WE ARE HERE TO PROVIDE CLEAN ENERGY CONTENTS 1. Company Profile 2 2. Business Regions 4 3. Project Operation Information 6 4. Operation & Financial Highlights 10 5. Chairman’s Statement 14 6. Management Discussion and Analysis 17 7. Directors and Senior Management 32 8. Directors’ Report 36 9. Environmental, Social and Governance Report 48 10. Corporate Governance Report 63 11. Independent Auditor’s Report 72 12. Consolidated Statement of Comprehensive Income 79 13. Consolidated Balance Sheet 80 14. Consolidated Statement of Changes in Equity 82 15. Consolidated Statement of Cash Flows 83 16. Notes to the Consolidated Financial Statements 84 17. Five Year Financial Summary 186 2 ANNUAL REPORT 2017 COMPANY PROFILE BOARD OF DIRECTORS AUTHORIZED REPRESENTATIVES Executive Directors Mr. Feng Yi Mr. Hung, Man Yuk Dicson Mr. Zhang Yingcen (Chairman) (appointed on 1 October 2017) Mr. Xian Zhenyuan (Chief Executive) Ms. Zhang Dongmei (resigned on 1 October 2017) Mr. Zhang Suwei (General Manager) (appointed on 26 March 2018) Mr. Feng Yi Mr. Sun Heng (resigned on 26 March 2018) COMPANY SECRETARY Ms. Li Tao Mr. Hung, Man Yuk Dicson Non-executive Director (appointed on 1 October 2017) Ms. Zhang Dongmei (resigned on 1 October 2017) Mr. Wang Jiansheng Independent Non-executive Directors HEAD OFFICE IN THE PRC Mr. Cao Zhibin (resigned on 27 November 2017) Mr. Li Liuqing 4th Floor, Mr. Yeung Yui Yuen Michael Tian Lun Group Building, Ms. Zhao Jun No.6 Huang He East Road, Zheng Dong Xin District, Zhengzhou City, AUDIT COMMITTEE Henan Province, the PRC Mr. Li Liuqing (Chairman) Mr. Yeung Yui Yuen Michael PRINCIPAL PLACE OF BUSINESS Ms. Zhao Jun IN HONG KONG Unit 1603, 16th Floor REMUNERATION COMMITTEE 100 Queen’s Road Central Central Ms. Zhao Jun (Chairlady) Hong Kong Mr. Zhang Yingcen Mr. Yeung Yui Yuen Michael REGISTERED OFFICE NOMINATION COMMITTEE Clifton House Mr. Zhang Yingcen (Chairman) 75 Fort Street Ms. Zhao Jun PO Box 1350 Mr. Yeung Yui Yuen Michael Grand Cayman KY1-1108 Cayman Islands CHINA TIAN LUN GAS HOLDINGS LIMITED 3 COMPANY PROFILE CAYMAN ISLANDS LEGAL ADVISER SHARE TRANSFER OFFICE Loong & Yeung Estera Trust (Cayman) Ltd Room 1603, 16/F, Clifton House China Building 75 Fort Street 29 Queen’s Road Central, PO Box 1350 Hong Kong Grand Cayman KY1-1108 Cayman Islands PRINCIPAL BANKERS China Construction Bank Corporation HONG KONG BRANCH Bank of China Limited The Hongkong and Shanghai Banking Corporation Limited SHARE REGISTRAR AND TRANSFER OFFICE STOCK CODE Computershare Hong Kong Investor Services Limited Rooms 1712-1716, 01600 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong INVESTOR RELATIONS Telephone : 86 371 6370 7151 Fax : 86 371 6397 9930 AUDITOR E-mail : [email protected] Website : www.tianlungas.com PricewaterhouseCoopers Address : Hong Kong: 22nd Floor, Unit 1603, 16th Floor, 100 Queen’s Road Prince’s Building, Central, Central, Hong Kong Central, Hong Kong Mainland: Department of Investor Relations, 4th Floor, Tian Lun Group Building, No.6 Huang He East Road, Zheng Dong Xin District, Zhengzhou City, Henan Province, the PRC Zip Code : 450003 4 ANNUAL REPORT 2017 BUSINESS REGIONS Jilin Hebei Shandong Gansu Shaanxi Province Henan Jiangsu Sichuan Chongqing Hunan Fujian Yunnan Guangdong Guangxi CHINA TIAN LUN GAS HOLDINGS LIMITED 5 BUSINESS REGIONS Urban Gas Transportation LNG Plant Long-haul Project Gas Project Project Transmission Pipeline Henan Hebi City Shangjie District in Zhengzhou City Xinye County Pingdingshan City Shilin Industrial Assemble Zone High-tech District in Puyang City Xinwei Industrial Park Xichuan County Heqi Industrial Assemble Zone Minquan County Gangwei New District Baofeng County Xuchang City Yucheng County Weibei Technology and Ye County Xuchange New Area Song County Food Industrial Park Lankao County Jilin Dunhua City Baicheng City Shuangyang District in Changchun City Qian’an County Panshi City Tongyu County Changchun Airport Economic Zone Da’an City Zhenlai County Yitong Manchu Autonomous County Jiutai City Nong’an County Changling County Yunnan Huize County Guangnan County Ludian County Gejiu City Yanshan County Hekou County Shandong Guangxi Cao County Gaoxin District in Heze City Luzhai County Shan County Dongming County Guanyang County Gansu Hunan Baiyin City Gulang County Dongkou County Fenghuang County Chongqing Hebei Kai County Xingtai City Guangdong Shaanxi Province Longhu Town in Chaozhou City Chenghai District in Shantou City Qian County Mizhi County Fuyan Town in Chaozhou City Chaoyang District in Shantou City Liquan County Wubu County Dongfeng Town in Chaozhou City Lechang City Jiangsu Sichuan Fujian Wujiang City Xindu District in Chengdu City Xindu District in Jintang County Sanming City 6 ANNUAL REPORT 2017 PROJECT OPERATION INFORMATION Place of operation Accumulated daily gas consumption of industrial and Daily gas supply commercial users Connectable urban Length of existing Number of existing gas capacity of natural (including public population pipelines stations and stations gas stations welfare users) Number of gas Province Project Time of establishment (10,000 persons) (KM) under construction (1,000 m3) Residential users Commercial users Industrial users (m3/day) stations Xuchang September 2003 81 275 1 600 243,193 1,194 77 598,913 3 Shangjie July 2007 21 92 2 360 74,278 298 69 544,278 2 Xinye November 2011 20 61 2 96 31,488 111 10 40,096 1 Minquan, March 2011 16 87 2 192 48,400 165 42 93,897 1 Shangqiu Henan Lankao May 2012 45 83 1 100 52,963 226 14 58,658 1 Song County June 2011 51 48 1 72 36,750 208 6 39,972 1 Weishi May 2012 28 103 3 120 36,896 163 26 66,155 1 Xichuan September 2015 67 53 1 60 5,725 26 12 18,359 1 Hebi November 2002 64 585 5 1,920 172,380 1,251 66 648,885 5 Puyang March 2010 15 78 1 80 39,054 424 11 25,764 — Cao County September 2012 32 75 1 36 55,821 114 0 19,899 1 Shan County October 2012 9 85 2 619 49,532 273 87 86,777 1 Shandong Heze November 2013 13 90 1 180 42,703 93 13 45,110 — Dongming December 2013 26 90 1 300 38,879 239 14 89,918 — Baiyin July 2011 30 106 1 576 65,607 744 26 618,293 2 Gansu Gulang November 2012 4 19 1 36 12,592 47 9 5,000 2 Qian County January 2015 14 82 1 144 31,511 222 21 149,736 1 Shaanxi Liquan January 2015 9 102 4 602 34,615 453 40 283,512 2 Dongkou October 2012 84 31 1 96 13,275 82 1 9,462 1 Hunan Fenghuang October 2015 42 17 1 24 3,090 — — — 1 Luzhai January 2012 13 17 1 14.4 4,724 28 3 2,890 — Guangxi Guanyang September 2013 29 13 1 96 1,002 8 — 20 — Gejiu August 2013 18 18 1 28 9 11 1 — 1 Guangnan August 2013 88 24 1 40 327 11 — 2,028 1 Hekou August 2013 8 15 1 10 454 22 — 1,517 1 Yunnan Huize August 2013 8 37 1 20 3,112 69 3 15,182 1 Ludian August 2013 — — — — — — — — — Yanshan August 2013 49 19 1 36 814 34 1 3,061 1 Chaozhou January 2014 — 69 1 600 — — 139 281,005 — Chaoyang May 2014 200 60 2 270 24,654 25 9 55,026 — Guangdong Lechang May 2016 16 27 2 168 10,628 54 3 14,532 — Chenghai May 2014 85 81 1 52 48,808 228 2 4,025 — CHINA TIAN LUN GAS HOLDINGS LIMITED 7 PROJECT OPERATION INFORMATION Place of operation Accumulated daily gas consumption of industrial and Daily gas supply commercial users Connectable urban Length of existing Number of existing gas capacity of natural (including public population pipelines stations and stations gas stations welfare users) Number of gas Province Project Time of establishment (10,000 persons) (KM) under construction (1,000 m3) Residential users Commercial users Industrial users (m3/day) stations Xuchang September 2003 81 275 1 600 243,193 1,194 77 598,913 3 Shangjie July 2007 21 92 2 360 74,278 298 69 544,278 2 Xinye November 2011 20 61 2 96 31,488 111 10 40,096 1 Minquan, March 2011 16 87 2 192 48,400 165 42 93,897 1 Shangqiu Henan Lankao May 2012 45 83 1 100 52,963 226 14 58,658 1 Song County June 2011 51 48 1 72 36,750 208 6 39,972 1 Weishi May 2012 28 103 3 120 36,896 163 26 66,155 1 Xichuan September 2015 67 53 1 60 5,725 26 12 18,359 1 Hebi November 2002 64 585 5 1,920 172,380 1,251 66 648,885 5 Puyang March 2010 15 78 1 80 39,054 424 11 25,764 — Cao County September 2012 32 75 1 36 55,821 114 0 19,899 1 Shan County October 2012 9 85 2 619 49,532 273 87 86,777 1 Shandong Heze November 2013 13 90 1 180 42,703 93 13 45,110 — Dongming December 2013 26 90 1 300 38,879 239 14 89,918 — Baiyin July 2011 30 106 1 576 65,607 744 26 618,293 2 Gansu Gulang November 2012 4 19 1 36 12,592 47 9 5,000 2 Qian County January 2015 14 82 1 144 31,511 222 21 149,736 1 Shaanxi Liquan January 2015 9 102 4 602 34,615 453 40 283,512 2 Dongkou October 2012 84 31 1 96 13,275 82 1 9,462 1 Hunan Fenghuang October 2015 42 17 1 24 3,090 — — — 1 Luzhai January 2012 13 17 1 14.4 4,724 28 3 2,890 — Guangxi Guanyang September 2013 29 13 1 96 1,002 8 — 20 — Gejiu August 2013 18 18 1 28 9 11 1 — 1 Guangnan August 2013 88 24 1 40 327 11 — 2,028 1 Hekou August 2013 8 15 1 10 454 22 — 1,517 1 Yunnan Huize August 2013 8 37 1 20 3,112 69 3 15,182 1 Ludian August 2013 — — — — — — — — — Yanshan August 2013 49 19 1 36 814 34 1 3,061 1 Chaozhou January 2014 — 69 1 600 — — 139 281,005 — Chaoyang May 2014 200 60 2 270 24,654 25 9 55,026 — Guangdong Lechang May 2016 16 27 2 168 10,628 54 3 14,532 — Chenghai May 2014 85 81 1 52 48,808 228 2 4,025 — 8 ANNUAL REPORT 2017 PROJECT OPERATION INFORMATION Place of operation Accumulated daily gas consumption of industrial and Daily gas supply commercial users Connectable urban Length of existing Number of existing gas capacity of natural (including public population pipelines stations and stations gas stations welfare users) Number of gas Province Project Time