Shanghai Zhenhua Heavy Industries Co., Ltd. Annual Report 2016 Important Notice I
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2016 Annual Report Stock code: 600320 900947 The company referred to: Shanghai Zhenhua Heavy, Zhenhua B share Shanghai Zhenhua Heavy Industries Co., Ltd. Annual Report 2016 Important Notice I. Hereunder, the Board of Directors, the Supervisory Board, directors, supervisors and senior executives of the Company guarantee that the Annual Report is of authenticity, accuracy and integrity; it contains no major omission, false record or serious misleading statement; they will be responsible both individually and jointly for any of above guaranty. II. All the directors of the company attend meeting of the board of directors. III. Ernst & Young LLP. (Special general partnership) issued standard unqualified audit report for the Company. IV. The Company′s responsible person Song Hailiang, accounting responsible person Huang Qingfeng and accounting responsible person (accounting chief) Wang Jue hereby declare that the financial reports in this Annual Report are true, accurate and complete. V. Report period profit distribution preplan or preplan for capital reserve transfer to increase capital stock as audited by the board not to distribute profit; not to convert reserve into capital stock. VI. Risks declaration of prospective statements □Applicable √Not applicable VII. Whether non-operational fund occupancy by the controller and its related parties exists with the Company? No. VIII. Whether there is external guaranty provision violating regulation or procedural decision-making within the Company? No. IX. Significant risk remind √Applicable □Not applicable The Company has described the risks in the annual report in details and the investors shall pay attention to that. Refer to the related chapters in the directors’ report for the description of the risk of the Company. X. Others □Applicable √Not applicable 1 / 507 2016 Annual Report Contents Chapter I Definition ............................................................................................................................. 3 Chapter II Company Profiles and Key Financial Indicator .................................................................. 3 Chapter III Business Profile ................................................................................................................. 9 Chapter IV Discussion and Analysis of the Board of Directors ........................................................ 10 Chapter V Substantial Events ............................................................................................................ 23 Chapter VI Equity Movement and Shareholder′s Profile ............................................................... 46 Chapter VII Preferred stock information ........................................................................................... 53 Chapter VIII Directors, Supervisors, Senior Executives and Employees .......................................... 54 Chapter IX Company Governance ..................................................................................................... 64 Chapter X Company Bond Information ............................................................................................. 68 Chapter XI Financial Statements ....................................................................................................... 71 Chapter XII Backup Documents Contents ....................................................................................... 507 2 / 507 2016 Annual Report Chapter I Definition I. Definition Terms used in this report means the following except for otherwise specified: Definition of frequently used terms The Company Refers to Shanghai Zhenhua Heavy Industries Co., Ltd. CCCC, controlling shareholder Refers to China Communications Co., Ltd. Effective controller Refers to China Communications Construction Group Chapter II Company Profiles and Key Financial Indicator I. Company information Statutory company name in Chinese Shanghai Zhenhua Heavy Industries Co., Ltd. Statutory Chinese Abbreviation of the Shanghai Zhenhua Heavy Company English name of the Company SHANGHAI ZHENHUA HEAVY INDUSTRIES CO.,LTD. English Abbreviation of the Company ZPMC Legal representative Song Hailiang II. Contact information Board secretary Securities Affair Agent Name Wang Jue Li Min Address 3261 Dongfang Road, Shanghai 3261 Dongfang Road, Shanghai Tel. 021-50390727 021-50390727 Fax 021-31193316 021-31193316 Email [email protected] [email protected] III. Basic information of the Company Registered address 3470, South Pudong Road, Shanghai Post code 200125 3 / 507 2016 Annual Report Office address 3261 Dongfang Road, Shanghai Post code 200125 Website http://www.zpmc.com Email [email protected] IV. Information disclosure and reference Designated media for information Shanghai Securities News, Hong Kong Wen Wei Po Website designated by China Security Regulatory www.sse.com.cn Commission for disclosure of annual report Annual report available at of the Company Securities and Law Affairs Office V. Stock Profiles of the Company Stock Profiles of the Company Short form of Stock Stock exchange listed Short form of stock Share code Stock before change type at A-share Shanghai Stock Shanghai Zhenhua 600320 ZPMC Industries Exchange Heavy B-share Shanghai Stock Zhenhua B-share 900947 - Exchange VI. Others Title Ernst & Young (special general partnership) CPA’s employed by the Office address Room 01-12, 17th Floor, No.1 Dongfang Company(Domestic) Dongcheng District, Beijing CPAs to sign Yang Lei, Tao Baiyi VII. Major Accounting Data and Financial Indicators in Last Three Years (I) Major accounting data Unit: Yuan Currency: RMB Growth 2014 Major over same 2016 2015 accounting data period prior After adjustment Before adjustment year (%) 4 / 507 2016 Annual Report Operating 24,348,087,928 23,272,394,677 4.62 25,477,011,081 25,069,421,487 Income Net Profit 212,419,946 212,411,967 0.004 202,223,273 199,386,986 attributable to shareholders of the Company Net Profit after 157,445,435 -214,409,604 Not -79,581,135 -79,581,135 deducting applicable non-recurring gains/losses Net cash 1,658,422,636 -1,831,961,473 Not -863,628,925 -873,383,052 generated from applicable operating activities Growth End of 2014 over same End of 2016 End of 2015 period prior year After adjustment Before adjustment (%) Net asset 15,196,736,263 14,869,572,883 2.20 14,990,495,511 14,780,603,810 attributable to shareholders of the Company Total assets 60,823,819,098 59,020,752,259 3.05 58,024,869,184 56,145,227,254 (II) Major Financial Indicators 2014 Growth over same Major financial index 2016 2015 period prior year (%) After Before adjustment adjustment Basic EPS (Yuan/share) 0.05 0.05 0.00 0.05 0.05 Diluted EPS (Yuan/share) 0.05 0.05 0.00 0.05 0.05 Basic EPS after deducting 0.04 -0.05 Not applicable -0.02 -0.02 non-recurring gains/losses(Yuan/share) Weighted average net assets earnings1.41 1.41 0.00 1.36 1.36 (%) Weighted average net assets earnings 1.05 -1.45 Increase 2.5 base -0.54 -0.54 ratio after deducting non-recurring point gains/losses(%) 5 / 507 2016 Annual Report Description of the main accounting data and financial indicators for the first three years at the end of the reporting period √Applicable □Not applicable 1. The company changed its accounting policies about methods on taxes calculation and report according to the Provision on Value-Added Tax issued by Ministry of Finance in Dec. 2016. It had no impact on the consolidation of 2016 and 2015 financial statement, as well as the net profit and owner’s equity. It can be seen on the 19th board meeting announcement. 2. This year, the company acquired 32.51% of the equity of CCCC Tianhe Co., Ltd, and obtained its control rights through a concerted action agreement. Since China Communication Construction Co., Ltd is the controlling shareholder of the Company and CCCC Tianhe Co., Ltd before the acquisition, so this is the acquisition under the same control. The assets and liabilities of CCCC Tianhe acquired are accounted as the historical cost and included in the consolidated financial statements, namely regarded CCCC Tianhe as a part of the Company and the presented in the earliest period. Accordingly, the company has relisted the beginning balance of the corresponding data. VIII. Accounting data difference in domestic and international accounting standards (I)Difference of net profit and net assets attributable to shareholders of listed company in the financial report disclosed according to international accounting standards and domestic accounting standards. □Applicable√Not applicable (II) Difference of net profit and net assets attributable to shareholders of listed company disclosed in accordance with the foreign and domestic accounting standards. □Applicable√Not applicable (III) Description of the difference between accounting standards at home and aboard. □Applicable√Not applicable IX. Quarterly Major Financial Indicator in 2016 Unit: Yuan Currency: RMB Q1 Q2 Q3 Q4 (Jan-Mar) (Apr-June) (July-Sept) (October-December) Operating Income 4,635,581,695 7,166,060,906 6,590,100,486 5,956,344,841 Net Profit attributable to 53,657,723 58,635,638 43,276,720 56,849,865 shareholders of the Company Net profit attributable to shareholders of listed company 33,458,662 77,209,410 27,270,343 19,507,020 after deducting non-recurring gains and losses Net cash generated from 384,687,691 -279,931,650 4,210,477 1,549,456,118 operating activities Description of difference between quarterly data and disclosed periodic data □Applicable√Not applicable X. Items and amount of non-recurring gains/losses √Applicable