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HK Bourse: Announcement From Xingye Copper International Group Ltd. -9-

28 Aug 2017 2:15 am
 
 
 
represented 88.4% as at 30 June 2017. As at the date of this announcement, the Group had not experienced 
any difficulty in raising funds by securing and rolling over the short-term loans borrowed from various 
banks in the PRC, which were renewed on an annual basis in accordance with local market practice. 
 
Despite the net current liabilities as at 30 June 2017, owing to the Group's ability to generate cash 
from operating activities, good credit standing and relationships with principal lending banks and 
available unutilised banking facilities of RMB737.7 million that will not expire within 12 months from 
30 June 2017 (including long term loan facilities amounted to RMB369.6 million effective until 2020) 
and cash at banks of RMB323.2 million (comprised pledged deposits of RMB109.8 million and cash 
and cash equivalents of RMB213.4 million) respectively. Based on the previous experience and the 
Group's relationships with its principal lending banks, the Board believes that the Group can roll over 
the existing short-term bank borrowings upon maturity in the coming year. The Board is confident 
that the Group has adequate financial resources to sustain its working capital requirement and meet 
its foreseeable debt repayment requirements. 
 
As at 30 June 2017, the Group had outstanding bank loans of approximately RMB861.4 million, of 
which RMB761.4 million shall be repaid within 1 year. As at 30 June 2017, 86.1% of the Group's 
debts was on secured basis. 
 
The gearing ratio as at 30 June 2017 was 40.6% (31 December 2016: 38.3%), which is calculated as 
net debt divided by total capital. Net debt is calculated as total debt (including all interest-bearing 
borrowings as shown in the consolidated statement of financial position) less cash and cash equivalents. 
Total capital is calculated as equity attributable to shareholders of the Company as shown in the 
consolidated statement of financial position plus net debt. 
 
Charge on assets 
 
As at 30 June 2017, the Group pledged assets with an aggregate carrying value of approximately 
RMB1,070.6 million (31 December 2016: RMB1,167.1 million) to secure bank loans and facilities of 
the Group. 
 
Capital expenditure 
 
For the six months ended 30 June 2017, the Group has invested approximately RMB23.4 million for 
purchase of property, plant and equipment. These capital expenditures were financed by bank borrowings. 
 
 
 
                                                 - 25 - 
Capital commitments 
 
As at 30 June 2017, the Group had contracted but not provided for future capital expenditures amounting 
to RMB9.6 million. 
 
Contingent liabilities 
 
As at 30 June 2017, the Group did not have any significant contingent liabilities. 
 
MARKET RISK 
 
The Group is exposed to various types of market risks, including price risk, interest rate risk and 
foreign exchange risk. 
 
Price risk 
 
The Group is exposed to raw material price fluctuations. Cathode copper, alloy trimmings, zinc, tin, 
nickel and other metals are the principal raw materials used in the production of the Group's products. 
The Group had made such purchases at market prices. In addition, sales of all products of the Group were 
according to market price, which might fluctuate and were beyond our control. Therefore, fluctuations 
in the prices of raw materials may have an adverse effect on the results of the Group's operations. 
 
The Group uses its Shanghai Futures Exchange and London Metal Exchange copper futures contracts 
to hedge against fluctuations in copper price. The Group recorded a gain on futures contracts of 
approximately RMB1.5 million for the six months ended 30 June 2017, which was approximately 
RMB7.5 million in the corresponding period of last year. 
 
Interest rate risk 
 
In addition to short-term deposits, the Group has no significant interest-bearing assets. Therefore, the 
Group's income and operating cash flows are, to a large extent, independent of changes in market 
interest rates. The Group's exposure to market risk for changes in interest rates relates primarily to 
fluctuations in interest rates on bank borrowings. The Group's exposure to debt is used for general 
corporate purposes, including capital expenditures and working capital needs. The Group's bank 
borrowings bear interest rates that are subject to adjustment by lenders in accordance with changes 
of the relevant regulations of the People's Bank of China ("PBOC"). The Group's financing costs 
will increase when the PBOC raises interest rates. Fluctuations in interest rates will affect the cost of 
undertaking new debts. The Group had not entered any interest rate swap to hedge against exposure 
to interest rate risk. 
 
 
 
 
                                                  - 26 - 
Foreign exchange risk 
 
 
The Group's export sales and certain part of the purchase of raw materials were denominated in foreign 
currencies, primarily U.S. dollars. Therefore, fluctuations in the exchange rate may have an impact 
on the Group's operating results. The Group has entered into foreign exchange forward contracts with 
local banks to hedge against foreign exchange rate risk. For the period under review, the Group had 
recorded a net foreign exchange gain of RMB3.0 million while recording a net loss of RMB7.4 million 
for the corresponding period in 2016. 
 
EMPLOYEES 
 
As at 30 June 2017, the total number of the Group's employees was 1,212 (31 December 2016: 1,282). 
Remuneration policies are reviewed periodically to ensure that the Group is offering competitive 
employment packages to our employees. The employees' benefits include salaries, pensions, medical 
insurance scheme and other applicable social insurance. Promotion and salary increments are assessed 
in accordance with performance. The Group's business growth depends on its employees' skills and 
contributions. The Group believes in the important position of human resources in a highly competitive 
industry and has devoted resources for training its employees. Besides, share options may be granted and 
shares may be awarded to eligible employees of the Group respectively in accordance with the terms 
of share option scheme adopted by the Company and share award scheme adopted by the Board. The 
Group has established an annual training program for our new employees so that the new employees 
can master the basic skills required to perform their duties, and existing employees can enhance or 
upgrade their skills. 
 
SHARE OPTION SCHEME 
 
The Company adopted a share option scheme on 1 December 2007 (the "2007 Share Option Scheme") 
which was terminated by shareholders at the extraordinary general meeting of the Company held on 
27 May 2016. No further options should thereafter be granted under the 2007 Share Option Scheme. 
Details of 2007 Share Option Scheme were set out in the published annual report of the Company for 
the year ended 31 December 2015. 
 
A new share option scheme had been adopted by shareholders at the extraordinary general meeting of 
the Company held on 27 May 2016 (the "2016 Share Option Scheme"). 
 
The principal terms of the 2016 Share Option Scheme were set out in the published annual report of 
the Company for the year ended 31 December 2016. 
 
During the period under review, no options were granted, exercised, lapsed, cancelled or outstanding 
under the 2016 Share Option Scheme. 
 
 
 
 
                                                 - 27 - 
AUDIT COMMITTEE 
 
The audit committee of the Board has reviewed with the management the accounting principles and 
practices adopted by the Group and discussed the financial reporting matters including the review of the 
interim results and the interim report for the period under review prepared in accordance with IAS 34. 
 
COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE 
 
The Company has complied with the Corporate Governance Code as set out in Appendix 14 to the 
Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing 
Rules") throughout the period under review. 
 
COMPLIANCE WITH THE MODEL CODE FOR SECURITIES TRANSACTIONS 
 
The Board has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as 
set out in Appendix 10 to the Listing Rules (the "Model Code"). Having made specific enquiry with 
all Directors, all Directors confirmed that they have complied with the required standard set out in the 
Model Code throughout the six months ended 30 June 2017. 
 
PURCHASE, SALES OR REDEMPTION OF LISTED SECURITIES OF THE COMPANY 
 
During the six months ended 30 June 2017, neither the Company nor any of its subsidiaries had 
purchased, sold or redeemed any of the listed shares of the Company except that the trustee of the 
Share Award Scheme, pursuant to the terms of the rules and deed of settlement of the Share Award 
Scheme, purchased on the Stock Exchange a total of 2,723,000 shares of the Company at an aggregate 
consideration of about RMB1,914,000. 
 
DIRECTORS' INTERESTS IN COMPETING BUSINESS 
 
None of the Directors were interested in any business apart from the Group's businesses which competed 
or were likely to compete, either directly or indirectly, with the businesses of the Group throughout 
the period under review. 
 
INTERIM DIVIDEND 
 
The Board does not declare the payment of an interim dividend for the six months ended 30 June 2017 
(six months ended 30 June 2016: Nil). 
 
 
 
 
                                                 - 28 - 
PUBLICATION OF 2017 INTERIM RESULTS ANNOUNCEMENT AND INTERIM REPORT 
 
This results announcement is published on the Company's website (www.huanyue.com.hk) and the 
 
 
 
 

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