i. important notice - · pdf filefalse or misleading statement or material omission in ... the...

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I. Important Notice 1.1 The Board of Directors and its members, the Board of Supervisors and its members and the Senior Management of the Company confirm, to the best of their knowledge, that there is no false or misleading statement or material omission in this Report and shall be severally and jointly liable for the truthfulness, accuracy and completeness of its contents. 1.2 All Directors of the Company attended the Board Meeting and reviewed the First Quarter Report 2017. 1.3 Chairman of the Company Mr. Xu Yongmo, Legal representative and CEO Mr. Li Yeqing, CFO Mr. Yeoh Khoon Cheng and Manager of Accounting Department Mr. Wu Xin confirm that the financial statements in this First Quarter Report are true, accurate and complete. 1.4 The First Quarter Report of the Company was not audited.

II. Basic information of the Company

2.1 Financial Highlights

Unit: Yuan

Reporting period end Last year end Change (%) of reporting

period end / last year end

Total assets 30,115,923,188 27,426,749,410 9.8

Net assets attributable to shareholders of the Company

10,084,536,602 9,994,864,233 0.9

Year beginning to

reporting period end (Jan-Mar)

Same period of last year

Change (%) of the reporting period / same

period of last year

Net cash flow from operating activities (Yuan)

322,734,716 317,591,846 1.62

Year beginning to

reporting period end (Jan-Mar)


Change (%) of the reporting period / same

period of last year

Sales revenue 3,876,399,209 2,405,205,841 61.17

Net profit attributable to shareholders of the Company

94,922,593 -136,403,349 169.59

Net profit attributable to shareholders of the Company after extraordinary items

84,059,760 -160,722,432 152.3

Return on net assets, weighted average (%)

0.95 -1.43 Increased by 2.38 percentage points

Basic earnings per share (Yuan/share)

0.06 -0.09 166.67

Diluted earnings per share (Yuan/share)

0.06 -0.09 166.67

3

Extra-ordinary items and amount: Applicable Not Applicable Unit: Yuan

Item Current period

(Jan-Mar) Remarks

Gains from disposal of non-current assets -2,530,113 Mainly are the gains/losses from disposal of fixed assets

Government subsidies, excluding regular fixed amount government subsidies

15,792,633 Mainly are the financial subsidies from local governments

Reversal of provisions for assets impairment of accounts

1,999,566

Other non-operating income and expenditures 658,878

Impacts from minority shareholders’ interests (after tax)

-1,648,021

Impacts from income tax -3,410,110

Total 10,862,833

2.2 Total number of shareholders, top ten shareholders and top ten holders of shares not subject to conditional sales at the reporting period end

Unit: share

Total number of shareholders 77,738

Top ten shareholders

Names of Shareholders (full name)

Shares held at the period

end

% Shares subject to conditional

sales

Mortgage or frozen Shareholder

type Shares

condition number

HOLCHIN B.V. 596,817,018 39.85 0 nil

Foreign corporation

State-owned Shares (held by Huaxin Group Co., Ltd.)

211,761,772 14.14 0 nil

State

HOLPAC LIMITED 29,779,888 1.99 0 nil

Foreign corporation

Huaxin Group Co., Ltd 27,923,942 1.86 0 nil

State corporation

Central Huijin Asset Management Ltd.

21,768,700 1.45 0 nil

unknown

FTIF-TEMPLETON ASIAN SMALLER COMPANIES FUND

13,235,738 0.88 0 nil

unknown

China Taiping Life Insurance Co., Ltd. – bonus – group insurance bonus

8,971,163 0.60 0 nil unknown

Wuhan Railway Bureau 8,064,000 0.54 0 nil unknown

Bank of Communications – Hua’an strategy selective hybrid securities investment fund

7,351,513 0.49 0

nil

unknown

4

FTIF TEMPLETON CHINA FUND 5497

7,120,619 0.4 0 nil

unknown

Top ten holders of shares not subject to conditional sales

Names of Shareholders Number of shares not subject to

conditional sales

Type and Number of Shares

Type Number

Holchin B.V.

596,817,018 RMB ordinary shares 322,380,858

Domestic listed foreign investment shares

274,436,160

State-owned Shares (held by Huaxin Group Co., Ltd.)

211,761,772 RMB ordinary shares

211,761,772

HOLPAC LIMITED 29,779,888 Domestic listed foreign investment shares

29,779,888

Huaxin Group Co., Ltd 27,923,942 RMB ordinary shares 27,923,942

Central Huijin Asset Management Ltd.

21,768,700 RMB ordinary shares

21,768,700

FTIF-TEMPLETON ASIAN SMALLER COMPANIES FUND

13,235,738 Domestic listed foreign investment shares

13,235,738

China Taiping Life Insurance Co., Ltd. – bonus – group insurance bonus

8,971,163

RMB ordinary shares

8,971,163

Wuhan Railway Bureau 8,064,000 RMB ordinary shares 8,064,000

Bank of Communications – Hua’an strategy selective hybrid securities investment fund

7,351,513

RMB ordinary shares

7,351,513

FTIF TEMPLETON CHINA FUND 5497

7,120,619 Domestic listed foreign investment shares

7,120,619

Remarks on relationship or concerted actions of the above shareholders

1. Holpac Limited is the party acts in concert with Holchin B.V.

2. Huaxin Group Co., Ltd. held state shares on behalf of the State. 3. It is unknown to the Company whether there is any relationship among the shareholders or any concerted persons referred in the “Administrative Measures of Disclosing Changes in Shareholding for Listed Companies”.

2.3 Total number of preference stock shareholders, top ten preference stock shareholders and top ten preference stock holders of shares not subject to conditional sales at the reporting period end

Applicable Not Applicable

5

III. Major Events

3.1 Status and reasons for major changes on major items and financial indicators in financial statements Applicable Not Applicable 3.1.1 Changes of Major Financial Indicators in the Balance Sheet

Unit: Yuan

Item Mar 31, 2017 Dec 31, 2016 Change % Remarks

Accounts receivable

977,510,294 502,371,725 475,138,569 95% Scale of business was expanded due to the merger

Advances to suppliers


Other receivables


Inventories 1,606,251,138 1,174,261,964 431,989,174 37% Scale of business was expanded due to the merger

Long-term receivables


Construction in progress

1,083,738,122 771,069,947 312,668,175 41% Increased investment in Eco business

Fixed assets pending for disposal

5,616,430 127,920 5,488,510 4291% Some assets were expired or in retirement and liquidation

Notes payable 73,250,000 148,902,088 -75,652,088 -51% Increase in sales revenue reduced the issuance of notes/bills

Advances from customers

496,036,146 307,809,502 188,226,644 61% Markets recovered and the scale of business was expanded due to the merger

Employee benefits payable

226,578,621 155,094,320 71,484,301 46% Employees were increased due to the expanded scale of business

Other payables 1,999,447,616 453,881,372 1,545,566,244 341% Increase in equity payment and business scale expanded

Current portion of non-current liabilities

2,808,216,848 4,242,439,250 -1,434,222,402 -34% Put option exercising of domestic corporate bond by investors was 0, and it was reclassified to long term liabilities

Debentures Payable

3,292,377,201 1,992,645,597 1,299,731,604 65% Put option exercising of domestic corporate bond by investors was 0, and it was reclassified to long term liabilities

Provisions 153,161,858 114,916,662 38,245,196 33% Scale of business was expanded due to the merger

Other comprehensive income

-2,360,577 2,889,647 -5,250,224 -182% Change in the exchange rate of the overseas standard money to RMB

3.1.2 Changes of Major Financial Indicators in the Income statement

6

Unit: Yuan

Item From year beginning to

reporting period end

(Jan-Mar 2017)


(Jan-Mar 2016)

Change % Remarks

Sales revenue 3,876,399,209 2,405,205,841 1,471,193,368 61% The merger made business scales expanded and cement price improved

Cost of sales 3,043,997,546 1,985,219,684 1,058,777,862 53% The merger made business scales expanded and coal cost rose

Asset impairment losses

-1,999,566 1,001,407 -3,000,973 -300% Accounts receivable were collected and bad debts were reversed

Net investment income

271,476 150,000 121,476 81% Investment income from tradable financial assets increased

Operating profit

82,969,007 -226,438,543 309,407,550 137% The merger made business scales expanded and cement price improved

Non-operating expenses

9,246,071 2,892,155 6,353,916 220% Assets disposal due to a RMX station relocation and the business scales expanded

Total profit 112,900,651 -185,843,543 298,744,194 161% The merger made business scales expanded and cement price improved

Income tax expenses

35,914,732 -42,547,925 78,462,657 184% Product prices rose and profits increased

Net profit 76,985,919 -143,295,618 220,281,537 154% The merger made business scales expanded and cement price improved

Net profit attributable to shareholders of the Company

94,922,593 -136,403,349 231,325,942 170% The merger made business scales expanded and cement price improved

Minority interests

-17,936,674 -6,892,269 -11,044,405 -160% Affected by the off-season and exchange losses, losses in Tajikistan joint venture increased

3.1.3 Changes of Major Financial Indicators in the Cash flow statement

Unit: Yuan

Item From year

beginning to

reporting period end

(Jan – Mar 2017)

Same period

of last year

(Jan – Mar

2016)

Change % Remarks

Net cash flows from investing activities

271,388,091 -300,141,485 571,529,576 190% The money fund was redeemed

Net cash flows from financing activities

-939,745,435 186,256,457 -1,126,001,892 -605% The consolidation scope was enlarged

3.2 Remarks on progress of major events, their impacts and solutions Applicable Not Applicable

7

3.3 Commitments that have not been fulfilled during the reporting period Applicable Not Applicable 3.4 Reason, warning and remarks in respect of that accumulative net profit is predicted to be loss or have great change compared with those of the same period of previous year from beginning of this year to end of next reporting period. Applicable Not Applicable Capacity of the Company was increased due to the merger, in addition, promoted by the measures of the national supply-side structural reform, prices of the Company's leading product - cement rose year-on-year, it is estimated that the net profit attributable to shareholders of the Company for January-June 2017 would increase by more than 50% over the same period of last year.

Huaxin Cement Co., Ltd. Legal Representative: Mr. Li Yeqing

April 25, 2017

8

IV. Attachments 4.1 Financial statements

Balance Sheet (Consolidated) March 31, 2017

Huaxin Cement Co., Ltd.

Unit: Yuan Type: not been audited

Item Period end Year beginning

Current assets

Cash at bank and in hand 3,431,839,503 3,719,378,221

Financial assets at fair value through profit or loss 206,066,540 801,555,568

Notes receivable 747,383,441 828,792,121

Accounts receivable 977,510,294 502,371,725

Advances to suppliers 225,470,168 66,412,138

Interests receivable 3,272,234 -

Other receivables 464,608,771 211,761,982

Inventories 1,606,251,138 1,174,261,964

Current portion of non-current assets 3,600,000 3,600,000

Other current assets 138,733,893 116,672,478

Total current assets 7,804,735,982 7,424,806,197

Non-current assets

Available-for-sale financial assets 70,042,567 69,247,625

Long-term receivables 241,299,756 30,010,131

Long-term equity investments 390,951,012 387,513,512

Fixed assets 16,593,788,229 15,343,820,403

Construction in progress 1,083,738,122 771,069,947

Construction materials 37,129,465 36,837,335

Fixed assets pending for disposal 5,616,430 127,920

Intangible assets 2,773,878,716 2,295,250,101

Goodwill 447,472,492 447,472,492

Long-term prepaid expenses 320,058,832 335,441,362

Deferred income tax assets 347,211,585 285,152,385

Total non-current assets 22,311,187,206 20,001,943,213

TOTAL ASSETS 30,115,923,188 27,426,749,410

Current liabilities

Short-term borrowings 1,052,006,304 904,000,000

Notes payable 73,250,000 148,902,088

Accounts payable 3,718,324,136 3,132,394,785

Advances from customers 496,036,146 307,809,502

Employee benefits payable 226,578,621 155,094,320

Taxes and other levies payable 261,627,352 245,703,466

Interests payable 184,229,773 144,763,154

9

Dividends payable 51,422,503 66,112,234

Other payables 1,999,447,616 453,881,372

Current portion of non-current liabilities 2,808,216,848 4,242,439,250

Total current liabilities 10,871,139,299 9,801,100,171

Non-current liabilities

Long-term borrowings 3,799,985,483 3,634,947,631

Debentures payable 3,292,377,201 1,992,645,597

Long-term payables 139,939,812 140,265,753

Long-term employee benefits payable 28,398,474 27,590,864

Special payables 17,203,600 -

Provisions 153,161,858 114,916,662

Deferred income 224,108,577 195,239,747

Deferred income tax liabilities 145,049,935 146,345,558

Total non-current liabilities 7,800,224,940 6,251,951,812

Total liabilities 18,671,364,239 16,053,051,983

OWNERS’S EQUITY

Share capital 1,497,571,325 1,497,571,325

Capital surplus 2,509,753,457 2,509,753,457

Other comprehensive income -2,360,577 2,889,647

Surplus reserve 588,645,153 588,645,153

Retained earnings 5,490,927,244 5,396,004,651

Total equity attributable to shareholders of the Company

10,084,536,602 9,994,864,233

Minority interests 1,360,022,347 1,378,833,194

Total owners’ equity 11,444,558,949 11,373,697,427

TOTAL LIABILITIES AND OWNERS' EQUITY 30,115,923,188 27,426,749,410

Legal Representative: Mr. Li Yeqing CFO: Mr. Yeoh Khoon Cheng Person in charge of Accounting Department: Mr. Wu Xin

10

Balance Sheet (Parent Company)

March 31, 2017



Item Period end Year beginning

Current assets

Cash at bank and in hand 1,731,878,870 2,479,003,755

Financial assets at fair value through profit or loss 206,066,540 801,555,568

Notes receivable 243,016,566 282,425,594

Accounts receivable 329,558,032 341,025,176

Advances to suppliers 17,695,354 10,367,685

Interests receivable 24,800,000 800,000

Other receivables 6,310,983,952 4,938,613,040

Inventories 68,641,994 56,312,850

Current portion of non-current assets 4,855,490 4,855,490

Other current assets 14,321,518 8,191,865

Total current assets 8,951,818,316 8,923,151,023

Non-current assets

Available-for-sale financial assets 41,787,067 40,992,125

Long-term receivables 19,762,889 22,564,378

Long-term equity investments 8,699,702,303 7,324,702,303

Fixed assets 365,427,102 381,600,329

Construction in progress 5,802,028 5,648,262

Construction materials 69,373 96,228

Fixed assets pending for disposal - -

Intangible assets 53,153,193 54,342,068

Long-term prepaid expenses 3,455,076 3,917,385

Deferred income tax assets 91,095,295 83,433,463

Total non-current assets 9,280,254,326 7,917,296,541

TOTAL ASSETS 18,232,072,642 16,840,447,564

Current liabilities

Short-term borrowings 100,000,000 -

Notes payable - -

Accounts payable 278,914,950 337,763,690

Advances from customers 19,910,775 17,862,536

Employee benefits payable 39,358,208 44,506,553

Taxes and other levies payable 29,111,586 38,847,912

Interests payable 163,305,881 140,261,325

Dividends payable 576,326 576,326

Other payables 1,755,946,363 715,053,105

11

Current portion of non-current liabilities 2,218,232,243 3,516,269,036

Total current liabilities 4,605,356,332 4,811,140,483

Non-current liabilities

Long-term borrowings 2,273,097,769 1,975,979,112

Debentures payable 3,292,377,201 1,992,645,597

Long-term employee benefits payable 8,132,046 10,582,771

Provisions 7,160,094 7,160,094

Deferred income 19,202,250 19,337,667

Deferred income tax liabilities 198,735 -

Total non-current liabilities 5,600,168,095 4,005,705,241

Total liabilities 10,205,524,427 8,816,845,724

OWNERS’S EQUITY

Share capital 1,497,571,325 1,497,571,325

Capital surplus 2,908,595,304 2,908,595,304

Other comprehensive income 19,650,507 19,054,301

Surplus reserve 588,645,153 588,645,153

Retained earnings 3,012,085,926 3,009,735,757

Total owners’ equity 8,026,548,215 8,023,601,840

TOTAL LIABILITIES AND OWNERS' EQUITY 18,232,072,642 16,840,447,564


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Income Statements (Consolidated)

Jan-Mar, 2017



Item This period Last period

1. Total sales revenue 3,876,399,209 2,405,205,841

Including: sales revenue 3,876,399,209 2,405,205,841

2. Total cost of sales 3,798,211,477 2,631,794,384

Including: Cost of sales 3,043,997,546 1,985,219,684

Taxes and surcharges 30,992,799 33,381,459

Selling and distribution expenses 276,379,668 232,094,234

General and administrative expenses 266,031,095 207,463,169

Financial expenses - net 182,809,935 172,634,431

Asset impairment losses -1,999,566 1,001,407

Add: Changes in fair value recognized in profit or loss

4,509,799 -

Investment income 271,476 150,000

Including: Investment income from associates and joint ventures

- -

3. Operating profit 82,969,007 -226,438,543

Add: Non-operating income 39,177,715 43,487,155

Including: gains on disposal of non-current assets

276,047 276,047

Less: Non-operating expenses 9,246,071 2,892,155

Including: Losses on disposal of non-current assets

1,004,650 1,004,650

4. Total Profit 112,900,651 -185,843,543

Less: Income tax expenses 35,914,732 -42,547,925

5. Net profit 76,985,919 -143,295,618

Attributable to shareholders of the Company 94,922,593 -136,403,349

Minority interests -17,936,674 -6,892,269

6. Other comprehensive income - net of tax -13,545,088 -40,493,553

Attributable to shareholders of the Company, net of tax

-5,250,224 -17,375,392

(1) Other comprehensive income that will not be reclassified to gain or loss

- -

(2) Other comprehensive income that will be subsequently reclassified as gain or loss

-5,250,224 -17,375,392

a. Changes in fair value of available-for-sale financial assets

596,206 -2,608,987

b. Differences on translation of foreign currency financial statements

-5,846,430 -14,766,405

Attributable to minority interest, net of tax -8,294,864 -23,118,161

7. Total comprehensive income 63,440,831 -183,789,171

13

Attributable to shareholders of the Company 89,672,369 -153,778,741

Attributable to minority interest -26,231,538 -30,010,430

8. Earnings per share

(1) Basic earnings per share (Yuan/share) 0.06 -0.09

(2) Diluted earnings per share (Yuan/share) 0.06 -0.09

As for the business merger under the same control occurred in the current period, the net profit realized by the acquired party before the merger is 0 Yuan, net profit realized by the acquired party in the last period is 0 Yuan.


Income Statement (Parent Company)

Jan-Mar, 2017




1. Total sales revenue 155,496,926 220,483,553

Less: Cost of sales 97,844,523 168,648,138

Taxes and surcharges 1,203,155 3,916,827

Selling and distribution expenses 10,152,166 10,430,430

General and administrative expenses 41,876,813 43,058,545

Financial expenses - net 38,483,727 30,154,589

Asset impairment losses - -

Add: Changes in fair value recognized in profit or loss

4,509,799

Investment income 24,121,476 67,824,969

Including: Investment income from associates and joint ventures

- -

2. Operating profit -5,432,183 32,099,993

Add: Non-operating income 139,337 4,309,791

Including: gains on disposal of non-current assets 21,541 21,541

Less: Non-operating expenses 18,817 135,774

Including: Losses on disposal of non-current assets

40,746 40,746

3. Total Profit -5,311,663 36,274,010

Less: Income tax expenses -7,661,832 -7,877,204

4. Net profit 2,350,169 44,151,214

5. Other comprehensive income - net of tax 596,206 -2,608,987

(1) Other comprehensive income that will not be reclassified to gain or loss

- -

(2) Other comprehensive income that will be subsequently reclassified as gain or loss

596,206 -2,608,987

a. Changes in fair value of available-for-sale financial assets

596,206 -2,608,987

6. Total comprehensive income 2,946,375 41,542,227


14

Cash Flow Statements (Consolidated)

Jan-Mar, 2017




1. Cash flows from operating activities

Cash received from sales of goods or rendering of services

4,372,611,778 2,917,441,593

Refund of taxes and surcharges 18,006,804 9,969,956

Cash received relating to other operating activities 73,059,818 113,790,274

Sub-total of cash inflows 4,463,678,400 3,041,201,823

Cash paid for goods and services 3,164,342,438 1,972,616,281

Cash paid to and on behalf of employees 499,290,434 354,250,574

Payments of taxes and surcharges 332,037,684 219,198,294

Cash paid relating to other operating activities 145,273,128 177,544,828

Sub-total of cash outflows 4,140,943,684 2,723,609,977

Net cash flows from operating activities 322,734,716 317,591,846

2. Cash flows from investing activities

Cash received from disposal of investments 600,000,000 -

Cash received from returns on investments 321,135 -

Net cash received from disposal of fixed assets, intangible assets and other long-term assets

5,115,471 220,505

Net cash received from disposal of subsidiaries and other operating units

- -

Cash received relating to other investing activities - 17,470,006

Sub-total of cash inflows 605,436,606 17,690,511

Cash paid to acquire fixed assets, intangible assets and other long-term assets

283,202,179 263,270,833

Cash paid relating to investing activities 3,439,914 -

Net cash paid for acquisition of subsidiaries and other operating units

47,406,422 54,561,163

Cash paid relating to other investing activities - -

Sub-total of cash outflows 334,048,515 317,831,996

Net cash flows from investing activities 271,388,091 -300,141,485

3. Cash flows from financing activities

Cash received from capital contributions - 2,000,000

Cash received from borrowings 586,000,000 872,000,000

Cash received from bond issuance - -

Cash received from other financing activities 8,276,418 118,221,604


Cash repayments of borrowings 964,565,042 663,069,400

Cash payments for interest expenses and distribution of dividends or profits

119,734,001 135,530,803

Cash payments relating to other financing activities 449,722,810 7,364,944

15

Sub-total of cash outflows 1,534,021,853 805,965,147

Net cash flows from financing activities -939,745,435 186,256,457

4. Effect of foreign exchange rate changes on cash -5,181,657 -14,014,252

5. Net increase in cash and cash equivalents -350,804,285 189,692,566

Add: Cash and cash equivalents at the period beginning 3,642,286,117 1,862,478,103

6. Cash and cash equivalents at the period end 3,291,481,832 2,052,170,669


Cash Flow Statements (Parent Company)

Jan-Mar, 2017




1. Cash flows from operating activities

Cash received from sales of goods or rendering of services

206,401,611 703,479,776

Refund of taxes and surcharges - 2,429,491

Cash received relating to other operating activities 379,670,255 30,890,250


Cash paid for goods and services 162,435,724 231,611,524

Cash paid to and on behalf of employees 109,131,196 92,887,720

Payments of taxes and surcharges 15,044,762 17,647,987

Cash paid relating to other operating activities 410,718,913 583,676,628

Sub-total of cash outflows 697,330,595 925,823,859

Net cash flows from operating activities -111,258,729 -189,024,342

2. Cash flows from investing activities

Cash received from disposal of investments 600,000,000 -

Cash received from returns on investments 121,135 -

Net cash received from disposal of fixed assets, intangible assets and other long-term assets

512,718 28,904

Net cash received from disposal of subsidiaries and other operating units

- -

Cash received relating to other investing activities - -

Sub-total of cash inflows 600,633,853 28,904

Cash paid to acquire fixed assets, intangible assets and other long-term assets

4,082,978 3,203,674

Cash paid relating to investing activities 843 -

Net cash paid for acquisition of subsidiaries and other operating units

397,000,000 54,561,163

Cash paid relating to other investing activities 981,000,000 -


Net cash flows from investing activities -781,449,968 -57,735,933

3. Cash flows from financing activities

Cash received from capital contributions - -

16

Cash received from borrowings 400,000,000 554,000,000

Cash received from bond issuance - -

Cash received from other financing activities 849,109,439 433,843,530

Sub-total of cash inflows 1,249,109,439 987,843,530

Cash repayments of borrowings 2,670,000 423,319,400

Cash payments for interest expenses and distribution of dividends or profits

20,126,360 29,408,970

Cash payments relating to other financing activities 1,137,417,924 425,131,290


Net cash flows from financing activities 88,895,155 109,983,870

4. Effect of foreign exchange rate changes on cash -2,170,646 508,862

5. Net increase in cash and cash equivalents -805,984,188 -136,267,543

Add: Cash and cash equivalents at the period beginning 2,450,928,764 969,962,927

6. Cash and cash equivalents at the period end 1,644,944,576 833,695,384


4.2 Audit Report

□Applicable √Not Applicable

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