(Incorporated in Bermuda with limited liability) Stock Code : 00152 2016 Annual Report CONTENTS Corporate Profile 2 Biographies of Directors and Senior Management 42 Corporate Information 4 Report of the Directors 46 Financial Highlights 5 Corporate Governance Report 53 Key Events in 2016 8 Disclosure of Interests 69 Chairman’s Statement 10 Management Discussion and Analysis Financial Report Overall Review 13 Independent Auditor’s Report 71 Logistic Business 16 Consolidated Balance Sheet 77 Toll Road Business 26 Consolidated Income Statement 79 Other Investments 34 Consolidated Statement of Comprehensive Income 80 Financial Position 36 Consolidated Statement of Changes in Equity 81 Outlook for 2017 40 Consolidated Statement of Cash Flows 83 Human Resources 41 Notes to the Consolidated Financial Statements 84 CORPORATE PROFILE Shenzhen International Holdings Limited is a company incorporated in Bermuda with limited liability and is listed on the main board of the Stock Exchange of Hong Kong. The Group is principally engaged in the investment, construction and operation of logistic infrastructure facilities, as well as providing various value-added logistic services to customers leveraging its infrastructure facilities and information services platform. Shenzhen Investment Holdings Company Limited, the controlling shareholder of the Company, is a corporation wholly-owned by Shenzhen Municipal People’s Government State-owned Assets Supervision and Administration Commission and, as at the date of this report, holds approximately 44.26% of the issued share capital of the Company. The Group defines the Pearl River Delta, the Yangtze River Delta and the Pan-Bohai Rim in the PRC as strategic regions, through investment, mergers and acquisitions, restructuring and integration, the Group endeavours to design, construct and operate logistic infrastructure projects including China Urban Integrated Logistics Hub and toll roads and applies supply-chain management techniques and information technology to provide high-end and value-added logistic services to customers, creating greater value for its shareholders. 2 Shenzhen International Holdings Limited Annual Report 2016 CORPORATE PROFILE Logistic Business 100% Shenzhen South China Logistic Park 100% Shenzhen Western Logistic Park 100% Nanjing Chemical Industrial Park Logistic Centre Logistic Parks 55.39% Shandong Booming Total Logistic Park 50% SZ Airport Express Center 51% Shenzhen Huatongyuan Logistic Centre (relocated in December 2016) 85.30% Shenzhen International Shenyang Integrated Logistic Hub 100% Shenzhen International Kunshan Integrated Logistic Hub 70% Shenzhen International Wuhan Integrated Logistic Hub 80% Shenzhen International Hefei Integrated Logistic Hub 100% Shenzhen International Wuxi Integrated Logistic Hub China Urban Integrated 80% Shenzhen International Shijiazhuang Integrated Logistic Hub Logistics (3) Hub 100% Shenzhen International Nanchang Integrated Logistic Hub 100% Shenzhen International Hangzhou Smart Integrated Logistic Hub Shenzhen International Guizhou Integrated Logistic Hub (4) 100% Shenzhen International Changsha Integrated Logistic Hub Shenzhen International 100% Shenzhen International Ningbo Integrated Logistic Hub Holdings Limited (1) 70% Phase 1 of Nanjing Xiba Port Port 70% Phase 2 of Nanjing Xiba Port Supply Chain Management Services of Port Third Party Logistic Service Logistic Logistic Information Service Services Logistic Financing Service Investments and Management of Logistic Equity Toll Road Business 50.889% Shenzhen Expressway Company Limited (1)(2) 89.93% Longda Expressway in Shenzhen Other Investments/Projects 49% Shenzhen Airlines Company Limited 1.30% CSG Holding Co., Ltd. (2) 75.94% Meilin Checkpoint Urban Renewal Project 100% Qianhai Project (5) (1) Listed company in Hong Kong (2) Listed company in the PRC (3) Only projects with land use rights of project sites acquired are included (4) The project was held jointly by two wholly-owned subsidiaries and a 68.45%-owned subsidiary of the Group (5) Excluding a residential land use project held by an associate in which the Group held 50% interests The above is a simplified corporate structure of the Group and does not include intermediate holding entities, and the percentages of interests shown represent the percentages for which the Group has acquired effective control. In this report, the English names of the PRC entities are translations of their Chinese names and included herein for identification purpose only. In the event of any inconsistency, the Chinese names shall prevail. Shenzhen International Holdings Limited 3 Annual Report 2016 CORPORATE INFORMATION BOARD OF DIRECTORS STOCK CODE Executive Directors: Shares : 00152 Gao Lei (Chairman) Senior Notes : 04542 (SZ INTL N1704) Li Hai Tao (Chief Executive Officer) Zhong Shan Qun AUDITOR Liu Jun (Vice President) Li Lu Ning (Vice President) KPMG Certified Public Accountants Non-Executive Director: Hong Kong Yim Fung LEGAL ADVISERS Independent Non-Executive Directors: Leung Ming Yuen, Simon Reed Smith Richards Butler Ding Xun (Hong Kong Legal Advisers) Nip Yun Wing PRINCIPAL BANKERS AUDIT COMMITTEE Bank of China Bank of Communications Leung Ming Yuen, Simon (Chairman) Ding Xun The Bank of Tokyo-Mitsubishi UFJ, Nip Yun Wing Hong Kong Branch China Citic Bank (PRC Domestic Bank) NOMINATION COMMITTEE China Development Bank (PRC Domestic Bank) China Everbright Bank (PRC Domestic Bank) Ding Xun (Chairman) China Merchants Bank Leung Ming Yuen, Simon DBS Bank Zhong Shan Qun Hang Seng Bank HSBC REMUNERATION AND APPRAISAL Industrial Bank COMMITTEE ING Bank N.V. Ping An Bank Ding Xun (Chairman) Shanghai Pudong Development Bank Leung Ming Yuen, Simon (PRC Domestic Bank) Gao Lei Standard Chartered Bank Taipei Fubon Commercial Bank, Hong Kong Branch COMPANY SECRETARY Wing Lung Bank Tam Mei Mei PRINCIPAL SHARE REGISTRAR HEAD OFFICE AND PRINCIPAL PLACE Conyers Corporate Services (Bermuda) Limited OF BUSINESS Clarendon House 2 Church Street Rooms 2206-2208, 22nd Floor Hamilton HM 11 Greenfield Tower, Concordia Plaza Bermuda No. 1 Science Museum Road Tsimshatsui East HONG KONG BRANCH SHARE Kowloon, Hong Kong REGISTRAR REGISTERED OFFICE Tricor Tengis Limited Level 22, Hopewell Centre Clarendon House 183 Queen’s Road East, Hong Kong 2 Church Street Hamilton HM 11 INVESTOR RELATIONS CONSULTANT Bermuda Wonderful Sky Financial Group COMPANY WEBSITE 6/F, Nexxus Building 41 Connaught Road Central, Hong Kong http://www.szihl.com 4 Shenzhen International Holdings Limited Annual Report 2016 FINANCIAL HIGHLIGHTS Total Assets Value Total Equity (HK$ million) (HK$ million) 28,700 28,436 60,741 26,728 58,998 3% 1% 21,908 47,363 19,988 42,383 43,223 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Net Asset Value per Share Revenue* Attributable to Shareholders (HK$ million) (HK$ dollar) 7,641 13% 6,738 6,354 5,772 5,328 9.40 9.60 9.50 8.40 1% 7.70 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 * excluding construction service revenue from toll road Profit before Finance Costs and Tax Profit Attributable to Shareholders (HK$ million) (HK$ million) 5,526 2,229 2,198 2,116 4,750 4,492 6% 1,878 4% 1,641 3,630 3,376 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Earnings per Share (Basic) Dividend per Share (HK$ dollar) (HK$ dollar) 0.500 0.455 0.430 0.374 0.374 14% 1.30 1.16 1.15 1.10 1.00 5% 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Shenzhen International Holdings Limited 5 Annual Report 2016 FINANCIAL HIGHLIGHTS ANALYSIS OF REVENUE AND PROFIT BEFORE FINANCE COSTS AND TAX BY PRINCIPAL ACTIVITIES (HK$ million) Share of profit of associates Operating and joint Revenue profit ventures Total 2016 Toll roads — Revenue 5,910 2,549 328 2,877 — Construction service revenue 146 – – – Toll roads sub-total 6,056 2,549 328 2,877 Logistic business — Logistic parks 572 165 16 181 — Logistic services 630 36 6 42 — Port and related services* 529 85 – 85 Logistic business sub-total 1,731 286 22 308 Head office – 690 875 1,565 Profit before finance costs and tax 7,787 3,525 1,225 4,750 Finance income 195 Finance costs (1,190) Finance costs — net (995) Profit before income tax 3,755 2015 Toll roads — Revenue 4,807 2,570 338 2,908 — Construction service revenue – – – – Toll roads sub-total 4,807 2,570 338 2,908 Logistic business — Logistic parks 616 221 19 240 — Logistic services 1,129 17 5 22 — Port 186 70 – 70 Logistic business sub-total 1,931 308 24 332 Head office – 825 427 1,252 Profit before finance costs and tax 6,738 3,703 789 4,492 Finance income 280 Finance costs (973) Finance costs — net (693) Profit before income tax 3,799 * Port and related services in 2016 included operation and management of wharf and logistic centres at Xiba Port in Nanjing, and port related supply chain management services business. 6 Shenzhen International Holdings Limited Annual Report 2016 FINANCIAL HIGHLIGHTS SUMMARY OF FINANCIAL INFORMATION A summary of the results and of the assets and liabilities of the Group for the last five financial years is depicted below. The 2016 figures are extracted from the audited financial statements. The 2012 to 2015 figures are extracted from the comparatives in the 2013 to 2016 audited financial statements. Year ended 31 December 2016 2015 2014 2013 2012 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 Results Revenue 7,787,180 6,738,397 6,370,230 5,962,765 5,739,514 Profit before income tax 3,754,805 3,798,508 4,755,804 2,637,192 2,774,979 Income tax expense (837,623) (736,318) (1,068,622) (530,894) (479,409) Profit before non-controlling interests 2,917,182