122269 Zhongwang AR Eng (攝cover)
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COMMITTED TO LIGHT-WEIGHT DEVELOPMENT FOR A GREENER WORLD China Zhongwang is the second largest industrial aluminium extrusion product developer and manufacturer in the world and the largest in Asia. The Group focuses on three core synergistic businesses namely, industrial aluminium extrusion, deep processing and aluminium fl at rolling. The three core businesses operate together on the basis of upstream and downstream resource-sharing and benefi t from mutual advantages. Contents 2 Corporate Information 6 Corporate Profi le 8 Financial Highlights 10 Core Businesses 12 Corporate Milestones 14 Chairman’s Statement 18 Management Discussion and Analysis 36 Profi les of Directors and Senior Management 41 Report of the Directors 52 Corporate Governance Report 64 Corporate Social Responsibility Report 75 Independent Auditor’s Report 76 Consolidated Financial Statements 82 Notes to the Financial Statements 134 Five-year Financial Summary China Zhongwang Holdings Limited 2 Corporate Information Place of Listing Company Secretary The Stock Exchange of Hong Kong Limited Mr. Cheung Lap Kei Stock Code Authorised Representatives 01333 Mr. Cheung Lap Kei Mr. Lu Changqing Executive Directors Mr. Liu Zhongtian (Chairman) Principal Bankers Mr. Lu Changqing Bank of America, N. A., Hong Kong Branch Mr. Chen Yan China Development Bank Corporation Ms. Zhong Hong Bank of Communications Corporation Limited Mr. Gou Xihui China Construction Bank Corporation Hang Seng Bank Limited Standard Chartered Bank (Hong Kong) Limited Independent Non-executive Directors Bank of China Limited Mr. Wong Chun Wa Agricultural Bank of China Limited Mr. Wen Xianjun Industrial and Commercial Bank of China Limited Mr. Shi Ketong Mr. Lo Wa Kei, Roy Registered Offi ce Cricket Square, Hutchins Drive Audit Committee P.O. Box 2681 Mr. Wong Chun Wa (Chairman) Grand Cayman Mr. Wen Xianjun KY1-1111 Mr. Shi Ketong Cayman Islands Nomination and Remuneration Committee Mr. Wen Xianjun (Chairman) Head Offi ce and Principal Place of Business in the PRC Mr. Liu Zhongtian No. 299, Wensheng Road Mr. Shi Ketong Liaoyang City Liaoning 111003 Corporate Governance Committee PRC Mr. Lo Wa Kei, Roy (Chairman) Mr. Wen Xianjun 42/F China World Tower Mr. Shi Ketong No. 1 Jianguomenwai Avenue Beijing 100004 PRC Strategy and Development Committee Mr. Liu Zhongtian (Chairman) Mr. Lu Changqing Mr. Wen Xianjun Annual Report 2015 3 Corporate Information Place of Business in Hong Kong Hong Kong Branch Share Registrar 56/F, Bank of China Tower Computershare Hong Kong Investor Services Limited 1 Garden Road, Admiralty Shops 1712–1716, 17th Floor Hong Kong Hopewell Centre 183 Queen’s Road East Wanchai, Hong Kong Legal Advisors As to Hong Kong laws Morrison & Foerster Investor and Media Relations Consultant 33/F, Edinburgh Tower Cornerstones Communications Ltd. The Landmark 19/F, Oriental Crystal Commercial Building 15 Queen’s Road Central 46 Lyndhurst Terrace, Central Hong Kong Hong Kong As to PRC laws Haiwen & Partners Closure of Register of Members For the purpose of determining shareholders who are entitled to 20th Floor, Fortune Financial Centre attend and vote at the annual general meeting of the Company 5 Dong San Huan Central Road to be held on 28 June 2016, the register of members of the Company will be closed from Wednesday, 22 June 2016 to Chaoyang District Tuesday, 28 June 2016 (both days inclusive), during which Beijing 100020, PRC period no transfer of shares will be effected. All instruments of transfers (including relevant share certifi cates and transfer forms) must be lodged at the Hong Kong Branch Share Registrar, Computershare Hong Kong Investor Services Limited, Auditor Shops 1712–1716, 17th Floor, Hopewell Centre, 183 Queen’s KPMG Road East, Wanchai, Hong Kong, no later than 4:30 p.m. on 21 June 2016. 8th Floor, Prince’s Building 10 Chater Road Central, Hong Kong Annual General Meeting The Company’s annual general meeting will be held on 28 June 2016, a notice of which is included in the circular to be Principal Share Registrar in the Cayman Islands dispatched to shareholders together with this annual report. Royal Bank of Canada Trust Company (Cayman) Limited 4th Floor, Royal Bank House Company Website 24 Shedden Road, George Town www.zhongwang.com Grand Cayman KY1-1110 Cayman Islands China Zhongwang Holdings Limited 4 ALUMINIUM APPLICATIONS With a history of just 200 years, the application of HIGHEST ANNUAL OUTPUT aluminium displays many remarkable properties AMONGST NON-FERROUS METALS including being light-weight, corrosion resistant, • The annual output of aluminium exceeds and excellent conductors of thermal and that of copper, lead, tin and other non- electrical energy. When other metals are added, ferrous metals combined aluminium alloys offer even more advantageous strength and tenacity. This is why aluminium alloy products are extensively used in different sectors, such as transportation, electric power engineering, machinery and equipment and infrastructure, etc. Annual Report 2015 5 MOST WIDELY USED MOST ABUNDANT METAL AFTER STEEL METAL ELEMENT IN THE • Extensive applications due to its light- EARTH’S CRUST weight, corrosion resistant, and good • Accounts for 7.3% of the Earth’s crust, and electrical and thermal conductivity qualities the most abundant metal element in the Earth’s crust • Weighs about 1/3 of steel or copper • Electricity conductivity is double that of copper of the same weight Source of Information: International Aluminium Institute China Zhongwang Holdings Limited 6 Corporate Profi le China Zhongwang Holdings Limited (the “Company”), together with its subsidiaries (the “Group”), is the second largest industrial aluminium extrusion product developer and manufacturer in the world and the largest in Asia1. On 8 May 2009, the Company (stock code: 01333) was successfully listed on the Main Board of The Stock Exchange of Hong Kong Limited. The Group has been primarily focusing on the light-weight development in the transportation, machinery and equipment and electric power engineering downstream sectors through the provision of quality fabricated aluminium products. The Group has won numerous global certifi cations and accreditations from the railway, automobiles, vessels, aviation and other industries. Our customers can be found in major markets all over the world. The Group was founded in 1993 with its headquarters based in Liaoning Province, China, and is now mainly engaged in industrial aluminium extrusion and deep processing businesses. After over 20 years of dedicated development, the Group currently has over 90 internationally advanced aluminium extrusion production lines (including 21 production lines of large-scale aluminium extrusion presses of 75MN or above). In addition, one of the two ultra-large 225MN extrusion presses that the Group ordered, being the largest and most advanced in the world, has arrived Yingkou plant and is under installation, which is expected to be completed by 2016. The other one will arrive in second half of 2016 for installation. The operation of the 225MN extrusion presses will reinforce the Group’s leading edge in the production of high precision, complex large-section industrial aluminium extrusion products. Meanwhile, the Group has also built a world-leading aluminium tilt smelting and casting facility which is ancillary to the extrusion production lines, as well as the largest customized industrial aluminium extrusion product die design and manufacturing centre in Asia. The Group has a professional research and development team, and was certifi ed by the Chinese government as a “State Accredited Enterprise Technology Centre”, a “State CNAS Laboratory”, Liaoning Engineering and Technology Research Centre, and Liaoning Post-doctoral Research Centre. The Group’s unique core competitiveness in the industry lies in the comprehensive strength of its four-in-one model, i.e. the integration of smelting and casting, die design, advanced equipment and research and development capability all under one roof. Moreover, the Group actively develops its deep processing business. With the support of the advanced production facilities in its deep-processing centre and the product and process design team, the Group is able to provide one-stop solutions to clients including product design, production and after sales service. The Group is enhancing its abilities in the design, manufacturing and development of aluminium-intensive new energy vehicles, in order to diversify product range of deep- processed products. The Group has developed a range of high value-added deep-processed products with promising market potentials, such as industrial aluminium pallets, aluminium high-speed train carriages suitable for alpine cold regions, aluminium body structures of new energy buses, as well as aluminium bodies and parts of passenger cars. Deep-processed products have enhanced the Group’s overall profi tability. The Group’s high value-added aluminium fl at-rolled product project is progressing steadily as planned. Phase I has two production lines with a designed annual production capacity of 1.8 million tonnes. Plant construction and equipment installation of the fi rst production line has been completed, the core equipment and ancillary facility in each production mill have undergone various test runs and followed by trial production. Key production procedures including smelting and casting, hot rolling, and cold rolling fi nished no-load and load tests, and started trial run in turns. The Group’s high value-added aluminium fl at-rolled product