Stock Code : 384 Interim Report 2013/14 CHINA GAS HOLDINGS LIMITED

Transcription

1 Stock Code : 384 Interim Report 2013/14 CHINA GAS HOLDINGS LIMITED

2 Contents Corporate Information 2 Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income 報 4 Condensed Consolidated Statement of Financial Position 5 Condensed Consolidated Statement of Changes in Equity 報 7 Condensed Consolidated Statement of Cash Flows 報 8 Notes to the Condensed Consolidated Financial Statements 報 9 Interim Dividend 中期 26 Closure of Register of Members 26 Management Discussion and Analysis 27 Prospects 42 Directors and Chief Executives Interests in Shares 46 Share Options 48 Interests of Substantial Shareholders and Other Person in Shares and Underlying Shares of the Company 51 Corporate Governance 55 Board Diversity Policy 55 The Corporate Governance and Risk Control Committee 56 Compliance of the Model Code 56 Review of Interim Results 中期 56 Purchase, Sale and Redemption of Shares /14 Interim Report 中期報告 1

3 CORPORATE INFORMATION Board of Directors Executive Directors ZHOU Si (Chairman) LIU Ming Hui (Executive Chairman, Managing Director and President) HUANG Yong (Executive President) LEUNG Wing Cheong, Eric (Deputy Managing Director and Chief Financial Officer) PANG Yingxue (Deputy Executive President) ZHU Weiwei (Vice President) MA Jinlong (Vice President) CHEN Xinguo (Vice President) Non-Executive Directors YU Jeong Joon (Vice Chairman) KIM Yong Joong (Vice President, alternate to YU Jeong Joon) Rajeev MATHUR 柾 柾 Rajeev MATHUR Independent Non-Executive Directors ZHAO Yuhua MAO Erwan WONG Sin Yue, Cynthia HO Yeung CHEN Yanyan Company Secretary NG Yuk Yee, Feona 公司 Authorised Representatives LEUNG Wing Cheong, Eric NG Yuk Yee, Feona Auditors Deloitte Touche Tohmatsu Certified Public Accountants 2 CHINA GAS HOLDINGS LIMITED 中國燃氣控股有限公司

4 Principal Bankers China Development Bank Industrial and Commercial Bank of China Agricultural Bank of China Bank of China Bank of Communications China Construction Bank Hang Seng Bank Dah Sing Bank 中 中 中 中 Head Office and Principal Place of Business in Hong Kong Room th Floor AXA Centre 151 Gloucester Road Wanchai Hong Kong 告 151 中 Registered Office Clarendon House 2 Church Street Hamilton HM11 Bermuda Clarendon House 2 Church Street Hamilton HM11 Bermuda Principal Share Registrar and Transfer Office MUFG Fund Services (Bermuda) Limited Rosebank Centre 11 Bermudiana Road Pembroke HM 08 Bermuda MUFG Fund Services (Bermuda) Limited Rosebank Centre 11 Bermudiana Road Pembroke HM 08 Bermuda Hong Kong Share Registrar and Transfer Office Computershare Hong Kong Investor Services Limited Shops Floor Hopewell Centre 183 Queen s Road East Wan Chai Hong Kong 中 183 中 Stock Code Website /14 Interim Report 中期報告 3

5 CONDENSED CONSOLIDATED STATEMENT OF profit or loss and other COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2013 Six months ended 30 September September 2012 Notes HK$ 000 HK$ 000 (unaudited) (unaudited) (restated) Revenue 3 10,461,324 7,147,127 Cost of sales (7,984,291) (5,548,581) Gross profit 2,477,033 1,598,546 Other income 253, ,201 Other gains and losses 4 24,713 9,356 Distribution costs (368,007) (278,963) Administrative expenses (515,659) (412,204) Finance costs 5 (335,045) (364,179) Share of results of associates 135,597 66,250 Share of results of joint ventures 162, ,949 Profit before taxation 1,835,185 1,071,956 Taxation 6 (350,509) (138,838) Profit for the period 7 1,484, ,118 Other comprehensive income Items that will not be reclassified subsequently to profit or loss: Exchange difference arising on translation 112,186 74,432 Decrease in fair value on available-for-sale investments (126) (832) Other comprehensive income for the period 112,060 73,600 Total comprehensive income for the period 1,596,736 1,006,718 Profit for the period attributable to: Owners of the Company 1,282, ,200 Non-controlling interests 201, ,918 1,484, ,118 Total comprehensive income attributable to: Owners of the Company 1,375, ,387 Non-controlling interests 221, ,331 Total comprehensive income for the period 1,596,736 1,006,718 Earnings per share Basic 8 HK27.41 cents cents Diluted 8 HK26.14 cents cents 4 CHINA GAS HOLDINGS LIMITED 中國燃氣控股有限公司

6 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 SEPTEMBER September March April 2012 Notes HK$ 000 HK$ 000 HK$ 000 (unaudited) (audited) (audited) (restated) (restated) Non-current assets Investment properties 9 253, , ,396 Property, plant and equipment 9 16,604,162 13,896,203 11,432,413 Prepaid lease payments 1,155, , ,634 Investments in associates 2,485,300 2,581,685 2,225,194 Investments in joint ventures 4,024,174 3,260,581 3,002,302 Available-for-sale investments 34,423 36,805 36,119 Goodwill 3,037, , ,334 Other intangible assets 1,057, , ,414 Deposits for acquisition of property, plant and equipment 373, , ,514 Deposits for acquisition of subsidiaries and associates 120,754 Amount due from an associate 232, , ,932 Deferred tax assets 98,544 97,236 94,065 29,476,205 23,141,236 19,851,317 Current assets Inventories 1,452, ,104 1,514,280 Amounts due from customers for contract work 354, , ,977 Trade and other receivables 10 4,193,442 3,399,046 2,674,234 Amounts due from associates 40, , ,174 Amounts due from joint ventures 63,337 39, ,913 Prepaid lease payments 40,225 32,033 29,671 Held-for-trading investments 11,035 11,110 10,893 Pledged bank deposits 241, , ,521 Bank balances and cash 6,654,877 3,959,191 4,582,426 13,052,439 9,353,803 9,769,089 Current liabilities Trade and other payables 11 7,730,451 4,147,834 3,813,114 Amounts due to customers for contract work 144, , ,295 Amounts due to joint ventures 624 1,356 Taxation 225, , ,939 Amounts due to associates 2, Amount due to a non-controlling interest of a subsidiary 4,421 4,366 5,165 Bank and other borrowings due within one year 期 12 8,308,312 8,445,193 8,646,378 16,413,810 13,017,144 12,743,959 Net current liabilities (3,361,371) (3,663,341) (2,974,870) Total assets less current liabilities 26,114,834 19,477,895 16,876, /14 Interim Report 中期報告 5

7 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Continued) AS AT 30 SEPTEMBER September March April 2012 Notes HK$ 000 HK$ 000 HK$ 000 (unaudited) (audited) (audited) (restated) (restated) Equity Share capital 13 47,967 45,697 43,831 Reserves 12,985,597 11,438,943 9,698,382 Equity attributable to owners of the Company 13,033,564 11,484,640 9,742,213 Non-controlling interests 2,165,862 1,258, ,072 Total equity 15,199,426 12,742,785 10,710,285 Non-current liabilities Bank and other borrowings due after one year 12 10,509,062 6,355,830 5,789,251 Deferred tax liabilities 406, , ,911 10,915,408 6,735,110 6,166,162 26,114,834 19,477,895 16,876,447 6 CHINA GAS HOLDINGS LIMITED 中國燃氣控股有限公司

8 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2013 Attributable to owners of the Company Employee Attributable share-based Investment Properties to non- Share Share compensation Translation revaluation revaluation Special Capital Statutory Accumulated controlling capital premium reserve reserve reserve reserve reserve reserve funds profits Total interests Total HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 At 1 April 2012 (audited) (restated) 43,831 5,865,071 94, ,513 3,782 1,601 1,602 30, ,076 2,779,490 9,742, ,072 10,710,285 Profit for the period 期 808, , , ,118 Decrease in fair value on available-for-sale investments (832) (832) (832) Exchange difference arising on translation 65,019 65,019 9,413 74,432 Total comprehensive income for the period 期 65,019 (832) 808, , ,331 1,006,718 Capital contribution by noncontrolling interests of subsidiaries 63,154 63,154 Exercise of share options 1, ,805 (28,300) 116, ,961 Disposal of a subsidiary (3,557) (3,557) Dividend paid (177,167) (177,167) (177,167) Dividends paid by subsidiaries to its non-controlling interests (46,826) (46,826) Recognition of equity-settled share based payments 4,919 4,919 4,919 Transfer to accumulated profits upon cancellation of share options (877) 877 Transfer 30,033 (30,033) At 30 September 2012 (unaudited) At 1 April 2013 (audited) (restated) 45,287 6,008,876 69, ,532 2,950 1,601 1,602 30, ,109 3,381,367 10,559,313 1,115,174 11,674,487 45,697 6,109,977 44, ,985 4,821 1,601 1,602 (70,810) 437,143 4,198,467 11,484,640 1,258,145 12,742,785 Profit for the period 期 1,282,895 1,282, ,781 1,484,676 Decrease in fair value on available-for-sale investments (126) (126) (126) Exchange gain on translation of operations outside Hong Kong 92,939 92,939 19, ,186 Total comprehensive income for the period 期 92,939 (126) 1,282,895 1,375, ,028 1,596,736 Acquisition of subsidiaries 737, ,178 Capital contribution by non-controlling interests of subsidiaries 50,062 50,062 Exercise of share options 2, ,413 (18,486) 474, ,197 Dividend paid (300,981) (300,981) (300,981) Dividends paid by subsidiaries to its non-controlling interests (100,551) (100,551) Transfer 115,619 (115,619) At 30 September 2013 (unaudited) 47,967 6,600,390 25, ,924 4,695 1,601 1,602 (70,810) 552,762 5,064,762 13,033,564 2,165,862 15,199, /14 Interim Report 中期報告 7

9 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2013 Six months ended 30 September 30 September HK$ 000 (unaudited) HK$ 000 (unaudited) (restated) NET CASH FROM OPERATING ACTIVITIES 2,570,545 2,888,653 NET CASH USED IN INVESTING ACTIVITIES (2,899,051) (1,913,072) NET CASH FROM (USED IN) FINANCING ACTIVITIES 2,983,703 (1,132,125) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 2,655,197 (156,544) CASH AND CASH EQUIVALENTS AT 1 APRIL 3,959,191 4,582,426 EFFECT OF FOREIGN EXCHANGE RATE CHANGES 40,489 27,728 CASH AND CASH EQUIVALENTS AT 30 SEPTEMBER 6,654,877 4,453,610 ANALYSIS OF THE BALANCES OF CASH AND CASH EQUIVALENTS Bank balances and cash 6,654,877 4,453,610 8 CHINA GAS HOLDINGS LIMITED 中國燃氣控股有限公司

10 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER BASIS OF PREPARATION The condensed consolidated financial statements have been prepared in accordance with Hong Kong Accounting Standard ( HKAS ) 34 Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants ( HKICPA ) as well as with the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the Listing Rules ). 2. PRINCIPAL ACCOUNTING POLICIES The condensed consolidated financial statements have been prepared on the historical cost basis except for certain investment properties and financial instruments which are measured at revalued amounts or fair values, as appropriate. 1. 報 34 中期 報告 報 The accounting policies and methods of computation used in the condensed consolidated financial statements for the six months ended 30 September 2013 are the same as those followed in the preparation of the Group s annual financial statements for the year ended 31 March 報 報 In the current interim period, the Group has applied, for the first time, certain new or revised Hong Kong Financial Reporting Standards ( HKFRSs ) issued by the HKICPA that are mandatorily effective for the current interim period. 中期期 中期期 報告 報告 New and revised Standards on joint arrangements and disclosures In the current interim period, the Group has applied for the first time HKFRS 11 together with the amendments to HKFRS 11 and HKFRS 12 regarding the transitional guidance. 中期期 報告 11 報告 11 報告 12 The impact of the application of these standards is set out below. 2013/14 Interim Report 中期報告 9

11 2. PRINCIPAL ACCOUNTING POLICIES (Continued) Impact of the application of HKFRS 11 HKFRS 11 replaces HKAS 31 Interests in joint ventures, and the guidance contained in a related interpretation, HK(SIC) INT 13 Jointly controlled entities Non-monetary contributions by venturers, has been incorporated in HKAS 28 (as revised in 2011). HKFRS 11 deals with how a joint arrangement of which two or more parties have joint control should be classified and accounted for. Under HKFRS 11, there are only two types of joint arrangements joint operations and joint ventures. The classification of joint arrangements under HKFRS 11 is determined based on the rights and obligations of parties to the joint arrangements by considering the structure, the legal form of the arrangements, the contractual terms agreed by the parties to the arrangement, and, when relevant, other facts and circumstances. A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement (i.e. joint operators) have rights to the assets, and obligations for the liabilities, relating to the arrangement. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement (i.e. joint venturers) have rights to the net assets of the arrangement. Previously, HKAS 31 had three types of joint arrangements jointly controlled entities, jointly controlled operations and jointly controlled assets. The classification of joint arrangements under HKAS 31 was primarily determined based on the legal form of the arrangement (e.g. a joint arrangement that was established through a separate entity was classified as a jointly controlled entity) The initial and subsequent accounting of joint ventures and joint operations are different. Investments in joint ventures are accounted for using the equity method (proportionate consolidation is no longer allowed). Investments in joint operations are accounted for such that each joint operator recognises its assets (including its share of any assets jointly held), its liabilities (including its share of any liabilities incurred jointly), its revenue (including its share of revenue from the sale of the output by the joint operation) and its expenses (including its share of any expenses incurred jointly). Each joint operator accounts for the assets and liabilities, as well as revenues and expenses, relating to its interest in the joint operation in accordance with the applicable standards. 10 CHINA GAS HOLDINGS LIMITED 中國燃氣控股有限公司

12 2. PRINCIPAL ACCOUNTING POLICIES (Continued) Impact of the application of HKFRS 11 (Continued) The directors of the Company reviewed and assessed the classification of the Group s investments in joint arrangements in accordance with the requirements of HKFRS 11. The directors concluded that the Group s investments in jointly controlled entities under HKAS 31 and was accounted for using the proportionate consolidation method, should be classified as joint ventures under HKFRS 11 and accounted for using the equity method. The change in accounting of the Group s investments in jointly controlled entities has been applied in accordance with the relevant transitional provisions set out in HKFRS 11. The initial investments as at 1 April 2012 for the purposes of applying the equity method is measured as the aggregate of the carrying amounts of the assets and liabilities that the Group had previously proportionately consolidated (see the tables below for details). Also, the directors performed an impairment assessment on the initial investment as at 1 April 2012 and concluded that no impairment loss is required. Comparative amounts for 2012 have been restated to reflect the change in accounting for the Group s investment in joint ventures 報告 報告 11 報告 11 期 期 Amendments to HKAS 1 Presentation of items of other comprehensive income The amendments to HKAS 1 introduce new terminology for statement of comprehensive income and income statement. Under the amendments to HKAS 1, a statement of comprehensive income is renamed as a statement of profit or loss and other comprehensive income. The amendments to HKAS 1 retain the option to present profit or loss and other comprehensive income in either a single statement or in two separate but consecutive statements. However, the amendments to HKAS 1 require additional disclosures to be made in the other comprehensive section such that items of other comprehensive income are grouped into two categories: (a) items that will not be reclassified subsequently to profit or loss; and (b) items that may be reclassified subsequently to profit or loss when specific conditions are met. Income tax on items of other comprehensive income is required to be allocated on the same basis the amendments do not change the existing option to present items of other comprehensive income either before tax or net of tax. The amendments have been applied retrospectively, and hence the presentation of items of other comprehensive income has been modified to reflect the changes. 1 1 報 1 報 報 1 報 報 1 (a) (b) 2013/14 Interim Report 中期報告 11

13 2. PRINCIPAL ACCOUNTING POLICIES (Continued) Except as described below, the application of the above new or revised HKFRSs in the current interim period has had no material effect on the amounts reported in these condensed consolidated financial statements and/ or disclosures set out in these condensed consolidated financial statements. 2. Summary of the effects of the above changes in accounting policies The effects of changes in accounting policies described above on the statement of profit or loss and other comprehensive income for the six months ended 30 September 2012 is as follows: Amendments As originally stated to HKFRS 11 adjustments As restated 11 HK$ 000 HK$ 000 HK$ 000 Revenue 8,566,483 (1,419,356) 7,147,127 Cost of sales (6,661,149) 1,112,568 (5,548,581) 1,905,334 (306,788) 1,598,546 Other income 265,823 (49,622) 216,201 Other gains and losses 87,556 (78,200) 9,356 Distribution costs (385,286) 106,323 (278,963) Administrative expenses (482,139) 69,935 (412,204) Finance costs (389,808) 25,629 (364,179) Share of results of associates 68,316 (2,066) 66,250 Share of results of joint ventures 236, ,949 Profit before taxation 1,069,796 2,160 1,071,956 Taxation (134,787) (4,051) (138,838) Profit for the period 935,009 (1,891) 933, CHINA GAS HOLDINGS LIMITED 中國燃氣控股有限公司

14 2. PRINCIPAL ACCOUNTING POLICIES (Continued) Summary of the effects of the above changes in accounting policies (Continued) 2. Amendments As originally stated to HKFRS 11 adjustments As restated 11 HK$ 000 HK$ 000 HK$ 000 Other comprehensive income Items that will not be classified subsequently to profit or loss: Exchange difference arising on translation Decrease in fair value on available-for-sales investments 74,432 74,432 (832) (832) Other comprehensive income for the period 期 73,600 73,600 Total comprehensive income for the period 期 1,008,609 (1,891) 1,006,718 Profit for the period 期 attributable to: Owners of the Company 808, ,200 Non-controlling interests 126,809 (1,891) 124, ,009 (1,891) 933,118 Total comprehensive income attributable to: Owners of the Company 872, ,387 Non-controlling interests 136,222 (1,891) 134,331 Total comprehensive income for the period 期 1,008,609 (1,891) 1,006, /14 Interim Report 中期報告 13

15 2. PRINCIPAL ACCOUNTING POLICIES (Continued) Summary of the effects of the above changes in accounting policies (Continued) The effects of the above changes in accounting policies on the financial positions of the Group as at 1 April 2012 and 31 March, 2013 is as follows: 2. As at (originally stated) HKFRS 11 adjustments and reclassification 11 As at (restated) As at (originally stated) HKFRS 11 adjustments and reclassification 11 As at (restated) HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 NON-CURRENT ASSETS Investment properties 450,600 (222,204) 228, , ,967 Property, plant and equipment 14,423,598 (2,991,185) 11,432,413 17,357,949 (3,461,746) 13,896,203 Prepaid lease payments 1,093,945 (173,311) 920,634 1,132,135 (160,292) 971,843 Investments in associates 2,286,243 (61,049) 2,225,194 2,652,109 (70,424) 2,581,685 Investments in joint ventures 3,002,302 3,002,302 3,260,581 3,260,581 Available-for-sale investments 76,658 (40,539) 36,119 78,983 (42,178) 36,805 Goodwill 1,038,591 (293,257) 745,334 1,209,279 (300,588) 908,691 Other intangible assets 1,281,448 (428,034) 853,414 1,267,221 (424,144) 843,077 Deposit for acquisition of property, plant and equipment 202,919 (31,405) 171, ,305 (52,619) 112,686 Amount due from an associate 141, , , ,462 Deferred tax assets 94,065 94,065 97,236 97,236 CURRENT ASSETS Inventories 1,743,372 (229,092) 1,514,280 1,122,838 (170,734) 952,104 Amounts due from customers for contract work 173,519 (34,542) 138, ,658 (65,113) 240,545 Amounts due from joint ventures 103, ,913 39,323 39,323 Trade and other receivables 3,169,928 (495,694) 2,674,234 4,019,190 (620,144) 3,399,046 Amounts due from associates 124,792 (7,618) 117, ,605 (5,271) 180,334 Prepaid lease payments 33,656 (3,985) 29,671 34,586 (2,553) 32,033 Held-for-trading investments 10,893 10,893 11,110 11,110 Pledged bank deposits 710,459 (112,938) 597, ,711 (110,594) 540,117 Bank balances and cash 4,817,767 (235,341) 4,582,426 4,298,095 (338,904) 3,959,191 Assets classified as held for sale 347,121 (347,121) CURRENT LIABILITIES Trade and other payables (4,737,019) 923,905 (3,813,114) (5,543,696) 1,395,862 (4,147,834) Amounts due to customers for contract work (244,667) 135,372 (109,295) (310,280) 61,469 (248,811) Taxation (189,339) 19,400 (169,939) (179,730) 13,053 (166,677) Amounts due to joint ventures (1,356) (1,356) Amounts due to associates (2,302) 2,234 (68) (2,907) (2,907) Amount due to a non-controlling interest of a subsidiary (5,165) (5,165) (4,366) (4,366) Bank and other borrowings due within one year (8,963,385) 317,007 (8,646,378) (9,082,138) 636,945 (8,445,193) NON-CURRENT LIABILITIES Bank and other borrowings due after one year (6,406,777) 617,526 (5,789,251) (6,862,710) 506,880 (6,355,830) Deferred taxation (526,741) 149,830 (376,911) (545,003) 165,723 (379,280) Non-controlling interests (1,056,777) 88,705 (968,072) (1,352,090) 93,945 (1,258,145) Total effects on net assets attributable to owners of Company 9,742,213 9,742,213 11,484,640 11,484, CHINA GAS HOLDINGS LIMITED 中國燃氣控股有限公司

16 3. SEGMENT INFORMATION The Group s reportable and operating segments under HKFRS 8 are: sales of piped gas, gas connection, sales of liquefied petroleum gas ( LPG ), sales of coke and gas appliance and Zhongyu Gas Holdings Limited ( Zhongyu Gas ), in which the Group s Chief operating decision maker reviewed the result of Zhougyu Gas being shared by the Group under equity method of accounting. 3. 報告 8 報 中 中 中 Segment information for the six months ended 30 September 2013 and 2012 about these businesses is presented below. Six months ended 30 September 2013 Sales of Sales of piped gas Gas connection Sales of LPG coke and gas appliance Zhongyu Gas Consolidated HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 Segment revenue 4,295,503 2,012,163 4,150,525 3,133 10,461,324 Segment result 709,271 1,104,954 13, ,801 1,871,161 Interest and other gains 111,252 Unallocated corporate expenses (96.679) Change in fair value of investment properties 6,215 Gain on deemed disposal of joint ventures 37,597 Loss on deemed disposal of an associate (15,033) Gain on disposal of a subsidiary 152 Finance costs (335,045) Share of results of associates 92,796 Share of results of joint ventures 162,769 Profit before taxation 1,835, /14 Interim Report 中期報告 15

17 3. SEGMENT INFORMATION (Continued) 3. Sales of piped gas Gas connection Six months ended 30 September 2012 (restated) Sales of coke and gas appliance Zhongyu Gas Consolidated Sales of LPG HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 Segment revenue 3,040,000 1,229,596 2,871,861 5,670 7,147,127 Segment result 513, ,442 (10,404) 4,248 33,163 1,216,667 Interest and other gains 49,939 Unallocated corporate expenses (111,266) Change in fair value of investment properties 8,011 Gain on disposal of a subsidiary 2,748 Finance costs (364,179) Share of results of associates 33,087 Share of results of joint ventures 236,949 Profit before taxation 1,071, CHINA GAS HOLDINGS LIMITED 中國燃氣控股有限公司

18 4. OTHER GAINS AND LOSSES 4. Change in fair value of held-for-trading investments Change in fair value of investment properties Allowance for trade receivables Gain on deemed disposal of joint ventures Loss on deemed disposal of an associate Gain on disposal of a subsidiary Six months ended 30 September 30 September HK$ 000 HK$ 000 (unaudited) (unaudited) (restated) 1,014 (1,403) 6,215 8,011 (5,232) 37,597 (15,033) 152 2,748 24,713 9, FINANCE COSTS 5. Interest on: Bank loans and other borrowings wholly repayable within five years Bank loans not wholly repayable within five years Less: Interest capitalised to construction in progress Six months ended 30 September 30 September HK$ 000 HK$ 000 (unaudited) (unaudited) (restated) 291, , , , , ,593 (61,665) (55,414) 335, , /14 Interim Report 中期報告 17

19 6. TAXATION 6. Six months ended 30 September 30 September HK$ 000 HK$ 000 (unaudited) (unaudited) (restated) PRC Enterprise Income Tax 356, ,010 Deferred taxation (5,826) (6,172) 350, ,838 No provision for Hong Kong Profits Tax has been made in the financial statements as the Group had no assessable profit for either period. Taxation arising in other jurisdiction is calculated at the rates prevailing in the relevant jurisdiction. The taxation charge of the People s Republic of China, other than Hong Kong (the PRC ) Enterprise Income Tax for the current and prior periods have been made based on the Group s estimated assessable profits calculated at the prevailing tax rates in accordance with the relevant income tax laws applicable to the subsidiaries in the PRC. 7. PROFIT FOR THE PERIOD 7. Profit for the period has been arrived at after charging (crediting): Depreciation of property, plant and equipment Release of prepaid lease payments Amortization of intangible assets Six months ended 30 September September 2012 HK$ 000 HK$ 000 (unaudited) (unaudited) (restated) 306, ,393 19,632 17,525 17,351 15,877 Interest income (35,397) (40,733) Loss on disposal of property, plant and equipment , CHINA GAS HOLDINGS LIMITED 中國燃氣控股有限公司

20 8. EARNINGS PER SHARE The calculation of the basic and diluted earnings per share attributable to the owners of the Company is based on the following data: 8. Six months ended 30 September September 2012 HK$ 000 HK$ 000 (unaudited) (unaudited) Earnings Earnings for the purposes of basic and diluted earnings per share (profit for the period attributable to owners of the Company) 期 1,282, ,200 Number of shares Weighted average number of ordinary shares for the purpose of basic earnings per share Effect of dilutive potential ordinary shares: 4,680,456 4,414,203 Share options 228, ,769 Weighted average number of ordinary shares for the purpose of diluted earnings per share 4,908,458 4,743, MOVEMENTS IN INVESTMENT PROPERTIES AND PROPERTY, PLANT AND EQUIPMENT Investment properties of the Group were fair valued by the professional valuers at 30 September The resulting increase in fair value of investment properties of HK$6,215,000 has been recognised directly in the condensed consolidated statement of profit or loss and other comprehensive income. 9. 6,215,000 報 During the period, the Group acquired property, plant and equipment at a total cost of HK$2,849,958,000 of which property, plant and equipment with carrying amount of HK$1,332,530,000 were acquired through acquisition of businesses. 期 2,849,958,000 中 1,332,530,000 During the period, property, plant and equipment with a carrying amount of HK$11,590,000 were disposed of or written off by the Group, resulting in a loss on disposal of HK$355,000. 期 11,590, , /14 Interim Report 中期報告 19

21 10. TRADE AND OTHER RECEIVABLES September 2013 HK$ 000 (unaudited) 31 March 2013 HK$ 000 (audited) (restated) Trade receivables 1,362,550 1,517,981 Less: Accumulated allowances (256,522) (248,149) Trade receivables 1,106,028 1,269,832 Deposits and advanced payments for construction and other materials 658, ,033 Deposits and advanced payments for purchase of natural gas and LPG Advanced payments to sub-contractors Other receivables, deposits and prepayments Amounts due from non-controlling interests of subsidiaries 781, , , , , ,711 44,248 30,232 4,193,442 3,399,046 Other than certain major customers with good repayment history which the Group allows a longer credit period or settlement by installment basis, the Group allows an average credit period of days to its trade customers The following is an aged analysis of trade receivables net of impairment losses presented based on invoice date at the end of reporting period: 30 September 2013 HK$ 000 (unaudited) 31 March 2013 HK$ 000 (audited) (restated) days ,404 1,148, days ,538 84,616 Over 365 days ,086 37,020 1,106,028 1,269, CHINA GAS HOLDINGS LIMITED 中國燃氣控股有限公司

22 11. TRADE AND OTHER PAYABLES The following is an aged analysis of trade payables at the end of reporting period: 11. 報告期 30 September 2013 HK$ 000 (unaudited) 31 March 2013 HK$ 000 (audited) (restated) 0-90 days ,438, , days , ,847 Over 180 days , ,162 Trade payables 2,615,447 1,891,362 Other payables and accrued charges 608, ,453 Construction fee payables 195, ,904 Loan interest payables 127,957 41,187 Deposits received from customers 196,895 76,380 Advanced payments from customers 1,119, ,680 Advances received from customers for contract works that have not been started 1,217, ,809 Amounts due to non-controlling interests of subsidiaries 30,565 84,059 Obligation on acquisition of subsidiaries 1,618,824 7,730,451 4,147, /14 Interim Report 中期報告 21

23 12. BANK AND OTHER BORROWINGS During the period, the Group obtained new bank and other borrowings of HK$6,393,131,000 of which HK$2,673,416,000 is repayable within one year. The loans bear interest at 0.75% to 6.55% per annum. The proceeds were used to repay bank and other borrowings and finance capital expenditure and general working capital of the Group. 13. SHARE CAPITAL 股 6,393,131,000 2,673,416, Number Share of shares capital 股 股 000 HK$ 000 股 Ordinary shares of HK$0.01 each issued and fully paid: 0.01 At 1 April ,569,725 45,697 Exercise of share options 227,000 2,270 At 30 September ,796,725 47, ACQUISITION OF BUSINESSES (i) During the period, the Group acquired 100% equity interest of Fortune Gas Investment Holdings Limited ( Fortune Gas ) at a consideration of USD400,000,000 (equivalent to approximately HK$3,120,000,000). Fortune Gas is engaged in the business of natural gas, wholesale and retail distributions, natural gas refueling, upstream coal bed methane ( CBM ) business, LNG supply to public transit vehicles and developing LNG dual fuel vessel refueling business along the Yangtze River. The goodwill of HK$1,574,343,000 arising on the acquisition of Fortune Gas is attributable to the anticipated profitability of its natural gas business, complementary business portfolio facilities synergy integration with the Group and the prospects of CBM business and LNG vessel and vehicle refueling business. The initial accounting for this acquisition has been determined provisionally, awaiting the receipt of professional valuations in relation to certain underlying assets and liabilities of the acquire. During the period, Fortune Gas contributed to the Group s revenue and profit of HK$193,278,000 and HK$26,097,000 respectively. 14. (i) 400,000,000 3,120,000, % CBM 1,574,343,000 CBM 193,278,000 26,097, CHINA GAS HOLDINGS LIMITED 中國燃氣控股有限公司

24 14. ACQUISITION OF BUSINESSES (Continued) (ii) In August 2013, the Group acquired the remaining 51% equity interest of Panva Gas Holdings Limited ( Panva Gas ) at a consideration of HK$170,300,000. Panva Gas became a wholly-owned subsidiary of the Group. Panva Gas and its subsidiaries are principally engaged in retail business of LPG in the PRC. The goodwill of HK$378,527,000 arising on the acquisition of Panva Gas is attributable to the anticipated profitability of its LPG retail business and synergy integration with the Group. The initial accounting for this acquisition has been determined provisionally, awaiting the receipt of professional valuations in relation to certain underlying assets and liabilities of the acquire. During the period, Panva Gas contributed to the Group s revenue and profit of HK$734,856,000 and HK$1,436,000 respectively. 14. (ii) 170,300,000 51% 中 378,527,000 期 期 734,856,000 1,436,000 (iii) During the period, the Group acquired 84% equity interest of ( 中 ) at a consideration of RMB30,450,000 (equivalent to approximately HK$38,063,000) 中 is engaged in natural gas business. The goodwill of HK$17,780,000 arising on the acquisition is attributable to the anticipated profitability of its natural gas business. The initial accounting for this acquisition has been determined provisionally, awaiting the receipt of professional valuations in relation to certain underlying assets and liabilities of the acquire. During the period, 中 contributed to the Group s revenue and profit of HK$5,503,000 and HK$2,435,000 respectively. (iii) 期 30,450,000 38,063,000 中 84% 中 17,780,000 期 期 中 5,503,000 2,435,000 (iv) During the period, the Group acquired additional 50% equity interest of China Gas-SK Energy Holdings Co., Limited ( China Gas SK ) at a consideration of RMB129,500,000 (equivalent to approximately HK$161,875,000). China Gas SK became a wholly owned subsidiary of the Group. China Gas- SK is engaged in natural gas business. The goodwill of HK$100,333,000 arising on the acquisition is attributable to the anticipated profitability of its natural gas business. The initial accounting for this acquisition has been determined provisionally, awaiting the receipt of professional valuations in relation to certain underlying assets and liabilities of the acquire. As the acquisition was completed in September 2013, no contribution of China Gas SK to the Group s revenue and profit was recognized during the period. (iv) 期 129,500, ,875,000 中 中 50% 中 中 100,333,000 期 期 中 2013/14 Interim Report 中期報告 23

25 15. CAPITAL COMMITMENTS As at 30 September 2013, the Group has capital commitments in respect of the acquisition for property, plant and equipment and construction materials for property, plant and equipment contracted for but not provided in the financial statements amounting to HK$164,426,000 (31 March 2013 (restated): HK$100,148,000) and HK$40,350,000 (31 March 2013: HK$13,009,000), respectively ,426, ,148,000 40,350,000 13,009, PLEDGE OF ASSETS The Group pledged certain property, plant and equipment and prepaid lease payments having a net carrying amount of HK$278,729,000 and HK$25,295,000 (31 March 2013: HK$259,282,000 and HK$16,123,000), investment properties having a carrying value of HK$54,000,000 (31 March 2013: HK$54,000,000), trade receivables having carrying amount of HK$9,009,000 (31 March 2013 (restated): nil), pledged bank deposits of HK$241,960,000 (31 March 2013 (restated): HK$540,117,000) and certain subsidiaries pledged their equity investments in other subsidiaries to banks to secure loan facilities granted to the Group. The Group did not pledge inventory as at 30 September 2013 (31 March 2013: HK$153,750,000) ,729,000 25,295, ,282,000 16,123,000 54,000,000 54,000,000 9,009, ,960, ,117, ,750, RELATED PARTY TRANSACTIONS The Group entered into the following transactions with related parties that are not members of the Group: 17. (i) During the period, the Group received interest income for total amount of HK$5,043,000 (six months ended 30 September 2012: HK$8,256,000) from an associate. (i) 5,043,000 8,256,000 (ii) During the period, the Group paid interest expense for total amount of HK$198,000 (six months ended 30 September 2012: HK$274,000) to a non-controlling interest of a subsidiary. (ii) 198, , CHINA GAS HOLDINGS LIMITED 中國燃氣控股有限公司

26 17. RELATED PARTY TRANSACTIONS (Continued) 17. (iii) The remuneration of key management of the Group was as follows: (iii) Six months ended 30 September 30 September HK$ 000 HK$ 000 Short-term benefits 期 11,723 29,896 Post employment benefits Share-based payments ,761 30,266 The remuneration of key management is determined by the remuneration committee having regard to the performance of individuals and market trends. 2013/14 Interim Report 中期報告 25

27 INTERIM DIVIDEND The Directors resolved the payment of HK2.2 cents per share as interim dividend (six months ended 30 September 2012: HK2.2 cents per share) The interim dividend will be paid on or about 30 January 2014, Thursday to shareholders whose names appear on the register of members of the Company on the date of 22 January 2014, Wednesday. CLOSURE OF REGISTER OF MEMBERS The register of members of the Company will be closed from 20 January 2014, Monday to 22 January 2014, Wednesday, both days inclusive, during which period no transfers of shares of the Company will be registered for the purpose of determining entitlement to the interim dividend. In order to qualify for the interim dividend, all transfers of shares accompanied by the relevant share certificates must be lodged with the Company s branch share registrar and transfer office of the Company in Hong Kong, Computershare Hong Kong Investor Services Limited at Shops , 17th Floor, Hopewell Centre, 183 Queen s Road East, Wanchai, Hong Kong for registration no later than 4:30 pm on 17 January 2014, Friday CHINA GAS HOLDINGS LIMITED 中國燃氣控股有限公司

28 MANAGEMENT DISCUSSION AND ANALYSIS The Group, a gas operator and service provider, is primarily engaged in the investment, construction and operation of city gas pipeline infrastructure facilities, gas terminals, storage and transportation facilities, gas logistics systems, transmission of natural gas and liquefied petroleum gas ( LPG ) to residential, industrial and commercial customers, construction and operation of gasoline and gas refilling stations as well as the development and application of technologies relating to petroleum, natural gas and LPG in China. 中 Business Review Financial & Operational Highlights For the six months ended 30 September 2013, turnover of the Group amounted to HK$10,461,324,000 (six months ended 30 September 2012: HK$7,147,127,000), increased by 46.4% over the same period last year. Gross profit (including LPG business) amounted to HK$2,477,033,000 (six months ended 30 September 2012: HK$1,598,546,000), increased by 55.0% over the same period last year. Overall gross profit margin was 23.7% (six months ended 30 September 2012: 22.4%). Profit before tax for the period amounted to HK$1,835,185,000 (six months ended 30 September 2012: HK$1,071,956,000), increased by 71.2% over the same period last year. Profit after tax amounted to HK$1,484,676,000 (six months ended 30 September 2012: HK$933,118,000), increased by 59.1% over the same period last year. Profit attributable to shareholders increased by 58.7% to HK$1,282,895,000 (six months ended 30 September 2012: HK$808,200,000). Overall net profit margin was 14.2% (six months ended 30 September 2012: 13.1%). Earnings per share amounted to HK27.41 cents (six months ended 30 September 2012: HK18.31 cents), an increase of 49.7% over the same period last year. 10,461,324,000 7,147,127,000 期 46.4% 2,477,033,000 1,598,546,000 期 55.0% 23.7% 22.4% 1,835,185,000 1,071,956,000 期 71.2% 1,484,676, ,118,000 期 59.1% 58.7% 1,282,895, ,200, % 13.1% 期 49.7% Total assets and net assets of the Group as at 30 September 2013 reached HK$42,528,644,000 and HK$15,199,426,000 respectively (HK$32,495,039,000 and HK$12,742,785,000 as at 31 March 2013 respectively). Bank balances and cash as at 30 September 2013 was HK$6,896,837,000 (HK$4,499,308,000 as at 31 March 2013). 42,528,644,000 15,199,426,000 32,495,039,000 12,742,785,000 6,896,837,000 4,499,308, /14 Interim Report 中期報告 27

29 MANAGEMENT DISCUSSION AND ANALYSIS (Continued) Business Review (Continued) Financial & Operational Highlights (Continued) Six months ended 30 September (Unaudited) (Unaudited) Change Financial Performance Turnover (HK$ 000) 10,461,324 7,147, % Gross profit (HK$ 000) 2,477,033 1,598, % Profit attributable to owners of the Company (HK$ 000) 1,282, , % Earnings per share Basic (HK cents) % Operational Performance Number of city natural gas projects 燃氣 Total natural gas sale volume (million m 3 ) 氣 3,497 3, % Natural gas sold through city gas projects (million m 3 ) 2,124 1, % Natural gas sold through long distance pipelines (million m 3 ) 1,373 1, % Total natural gas sale volume user breakdown (million m 3 ) 氣 Residential households % Industrial users 2,428 2, % Commercial users % Gas stations (CNG/LNG/L-CNG) % New piped gas connections and gas stations during the period 燃氣 氣 Residential households 850, , % Industrial users (12.1)% Commercial users 3,485 3, % Gas stations (CNG/LNG/L-CNG) % Accumulated number of connected piped gas users and gas stations 燃氣 氣 Residential households 9,597,530 7,805, % Industrial users 2,407 1, % Commercial users 54,497 46, % Gas stations (CNG/LNG/L-CNG) % Average residential connection fee (RMB/household) Total length of existing intermediate and main pipelines (km) 2,548 2, % 中 公 44,400 35, % 28 CHINA GAS HOLDINGS LIMITED 中國燃氣控股有限公司

30 MANAGEMENT DISCUSSION AND ANALYSIS (Continued) Business Review (Continued) New Projects Expansion As at 18 November 2013, the Group has secured 208 city piped gas projects (with exclusive concession rights), 11 long distance natural gas pipeline projects, 1 natural gas development project, 2 coal bed methane development projects, 98 LPG distribution projects, and has completed the construction of 224 compressed/liquefied natural gas ( CNG/LNG ) refilling stations for vehicles in 23 provinces (including autonomous regions and municipalities). From 1 April 2013 to 18 November 2013, the Group also secured 29 new city piped gas projects and 2 new long distance natural gas pipeline projects locating in Anhui Province, Guangxi Zhuang Autonomous Region, Gansu Province, Heilongjiang Province, Hubei Province, Hunan Province, Liaoning Province, Inner Mongolia Autonomous Region, Shandong Province and Hebei Province: Provinces/Autonomous Regions/ Municipalities Cities/Districts Anhui Guangxi Zhuang Autonomous Region Gansu Province Heilongjiang Province Hubei Province Hunan Province Liaoning Province Inner Mongolia Autonomous Region Si County, Yongqiao District in Suzhou Luchuan County Heshui County, Huachi County Baoquanling, Suibin County, Tongjiang City Dawu County, Yun County Datonghu District in Yiyang Fushun County, Qilihe District in Yi County Urad Front Banner, Wuhai Economic Development Zone 2013/14 Interim Report 中期報告 29

31 MANAGEMENT DISCUSSION AND ANALYSIS (Continued) Business Review (Continued) New Projects Expansion (Continued) Provinces/Autonomous Regions/ Municipalities Cities/Districts Shandong Hebei Province City Projects of Fortune Gas Leling city New District in Botou City, Raoyang County 11 cities or districts 11 As at 30 September 2013, the connectable city population covered by the Group s gas projects increased to 69,988,000 (approximately 21,552,000 households), increased by 7.7% over the same period last year. 69,988,000 21,552, % Gas Business Review The Group s gas business is divided into two segments, namely natural gas segment and LPG segment, which cater for the needs of different customer groups and require different market development strategies. The performance of each segment for the six months ended 30 September 2013 is discussed below. 燃氣 Natural Gas Business As an operator and service provider mainly focusing on natural gas supply, the Group has, through its efforts in the past 11 years, established a unique operating and management system that suits it best in the natural gas industry in China. With constant optimisation, such system has proven to contribute positively towards the management efficiency and operating results of the Group. 氣 Construction of Piped Natural Gas Networks City natural gas pipeline networks are the foundation of the Group s gas supply. By constructing its networks with urban arterial and branch pipelines, the Group connects natural gas pipelines with its residential as well as industrial and commercial customers, from whom connection fees and gas usage fees are charged. 氣 30 CHINA GAS HOLDINGS LIMITED 中國燃氣控股有限公司

32 MANAGEMENT DISCUSSION AND ANALYSIS (Continued) Business Review (Continued) Construction of Piped Natural Gas Networks (continued) As at 30 September 2013, the Group operated piped natural gas supply in 137 cities and had intermediate and arterial pipeline networks (excluding pipeline in the premises of our customers) of 44,400 km in length with 150 processing stations (city-gate stations) have been constructed ,400 中 150 Natural Gas Users Natural gas customers of the Group are mainly classified into residential customers, industrial and commercial customers, and CNG/LNG refilling stations for vehicles. Residential Customers During the period, the Group completed natural gas connection for 850,438 residential households, an increase of approximately 43.8% over the same period last year, and the average piped gas connection fee for residential customers was RMB2,548 per household. 期 850,438 期 43.8% 2,548 As at 30 September 2013, the number of accumulated connected residential users of the Group was 9,597,530, an increase of approximately 23.0% over the same period last year, representing 44.5% of the total number of connectable customers. The Group s overall connection rate, though rising constantly, remains low when compared to the 70% connection rate in developed markets. It is expected that the number of new users subscribing to the Group s services will increase steadily in the future, and will generate stable gas connection income to the Group. 9,597,530 期 23.0% 44.5% 70% 2013/14 Interim Report 中期報告 31

33 MANAGEMENT DISCUSSION AND ANALYSIS (Continued) Business Review (Continued) Industrial and Commercial Customers The Chinese Government has been encouraging industrial users with high energy consumption to use natural gas, a clean energy, to replace highly polluting coal and oil to achieve energy conservation and emission reduction. Industrial and commercial users have a higher demand for natural gas compared with residential users, while the operating cost per unit of gas supply is relatively low. As such, in addition to meeting the demand of residential customers for natural gas, the Group has also accelerated the process of gas connection for industrial and commercial customers. As the implementation of the Group s hub-satellite cities development strategy continues, the Group expects to secure more piped natural gas projects in industrial cities, economic development zones and industrial parks. These projects will become one of the Group s major drivers for gas volume growth in the future. During the period, the Group connected 226 industrial customers, mainly in industries such as petrochemicals, ceramics, building materials, metallurgy and glass, as well as 3,485 commercial customers ,485 As at 30 September 2013, the total numbers of industrial customers and commercial customers acquired and connected by the Group were 2,407 and 54,497 respectively, an increase of approximately 27.0% and 16.6% respectively over the same period last year. During the period, the average connection fee for industrial customers was RMB96 per m 3 per day (calculated based on the contracted daily gas supply volume), and the average connection fee for commercial customers was RMB48,986 per user. 2,40754, % 16.6% 96 48,986 During the period, the Group recorded gas connection income of HK$2,012,163,000, an increase of approximately 63.6% over the same period last year, accounting for approximately 19.2% of the Group s total turnover for the period. 2,012,163, % 19.2% 32 CHINA GAS HOLDINGS LIMITED 中國燃氣控股有限公司

34 MANAGEMENT DISCUSSION AND ANALYSIS (Continued) Business Review (Continued) CNG/LNG Refilling Stations Given the advocacy of energy conservation and emission reduction by Government policies, and the gradual easing of shortage of natural gas supply, natural gas, as a clean energy, has become a preferred choice for vehicle and vessel fuels. On 14 October 2012, the National Development and Reform Commission of China ( NDRC ) promulgated the Natural Gas Utilisation Policy. Taking into account different factors such as the social, environmental and economic benefits achieved by using natural gas and the consumption characteristics of different users on the whole, the NDRC emphasized the priority use of natural gas application in cities and by vehicles and vessels. In order to develop the natural gas refilling business for vehicles and vessels, China Gas Clean Energy Company Limited, a wholly-owned subsidiary of the Group, joined force with the Group s city gas companies to step up efforts in the development and construction of CNG/LNG refilling stations for vehicles and vessels to expand the Group s market share in the natural gas refilling business. 中 中 During the period, the Group completed the acquisition of the entire interest of Fortune Gas Investment Holdings Limited ( Fortune Gas ). In addition to its 11 city piped natural gas projects and 1 coal bed methane development project, Fortune Gas also possesses experience in LNG projects development and a solid customer base. It also owns numerous patents and intellectual property rights in LNG vessel engines and oil-to-gas conversion technology for vessels, and is therefore expected to generate strategic synergies with the Group s CNG/LNG business initiatives. 期 11 1 The Group currently owns 224 natural gas refilling stations, including 208 CNG refilling stations for vehicles and 16 LNG refilling stations for vehicles, an increase of 46.4% over the same period last year. During the period, natural gas volume for vehicles accounted for 8.7% of the Group s total natural gas volume, an increase of approximately 16.1% over the same period last year 期 46.4% 期 8.7% 期 16.1% 2013/14 Interim Report 中期報告 33