Annual Report 2007
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ZZhaojinhaojin AR07AR07 CoverCover Output.inddOutput.indd 1 22008/3/22008/3/22 上午上午 05:09:4305:09:43 Zhaojin Mining Industry Company Limited Annual Report 2007 Contents Corporate Information 2 Corporate Profile 4 Financial Summary 5 Corporate Structure 6 Chairman’s Statement 7 Management Discussion and Analysis 9 Directors, Supervisors and Senior Management Profile 22 Report of the Directors 28 Corporate Governance Report 51 Report of the Supervisory Committee 73 Independent Auditors’ Report 75 Consolidated Income Statement 77 Consolidated Balance Sheet 78 Consolidated Cash Flow Statement 80 Consolidated Statement of Changes in Equity 83 Company Balance Sheet 84 Notes to Financial Statements 86 Five Year Financial Summary 176 1 Zhaojin Mining Industry Company Limited Annual Report 2007 Corporate Information Name of the Company Supervisors and Members of the Supervisory Committee 招金礦業股份有限公司 Mr. Wang Xiaojie (Chairman) English Name of the Company Mr. Cheng Binghai Mr. Chu Yushan Zhaojin Mining Industry Company Limited Secretary to the Board Legal Representative Mr. Wang Ligang Mr. Lu Dongshang Company Secretary Executive Directors Mr. Ngai Wai Fung Mr. Lu Dongshang (Chairman) Mr. Wang Peifu (Chief Executive Officer) (CEO) Qualified Accoutant Mr. Ma Yushan Mr. Nelson Ving Lung Ma Non-executive Directors Authorised Representatives Mr. Liang Xinjun (Vice Chairman) Mr. Wu Ping Mr. Lu Dongshang (Chairman) Mr. Liu Gendong Mr. Wang Peifu Mr. Cong Jianmao Audit Committee Members Independent non-executive Directors Ms. Chen Jinrong (Chairman) Mr. Liu Gendong Mr. Yan Hongbo Mr. Yan Hongbo Mr. Ye Tianzhu Mr. Choy Sze Chung Jojo Ms. Chen Jinrong Mr. Choy Sze Chung Jojo 2 Zhaojin Mining Industry Company Limited Annual Report 2007 Auditors Principal Place of Business in Hong Kong International Auditors: Ernst & Young 8th Floor 18th Floor Gloucester Tower Two International Finance Centre The Landmark 8 Finance Street 15 Queen’s Road Central Central Central, Hong Kong Hong Kong Hong Kong Share Registrar and PRC Auditors: Transfer Office Beijing Tin Wha Certified Public Accountants 14/F, Wu Dong Building Computershare Hong Kong Investor Services No. 9 Chegongzhuang Avenue Limited Xicheng District, Beijing Rooms 1712-16, 17th Floor PRC Hopewell Centre 183 Queen’s Road East Legal Advisers Wanchai Hong Kong PRC Law: King & Wood PRC Lawyers Principal Bankers 28-29/F Huai Hai Plaza Bank of China 1045 Huaihai Road (M) 78 Fuqian Road Shanghai 200031 Zhaoyuan City China Shandong PRC Hong Kong Law: Huen Wong & Co. Agricultural Bank of China in association with Fried, Frank, Harris, 298 Wenquan Road Shriver & Jacobson LLP Zhaoyuan City 9/F Gloucester Tower Shandong The Landmark PRC 15 Queen’s Road Central Central, Hong Kong Website of the Company Registered Office www.zhaojin.com.cn 2 Wenhua Road Stock Code Zhaoyuan City Shandong, PRC 1818 3 Zhaojin Mining Industry Company Limited Annual Report 2007 Corporate Profile Zhaojin Mining Industry Company Limited (the “Company”) (stock code: 1818) and its subsidiaries (the “Group”) were jointly established by Shandong Zhaojin Group Company Limited (the “Zhaojin Group”), Shanghai Fosun Industrial Investment Co., Ltd. (the “Shanghai Fosun”), Shanghai Yuyuan Tourist Mart Co., Ltd. (the “Shanghai Yuyuan”), Shenzhen Guangxin Investments Co., Ltd. (the “Guangxin Investments”) and Shanghai Laomiao Gold Co., Ltd. (the “Laomiao Gold”) as its promoters with the approval from Shandong Province People’s Government. The Company was incorporated as a joint stock limited company in the People’s Republic of China (the “PRC”) on 16 April 2004 and listed on the Main Board of the Stock Exchange of Hong Kong Limited (the “Stock Exchange”) on 8 December 2006. We are an integrated enterprise combining exploration, mining, ore processing and smelting operations who has focused on the gold production business. We are one of the leading gold producers and one of the biggest enterprises of gold smelting in PRC. We are strategically based in the Zhaoyuan district of Shandong province in Jiaodong peninsula of the PRC, which has a long history of gold exploration and production. According to the statistics from China Gold Association as of 31 December 2005, its gold resources represented approximately 10% of the PRC’s total remaining gold resources. Zhaoyuan district, which is named by China Gold Association as the “Gold Capital of China”, is the largest gold production base and the first gold production city in the PRC. We are the leading gold producer in the PRC, with a complete and professional gold production chain including exploration, mining, ore processing and smelting operations. Our principal products are Au9999 and Au9995 standard gold bullion. Our main technologies and equipment are of advanced both in the PRC and internationally. We have five operating mines in the Zhaoyuan district, namely Dayingezhuang Gold Mine, Jinchiling Gold Mine, Xiadian Gold Mine, Hedong Gold Mine and Jintingling Gold Mine. According to the Behre Dolbear Report, as at 31 December 2007, our remaining gold resource under the Code of The Joint Ore Reserves Committee in Australia (the “JORC”) were approximately 6,769 kozs (as at 30 June 2006: 5,795 kozs) and our remaining gold reserves were approximately 4,834 kozs (as at 30 June 2006: 4,196 kozs). Our mines in Zhaoyuan district are well integrated with resourceful reserves. We are committed to innovation and have achieved remarkable results with increasing gold reserves and gold production. Outside Zhaoyuan City (“Outside Zhaoyuan”), Shandong Province, besides our mines under construction located in Hainan and Xinjiang, during the year, we have acquired several exploration rights covering an area of 659.55 sq.km. and mining rights covering an area of 12.18 sq.km, with gold resources of 5.422 tons (approximately 174 kozs, according to Behre Dolbear Report) in Xinjiang, Sichuan, Gansu, Hunan, Inner Mongolia, Heilongjiang and Yunnan, which have paved the path for our persistent and steady development. With excellent location, abundant resources, advanced technologies and innovative management, we proactively participate in the consolidation and development of domestic and overseas gold resources, strive to attain continuous growth in our results and profits and become one of the top and leading gold production enterprises in the PRC and the world. 4 Zhaojin Mining Industry Company Limited Annual Report 2007 Financial Summary Financial Summary Summary of Operating Results For the year ended 31 December 2007 2006 2005 2004 RMB’000 RMB’000 RMB’000 RMB’000 Revenue 1,512,273 1,164,415 867,687 428,084 Gross profit 754,821 623,175 439,387 190,869 Share of profit/(loss) of associates 1,979 (1,935) (717) – Profit before tax 559,995 517,750 239,976 100,027 Profit attributable to Shareholders of the Company 388,447 351,190 162,891 165,565 Earnings per share (RMB) 0.53 0.54 0.31 0.14 Summary of Assets As at 31 December 2007 2006 2005 2004 RMB’000 RMB’000 RMB’000 RMB’000 Total assets 5,013,877 4,907,558 2,133,045 1,025,012 Cash and cash equivalents 1,625,689 2,695,397 138,565 349,804 Total liabilities (1,260,663) (1,443,134) (1,328,005) (412,532) Total net assets 3,753,214 3,464,424 805,040 612,480 Net assets per share (RMB)* 5.15 4.75 1.52 1.16 * As at 31 December 2007, net assets per share is calculated on the basis of net assets of RMB3,753,214,000 and the total number of issued shares of 728,715,000 shares. 5 Zhaojin Mining Industry Company Limited Annual Report 2007 Corporate Structure 6 Zhaojin Mining Industry Company Limited Annual Report 2007 Chairman’s Statement To Shareholders, I am pleased to present the annual report of Zhaojin Mining Industry Company Limited (the “Company”) and its subsidiaries (collectively the “Group”) for the year ended 31 December 2007 (the “Year”) on behalf of the board of directors (the “Board”) of the Company. I would also like to express our kind regards to all shareholders (the “Shareholders”) of the Company on behalf of the Board and all staff members. The year 2007 is the first year after the Company’s listing on the Stock Exchange and it took a great leap in its outbound expansion. Strong growth in operating results as well as outstanding financial and operational performance demonstrated our steady progress towards the goal of being a top international gold production corporation in the PRC and the world. For the year ended 31 December 2007, the Company achieved an aggregate gold production of approximately 19,364 kg (approximately 622,567 ozs), representing an increase of approximately 23.75% as compared to the corresponding period in the previous year, of which gold produced from our own mines accounted for approximately 8,378 kg (approximately 269,359 ozs) and smelting and processing gold accounted for approximately 10,986 kg (approximately 353,208 ozs). In accordance with the Hong Kong Financial Reporting Standards (the “HKFRS”), our annual sales revenue amounted to RMB1,512,273,000, representing an increase of 29.87% as compared to the prior year. Net profit amounted to RMB375,923,000, representing an increase of 30.02% as compared to the net profit (before interest income arising from the share application funds) of RMB289,131,000 of last year, and an increase of 7.51% as compared to the net profit (after interest income arising from the share application funds) of RMB349,651,000 of last year. The Company’s assets, shareholders’ equity and earnings per share all accomplished, constant and steady growth during the Year. As the Company harvested growing results, we took