2018 Annual Report

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2018 Annual Report 出 Vision hi The Group is dedicated to its core value of res Exercising Caution in Details and 時 Implementation; Building a Strong Foundation to Seek Greater Success. 要 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 轉 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 用 role model in the new era. The Group will insist on developing into a leading corporation with competitive international complex B版 construction and infrastructure investment. 出 Contents 2 Corporate Structure 4 Board of Directors and Committees 5 Corporate Information 6 Financial Highlights 8 Major Events of the Year 2018 16 Chairman’s Statement 26 Management Discussion and Analysis 32 Business Review 46 Major Awards and Accolades 2018 48 Corporate Citizenship • Staff Development and Personal Growth • Environmental Policy • The Group and Community • Investor Relation 60 Directors and Organisation 67 Corporate Governance Report 79 Directors’ Report 87 Connected Transactions 97 Audited Consolidated Financial Statements • Independent Auditor’s Report • Consolidated Income Statement • Consolidated Statement of Comprehensive Income • Consolidated Statement of Financial Position • Consolidated Statement of Changes in Equity • Consolidated Statement of Cash Flows • Notes to the Consolidated Financial Statements 198 Five Year Financial Summary 200 Particulars of Major Investment Properties 2 China State Construction International Holdings Limited Corporate Structure Annual Report 2018 3 Corporate Structure (continued) MAINLAND CHINA Infrastructure Operation of Prefabricated Other Construction Investment Infrastructure Assets Construction Related Business (PPP* and other models) HONG KONG Mechanical and Investment- Other Civil Foundation Building Electrical driven Construction Engineering Engineering Construction Engineering Contracting Related Works Works Works Business Business MACAU Mechanical and Investment-driven Building Foundation Other Construction Electrical Contracting Construction Engineering Works Related Business Engineering Works Business OTHERS Curtain Wall System** Operation Management Business** * “PPP” — “Public-Private-Partnership” ** Operate through a listed subsidiary, Far East Global Group Limited (Stock Code: 00830) 4 China State Construction International Holdings Limited Board of Directors and Committees Board of Directors Committees (see Notes below) Chairman and Non-executive Director Audit Committee Yan Jianguo Raymond Ho Chung Tai (Chairman) Adrian David Li Man Kiu Executive Directors Raymond Leung Hai Ming Zhang Haipeng (Chief Executive Officer) Lee Shing See Tian Shuchen Zhou Hancheng Remuneration Committee Hung Cheung Shew 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 Raymond Leung Hai Ming Notes: The following changes have been effected from the conclusion of the Board Meeting of the Company held on 22 March 2019 and the director list above has incorporated such changes: (1) Mr. Zhou Yong resigned as Executive Director of the Company and consequently ceased to be the Chairman of the Company; and (2) Mr. Yan Jianguo was appointed as the Chairman and Non-executive Director of the Company. Annual Report 2018 5 Corporate Information Authorised Representatives Principal Bankers Yan Jianguo Agricultural Bank of China Limited Zhang Haipeng 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 Transfer Office Industrial and Commercial Bank of China Ltd. The Bank of East Asia, Limited SMP Partners (Cayman) Limited The Hongkong and Shanghai Banking Corporation Limited Royal Bank House — 3rd Floor Wing Lung Bank, Limited 24 Shedden Road, P.O. Box 1586 Grand Cayman KY1-1110 Listing Information Cayman Islands Shares Hong Kong Branch Share Registrar and Hong Kong Stock Exchange: 03311 Transfer Office Guaranteed Notes (CSCFIN II N2211) Tricor Standard Limited Hong Kong Stock Exchange: 05037 Level 22, Hopewell Centre US$550,000,000 3.375% Guaranteed Notes due 2022 issued by China State 183 Queen’s Road East Construction Finance (Cayman) II Limited Hong Kong Guaranteed Notes (CSCFIN II N2711) Registered Office Hong Kong Stock Exchange: 05038 US$250,000,000 3.875% Guaranteed Notes due 2027 issued by China State Cricket Square Construction Finance (Cayman) II Limited Hutchins Drive P.O. Box 2681 Senior Guaranteed Perpetual Capital Securities Grand Cayman KY1-1111 (CSC FIN SGPS) Cayman Islands Hong Kong Stock Exchange: 05462 US$500,000,000 6.0% Senior Guaranteed Perpetual Capital Securities issued by China State Construction Finance (Cayman) I Limited Head Office and Principal Place of Business in Hong Kong Website 28th Floor, China Overseas Building www.csci.com.hk 139 Hennessy Road, Wanchai Hong Kong Financial Calendar AUDITOR Closure of Register of Members — Annual General Meeting 29 May 2019 to 3 June 2019 (both days inclusive) PricewaterhouseCoopers Annual General Meeting Legal Advisor 3 June 2019 Mayer Brown JSM Closure of Register of Members — Final Dividend 11 June 2019 Payment of Proposed Final Dividend 3 July 2019 6 China State Construction International Holdings Limited Financial Highlights For the year ended 31 December (Note a) 2014 2015 2016 2017 2018 (restated) (restated) Results (HK$’000) Revenue 34,522,262 38,001,876 46,207,508 50,152,524 55,626,304 EBITDA (Note b) 5,118,701 6,103,727 7,061,232 8,223,304 8,369,258 Profit from core business (Note c) 3,575,331 4,524,126 4,153,546 5,072,521 5,323,976 Profit attributable to owners of the Company 3,575,331 4,524,126 5,130,066 5,490,091 4,500,148 Financial Ratios Net margin (%) 10.4 11.9 11.1 11.0 8.2 Current ratio (times) 1.07 1.02 1.01 1.07 1.12 Financial Information Per share Earnings (HK cents) (Note d) 91.77 112.37 119.51 118.85 89.13 Dividend (HK cents) 26.00 33.00 33.00 35.00 27.00 Net assets (HK$) 5.40 5.74 5.72 7.62 8.53 Other Information Value of incomplete contracts at 31 December (HK$ billion) 93.10 127.06 153.89 188.01 236.56 Notes: (a) The figures from 2014 to 2015 have been restated for the application of merger accounting for common control combination, acquisition of Precious Deluxe Global Limited and its subsidiaries and changes of measurement of investment properties. (b) EBITDA represents Profit before Tax, Finance costs, Depreciation and Amortisation charged to the Income Statement during the year. (c) Excluding gain on fair value changes of investment properties, impairment loss on concession operating rights and loss on disposal of a subsidiary. (d) The weighted average number of ordinary share used in the calculation of earnings per share for the year ended 31 December 2017 has accounted for the bonus element of the rights issue which was completed on 12 October 2017. The earnings per share for the corresponding year of 2016 have been retrospectively adjusted to reflect the bonus element of the rights issue. Annual Report 2018 7 Financial Highlights (continued) Results Financial Information Profit Attributable to Per Share Owners of the Company Revenue (HK’000) (HK’000) (HK cents) 6,000,000 60,000,000 120 5,000,000 50,000,000 100 4,000,000 40,000,000 80 3,000,000 30,000,000 60 2,000,000 20,000,000 40 1,000,000 10,000,000 20 0 0 0 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Profit Attributable to Owners of the Company Earnings Revenue Dividend Breakdown of Segment Breakdown of Segment Revenue Results* for the year ended 31 December 2018 for the year ended 31 December 2018 Far East Global Far East Global 5.6% 2.1% Macau Hong Kong Macau 9.1% 14.5% 12.6% Hong Kong 26.8% Mainland Mainland 55.0% 74.3% *Excluding loss of Overseas Segment 8 China State Construction International Holdings Limited Major Events of the Year 2018 Walk for Millions by Community Chest was fully supported by employees of the Group On 14 January, nearly 400 employees of the JANUARY Group and their family members participated in the first large fund-raising activity for the year by the Community Chest: Hong Kong and Kowloon Walk for Millions 2017/18. The opening ceremony was officiated by the Chief Executive, the Hon Mrs. Carrie Lam Cheng Yuet-ngor. All funds raised by this event were allocated to Family and Child Welfare to offer assistance to family in need, to encourage mutual support relationship among family members, as well as to maintain and strengthen family bonding. CSCI was awarded the “Golden Hong Kong Stocks Award 2017” industry award On 18 January, the New Value of Hong JANUARY Kong Stocks Summit and Golden Hong Kong Stocks Awards 2017 award presentation ceremony for the listed companies held in Shenzhen. At which, CSCI was awarded the Most Valuable Vehicle and Industrial Manufacturing Company in the Golden Hong Kong Stocks Awards. Annual Report 2018 9 Major Events of the Year 2018 (continued) MARCH China State Construction Macau (CSC Macau,中建澳門) was awarded Good Citizen Award On 11 March, CSC Macau was awarded Good Citizen Award by the Public Security Police Force of Macau. The award aims to recognize the outstanding contribution of CSC Macau regarding the prevention and rescue work after the “8.23 Typhoon”. Groundbreaking ceremony of Airport 3801 Construction Project constructed by China State Construction (Hong Kong) FEBRUARY (CSCHK, 中建香港) was held successfully On 8 February, the groundbreaking ceremony of Airport 3801 Construction Project in Hong Kong was held successfully.
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