) – (10,101,194) (421,938) (279,527) – 127,550 NET ASSETS (4,961,268) – 577,664 TOTAL LIABILITIES – CURRENT LIABILITIES 500,000 577,664 – 187,320 – Obligations underfinanceleases 577,664 – Deferred taxliabilities 151,027 12,901,282 Deferred income – Guaranteed notespayables – 453,286 8,141,167 Borrowings 411,838 – – NON-CURRENT LIABILITIES 3,186,846 543,642 2,104,943 TOTAL ASSETS 399,645 919,473 296,827 48,757 CURRENT ASSETS 497,861 – 361,471 6,530,992 240,000 Loan toajointventure 490,842 36,156 356,085 Deposit paidforaninvestment 6,353,833 Trade andotherreceivables Amounts duefrominvesteecompanies 29,237 5,501,701 Investment inconvertiblebonds Available-for-sale investments 4,926,465 Goodwill Trademark, projectbacklogsand Deferred taxassets Concession operatingrights Interests inassociates netet 7,2 1,4 ,8,1 1,489,188 1,186,012 915,049 673,224 investments iecs99022512656200,640 226,596 252,551 9,950 licences control combination.

1,5,7)(46495 3,6,3)(46,581,445) (36,263,338) (31,221,072) (24,604,935) (22,761,392) (17,950,076) (13,612,234) (12,287,343) 266601,9,9 3372132,249,500 23,397,291 17,097,999 12,686,630 745803,6,3 2402166,579,107 52,450,211 34,329,607 38,367,339 29,052,920 27,445,850 21,269,340 14,759,220 56273 1,9,0)(35196 (15,360,373) (13,501,946) (10,992,701) (5,662,733) ,9,7 372441,8,7 19,997,662 16,186,873 13,762,404 9,495,774 Five YearFinancialSummary rsae)(ettd (restated) (restated) (restated) K’0 K’0 K’0 HK$’000 HK$’000 HK$’000 HK$’000 0121 032014 2013 2012 2011

As at31December

(continued)

(48,817,557) (30,743,970) (18,073,587) (13,085,694) ting forcommon 21,246,978 70,064,535 32,407,304 37,657,231 17,949,961 (3,879,322) 6,044,202 3,800,193 3,573,662 1,536,372 2,771,990 HK$’000 (367,242) (738,610) 186,025 280,951 269,816 108,043 281,858 239,503 577,664 36,991 (2,719) 2015 – – 203

China State Construction International Holdings Limited Annual Report 2015 Particulars of Investment Properties

Approximate gross floor Group’s Address Use Lease term area interest (sq.ft) % (a) 11th, 12th and 13th Floors, China Commercial Freehold 15,672 100 Construction Commercial Building, Rua do Campo No: 88–96 and Rua de Santa Clara No: 1-3A, Macau

(b) 1st, 2nd, 3rd, 22nd and 23rd Floors, Commercial Medium-term 39,057 100 Zhongjian Commercial Building, lease Yingbin Road South, Gongbei District, Zhuhai, Guangdong Province, the PRC

(c) No. 201, Ground Store, Commercial Medium-term 1,057 100 No. 245 Qiaoguang Road, lease Annual Report 2015 Gongbei District, Zhuhai, 204 Guangdong Province, the PRC

(d) Room 1104, 11th Floor, Commercial Medium-term 1,134 100 Zhongzhu Building, lease No. 1081 Yingbin Road South Gongbei District, Zhuhai, Guangdong Province, the PRC

(e) Shop A on Ground Floor and Commercial Medium-term 6,542 100 Car Parking Spaces Nos. 1 to 24 lease on 1st Floor, Fu Po Garden, Estrada Marginal do Hipodromo No: 70–76, Macau

(f) Shops on Basement, Commercial Freehold 16,175 100 China State Construction International Holdings Limited Ground Floor and 1st Floor, Car Parking Spaces Nos. 1 to 6 on 1st Floor and Nos. 15 to 16 on 2nd Floor, Edificio Ou Va, Rua do Ribeira do Patane No: 109–115, Avenida Marginal do Patane No: 26–36, Macau 28th Floor, China Overseas Building, 139 Hennessy Road, Wanchai, Hong Kong Tel : 2823 7888 Fax : 2527 6782 Website : www.csci.com.hk