2020 Annual Report 年度報告 Contents
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Stock Code 股份代號 : 1787 (A joint stock company incorporated in the People's Republic of China with limited liability) (於中華人民共和國註冊成立的股份有限公司) 2020 ANNUAL REPORT 2020 ANNUAL REPORT 年度報告 年度報告 CONTENTS Corporate Information 2 Financial Highlights 3 Chairman’s Statement 4 Management Discussion and Analysis 10 Brief Biographies of Directors, Supervisors and 25 Senior Management Report of the Directors 33 Report of the Supervisory Committee 77 Environmental, Social and Governance Report 83 Corporate Governance Report 103 Independent Auditor’s Report 121 • Consolidated Statement of Profi t or Loss 128 • Consolidated Statement of Comprehensive Income 129 • Consolidated Statement of Financial Position 130 • Consolidated Statement of Changes in Equity 132 • Consolidated Statement of Cash Flows 135 • Notes to the Consolidated Financial Statements 137 Defi nitions 248 CORPORATE INFORMATION EXECUTIVE DIRECTORS JOINT COMPANY SECRETARIES Mr. Liu Qin (appointed on 30 December 2020) Mr. Tang Qi Mr. Wang Shuhai (appointed on 30 December 2020) Ms. Ng Sau Mei (FCG, FCS) Mr. Tang Qi (re-appointed on 30 December 2020) Mr. Wang Peiyue (retired on 30 December 2020) HONG KONG LEGAL ADVISER Mr. Li Tao (retired on 30 December 2020) Jingtian & Gongcheng LLP NON-EXECUTIVE DIRECTORS Suites 3203-3207 Edinburgh Tower Mr. Li Guohong (re-appointed on 30 December 2020) Mr. Wang Lijun (re-appointed on 30 December 2020) The Landmark Ms. Wang Xiaoling (re-appointed on 30 December 2020) 15 Queen’s Road Central Hong Kong INDEPENDENT NON-EXECUTIVE DIRECTORS PRC LEGAL ADVISER Mr. Wang Yunmin (appointed on 30 December 2020) Beijing Hualian Law Firm Mr. Liew Fui Kiang (appointed on 30 December 2020) 10th Floor, Gao Lan Building Ms. Zhao Feng (appointed on 30 December 2020) No. 32 Liang Ma Qiao Road Mr. Gao Yongtao (retired on 30 December 2020) Chao Yang District, Beijing, China Mr. Lu Bin (retired on 30 December 2020) Zip Code: 100125 Ms. Hui Wing (retired on 30 December 2020) SUPERVISORS INTERNATIONAL AUDITOR Mr. Li Xiaoping (re-appointed on 30 December 2020) SHINEWING (HK) CPA Limited Ms. Liu Yanfen (re-appointed on 29 December 2020) Mr. Luan Bo (re-appointed on 30 December 2020) DOMESTIC AUDITOR TianYuanQuan Certified Public Accountants AUDIT COMMITTEE (Special General Partnership) Ms. Zhao Feng (Chairman) Mr. Li Guohong H SHARE REGISTRAR Ms. Wang Xiaoling Tricor Investor Services Limited Mr. Wang Yunmin Level 54, Hopewell Centre Mr. Liew Fui Kiang 183 Queen’s Road East, Hong Kong NOMINATION COMMITTEE REGISTERED OFFICE AND Mr. Wang Yunmin (Chairman) Mr. Wang Lijun HEADQUARTERS IN THE PRC Mr. Liu Qin No. 2503 Jingshi Road Mr. Liew Fui Kiang Licheng District, Jinan Ms. Zhao Feng Postal Code 250107 REMUNERATION AND APPRAISAL PRINCIPAL PLACE OF BUSINESS IN COMMITTEE HONG KONG Mr. Liew Fui Kiang (Chairman) Rooms 4003-06 Mr. Wang Shuhai China Resources Building Mr. Tang Qi No. 26 Harbour Road Mr. Wang Yunmin Hong Kong Ms. Zhao Feng STRATEGY COMMITTEE STOCK CODE Mr. Li Guohong (Chairman) Hong Kong Stock Exchange: 01787 Mr. Wang Lijun Shanghai Stock Exchange: 600547 Ms. Wang Xiaoling Mr. Wang Yunmin WEBSITE Mr. Liew Fui Kiang http://www.sdhjgf.com.cn 2 SHANDONG GOLD MINING CO., LTD. FINANCIAL HIGHLIGHTS 2016-2020 FINANCIAL INFORMATION AS EXTRACTED FROM CONSOLIDATED FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS: For the year ended 31 December 2020 2019 2018 2017 2016 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (Note) (Note) Revenue 63,645,351 62,613,141 56,250,494 51,041,303 49,072,691 Cost of sales (57,088,914) (57,601,794) (52,213,915) (47,398,660) (45,567,129) Gross profit 6,556,437 5,011,347 4,036,579 3,642,643 3,505,562 Selling expenses (107,147) (188,120) (126,995) (31,152) (34,440) General and administrative expenses (2,319,331) (1,768,667) (1,445,860) (1,214,344) (1,225,662) Research and development expenses (387,558) (333,050) (321,041) (273,559) (265,333) Other income 26,435 37,704 14,398 15,979 14,845 Other gains and losses, net 143,354 107,585 253,554 (30,625) 39,952 Finance income 72,877 71,466 67,646 37,445 10,988 Finance costs (811,872) (866,894) (936,319) (575,966) (375,598) Share of results of associates 10,669 1,319 38,066 34,024 27,662 Profit before tax 3,183,864 2,072,690 1,580,028 1,604,445 1,697,976 Income tax expenses (687,562) (660,376) (559,231) (431,452) (385,194) Profit for the year 2,496,302 1,412,314 1,020,797 1,172,993 1,312,782 Profit for the year attributable to: Owners of the Company 2,231,533 1,290,503 964,411 1,118,920 1,286,642 Non-controlling interests 264,769 121,811 56,386 54,073 26,140 2,496,302 1,412,314 1,020,797 1,172,993 1,312,782 (restated) (restated) (restated) (restated) Basic and diluted earnings per share (RMB) (Note) 0.51 0.30 0.25 0.31 0.43 2020 2019 2018 2017 2016 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (Note) (Note) Assets and liabilities Total assets 64,461,691 58,848,726 54,560,477 43,131,721 29,366,421 Total liabilities 32,603,506 32,780,401 28,886,040 25,637,955 12,676,700 Non-controlling interests 3,030,354 2,860,413 1,943,845 1,026,341 1,008,906 Perpetual bonds 3,999,387 –––– Total equity attributable to owners of the Company 24,828,444 23,207,912 23,730,592 16,467,425 15,680,815 Note: The consolidated financial information during the years ended 31 December 2016 and 2017 were extracted from the Prospectus that do not incorporate the financial information of SDG Capital Management and its subsidiaries which were acquired by the Company through business combination involving entities under common control during the year ended 31 December 2019. The calculation of basic and diluted earnings per share has been retrospectively adjusted for the bonus issue on 20 August 2019 and 19 August 2020. The profit attributable to owners of the Company used for the calculation of basic and diluted earnings per share was extracted from the Prospectus without taking into consideration the profit attributable to owners of the Company as if the acquisition of SDG Capital Management and its subsidiaries were completed on 1 January 2016. Annual Report 2020 3 CHAIRMAN’S STATEMENT To all shareholders, I wish to take this opportunity to express my sincere gratitude for your trust and support to Shandong Gold Mining Co., Ltd. On behalf of the Board, I am delighted to present the 2020 annual report of Shandong Gold and to report on the Company’s performance for the period to all shareholders. OVERVIEW OF THE COMPANY’S OPERATION The Company’s main business, operating model and conditions of the industry during the Reporting Period The core business operations of the Company during the Reporting Period During the Reporting Period, the Company’s approved business scope was mainly: mining and beneficiation of gold, production and sales of specialized equipment for gold mines and construction and decoration materials (excluding products restricted by national laws and regulations). The Company mainly produces standard gold bullions and investment gold bars and silver ingots and other products of various specifications. On the one hand, the Company endeavors to leverage on the core advantage of domestic resources. On the other hand, it implements the “going global” strategy and participates in global resource allocation in an active manner. The mining enterprises under the Company’s management are located in Shandong, Fujian, Inner Mongolia, Gansu, Xinjiang and other provinces in the PRC, and overseas in Argentina, South America and Ghana, Africa, forming an integrated industry chain covering exploration, mining, processing, smelting (refining) of gold and deep processing and sales of gold products, as well as the production and sales of mining equipment and materials, with a supporting scientific and technological research and development system. Operating Model Large-scale operating model: The Company focuses on the development and utilization of gold mineral resources. By adopting the gold production model of scattered mining and centralized smelting, the Company has been able to enhance its scale advantage and modern production level of its gold resources in the Laizhou region of the Jiaodong Peninsula. The Company’s Jiaojia Gold Mine, Linglong Gold Mine and Sanshandao Gold Mine were among the first in the country to achieve cumulative gold production of over 100 tonnes. Domestically, Shandong Gold Smelting Co., Ltd. ranked among the top in the industry in terms of both the refining volume and the trading volume. The Company aims to boost its large-scale operations by improving the level of mechanical operation and enhance corporate efficacy through the construction of the project of “world-class exemplary mine”. At present, our mining enterprises firmly occupy the leading position in the domestic mining industry in terms of equipped production level and mechanization degree. Moreover, the underground trackless mining equipment configuration has always maintained an advanced level internationally. Currently, the Company is accelerating the construction of a world-class gold base and has set up the construction plan of a world- class gold base leveraging on the mining rights resources covering “Sanshandao Resource Belt, Jiaojia Resource Belt and Xincheng Resource Belt” and relying on the six major segments of mining, refining, circular economy, intelligent mine, ecological mine and industrial synergies, setting its mind upon becoming the first domestic 10,000-tonne gold production base. 4 SHANDONG GOLD MINING CO., LTD. CHAIRMAN’S STATEMENT Technology and innovation-driven model: The Company always places its emphasis on technological innovation with the aim of building core competitiveness in the era of corporate digitalization to accelerate in-depth integration of the new generation of information technology and industrial automation.